Among the cheering crowds outside Windsor Guildhall on April 9 there were probably some who were delighted they took up Coral Eurobet’s odds of 5-1 that Prince Charles would marry in 2005. The payouts will not worry Coral’s directors too much. In the three years since Vaughn Ashdown and Mick Mariscotti led an £860m management buyout with backing from Charterhouse, sales and profits have surged. Over the past three years Coral has been acquiring independent bookmakers in Britain, and has increased the number of shops from 870 to more than 1,200. Its sales have jumped £2 billion in the past year alone, reaching £5,378m in 2004, while operating profits have rocketed to £145m. The catalyst for this growth has been a change in gambling taxation. Before 2001, bookmakers’ sales were taxed at 6.75%, meaning that it was uneconomic to offer any bet with less than a 6.75% margin. Now bookmakers’ gross profits are taxed rather than customers’ stakes. Coral has had a surge in custom and has been able to introduce hugely popular low-margin betting products at its shops and on its internet sites, Coral.co.uk and Eurobet.com. It has also doubled the size of its telephone-betting operation, launched Coralpoker.com and Eurobetpoker.com, two new internet poker sites, and grown its traditional sports betting. It is certainly living up to its Eurobet name – finance director Mariscotti reckons that almost three-quarters of the group’s internet business comes from outside Britain. Coral was founded in 1926 by Joe Coral and in the past seven years has been privately owned, initially by Morgan Grenfell Private Equity. Charterhouse took a 75% stake in the 2002 buyout, and is reported to have already recouped, through refinancing, more than its original £278m equity investment.
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