Big Wins Lower Earnings for Ladbrokes After First Quarter 2013
Ladbrokes is one of the oldest sportsbook operators in the United Kingdom; one of those companies you always expect to do well due to its longevity and outstanding reputation. Unfortunately, Ladbrokes isn’t expecting to have such a great quarter, forced to issue a shock profit warning to its shareholders as its shares dropped 8% with the poor performance. On the plus side, for customers anyway, that translates to an increase in wins for Ladbrokes’ sports bettors.
Ladbrokes held the position as the largest bookmaker in Great Britain, operating more than 2,000 land-based betting shops, but has since fallen to the number-two spot, behind William Hill. Its rival has taken a substantial lead in online gambling revenue, but Ladbroke’s officials are certain that their profits will return to their higher status quo in the very near future, for various reasons. Ladbrokes online gambling sector, for one, is expected to rise as the company has put a great deal of effort, and funding, into the enhancement of its online sports betting website.
The reduction in profits has been attributed to several key factors, including higher taxation of on physical betting machines and a significant upswing in customer winnings. In a statement, Richard Glynn, CEO of Ladbrokes, blamed British market conditions. “The trading environment and economic conditions since the start of the year have remained challenging.”
Ladbrokes made it clear that its head officers were expectant of a lower quarterly report. The government recently imposed a higher rate of 20% taxation on in-house, high street game machines, as well as other elevated operations costs. Throw in the extensive winning streaks of its customers, especially in racebook wagers, and the suppressed revenue was inevitable.
As we all know, gambling operations rely on probable odds to make a long term profit. Casinos, sportsbooks, racebooks, they all contribute odds that favor the house. In the same token, there are always upswings and downswings in the average bettor’s routine. Sometimes you win, sometimes you lose, but with sports betting sites in particular, if a streak of favorites win their contests, the bettors’ tend to absorb a much larger amount of money than the operator takes in.
Over the last quarter, there were several races that went to the favorite. Bettors tend to lean towards favorites, because, well, they are the favorites. In addition, there were a considerable number of events that got rained out, resulting in no action and the return of all bettors’ wagers for those events. All things considered, Ladbrokes simply had a bad quarter.
As with all gambling venues, the odds state Ladbrokes will do much better in the following quarter, taking in a lot more from wagers and, with the new website upgrades, will see a lot of its old customers, as well as some new ones, returning to the online sportsbook. Considering how many punters have been boasting big wins at Ladbrokes Sportsbook of late, that alone could bring a large influx of bettors looking to cash in on the bookie’s recent bad luck.