Ladrokes Earns More from Touch Screen Roulette Machines Compared With Horse Racing
On August 7th, 2008, revenues from touch screen roulette machines in the betting shops of Ladbrokes have surpassed the earnings from traditional horse racing wagers-the first product of the company to do so in the 122 years of its existence. The average weekly total per machine lost by players enjoying Ladbroke's UK Betting shops improved by 18.2 percent to UK Pounds 676 million pounds during the first six months of the year.
Average over the counter takings improved by 0.9 percent to UK Pounds 251.80, with horse racing accounting for just half of the total, steadily losing share to other sports wager foffers like roulette machines and football. Earnings from Ladbrokes' 8,100 machines for the first part of the year were 142.5 million pounds, benefitting from the recent deregularization of the market that has allowed Ladbrokes' on television and open for late evening dealing. Almost seven years ago, about 2/3 of Ladbrokes' shop earnings were from horse racing but roulette machines and football have attracted a new batch of players.
The company's finance director, Brian Wallace, warned investors that 7 years of growth from the roulette machines was now likely to slow down as the market matured. He expects machine earnings to improve by eleven percent for the 2nd half of 2008, prompting concerns among some gaming analysts about the future prospects for the betting shop industry.
Its rival bookmaker William Hill has also warned that machine growth is expected to slow down. Gross wins from Internet bookmaking, poker and casino operation of Ladbrokes improved twenty-three percent to 96 million pounds but the organization in effect gave away 9.4 million pounds in free wagers, promotions and bonuses as well as spend 19 million pounds on marketing expenses involved in attracting and retaining players.
As a result, operating profit from the e-gaming division was almost flat at 26.2 million pounds. The chief executive of Ladbrokes, Chris Bell commented that he did not expect any massive promotional activity on the high street to reach the levels seen on the World Wide Web. Nevertheless, Ladbrokes debut their reward points-based loyalty card scheme in June, which has already seen one million pounds in free wagers redeemed by players.
Bell and the head of e-gaming, John O'Reilly, have been petitioning Treasury officials to substantially scale down the fifteen percent gross profits tax charged on online sports bookmakers based in Britain. They argue that their online business will struggle to compete against their rival that are located in offshore tax havens.
William Hill and other companies are making a similar argument to Treasury officials but they and Ladbrokes remain committed on following a gentleman's agreement under which well-known British bookmakers promised in 2001 to bring their World Wide Web business on shore, in exchange for the modification of betting duty with a bearable tax on gross profits.
August 25, 2008
Jeneth Grenville
Copyright © Roulette.cd 2004