Ladbrokes Online Gambling Goes to Gibraltar.

Published Thursday, August 06, 2009 -

In a move that will cost the U.K.Treasury millions of GBPs Ladbrokes has decided its fortunes lie in Gibraltar. After struggling with the unfair tax advantage that offshore online gambling operators have over those located in the U.K. Ladbrokes is following rival William Hill to an offshore jurisdiction.

Christopher Bell, who serves as the Chief Executive of Ladbrokes Ltd. since February 2006. and as the Chief Executive Officer of Ladbrokes Worldwide since June 2000 said, "intense competitive pressures" prompted the decision. Adding, "Operating from the UK has become unsustainable and we will relocate by the year end," The company, which has more than 2,000 betting shops in the U.K., said cancellations and poor margins in horse racing and a first ever loss making month on football added to pressure caused by recession.

Pre-tax profits for the six months to June 30 fell 3.9% to £131.3 million, although this widened to a 25.6% drop to £98.6 million when excluding one off items and gambling by certain high rolling customers. In the U.K. Ladbrokes retail business, said revenues fell 7.4% to £343.6 million, while profits fell 16.5% to £82.1 million. Bell said, "The economic and trading environment remains challenging and continuing uncertainty makes forecasting difficult." After announcing the move to Gibraltar shares in Ladbrokes rose 2.15 percent. The company expects to save GBP7 million-plus annually from the move giving the firm a new lease on life in the online gambling world. Ladbrokes uses the OpenBet system from Orbis Technology in it's online gambling division. A handfull of jobs will be lost in the U.K. which is insignificant compared to the millions of GBPs that the government coffers will loose as a result of this exodus. It is possible that U.K. politicians may regret the decision they made to raise the tax in the country on online bingo and other online gambling operations. Ladbrokes' has some of it's gaming products already operating out of Gibraltar as well as several other online betting firms based there, including PartyGaming and 32 Red, mainly due to the low tax regime.

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