It’s a pity billionaire Denise Coates forged her success by preying on human weakness, awarding herself a whopping £265 million salary, because in other circumstances she would surely be a feminist role model.
The daughter of a self-made man, Coates gained a first in econometrics and went on to build her business up from scratch as a result of an instinct for the future and sheer hard graft. As that business grew, she based it in Stoke – bringing good jobs to a languishing post-industrial city – and set up a foundation which has donated £100m to charities like Oxfam and CAFOD. On top of throwing energy into growing her company, she has five children, four of whom are adopted from the same family.
There is a lot to commend there; in 2012, her entrepreneurship was recognised when she was awarded a CBE for her services to the community and business and the following year she was named one of the UK’s most powerful women by BBC Radio 4’s Woman’s Hour.
And yet for all Coates’ undoubted attributes, there is no getting away from the central fact: her online betting company, Bet365, which last year had an operating profit of £682m, has flourished on the back of the UK’s two million problem gamblers; and the obscene salary she pays herself – which is 9,500 times the national average – is money that would have been better staying in the pockets of those individuals who can ill afford to lose on the horses (or blackjack or roulette or football).
Much attention has been paid to the evils of Fixed Odds Betting Terminals (FOBTs) which have been spreading like smallpox in the UK’s most deprived areas where people stake what little money they have (or haven’t) on the vain hope of beating the system.
FOBTs – described as the “crack cocaine of gambling” – are so pernicious because bets of up to £100 can be placed every 20 seconds; often the terminals are juxtaposed with pawnshops encouraging those who have already lost too much to trade their possessions for one more go.
After a succession of suicides were linked to FOBTs, the government promised to reduce the maximum stake to £2. Of course, reducing the maximum stake reduces profits, which in turn reduces income to the Treasury. It took the resignation of sports minister Tracey Crouch to force the government to back down on plans to delay the move until October 2019. Thanks to Crouch, it will now take place in April as originally promised.
This is a step forward; but the understandable focus on FOBTs means the burgeoning issue of online gambling has been less publicised. Which brings us back to Coates. Coates is no stranger to high stakes.
She began her career in her family’s bookmakers business. In 2001, she realised the future of gambling was online and borrowed £15m from RBS with the family firm as collateral. Her risk paid off as Bet365 has grown into one of the world’s largest online gambling companies, taking £52.2bn in wagers last year alone.
But there are many things about Bet365 (and other online betting companies) that don’t sit easy. There’s its name for a start. Bet365 is encouraging consistent, daily betting – not the odd flutter on the World Cup or the Grand National.
Then there’s the whole tax avoidance thing. Like most online gambling companies Bet365 moved its headquarters to Gibraltar because of its more “favourable regulations” (ie the millions they no longer have to pay to the Treasury).
But mostly, the unease with Coates’ success comes from knowing it is built on (and fuelling) an upsurge in online gambling amongst smart phone-using millennials who can place a bet at the tap of a screen.
Unlike casinos and indeed FOBTs, online gambling sites can be accessed day or night, sober or drunk, and using a credit card. The service Coates’ company offers is not merely 365 days a year, but also 24/7.
A recent report from the Gambling Commission showed 25 to 34-year-olds are the group most likely to have more than five online gaming accounts and to have gambled in the past four months.
Online, stakes on casino games like blackjack and roulette have been known to be as high as £10,000. In sports, there is now a panoply of hypotheticals you can take a punt on. Where once the options were fairly limited – the final result, the highest goal scorer – there is much more focus on in-play betting: the first penalty, the first red card or even, in one famous case, whether or not a particular player will eat a pie on camera.
Sure, some of this is harmless – a way of adding a bit of extra excitement to the event; but it’s not the harmless gambling that brings the likes of Bet365 the millions; it’s the problem gambling.
Coates’ financial success also underlines the way in which gambling and football have become totally enmeshed. North and south of the border, betting companies such as William Hill and Ladbrokes sponsor leagues and cups and strips, largely replacing tobacco and alcohol brands.
In Coates’ case, the connection is even closer; Bet365 has 50.01 per cent of the shares in Stoke City FC; Coates’ father Peter is the chairman and her husband Robert is a director.
Online gambling is widespread among players who tend to have a lot of down time sitting around hotel rooms with nothing to do but play on their phones; there is peer pressure too. It gives the players something to bond over, the irony being, of course, that if they are caught gambling on football matches they face a fine or suspension.
I suppose you could argue that making money out of gambling is no worse than making it out of smoking or drinking; all three involve fostering potential addictions.
But in Coates’ case, it’s the sheer scale of the individual profiteering that shocks. The £265m she is pocketing this year alone is more than double the total wage bill for Stoke City.
That sum would be offensive enough in any sphere; but if she were making her money from manufacturing a product or providing a service or creating something of social value, then at least there would be a quid pro quo.
As it is, it is dirty, predatory money, and she’s made no attempt to cleanse it; the addiction charity Addaction claims the sum she paid herself is over 26 times more than the entire industry’s contribution to treatment, and her foundation has made no contribution to that cause.
To say Coates has worked hard for what she has earned is not enough; to say she is not breaching any laws is a cop-out.
The growth of Bet365 depends on persuading more and more people to squander money they cannot afford on a game that, in the long-run, they will always lose. And – successful woman in a man’s world though she is – that’s not something to celebrate.