A billionaire donor to the Conservative Party behind the betting company Betfred paid themselves and their families a £50m dividend as a surge in online gambling during the coronavirus pandemic offset the temporary closure of 1,470 high street bookies.
In the year to the end of September 2021, Betfred customers placed £6.9bn, up from £6.4bn, giving the Manchester-based company a £526m profit, up slightly on the previous year.
In November 2021, the company paid a dividend of £50.7m to its shareholders, the Donne family, led by brothers Fred and Peter, who used to work for their father’s betting company opening its first store in 1967.
The payout came on the back of strong pandemic performance as the company shrugged off the impact of Covid-19, which forced the closure of its bookmaker network for an extended period.
While the parent company did not provide a breakdown of its revenue from online versus high-street sources, it said increases in share, revenue and profit from its online business offset the impact of the store closures.
Its online operations are based in Gibraltar, but Companies House filings for the subsidiary that houses its online operations show the extent of its online business’s decline.
Revenues in the high street business fell from £301m to £244m, but the group’s turnover was flat on last year due to an increase in online gaming.
Total profit at group level was distorted by non-recurring factors. Pre-tax profit was £6m in the year to the end of September 2021, down from £205m a year earlier.
However, the 2020 result was boosted by a £98m rebate from HMRC – after a court found the tax authorities overcharged the company in VAT between 2005 and 2013 on its betting terminals with fixed coefficients, controversial digital roulette machines.
It also benefited from a £94m increase in the value of investments that year, compared with a loss of almost £22m this year.
The figures for 2021 have been published with the government on the verge of publishing a white paper proposing reform of gambling laws that could clamp down on online gaming companies with measures such as £2 to £5 betting limits on slot machines.
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