Un-Luck o’ the Irish is Paddy Power’s Windfall

2007-09-07

It seems the stereotype may not hold true – except for bookmaker Paddy Power that is. Citing an unexpected number of favorable sporting event results, the Irish firm saw profits for the first six months of 2007 raise to over 35.4M (Eire), nearly double the 17.5M (Eire) it recorded during the same time in 2006. Even this past July and August have proved fruitful, as bad weather has brought about more sporting upsets. Paddy Power is now projecting a fiscal year profit of 68M (Eire), nearly 6M more than it had forecast in June.

“While the summer weather was poor it was nothing compared to the ‘perfect storm experienced by many punters during the first half of 2007” according to Paddy Power chairman Fintan Drury.

Ireland in particular suffered huge home losses, in golf, rugby and football. Even a succession of favored Irish horses were beaten at Ascot, Cheltenham and the Classics. Indeed, Irish horses usually fare particularly well at Cheltenham but this year only pulled out five victories during the full four days.

In golf, Angel Cabrera overcame 100-1 odds to win the US Open, while Zack Johnson won The Masters despite being a 200-1 underdog. When underdogs win big, it usually is good news for sportsbooks, as most betters take favorites.

A normal danger for Gaming companies is that having bettors lose so big may mean many punters will simply give up on gambling. Paddy Power though is recognizant of this fact and as such offers a wider range of special bets – such as refunding all bets on a second place finisher at Cheltenham.

Paddy Powers stock rose nearly 5% on Tuesday, closing at 24.10 (Eire)

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