Denise Coates, the founder of Bet365, made headlines earlier this week when she became the highest paid CEO in British history. Her payout of £199,305,000 (along with dividend payments of £18 million) catapulted her into the realms of the super rich, and dwarfed the total taken home by previous title holder Sir Martin Sorrel (£48 million). But who exactly is Denise Coates, and how is she in a position to pay herself so much? Here is the remarkable story of a truly modern gambling baron, billionaire and arch entrepreneur.
Who is Denise Coates?
Denise Coates began her career counting cash in her father’s betting shops, which then went under the name Provincial Racing. She graduated with a first class degree in econometrics – the basis of all odds calculation – from Sheffield University, and soon became manager of the family business at the age of just 22.
And then she took, in her own words, “the ultimate gamble”. Noting the rise of the internet and the growth of online gaming platforms, Coates decided to create a new digital sports betting platform dubbed Bet365. After buying the Bet365.com domain on eBay for $25,000, she borrowed £15 million from RBS to launch the business, laying down the family’s entire chain of Provincial Racing shops as collateral.
How did Bet365 begin?
The business began inauspiciously – Coates worked out of a rented portakabin in a car park near one of her betting shops in Stoke, and set about trying to build a new online betting site with a ragtag team of coders and actuaries. The website itself went live in 2001, and soon grew to become one of the world’s largest online gambling companies.
“We mortgaged the betting shops and put it all into online,” Coates said in a 2012 interview with The Guardian.
“We knew the industry required big startup costs but … we gambled everything on it. We were the ultimate gamblers if you like.”
The gamble paid off. Bet365 recorded $2 billion in revenues and facilitated $45 billion in bets in the year to March 2016. Coates still runs the company alongside her brother, John, though she remains the majority shareholder with a 50.01% ownership stake. Her personal fortune is now estimated to sit at £3.17 billion, making here the 474th richest person in the world.
Needless to say, Coates astonishing success has made her something of an inspirational figure. She was awarded a CBE in 2012 and was named one of the 100 most powerful women in the UK in a 2013 BBC survey. But her tenure has not been without controversy.
Why has she been paid so much?
It all comes down to the gamblers. Bet365 customers wagered more than £47 billion in online bets last year, an increase of more than £10 billion on 2015. And the company’s revenues jumped accordingly: Coates oversaw a 39% uptick in revenues to a record £2.15 billion in 2016, while profits soared by 15% to £514m.
The average pay for FTSE 100 bosses was £4.5m last year. Coates has taken home more than 40 times that amount. To put that in context: Mrs Coates was paid more than eight times the yearly wage of Barcelona star Lionel Messi, and 7,000 times the average earnings in the UK.
Why is the pay packet controversial?
Gambling has fallen under particular scrutiny in the current climate of austerity, widening wealth gaps, and mental health issues. Essentially, Coates’ detractors say that she has derived her fortune from the addiction of the working classes, while others point out that her gargantuan pay packet has come at the precise time that the number of bankruptcies and suicides from gambling is peaking. The Gambling Commission estimates that there are now 2 million people who are classified as “problem gamblers”.
In response, Coates has assured Bet365 shareholders that she is “committed to developing an evidence-based approach to responsible gambling.”
She goes on:
“To this end, the group continues to work with research partners on a number of projects to improve its methods of identifying harmful play and deliver more effective harm-minimisation interventions.”
The naysayers remain unconvinced. But with Bet365’s fortunes soaring, and the government uneager to tighten the loopholes in online gambling regulation, it doesn’t look like Coates will be slowing down anytime soon.
For more inspiring stories, meet Evan Spiegel, the world’s youngest billionaire.