Digital divide: the story of how bet365.com left the competition trailing in its wake

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The tale of bet365’s staggering rise is the stuff of industry legend. It was March 2001 when, around 12 months after the dotcom bubble went pop in spectacular fashion, bet365.com launched and began accepting bets over the internet. Denise Coates, who had bought the domain off eBay for a reported $25,000 and secured a £15m loan against her father Peter’s betting shops to build the site, was convinced online was where her family’s fortunes lay. This was a calculated gamble she was prepared to take and so the 33-year-old at the time famously established bet365 from a portable cabin in the inauspicious surroundings of a Stoke-on-Trent car park near to one of the betting shops.

What followed was Denise Coates, a maths whizz with a first-class honours degree in econometrics (statistics applied to economics), and her younger brother, John, turned this online start-up into a global powerhouse. It also made them multi-billionaires along the way. Twenty years ago, however, bet365 with its green, yellow and white livery was just another new online betting brand that had sprouted up and was fighting for attention on this newish medium.

“I was convinced early on that gambling would work on the internet,” Denise Coates once told the local newspaper in a rare interview. Outside investment was hard to come by, though. “At the time, the dotcom bubble had burst and a loss-making internet company wasn’t looking the best investment,” she revealed.

Words of advice

Chris Welch, VP of sports at Catena Media, was Coral Eurobet’s executive marketing director when, in 2001, he was invited to the annual Betting Shop Manager of the Year awards at a plush hotel in central London. Seated on his table that evening was a family that owned a small chain of betting shops: Peter, John and Denise Coates.

While tucking into the main course, Welch heard from the Coates’ how they had recently launched an online betting site (bet365) and had grand plans for their digital venture. Welch listened politely, yet he feared the worst and advised the trio to focus on their retail estate as, he mused, his company was haemorrhaging cash in the nascent online arena. Indeed, the previous year internet-only brand Eurobet lost £12m on football’s Euro 2000 alone.

“To my mind, a small regional bookmaker trying to enter this space and be successful was almost inconceivable – clearly the Coates family had different ideas,” Welch tells EGR Intel 20 years on. Bet365 was predominantly a tele-betting operation back then, while advertising the latest prices and the all-important telephone number on Teletext was still a thing. Bet365 had a bank of call handlers taking bets and dealing with customers’ queries seated alongside the odds compilers when Nigel Ridgway joined in 2002 to work the phones.

By then, the fledgling business had moved from the temporary building into a proper open-plan office with the small IT department situated at the back of the room behind a glass partition. There was also a kitchen and an office each for the Coates family. “It was a real buzz; everything was going off around you,” Ridgway remembers.

Something that would be incongruous at an online bookmaking operation today – or even back then – was the fact bet365 employed tea ladies to push drinks trolleys around the office and supply staff with hot beverages. By the time Ridgway left in 2012, there were around a dozen on the payroll to keep the growing army of employees refreshed. “It was very British,” Ridgway remarks. The overall headcount, he says, swelled from around 25 members of staff when he first arrived to more than 1,000 at the time of his departure. “It just grew exponentially,” he recalls. “Every year it seemed like we needed more space. We were able to expand in the existing building and we completely took it over.”

Online betting was still in its infancy in the early 2000s, of course. According to data by the Office of National Statistics, an estimated 36% of UK households had internet access back in 2001. And those that did had to endure sluggish 56k dial-up connections, data limits and crude websites.

The UK’s big three established retail bookmakers, William Hill, Ladbrokes and Coral, all released sports betting sites prior to bet365’s launch in March 2001. In fact, William Hill’s online sportsbook, willhill.com, first flickered into life in 1998 (a winery in California originally used WilliamHill.com). Yet bet365 would eventually breeze past these household names to become a true global giant of digital sports betting.

“You don’t have to be first to be the best,” states Mark Blandford, who, much like the Coates’, owned a chain of betting shops before he launched online bookmaker Sportingbet in 1998. “There’s nothing wrong in looking at the market and the competition and being able to spot opportunities to improve on what’s in the market. I think that’s exactly what Denise did.”

Bet365 also focused on doing as much as possible in-house rather than relying on third parties. This included the affiliate programme, which had initially been farmed out to a company in Vancouver, Canada. Matthew Glazier was chiefly responsible for bringing the programme in-house when he joined bet365 in 2004 as head of marketing after firing off a speculative letter outlining his credentials to John Coates.

“They were an up-and-coming bookmaker at the time,” Glazier says. “John Coates himself said when I first spoke to him that they regarded themselves as being in the second tier of bookmakers at that time, which sounds incredible to say now but that was the case.”

Realising online was the future for bookmaking, alongside aspirations of becoming a first-tier bookmaker, Denise Coates took the decision to sell the family’s betting shops to Coral in 2005 for £40m. This was a pivotal moment in the company’s history as the cash from the sale was used to pay off the RBS loan, while part of the proceeds was also ploughed into technology as online gambling began to really take off. In addition, bet365 went multi-lingual, and so, bilingual and polyglot staff were recruited to manage overseas customers.

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