The billionaire Conservative party donors behind the gambling firm Betfred paid themselves and their family a £50m dividend, as an increase in online gambling in the coronavirus pandemic offset the temporary closure of its 1,470 high street bookmakers.
Rob Davies www.theguardian.com
Betfred’s customers wagered £6.9bn in the year to the end of September 2021, up from £6.4bn, providing winnings of £526m for the Manchester-based company, a marginal increase on the previous year.
The company paid a dividend of £50.7m in November 2021 to its shareholders, the Done family headed by the brothers Fred and Peter, who worked in their father’s bookmaking business before opening their first shop in 1967.
The payout came on the back of a resilient pandemic performance, as the company shrugged off the impact of Covid-19, which forced the closure of its network of high street bookmakers for long periods.
While the parent company did not provide a breakdown of its income from online versus high street sources, it said an increase in stakes, revenues and profits from its internet business had made up for the impact of shop closures.
Its online operation is based in Gibraltar but Companies House filings for the subsidiary that houses its online operations indicate the extent of the slack that its internet business picked up.
Revenues in the high street business slumped from £301m to £244m, yet group turnover was flat on the year before because of the increase in online play.
Overall profit at group level was distorted by one-off factors. Pre-tax profit was £6m for the year to the end of September 2021, down from £205m the year before.
However, the 2020 result was boosted by a £98m rebate from HM Revenue and Customs – after a court found that the tax authority had overcharged the company VAT between 2005 and 2013 on its fixed-odds betting terminals, the controversial digital roulette machines.
It also benefited from a £94m increase in the value of investments that it held that year, compared with a near £22m loss this year.
The 2021 figures were published with the government on the verge of publishing a white paper proposing a reform of gambling laws that could crimp online gaming companies with measures such as stake limits of between £2 and £5 on slot machine games.
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Betfred did not directly refer to the white paper but warned that it could be adversely affected by legislation.
Companies House filings show that the company made no political donations this year.
However, the Done brothers have donated £375,000 to the Tory party since 2017, via their Rainy City Investments vehicle.
The group made charitable donations of £157,000 during the year, down from £289,000 in 2020, and its highest-paid director earned £456,000.