Beating the odds

By Julian Rogers

Multi-millionaire betting tycoon Victor Chandler rescued his eponymous business from the brink of bankruptcy, turning it into a global gambling empire with half a million customers in over 160 countries. Today’s punter craves immediate betting and entertainment around the clock, he tells Julian Rogers.

“I would die of boredom if I wasn't working. It would drive me insane.”
-Victor Chandler

The old adage states “You never see a bookie on a bicycle”, alluding to the preconception that all bookmakers swan about in top-of-the-range cars bankrolled by hapless punters chasing those elusive winners. Cigar-puffing Victor Chandler, who has amassed a fortune of UK£160 million according to the Sunday Times Rich List, can often instead be found aboard one of his horses on the 40 acres adjoining his 10-bedroom Spanish farmhouse. In the cutthroat, esoteric sphere of gambling, this Gibraltar-based bookmaker and his trappings of wealth are tangible proof that the house (mostly) wins.

My rendezvous with Chandler is at a discreet, but ostentatious, hotel tucked away in London’s upmarket district of St James’. The petit lobby is filled with ornate chandeliers, antiques and a charming grandfather clock. A portrait of Queen Elizabeth II posing in her Coronation robes hangs above the mantelpiece. This quintessentially British hotel is the Gibraltar-based bookie’s bolthole for his few days in London recuperating from an operation on his sinuses. Having perused almost every square inch of the complementary newspaper on the coffee table, a tanned Chandler finally arrives in reception – 30 minutes late for our scheduled tête-à-tête.

It’s immediately clear this 59-year-old gambling magnate plays up to his moniker of ‘The Gentleman Bookmaker’ with his sharp suit, blue silk handkerchief poking over the brim of his breast pocket and expensive gold wristwatch. Even his aftershave whiffs of money. Where he doesn’t fit the bookmaker stereotype is in his demeanour; Chandler is polite and reserved, with a soft, gravelly voice, no doubt influenced by his penchant for big cigars. He apologises for his tardiness (business phone calls) and orders a bottle of still water and an espresso before we retreat to the private bar.

Our lavish surroundings conceal the fact that for Chandler the past couple of years has been a tough period, especially with his big customers tightening their belts. “Business has been significantly affected at the top level, especially last year,” he reveals. “Some people were seriously affected and others pulled the reins in a bit because they didn’t know where it [the recession] was going while other people who had almost retired had to go back to work.” The high rollers used to account for around half of all business but this proportion has dropped “substantially” says Chandler, who built a reputation in the early days for accepting lumpy bets. Countries hit hard by the economic downturn have had a knock-on effect on business. “Ireland is a disaster,” he exclaims. However, the bottom end of the market has survived very well. “I think this is because of the Sainsbury’s or Tesco effect where people are taking dinner for two and a bottle of wine home instead of going out for supper – people choose not to have a night out but stay in and have a gamble online for 20 quid.”

Overall transactions (number of bets) have seen an uplift recently – this is a firm that takes around UK£1 billion a year in bets. The high rollers are slowly returning but Chandler is coy when it comes to divulging his biggest payout to date. “All big bets are relative because when you start out in business everything is a big transaction,” he suggests. “A big bet is when you have UK£200,000 in the bank and you take a risk that is going to cost you UK£40,000 or UK£50,000. A business like ours could take a risk of having a liability of UK£1 million.” It’s clear that Chandler’s responses to my questions are carefully formulised in his head before leaving his mouth; you can almost see the cogs turning, creating long, but not uncomfortable, pauses in the conversation.

Where this third-generation bookie is looking to clean up is the football World Cup Finals in South Africa, just a few weeks from now. Although Chandler has little interest in football, experts are predicting that as much as UK£50 billion could be wagered on the month-long tournament. Chandler has been granted a licence to operate in South Africa just in time to capitalise on the betting frenzy. “Without doubt there will be record turnover,” says Chandler, “because more and more people have access to betting sites than ever before.” Although Chandler is English, he won’t be cheering on his home country; it all comes to down to cold, hard liabilities for this astute businessman. “We almost certainly don’t want England to win,” he announces coolly before taking a slurp of his espresso. Historically, patriotic English punters have poured their pounds on their nation’s team but a global customer base has tipped the balance. “Because we have more customers in more countries the risk is more spread nowadays – it’s not as focused as it used to be,” he explains.

