BUSINESS

Bet365 celebrates another boffo year; FOBTs top OTC betting activity in UK shops

TAGs: Bet365, Denise Coates, Fixed Odds Betting Terminals, gambling commission, UK Gambling Commission

bet365-denise-coates-uk-gambling-commissionA year ago this time, Stoke-based online betting outfit Bet365 reported a pre-tax profit of £91m for the year ending March 31, 2011. This week, the privately held company reported a profit of £116.5m (+22%) on revenues of £721.8m (up from £501.4m) and turnover totaling £12.4b (+45%) for the 12 months ending March 31, 2012. Profits would have been £5.8m higher but for the company’s majority stake in the money-losing Stoke City football club.

Profits would have been significantly higher still if Bet365 had followed the lead of most of its UK competitors and relocated its HQ to Gibraltar or a white-listed jurisdiction like Alderney or the Isle of Man. Bet365’s decision to remain in Stoke resulted in a £20.3m corporation tax bill (up from £18.5m last year). Add in betting duty and VAT and Bet365 anted up a whopping £130m to the UK taxman. (George Harrison just turned over in his grave.) Still, their decision to stay in the UK means they won’t face any additional tax burdens when the UK’s new licensing regime becomes a reality. In fact, given the rumored 5% tax rate haircut the UK government intends to offer betting companies as an incentive, Bet365 actually stands to improve their bottom line.

Over the past 12 months, Bet365’s total salary expenditure rose to £51.19m (+£3m) as the company’s payroll expanded to 2,151 from 1,673 a year ago. Founder Denise Coates, who was named a Commander of the British Empire in the Queen’s New Year Honors list in 2011, commanded a £6.3m total pay packet last year. She also receives a half-share of dividend payouts, which means she’s taking home an extra £20.1m this Christmas. Coates’ brother John received a £10m dividend, while father Peter earned a £3.1m dividend for having the bloody good sense to have such bloody smart kids.

UK GAMBLING COMMISSION ANNUAL STATS ARE OUT
So long as we’re throwing around numbers, the UK Gambling Commission has released stats on the gaming industry for the 12 months ending March 31, 2012. Total gross gaming yield (GGY) came in at £5.8b, up a mere £0.2b from the previous 12-month period. Non-remote betting accounted for 52% of total GGY, followed by casinos (15%), UK-regulated remote betting (12%), bingo (11%), arcades (6%) and lotteries (4%). Compared with the 2010-2011 period, non-remote betting GGY was up 2%, casinos up 9%, bingo up 1%, lotteries up 35%, remote betting up 8% while arcades were the lone decliner, down 10%. The number of employees across all gambling sectors fell 8% to 109,666, of which 54,449 were employed in the non-remote betting industry.

The average number of gaming machines in operation across the UK fell 10% during the period in question, while the total GGY rose 6%. The average number of machines in betting shops rose 3% to 35,852, representing 26% (up from 22%) of all machines in operation but accounting for 67% (up from 64%) of total machine GGY. The shops almost exclusively feature Category B2 machines, which allow wagers up to £100 per spin and are considered by Panorama producers to pose a greater threat to England than Hitler’s Heinkels. Total GGY of machines in betting shops was £1.447b (+11%) narrowly surpassing the shops’ over-the-counter betting GGY of £1.394b (-6%).

Overall gambling participation rose to 58.1% from 56.2%. The number of respondents who wagered online rose from 11.2% to 12.2%, but once you strip away those who wagered exclusively on the National Lottery, the number of remote gamblers fell from 5.9% to 5.4%. Remote gambling turnover at UK-regulated operators rose 13% to £15.173b, with betting accounting for £14.658b (+12%), casino contributing £487.9m (+46%) and bingo adding a mere £27.14m (+1%). Remote GGY rose 8% to £717.16m, with betting up 29% to £636.85m, casino up 52% to £19m, bingo down 9% to £2.04m and the betting exchange category down 62% to £59.27m, reflecting Betfair’s offshore move in the first quarter of the monitoring period.

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