Denise Coates and that £200 million pay packet

I’m just wondering who is going to chunter over this:

Denise Coates, the billionaire founder and boss of gambling firm Bet365, paid herself £217m last year as her company made a £525m profit from a record £47bn of bets.

The 50-year-old, who started Bet365 in a Portakabin in a Stoke car park 17 years ago, is now the best-paid boss in Britain, dwarfing previous titleholder ad man Sir Martin Sorrell on £48m.

Coates’s £199,305,000 pay this year is more than 1,300 times that of the prime minister and more than double the wage bill of Stoke City, the Premier League club owned by Bet365. On top of the £199m, Coates collected £18m in dividend payments.

That would seem to indicate that it really was pay. So, employers NI, income tax in the top band, that’ll be at least 50% tax paid then. Not even using Ritchie’s dividend trick.

Do we expect to see anything about how much she has contributed to he Exchequer then?

39 comments on “Denise Coates and that £200 million pay packet

  1. The only negative is that the folk in this country pissed away 47 thousand million on gambling.

    Their choice tho’–no fucker else’s. Esp not the sanctimonious garbage at the Gladrag who take their weedy , pink-arsed stand with socialist scum who have pissed away tens of millions of lives as well as the productive efforts of millions more and financial and cultural capital accumulated over centuries. And in the case of traditional China despoiled by Mao , millennia.

    As for the 1300 times the PM salary twaddle. Based on performance a bloke with a job picking up dogshit in the street is more than 1300 times more use and value than that well-off, MC/CM London Bubble, Remainiac, BluLabour bitch Thrasher “The Fish Faced Cow” May.

  2. First thing that strikes me about the figures is how low their margin was last year. 525M profit on 47,000M turnover. 1.1%.

    Of which the CEO’s pay was 41%. Seems rather high.

    Question is, is the profit figure before or after CEO’s pay? Would a journo know the difference?

  3. abacab; the 47bn number is total value of stakes placed. Revenue to the firm is £2bn. That’s roughly equivalent to an overround of 4%. If the average stake is a tenner, they’re handling about 13m bets a day. Since they are solely online, this seems reasonable.

    The 4% number does seem a bit low (compared to horseracing, anyway), but the nags are quite a small part of the betting industry these days. Got overtaken by football and golf quite some time ago now. So if the result is only three ways (home win, draw, away win) then 4% is probably OK-ish.

  4. “The only negative is that the folk in this country pissed away 47 thousand million on gambling.”

    Ecks, not just this country. That would be £700-800 for every person in this country – which would be a bit extreme..:)

    abacab

    Isn’t the turnover the bets placed, not the profit margin on the bet? Hence, yes, after all business costs as well, I would expect profit (as a % of turnover) to be very low?

  5. @Ducky: “the 47bn number is total value of stakes placed.”

    Isn’t that indeed the turnover?

    Your 2Bn then being turnover – payouts?

  6. Should she be paying tax on money made from overseas bets?

    I thought you should only pay tax where the transaction takes place.

  7. DMD

    If they do casino type stuff as well, ie always fixed odds, wouldn’t that pull the % down (compared to nags etc)?

  8. @Chester,

    Very drôle. The transaction she’s paying income tax on is the payment of her salary, which is taxed where she resides.

  9. abacab

    A business ordinarily might make 20-25% gross margin? You are not going to put £100 on black (or red) for a £200 – 25% return if you win? You will want it close to £200, and it’s basically the 0 (or whatever it is, I don’t bet) that is the house take?

    Their turnover (if considered in the traditional business sense) would normally be seen as the cut, from which they have various costs of running the business?

  10. Bet365 allow you to bet on just about anything.

    Looking at their site at the moment, I can see: Sports, In-play, Casino, Games, Poker, Vegas and Bingo.

    The sports are just about anything from the traditional horse racing to E-sports (?) and virtual sports (??).

    The number of football matches you can bet on is staggering, matches from all over the world, and it isn’t just win/draw/lose any more. You can even bet on the number of corners.

  11. Presumably there will be opeds in the Guardian celebrating this woman, a STEAM graduate no less, achieving this.

    Right?

  12. “The only negative is that the folk in this country pissed away 47 thousand million on gambling.!”

    Not all bets lose.

  13. It is, candidly, a scandal of staggering proportions that under the tax system managed by this far right Tory government this women is able to take 18m as a dividend instead of salary and thereby avoid NIC on that salary foregone.

  14. acabab; in the sense that it is customer cash flowing through the firm, yes, £47bn is turnover. But, a certain amount is going to flow straight back out in winnings, so it’s not equivalent to Tesco’s turnover.

    Yes, the equivalent turnover number is Stakes – Payouts so £2bn.

    Bookies should be completely agnostic about the result of an event; the odds that you see don’t represent the probabilities. Take the odds for a race/match, convert to probabilities, sum them, and (assuming that they haven’t buggered up the book) the total will be greater than 1. The amount over 1 is their margin.

  15. “Presumably there will be opeds in the Guardian celebrating this woman, a STEAM graduate no less, achieving this.”

    Of course not,she’s a self-made woman who didn’t moan and complain about the Patriarchy all the time. Just got on a created something out of nothing by sheer hard work. Thats not what women are supposed to do, in fact its downright masculine. How dare she behave like men! Woman are supposed to sit around complaining about how much they are oppressed by men, and its impossible for a woman to get on in society, and how they must be given all manner of special treatment because of the shape of their genitalia. Then they get written about in the Guardian.

