Ladbrokes claimed £102m furlough despite online boost

By Ben King
BBC News Business Reporter

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Image source, Getty Images

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

Accounts published on Thursday show that Ladbrokes claimed £57.5m in 2020, and the BBC understands it claimed a further £44m this year.

Entain’s revenues have increased since the pandemic started, thanks to strong online growth.

Entain said the money protected 14,000 jobs, and is “under review.”

The biggest claimers from the furlough scheme were mostly those for whom Covid lockdowns meant steep falls in revenue – airlines, pub companies, leisure groups, shops, restaurants and caterers.

One company stands out in the list – Ladbrokes, the UK’s largest operator of betting shops, with 2,845 premises branded Ladbrokes or Coral.

Even though they had to be closed for large portions of 2020/2021, there was a way out – it could go online.

Its parent company, FTSE 100-listed gaming giant Entain, has a big online gambling business, and customers who couldn’t bet in shops during the dark days of lockdown flocked to websites and apps instead.

Last April’s Grand National broke the record for the biggest online sports betting event in the UK.

This meant that despite lockdowns, Entain’s 2020 revenues were unchanged from the year before at £3.6bn, and it even managed to record a profit of £114m. The revenues for the first nine months in 2021 grew by 8%.

Entain’s BetMGM joint venture is another way Entain can benefit from the rapid growth in online betting in America.

£102m furlough claim

Ladbrokes claimed a significant furlough despite a solid financial performance.

Accounts for Ladbrokes Gaming and Betting Ltd, a subsidiary company of Entain, filed with Companies House and published on Thursday show that it claimed £57.5m of furlough in 2020.

The BBC understands the company claimed around £44m in 2021, taking the total to £102m.

BBC analyses of HMRC data show that it would rank among the top 20 furlough requests for 2021.

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

“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 has the legal right to the money. There is nothing that suggests Entain did any wrong by retaining or making the claim.

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 is the Vice Chair of the Gambling Related Harm All Party Parliamentary Group. He stated: “The greedy of these companies that derive enormous profits from addicted gambling people, never ceases amaze me.”

“Any business with clear moral values would return this money to the UK taxpayer immediately.”

Many other companies, including those in the housebuilding and games industries, decided to repay furlough funds after the pandemic’s impact was less than they initially thought.

Flutter, the owner of Paddy Power’s betting shops did not tap into the furlough program at all.

Betfred claimed at least £46.6m in furlough

Betfred has 1500 betting outlets and made significant furloughs despite increasing profits.

It claimed £28.1m in furlough the year ending 27 Sep 2020, according to company accounts.

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

The total for the group adds up to between £46.6m and £65.6m, though these figures don’t include any claims it may have made in October and November 2020.

Betfred Group saw turnover fall from £621m to £525m in the year ending 27 September 2020, the latest figures available, as lockdowns forced its shops to close.

However the group still made substantial profits, up from £171m to £205m, lifted by some one-off gains including £98m resulting from a successful court case against HMRC for VAT paid on fixed-odds betting terminals from 2005 to 2013.

A Betfred spokesman said: “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 shops on the high street.”

Source: BBC.com

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