Online Gambling Priority Focus at Ladbrokes

Published Friday, May 15, 2009 -

Ladbrokes, one of the largest companies on the planet taking wagers has reported a 34 percent drop in revenues after taxes and interest paid. The company which owns more than 2,300 Irish and U.K. betting kiosks blames the drop in profit on payouts of winning bets and the fact that their online operations are not meeting projected expectations.

In the last four months have been disappointing for the company to say the least but a Ladbrokes spokesperson said that the trend isn't representative of company expectations for the year, with "more normal trends" being seen in May. March's Cheltenham horseracing festival proved very costly for the English company. Free bet promotions and "unfavorable cost phasing" in the Internet unit also hurt profit.

The bookmaker is saying that web gambling has become it's priority focus in response to slowing growth at its betting shops, it's traditional main profit generator. Chris Bell, Chief Executive Officer for the company said, "It has been a bit of a rollercoaster ride for us," adding that costs linked to gaining new Internet gambling customers will fall during the rest of the year. Ladbrokes also said results at the end of February, excluding so-called high rollers, were in line with the company's forecast, even with a high number of horse race cancellations.

Weaker growth from gambling machines, Irish betting shops and Internet wagering "is more of a fundamental concern," analyst Matthew Gerard at Investec Securities wrote. He added "There is nothing hiding from the fact this is a disappointing update,"

The amount left behind by gamblers, declined by 4 percent in the U.K. through April, the company said. The decline was 7 percent in Ladbrokes' British betting shops. "While it is difficult to predict future staking levels in the current economic climate, the general resilience of our business and strong cost control gives us confidence in the outturn for the full year," CEO, Bell concluded.

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