In the beginning: 1800 - 1899
A love of betting in general and betting on horses in particular is an integral aspect of English heritage. The St. Leger, the oldest Classic in the world, was first run in 1776, four years before the Derby, although race meetings on Epsom Downs date back to 1661 and meetings at York, Doncaster and Chester have their roots in the previous century.
One fine day towards the end of the 18th Century, Harry Ogden, a Lancastrian, informed onlookers at Newmarket Heath that he was prepared to offer prices against each and every horse in a race. Ogden is widely acknowledged as the UK’s first professional bookmaker.
Irrespective of Ogden’s endeavours, betting activity, come the dawn of the 19th Century, was still dominated by transactions among individuals, often racehorse owners and their friends, and horseracing remained primarily a rich man’s preserve. It was the dawning (still some decades away) of the age of steam, railways and mass transport that eventually enabled the public to ‘go racing’ and opened up the Sport of Kings to all.
Betting contracts between punters and bookmakers, in which no money changed hands, often led to debts and ill will. Such contracts were made legally unenforceable under the 1845 Gaming Act, a measure that encouraged bookmakers to insist on cash. Betting shops made an appearance, only to be outlawed by the Betting Act of 1853. Bookmaking continued, albeit with an ‘on course’ focus, although by 1870 the place to be on race days was Hyde Park where bookies pinned betting lists to trees and punters hunted among the flora for the best odds. Such gatherings proved unruly and were eventually banned by the police.
In 1886 Messrs Schwind and Pennington went into partnership as commission agents, their principal objective being to back horses trained by the former at Ladbroke Hall in Worcestershire. It was to prove a fortuitous association.
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From Ladbroke Hall to Mayfair: 1900 - 1949
Enter Arthur Bendir who joined the Schwind/Pennington partnership in 1902 and effectively founded Ladbrokes, a name he alighted on having spotted a signpost to Ladbroke Hall on his first visit.
Bendir brought something very special to the Schwind/Pennington party: he changed the emphasis from backing horses to laying them, choosing to act as both a bookmaker and a punter. Bendir took the unequivocal view that Ladbrokes’ interest in the Sport of Kings was best served by an elite clientele. Ladbrokes’ client base, benefiting from the patronage of members of such clubs as Whites, the Carlton and the Athenaeum, grew rapidly, all the more so through the discreet introduction of members of the armed forces by Guards Officers who were equally discreetly employed as commission agents.
Ladbrokes’ London offices, originally situated in the vicinity of the Strand, moved to Hanover Square in 1906 and, in 1913, the firm graduated to Six Old Burlington Street, Mayfair.
Binder appreciated the importance of attracting talent. One of his most notable appointments was that of Helen Vernet, the elegant descendent of a noble Scottish family. Ms Vernet agreed to become one of Ladbrokes’ representatives on the Rails, the area between the Members and Grandstand enclosures where the serious layers place their money. Vernet earned the respect of her male peers, a reputed minimum annual income of £20,000 and a place in history as the first lady bookmaker.
Bendir had succeeded in his quest to position Ladbrokes as bookmakers to the gentry, so much so that word had it that an entry in Debretts was a prerequisite to opening an account with an enterprise where gentlemen’s obligations or otherwise were settled in the splendour of a four storey Queen Anne house amid feather pens, ledgers, brandy and cigars.
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Stein takes Ladbrokes public: 1950 - 1969
Business continued to flourish, particularly during the immediate post war years, but faded in the Fifties and, in 1956, Ladbrokes was acquired by Cyril Stein and his uncle, Max Parker.
The arrival of Stein, who had been weaned on the bookmaking business, ushered in a new era: for Ladbrokes and for the betting industry. Stein was to emerge as one of the most innovative entrepreneurs of his generation.
Ladbrokes’ directors had, historically, shown a marked reluctance to welcome clients who hailed from less than privileged backgrounds. Stein appreciated the need to retain the firm’s traditional business but he also appreciated the need to attract a wider public. In short order the firm advertised for new customers, introduced ‘no limit’ and ‘ante post’ betting and extended opening hours to facilitate greyhound betting. Just for good measure Ladbrokes also sponsored a horse race at Newmarket: a first for the firm and the forerunner of the bookmaking industry’s now customary race sponsorship activities.
