Hilton Morphs Into Ladbrokes
Published: Friday, February 24, 2006 Online-Casinos.com
HILTON MORPHS INTO LADBROKES
Hotels sold, British group now focuses on online gambling and Asian and European
gaming opportunities
The UK Hilton group completed the formalities on its GBP 3.3 billion hotel sale
to US Hilton this week, and immediately set about transforming itself into a bigger,
stronger Ladbrokes gambling group
The group has re-branded itself as Ladbrokes - a pure gaming company using the
Internet to exploit opportunities in Europe and Asia, reports Reuters.
"Through e-gaming we reach into 200 countries around the world, and there's
the intention to push that even faster," outgoing Deputy Chief Executive
Brian Wallace told the news service.
Hilton reported a 10 percent rise in full-year profit and said it would return
up to 4.2 billion pounds to shareholders early in the second quarter following
the hotel sale.
The Ladbrokes name will be registered this week and the Hilton Group title dropped.
Profit before tax rose 9.9 percent to GBP 413.9 million in 2005 and operating
profit from online gaming nearly doubled to GBP 41.4 million. The group is currently
valued at around GBP 6.1 billion.
"When we said four years ago this business could make 50 million, people
laughed," Wallace said of the online gaming division. "Well, we're a
long way towards that."
Rosemary Thorne, the new group finance director, said Ladbrokes was in a number
of discussions for ventures in Europe and Asia.
"But these are very small acorns and not all of them will grow into big trees,"
she added.
Chris Bell, the chief executive of Ladbrokes, who now takes control of the group,
said it would soon review the policy of not taking online bets from the United
States, where the legality of online gaming remains ambiguous.
The potential profits offered by online gambling are phenomenal and, over the
past few years, the smart money has turned to poker.
This trend has resulted in a boom that has transformed the game into an industry
that rivals the early days of the dotcom gold rush.
According to Ladbrokes, an estimated GBP 36 million was staked on online poker
sites every day in 2005, up 89 percent year on year. "Launching early [in
the poker sector] was a key critical advantage," said Albert Tapper, general
manager at Ladbrokes Poker.
"We launched in May 2002 and we were the first big name betting brand to
launch online poker. We established 'liquidity' early on, which is the word used
in the industry for having lots of players. Lots of players is critical because
it means you can offer a range of tournaments and a good choice of cash games."
However, Tapper maintained that it is unfair to talk of online poker in terms
of a boom which implies a bust just around the corner. Ladbroke's research suggests
that the future for the market is bright, as its main audience is young players.
The company's report from January 2006 shows that 60 percent of players are under
30 years old and the average age is just 32. There are more 19 year olds than
any other age year.
"I don't think it's right to say that poker is a bubble about to burst. There
are a huge number of people playing; at peak times we'll be dealing 15,000 hands
an hour and that's a lot of games," said Tapper.
Lee Ferris, poker marketing manager at sports betting firm Victor Chandler, backs
up the argument that demand is leading the success and not the other way around.
"Some of the greatest dotcom successes - eBay, Amazon, online poker - have
been as a result of the clever reinvention of a product or service repositioned
properly for the online consumer," he said.
