Betfred Prepares for Betting Shop ClosuresJake Cooper | 27 Jun 2018
Founder of major betting brand Betfred, Fred Done, has received £10.2 million in dividends as his company prepares for widespread betting shop closures and huge staff lay-offs. The concerning news follows the UK government’s announcement that it will soon launch a nationwide crackdown on British gambling machines.
Betfred revealed pre-tax losses of over £18.1 million for the year ended September 2017. This showed a significant £32.4 million pre-tax profit drop from 2016’s results. However, despite this drop, Done (who has a net worth of approximately £1.4 billion, was paid out the same dividend as the one he received the previous year.
Fred Done and his brother, Peter, originally founded Betfred in the early 1960s. The bookie has since become one of the UK’s largest private betting firms, operating Britain’s third largest betting shop chain. Currently, the brand has 1,666 facilities across the UK in total.
FOBT Crackdown to Slash GGYs
The government revealed last month that it plans to crack down on the controversial fixed odds betting terminals (FOBTs) that are popular in the nation, slashing their maximum stakes from £100 to just £2 per game. This announcement elicited a wave of anguish from bookies and industry shareholders, as the reduction in stake is set to cost the operators of FOBTs hundreds of millions of Pounds in annual GGY earnings.
Last month, Done noted that the clampdown could force Betfred to close as many as 900 of their retail betting shops, which would also involve laying off up to 4,500 workers. Reports have also emerged that Done was at one point mulling over a judicial review in a bid to overturn the UK government’s decision to crack down on the highly addictive gambling machines.
Betfred Sells Tote to Alizeti
Following the government’s announcement, the Managing Director of Betfred sent emails to the firm’s staff, encouraging them to lobby against the crackdown as the slashed stakes would have a direct impact on the viability of its betting shops. With that said, an agreement between the government and bookies states that the stakes may not be reduced before 2020 to give the companies time to prepare.
As well as physical shops, Betfred also operates the tote racing business and an iGaming platform which it will likely boost as it seeks to offset its losses from FOBTs. The bookie acquired the Tote back in 2011 along with a seven-year pool betting monopoly, but this monopoly will expire this year and Britbet will take over that role.
Done has now agreed to sell his pool betting business to the Alizeti consortium and racecourse owner Alex Frost. The consortium has acquired an initial 25% stake in the business, and also has an option to buy the remaining 75% over the next five years.