The boss of Ladbrokes has launched an extraordinary attack on his bookmaking rivals by slamming the “race-to-the bottom offers” they offered during what was the worst Cheltenham Festival in “living memory”.
Jim Mullen, chief executive, fired the broadside as Ladbrokes unveiled first-quarter results that showed the company was able to weather the Cheltenham storm in part because favourable football results offset its horseracing losses. But he was critical of other bookies, whom he claimed had “abandoned bookmaking principles” in pursuit of punters.
“There were some real race-to-the bottom offers which was a race we were not going to get involved with,” he said. “The difference in offers between Cheltenham and Aintree highlighted the fact that some of the sector lost their mind during that festival.”
The bookmaking industry, which fared better at this month’s Aintree Grand National meeting, is estimated to have lost more than £60m during Cheltenham in March after a host of favourites galloped home. Less than a week after the festival finished, William Hill, Ladbrokes’ bigger rival, rattled investors by sounding a profit warning that it partly blamed on the racing results.
Mr Mullen claimed that as “a well-managed, well-governed business” Ladbrokes had expected to suffer heavy losses at Cheltenham. In what appeared to be a thinly veiled reference to William Hill he added: “We managed to absorb it, therefore after the Cheltenham Festival we didn’t have to go back to analysts and investors.”
A William Hill spokesman said: “Bigger companies will suffer a bigger impact when events like Cheltenham go against you – and as one of the bigger players in the market we did see a bigger impact.”
William Hill also blamed its profit warning on new anti-problem gambling measures that allow online punters to take short time-outs or longer exclusions from betting. Ladbrokes, however, said the impact of those measures had not taken it by surprise.
“That’s all been fully blended into our numbers, that’s why we don’t talk about it,” Mr Mullen said. “It’s well within the plan and we’ve managed the business accordingly.”
He warned that if Leicester City, which were 5,000-1 outsiders at the start of the football season, keep up their current form and win the Premier League it will cost Ladbrokes about £3m. Despite that, shares in the bookie rose 4.6pc to 121.9p after it pleased investors with its first-quarter numbers that showed the turnaround plan Mr Mullen started last year is on course.
Ladbrokes, which last year suffered its first annual pre-tax loss in a decade, said net revenue was up 10.6pc in the three months to the end of March, including a 36.5pc surge in digital revenues, an area Mr Mullen hopes to grow.
Key to Ladbrokes’ future is its ambitious £2bn tie-up with rival Coral, which is being investigated by the Competition and Markets Authority (CMA) and could be blocked because the merged company will have too many betting shops. The CMA had been due to issue its provisional findings this month but has now delayed publication until mid-May.
“I think they’re being thorough,” Mr Mullen said of the postponement. “The most important thing to me is the relationship [with the CMA], that’s still strong.”
Ladbrokes has almost 300 shops in Belgium, where the government has suggested gaming taxes might be hiked.
“I was in Belgium on Monday, meeting with the team,” the Ladbrokes chief said. “We’re fully prepared, ready for an appeal if need be, ready to offer other counter proposals.”