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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Fernando Noodt (00:12.864)
At the close of last Friday, BedFred announced that it would proceed to close a tenth of its UK retail estate. The consolidation will see up to 130 Bedfred shops closed, impacting 600 jobs as leadership stakes a direct response to the changing economics of UK gambling. BedFred joins Evoke, Entain, and Vlader Entertainment in declaring estate reductions as part of their UK cost balancing strategies.
Surrounded by compounding headwinds and dire circumstances, industry observers guess what the future of UK gambling will be on the high streak by the end of the year, let alone this decade. Welcome to iGaming Daily, brought to you by Optimove, the creator of positionless marketing and number one player engagement solution for iGaming and Sports betting operators. I am Fernando Nott, media manager for SBC, and your host for today's episode. In yet another Ted and Ted Talking Time. It's been a while since we
We've done this to all three together. Of course, you guys have been on the podcast with Charlie Horner, but it's been a while since we all three of us have been together here. So Ted Memir, editor at large at SBC, how are you today?
Ted Orme-Claye (01:10.393)
Yeah.
ted (01:22.616)
Very well, Fernando, ready to tango with Argentina.
Fernando Noodt (01:25.964)
Yeah, absolutely. Absolutely. Let's go. And Ted Yeah and Ted is Ted Armclay, editor for S V C News is bringing the wine and the meat. So Ted, how are you today?
Ted Orme-Claye (01:38.266)
Good, mate, very good. Thank you, Fernando. Good to have the gang back together again. Like you say, it's been a while. And yeah, we've got quite a big topic to talk about as always. So yeah, good stuff.
Fernando Noodt (01:49.101)
Yeah, tremendous topic for Ted and Ted talking time. So no more words with the T. So let's just start with it. it's never easy to talk about this subject because of course we've like we've mentioned before, six hundred jobs impacted by by this decision. Ted O C so can we summarize to some extent what has Bethred summoned for its retail unit?
Ted Orme-Claye (01:53.433)
You
Ted Orme-Claye (02:16.368)
you
So Sky News broke late last week that Betfred would be closing down over 130 of its betting shops Betfred is I think probably the single biggest retail operator in the UK with its I mean obviously Ladbrokes Coral has a very large sweep of Betfred is that one single brand on the UK high street is probably the biggest one I think has about 1200 shops as I said Sky News broke last week that they are going to close 130
two of these I believe is the exact figure. As you've said Fernando, that's going to come at the expense of 600 jobs. I think that amounts to around one in ten of the company's betting shops. As you alluded to, this is something that isn't particularly like, what's the word I'm thinking, not like,
It's not that much of a surprise in UK gambling at the moment really. Betfred is the latest in a series of major bookmakers to do this. Flutter Entertainment closed down, announced earlier this year, sorry, that it was going to close down a number of shops across both the UK and the Republic of Ireland.
Entain has been closing quite a few outlets in Ireland, I believe but also a few in the UK and I've evoked announced earlier in the year that it was going to it was going to close some William Hill shops as well I mean in general the UK retail betting has been struggling for quite a while in the year since Covid it's been fairly stagnant We've seen figures from the gambling Commission showing either steadily declining or occasionally mainly, you know making a bit of a gain but only about by about one or two percent in terms of growth
Ted Orme-Claye (03:56.007)
gambling yield I think. yeah, know, Betfred and his retail outlets have been feeling the pressure for some time and they are now
They're now going through with these closures, they're attributing it, they're very directly attributing it to a number of political decisions and wider economic factors, not least among them the increase in gambling taxes in April, stemming from the much discussed November budget last year, as well as national insurance contributions, wages.
just a generally difficult economic outlook for the UK. Yeah, an economic outlook that shared by many other countries at the moment, I believe. So yeah, it's a tough call for them. It's obviously very sad news for the people who work at these shops who will need to find some new means of employment.
Yeah, it's a sign of the times for both the UK betting industry and the UK high street and retail sectors in general, I think, across a lot of different industries outside gambling.
Fernando Noodt (05:08.128)
And Ted, you mentioned that this is hardly a surprise considering the general context, especially following the the the COVID pandemic and all that. And of course the the advancements of of or the evolution, should I say, of the of not only this industry but all industries which tend to to shift away from from retail. But this is like you said, hardly a surprise to some extent. but what was the industry reaction to?
Ted Orme-Claye (05:30.832)
Hmm.
Fernando Noodt (05:37.324)
This decision.
Ted Orme-Claye (05:38.995)
you
Initially on LinkedIn and so on, think the reaction was again people not acting overly surprised but still being very sad and disappointed at yet another major UK retail betting chain permanently closing the doors on some of its shops. I think a lot of people have been quick to use this as a bit of ammunition against the new tax regime, the betting and gaming council put out a statement
ted (06:08.898)
Mm.
