Ladbrokes has seen profits almost double over the past four months due to heavy losses by its “high roller” telephone gamblers. The rise in phone sales offset a poor performance by the chain’s high street betting shops.
The company says that profits rose by 84% for the four month period to the end of October but excluding phone sales and the cost of its recent advertising campaign, profits dropped by 12%.
Telephone gamblers brought in revenues of £91.8 million for the period but fears that the company is over-dependent on the erratic high-stakes betting market caused the company’s shares to drop 9p to 370.50 this morning (November 15).
Ladbrokes was hoping to shore up its flagging retail takings with the £4.7m TV campaign it launched in October. The ad, created by M&C Saatchi, stars former footballers Ian Wright and Ally McCoist.
The ad is now the subject an Advertising Standards Authority (ASA) investigation after it received complaints that the use of celebrities encourages bravado and could encourage youngsters to gamble (MW 25 October).
The ASA investigation is the first test case for the new controls on gambling advertising following the introduction of the Gambling Act 2005 in September, which lifted the ban on broadcast advertising for UK gambling companies.