The decision of the Competition & Markets Authority to allow the Ladbrokes/Coral merger is guaranteed to have repercussions for greyhound racing, though how significant they turn out to be, and their timescale, remains to be seen.
In the first instance, there will be no requirement to sell any greyhound tracks, though that is hardly surprising since the combined four is less market share than Galliard Homes enjoyed before they shut Oxford and sold Hall Green and Belle Vue (and kept Wimbledon and Perry Barr).
Given the bookmaker-owned tracks’ reputation for providing top class facilities and prize money, that is surely only good news.
But things start to get more interesting once you view it against a BAGS/SIS backdrop. As has been explained previously, each organisation considers the other superfluous. BAGS feel they could produce the content, and SIS feel they could administer the whole operation. The marriage of convenience formally ends later this year and SIS appear to have forced the issue.
The Coral tracks have long since thrown themselves in with SIS and will be joined by their new partners Ladbrokes whose BAGS contract is not being renewed. The SIS greyhound operation is run by former Ladbrokes Head of Stadia, Gordon Bissett.
So far so good. But of course SIS, which is 23% owned by Ladbrokes, now have a product to sell to BAGS (or maybe NOT sell to BAGS). Corals and Ladbrokes have consistently maintained that they produce the best racing and are entitled to a bigger BAGS fixture fee than the other tracks (It is whispered that Coral tracks get even more per meeting than Ladbrokes) AND they have a decent chunk of the meetings (combined currently 31% of all BAGS fixtures including several prime slots).
But it seems that is not enough! The CMA enquiry acknowledged the bookmakers combo’s “dissatisfaction with the BAGS process, in particular with not being involved in decisions regarding the allocation of BAGS fixtures”
Going forward what if Ladbrokes/Corals (the shops) decide that they don’t want to buy ‘product’ from BAGS, they would rather buy from SIS? It’s not impossible! Did we mention that SIS is partially owned by Ladbrokes?
Now some of you might think this is more incestuous than a hillbilly wedding, but not the CMA. Quote: “We also found that the Merged Entity would be unlikely to be able to increase its allocation of broadcast greyhound races to the detriment of other greyhound track owners. This is because the evidence indicated that the Parties are unlikely to have the ability to influence the decisions of the relevant media rights purchasers on the purchasing and allocation of greyhound races to the detriment of other greyhound track operators. In particular, both Ladbrokes and Coral have sold the media rights for their greyhound tracks to SIS until 2020 and we therefore understand that SIS will be negotiating with BAGS in relation to the Parties’ greyhound media rights. We also considered that SIS had robust governance procedures in place and also applied a policy based on principles of fair, reasonable and non-discriminatory access. “
Well that puts my mind at rest!
But what if . . .
Between them the two companies own around 4,100 betting shops and will be forced to sell between 350-400. Yet they will still control 42% of the market. More if others, including William Hill, join the party.
But will Ladbrokes/Corals commercial rivals Hills, Paddy Power, Betfair and Betfred really want to jump aboard Gordon Bissett’s SIS bandwagon?
If BAGS survive with the support of a significant proportion of the 58%, we end up with a truly competitive market, AND an increasingly finite product, which surely plays into the hands of the greyhound industry?
Indeed there could be much more money available. It is estimated that SIS profit by around £11m per year from their greyhound racing operation; while BAGS is a non-profit making set-up.
Moving on, some other points regarding on-line betting that possibly reinforce some thoughts from a previous Editors Chair.
For instance we learn from the CMA report that FOBTs (fruit machines) now account for 56% of betting shop profits. Greyhound racing is a derisory 7%, surprisingly though within 1% of football. Horse racing yields 20%. We also learn from William Hill that their on-line turnover had gone up by 140% over four years. Presumably the others are similar. Most of the companies claim that on-line business is in addition to, not to the detriment of, the shops.
And finally, only 27% of betting shop punters are under 35, compared to 30% who are over 60 with a Gambling Commission study suggesting that the early penetration of on-line gambling by 18-34 year olds is now leeching into the 35-54 age group.
To repeat a point made previously – the future, at least in the longer term, is on-line. For that, greyhound tracks won’t need betting shops – whose very future may hinge on future taxation of FOBTs.
Indeed, with on-line mass tote integration, they may not need the betting industry at all.
