Profits in Britain's Gambling Pool

In Britain, bingo for cash prizes is carried on in 400 to 500 commercial establishments.

This includes elaborate ones of the Rank Organization in former movie palaces. As for the gaming clubs that flourish everywhere, the government has been using ads in an effort to register them and make a tally.

The government, of course, gets its bite in the form of revenue from licenses, gambling taxes (33 and one-third percent on football pools, 10 percent on greyhound totalizator betting, but nothing on gamblers' winnings), and income and profits taxes.

Probably the two heaviest contributors in the last category are the William Hill group, the 'world's biggest bookmakers,' and Littlewoods, biggest pools operator.

Hill, now organized like any self-respecting big business in a publicly held holding company, Holders Investment Trust, Ltd., has a total annual gambling turnover of around $112 million - some $70 million in racing bets, the rest in fixed-odds football coupons.

William Hill, still group chairman, started as an on-track bookmaker.

In 1939, the war curtailed racing. Inspired by the success of the football pools (where stakes are pooled and 'dividends' determined by the total stakes and numbers of winners), Hill devised the fixed-odds system.

The 'punter' gets fixed odds (up to 100,000 to one) for correctly selecting any of several variations of home wins, away wins, and ties. During this year also, Hill took in Lionel Barber, an accountant, to help run the business.

It was after the war that Hill's fixed-odds system really took hold. Since then, Hills' has been the tale of a growth company. Until 1954, the various companies were owned 80 percent by Hill, 20 percent by Barber.

In that year, they acquired Holders, sold the other companies to it.

So far, the only diversification has been acquisition of debretta, ltd. (fancifully spelled without capitals), a North Ireland children's wear manufacturer.

Though barber insists 'we are businessmen, not gamblers,' there's a risk, as in most growth industries. In last winter's bitter weather, for example, there were two months without racing or football.

Pretax group profits of $4.5 million in the year ended July 31, 1961, fell to $1.7 million the following year.

Latest figures haven't been announced, but there's a loss of $1.7 million on football alone. In the previous years or so, Holder's stock has dropped from $4.20 to $1.68 on the market.

The government has its own modest toe in the gambling pool, with its Premium Savings Bonds, on which the four and a half percent interest goes into a pool for monthly prizes -- totaling $43 million.