Bookmakers are not exactly easy to beat. If they were, gambling would be a cash cow for everyone who places a wager. Recently, some tears were shed for bookies in the United Kingdom. After the outcome of the Cheltenham Festival, bookies suffered stunning losses. The total loss tally is a staggering £60 million. Some are calling this the worst ever Cheltenham Festival. Those lamenting the outcome are mostly bookies. The people who won some of the £60 million are not exactly complaining.
The bookmaker Ladbrokes suffered the greatest in the aftermath of the horse racing show. Ladbrokes is a huge bookmaker in the United Kingdom. Labbrokes has its collective hands in a number of different gambling ventures. Horse racing may be one of the most popular ways to place a wager. A huge event such as the Cheltenham Festival brings in a number of betters who might otherwise not place a wager during the year.
Why did the bookmakers do so poorly? There were 28 races run over the course of four days. Only nine favorites and one joint favorite turned out to be winners. Underdogs have a tendency to have high payout odds. With all the underdogs coming in winners, bookmakers were stuck having to make huge payouts to those who placed wagers great and small. All of that added up to a disastrous sum of losses for the bookies. Again, the bookies’ loss was the players’ gain.
Rich Ricci had a very good four days. The horse owner found himself winning about £400,000 thanks to three horses coming in as winners. Ricci previous worked as a Barclay Banker. Surely, he is not regretting his decision to move into the world of horse racing after the huge wins he pulled off thanks to his three horses coming in.
Is Ladbrokes in a lot of trouble due to the huge losses? According to the company, things are not going to be too negative. Revenues are up 10.6% and the losses are sure to be covered by the wins Ladbrokes has experienced throughout the year. Surely, Ladbrokes has a decent amount of capital in reserve and is not going to fall into dire straits. A series of similar major losses, however, could cause chaos among the bookmakers. A lot of very unique outcomes would have to occur in order for this to happen. The odds are in the bookmakers’ favor. A repeat of events similar to the Cheltenham Festival twice in the same year is probably not forthcoming. Then again, no one can tell for sure what can happen in the wild world of wagering.
Additional bad news for Ladbrokes is emerging in another sport. Football is easily the most popular sport among betters throughout the world. Scores of football fans like to place wagers on football teams. Leicester City won the Premier League much to the benefit of fans who put bets on the team. Ladbrokes, however, is reporting it will lose about £3 million on the event. Ladbrokes has not reached the point of panicking, but the company definitely wants a few clear wins in order to recoup a decent amount of the money it has lost.
Ladbrokes did suffer its first loss ever last year. The sum total was £43 million in losses. Now, just because the company lost £60 million in horseracing and £3 million in football does not automatically mean Ladbrokes is on the way to losing money another year in a role. The companies wins could end up being in the billions. Wins offsetting losses is simple math and economics. As long as the wins add up to figures more than losses, the company stays in the black.
That said, sugarcoating Ladbrokes situation would not be a wise thing for any company accountants to do. No company can continue to endure £60 million weekend and £4 million championship event losses. Luck really does need to swing in Labbrokes’ favor soon.