Scotbet Handed Lifeline As FOBT Stake Reduction Kicks In
July 22, 2019
Struggling Scottish independent bookie Scotbet has been bought out of receivership via a pre-pack deal by it’s existing Directors. The chain, formerly known as Morrisons Bookmakers, once operated 75 shops north of the border but has struggled since a previous management buyout in 2011 after years of under investment.
Under the pre-pack deal with Administrator RSM, eleven of the existing forty one betting shops will close leaving Scotbet to operate from the remaining thirty sites. The Scotbet online betting site closed from April 1st as the business failed to transition and benefit from the online betting boom in the UK over the last 15 years.
Scotbet Chairman and Director John Heaton who was paid £229 000 in the year to July 2017 has joined with fellow Director and General Manager Bill Stratton to form Scotbet123 Ltd to acquire the shops from the joint receivers.
In their last published accounts to July 2017, Scotbet made an annual loss of £631 000 on sales of £130M. The betting group had been backed by Clydesdale Bank but it is understood their banking facilities were due for review in April this year .
Following the announcement of the deal Heaton said they had been working to turn around the business for some time but following increased competition and the shift towards online betting, implementation of the £2 stake was “the straw which broke the camel’s back”.
Heaton who was formerly Chief Executive of the Tote said: “I very much regret the loss of jobs, but hopefully we will have saved up to 30 shops and those employees’ jobs will be safe. The alternative was the closure of the whole group.”
Both Ladbrokes and William Hill have also announced significant shop closures in recent weeks as the expected impact of the cut in FOBT maximum stakes takes effect. In its most recent statement, Ladbrokes stated that like for like revenue was down 39% since the cut in FOBT stakes, this figure being less than the 42% that the bookmaker had previously estimated.