Punters' Olympic betting binge sends Hilton profits soaring

Hilton Group, the owner of Ladbrokes and the hotel chain, yesterday reported a huge leap in gambling activity over recent months, with betting on the Olympic Games taking on epic proportions.

Hilton Group, the owner of Ladbrokes and the hotel chain, yesterday reported a huge leap in gambling activity over recent months, with betting on the Olympic Games taking on epic proportions.

The group said first-half profits rose 72 per cent to £190m, but spoke of a recent dramatic increase in interest in Olympic sports. "In the last Olympics we saw only £100,000 staked on the whole thing. This year we have taken that on one part of the shot put event," Chris Hill, the managing director of Ladbrokes, said. He added many customers had used its internet technology to bet on the Olympics as events were taking place.

Most favourites lost at Cheltenham, Ascot and Euro 2004 this year, contributing to a 25 per cent increase in Ladbrokes winnings over the past six months. The increasing propensity of the British public to bet on all sporting events led to a 51 per cent increase in profits at Ladbrokes to £153m. Internet betting and online gaming, such as blackjack and poker, are also becoming popular, and profits here were up 95 per cent to £12m at Ladbrokes.

Traditional betting shops are also still drawing in the punters. The company has doubled the number of fixed-odds betting terminals (FOBTs) to more than 4,000. These keep punters amused with roulette and virtual-racing games while they wait for the next live race, and helped lift profits in its retail outlets by 44 per cent. Longer trading hours and Sunday openings in more shops have also added to profits.

Its telephone betting division took a hit when televised horse racing was off-air for 10 weeks this year while course owners renegotiated broadcasting rights. But the group regained lost ground to increase its gross win by 73 per cent to £25.9m and more than double operating profits to £11.8m.

So good has Ladbrokes' run been in the first half of the year that it is expecting punters to get their own back. "It is unusual to have results go our way all the time, so we are expecting at some point this year that we may not have as many winners," David Michels, the chief executive of Hilton, said.

He struck a more cautious note on the recovery of the hotels division. The global hotels business has suffered in the wake of the 11 September attacks, terrorism fears, the Iraq war and the outbreak of Sars. However, operating profits increased 19 per cent to £67m, with revenues per room up 9.2 per cent.