Bookies' bonanza comes at a price

WELL, it ain’t such a bad life being a bookie after all. Just a year after moaning and groaning to all and sundry about the declining margins on its racing business, the biggest bookie of them all, Ladbrokes, has announced record profits for the first six months of this year.

The figures are impressive if you are a Hilton Group shareholder or a friendly analyst. Ladbrokes announced a 51 per cent increase in operating profit to 153.7million while UK retail profits were up a vigorous 44 per cent.

To be fair there are some special factors in the results. People should beware of Greeks bearing gifts and punters should beware of Greek national sides winning football tournaments. And after last year’s bloodbath for the layers at Cheltenham, a mere five winning favourites obliged at this year’s Festival, and most of us still have the scars to remember it by.

Then there are the underlying aspects of growth like the appalling fixed odds betting terminals (FOTBs), where Ladbrokes now has an average of 3.9 per shop compared to the statuary limit of four. The key word in these dreadful contraptions is "fixed",

with the FOTB "roll out" across the Ladbrokes estate actually accounting for nearly 60 per cent of the growth in the Ladbrokes "gross win".

The Ladbrokes e-gaming business is only in its fourth year and is still dwarfed by the better-established gaming options. However, operating profit in options like the online poker schools nearly doubled to 12.1million.

The key aspect of the Ladbrokes figures, from a horseracing point of view, is that racing’s share of this rapidly expanding market has stabilised at just over 40 per cent of the betting shop business.

We should remember it is quite recent history when many people were predicting the end of betting shops, as business moved online and offshore.

Now Ladbrokes is recording half-year growth of 14 per cent in its high street gross win and they - and the rival chains - are still gobbling up betting shops, just as fast as they can.

Far be it from me to rain on this bookies’ parade, but I would just mention a couple of flies sticking in this lucrative ointment.

Firstly, these sensational results bring into sharp relief the disreputable campaign of the big bookies to increase their margins at the expense of the punter and the shameful participation of the British Horseracing Board in these efforts.

This has mainly consisted of attempts to change, undermine or weaken the vigorous on-course market on which starting prices are set, and thus competitive prices are maintained for the punter.

When the Government succumbed to the long campaign to remove betting tax, the understanding was that we would be moving into a world of high turnover and lower margins. That environment is good all round but perhaps we should not be surprised that corporate greed still attempts to change that environment into one of high turnover and high margin for the layers.

Secondly, Ladbrokes and indeed other bookies should take a careful look at the current of criticism emerging from their own staff in the columns of the Racing Post and other papers. These same papers depend on adverts from the bookies as their lifeblood and therefore tend not to bite the hand that feeds them.

However, even in the Ladbrokes world of patsy staff councils (which substitute for real unions), concern is rising at the deterioration in working conditions that the much longer hours are imposing on its workers without any feeling of sharing in the company’s boom time in profits.

In the short term, the Ladbrokes senior executives with their happy shareholders and bulging satchels can laugh off this concern. In the longer term these things have a way of coming back to haunt a company, as British Airways is finding out.

NAYYIR will be marginal odds-on in today’s Celebration Mile feature event at Goodwood, but deserves to be and rates a confident nap. For those with more adventure in their souls, take a look at the first at Cartmel where 14 pretty useless Flat-raced three-year-olds line up to see if any of them will make up into a decent hurdler.

The answer is that there are three who just might. These are the ex-German, Prairie Sun, the Cheveley Park-bred Show No Fear and my particular fancy, the heavily raced, but tough and consistent, Siegfrieds Night. A lucrative forecast combination may beckon here.