The impact of the internet on business models across the industry can be no better seen than in the decisions of Ladbrokes as they try to shrug off a slump in profits
UK gambling laws have long since allowed a wide variety of betting opportunities to the public from high rolling casinos down through betting shops to the racecourse bookie and of course, the Pools. The Pools, although now fading from popularity, enjoyed huge swathes of success as it’s low stake, high reward possibility recipe attracted a huge following, and indeed for many of us it was the pools that were the first form of gambling to touch upon our lives.
Bookies Beaten By Bytes
• Ladbrokes close 60 betting shops
• Profits down despite rise in revenue
• Digital revenue rise points to future
The classified results would scroll up the screen as the unworldly voice of Len Martin slowly intoned the scores of each match at the end of the BBC’s sports programme “Grandstand” and the sponge-faced Frank Bough would give us a round up of the pools forecast. Of course at the time my interest was an abstract one of someone who only saw this strange “pools” concept as a delay between myself and the next episode of Doctor Who.
I recall my father attempting to explain the principle to me but even at that age I was aware that the chances of winning big on the pools were extremely small, and felt instinctively that there was something slightly odd about a man who didn’t like football per se actually spending money on it. Of course my alternative plans for the money would probably have concerned more chocolate and perhaps a copy of The Beano, but even so, I’m still not sure I was wrong.
In my teen years, and often in the role of silent observer trying not to get anyone in trouble for my being too young to be there, there were the odd occasion when I would find myself in a bookmakers. Compared to the pools concept that was simply mathematically divergent from common sense as I saw it, the bookmakers was a futuristic alien world which to my distinctly middle class hippy-raised eyes was not entirely pleasant, in fact quite the opposite.
Tired Old Infrastructure Shed
The reason the bookmakers looked futuristic to me n the early 1980s is because I spent most of my time back then worried about nuclear war. Hippy parents might try very hard to create a nurturing, caring environment where everyone is equal and all about loving the planet, but then the go on a march against nuclear weapons and they metaphorically drop this nightmare scenario on you about everything you know and love getting vaporized or irradiated so it glows in the dark and dies.
The bookmakers I was taken into was far too reminiscent of something out of Mad Max. The grilled windows, the graffiti strewn walls, the shuffling clientele wearing that delightful aftershave Eau De Special Brew, and muttering to themselves. The staff seemed not to be working but under a state of siege and the addition later on of bulletproof glass did nothing to improve the place, the message being that they were safe and you were outside with the men who had guns.
Of course these days betting shops a different kettle of fish entirely with more plasma screens than NASA’s launch command center and the sort of bright glowing atmosphere that makes one think of a medical facility rather than bookmakers. The trouble is, of course, that few people would know it has changed so radically, their first impressions made at a young age by the seedy premises and rank atmosphere, and as we all know those first impressions are lasting impressions.
Whilst this now erroneous impression has kept the punters of my generation away, what has kept the next generations from even bothering having a look is the internet. With a plethora of online casinos in UK and their bookmaking equivalents springing up hither and yon, the dear old high street bookmakers days were starting to look numbered. Sites like Bet365 provided an easier, more accessible, less menacing gambling facility than even their own bricks-&-mortar betting shops could.
New World Order
Those that quickly capitalized on this new frontier have done very well from the internet, it’s evident and manifest superiority over the real-world casino/bookmaker culture meaning that as time goes on it will come to dominate the gambling world. For evidence one need go no further than the local Ladbrokes where group operating profits are down 9.3% year on year, despite the digital revenue from internet and mobile gambling rising 22.9% over the same period.
Like any good business from the fruit and veg stall on the corner to online websites in India, Ladbrokes are adjusting to this new marketplace and shedding the costly real-world shackles that no longer make as much economic sense. This means that sixty of their branches will close across the country, as they focus on providing what Chief Executive Richard Glynn called their “digital offer”. Across their sportsbook business the amount staked with them rose 32% so there’s still strong growth to be farmed, but shifting to do so is going to be painful.
“We delivered against all our operational targets, enjoyed a successful World Cup and saw clear growth in key areas of the business,” Glynn said smoothly, adding “The changes put in place have made us competitive and our customers are responding.” Which neatly skirts around the “changes” having cost so much money thus the fall in profits despite the 3.8% rise in revenue over the year, topping some 1.2 billion GBP. The new management, much touted in the gambling news pages, has its work cut out.
Of course those who like to bet on sports in UK have all manner of choices available on the net and despite their rise in digital revenues it is still playing catch-up to the leaders in the field like Bet365. However that will merely drive them to be all the more competitive and as the growth of online gambling continues, as it surely will, the high street bookmakers is likely to go the way of the Dodo in the next few decades. The tragedy of their loss, I’m afraid, completely lost on me.