Taking a punt on the bookies

13 April 2012

With the stock market as nervous as a highly-strung novice chaser, City punters are thinking of taking a chance on racing as a good investment.

Dealers are beginning to look at the big bookmakers quoted on the Stock Exchange as value, pointing to the fact that when times get hard, the gamblers among us still manage to find a pound or two for a flutter on a horse.

David Hood, of William Hill, said: "In times of recession people tend to turn to God, gambling or alcohol. As a company we tend to stand our ground in such times, and we have made big investments in the right businesses. I think that it is reflected in the general business which we are now attracting.

"However, we are purely bookmaking, unlike Ladbroke's, who are into hotels as well. And we have not floated on the Stock Exchange yet. The intention is still to try to find a window for flotation in the early part of 2002." Hood emphasised that the general downturn in share-dealing had not affected their betting business.

"For instance, the betting on the Breeders' Cup at the weekend was the best we have ever had. Undoubtedly that was because of the strength of the team we sent over and our previous success at Belmont Park.

"The results were very good for punters and they latched on to the French runner Banks Hill and also Fantastic Light. They did not hit Johannesburg so hard. But if Sakhee had gone in it would have turned into a very expensive day for us."

On-line bookmaker Sportingbet.dot.com is also doing well and has issued a rosy trading statement. It's chief executive, Nigel Payne, said: "When people have no money they treat themselves to a bet. When they are flush, they also have money to do it."

Irish bookmaker Paddy Power is also flourishing. Trading as Power Leisure their shares are 229p at the moment. That is offpeak, but the shares have come up from 163p.

Market pundits are also expecting companies like Stanley Leisure and Ladbroke's owner Hilton to see an upturn in profits in the near future.

Meanwhile, all this will be grist to the mill to members of the British Horseracing Board as they continue their negotiations with the bookmakers over the funding of the 2002-3 levy scheme.

At present, the offer from the Levy Board's Bookmakers' Committee would produce almost £100m in a full year, comprising of a levy arrangement of £85m plus approximately £13m for the betting-shop servcie of live pictures and information.

However, the BHB, aware that bookmakers' balance sheets are likely to improve under the new gross profits tax regime, are looking for a substantial increase on that offer.

The gap between the two sides is reputed to be as high as £150m so, clearly, there is a lot more negotiating to do if tomorrow's midnight deadline for agreement is to be met.

Henrietta Knight takes delivery of Go Ballistic at her Oxfordshire stable this morning as the latest trainer to handle the popular jumper.

The 12-year-old started out way back with David Nicholson and has also been associated with John O'Shea, Alan King and latterly Richard Phillips.

Go Ballistic, owned by Sheila Lockhart, is a great favourite with the public because of his fighting qualities, epitomised by his game performance in the 1999 Tote Gold Cup when second to See More Business, the year after he won the Jim Ford Chase at Wincanton.

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Taking a punt on the bookies

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