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Bookies Lick Their Lips
Bookies lick their lips
The World Cup will pull in punters like never before - even if it doesn't prove to be a cash cow
Jamie Doward and Nick Mathiason
Sunday June 2, 2002
The Observer
Christopher Bell is a happy man. The Ladbrokes chief executive spent last Thursday wandering around his company's newest betting shop in Manchester's Spring Gardens and he is more than pleased with the results. The shop cost £500,000 to fit out and now boasts gleaming plasma screens, internet connections and a proper cafe serving cappuccinos - 'not just a vending machine on the wall', Bell said proudly.
The store is proof that betting is now big business. Five years ago the UK industry had an annual turnover of around £5 billion and a cloth-cap-and-greyhounds image. This year Bell reckons the figure will be more like £11bn, thanks in part to the way betting on football has brought in a younger, hipper clientèle.
'Football is a hearts-and minds-product. It's now screened every day of the week and that has helped attract younger customers,' Bell said. Bizarrely, the launch of the National Lottery seems, to have benefited the bookies. 'It's helped take the stigma away. Betting is now on people's radar,' Bell said.
Predictions for this World Cup back this claim. The UK bet £40 million on USA '94 (when England were notably absent) and £85m on France '98. 'The World Cup is now the key event for us,' Bell said. 'You've just got to look at the difference in scale compared with the last time.'
This World Cup the wager is predicted to rise to a staggering £250m.
But the success or otherwise of the England team will be crucial. Sportingbet.com, the biggest online sports gambling site, reports that as soon as the national team packs its bags, domestic punters stop betting.
Group finance director Andrew Mciver said: 'There's a big Irish following for this World Cup. We had been taking money every day, but since Roy Keane went home we haven't seen a single penny.'
For Sportingbet, the worst outcome would be if Cameroon were to win. The firm offered good odds, and punters reacted enthusiastically. 'So many people are offering prices that if you alter them a smidgen, people react,' Mciver said.
This is especially true for this World Cup. Punters in the Far East - who tend to bet more heavily than their western counterparts - are scouring the globe for the best deals. Mciver points out that this World Cup has a truly global following, with China, Japan and Korea stimulating interest in the Far East, the added attraction of the US qualifying prompting Americans to have a flutter, and a strong European showing. Global betting on the World Cup could be as high as £2bn if illegal gambling in the Far East is included.
The internet has played a major role. Around £50m will be bet by UK punters online this World Cup, according to Ladbrokes. 'This is the first World Cup where the internet plays a part,' Bell said. 'It makes the event time-zoneless. You can bet in any language, any currency. Between 10 and 20 per cent of takings will be through the web.'
Domestically, the biggest driver has been the abolition of betting tax. Since the tax was abolished last October turnover is up nearly 70 per cent. Monthly turnover is now £1.3bn, and the full-year figure could dwarf the industry's own predictions. 'The World Cup, combined with zero taxes for punters, can only accelerate the pace of change in a booming sector of the economy,' said Professor Leighton Vaughan Williams, director of the betting research unit at Nottingham Trent University.
The abolition of betting tax has also attracted overseas punters. 'The UK is set to establish itself as the key player on the international stage for betting on sports events. We see clear evidence of this happening, and we predict that betting turnover will continue to rocket, particularly on the internet,' said Dr David Paton, also of Nottingham Trent University.
The internet bookies are now looking to use the World Cup as a marketing tool. In a one-off promotion, Sportingbet recently wiped out the 11 per cent margin it makes on each bet to attract new punters. The move meant the internet firm signed up more than 1,000 punters on the day.
'It's a great opportunity to recruit customers, rather than an opportunity to make money,' Mciver said.
The number of games, coupled with what Mciver terms 'the predictability of the outcomes' means the event is unlikely to be a cash cow. Sportingbet has looked to dilute the risk of a huge payout by limiting the amount punters can bet. The maximum it will accept from an individual is £25,000. Its maximum exposure to any one game is £150,000.
The World Cup's marketing potential is not confined to punters, however. The venture capitalists who own William Hill, Britain's second-largest bookie, decided that tapping the markets for cash during the World Cup was too good an opportunity to miss. A float date of 17 June is slated: the day two second-round matches are scheduled.
Last week, William Hill's shop fronts were covered with World Cup betting advertising and a huge poster inviting punters to bet on the company's fortunes. And despite difficulties with high-profile public offerings, it looks like the World Cup has sprinkled its magic.
An incredible 40,000 individual investors have asked for a Hills' prospectus. 'They're pushing the growth story to increase the number of private investors,' said one leading gaming analyst, who cautioned that institutions need more convincing.
A William Hill spokesman said: 'The good news on the World Cup is about timing. We had to get the issue of horseracing data out of the way. We had to have a good year trading on the internet. We needed the effects of tax-free betting coming through and the fact that the World Cup is on raises the profile.'
Not that the bookies will always clean up. To engage punters, betting firms need to offer odds on all games. But as Mciver said: 'Brazil-Costa Rica? You know which way that one is going to go.'
Bleach, boots and bandages
Football crazy William Hill is offering odds of 4-7 that David Beckham will sport two or more different hairstyles.
It also has odds of 13-2 that the golden boy will wear golden boots in his opening game.
Cantor Index is offering an 'injury bet', in which gamblers predict how many players will have to be carried off the pitch on a stretcher.
