UK bookmakers beat England fans in 2018 World Cup

Football may not be coming home this year, but faith has been restored in the England team. We dared to dream, but it wasn’t meant to be, and this was the perfect recipe for bookmakers cashing in on the broken dreams of England fans.

Ladbrokes
Source: Bloomberg

‘Our country has been through difficult experiences in terms of unity. Sport — football in particular — has the power to help that. It is a special feeling,’ – England manager Gareth Southgate. 

Former England striker Les Ferdinand once said ‘nothing surprises me in football’, but this year’s World Cup in Russia did try. Title-holder Germany failed to make it past the group stage, and both Lionel Messi and Christiano Ronaldo took an early exit in what is likely to be their last chance of bagging the ultimate prize. But one of the biggest surprises may be the faith that has been restored in the England team and the belief that maybe, just maybe, 1966 was not a one-off.

For now, the waistcoats have been put away and the date as to when football is coming home has been postponed, but England fans have never felt more confident in their chances of winning a World Cup in the future following the performance of Gareth Southgate’s team.

The World Cup always encourages spending, and believing you have a shot of winning only spurs this on further. Estimates show that this year’s tournament has encouraged at least £720 million of spending, according to The Centre for Economic & Business Research. With the likes of pubs (such as JD Wetherspoon, Marston's, Fuller Smith & Turner and Greene King), takeaway operators (Just Eat) and kit sellers (Sports Direct) all benefiting, the World Cup may have proven to be a life-saver for the UK’s struggling retail sector.

Read more about the UK’s retail sector, how it’s performing and where the opportunity lies

UK bookmakers cash in as England fans dare to dream

The revival in England’s chances, however, provided more of a boon to bookmakers than any other sector. If you wanted to try and put a price on inspiration, then the gambling industry may be your best bet. At the last World Cup in 2014, when less than 10% of British punters dared betting on England to win at odds as high as 100-1, consumers still wagered around £1 billion on the event. This year, it is estimated as much as £2.5 billion was wagered, with two-thirds of all UK bets backing England ahead of their (unfortunately last) game with Croatia.

If there was one group of fans donning a Croatian checkerboard underneath their Southgate-inspired waistcoat then it was the directors of Ladbrokes-Coral owner GVC Holdings, Paddy Power, and William Hill. While they benefited as England progressed, football coming home would have proven extremely expensive for bookmakers.

The best-case scenario for bookmakers was England making it to the final, drawing the game and then losing in extra time. Draws are already unpopular with people betting on football, and the patriotic emotions that the World Cup can stir-up only exacerbate this. Although England reaching and losing the final would have maximised profits for the bookmakers, they will be happy enough with the team crashing out to Croatia in the semi-finals. The rallying support behind the England team spurred activity, with William Hill reporting nearly 8000 bets being made per minute in the run-up to the Croatia game, a record excluding the Grand National.

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Although estimates vary, England’s exit from the tournament saved UK bookmakers from having to make their largest pay-out in history, at least £100 million, and as much as £200 million to customers. England winning the World Cup would have obviously been far worse: online betting odds comparison service Oddschecker, which works with all the major operators, claimed about 19% of all the bets on football coming home were at odds of over 25-1, as fans started placing bets on England being victorious as far back as February 2015.

But the extra-time goal that dumped Southgate’s men out of the tournament ‘saved us millions upon millions’, a spokesman of Ladbrokes Coral told Thisismoney, adding that England making it to the final would have ‘cost UK bookies around £200 million’. In addition, the head of Paddy Power’s public relations team was reported in The Times as stating that a ‘France or Croatia World Cup win would be a profit-maker for us’.

Either way, the pay-out that was potentially on the cards would have eclipsed the Cheltenham horse racing festival in 2016 (considered one of the worst days ever for bookmakers) when they had to cough up £60 million in single day.

UK bookmakers see share prices rise on England exit

Both Paddy Power Betfair and GVC Holdings are trading higher now than they were at the open on the day of England’s first match against Tunisia on 18 June, but William Hill has lost ground.

All of the UK bookmakers saw their share prices rise following England’s defeat to Croatia. Compared to their opening price on 11 July (the day of the match), both GVC Holdings and William Hill saw their shares rise by as much as 1.9% the following day once investors had the chance to react to the result, while Paddy Power Betfair rose by as much as 2.5%.

