Ladbrokes moves online ops to Gibraltar
Thursday, August 6, 2009 @ 12:42 PM
U.K. betting group Ladbrokes PLC (LAD.LN) said Thursday that it will move its online sportsbook operations to Gibraltar to cut its tax bill, two days after rival William Hill PLC (WMH.LN) announced a similar move.
Ladbrokes, the U.K.'s largest gaming company by revenue, also reported a sharp fall in first-half earnings due to customers claiming big winnings as well as costs related to its online gaming operations. It said it would cut its dividend by 31%.
Chief Executive Chris Bell said the group's online sportsbook business "faces aggressive competition from offshore operators, who hold very significant cost advantages by operating from low tax jurisdictions."
"Operating from the U.K. has become unsustainable and we will relocate by the year end," he said in a statement.
Gibraltar is already the home of pure online gaming companies such as PartyGaming PLC (PRTY.LN) and 32 Red PLC (TTR.LN), and Ladbrokes' gaming products are already based there. The company, which which operates about 2,100 betting shops in the U.K., expects to save GBP7 million-plus annually from the move, which will result in a "handful" of local jobs being lost, CEO Bell told reporters on a conference call. William Hill is expected to save GBP10 million annually after moving, according to analysts.
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