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Ladbrokes warning as profits slump
Bookmaker Ladbrokes reported a sharp fall in profits today as it battles to overhaul its digital business in time for this summer's football World Cup.
As well as a 66% slump in 2013 profits to £67.6 million, Ladbrokes warned that it will cut its 2,300 strong estate of shops by between 40 and 50 this year.
The company's under-pressure chief executive Richard Glynn said the results were disappointing but that it had made progress in efforts to ensure that its online offer catches up with competitors such as William Hill.
It is racing to complete product upgrades, such as a single wallet allowing punters to bet on sport and play casino games from one account, in time to deliver "tangible benefits" from the World Cup onwards.
Gaming machines have been a major contributor to profits in recent years but, with the market slowing more than expected last year, Ladbrokes is replacing its 9,000 cabinets with more sophisticated models over the first half of this year.
The move comes amid growing calls for the use of the fixed-odds betting terminals - dubbed the "crack cocaine of gambling" - to be banned or limited.
Ladbrokes said a boardroom committee will be set up to focus on the topic of problem gambling and that from next year it will link the pay of top executives to its efforts in ensuring the responsible use of gaming machines.
Mr Glynn said: "Responsible gambling is not a passing regulatory issue but a fact of life for all operators and an issue we take very seriously. Problem gamblers, contrary to popular myth, are not good for business."
Ladbrokes said sporting results so far in 2014 have largely favoured customers, with poor results in football and horse racing.
The company said: "While fair to expect that customers will recycle some of these winnings, it is unlikely that we will recoup all in this year."