Ladbrokes makes Gibraltar move; egaming H2 profit, turnover down

LADBROKES will join William Hill in relocating its online betting division to Gibraltar, the UK company announced this morning as part of its half year results update.

The news came as Ladbrokes announced a 2.3% fall in revenues to £84.6m for its egaming division in the six month period to the end of June, from £86.6m in the same period in 2008. Operating profit for the division fell by more than a fitfth , to £20.8m from £26.2m.

Ladbrokes chief executive Chris Bell said the key challenge for the company’s egaming division in the period had come from rival online gambling companies that did not pay UK taxes or levies, and that the company’s decision to move its online betting division to Gibraltar was “driven by clear commercial necessity”. As reported on EGRmagazine.com, William Hill announced that it would move its online betting and fixed-odds to Gibraltar earlier this week.

The business would “remain tightly focused on cost” as it reduces marketing spend for its online gaming products and focuses on monetising its player base, he added.

Ladbrokes will launch a new-look sportsbook during the second half of the year as part of its drive to reverse the downward trend, the company revealed, with younger players a particular target. It will feature a greater product range, video-streamed sports and improved functionality.

The bookmaker said it had been successful in recruiting players in the period, with sign-ups up 5.1% and active customers up 9.4%. However, this was offset by a poor gross win margin for the sportsbook and lower average player yield, which fell from £160 to £143.Online casino in particular experience softer yields, as high staking players cut down on their spending.

Net sports betting revenues fell by 5% from £32m to £30.5m, although amounts staked rose 11% and the number of active players rose 4% during the period, and in-running betting activity levels were up 48%.

Sports margins fell to 7.2% on last year’s 8.1% as sporting results went in favour of the punters.

Casino active players grew 31.3% thanks to a UK TV advertising campaign, but net revenue grew just 0.8% to £26.8m because of lower spending from the high staking customers.

The European online poker marketplace continued to be challenging due to the high liquidity enjoyed by US-facing sites. Ladbrokes’ poker net revenue fell 13.6% during the period to £12.7m. Key areas of focus in the second half include product and service enhancements and the rollout of the Italian poker service.

However Bingo was more positive, as net revenues grew 29.8% to £6.1m. Ladbrokes said player loyalties looked strong and it expected to see continued player and revenue growth in the second half.

Ladbrokes group net revenues were down 6.6% to £504.4m, compared with £539.8m in 2008 and ore-tax profits fell 3.9% to £131.3m, compared with £136.6m last year.