The parent company of high street bookmaker king Ladbrokes announced huge profits after a surge in online activity during lockdowns. Ladbrokes may be most well-known for its sportsbook, but it also operates a hugely successful online casino with a range of video slots and live casino titles.
In March 2020, the UK Government announced a nationwide furlough scheme that would help support employees and businesses because of the restrictions it imposed to support the ongoing fight against Covid-19. Most businesses in the UK took up this option, as the times were uncertain. However, there were some businesses that saw their profits soar during the lockdowns. Were the furlough payments really needed, or was it just outright greed?
We take a look at one of the UK’s largest live casinos and look at why it should pay back its furlong payments to UK taxpayers. One thing is for sure, the UK public is angry, and the cost of not paying back some of its furlong payments is likely far higher than the brand reputation lost and people boycotting the live casino and sportsbook.
Furlough Claims: Accounts show that Ladbrokes claimed £57.5 million in 2020 and £44 million more in 2021, making a total of £101.5 million over the 2 years. However, it has since emerged that the gambling giant saw its online activity skyrocket, which led to major revenue.
Ladbroke Ownership – Entain UK LSE Company Own Ladbrokes
Ladbrokes is owned by Entain, which operates on a global scale, and was the subject of a takeover bid, even during those ‘difficult’ times. US giant, Draftkings, was the interested party, and it is thought that Entain would have accepted a bid somewhere in the region of £16 billion. However, no deal materialised after the two parties were unable to agree on a fee.
During the lockdowns, Entain was forced to close the doors of both its Ladbrokes and Coral shops, which are a common sight in towns across the UK. Sporting events were put on hold, resulting in revenues sinking from £983 million to £681 million for 2020.
As well as its sportsbook, Ladbrokes is well known for its live casino games from brands like Evolution live, and a catalog of live dealer titles, meaning that the company must have known that revenue was still going to be generated even with high street shops closing?
Controversy as the betting & live casino operator still records record revenues
In a report by the Guardian newspaper, it states that although revenues may have slumped £300 million, the betting operators still recorded healthy numbers. Additionally, owners Entain saw its revenues hit an almighty £3.6 billion for 2020, which possibly played a key role in the valuation Entain put on itself.
The astronomical value Entain wanted has inevitably led to people asking, ‘did they really need £102 million of government funds, which will ultimately be paid back by the hard-working taxpayer?’. Many think not, and Ladbrokes’ image has ultimately been tainted due to these new findings. Ladbrokes saw its profits increase, as many players sought gambling activity from isolation in their own homes.
There is definitely an ethical argument here, but Entain is standing its ground by claiming that the furlough money was much needed.
Public Outrage–Why should this company keep its furlong payments?
It is understandable that a large number of the general public have expressed their disgust with the latest news. Many people lost jobs, personal assets, and even entire businesses due to the restrictions, and yet it would appear that a highly profitable company is claiming additional benefits while those truly in need suffer.
If nothing else, many claim this money would have been better spent on providing additional funding for medical supplies–and it has to be said that they have a point. Meanwhile, rival high street bookmaker William Hill, now under the ownership of 888 Holdings, paid back £24.5 million in furlough claims, whereas Flutter Entertainment, owner of Paddy Power, didn’t claim any furlough at all.
All things considered, it certainly looks as though Ladbrokes (Entain) has acted on pure greed. The question that now remains is, ‘will these actions come back to bite them’. The next few months to a year will be a strong indicator, and if Ladbrokes will regret its actions or not.