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.