Pools firm to spend£14m on spread betting move

[AussieVamp2]

Football pools group Zetters plans to invest its £14million cash pile in building an online spread-betting business to rival City Index and IG Index.

Chairman Tony Wollenburg, who co-founded City Index 17 years ago, said the new venture would focus on financial gambles - share indexes, futures and the like. "Sport may be good promotionally, but financials is where the real money is," he said.

Wollenburg led the group that bought out the Zetter family's 38 per cent stake earlier this year. "We will certainly keep the pools business," he said, reporting profits down 35 per cent at £1.1million. But he said "significant deals" in other areas would make it marginal business.Zetters already has a link with online sport channel 365 Corporation, and followers expect it to develop strongly. "The sports betting website for Euro 2000 worked out very well," said Wollenburg. "We've learned a lot about how to roll out further online products."

[AussieVamp2]

Football pools group bets on a new set of punters

By Lucy Baker


1 July 2000

Zetters, the football pools operator, yesterday reported a 26 per cent fall in full-year profits as it continued to suffer from the impact of the National Lottery.

But Anthony Wollenberg, Zetter's chairman, said the company would re-invent itself as an online "lifestyle" betting operator to become less vulnerable to the tough trading conditions in the pools sector.

Zetters' pre-tax profit fell to £1.14m in the year ended 31 March from £1.54m the previous year, while turnover dropped 34 per cent to £10.4m. The figures included an exceptional gain of slightly more than £1m from the disposal of the group's bingo hall interests last July. Zetters will not pay a dividend, but will instead reinvest its earnings to develop the business.

Mr Wollenberg, who was part of a consortium which bought the Zetters family controlling stake in January, emphasised that the figures released yesterday related to the period before the new management was installed. He said: "We didn't invest in this company on the strength of its pools business. We have plans to move into altogether different areas."

Mr Wollenberg's team, which was backed by Undervalued Assets Trust, an Edinburgh-based investment company, and Durlacher, the corporate finance group, paid £3.6m, or 135p a share for the 38 per cent holding, valuing the company at £9.7m. Zetters shares yesterday ended down 7.5p at 182.5p.

Mr Wollenberg, who co-founded City Index, the spread betting firm, said the strategy for Zetters would include developing "innovative lifestyle products" and gave the example of weather derivatives which would allow people to hedge against rain at Wimbledon. He declined to expand further but confirmed that the group's development could include making acquisitions, adding that Zetters was monitoring the performance of internet companies on the Stock Exchange and had a war chest of £7m. Mr Wollenberg also hinted that the group could establish an offshore operation, following the lead of fellow bookmakers such as Victor Chandler, Ladbrokes and William Hill.

Zetters has already dipped its feet into the crowded internet betting market by announcing a joint venture with 365, the online services company, to offer an interactive sports pools website during the Euro 2000 football championship. A full Web gaming service is expected to be launched at the end of summer in time for the start of the new football season.

The decline in the traditional pools market was highlighted earlier this week when Littlewoods disposed of its leisure division for £161m.

[AussieVamp2]

John Cassy
Saturday July 1, 2000

Zetters is planning to reinvent itself as an international online financial spread-betting operation after a decline in its core football pools business.
The company is understood to have applied to the financial services authority for regulatory clearance to compete with bookies IG Index and City Index by offering punters the chance to bet on a range of stock market prices. Chief executive Tony Wollenberg said Zetters was also talking to potential partners in the US and Far East about tapping "vast" overseas gaming markets.

He hopes that making Zetters available through the internet, digital television and handheld web access devices will attract people who do not use betting shops.

Bets placed on share price changes, interest rate moves and index levels are among the fastest-growing areas of the bookmaking industry. That has led IG Index to seek a £115m flotation next month.

However, Mr Wollenberg warned that Zetters might relocate to an offshore tax haven if the government refused to reduce the betting levy.

The declining popularity of football pools was reflected in full-year results to March 31. Turnover fell by £5m to £10.42m, pre-tax profit slipped from £1.54m to £1.14m