Manchester United poor start helps Paddy Power
Reds’ winless beginning to the new season sees gamblers splashing €11m
Thursday 28 August 2014
Louis van Gaal’s stuttering start as Manchester United manager is helping the bookies strike back against the punters, the head of Paddy Power said yesterday.
Despite a stellar World Cup, Paddy’s pre-tax profits sank 13 per cent to €61.6m (£49m) in the first half of the year as a clutch of winning football favourites helped gamblers clean up on accumulator bets.
But so far in the second half, more favourable results – including the Reds’ winless beginning to the new season – have seen gamblers leave behind €11m with the bookie so far.
“Not many predicted that Man United would have had the start they’d had, that’s also helped us,” the outgoing chief executive Patrick Kennedy – a Liverpool fan – said.
Paddy added nearly 150,000 customers during a World Cup in which it took €198m in stakes, more than double 2010. It also profited from a goalless final and unfancied Colombian striker James Rodriguez claiming the golden boot.
But the bookmaker has slowed its high street advance following new restrictions, as well as a rise in the tax rate to 25 per cent from next year.
The looming point of consumption tax – a 15 per cent tax on online gaming profits – will be introduced in December and would have cost the bookie an extra €20m in tax if applied to the first half.
Paddy Power is the latest of the bookies have paid the price for a host of football favourites winning in January and March with a dent in first half profits.
But the firm - like the rest of the industry - is already on the way to making that back as results turn in favour of the layers, helped by Manchester United’s rocky start to the season.
It pays to look past the ebb and flow of results though to look ahead to the real challenges facing the industry. The political climate has long since turned sour with new rules limiting play on profitable but controversial “crack cocaine” gaming machines as well as a consultation on new planning restrictions on betting shops. Duty on machine revenues will be hiked to 25 per cent from next year.
Even if the growth is coming from online gambling, in December a 15 per cent tax hike on those takings will blow a hole in profits. Players will inevitably have to cut back on their marketing costs which - for Paddy at least - has been so successful in drawing in gamblers. For now it would take a brave punter to bet on the bookies.
- 1 Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
- 2 New Zealand 'the best country to work as a prostitute', says sex worker advocacy group
- 3 Purity balls: Girls in the US making virginity pledges as fathers vow to 'protect purity'
- 4 Mother 'will allow son's circumcision in return for release from prison'
- 5 Female Muay Thai champion hustles coaches to give them a beating
Greek hospitals cannot afford painkillers, scissors or sheets as budget cuts bite
Purity balls: Girls in the US making virginity pledges as fathers vow to 'protect purity'
Female Muay Thai champion hustles coaches to give them a beating
Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
Picture of couple posing with beached dolphin 'that later died' causes outrage
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
Report finds that Britain's wages are the most unequal in Europe
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...