Ladbrokes blames betting tax hike for plan to shut on-course bookies
UK betting group Ladbrokes is likely to terminate all its on-course bookmaking activity in Ireland after the betting tax was doubled to 2pc in the latest Budget.
The betting firm also sponsors some races at certain fixtures at those racecourses. However, Ladbrokes Ireland director Jackie Murphy said that the race sponsorship at locations where it exits the on-course betting shops will also cease.
It will also slow investment in its Main Street estate. Ms Murphy told the Irish Independent that the costs of operating the on-course betting shops as a result of the increase will make them unviable. She claimed it's unlikely that any other operator will take them over once Ladbrokes' contracts expire, unless they want to operate them on a loss-making basis.
"I would be surprised if anyone else goes into them," she said. "No one would be doing it to make money."
Ladbrokes operates betting shops at eight racecourses: Galway, Limerick, Killarney, Punchestown, Listowel, Navan, Gowran Park and Clonmel. Ms Murphy said that existing contracts on some of those on-course betting shops expire later this year or early next year, while Punchestown runs until 2020. She said that Ladbrokes pays either a fixed rent or profit share to operate the outlets. The contracts are held with the individual racecourses.
She acknowledged that smaller racecourses may come under pressure as a result of the decision to cease race sponsorship at courses where it has betting shops.
Ladbrokes does not sponsor any races at Galway, but has operated the betting shop there since about 1995. It's operated the Limerick outlet for about 10 years, and Punchestown for seven years. Turnover at each of the outlets varies widely.
Ms Murphy said that a race day at Killarney might see a its on-site betting shop take €6,000 in bets, but the figure could be as high as €60,000 at Punchestown, depending on the event.
She said it's possible that Ladbrokes may seek to retain the contract at Punchestown given that its profile is higher and it receives TV coverage, but that even its presence there will have to be reviewed.
She insisted the only way to make the on-course betting shops it operates in viable for Ladbrokes or any other operator would be to make them available rent-free, which she accepted is not a feasible scenario for the racecourses.
Ladbrokes operates 141 of its own outlets in Ireland, having closed more than 50 in 2015 following an examinership process.