This article titled “Bookies hope Cheltenham will help profits jump” was written by Julia Finch, for guardian.co.uk on Monday 14th March 2011 21.16 UTC

At about 1.30 on Tuesday tomorrow afternoonthere will be a huge roar from the West Country, as the crowd at the opening day of this year’s Cheltenham festival gives its traditional reaction to the start of the week’s racing. The embattled gambling industry – which enjoyed a stellar four days last year – will be praying that the gamblers’ cheers soon subside once again, after what is always a crucial event for the layers.

Rarely has that been more true than this year, with bookmakers finding life rather heavy going in the public markets. Those punting on the shares of Ladbrokes, William Hill and (the novice) Betfair have watched their investments underperform the FTSE-250 form guide over the past six months. Meanwhile, Betfair’s move offshore last week – to save about £18m in betting taxes – is a reminder of how this low-margin business will always look for an edge, large or small.

Punters doubting this will find further evidence of penny-pinching in the groups’ lengthy terms and conditions. Both Ladbrokes and Betfair have quietly introduced “inactive account fees” this year – essentially charging their customers for the heinous crime of depositing cash in their accounts (and not spending it). Ladbrokes admits it is likely to make a profit from this new levy, while Betfair refuses to say, although it did make £1.5m from “managing” customer funds in the first half of its financial year.

Meanwhile, a Lib Dem manifesto policy – which ended up in the coalition agreement – proposes that these dormant deposits are transferred into a fund for improving local sports facilities and supporting sports clubs. So could the timing of the bookies’ latest move be a coincidence? It seems like a long shot.

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