BOOKMAKING has never been the most popular of industries. Yet in Northern Ireland the industry employs nearly 2,000 people and makes a significant contribution to the economy - despite being actively discriminated against because shops can't open on a Sunday.
You can bet online and by phone on a Sunday. You can also punt on course at Downpatrick or Down Royal (which are subsidised by all betting shops in Northern Ireland) on a Sunday when there is a meeting, and you can go into a betting shop in Lifford or Dundalk because they are open across the Republic on the lord's day, just as they are in England, Scotland and Wales.
Of course, since the set-up of our Executive, we’ve managed to avoid that piece of legislation which would see our bookmakers treated fairly and stop the clearly proven and reported-upon illegal gambling taking place on Sunday, and reduce the far less regulated and controlled internet gambling taking place also.
And yet our bookmakers continue to employ close to 2,000 people in Northern Ireland and pay their taxes, rates and rents. They are good and decent people in my experience (for the last few years I've been working with the Northern Ireland Turf Guardians Association, the representative body of local bookmakers) and very entrepreneurial too (just look at Toal’s new shop on Belfast's High Street, one of the largest in the UK, if you want a local example).
The Irish also have a flair for it globally. One of the most audacious corporate deals anywhere in the world this summer was pulled off last week when Betfair and Paddy Power were proposed to merge. ‘Betty Power’ as it was jokingly being called brought gasps of admiration from across the business world and big surges in the respective companies’ share prices.
According to one Sunday paper, the deal created 207 millionaires among Paddy Power shareholders, many of them Irish. And while the proposed Coral/Ladbrokes £2.3 billion merger last month would appear to have been done out of desperation, the view from the betting and financial sectors is that Paddy Power Betfair, the official name of the new company if the merger is approved, is a meeting of ‘the two smartest boys in the room’.
The merged companies will have a value of £5.3 billion and a UK market share of around 18 per cent, well ahead of William Hill’s 15 per cent (its share price fell nearly 3 per cent on news of the deal).
Probably more importantly, the merger will also create the world’s biggest online gaming company. So while we tend to think of the likes of Ryanair, CRH, Glen Dimplex, Digicel and Kerry Group as the great international Irish business success stories, you have to marvel at the company created in 1988 by Stewart Kenny, David Power and John Corcoran with only 40 shops. And by the way, it was 1994 when Paddy Power scored its first of many successful PR goals when it offered 100,000 -1 on Pope John Paul II being the next Glasgow Rangers signing.
The king-maker of the deal seems to have been the proposed new entity’s chief executive Breon Corcoran from Mullingar, who is current CEO of Betfair and formerly the number two in Paddy Power before he switched to Betfair three years ago. He’s only 43 and a maths graduate of Trinity with an MBA from Insead, Europe’s top business school. He’s credited with turning Betfair around in that time and according to Bloomberg, he was paid nearly £12 million last year for doing so. That’s a lot of five quid accumulator bets.
And guess who else is near the top of the tree in all of this? Cormac McCarthy, the current finance director of Paddy Power and former chief executive of Ulster Bank in Ireland. It always amazes me how these guys can bounce back so quickly.
It will be interesting to see if the new entity makes a move up here. Paddy Power bought McGranaghan’s bookmakers in 2008 but has done little further in this market place since, although it was known to have made a bid for Eastwood’s when Ladbrokes made that £135 million acquisition in the same year.
There is a lot of consolidation going on in the gambling space so a few other acquisitions/mergers are likely, it remains to be seen if anything happens up here in Northern Ireland though.
Finally, it wouldn’t be a summer column without talking about a few books. I didn’t get much read this summer, just the famous ‘Liar’s Poker’ by the brilliant Michael Lewis. Readers of this column with good memories will remember my enthusiasm for one of Lewis’ other great books, ‘The Big Short’, which was a fantastic description of the collapse in the US and world financial markets and the geeky guys who saw it coming and ‘shorted’ the market with extremely profitable returns.
Liar’s Poker describes Lewis’ time as a ‘geek’ trader with Wall Street royalty, Salomon Brothers, in the 1980s. Once again, it has great explanations of the creation of the Mortgage Bond market which paved the way for the financial crisis in 2008, Black Monday in 1987 and the creation of junk bonds – all told through a fascinating cast of characters who were the financial legends of their day.
In the end, and knowing it wasn’t for him, Lewis leaves Wall Street and becomes a full-time writer. He’s written a famous article (now part of one of his books) on how Ireland and the Irish managed the financial crisis.
First published in Vanity Fair, it’s available there online, it’s well worth a read if you have a half hour as we all start back to school, or at least that’s what it feels like.
:: Paul McErlean (paul @mcepublicrelations.com) is managing director of MCE Public Relations Ltd.