As the law stood, cash bets could only be placed on course and a would-be off-course punter had to demonstrate sufficient creditworthiness to open an account with a bookmaker. The law favoured the prosperous and the less prosperous resorted to the criminal, albeit widespread, practice of placing their wagers with illegal ‘bookies’ runners’. The law was to change and, courtesy of the Betting and Gaming Act, betting shops were legalised with effect from 1 May 1961: more than 100 years after they were outlawed by the Betting Act of 1853.
During the ensuing years betting shops opened at the rate of around 35 a week and eventually peaked at more than 15,000 in 1968. Ladbrokes acquired its first shop in 1962 and although outlets were subject to draconian restrictions (blacked out windows/customers prohibited from loitering after placing their bets) Stein embarked on the creation of a major retail operation. Profits derived from the traditional areas of the business were ploughed into the property venture and fixed odds football betting was introduced to widen appeal.
Bookmakers do not always win. On the last Saturday of 1963 adverse football results cost Ladbrokes more than £1 million. In the same year Ladbrokes achieved a ‘first’ by offering odds on the outcome of the Conservative Party leadership contest. Victory went to Sir Alec Douglas-Home and Ladbroke made a profit of £1,400. The creation of a new income stream was under way and the firm subsequently took £1.6 million on the 1966 General Election: significantly more than on that year’s Derby (won by Charlottown at 5:1).
In 1967 Stein became Chairman of Ladbrokes and duly presided over the Company’s flotation on the London Stock Exchange. The offer for sale of 1,350,000 shares in Ladbroke Group at a price of 10 shillings per share was massively oversubscribed and attracted more than £60 million worth of applications. At this stage the Company’s betting operations encompassed more than 100 betting shops and five credit offices. With a market capitalisation of close on £1 million, the firm that owed its name to a signpost in Worcestershire had come of age. An article in the Daily Mail commenting on the oversubscription concluded: ‘As Mr Stein has been heard to say in an expansive moment: “I am not going to argue whether Ladbrokes are the largest bookmakers in the world. All I can say is that they are the best.”
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A five star acquisition: 1970 - 1989
The Seventies and Eighties heralded a period of exceptional growth and diversification at Ladbrokes. A move from the Old Burlington Street premises to Ganton House near Carnaby Street in the early Sixties was followed by a further relocation to Hanover House in Harrow to accommodate the infrastructure required to support a fast expanding asset base.
The acquisition of the London & Leeds Development Corporation in 1972 signalled Ladbrokes entry into international property development with office projects spanning Amsterdam, Brussels, Paris and the US. Three Dragonara hotels, named after the Company’s first hotel in Malta, were constructed in the UK: the seeds of a venture that would see Ladbrokes develop into one of the world’s premier hotel operators. Casino interests acquired at the onset of the Seventies were divested within a decade but the expansion of the retail betting estate, which by 1973 numbered more than 1,100 shops, continued apace. The focus was on quality locations and, as the Seventies drew to a close, the overall number of betting shops in the UK had consolidated to under 10,000. The three major players in the odds making business were Ladbrokes, William Hill and Coral.
In 1984 Ladbrokes expanded into Belgium through the acquisition of Le Tiercé SA, operators of a 400-strong betting shop chain, while the following year witnessed the Company’s first move into the Transatlantic horseracing industry with the purchase of the Detroit Race Course.
In the UK the first major Act of Parliament in relation to the betting industry for 25 years signalled a significant relaxation of the restrictions on retail betting. As from 1986 betting shops were permitted to (i) display live television coverage of sports events (ii) serve light refreshments and non-alcoholic drinks and (iii) improve comforts thereby encouraging clients to remain on the premises.
To capitalise on the new era of deregulation, Ladbrokes joined forces with other major bookmakers including William Hill and Coral and a number of racecourses to form Satellite Information Services, a television communications enterprise specifically designed to transmit horse and greyhound racing directly into Britain’s betting shops.