Ted Orme-Claye (06:09.81)
I believe where they were as you'd expect quite critical of the the new the new gaming taxes and the impact these are having on businesses which I think are leading to decisions like this Fred Doan has also done an interview on betfred TV betfred's in-house media channel where he talked about over taxation and over regulation so I think the main reaction to this really has been one of frustration at a
a of what the industry sees as negative political decisions that are affecting its business.
Fernando Noodt (06:47.81)
Yeah, I think it's fair to say that following of course what Fred Dunn said, it it does have a reason. Th the reason behind it is certainly some something to do with the the UK gamblings segment current context, which was one of the the things we wanted to discuss today. But Tedem, Bed Fred had expanded its betting shops to own the betting the the biggest sorry UK state. So why do you think
it's changing its strategy right now. I I presume that it has something to do with the with the general context in the UK.
ted (07:26.508)
Okay, I don't think that this is a change in strategy by Betfred.
I think it's more kind of a rebalancing to the actual kind of economics of UK gambling. And I think that here we've got to kind of stand back and look at what Betfred has become. And even amongst the UK practical, this is a company that has a very kind of unique business profile and makeup. And you only have to just turn to it's kind of company's house accounts, which for...
The financial year of 2025, it detailed that the company had generated a group income of 1.2 billion, of which retail accounts for 60 % at circa 900 million and the rest of it coming online. I think that this is much more a protective move by management.
to look after the bottom line and protect profitability. Let's remember that for the past two years, Betfred were returning from the red by a very long journey in which he implemented the business becoming this retail champion and owning the UK's biggest estates. I just think that this is...
part of a strategy that, no, part of a kind of protection of that strategy, but just revising down its estates that might be kind of exposed. And I think that if you return back to kind of the economic reality, it's that the cost of the estates need to be revised down, but all focus now, and I think for the end of year, across all leadership teams, is about profitability and profitability alone.
Fernando Noodt (09:09.688)
So I guess that's in order to to address profitability, it makes sense that they talk about economic reality of UK gambling, even though the tax increases have been on online while the decision has been on retail. So I guess it's it's it's in terms of balancing what the company has to offer in the UK, because of course they all have to assume the the cost for for both things, even though
you may think, okay, so this is on these tax increases are only on online gaming, why would you close your your land base or or reduce your retail estate? But I think it it all makes sense in the in this omni channel offering that companies like to to to to talk about all throughout. So with this in mind, why consolidate your estate when the squeeze is online?
ted (09:41.742)
Yeah.
ted (09:53.988)
Mm-hmm.
ted (10:07.888)
It's a good question, right? It's a very kind of prominent observation. And I think that here, again, I'm going to say this because I think we have to be really sensitive discussing this matter and how it impacts people's lives. So look, you're right to point out that the taxes, especially in the UK...
have been penetrating the online business. However, I think the reality for tier one such as Betfred is that the pressure is kind of deeply pinpointed to the bottom line in profits and cash flow. And that the reality is that the cuts to estates are more effective.
the cuts to business, retail business and its estates are more effective than they are to kind of an online platform. And it's kind of the reality facing kind of all mass market brands. Physical retail carries much more direct costs than online. That's just the business reality. And I think that if you stand back, it's therefore logical that the cuts are announced at the retail level before on before impacting online units. Also, let's remember
And let's not forget that revisions are being undertaken group-wide because the thinking here is how do we soften expenditures as a top priority? I think that this is the kind of the reality of revisions for tier ones and PLCs. And it's going to be about deep cuts that perhaps last longer than originally depicted. And every unit will be under a spotlight. There's no escaping this.
Ted?
Ted Orme-Claye (11:39.505)
Yeah, I mean, I'd agree. Yeah, very much a groovy Ted. think as I phrase often news very often on this podcast, Ted has hit the nail on the head there. Yeah, like he says, the industry right now is really just heavily focused on profitability and cutting costs as much as possible, making sure that.
It's all about efficiencies. Retail betting, like Ted says, is a sector where it often carries a lot more immediate direct costs. You've got business rates on these shops. You've got the rental costs on the shop units, energy bills, water bills, even the Wi-Fi bill. You've then got, unfortunately, the staff cost as well. And people will be losing their jobs because of this, but that's a cost that's then cut for the company.
All that is very immediate, it's daily. You mentioned earlier Fernando, how in general people are moving more towards online betting, much how in general people are moving towards online commerce over retail and high street commerce across various industries.
As a result of that, a lot of the betting shops are out there, not just for Betfred but for all of the other retail brands as well. They're probably not bringing in as much money in comparison to all these different costs I've just mentioned as they used to be and certainly not in comparison to the online products. And even though these gaming taxes are the new ones anyway, the ones that are coming in April, are really only on online casino for the most part, sports betting and retail.
are excluded from them. For omnichannel companies they are going to be looking at that and thinking well we've got a lot of cost inefficient shops let's close them and ease the burden on our quite lucrative online gaming brand or product. That's the decision a lot of them would have been left with.