GVC shares soar to all-time high as World Cup draws to a close

GVC shares have performed the best throughout the tournament and reached an all-time high of £111.90 days after the England-Croatia result, having opened at £100.85 on the day of England’s first game.

Paddy Power Betfair shares find ground throughout World Cup

Apart from a minor dip following England’s historic penalty-win over Colombia, Paddy Power Betfair shares managed to rise throughout the tournament. Having opened at £835.25 on the day of England’s first game (it is worth noting that the bookmaker also announced the completion of the merger of its US business with FanDuel on this day, although that had been first revealed in May), Paddy Power Betfair shares reached an intraday high of £852.75 on the day after England’s departure. However, shares have since dived.

William Hill shares rise after Croatia knocks out England

Although William Hill shares rose in the wake of England’s exit from the tournament, the bookmaker is now trading lower than it was before the start of the tournament. Having opened at 307.8p on the day of England’s first game, William Hill shares hit a high of 301.35p the following day. Shares have since risen further, reaching as high as 303.45p.

UK bookmakers aggressively advertise to push in-play betting

UK bookmakers have already been heavily criticised for their approach to marketing and, although the industry has taken voluntary steps to help with the likes of problem of gambling (for example), they have still been condemned by some for their overwhelming promotion of betting during the World Cup – with up to three games being televised daily at one point (although the BBC also had its share of matches).

About one-fifth of all adverts broadcast during the World Cup coverage by ITV, which saw its bet on England progressing through the tournament pay-off, is thought to have been gambling related. The rise of in-play betting, which allows punters to place bets during a live game, has meant bookmakers are encouraged to advertise not only in the run-up to a match, but also during it (with the half-time slot being prime). Some estimates suggest that four out of every five bets placed in the UK during the tournament this year were made while the match was in-play, with up to £4000 being wagered per second at its peak.

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The growth of in-play betting has been assisted by the rise of online and mobile betting, which has been very beneficial to bookmakers by allowing them to streamline processes while also collecting data that could be used to personalise marketing efforts for individual customers. This practice has also been heavily criticised however, with a report from Bournemouth University released earlier this year stating ‘there is only a fine line between the legitimate marketing and personalisation of content and offers on the one hand, and exploitation and manipulation on the other’.

Interestingly, UK bookmakers may have a new audience to attract. The Times reported that about three in every ten bets made during this World Cup was made by a woman, compared to just one in every ten bets made during the 2014 World Cup. Whether that comes down to the sector’s approach to advertising, World Cup fever, or a genuine trend can be debated, but it will be welcomed by industry regardless.

The growing popularity of in-play betting and potential new customer bases to chase could play an important role in helping bookmakers cushion the blow that will come from the crackdown on fixed-odd betting terminals (FOBTs), which had been at the forefront of their business until the government took drastic action earlier this year by reducing the maximum stakes of the machines from £100 to just £2.

Read more about the high stakes for UK bookmakers amid crackdown on betting shop FOBTs

England could look to host World Cup with faith restored in team

England lost out on its bid to host the 2018 World Cup, but talk that the country could launch a fresh bid to host the tournament in the not-so-distant future has begun to circulate. UEFA said it would support an individual bid by England or a collective one from all the members of the UK in June 2017, and deputy leader of Labour, Tom Watson, has said his party would back any attempt to bring the World Cup to England for its centenary year in 2030.

The economic benefits of hosting any well-organised international sporting event are well-known. Media start-up The Bell, which covers Russian business news, reported the World Cup was expected to generate around 300 billion roubles (£3.6 billion) in revenue for Russian bookmakers on the basis that the volumes of bets would be about 1.5 times higher than usual. But that sum could be considerably higher after follow-up reports suggested bet volumes with Russian bookmakers were actually 5 times higher. Online searches for Russian bookmakers between May and July were reported to be over three times higher than usual, outpacing the growth in searches for the likes of stadiums and parking.

Put simply, England hosting a World Cup would be a boon for bookmakers. Still, regardless of where future tournaments will be held, UK bookmakers are set to benefit from the revived belief that England can win the cup sooner rather than later, stirring up our emotions and encouraging us to put our money where our mouth is. This new and improved England team, led by the Marks & Spencer-waistcoat wearing Southgate, has reinstalled the country’s belief in football: and that is good news for everyone – the public, politicians and business.

As we England fans like to point out: we didn’t say when football was coming home.

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