Ladbrokes to Offer Offshore Betting to Avoid Government Levy

Ladbrokes, the UK's largest betting shop chain, will begin offering offshore telephone betting to customers, a move aimed at evading the government's 9% betting duty. This decision follows a similar move by bookmaker Victor Chandler, who relocated its off-course credit betting business to Gibraltar earlier this year. Other major betting shop chains, including William Hill and Coral, are also planning to establish offshore services.

Key Takeaways:

• Ladbrokes' offshore telephone betting service will allow UK customers to place bets with a 3% charge, compared to the 9% duty when betting domestically.
• The Gibraltar-based telephone betting business will create 200 new jobs and already services non-UK-based customers.
• Telephone betting operating profits jumped from £2.8m to £13.2m in the first half, while retail betting dropped from £49.6m to £40.1m.
• Margins showed signs of recovery since July, and the company is on track to achieve its target of £16m savings from Stakis.
• Ladbrokes is in talks to sell its underperforming betting businesses in the Americas.

Statistics:

• Telephone betting accounts for only 10% of the total sports betting market.
• The company reported a 3% rise in pre-tax, pre-exceptional interim profits.
• Retail betting profits dropped by £9.5m in the first half.
• Telephone betting operating profits increased by £10.4m in the first half.

Sources:

• Financial Times Limited. (1999). Lex, Page 16.
• Financial Times Limited. (1999). Hilton Group eyes hotel chains, Page 18.