Via Mark Davies —who rejoices.

For sale: Personal details of millions of Ladbrokes gamblers, offered to the MoS by a mysterious Australian

The confidential records of millions of British gamblers who bet with top bookmaker Ladbrokes have been offered for sale to the Mail On Sunday. The huge data theft is now at the centre of a criminal investigation after this newspaper was given the personal information of 10,000 Ladbrokes customers and offered access to its database of 4.5 million people in the UK and abroad.

(more…)

This is no fake claim, as attested to by the fact that a “taster” of the full database was handed over by the culprit, fully ten thousand names and highly confidential personal details for the purpose of whetting the potential client’s appetite.

Hey-ho. The gambling industry at its predictable worst.

These incidents are not new – I reported on an occurrence a few years ago in which an online gambling industry leader touted a database of 100,000 UK players to the highest bidder on his forum. Neither are they remotely hard to believe; while the average customer service representative might struggle to access his company’s full customer list, an employee higher up the chain in the IT department should have no such difficulty – a quick copy, paste and save…and it’s time to start lining up the buyers. I daresay the names of four and a half million bona fide gamblers would fetch a very fine price.

And while our data watchdog, the ICO, huffs and puffs its righteous indignation, I’m sure they know there really is very, very little you can realistically do about this. Just one employee with access is all you need.

It serves as a reality check: when you put your details online, they are just that: online. Assume that, at some future point, someone will be hawking your phone number, email and physical address to the highest bidder.

I commented also in my Ladbrokes data theft post, and see also the Racing Post’s Ladbrokes reassure users over data protection article.

Oh well, I don’t know; maybe privacy is overrated.

Via Barry Ritholtz (author of Bailout Nation)

The Guardian’s Nils Pratley was compelled to write at the time;

“Has Joe Lewis, the British billionaire, built a stake of 7% in Ladbrokes? The company apparently doesn’t know, but the story smells true.  Ladbrokes would appeal to a value hunter. A sizeable chunk of the revenues comes from electronic roulette machines. These properly belong in casinos but the government has agreed they can be operated by high street bookies. For Ladbrokes, it’s risk-free cash.  Lewis may also have noticed that his multi-millionaire friends are gamblers by instinct. Ladbrokes is doing nicely with its volatile, but often lucrative, income from “high rollers”.  Yes, deregulation has produced more high street competition, but the market leader is unlikely to be blown away. Given the weakness in the shares, Lewis would be making a reasonable bet.”

I wrote to Pratley at the time, suggesting that that his comments were careless in the extreme, and based upon no real knowledge of the gambling industry’s structure, its regulatory framework and its future outlook.  Pratley  did not reply.

In the interim period, Joe Lewis and his partners allegedly chalked up a loss of over $1 billion dollars in the collapse of the American investment bank Bear Stearns.

Ladbrokes, meanwhile, recently announced results for the 3 months ended 30 September 2009.  Group net revenue was down 15 per cent.  Gross win margin was significantly lower due to poor horseracing margins and an exceptionally low football margin.   Group operating profit fell 58 per cent to £22.4m.   The company also launched a £275m (€300m) steeply discounted rights issue, that comprised of a one-for-two issue of 300m new shares, priced at 95p, or a 48 per cent discount to its then closing price of 181p

At the time of Lewis’ acquisition of shares in Ladbrokes,  the company was valued at around 1.9bn; this morning, it is valued at 848mn.  This would suggest that Lewis may be sitting on a loss in the company somewhere in the region of 60m.

The Irish investors JP McManus and John Magnier, have also allegedly built up stakes in Ladbrokes in the past, and they too may now be sitting on significant paper losses.

In the wake of the recent release of the company’s results, Ladbrokes’ CEO Chris Bell spoke of the Ladbrokes franchise  as being “a profitable and cash-generative business with strong positions in markets that remain attractive.”

There is no reason, however, why the company’s recent profit warning, alongside the unexpected arrival of a heavily discounted, highly dilutive rights issue, should not trigger a change of management at Ladbrokes.

