When will the Credit Crunch hit the Bookmakers?

Gamla Stan

Gamla Stan

At the Start
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Aug 19, 2005
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Well it has...

Read today that Ladbrokes debt as a percentage of Capital is a whopping 70%!

My employer (Hills) has announced a huge restructure outsourcing jobs to Bulgaria, Gibraltar and Manilla. (I'm for the chop but not too bothered as I have a job lined up elsewhere in another field, more worried for colleagues). Amazingly this has gone unreported in the RP thus far (talking about hundreds of people at risk) but last time someone from Hills went to the RP about something similar, there was a nasty witch hunt.

Anyone think some of the big names will be in Administration by the end of the year?
 
Our call centre (SJ's in Wantage) closes in just over 3 weeks time with the business transferred to the call centre in Gibraltar.
 
Traditionally betting has been considered recession-resilient rather than recession proof. There are plenty of stats that demonstrate that. As bookmaking is a cash generating machine ( cash cow) many are quite highly leveraged ( lots of debt relative to profits)

Betfair/ broadband were not around in previous recessions but even so only those that have overextended themselves by say, buying/ leasing too many new shops are likely to be in an irrecoverable position.They will tighten things up and make savings where they can but I would not expect the industry to suffer many failures amongst the larger players.
 
Interesting Arkwright, I know a couple of people who work for SJ in Gib, how does that leave you?

Gib will be flooded with Bookmaking/Gambing firms soon enough.

I wouldn't be surprised to see some big mergers this year from the "top 10" Bookmakers. Hills, Coral, Bet Fred and Ladbrokes are far far too reliant on their shops and telephone betting operations which are well in decline now.
 
We can take our redundancy and then work a temporary contract over in Gib which seems the logical thing to do with things as they are in the UK at the moment.
A full time move doesn't appeal,but if needs must!
 
Hills & Fred are both moving staff out here. Word is Coral aren't too far behind.

This wouldn't happen if business taxes weren't so high in UK.
 
Though I haven't studied the sector for some time I would think Coral/Gala with its weak bingo business is the most under pressure amongst the big boys. I would guess ( no more than that ) that Betfred's expansion moves may have not been best timed.

Mergers amonst the big companies seem unlikely for a number of reasons. NB I bet they wish they had sold the TOTE
 
To be fair to Boyles, that was a logistical move more than anything. There are a few more satellites that you can pick up here than in Ireland and a pool of trained staff 15 miles away ready for poaching.

Not quite sure why they picked Spain over Gib.
 
Interesting thread. I wondered how long it would be until the credit crunch hit the bookmakers. I don't go in that often any more but there is rarely any more than a handul of people in there... and most of the time they are the staff from my local Chinese restaurant!
 
Things have gone very quiet. If I have a job this time next year I will consider myself to be doing very well. I hope Cheltenham gives the whole industry an injection.
 
cricketfan said:
To be fair to Boyles, that was a logistical move more than anything. There are a few more satellites that you can pick up here than in Ireland and a pool of trained staff 15 miles away ready for poaching.

Not quite sure why they picked Spain over Gib.
Click to expand...

Maybe a currency thing - same currency as Ireland maybe? Cheaper rent up the coast but still the benefits of being close to Gib and others in the industry.

Here's hoping for a good/not as bad as normal Cheltenham anyway :)
 
I'd have thought it was on course bookies who were the more vulnerable, as surely attendances are going to drop.
 
The course bookmakers are already screwed Warbler - Shadow Leader will know far more about it than myself but this perception that the public have that bookmaking is a "license to print money" is far from the actual reality with most of the business now being pumped through a computer.
 
Paddy Power was worth more then Bank of Ireland or Allied Irish Bank last week but I think they were downgraded by a broker during the week which may have changed the situation.
 
There is a myth that bookmaking is a licence to print money; as Irish Stamp says, life is tough indeed as an oncourse bookmaker. A lot of them are struggling and have been for a while now; unfortunately the oncourse market - which gives British racing much of its character - is dying slowly.
 
A friend of mine started making a book in Ireland a few years ago.He specialises in point to point form and loves the festival meetings around the country.He tries not to let his opinion get in the way of seperating mugs from their cash.He would earn a nice wage after expenses which isn't bad for roughly a 3 day week.He is happy earning a wage and has absolutely no intention of taking on the big boys.
 
An explanation of gearing. Gamla used debt to equity, whilst it is a useful measure for comparison, a more important measure is debt to Earnings before Tax, Depreciation, and Amortisation (EBITDA).

Debt:EBITDA gives an indication of how much debt you can service.Capital is an asset value figure and does not show whether you can service debt. Using a house as an example. Capital would be the equity one has but if you have no income then you have to sell to pay any mortgage. Ebitda would be the total income you have to service your debt. Administration comes like repossession when you cannot service debt.
 
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