Impact of Recession Worse on Bookies Than Expected
Much of the news in the world of bookmaking by week's end dealt with the impact of a worldwide recession. It's been said that the gambling industry for the most part is recession-proof. We learned very early on that this wasn't the case with Las Vegas and now the British bookies are voicing concerns as well.
Ladbrokes (LAD.L), Britain's biggest bookmaker, raised 286 million pounds ($457 million) through a surprise rights issue to cut debt, sending its shares to an eight-week low on Thursday.
That company's CEO said the impact of the recession is worse than expected.
Looking ahead to 2010, Chief Executive Chris Bell said: "Unemployment, in my view, is going to have to peak before things start to get better".
Ladbrokes said it planned to resume dividend payments at the time of its first-half results next year.
Bell also cited an unusual number of football and horse racing events going the punters way.
For the North American facing bookmakers, bet sizes are definitely much smaller than in past years.
"We are seeing more $5 and $10 bets and deposits," said one online gambling affiliate who wished not to be identified. "This is hurting my business."
The majority of affiliates work off of player losses and if they are betting less and winning more, this type of business is a difficult one to sustain.
A historic early run for bookmakers in College Football has helped prop up the industry over the past several weeks but whether that trends continues remains to be seen.
Jagajeet Chiba, Gambling911.com
