Betting Ladbrokes has blunt problems online


Ladbrokes has had another executive shake-up after Richard Ames pays the penalty for an underperforming digital division.


COMPANY REPORT


adbrokes chief executive Richard Glynn has admit- ted that the company’s deci- sion making wasn’t sharp enough as the firm posted a 50 per cent drop in operating profits for its online ‘digital’ division for the first half of the year.


L


Online, the company made £15m during the period, down from £29.7m, on broadly flat revenues of £88.3m. But the cost of investment in a new website has eaten away at profits. Worst still, the company doesn’t expect the website to be up and running until Q4. Given that it was originally


envi-


sioned to be launched for Euro 2012, product director Richard Ames has taken the blame and left the company.


In his wake Nick Rust will now oversee both the company’s domestic retail and digital divisions, while Damian Cope will assume


responsibility for international busi- nesses. Director of IT Mark Grimes has joined the Executive Committee to ensure technology delivery is given increased profile and scrutiny. Glynn commented: “The delivery of


several key technology developments is our focus in H2. During Q4 we will deliver our new sportsbook, and begin the subsequent migration of all active customers. Our new mobile platform, which is reliant on the same technology, will then follow. The active data warehouse, now in use to underpin our new trading fieldbook, will be deployed


further in Q4, providing enhanced cus- tomer analytics to our market- ing teams. This then facilitates the subsequent development of our Customer Relation- ship Management capabilities.


“During H2 we will also extend the use of recent enhance- ments in


RICHARD GLYNN: ‘MY JOB IS TO TURN LADBROKES ROUND’


our trading systems to cover further core sporting products. We remain confident that a combination of these developments, together with contin- ued improvements to CRM through- out 2013, will allow us to grow our digital business significantly.” Fortunately for Ladbrokes, its retail division has had a storming time in the first half of the year, helping the company achieve group operating profit of £106.9m, up 11.0 per cent. The UK retail operating profit was up 21.1 per cent to £91.3m with net revenue in the period rising by 9.7 per cent, driven by growth in both machines and OTC (20.1 per cent and 2.4 per cent respec- tively).


Glynn said: “We have begun, over


the past six months, to evolve an increasingly differentiated approach to running our shops, using customer insights and local market data to inform decisions and grow our market share. All aspects of operations from staffing and opening times, promotions and concessions, through to decisions on shop investment are now based around a principle of ‘local retailing’ which enables us to meet more closely the needs of our customers.


“This has already assisted efficiency and in H1 enabled us to deliver better service at a reduced cost - our trading hours increased by 6 per cent whilst paid hours reduced by over 7 per cent. Going forward, our growing focus on targeted activities in local market- places will enable Ladbrokes to develop an increasingly competitive approach.”


ANALYSIS


Given the fact that Richard Glynn was brought in to turn around Ladbrokes’ online fortunes, there will be those arguing that the chief executive is treading on thin ice now. The departure of Richard Ames has bought him some time and he is still bullish despite the continuing delay of the £50m in- house website


development. “My job is to turn Ladbrokes round,” he said. “If you look at our performance,


particularly given the dire economic conditions in retail, I think a lot of people would like our performance there.” William Hill learned the hard way about bankrolling the development of proprietary software and resorted to teaming up with Playtech, which worked to great effect. It is a wonder that Ladbrokes did not heed the lesson learnt by its biggest rivals.


Star Sports expands again ‘


ACQUISITION


Gentlemen’s Bookmaker’ Star Sports has extended its reach again with the acquisition of Sporting Chance, a small credit book- making business based in Ellesmere, Shropshire. The deal will see the transfer of all Sporting Chance’s credit clients to Star Sports for an undisclosed fee. Current Sporting Chance clients will be able to con- tinue to use their existing account numbers and the telephone number will remain unchanged. They will also benefit from access to one of the UK’s fastest growing and most exclusive bookmakers in the world. Star Sports managing director Ben Keith com- mented: “Star Sports is steadily growing and is now firmly a front row telephone bookmaker in terms of slips, turnover and, without doubt, our levels of cus-


tomer service. The acquisi- tion of Sporting Chance and other such small firms shows that we are equally serious about offering a top quality telephone betting service to small punters as well as whales.”


Managing director of Sporting Chance Mark Pearce added: “We were a customer of Star Sports and they have always been an absolute pleasure to deal with. It was the right time for us to sell and we’re thrilled that our customers will be betting with them, as their focus on customer service is second to none. I wish Star the very best for the future.”


The bookmaker has also purchased Pitch 6 in the Tat- tersall’s enclosure at Good- wood from Apollo Bookmakers. The deal saw Star Sports standing at ‘Glo- rious Goodwood’ for the


8 BettingBusinessInteractive • AUGUST 2012


Hills to appeal


LEVY W


illiam Hill is to turn to the Court of Appeal after the


High Court found in favour of the Levy Board’s deci- sion not to pursue big betting exchange users for Levy payments. The bookmaker


believes that the reasons behind the judgement are different to those put forward by either the Levy Board or Betfair. The firm said: “The judge ruled that whilst those carrying on a business of receiving bets are subject to a levy, enti- ties carrying on a business which merely includes the receiving of bets might not be. William Hill will argue that the distinction between those types of entities, particularly in the context of exchange users, is not clear, and that this reasoning was not argued at any point in the proceedings.”


Chief executive Ralph


Topping added: “We think it is important for book- makers, the Levy Board and horseracing that we take this to the Court of Appeal.


Independently


from all the arguments put before him, the judge drew his own conclusions as to the meaning of the Act in question, and we were never given an opportu- nity to address that think- ing. We don’t think it is right. The only simple interpretation of his judge- ment - i.e. that no users of exchanges pay levy, ever - seems to go against what Parliament has said previ- ously about both levy, tax- ation and licensing, and could if


unchallenged


STAR SPORTS ALREADY HAS A PITCH AT ASCOT


first time and strengthens the firm’s commitment to having a visible presence at racing’s flagship events. Keith said: “With busi- ness becoming more and


more centred around the biggest days, we are contin- uing to work hard at getting as stuck in as possible and becoming the punters first choice festival bookmaker.


Glorious Goodwood is one of


the racing calendar’s most beautiful and popular events and is an obvious addition to our pitch-side business.”


totally undermine any value in the Levy. We are certain this is fundamen- tal to the future of the Levy Board, and hence impor- tant to British Horse Racing and bookmakers, and once again, we believe it requires clarification.” William Hill had origi- nally driven the case to the High Court with the BHA, but lost its running mate once the sport had secured a commercial deal with Betfair. The exchange’s chief legal and regulatory officer Martin Cruddace said the High court had ‘vindicated’ the position of Betfair. “It is now neither sustainable nor rational to argue that Betfair customers should be liable to pay the Levy any more than should cus- tomers of any other betting operator.”


Levy ruling


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