Boylesports managing director John Boyle hopes to reach a €1 billion turnover in two years, writes Barry O 'Halloran

Last Saturday, a branch of Boylesports bookmakers took a €20,000 bet at even money on Armagh in the senior All-Ireland football semi-final. At the same time, the chain's owner and managing director, John Boyle, was in Croke Park cheering the team one of his customers hoped would cost him €20,000.

It's a far cry from 1982, when Boyle opened his first betting shop on Market Hill, Co Armagh with a £6,000 loan from his father, after losing his job as a breadman. Back then, it could have taken more than two months to see the equivalent of €20,000 in turnover, let alone taking it in in one single bet on a football match.

With 100 shops and a turnover of over €500 million a year, Boylesports can afford to stand bets of this nature, and pay out when the punter wins. The company has grown to become the third-biggest player in the Irish market after Paddy Power and Ladbrokes. In short, Boyle has come a long way.

But so has the bookmaking business itself. Boyle's first shop had no television and no seating. Odds were displayed on chalk boards and the bookie shouted the race results as they came in from the counter.

Yesterday, Boylesports opened its 100th shop. Located on Capel Street, Dublin, it has plasma television screens showing live sporting events, along with the odds and bets available. The punters have free tea and coffee on tap and sit in comfortable armchairs.

While the premises owned by some of their British-based competitors still leave a lot to be desired, Irish bookies like Boylesports have left their seedy image behind. The economic growth of the last decade, the increase in disposable income and a rise in customers' expectations were the main drivers of this change.

"I came down to Drogheda [ where he opened his second shop] in 1989, and people were saying there was a recession," Boyle says. "But compared to what I had - a small shop in a town of 2,000 people - it was great. You had 50,000 people in Drogheda at the time. I said, well, if this is a recession, I wouldn't mind one. But then when the Celtic Tiger came along in 1994 and 1995, and things took off, I could see what they were talking about."

Boylesports has benefited from continued growth in disposable income. In the 12 months to the end of June 2004, it turned over €266 million. A year later, that grew to €368 million and at the end of June this year, it rose to €504 million.

The business operates on margins of 12-15 per cent, so it is looking at gross profits of between €60-€75 million this year. Boyle's ambition is to hit a turnover of €1 billion. He originally believed he would achieve this by 2009, but now says, "we can do that in two more years".

Boyle intends to add another 100 shops to his chain, but says it will hit the €1 billion mark long before this. A steady increase in the average bet wagered is a contributor to turnover growth. "We'd have an average of about €20 across all our shops," he says. "Not so long ago, a fiver was considered to be a good bet."

There are also plenty of punters who bet at the €50 and €100 level and above. Then there are the big players, who operate in four, five and six-figure territory. "There are quite a few of those. You'd be surprised," he says. "There is a lot of money out there."

A chain with a €500 million turnover can manage the risks involved with such high bets, but he concedes that a winner at this level can wipe out an individual branch's profit.

However, like all bookies, Boylesports employs traders who lay off big liabilities by passing the risk on to others, preferably at bigger odds.

"What we're doing is buying money at one price, selling it at another, hopefully bigger, price," he says. The "price" is the odds at which the bets are taken and laid off. Trading, or laying off, is central to successful bookmaking. Bookmakers have a level of liability they'll carry on any given event, and lay off anything over and above this amount. One of the channels for this is the internet, which hosts betting exchanges that offer better odds than the bookies themselves.

The industry has been quick to criticise the exchanges because they allow individuals to offer odds as well as betting on them, and thus act as "unlicensed bookmakers". However, this has not stopped the betting shops from using them as a means of laying off. Boyle is more upfront about this than many of his competitors. "They're there and we use them," he says.

He adds that the company is looking at the possibility of offering some kind of exchange product in the future. "If it's what customers want, then we should be providing it to them."

The internet is already a key retail channel for Boylesports, along with the phone. In common with his rivals, Boyle believes these will continue to increase their contribution to revenues to the point where the emphasis may shift altogether.

Technology alone is not the only thing responsible for this. A key factor is live television coverage of GAA, soccer, rugby and golf. There are also two racing channels available to Irish viewers: Attheraces (ATR), which covers all the Irish tracks and a high number of British courses, and Racing UK, which covers big British courses.

When the original ATR closed for a few months two years ago after hitting financial difficulties, Boylesports noticed an immediate fall-off in internet and phone betting. Punters did not want to bet on events they could not watch. But the company is ensuring this does not happen again by sponsoring ATR's coverage of Irish racing. It is using this as a clever way of cross-marketing, by flagging its online poker brand as the sponsor of the racing coverage.

Online poker and casino games are the next big thing for high-street bookmakers. They are essentially a no-risk product, as they simply provide the websites on which people play each other and take a small percentage or "rake" off winnings.

The word "casino" holds a clue to where Boyle sees the business going. Now that Minister for Justice Michael McDowell has agreed that existing casinos (which operate as private clubs) should be licensed and regulated, bookmakers are likely to broaden their product offering.

One thing Boyle would like to see here is the fixed-odds betting terminal (FOBT), a feature of British high-street bookmakers. They are a development of the slot machine, allowing people to bet on numbers-based games at fixed odds.

Boyle argues that this product already exists here in another form, known as "virtual racing". These are races involving computer-generated horses or dogs, shown on television screens in the same way as real racing. Bookies offer odds on these cartoons to allow people to bet on them as if they were real.

The product is based entirely on a computer programme linked to the numbers of the computer-generated animals involved, much like FOBTs. "It's the same thing, except that people are betting over the counter instead of putting it into a machine," Boyle says.

But FOBTs and virtual products attract a different clientele, he says. "The people who bet on horses aren't interested in the FOBTs and the people who are interested in those might back one or two horses in the whole year. They're different products."

Boyle believes high-street bookmaking is making the inevitable shift towards bringing in new customers with new gaming and betting opportunities. "What I'm talking about is mini-casinos where you'll have your racing in one part of the shop, sports betting in another and gaming in another."

The only real risk to the business is an economic downturn, which would hit disposable incomes. But Boyle is not worried about this.

"If you believe that something is going to happen to the business you're in, then you're going to focus on getting out of it, and that's what you'll do," he says. "I'm focused on growing this business to a €1 billion turnover, and that's my drive, my passion, at the moment," he says.

Though he enjoyed a bet on the horses and the dogs before he got into the bookmaking business, Boyle says that backing a winner no longer gives him the same buzz.

"I suppose with this game, I realised that you can always make a margin out of it, and that's what gives me my buzz now."

FactFile

Name: John Boyle

Age: 50

Position: Managing director and owner of Boylesports bookmakers

Background: Initially worked as a breadman, but lost his job when the recession bit in the 1980s. He borrowed £6,000 from his father and opened his first bookmakers in Market Hill, Co Armagh, in 1982. Seven years later, he opened a second branch in Drogheda, and the chain began expanding from there.

Family: Married with a grown-up family

Hobbies and interests: Sport of all kinds, especially Gaelic football and hurling, horse and dog racing

Why he is in the news: This week the chain opened its 100th outlet on Capel Street, Dublin, and it topped €500 million turnover in the year to the end of last June