For those shareholders that have seen the value of their investment in the company decrease significantly  in recent times, the charge sheet against Bell could run as follows;

that he was guilty of swallowing the myth that gambling companies were resilient in the face of an economic downturn;  that he wrongly believed that fixed odds betting terminals would not cannibalise the company’s traditional core business;  that he did nothing to stem the tide as punters deserted the horse racing product; that he failed to appreciate the threat that Betfair poses to his company’s traditional business model; that he failed to exploit the opportunities presented in the newly liberalised betting markets of Italy and Spain; that he has failed to innovate; that he has failed to exploit the value of the Ladbrokes brand, not least in the online sphere, etc, etc …

Moreover, shareholders should demand that the £957,000 bonus that was paid to Bell this year be returned.  They should also question why it was that he was granted a 11.4% salary increase last summer (attributed to “reflect competitive pay levels and the continuing high levels of leadership Mr Bell gives to the business.”).

Meanwhile, in the wake of the recent rights issue, the short sellers have arrived on Ladbrokes’ lawn, with CATAPULT CAPITAL,MILLENNIUM PARTNERS, L.P and Highbridge Capital Management all recently disclosing short positions in the company.

Cross-posted from BettingMarket

Both the bookmakers and the prection markets are utterly useless in trying to divine who will get the Nobel prize of economics.

Below is the 2009 prediction post-mortem:

1. Bookmakers

Ladbrokes’s probabilities (odds) for the 2009 Nobel prize in economics:

Eugene Fama 2/1
Paul Romer 4/1
Ernst Fehr 6/1
Kenneth R. French 6/1
William Nordhaus 6/1
Robert Barro 7/1
Matthew J Rabin 8/1
Jean Tirole 9/1
Martin Weitzman 9/1
Chris Pissarides 10/1
Dale T Mortensen 10/1
Xavier Sala-i-Martin 10/1
Avinash Dixit 14/1
Jagdish N. Bhagwati 14/1
Robert Schiller [sic] 14/1
William Baumol 16/1
Martin S. Feldstein 20/1
Christopher Sims 25/1
Lars P. Hansen 25/1
Nancy Stokey 25/1
Peter A Diamond 25/1
Thomas J. Sargent 25/1
Dale Jorgenson 33/1
Paul Milgrom 33/1
Oliver Hart 40/1
Bengt R Holmstrom 50/1
Elhanan Helpman 50/1
Ellinor Ostrom 50/1
Gene M Grossman 50/1
Karl-Goran Maler 50/1
Oliver Williamson 50/1
Robert B Wilson 50/1

2. Betting Pools

Here is the betting in the Nobel pool at Harvard:

Robert Barro -10%
John Taylor – 8%
Paul Milgrom – 8%
Jean Tirole – 6%
Oliver Williamson – 6%
Martin Weitzman – 6%
Eugene Fama – 5%
Richard Thaler – 5%
Lars Hansen – 4%
Paul Romer – 4%

3. Prediction Markets

InTrade:

Previously: Nobel Prize for Economics 2009 Predictions

1. Bookmakers

Ladbrokes’s probabilities (odds) for the 2009 Nobel prize in economics:

Eugene Fama 2/1
Paul Romer 4/1
Ernst Fehr 6/1
Kenneth R. French 6/1
William Nordhaus 6/1
Robert Barro 7/1
Matthew J Rabin 8/1
Jean Tirole 9/1
Martin Weitzman 9/1
Chris Pissarides 10/1
Dale T Mortensen 10/1
Xavier Sala-i-Martin 10/1
Avinash Dixit 14/1
Jagdish N. Bhagwati 14/1
Robert Schiller [sic] 14/1
William Baumol 16/1
Martin S. Feldstein 20/1
Christopher Sims 25/1
Lars P. Hansen 25/1
Nancy Stokey 25/1
Peter A Diamond 25/1
Thomas J. Sargent 25/1
Dale Jorgenson 33/1
Paul Milgrom 33/1
Oliver Hart 40/1
Bengt R Holmstrom 50/1
Elhanan Helpman 50/1
Ellinor Ostrom 50/1
Gene M Grossman 50/1
Karl-Goran Maler 50/1
Oliver Williamson 50/1
Robert B Wilson 50/1

2. Betting Pools

Here is the betting in the Nobel pool at Harvard:

Robert Barro -10%
John Taylor – 8%
Paul Milgrom – 8%
Jean Tirole – 6%
Oliver Williamson – 6%
Martin Weitzman – 6%
Eugene Fama – 5%
Richard Thaler – 5%
Lars Hansen – 4%
Paul Romer – 4%

3. Prediction Markets

2a. InTrade has just opened some Nobel prediction markets —see under “current events”.

