-0.6 C
New York
Tuesday, January 25, 2022

Ladbrokes claimed £102m furlough despite online boost

Art

Bookmaker Ladbrokes claimed £102m from the furlough scheme, despite rapid growth in online betting making up for all losses from the closure of stores.

According to accounts released on Thursday, Ladbrokes claimed £57.5 million in 2020, and the BBC understands it claimed an additional £44 million this year.

Entain’s parent company has actually increased revenues since the pandemic began, owing to strong online growth.

Entain stated that the funds “protected 14,000 jobs” and are “under review.”

The majority of those who benefited from the furlough scheme were those for whom Covid lockdowns resulted in significant revenue losses – airlines, pub companies, leisure groups, shops, restaurants, and caterers.

One company stands out in the list: Ladbrokes, the UK’s largest betting shop operator, with 2,845 locations branded Ladbrokes or Coral.

Even though it had to close them for much of 2020 and 2021, it had a lifeline – the internet.

Its parent company, FTSE 100-listed gaming behemoth Entain, has a sizable online gambling business, and customers who couldn’t bet in stores during the lockdown flocked to websites and apps instead.

The Grand National in April of last year broke the record for the largest online sports betting event in the United Kingdom.

Despite the lockdowns, Entain’s 2020 revenues remained unchanged from the previous year at £3.6 billion, and it even made a profit of £114 million. Revenue increased by 8% in the first nine months of 2021.

Through its BetMGM joint venture, Entain is also well positioned to benefit from the explosive growth of online betting in the United States.

Rachael Blackmore winning the Grand National riding Minella Times

£102m furlough claim

Ladbrokes made a large furlough claim despite a strong financial performance.

Ladbrokes Gaming and Betting Ltd, an Entain subsidiary, claimed £57.5 million in furlough in 2020, according to accounts filed with Companies House and published on Thursday.

According to the BBC, the company claimed around £44 million in 2021, bringing the total to £102 million.

According to a BBC analysis of HMRC data, that would be one of the top 20 furlough claims for 2021.

“The furlough scheme was a sensible and highly welcome policy intervention that helped us, as one of the country’s largest retailers, maintain the livelihoods of more than 14,000 retail colleagues on full pay,” said an Entain spokesperson.

“Whilst the virus is still with us and the outlook, although improving, is still far from certain, the Board will continue to keep the situation under review.”

Entain is legally entitled to claim the money, and there is no suggestion that it did anything wrong in making the claim or retaining the money.

However rival bookmaker William Hill opted to return £24.5m of furlough money in August 2020, citing the “strength of the post-lockdown recovery.”

Iain Duncan Smith MP, the vice chair of the Gambling Related Harm All Party Parliamentary Group, said: “The greed of these companies, that derive vast profits from addicted gamblers, never ceases to amaze.

“Any company with a clear sense of morality would immediately hand this money back to the UK taxpayer.”

A number of companies in other industries opted to return furlough funds when the impact of the pandemic proved less severe than initially feared – including housebuilders Redrow, Barratt and Taylor Wimpey, Games Workshop, and distribution giant Bunzl.

Flutter, owner of the Paddy Power betting shops, did not tap the furlough scheme at all.

Betfred shop in Stockport, closed during the pandemic

Betfred claimed at least £46.6m in furlough

Despite rising profits, Betfred, which operates 1500 betting shops, made significant furlough claims.

According to company accounts, it claimed £28.1 million in furlough for the fiscal year ending September 27, 2020.

Furthermore, according to HMRC data, a Betfred subsidiary company, Done Brothers (Cash Betting) Ltd, claimed between £18.5m and £37.5m from December 2020 to May 2021. (which only gives a range, not a specific figure).

The total for the group is between £46.6m and £65.6m, though this does not include any claims made in October and November 2020.

Betfred Group’s turnover fell from £621 million to £525 million in the fiscal year ending September 27, 2020, according to the most recent figures available, as lockdowns forced its stores to close.

However, the group’s profits increased from £171 million to £205 million, boosted by one-time gains such as £98 million from a successful court case against HMRC for VAT paid on fixed-odds betting terminals from 2005 to 2013.

“Thanks to the Government’s Job Retention [furlough] Scheme, we have not had to make a single redundancy due to the pandemic, and we will continue to invest in our high street shops,” a Betfred spokesman said.

 

SourceBBC
- Advertisement -

More articles

- Advertisement -

Latest article