Gala Coral Group announces betting shop closures in Q2 results

maker Gala Coral is to close a number of betting shops, following in the footsteps of competitors Ladbrokes and William Hill.

The firm revealed the decision on Tuesday alongside its Q2 financial statement, which showed a 3% rise in gross profits to £215m. The statement cited government action against betting machines as the reason for the closures, including the "scaremongering and misleading information" and "prejudicial statements" made by certain campaigners and politicians.

The statement read: "As a result of the announced changes, and consistent with statements made by our competitors, the Group regards shop closures, and therefore job losses, as inevitable.

"Tax revenues will also suffer and payments to racing reduce, which will threaten the fragile economic position of the UK's second most popular sport."

Market leader William Hill is due to close 109 betting shops, while Ladbrokes has announced the closure of 50. If Coral was to match the proportion of closures it would close around 80 of its 1,822 branches, each of which employs four to five staff.

The bookmakers argue such closures are unavoidable in light of the 5% increase in Machine Games Duty as part of a renewed government focus on problem gambling that targets FOBT's (fixed odds betting terminals) especially. FOBT's are considered by some to be addictive, high risk and as fuelling a growing problem.

But the firms consider such information erroneous and are disgruntled that the government continues to react to it regardless of their efforts to address the issue, in particular their adoption of the Association of British Bookmakers’ (ABB) Code of Conduct.

Ralph Topping, CEO of William Hill, has voiced fears that government action will proliferate illegal gambling, destroy jobs for low-paid workers and generally hamper the growth of the industry, arguing that greyhound racing in particular will suffer due to being bookmaker funded.

Away from the closures Coral's Q2 report demonstrates positive results for the firm. Despite a 19% fall in retail EBITDA since last year due to a series of poor football results and the phasing of machine content costs, the company’s strong online performance allowed for overall growth, with turnover increasing 8% year-on-year.

Carl Leaver, CEO of Gala Coral Group, said: "Online growth momentum is very encouraging with Coral.co.uk now coming through strongly. The combination of a single online wallet, improved content and simplified customer journeys is driving both activities and spend per head significantly ahead of expectations.

"The take-up on mobile is particularly pleasing with over 66% of sportsbook activities now using our mobile platform."

Leaver also commented on the success of 'Coral Connect', which allows customers to access their single wallet both over the counter and on machines, with sign-ups already ahead of the full-year target.

He added that demand in Italy for new virtual betting products has also been beneficial for the firm.