Sportingbet buys online rival

SPORTINGBET consolidated its position as the world's largest online betting company today with the acquisition of fellow UK internet betting group Sporting Odds but warned that a Brazil victory today and again in Sunday's World Cup final would take the smile off their faces.

Sportingbet, which has more than 600,000 customers worldwide, said it has bought Sporting Odds, the fixed odds business of spread betting firm Sporting Index, for a total of up to £5.3m.

Sporting Odds reached break-even recently although it lost £7.1m on a turnover of £38m last year. The deal is in shares and loan notes locked up for 16 months in a transaction that gives Sporting Index a 1% shareholding in Sportingbet.

Unveiling profits before tax of £5m in the year to 31 March against a £4.2m loss last time, Sportingbet chief executive Nigel Payne claimed the company is the second most profitable internet company in the world after online auctioneer eBay. House broker Dresdner Kleinwort Wasserstein forecasts current-year profits of £15m.

While the World Cup has so far delivered high margins for Sportingbet, which concentrates on 'leisure' punters - there is a £1,000 limit on bets and maximum exposure of £50,000 - Payne warned that a Brazil victory would pare back the gains from the early exit of other World Cup favourites.