It believes between 145 and 155 players will make their exit this way.
The World Cup will pull in punters like never before - even if it doesn't prove to be a cash cow
Jamie Doward and Nick Mathiason
Sunday June 2, 2002
The Observer
Christopher Bell is a happy man. The Ladbrokes chief executive spent last Thursday wandering around his company's newest betting shop in Manchester's Spring Gardens and he is more than pleased with the results. The shop cost £500,000 to fit out and now boasts gleaming plasma screens, internet connections and a proper cafe serving cappuccinos - 'not just a vending machine on the wall', Bell said proudly.
The store is proof that betting is now big business. Five years ago the UK industry had an annual turnover of around £5 billion and a cloth-cap-and-greyhounds image. This year Bell reckons the figure will be more like £11bn, thanks in part to the way betting on football has brought in a younger, hipper clientèle.
'Football is a hearts-and minds-product. It's now screened every day of the week and that has helped attract younger customers,' Bell said. Bizarrely, the launch of the National Lottery seems, to have benefited the bookies. 'It's helped take the stigma away. Betting is now on people's radar,' Bell said.
Predictions for this World Cup back this claim. The UK bet £40 million on USA '94 (when England were notably absent) and £85m on France '98. 'The World Cup is now the key event for us,' Bell said. 'You've just got to look at the difference in scale compared with the last time.'
This World Cup the wager is predicted to rise to a staggering £250m.
But the success or otherwise of the England team will be crucial. Sportingbet.com, the biggest online sports gambling site, reports that as soon as the national team packs its bags, domestic punters stop betting.
Group finance director Andrew Mciver said: 'There's a big Irish following for this World Cup. We had been taking money every day, but since Roy Keane went home we haven't seen a single penny.'
For Sportingbet, the worst outcome would be if Cameroon were to win. The firm offered good odds, and punters reacted enthusiastically. 'So many people are offering prices that if you alter them a smidgen, people react,' Mciver said.
This is especially true for this World Cup. Punters in the Far East - who tend to bet more heavily than their western counterparts - are scouring the globe for the best deals. Mciver points out that this World Cup has a truly global following, with China, Japan and Korea stimulating interest in the Far East, the added attraction of the US qualifying prompting Americans to have a flutter, and a strong European showing. Global betting on the World Cup could be as high as £2bn if illegal gambling in the Far East is included.
The internet has played a major role. Around £50m will be bet by UK punters online this World Cup, according to Ladbrokes. 'This is the first World Cup where the internet plays a part,' Bell said. 'It makes the event time-zoneless. You can bet in any language, any currency. Between 10 and 20 per cent of takings will be through the web.'
Domestically, the biggest driver has been the abolition of betting tax. Since the tax was abolished last October turnover is up nearly 70 per cent. Monthly turnover is now £1.3bn, and the full-year figure could dwarf the industry's own predictions. 'The World Cup, combined with zero taxes for punters, can only accelerate the pace of change in a booming sector of the economy,' said Professor Leighton Vaughan Williams, director of the betting research unit at Nottingham Trent University.
The abolition of betting tax has also attracted overseas punters. 'The UK is set to establish itself as the key player on the international stage for betting on sports events. We see clear evidence of this happening, and we predict that betting turnover will continue to rocket, particularly on the internet,' said Dr David Paton, also of Nottingham Trent University.
The internet bookies are now looking to use the World Cup as a marketing tool. In a one-off promotion, Sportingbet recently wiped out the 11 per cent margin it makes on each bet to attract new punters. The move meant the internet firm signed up more than 1,000 punters on the day.
'It's a great opportunity to recruit customers, rather than an opportunity to make money,' Mciver said.
The number of games, coupled with what Mciver terms 'the predictability of the outcomes' means the event is unlikely to be a cash cow. Sportingbet has looked to dilute the risk of a huge payout by limiting the amount punters can bet. The maximum it will accept from an individual is £25,000. Its maximum exposure to any one game is £150,000.
The World Cup's marketing potential is not confined to punters, however. The venture capitalists who own William Hill, Britain's second-largest bookie, decided that tapping the markets for cash during the World Cup was too good an opportunity to miss. A float date of 17 June is slated: the day two second-round matches are scheduled.
Last week, William Hill's shop fronts were covered with World Cup betting advertising and a huge poster inviting punters to bet on the company's fortunes. And despite difficulties with high-profile public offerings, it looks like the World Cup has sprinkled its magic.
An incredible 40,000 individual investors have asked for a Hills' prospectus. 'They're pushing the growth story to increase the number of private investors,' said one leading gaming analyst, who cautioned that institutions need more convincing.
A William Hill spokesman said: 'The good news on the World Cup is about timing. We had to get the issue of horseracing data out of the way. We had to have a good year trading on the internet. We needed the effects of tax-free betting coming through and the fact that the World Cup is on raises the profile.'
Not that the bookies will always clean up. To engage punters, betting firms need to offer odds on all games. But as Mciver said: 'Brazil-Costa Rica? You know which way that one is going to go.'
Bleach, boots and bandages
Football crazy William Hill is offering odds of 4-7 that David Beckham will sport two or more different hairstyles.
It also has odds of 13-2 that the golden boy will wear golden boots in his opening game.
Cantor Index is offering an 'injury bet', in which gamblers predict how many players will have to be carried off the pitch on a stretcher.
It believes between 145 and 155 players will make their exit this way.