Anyone currently surveying the investment horizon, as folks do at this time of the year, could surely come up with only one conclusion: that in the short term it’s extremely unlikely that Britain’s economy will suddenly burst into life.
Bumping along the bottom of an unprecedentedly deep economic cycle, heavily in debt, unable to cut interest rates further and likely to undertake even more quantitative easing, how could it do anything else?
We may take some form of solace from the fact that only one European economy, Germany’s, is in a better position, but that’s little consolation to investors.
Given this miserable set of circumstances, it’s no surprise to sense a collective intent to invest in ‘naughty stocks’, ie companies engaged in the manufacture of fags and booze, as well as in sports betting.
Consider, for example, the recent performance of Ladbrokes’ shares, up 17 per cent since October, when it revealed positive third-quarter figures and its intention to extend the number of football-related events covered by in-play betting from 200 in August to 700 by November.
The shares also yield around 5.9 per cent, almost 12 times more than the return on an average savings account.
Israeli-based 888 Holdings announced in November that its third-quarter group revenues had grown by 42 per cent compared with 2010, while the ubiquitous Paddy Power, in its most recent interim management statement, said the amount staked by UK punters rose by eight per cent as the company opened almost 40 new shops across the country last year.
Impressive as these figures may appear, they pale into insignificance when compared with the estimated size of the legal, but mostly illegal, Asian gambling industry.
Declan Hill, author of The Fix, first published in 2008, quoted “a recent study for the American Journal of Foreign Policy estimated the (size of the) entire Asian gambling industry, both legal and illegal, at $450 billion a year.”
Considering that the aggregate turnover of every major football club in Europe’s top divisions equates to $24 billion, to call the Asian gaming market ‘huge’ is an equally colossal understatement.
In Dubai on Saturday, an England cricket XI take on an ICC XI in the opening match of England’s Gulf Tour, during which they’re scheduled to play three Test matches, four ODIs and three T20 games against Pakistan in either Dubai or Abu Dhabi.
Pakistan have been unable to play home matches since terrorists attacked the Sri Lankan team in Lahore in 2009, and there is a justifiable feeling that shadowy Asian betting syndicates have considerably more clout across the Gulf than in Pakistan.
It is this potentially cancerous influence which exercised the mind of England captain Andrew Strauss earlier this week before his team flew to Dubai.