Diversification gathered momentum. The acquisition of the Texas Homecare DIY chain, with more than 100 UK outlets, for £200 million was followed, in 1987, by a transaction that transformed the scale of the Company’s hotel operations. Ladbrokes acquired Hilton International (the spin off from Hilton Hotels Corporation which held the rights to the Hilton name in the US) for £645 million from Allegis Corporation.
As the Eighties drew to a close, the betting portfolio was expanded further with the purchase of Vernons, the ‘Triple Chance’ football pools specialists, while the number of betting shops in the UK topped the 1800 mark. Record Group profits of more than £300 million in 1989 marked 20 years of unbroken profit growth.
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Deals and deregulation: 1990 – 2000
Ladbrokes marked the dawning of a new decade with the opening, in Birmingham, of Europe’s largest betting shop in which an entire wall was dedicated to the televised coverage of live racing and other sporting events.
Other innovations included the introduction of race-by-race betting on horses, the use of debit cards by telephone customers and late summer opening (an industry first) to take advantage of the ‘evening racing’ market.
Cyril Stein, the author of so many chapters of ‘the Ladbrokes story,’ retired in 1993 following an inimitable 37-year roll of the corporate dice. With expansion ever to the fore, one of his last throws saw Ladbrokes outline plans for the development of off-track betting operations in Argentina.
The launch of the National Lottery in 1994 provided a major challenge to the betting industry but also heralded further deregulation to enable the sector to compete. In relatively short succession betting shops were permitted to:
- Open on Sundays (in common with pubs and other retail outlets);
- Display events, products and prices in ‘see through’ windows;
- Advertise and market facilities other than on radio and television;
- Extend food and snack services;
- Utilise ‘any size’ TV screens; and
- Introduce slot machines, the Irish Lottery and numbers games such as 49s.
Ladbrokes responded to the arrival of the National Lottery with the purchase of three London casinos -- Maxims, Chesters and the Golden Horseshoe – from City Clubs for £50 million.
With the strategic focus on betting, gaming and hotels, property interests were largely divested as was Texas Homecare, sold to J. Sainsbury in 1995 for £290 million: a £90 million profit.
The following year saw the Government, acknowledging the impact of the National Lottery, reduce betting duty from 7.75% to 6.75%, while customer tax was cut from 10% to 9%. Ladbrokes acquired the 114-strong AR Dennis chain of betting shops in London and the South East – taking its UK outlets to more than 1,900 -- and also introduced electronic point of sale technology into its retail estate, paving the way for fully automated bet capture and settlement.
At the end of 1997 Ladbrokes acquired Coral, the UK’s third largest bookmaker with more than 800 licensed betting offices, from Bass for £375 million. The deal was referred to the Monopolies and Mergers Commission which, in the Autumn of 1998, ruled that the transaction was anti-competitive and ordered Ladbrokes to divest the majority of Coral’s assets. In February 1999 Ladbrokes sold Coral’s UK operations to Morgan Grenfell Private Equity, a subsidiary of Deutsche Bank, for £390 million, while retaining certain retail betting outlets in Ireland and Jersey.
Hard on the heels of the Coral shuffle came Ladbrokes’ agreed £1.2 billion acquisition of Stakis, the Glasgow-based leisure specialists: a transaction that added 54 hotels and 22 casinos to an enterprise that now ranked as the UK’s second largest hotelier after Granada Group. The hotels were rebranded under the Hilton banner and, to reflect the scale of the hospitality operations, Ladbrokes changed its name to Hilton Group which comprised two divisions: Hilton International and Ladbroke Betting and Gaming.
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Ladbrokes. com, Hilton and a £4 billion payout: 2000 onwards
The Ladbroke arm of Hilton Group celebrated the year 2000 by replicating its across-the-board array of products and services on the Internet: a vital investment in the global growth potential of the online betting and gaming market. Ladbrokes.com, the Company’s principal commercial platform, was poised to become one of the most active betting websites in the UK.
