INDUSTRY NEWS
Bookmakers “not coining it, but drowning in high costs”
B
ritish bookmakers are suffering from rising costs and the VAT regime, despite portrayals of a highly profitable business, Global Betting and Gaming
Consultants has charged. The consultancy firm argues: "The media has had a lot of fun with the UK’s bookmakers recently. They have been blamed for locating shops in areas that exploit the poor; horse racing has complained bookmakers are not paying enough; the government wants to tax the punter at the point of consumption; and B2 machines [FOBTs] come in for endless criticism. The onslaught has been relentless. "With all this anti-bookmaker sentiment around you would be forgiven for
believing that the bookmakers have never had it so good, making vast profits off the backs of ordinary punters, and they richly deserve the kicking they were getting. "But what is really odd is that, while the media is having us believe that bookmakers gave been coining it since they introduced FOBTs, the fact is that bookmakers’ profits are down substantially since 2007. Ladbrokes has seen a 61 percent decline in profits since 2007. William Hill has done better with a 36 percent decline since 2008 but they are still down," the firm says. It goes on to ask: "If trading is difficult for the big firms what do you think it is
like for the rest of the industry where fixed costs relative to revenue are higher? For the smaller bookmaker the situation is even worse. "The industry is faced with a rising tide of costs. Bookmakers are exempt from VAT, so every invoice costs 20 percent more than if they were any other VAT-
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registered business. The cost of the horse racing [TV feeds] in betting shops has risen dramatically in recent years and is now unaffordable. Gambling and local authority licensing costs are extortionate. "During those good years of 2006 and 2007 businesses were suckered into
believing that chancellor Gordon Brown had abolished boom and bust. It was during those good times that executives paid too much to buy peace. They paid too much because the financial community wanted certainty. The cost of certainty has been paid through the profit and loss account."
Global Draw plans bespoke tournaments for Jenningsbet G
aming machines provider The Global Draw has extended its contract with Jenningsbet to 2015.
After working with the bookmaker for 12 years, The Global Draw, a subsidiary
of Scientific Games, will continue to supply machines to Jenningsbet’s 95 UK shops. Said Greg Knight, Jenningsbet’s managing director: “The Global Draw’s
consistent support has been pivotal to our significant growth and we are delighted to demonstrate our appreciation for this support by, yet again, extending our contract. “Gaming machines are an essential part of our offering and The Global Draw
provides unrivalled quality when it comes to machine management and implementation, game content and staff training and support. “The Global Draw’s best practices and technical back office staff training build
familiarity and confidence with new machines, games and promotions. This has resulted in our staff having a greater product understanding, which helps drive enhanced customer service, an increase in operational efficiency and ultimately assists the company in boosting cash box yield.” For example, promotions have helped Jenningsbet support the rollout of new
games by providing an additional draw to attract new players, as well as engage existing
players.The two companies now work together to develop specialised Jenningsbet tournaments exclusive to Jenningsbet customers. “Independent bookmakers continue to benefit from our dedication to the
industry,” said Phil Horne, managing director at The Global Draw. “Jenningsbet is our largest independent bookmaker and we are delighted to continue supporting the company as it expands. We are committed to ongoing development of machines, quality content and support programmes, which are integral to helping drive machine revenue for Jenningsbet and all of our independent customers.” The Global Draw’s content and exclusive in-house titles will continue to be
delivered to Jenningsbet through its Nevada terminal. The firm attributes much of its success with Jenningsbet, and with other
customers such as Ladbrokes, to the strength of its content – a factor boosted by its acquisition of Barcrest last year. Said content development director Rick Mountney: “Our aim is to develop titles
that create long-term consumer loyalty, not short-term novelty. Pushing the boundaries of innovation is what keeps our content ahead of the game. “Providing exciting games that keep players engaged is key to helping our customers increase cash box revenue. The better the game, the longer its lifespan – it’s about getting the whole content recipe right. We have created some of the industry’s most iconic titles including Key Bet Roulette and Rainbow Riches.” For instance, Key Bet Roulette,
one of the firm’s flagships, goes beyond a standard roulette offering to incorporate a progressive pot, a bet multiplier and an additional side bet.
10 APRIL 2012 THE INDEPENDENT VOICE OF THE AMUSEMENT AND STREET GAMING INDUSTRY
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