Increased Interest in Online Betting Saves Ladbrokes Coral from Revenue Decline

Major UK sports betting and casino operator Ladbrokes Coral reported encouraging financial results for the start of the year in spite of the slump in business it experienced across its high-street betting shops. This boost in revenue is to be attributed to the substantial increase in interest towards its web-based betting platforms.

The UK gambling giant released its financial results for the first half of 2017 yesterday to reveal revenue of £1.2 billion, which stands for a boost of 1% following the £2.2 billion merger of the two companies that took place last year. The Ladbrokes Coral Group reported a 7% climb in operating profits which stood at £158.3 million.

Betting Shops Revenue Dropped by 6%

The favorable rise in profits resulted mainly from the increased interest of punters towards Ladbrokes Coral’s digital betting platform. Meanwhile, the revenue the gambling company generated across its landbased betting shops during the first half of the year dropped down by 6% to £697.2 million in comparison to the results reported for the same period in 2016. In contrast, Ladbrokes Coral’s revenues from online betting swelled dramatically as the group revealed a steady 18% rise to £374.5 million. These satisfactory figures include revenue from sports betting wagers punters have placed on their mobile devices.

The group’s Chief Executive of Operations, Jim Mullen, explained the favorable trend was to be ascribed to the seamless technology integration between the two companies. Thus, Ladbrokes Coral is expected to produce £150 million synergies by the start of 2019.

The encouraging financial report follows the news of Ladbrokes Coral’s declining the takeover offer of another giant in the interactive betting industry, namely CVG. Last week, it was reported that the Isle of Man gambling operator proposed to purchase Ladbrokes Coral for the sum of £3.6 billion only to be turned down for a second time.

Ladbrokes Coral Remains Optimistic about Potential FOBT Bet-Size Changes

Ladbrokes Coral’s Chief Executive also took the opportunity to express his optimism regarding the severe regulatory measures the industry might face following the release of a review by the UK government. Analysts suggest the UK gambling industry may take a severe hit if local regulatory authorities enforce certain changes, calling for the reduction of bet sizes on the so-called fixed-odds betting terminals or FOBTs. These betting terminals are often referred to as the “crack cocaine of gambling” due to their highly addictive nature.

Last month, campaigners called for a severe reduction to the amounts bettors can stake on fixed-odds terminals and suggested that the bet size should be decreased from £100 to £2 per round. If these changes are indeed introduced, UK betting operators, Ladbrokes Coral included, should brace themselves up for a substantial decrease in landbased profits. Ladbrokes Coral alone can face £449 million in losses from FOBT revenue next year. Despite this, the group’s Chief Executive believes Ladbrokes Coral has no reasons to be concerned about the potential negative impact of the government review.

The Group Reported Unprecedented Interest in Mayweather vs McGregor Match

Mullen also disclosed that the boxing match between Floyd Mayweather and Conor McGregor, which took place this past Saturday, ranked as the biggest sports betting event for Ladbrokes Coral this year, outside of the Grand National. Mullen expressed his surprise at the massive discrepancy between the amounts wagered on the two boxing pros. Mayweather, who is largely considered a veteran in this sport, was greatly surpassed by McGregor as the majority of punters preferred to back the Irishman, despite his long hiatus from the ring. In the tenth round, Mayweather prevailed over his less experienced opponent McGregor, whose background is in MMA fighting, to the benefit of Ladbrokes Coral as it gave the group a nice head-start to the second half of the financial year.

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