With the emphasis on remote gaming, the Millennium also signalled the sale of the vast majority of the Company’s casino interests to private enterprise Gala, backed by Credit Suisse First Boston, for £235 million. The portfolio comprised 27 UK casinos (six in London and 21 in the provinces) and two overseas units in Gibraltar and the Isle of Man.
In contrast, the expansion of the hotel base continued and, in the summer of 2001, Hilton Group completed the £620 million acquisition of Scandic Hotels AB, a Stockholm based hotelier with a major presence in the Nordic region.
The Government’s decision to abolish 9% Betting Tax in favour of a 15% Gross Profits tax in 2001 was well received by bookmakers and betting shop punters alike, with the latter delighted to find themselves on a level tax exemption field with their ‘on course’ brethren.
By 2003 the Ladbrokes division of Hilton Group had a UK retail estate of close on 2000 shops, with the annual spend on new outlets, in-store design and technology running at around £50 million.
It was towards the end of 2005 that Hilton Group’s management, responsible for two of the world’s premier brands, Hilton and Ladbrokes, announced that agreement had been reached, subject to shareholder approval, to sell the Hilton International Hotel division to Hilton Hotel Corporation, its US corporate cousin, for £3.3 billion. The deal, involving the sale of more than 400 Hilton International hotels, reunited Hilton’s 2,800-strong hotel network some 40 years after the asset split.
The Company’s name reverted to Ladbrokes PLC, Christopher Bell, the former head of Ladbrokes Worldwide, was appointed Chief Executive and the cashing in of the Hilton chips led to an epic £4 billion special payout for shareholders: no small achievement for an enterprise that, less than four decades earlier, had been capitalised at under £1 million.
The historic development of the international hotel portfolio gave way to a selective extension of Ladbrokes’ overseas interests hand in hand with the rapid growth of the eGaming operation. In 2006, Ladbrokes’ exploratory focus on Asia led to a consultancy association with the China Sports Lottery: an entrée into a country and a market described by management as a “strategic imperative.”
Ladbrokes’ successful application for more than 140 betting licences in Italy towards the end of 2006 was followed, in the New Year, with news that a testing of the betting climate in Spain, a traditionally vibrant gambling market, was also imminent. The emergence of sportsbetting regulation in the Madrid region provided the catalyst and Ladbrokes launched a joint retail venture under the ‘Sportium’ brand with Cirsa Slot Corporation, the largest slot machine operator in Spain and a subsidiary of leisure combine CIRSA Corporation.
Sportium swiftly emerged as the clear market leader in Madrid although, in order to maximise the potential of the Spanish betting industry, regulatory change is required in other regions.
The New Year of 2007 also saw consolidation in the shape of the acquisition of Sponsio, Ladbrokes’ online betting and gaming partner in relation to operations in Sweden, Norway, Denmark and Finland: countries that had proved highly receptive to Ladbrokes.com. The original partnership was forged in 2001.
The Gambling Act 2005, which came into effect on 1 September 2007, saw betting shop opening hours extended to between 7 am and 10 pm accompanied by the removal of restrictions on radio and television advertising. Within a matter of weeks, Ladbrokes launched a £5 million national TV advertising campaign: a ‘first’ for the Company and for the bookmaking fraternity.
The same year also witnessed the divestment of Vernons football pools: sold to Sportech for £47 million.
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2010 Richard Glynn appointed Chief Executive
2010 saw the appointment of Richard Glynn and the establishment of a reorganised operations board with a number of new appointments. The company structure now places the consumer at the heart of its operations.
In February 2011 the Group outlined the critical success factors and key investments it believes are crucial to the future success of the business.
Ladbrokes’ retail estate, including the UK, Ireland, Belgium and Spain, encompasses 2,700 outlets, while Ladbrokes.com, with nearly 800,000 active clients, offers betting on 13 tailored sites in nine different languages; supporting 17 currencies.
The Ladbrokes brand, born more than 120 years ago courtesy of a signpost to Ladbroke Hall in Worcestershire, continues to travel well.
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