Betfair rides out tax hike as shock sports results help profits rise

“Any league table that has Leicester at the top of it is a good one for the bookies,” Betfair boss Breon Corcoran said as the firm rode out a £27 million tax grab from the Chancellor to land higher profits.

Betfair’s original product — the Exchange which allows punters to be the bookie and bet against each other, with the firm taking a 5% profit — is still its main business, but its Sportsbook (a more traditional betting business) is growing rapidly — with volumes almost doubling to £800 million in the six months to September.

The Chancellor’s point of consumption tax on online betting cost Betfair £26.9 million over the period, but Corcoran still managed to engineer a 9% rise in underlying pre-tax profits to £66.3 million.

The group’s number of regular users has reached a record 1.19 million, helped by the 47% rise in new customers for the Sportsbook since the start of the football season.

Many have left their cash behind with the bookies on a “few interesting Saturdays” littered with shock results, not least thanks to Leicester’s “goal machine” Jamie Vardy.

Corcoran said the results were “ahead of our original expectations” and Betfair also gained a boost from the US market, where it launched in-play betting on racing.

The chief executive is poised to lead the newly merged online gambling giant Paddy Power Betfair when the £5 billion merger completes early next year.

Corcoran said “no decisions” had been made on job cuts among the two firms’ 7000 staff to find £50 million in cost savings.