    Women like Denise Coates show this is all bollocks, so will be studiously ignored, or even attacked for something or other, like paying massive amounts of tax in the UK, or moving her company HQ to Gibraltar, that sort of thing. By her success she has made herself an honorary man,not to other men, but to feminists, as a successful woman negates everything they stand for.

  16. PF, I would have thought so. Those games are quite tightly regulated, like FOBT.

    IIRC, the introduction of betting exchanges depressed the overround, until the exchanges started playing with their commission rates, which woke a lot of their customers up. I think at least one, possibly Blue Square?, switched to just offering odds, instead of being an exchange.

    It’s not just the online stuff depressing margins though; before about 2002, I think, the bulk of the business was dogs and nags, and around that time an independent bookmaker that I knew told me that he was taking more bets on golf, tennis, formula one, whatever, than on the horses. And those events have much smaller fields.

  17. The number of bets you can do is staggering, they must have some automated process of working out the odds. On a Saturday they will offer hundreds of football matches, with hundreds of possible bets for each – correct score, number of goals, first goalscorer, number of corners, score at half-time/full-time. Add to that the in-play odds changing. No way are actual people handling that.

  18. STEAM graduate?

    Googles… Science Technology Engineering Arts Maths. So, an *anything-except-history* graduate. Why not just say “graduate”? Way hey, she’s one of 50% of the entire population.

  19. @jgh – it’s the idea that “if we add something to STEM it’ll have the same value”, which is entirely getting it back-asswards. STEM is STEM since it’s the high-value degrees – adding something to the acronym doesn’t add value to that which was added.

    It’s like the US habit of promoting markers (i.e. the dependent variables) of being middle-class and prosperous, such as, oh, having a university degree, rather than the underlying traits that make one middle-class and prosperous.

  20. Rob: it’s partially automated but surprisingly labour-intensive still. A lot of the initial data entry is still manual, and there are people constantly monitoring to see if things go out of whack. There are algorithmic processes to set and adjust lines, but really the primary goal is to make sure the book is flat (plus the vig, which for most books these days is ~5.2%). That’s the gross profit margin, out of which among other things has to come a very large IT spend. There’s a lot of historical data so the Law of Large Numbers kicks in and enables you to set initial lines automatically with a fairly high degree of confidence.

    Bet365 are monsters. They can significantly move a market all by themselves. Good luck to ’em.

  21. PF – 25% gross margin?
    Whatever you do, don’t try retail. You would easily fail with a margin that low.

  22. jgh – history comes under ‘arts’, hence a history degree is a bachelor of arts degree.
    And yes we would refer to STEAMs graduates by the more common term ‘graduate’.

  23. Martin,

    You understand what I was saying. All sectors / businesses are quite different! And when I say gross margin, I’m intuitively thinking sales less cost of sales. Including direct salary costs etc, not simply the cost of a good, because again, it’s all different by sector. Service companies often don’t have the same notion of “cost of sale”.

  24. The comment was really intended in the context of comparing very low margin set ups, ie similar to “agents” type businesses (where turnover is more the “fee” for arranging).

  25. Bloke in North Dorset: “Not all bets lose.”

    Mr Ecks “That’s the way to bet tho’.”

    and heres why. lets just say youre an ex caps trader and an ex crack/spark option trader that breaks out his long forgotten APL chops and maps those hundreds of bets into a big array and starts making maybe 200 or 250 a day doing bets across exchanges (some days down 750, some days up 1500) … sorta a fun hobby …
    …. but do that for a couple of months straight, and the exchanges start refusing your business, or give your account ” custom odds” slightly worse than their generally posted odds…
    … then they offer you a job, but not at enough pay to tempt you away from being “un pensionato”

  26. I suggest the reported annual turnover figure of £47b for Bet365 is incorrect. Looking at the UK Gambling Commission stats for 2016-17 (http://www.gamblingcommission.gov.uk/news-action-and-statistics/Statistics-and-research/Statistics/Industry-statistics.aspx) they indicate turnover for the whole of the UK online gambling industry (betting and gaming) is £55b. I can’t see Bet365 being 7x bigger than the all its rival operators combined! Will Hill, PaddyPower, Ladbrokes, Gala, Bet Victor, etc.)

  27. Fact Checker

    “predominantly UK facing”

    Hmmm… OK, but click on 365.com and the first thing you get is a choice of 18 different languages?

    Then “Contact us” and “about us” and one finds:

    “The group employs over 3,000 people and has over 22 million customers worldwide.”

    And I thought we were a nation of shop keepers..:)

    I can’t be bothered to get too forensic (and they are being spoil sports by refusing to disclose geographical turnover etc – “severely prejudicial” and all that – lol), but a cursory look at the directors’ report and tax, subsidiaries and other notes does “point” (if nothing else) to significant o/seas activity:

    https://beta.companieshouse.gov.uk/company/04241161/filing-history

    Unless there is something else that contradicts and it really is just a predominantly UK outfit?

  28. “I suggest the reported annual turnover figure of £47b for Bet365 is incorrect.”

    The consolidated group accounts (showing the £46.9bn of wagers) do have a clean audit report (in the link above)?

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