Paddy Power gambles on customer loyalty to survive controversy

The bookmaker's been in hot water over its duty of care towards gamblers recently, but business is still booming.

by Rebecca Smith
Last Updated: 09 Mar 2016

There are some things in life nearly as certain as taxes and death. Paddy Power’s unfailing ability to stir up controversy is one of those things, and like clockwork, the betting company’s unveiling of its annual results will have gambling campaigners rubbing their hands in glee at a new chance to stick the knife in. Or possibly frothing at the mouth.

The Irish bookmaker, which completed its merger with online betting exchange Betfair last month, announced its profits were up 8% last year. Its revenue increased 24% to €1.1bn (£850m) and pre-tax profits hit €179.7m, which Paddy Power said was boosted by a robust online performance.

Operating profit rose 10% to €180m, but Paddy Power stressed what a hefty burden new, higher taxes are proving to be – it would have been 50% higher otherwise. (Which some might say is an argument for the higher taxes in itself...)

Paddy Power is unlikely to find a sympathetic audience for its grumbling. A recent report by the Gambling Commission revealed the bookmaker had encouraged a man with serious gambling problems to continue betting until he lost five jobs, his home and access to his children. 

The company’s response is unlikely to have helped matters – it made a voluntary payment of £280,000 to a ‘socially responsible’ cause, which the Guardian happily pointed out would have taken it only three hours to recoup. It’s a similar question as to whether a tiny tip is more insulting than none at all. That relatively trivial donation isn’t going to convince anyone that gambling firms are taking their duty of care seriously. 

But does Paddy Power care? And what should the duty of care be for gambling firms actually be? It’s difficult to say just how companies in that position should – and indeed can – handle problems around gambling. You may say it’s just the nature of the business, but if you are going to operate a betting firm, there should surely be better regulations regarding customer supervision. Allowing people to gamble is one thing, it's quite another to encourage someone with a known problem.

And regardless of what’s currently ‘allowed’, seeing Paddy Power’s booming results at the expense of some of its customers’ well-being will leave a bitter taste. Mind you, such controversy isn't going to make much of a dent to the betting juggernaut. Those using its services are going to keep on doing so and those who view gambling distastefully are unlikely to be setting foot in a Paddy Power branch anytime soon anyway.

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