Ladbrokes left for dead in online world

There are plenty of examples in business where a company dominates an industry right until the moment it doesn’t, and quickly ends up as proverbial roadkill in the wake of a more nimble competitor.

This is the position Ladbrokes is in today.

Go back to the pre-internet days and Ladbrokes – and to a lesser degree Coral – were the dominant forces in UK and Irish bookmaking. Ladbrokes, “the magic sign” as it was known through the 1980s and 1990s, was renowned as being the most influential of the big bookies, at a time when Paddy Power was essentially a small Irish bookmaker.

Today, the Irish firm has transformed into the betting giant Flutter Entertainment, while Ladbrokes, after merging with Coral in 2017, is part of Entain Group. Entain’s overall value is about a quarter of Flutter’s €27 billion.

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There are many reasons why Ladbrokes has fallen away but arguably the main one was its failure to embrace the shift to online betting.

Ladbrokes dominated high-street betting for decades but was unable to sacrifice that focus on physical bookmaker outlets to invest seriously in the online world. Paddy Power, under then chief operating officer Breon Corcoran and CEO Patrick Kennedy, dived headlong into online gambling in the 2000s and hasn’t looked back.

The trend appears to be continuing. Shares in Entain plunged 12 per cent on Monday after it warned of a slowdown in online betting amid “regulatory headwinds” and results that went against them. There should be little sympathy for a gambling company caught out by stronger regulation – any firm in a so-called vice industry must recognise that tight regulation should be good for business.

The drop on Monday continues the recent trend for Entain. Its shares are down 13 per cent in the past year. Flutter’s are up 42 per cent over the same period.

We are far away from a world where punters look to Ladbrokes to get a true understanding of the market in a horse race. Those days are long gone, and there is no sign they are coming back. If business schools aren’t using Ladbrokes as a case study today, perhaps they should.