Denise Coates stands at the head of a company that is the front-runner in the UK sportsbook market. eGR sat down for its yearly chinwag with the founder of one of the gaming industry’s most-respected private firms, bet365, to discuss how 2011 has been for them and what the next year is likely to hold.
It’s clear from the outset, regulation is one of the factors Coates believes will make or break the industry on a worldwide basis. Much of her company’s focus is on any changes to the UK market, which are likely in the next couple of years. The company doesn’t want to be in a position where they’re paying over the odds tax-wise, with John Coates telling a DCMS committee this time last month: “We are already accruing gross profits tax on our Spanish business, plus we are paying 15% in the UK and we will be paying 20% in Denmark from January, which is unsustainable.”
In light of these comments, Coates tells eGR: “Clearly, such a position is unsustainable. Our position is that where there is sensible regulation and taxation we will take a licence.”
It’s clear that the bet365 supremo views the industry’s current regulatory trend as something of a luxury – like the industry’s version of champagne. She went on: “As long as regulation remains sensible if there is a move to a place of consumption tax at a sensible rate (where we pay GPT on UK customers but not non-UK customers) we can remain based in the UK. Unless such a change is made, it would be impossible for businesses to base themselves in the UK which would be a crazy situation. If you take just us as an example, we employ more than 1,700 people in Stoke which is hugely important to the local economy. We must be able to achieve a system where this is possible going forward.”
The fact Coates’ firm does so well is no surprise. When you look at the CEO and listen to her comments, you realize her knowledge and insight counts volumes. She might not share Calvin Ayre’s party lifestyle but the business model her firm has adopted has a number of comparisons and goes to show the pitfalls that would arise were her company to go public. Staying private leaves you well placed to make the quick nimble decisions that are needed in the fast-paced global gaming industry.
Due to the company being private, much of the financial data is kept hidden from the public and as a result, this interview gave us a rare insight into their figures. For the first six months of this year (to September) gross gaming revenue was up 37.6% to £269.9m and sports betting the star performer as revenue rose 47.5% to £195.1m. Coates also described their new sports site as “highlight of the year business wise.”
Acquisitions are never far from any conversation concerning the gaming industry. Coates relayed that there are no plans to go all Pwin on us, as she’s “not sure acquisitions are right for bet365 and the way we are set up,” and that there’s a preference towards organic growth.
The biggest challenge over the coming year will be how to combat the regulatory changes in Denmark, Spain and Australia with the UK always in the back of their minds. With Coates at the helm, they have the best shot at even more success and their strong stance on staying private moves to back this up even further.