Paddy Power Betfair on front foot as it heads to Cheltenham
Results show bookmaker won 8.7 per cent of €11.4 billion bet by customers in 2016
Paddy Power Betfair lost €23 million at the Cheltenham festival last year, according to chief executive Breon Corcoran. Photograph: Matt Cardy/Getty Images
Paddy Power Betfair and its rivals are heading to Cheltenham next week with an extra edge on their customers. The four-day national hunt racing festival has lost some stars to injury, including the Irish-trained Annie Power and Don Cossack, who captured two of its top prizes in 2016.
Their victories contributed to the €23 million that Paddy Power Betfair chief executive Breon Corcoran said the group lost at the meeting last year. Their absence and that of several other marquee names means that even before the tapes have gone up on Cheltenham 2017 some punters’ ante-post bets have gone south.
In fact, this is the more usual scenario. The odds are against racing fans enjoying a winning week in the Cotswolds. That won’t stop them trying and the Irish betting giant will be lining up to take them on. Not only that, it will, as usual, use the event’s profile to recruit new customers in two of its core markets, Ireland and Britain.
Last year’s sports results ebbed and flowed between bookie and gambler. Paddy Power Betfair’s 2016 results showed that of the £9.9 billion (€11.4 billion) staked by customers on racing and other events, the bookmaker won £1.2 billion, or 8.7 per cent.
This means that, on average, its clients lost £8.70 out of every £100 they wagered with the company in 2016. The previous year’s winning margin was 8.8 per cent or £8.80 out of every £100.
So whatever Paddy Power Betfair lost at Cheltenham, it won back over the course of the rest of the year. It noted yesterday that results at the European Football Championship were more favourable to bookmakers. A £350 million contribution from online casino games increased overall revenues to £1.55 billion. The group ended the year with £330 million in operating profits.
Regulation poses its most obvious immediate challenge. An extension of the levy paid to horse racing in Britain will cost Paddy Power Betfair an extra £10 million. New European Union anti money-laundering rules and developments in another key market, Australia, could also add to the group’s expenses.