Fernando Noodt (13:38.861)
Yeah, absolutely. There's a lot of things to consider when making this decision and a lot of things to consider going forward for UK's gambling industry. But right now there's a short commercial break we have to consider ourselves. So we'll be right back with more Light Gaming Daily. Okay, that was weird. Anyway.
And we're back with more iGaming Daily to continue discussing the decision by Bedfred to close a tenth of its UK retail estate and what it means for the UK gambling industry altogether. So guys after the the November twenty fifth budget, some posit that retail could be a winner. So can we finally put that argument to rest and admit that the tax hikes are killing retail altogether?
Ted Orme-Claye (14:33.552)
If I can jump on this first, I think there's a bit of a nuance to this. I know that in our last, just before we went to the break, in our last talking point there, Fernando, I noted how I think obviously the gaming taxes will have a bit of an indirect effect on retail because of companies looking to maximise cost efficiencies and so on, to use a nice little LinkedIn-esque phrase there. But, you know...
I think part of this, can't entirely just say this is all because of the taxes. We mentioned earlier how UK retail betting and the UK high street in general has been suffering for many years. I remember the death of the UK high street being a conversation when I was in school, in the aftermath of the recession in 07, 08 sort of time. So this is a very long running conversation. It's a very long running trend. As I said earlier, we've seen gambling commission.
stats showing that retail betting has steadily got a little yield from it, it's got a little bit less each quarter or each half or so on. So the sector in general has been struggling and been quite stagnant. I think sometimes I think comes across as a little bit disingenuous of some people in the industries to say, we're closing these shops just because of the taxes. There are lots of other factors. And to be fair to Betfred and the statement their CEO put out last week, they have acknowledged
that there are a range of different factors as well like we said earlier. I don't know if maybe as well we can really say that retail is going to get killed off. I think it will always be there. It's just going to be a case of these companies are going to have to recognise they're not going to have as massive estates as they used to have and they're just going to have to think very carefully about where they maintain shops, where they get the best returns.
think maybe the focus will end up being on city centre shops that are in quite lively areas of commerce that are quite well connected to where people are to be going to watch sport, where people are passing through to get to stadiums and so on, where people are going out to have a drink and watch the football or whatever or watch the racing in a local pub, where they might be going and running over Evans and then remember, yeah, the Champions League's on tonight, why don't I nip in here and put a quick bet on. I think that's where they're going to have to be looking at is where
Ted Orme-Claye (16:52.644)
shops can really get them can be most efficient against the against these costs of business rates the the retail costs the staff costs and so on so yeah I don't think it's going to kill it but it will carry on shrinking I think
Fernando Noodt (17:09.346)
Yeah, Tedam, I feel like you wanted to say something about this.
ted (17:13.348)
No, no, I completely agree with what Ted said. I think it's just far, far too simplistic just to say it's taxes. I think that it's been a decade of compounding pressures on the retail states and retail businesses in the UK. And it's going to be a long recovery. I'll leave it at that.
Fernando Noodt (17:37.775)
Okay, so we kind of cover that there's not only the the gambling tax that is affecting the the retail shops but also other costs that are impacting not of course not only the the gaming shops, the retail gaming shops, but also all all industries, of course. the gambling tax on online only affects like only lies on top of all the other costs that these companies have to assume. But
While the shutters are permanent permanently closed, at one hundred and thirty something, Bedford Shop's new PM Andy Burnham has indicated that he will raise business rates on AGCs or businesses with social harms. So how should operators be preparing with another hostile administration?
ted (18:27.616)
Okay, I'm still kind of in the view that it's a bit too early to call kind of Birn's Premiership hostile towards gambling. And yes, I mean, some of the retroactivity has come out, especially on this terminology of anti-social businesses hasn't been received well by...
UK gambling, also the fact that he is putting up business rates on arcades. But I still think that you're going to hold your horses, man, and see how it kind of pans out towards kind of the wider picture of UK gambling and especially kind of the implementation of the final stages of the gambling review itself. The other thing here is that I'm also kind of wary of the industry being kind of so reactive or responsive to any kind of criticism.
And there was kind of a debate going on here about the exposure of UK gambling on the high street that I don't think anything we've had an effective debate on that does carry kind of social elements and social anxieties and I still think that we have that has to be revisited.
I'd love to hear kind of Ted's opinion on that because you've tracked that debate from start to finish. Where is it now and where do see it heading over under the burden of premiership?