2b. Inkling Markets – Which economist will receive the 2009 Nobel Prize for Economics (a.k.a. the Sveriges Riksbank Prize in Economic Sciences)?

Previously: Will Chicago get the Olympics? Don’t bet on it. Too risky.

Stay away from these markets where the intention is to divine the decision of a close, opaque group. It is impossible. No good information leaks out.

Previously: The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction.

Previously: Who will get the 2009 Nobel Prize for Economics? Don’t bet on it. Too risky.

-

UPDATE: The Royal Swedish Academy of Sciences has decided to award The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2009 to Elinor Ostrom “for her analysis of economic governance, especially the commons” and Oliver E. Williamson “for his analysis of economic governance, especially the boundaries of the firm”.

Group net revenue (1) (excluding High Rollers) from 1 July to 30 September 2009 was down 15 per cent in comparison with the corresponding period in 2008. The company said that gross win margin was lower when compared with the corresponding period in 2008 due to poor horseracing margins and an exceptionally low football margin. Group operating profit fell 58 per cent to £22.4 million (2008: £52.8 million).

UK Retail total net revenue declined by 15 per cent; whilst in eGaming net revenue was down 13 per cent. with the greatest decline of 31 per cent. seen in the Sportsbook business which saw a poor gross win margin of only 4.6 per cent. (2008: 7.5 per cent.).  In poker, net revenue declined 21 per cent.; in games, net revenue declined 7 per cent.

Ladbrokes said that it is now proposing to raise approximately £275 million by way of a Rights Issue of 300,658,2 39 New Ordinary Shares.

2a. InTrade has just opened some Nobel prediction markets —see under “current events”.

2b. Inkling Markets – Which economist will receive the 2009 Nobel Prize for Economics (a.k.a. the Sveriges Riksbank Prize in Economic Sciences)?

Previously: Will Chicago get the Olympics? Don’t bet on it. Too risky.

Stay away from these markets where the intention is to divine the decision of a close, opaque group. It is impossible. No good information leaks out.

Previously: The market participants did not possess a sufficient level of information completeness to arrive at the correct prediction.

2. Bookmakers

Ladbrokes’s probabilities (odds) for the 2009 Nobel prize in economics:

Eugene Fama 2/1
Paul Romer 4/1
Ernst Fehr 6/1
Kenneth R. French 6/1
William Nordhaus 6/1
Robert Barro 7/1
Matthew J Rabin 8/1
Jean Tirole 9/1
Martin Weitzman 9/1
Chris Pissarides 10/1
Dale T Mortensen 10/1
Xavier Sala-i-Martin 10/1
Avinash Dixit 14/1
Jagdish N. Bhagwati 14/1
Robert Schiller [sic] 14/1
William Baumol 16/1
Martin S. Feldstein 20/1
Christopher Sims 25/1
Lars P. Hansen 25/1
Nancy Stokey 25/1
Peter A Diamond 25/1
Thomas J. Sargent 25/1
Dale Jorgenson 33/1
Paul Milgrom 33/1
Oliver Hart 40/1
Bengt R Holmstrom 50/1
Elhanan Helpman 50/1
Ellinor Ostrom 50/1
Gene M Grossman 50/1
Karl-Goran Maler 50/1
Oliver Williamson 50/1
Robert B Wilson 50/1

3. Betting Pools

Here is the betting in the Nobel pool at Harvard:

Robert Barro -10%
John Taylor – 8%
Paul Milgrom – 8%
Jean Tirole – 6%
Oliver Williamson – 6%
Martin Weitzman – 6%
Eugene Fama – 5%
Richard Thaler – 5%
Lars Hansen – 4%
Paul Romer – 4%

-

UPDATE: The Royal Swedish Academy of Sciences has decided to award The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2009 to Elinor Ostrom “for her analysis of economic governance, especially the commons” and Oliver E. Williamson “for his analysis of economic governance, especially the boundaries of the firm”.

UPDATE: InTrade – Next President of World Bank