Ladbrokes and its parent company Entain have been facing criticism after it was revealed that the UK bookmaker claimed over £100 million ($137m) in furlough payments during the COVID-19 pandemic.
Accounts recently published by Companies House show that Ladbrokes benefited from a £57.5 million ($79m) payment in 2020 and another £44 million ($60.4m) in 2021.
While brick-and-mortar outlets were closed during the lockdowns, Entain — who also owns Coral — profited from a phenomenal upturn in online business, as housebound players flocked to its internet gambling sites.
In 2020, revenue from its betting shops fell — from £983 million ($1.3 billion) to £681 million ($935m) — but at the same time, Entain (then GVC) saw online turnover soar, meaning that overall revenue for the year matched that of 2019, pre-COVID.
Entain grossed a massive £3.6 billion ($5b) in 2020, generating a pre-tax profit of £114 million ($157m).
Entain Refusing to Follow Example Set by Other Operators
A major point of contention is how Entain’s furlough policy differs from other companies in the gambling sector. Several betting firms have chosen to forego any financial assistance from the government.
Some operators, like William Hill, decided to pay back the money they had claimed, after performing far better during the pandemic than they initially expected. In Hill’s case, this was a significant sum — £24 million ($33m) — but still well shy of that claimed by Ladbrokes.
Others such as Paddy Power’s owner, Flutter plc, never made a claim for furlough payments — perhaps predicting that increases in online revenue would compensate for any damage inflicted on its high street businesses.
Despite the actions of fellow bookmakers, Ladbrokes has yet to follow suit. It is safe to say that the decision has raised a few eyebrows.
Addressing the disapproval, an Entain spokesperson said: “The furlough scheme was a sensible and highly welcome policy intervention that helped us, as one of the country’s largest retailers, to maintain the livelihoods of more than 14,000 retail colleagues on full pay.
“Whilst the virus is still with us and the outlook, although improving, is still far from certain, the board will continue to keep the situation under review.”
CEO Nygaard-Andersen, Defends Entain’s Decision
Entain’s CEO, Jette Nygaard-Andersen, recently backed up these sentiments. In an interview with The Telegraph, she was unabashed about the decision to hold onto the furlough money.
Nygaard-Andersen said, “The furlough schemes were put in place for a reason. The reason was a pandemic, which, by the way, we are still in the midst of.”
She continued, emphasizing the predicament of Ladbrokes’ employees:
“During the pandemic and the lockdown, we’ve been able to support our colleagues and pay them 100 percent of their pay.”
“It’s still far from certain how this will play out. So that’s really how we view it and the board is keeping — and will continue to keep — the situation under review, but it’s just too early.”
However, Nygaard-Andersen was not ruling out a repayment. Asked if the money could be given back in the coming months she replied, “When I say keeping it under review, that’s exactly what I mean.”