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High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email]ftsales-support@ft-com[/email] to buy additional rights. Betfair predicts mobile betting boom - FT-com
Betfair, the online gambling exchange, has predicted that punters using mobile phones and iPads could account for up to half of total revenue by 2016, as the company reported interim profits up by nearly half.
“It’s a mass market play [for us] – this is not a niche product,” said Stephen Morana, Betfair’s chief financial officer. “There is a huge shift towards the mobile world – in five years’ time, 50 per cent of our business could be through smart phones.” High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email]ftsales-support@ft-com[/email] to buy additional rights. Betfair predicts mobile betting boom - FT-com
Roaming punters using mobile devices helped boost pre-tax interim profits, before exceptional charges, by 46 per cent to £24.7m in the six months to October 31, prompting management to propose an interim dividend of 3.2p per share.
The results are a welcome boost for the company, whose share price has struggled since it floated at £13 per share last year.
“It’s fair to say we had a couple of wobbles [making the transition] from private to public company,” said Mr Morana. “What these results do is give more confidence we are back on track and we’re delivering with a positive momentum to the business.”
Diluted earnings per share rose 173 per cent to 16.9p, boosted by the company buying back £23.7m of shares.
Underlying revenue rose 1 per cent to £191.3m compared to the year before, due to growing activity on Betfair’s peer-to-peer betting exchange, which enjoyed a 7 per cent increase in aggregate bet values. While revenue from mobile products accounted for only £9.1m, an increase of 88 per cent, Mr Morana said customers using mobile devices tended to bet more.
Nick Batram, an analyst at Peel Hunt, said the results showed Betfair was turning its fortunes round after “losing its way over the past 18 months”.
“The greatest competition is from the fixed-odds bookmakers – the likes of William Hill have significantly stepped up their game,” he said. “Betfair made a lot of mistakes but they were mistakes that were addressable ... and it is now making its interface a lot smoother and more enjoyable.”
Betfair said Mr Morana would become interim chief executive on January 1, following the departure of David Yu. Mr Morana will stay in the post until Breon Corcoran, formerly chief operating officer of Paddy Power, takes over on August 1 next year.
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The Rev. Jeff Fugate of Lexington, a nationally known evangelist and pastor of Clays Mill Road Baptist Church, said Wednesday that gambling would bring only brokenness to Kentucky families and shouldn't even be considered by lawmakers.
"We've got plans in place to fight against it, and we believe that, if legislators are going to vote for it in the majority of districts, they'll be gambling their seat away," Fugate said.
Kentucky has a long history of betting on horse races but doesn't allow casino-style gambling.
Beshear, in a speech on the first day of his second term, said he wants voters to decide whether to expand gambling beyond horse races, lotteries and charitable bingo games. He didn't say specifically what kinds of gambling he is endorsing, though over the past four years he has been a proponent of casinos and of slot machines at horse tracks. So far, lawmakers have refused to approve either option.
Gambling proponents argued that slots at horse tracks would generate money to increase purses. That, they said, would bolster the state's struggling thoroughbred industry and allow Kentucky to keep its designation as "the horse capitol of the world" while also generating needed revenue for the state's General Fund.
Beshear made his support for gambling a key issue in each of his last two gubernatorial elections, and he won them both.
One of the state's best-known gambling foes, John-Mark Hack, is planning to take a lead in the upcoming battle. Hack is the volunteer coordinator for the newly formed Stop Predatory Gambling — Kentucky. He helped to derail efforts early in Beshear's first term to legalize casinos.
Hack said his opposition isn't to Beshear, but to gambling.
"As Kentuckians, we encourage everyone to support the governor's efforts to create more and better jobs, more effective job training, and a state that creates opportunities and promise for every single one of our children," Hack said. "We just don't believe we can accomplish those goals by pursuing the failed policy of predatory gambling."
Lawmakers are scheduled to return to Frankfort on Jan. 3 for the start of the 2012 legislative session that is expected to last into early April. They will have several high-profile chores, including the politically sensitive task of redrawing boundary lines around legislative and congressional districts, and the adoption of a two-year state budget.
Beshear said his gambling proposal, if passed, would be a revenue generator for the state budget. His idea is to also pass a gambling tax.
"Kentucky's future will be better if we improve the revenue picture for essential services through tax reform, as the governor's inaugural speech offered to do," said the Rev. Marian McClure Taylor, executive director of the Kentucky Council of Churches. "But our future will not be better if we turn to expanding gambling, and the Kentucky Council of Churches will continue to speak against an approach proven to be harmful to families and communities."
Fugate, whose radio programs are aired across the nation, said he's hopeful lawmakers will reject the proposal.
"Here's what the populace needs to understand," he said. "When the governor says let the people decide, that's a misnomer. The legislative body has to vote for or against gambling. The constitutional amendment then goes on the ballot to either ratify or reject their decision."
Martin Cothran, a spokesman for The Family Foundation, said he expects lawmakers will face strong pressure to vote for the gambling proposal or risk losing funding for projects in their districts.
"Kentuckians should strap themselves in again for the corruption of our political process that always accompanies these efforts," Cothran said.