Betfred Reports Loss Despite Nearly Doubling Online Gambling Revenue

Betfred’s online gambling operations have grown significantly, but the company reported a pre-tax loss of £71.7 million ($91.7 million) for the year ending October 1, 2023 – a massive swing from its £19.6 million ($25.1 million) profit in the previous year. 

Betfred’s Turnover Climbs 25.6%, Driven by 99% Surge in Online Revenue

Overall turnover at the UK-based gambling giant Betfred grew by 25.6% to nearly £908 million ($1.2 billion), driven mostly by a big increase in online revenue.

Retail contributed just under £577 million ($738 million) in turnover, up slightly from £557.6 million ($713.2 million) last year. But the star performer was online, which saw revenues soar 99%, from £165.5 million ($211.7 million) to £331 million ($423.4 million). However, even this stellar growth could not offset huge losses.

The loss was largely caused by exceptional costs of £60.9 million ($77.9 million) – including payment of £40 million ($51.2 million) for onerous contracts and write-downs in US prepayments of more than £6 million ($7.7 million) – as well as strategic moves such as withdrawing from the Maryland sports betting market and selling part of its investment portfolio for a total of more than £60 million ($76.7 million).

Betfred is not alone among peers in facing financial challenges. Bet365 also reported losses despite increasing revenues. This suggests that higher turnover is not leading to greater profitability across the wider market.

Done Family Skips Dividend Amid Financial Challenges

The Done family did not pay themselves a dividend this year, after receiving more than £50 million ($64 million) last year – reflecting the company’s financial caution amid tough conditions.

Yet while dealing with these financial headwinds, Betfred has pushed ahead with expansion. It acquired Sharp Gaming as a new technology division through a customer migration costing about £100 million ($127.9 million) and raised its stake in South African online gaming company LottoStar to 51%. It also opened new retail sites in Nevada, Ohio and Colorado to further bolster its presence in the US.

Despite this latest financial setback, investments and continued expansion show Betfred’s long-term growth focus and resilience in what is becoming an increasingly competitive gambling marketplace. Fred and Peter Done founded Betfred in Salford in 1967 with a single shop. Fred Done said he would “retire” after opening 1,000 shops. He stepped down as chief executive last year but remains chairman, while his brother Peter Done is a director. The company now employs more than 8,000 people and has 1,387 licensed betting shops.