Ladbrokes has considerably changed many aspects of its business over the last year as it aims to capitalise on the changing nature of the general gaming industry.
The increasing focus on online gaming has led to the company establishing Ladbrokes Israel as a way to boost its relevance and revenue in that area. Ladbrokes also announced a partnership with online software developer Playtech as part of efforts to establish itself as a strong online gaming operator. Despite Ladbrokes’ investments and high hopes for success in the Internet gambling arena, it appears that things have not gone as smoothly as originally hoped.
It came as Ladbrokes issued a warning that full year profits from its egaming division would be much lower than originally expected. Profits from the division were originally forecast to be £27.5 million (around US $44.4 million) for the year, but have now been revised by Ladbrokes to be between £10 million (around US $16.1 million) and £14 million (around $22.6 million).
Ladbrokes CEO Richard Glynn said that the lower profit levels for its online gaming operations were due to a number of unexpected events that were encountered by the company over the course of the year.
“Our digital earnings have been disappointing, reflecting a lack of competitiveness in sportsbook, lower margins than planned and a greater disruptive impact than expected from the transition necessary to grow digital for the long term,” he said.
It wasn’t all doom and gloom for the company, however.
Despite the lower than expected profit margins, Glynn said the company was still confident that its restructuring would translate into better performance and better profits in the future. “We remain confident that the strong foundations we are putting in place will drive performance during 2014 and beyond,” he added.
While Ladbrokes is a huge company in the live gaming market, especially in sports betting, it will be difficult for just about any company to quickly establish itself in the ever competitive online gaming industry.
There is certainly a major chance that Ladbrokes’ online gaming fortunes could change, especially given its size and capital, but it will likely take some time for that to happen. A clearer picture of the company’s success in the online gambling realm will be seen once the dust of its restructure settles.