Closure of Irish shops to follow 65pc plunge in Ladbrokes profit
LADBROKES' first-half profit tumbled in Ireland as punters beat the bookies on many horse races and soccer games while the recession deterred others from gambling at all.
The betting chain which owns 208 Irish betting shops and 2,100 in the UK, posted a 65pc fall in operating profit to £5.4m (€6.3m) in the Republic as fewer bets were placed and events such as Cheltenham saw favourites romp home, boosting Ladbrokes' payouts to gamblers. Overall profit slipped 3.9pc to £131.3m (€153.5m), prompting the bookie to cut its dividend, announce plans to sell its Italian retail business and move its online sports' betting to Gibraltar to save about €7m.
"The environment in Ireland is particularly challenging," the company said yesterday. "In response to the challenging environment, the business continues to maintain a tight focus on cost control."
Closed
Ladbrokes said 36 bookies have closed across Ireland so far this year and it plans to shut another five unprofitable shops before Christmas. Ladbrokes has expanded rapidly on both sides of the border in recent years, buying chains such as Eastwood, which belonged to boxer Barry McGuigan's former manager Barney Eastwood, and by opening new stores close to long established rivals.
The Irish results would have been worse but for Finance Minister Brian Lenihan's decision to postpone plans to double gambling taxes. The taxes would have boosted the bookmaker's tax bill by €3m this year. Justice Minister Dermot Ahern is reviewing the gambling industry in Ireland and plans to introduce legislation to legalise conventional casinos and other forms of gambling.
Most of the 36 bookies which closed belonged to William Hill.
Rival Paddy Power opened seven bookies in the first half. The Irish bookmaker said it won't shift on-line sports-betting operations to Gibraltar after announcements by Ladbrokes yesterday and rival William Hill last week. Online bookmakers based offshore pay about 1.5pc in tax compared with 15pc for UK-based operators. Paddy Power uses the Isle of Man for its operations.
"It gets to the point of 'last man standing,' it really gets to be untenable," Ladbrokes chief executive Christopher Bell said about the move to Gibraltar. "We made it quite clear we wanted to stay in the UK."
- Thomas Molloy
