Bet365 Boss Takes Pay Cut
CEO of leading British bookmaker bet365, Denise Coates has taken a £170 million pay cut as the gambling sector was struck by the pandemic. Despite the impact on her salary, Coates is still thought to be the UK’s highest taxpayer. By cutting its director’s paychecks, bet365 was able to keep its revenues level with the previous year.
Denise Coates recognized the potential of the internet for the gambling industry early.©Burst/Pexels
UK’s Highest Taxpayer
Denise Coates, the founder and CEO of popular sports betting platform bet365, has had her salary cut by almost a third. Her pay packet fell to £250 million in the year to March 2021, as growth slowed in the gambling sector. It is the first time in three years that Coates’ paycheck has fallen.
Coates also benefitted from a £97.5 million dividend, which was split amongst bet365’s four directors. That brought her overall take-home up to around £300 million. Coates runs bet365 alongside her father Peter Coates and brother John Coates. Despite the reduction to her salary, she is still amongst the amongst the highest paid executives in the world.
Combined with her split of the dividend, Coates’ paycheck placed her just above Apple’s Tim Cook. According to Bloomberg, the tech giant’s CEO earned $265 million in 2021. The world’s highest paid executive last year was Tesla’s Elon Musk, who received $6.7 billion in total remuneration. However, much of that consisted of stock awards.
Coates has been amongst the UK’s best-paid executives for more than five years and is one of the UK’s wealthiest women. Over the last five years, she has received more than £1.3 billion from bet365. It is thought that Coates owns around half of the family business, which she helped to catapult to success.
Her strategic expansion of her father’s betting business proved fruitful when she recognized the potential of the online gambling market. Bet365 was launched in 2001 where it was run from a portacabin. By 2016, the operator had grown to become one of the world’s largest online gambling firms.
Sports Calendar Disrupted
The operator, still based in Coates’ hometown of Stoke-on-Trent, now operates betting licenses in at least sixteen countries. It has not disclosed the full list of jurisdictions in which it operates. The operator has reason to be secretive over its operations, as it has faced controversy in recent years.
Bet365 makes a significant portion of its profits in China. It is the only major UK gambling operator to offer its online services there, where gambling is considered to be illegal. However, rules around online gambling are vague and bet365 has maintained that Chinese law only applies to local businesses.
The latest accounts filed at Companies House show that bet365’s revenues remained largely flat for the first year of the pandemic, at £2.82 billion. Records for the previous year show that the firm made £2.81 billion. These results were down from £3 billion in 2019. Bet365 did well to keep its revenues level, as the vast majority of its business is reliant on sporting fixtures.
Early on in the pandemic, the sporting calendar was deeply impacted by delays and cancellations. That had a huge knock-on effect for sports betting operators, which struggled to offer their customers fixtures to bet on. Some opted for some more creative opportunities, such as marble racing, whilst most switched focus to their online casino brands.
Bet365’s business model is primarily based on sports betting, although it does have some online casino and slot offerings. It was able to offset some of its losses by redirecting its customer base to these products. By the end of the first half of that year, sporting schedules started to recover, although most events were held behind closed doors.
Charitable Donations
The recently filed financial accounts also show that bet365’s operating profit increased by 47% year on year to £285.5 million. This increase was driven by the cuts to directors’ pay packets. The company also made significant charitable donations, mostly through the Denise Coates Foundation. It received £103 million from bet365, up from nearly £90 million the year prior.
Amongst these donations was a gift of £10 million to Denise Coates’ local NHS trust. The donation was made to support hospital staff working on the frontline of the pandemic at University Hospitals of North Midlands.
The Foundation also contributed more than £1 million to NHS Charities Together through fundraising at the Virtual Grand National. Announcing the strategic report, Denise Coates was happy with how bet365 had coped during a difficult time for the sector. She stated:
“I am delighted with how the Group responded and adapted to these challenging circumstances. We continued to operate the business successfully throughout multiple lockdowns with business continuity plans enacted to allow staff to work from home. I am pleased that no redundancies or reductions in basic pay were made as a result of the pandemic and that the Group did not make use of any government support programs in any jurisdiction.”
Bet365 owns Stoke City Football Club, which was also heavily impacted by the covid-19 pandemic. The club was already struggling, having been relegated from the Premier League in 2018. During the pandemic, the ban on spectators attending matches cut off some of its revenue streams. In the year to March 2021, Stoke City reported a pre-tax loss of £55.9 million, on a turnover of £29.3 million.