Ted Orme-Claye (19:49.421)
Yeah, it's a good question. I think you've made a good point that obviously it's still quite early for us to just definitively say he's anti-gambling. There is also the conversation around AGCs as well. We've seen some stuff on social media, I think, of when...
some like labour social media pages and that have talked about this policy and they've shown pictures of when they say AGCs you've seen pictures of betting shops getting included in there as well so I think that's going to be a bit of a that might be an interesting talking point for the industry as we go if you know if we go down this route of increasing business rates on what Burnham calls anti-social businesses whether there's whether AGCs and betting shops are going to get thrown into the same bracket because I do think there is quite a noticeable difference between the two
AGC's are certainly a lot more controversial and that relates to what you just asked me now Ted, been the target of quite a long-running political campaign of a lot of Labour MPs in particular but I think also members of the Green Party and some of them more like left-leaning parties in British politics who do view them as having a negative societal impact. Dorn Butler MP for Brent in London I believe has been quite passionate about this
ted (20:57.23)
Mm-hmm. Mm-hmm.
Ted Orme-Claye (21:09.426)
has spoken about it a lot in parliament, has penned open letters on the topic and a big group, there was that big group of councils last year wasn't there who co-authored a letter calling for a reversal of the aim to permit rule. Andy Burnham lent his support to that letter so I think that might be kind of where some people are getting the idea that he might be anti-gambling.
Yeah, in fact regarding that aim to permit rule, think it is looking like that's going to get revoked via the English, what's it called? English Community Empowerment and Local Communities Bill or something like that or something with an equally catchy name. Which has a clause in that that wants to amend the gambling act to remove the aim to permit rule which basically requires councils to lean more towards permitting a venue than rejecting its application.
All of this is just sort fueling lot of speculation about the future of retail betting under both a Burnham administration or Labour in general. But yeah, I do agree with you Ted and I think people are, because of some of the things he's lent his support to in the past like Dawn Butler's campaign around AGCs, people are quite quick to assume that he's anti-gambling or just wants to stamp it all out, which I don't think is entirely fair.
Fernando Noodt (22:36.66)
And UK operators are of course dealing with battles on all cylinders, no leadership at UKGZ, FRA is incoming, tax hikes, marketing restrictions, shop closures. I'm tired, boss. You know that meme with the green mile. So is there any hope for the industry? where are the the opportunities coming from, Ted?
ted (22:51.086)
He
Ted Orme-Claye (22:51.856)
Hahaha
ted (23:00.676)
okay, I think that, you know, it's been a very kind of traumatic decade for retail banking in the UK. There's no escaping that and there further headwinds coming on the radar.
But I think that kind of the structure in the market makeup is going to change in the next five years. I see it's, I think I was discussing with Charlie Horner the other day, and I think that retail itself, not just for gambling, but for any kind of high street business.
is becoming a very unique science and only a handful of companies in each field will be able to compete. If I'm looking at kind of the pack at the moment of who's got a high street presence, I actually do think that it will be, Bedford will be in there, with quite significant.
revisions coming on in its estates. And I also believe that the makeup of what makes a bedding shop in terms of its interior and its offering will change wholesale. I think it will be a much more simplistic offering than it is now with less resources and much more focus on kind cost controls. I think that's the only way it's going to survive now. And I actually think that in the UK in the future, there'll only be two or three competitors.
Ted Orme-Claye (24:31.736)
I think as well another big question might be on whether retail betting continues to have like the gaming element. At the moment if you go into a British betting shop most of them will have a couple of the FOB-T machines which are basically slot machines aren't they, e-gaming machines. Those are the ones that I think are often a lot of source of controversy aren't they and that's why adult gaming centres are so controversial because their entire offering is FOB-Ts and slot machines. So I wonder if maybe some
ted (24:40.462)
here.
ted (24:52.836)
you
Ted Orme-Claye (25:01.65)
retail betting chains might start to look to try and differentiate themselves even more from the AGC's and from casinos by...
rolling that back a little bit and making and really, really emphasising that the focus is on sports betting and like the social element of that, people coming in and chatting about the sport, talking to the staff, putting their bets on, like having a bit of a laugh with each other and that side of thing. But on the other hand, the FOBTs do obviously make these shops a lot of money as well, so, you know, would it be in their interest to get rid of them? I think it's an interesting conversation that could be had.
as we go further down this political line.
Fernando Noodt (25:44.482)
We'll definitely be having more conversations about UK gambling reality as more headwinds coming come come ahead. And of course the tax hikes and all other costs are becoming increasingly important for the industry, especially on retail. but we'll have to hashtag wait and see what happens with the industry in the UK. Of course, keep up to date by subscribing to SVC News newsletter and all SVC Media's newsletters as well to know all.
the information firsthand as it comes live on our SVC Media Network. That has been all for today's episode of iGaming Daily. Thank you very much, Ted and Ted. And thank you very much, Luke Walters, for producing this episode. I'm Fernando Nott and to our listeners out there, we'll see you in the next one.