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Paddy Power Betfair takes £5m hit from Trump election win | Paddy Power Betfair takes £5m hit from Trump election win |
(about 2 hours later) | |
Paddy Power Betfair blamed the unlikely pairing of Donald Trump and the Manchester United striker Zlatan Ibrahimovic as it cut its full-year profit forecast. | Paddy Power Betfair blamed the unlikely pairing of Donald Trump and the Manchester United striker Zlatan Ibrahimovic as it cut its full-year profit forecast. |
The “unexpected US election outcome”, in which Trump triumphed over Hillary Clinton in November, cost the bookmaker £5m as it paid out to punters who backed him for the White House. | The “unexpected US election outcome”, in which Trump triumphed over Hillary Clinton in November, cost the bookmaker £5m as it paid out to punters who backed him for the White House. |
The impact was exacerbated by the group’s decision to pay out £800,000 to gamblers who backed Hillary Clinton even before the polls closed, on the assumption that the Democrat candidate would win. | The impact was exacerbated by the group’s decision to pay out £800,000 to gamblers who backed Hillary Clinton even before the polls closed, on the assumption that the Democrat candidate would win. |
With just a month to go until the election, Betfair gave Trump just a 14% chance of winning after a tape emerged of the presidential candidate boasting about groping women. | With just a month to go until the election, Betfair gave Trump just a 14% chance of winning after a tape emerged of the presidential candidate boasting about groping women. |
The bookmaker still gave Clinton a 74% chance of winning two weeks later, after the FBI reopened an investigation into her use of private email servers. | The bookmaker still gave Clinton a 74% chance of winning two weeks later, after the FBI reopened an investigation into her use of private email servers. |
An outsider’s victory usually favours bookmakers because they end up paying out to very few people. And if a flurry of bets are placed on an outsider, at a horse race for instance, the bookmaker will usually respond by shortening the odds to limit what it will pay out. | |
But in the case of Trump, bookmakers refused to believe he had a good chance of winning right up until election day and did not adjust his odds. | |
That meant big returns for punters who believed all along that he had a chance. | |
Created last year by the merger of Paddy Power and Betfair, the group also suffered a £35m hit from “customer friendly” sports results towards the end of 2016. | Created last year by the merger of Paddy Power and Betfair, the group also suffered a £35m hit from “customer friendly” sports results towards the end of 2016. |
These included 12 goals in 12 games for Ibrahimovic, who the bookmaker said typically attracts the biggest stakes from gamblers betting on a goalscorer. | These included 12 goals in 12 games for Ibrahimovic, who the bookmaker said typically attracts the biggest stakes from gamblers betting on a goalscorer. |
Revenues were up 11% but the group cut its forecast for full-year underlying profits, which it had previously said could reach £405m, to about the “mid-point” between £390m and £405m. | Revenues were up 11% but the group cut its forecast for full-year underlying profits, which it had previously said could reach £405m, to about the “mid-point” between £390m and £405m. |
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