Paddy Power's football punt pays off

The Euro 2012 football championships help Paddy Power's profits jump 21%.

by Elizabeth Anderson
Last Updated: 29 Aug 2012
The Irish bookmaker has capitalised on the rising number of people turning to gambling during the economic downturn, and its lucky streak is continuing. Paddy Power (which came sixth in MT’s Britain’s Most Admired Companies Awards) has reported a whopping 21% jump in half year profits to 68.7 million euros (£54.5m). That compares with 56.2 million euros (£44.6m) a year earlier.

The bookmaker said an aggressive marketing campaign during the Euro 2012 football championships and further growth in online gaming were the reasons behind the boost. PR stunts including the company’s use of a giant 'vuvutruck' in response to Uefa’s ban on vuvuzelas encouraged gamblers to have a flutter during Euro 2012, with 78m euros in bets placed during the three weeks of the matches.

Paddy Power’s profit cheer today came despite a six million euro fee to get its Italian business up and running. Profits were also dented by the bookmaker’s refunds of 5.6m euros to customers on its money-back offers after events including Chelsea winning the Champions’ League trophy and England versus Italy going to penalties in the European cup.

But a heavy marketing strategy during Euro 2012 helped attract new business. The football tournament ‘contributed to a 50% increase in online customer acquisition for the half year,’ chief executive Patrick Kennedy said. Active customers are now at 1.2 million, up 41%.

Paddy Power’s overseas business is also going strong. Profit rose 35% in Australia, where it entered the market two years ago after acquiring Sportsbet, and the company has also been gaining a steady foothold in Italy since launching in May. But most of Paddy Power’s rewards come from the internet. The increasing popularity of online betting raised internet earnings to 48.5 million euros (£38.5 million) – making up nearly three quarters of the group’s profits.

Paddy Power wasn’t the only gaming company cashing in today. Online casino operator 888 Holdings said it made a pre-tax profit of $18.4m (£11.6m) in the first half of the year compared to a loss of $22.1m (£14m) the same time a year ago.

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