The gambling industry – which always tries to paint itself as a wildly exciting sector – is in the doldrums. It has been devoid of genuinely new ideas for years, and its current mantra involves repeating decade-old ambitions (online and international growth) or merging to cut costs.
We’ve seen this with the Ladbrokes/Coral and Paddy Power/Betfair tie-ups and the latest is the somewhat cheeky £3.6bn approach for William Hill by two of its small rivals – online group 888 and casino/bingo operator Rank.
William Hill laughed that one out last week – a “three-way marriage of inconvenience” as the bookie’s chairman, Gareth Davis, put it – but the issue is sure to be raised again. Rank reports results on Thursday and the two suitors must do something before next Sunday to avoid being timed out.
Still, if there is going to be a development this week, someone at Rank and 888 has some work to do. Their proposal states: “888 and Rank see particular opportunity in... some 2m higher-value [Grosvenor] casino customers, of whom over 50% play or bet online but currently under 3% play online with Grosvenor.” So the pitch seems to be: “We can’t get our punters to play with us. Do you fancy a stab?”
Rank boss Henry Birch insists his approach wasn’t opportunistic. Lord knows what it would have looked like had he rushed it out.
The name’s bond – unsold British bond
“Nothing will teach you more about perceived value than taking something with literally no value and selling it in the auction format. It teaches you the beauty and power of presentation, and how you can make magic out of nothing.”
So said Sophia Amoruso, the founder of fashion retailer Nasty Gal, and while that seems to sum up auctions rather neatly, Amoruso sadly appears to have remained silent on the concept of reverse auctions (I want to buy something, please put in your offers for what you’ll sell it for). Can they also make seemingly dull assets suddenly seem like gold?
We will get a chance to see that particular theory in action on Tuesday, when the Bank of England takes a second stab at buying back boring old long-dated gilts as part of its latest attempts at quantitative easing.
Last week, the first effort at a long-dated buyback ended up making the Bank look like it was running a fringe event at the Rio Olympics: very few people showed up.
For the first time ever Threadneedle Street couldn’t buy the quantities of bonds wanted, at any price. It wasn’t exactly a triumph. Developing.
Referendum shock? Let’s hit the shops
In Annie Hall, Woody Allen’s character, Alvy Singer, courageously sums up his relationship with Diane Keaton’s eponymous heroine. “A relationship, I think, is like a shark,” he smooths. “You know? It has to constantly move forward or it dies. And I think what we got on our hands is a dead shark.”
It could be stretching a great gag too far, but it is tempting to view an economy along similar lines. It has to be kept moving by consumer spending, or it dies. And what we have on our hands in the UK is still – just about – a live shark.
Retail sales data due this week from the Office for National Statistics is expected to show that we have continued to spend despite the shock of the referendum result.
Warm weather and heavy discounts helped drive a rebound in other recent measure of retail sales, and figures published last week by the British Retail Consortium (BRC), showed that the value of online and high-street sales rose at its fastest pace for six months in the four weeks to 30 July. The statistics chimed with further studies, as well as with another great Annie Hall gag. Annie: “Sometimes I ask myself how I’d stand up under torture.” Alvy: “You kiddin’? If the Gestapo would take away your Bloomingdale’s charge card, you’d tell ’em everything.”