Football betting’s growth has had a detrimental effect on that traditional betting medium and one of Chandler’s passions – horse racing. Football is the most popular sport in the world so it stand’s to reason today’s generation would rather have a flutter on a clash between two of Europe’s top sides rather than a nag running in a handicap at Newbury. “This sport is not only tailing off here in the UK and Ireland, but there is scant interest in it in other parts of the world,” he muses. And Chandler is openly critical of the racing industry for the way the so-called ‘sport of kings’ is marketed and run. “It saddens me that we [bookmakers] and the racing industry can’t work together to produce a product that fits the 21st century because the industry is running out of time to be as radical as it could be. We are also running a sport whose diary is based on a 19th century Victorian social diary – it’s nonsense.”

Window dressing

Chandler’s sole London betting shop sits just a few streets away from his hotel. The dark wood interior, soft lighting and bank of TV screens flashing up odds has the feel of a private members’ club. As well as catering to Mayfair’s well heeled, the place also attracts the odd degenerate gambler too, says Chandler. “There’s a Greek who has lost a fortune in there over the past few weeks so the other day he threw his mobile at one of the TV screens and smashed it [after another losing wager]. That’s the fourth screen he has smashed now,” Chandler reveals, punctuated by a burst of laughter. It would appear that to ban the customer from the shop would be bad for business.

Chandler’s high street presence is negligible; he sold most of his UK shops in the past decade after initially shifting telephone betting operations to sunnier climes in the British overseas territory of Gibraltar. As well as being a popular hangout for wild monkeys, the Rock, situated off the coast of southern Spain, has attracted a stream of betting firms, primarily because of its offshore status. Chandler was a trailblazer for shifting operations abroad back in the 1990s so that UK telephone gamblers didn’t have to pay the nine percent tax on their bets. They paid Victor Chandler, who became the largest employee in Gibraltar, a three percent service charge instead. A chance conversation kick-started the shrewd venture. “I was in the bath and my wife at the time was reading the Daily Mail, and she said to me ‘If Irish bookmakers are allowed to take bets in the UK, why can’t you take bets from the UK in Gibraltar?’ A light went on in my head and we got the decision within one week that there was nothing stopping us from doing so.”

Initially, customers were unsure about the move but they soon jumped at the chance of placing tax-free bets. “Some people were wary of the whole thing because they thought it was illegal or they were doing something illegal by betting with us. But soon we couldn’t cope with the amount of accounts we were opening up from the UK and Ireland – it was extraordinary.” The European football championships in 1996 (Euro 96) was a case in point. “During the tournament, Gibraltar couldn’t supply us with enough telephone lines to take bets so we used about 50 mobile phones, but the signal wasn’t great.” Chandler’s foray into foreign shores would be later credited as a catalyst for the UK government abolishing betting tax, replacing it with a 15 percent level on bookies’ profits. Chandler moved the whole business to Gibraltar in 1999 and today employs nearly 300 people; most of the staff recruited are fluent in at least two languages.

Chandler’s interest in taking bets from non-UK bettors was first aroused by the 1994 World Cup Finals in the USA. England and Scotland failed to qualify but a global betting market was starting to flourish. “I divested most of my interest in the betting shops because that World Cup opened my eyes to the fact that there were people outside of the UK and Ireland who wanted to bet.” During the tournament a man turned up at his London office wishing to place a £1 million bet in cash on behalf of a Chinese businessman, indicating the potential that lay in the Far East. China had just begun to screen live English Premiership League football matches so Chandler looked to cater to rich businessmen wanting to bet five and six-figure sums on football. One ex-client in the Far East managed to rack up gambling debts with Chandler of an eye-watering UK£21.245 million. The collapse of the Asian stock markets left the punter short of funds to clear the debt. Fortunately for him, Chandler snipped the total owed to UK£15 million and accepted monthly instalments of UK£3 million.

Gambling is illegal in many countries in  that part of the world – run by underground bookies and organised gangs – but it is still a pastime ingrained in their cultures, especially in China. Chandler has websites dedicated to the Chinese but sometimes has to change URLs when the authorities in the communist country close the sites down. Despite the cat-and-mouse nature of doing business, Chandler, who makes regular business trips to Asia, appears blasé about the risks, adding that it is a “grey area”. “It is the biggest untapped market and we have a wonderful business there that grows weekly, not monthly,” he explains. “China’s different attitude, culturally, to gambling is fascinating because it is just part of life for them.” In the western world a stigma still exists with gambling; people who enjoy a flutter are often perceived as perpetual losers. “I think there will always be a stigma,” Chandler whispers. “However, I think there is a much more of a stigma in France where bookmakers are looked upon as gangsters. I member going to Cagnes-sur-Mer in the 1980s and seeing bookmakers arrested regularly.”

Chandler looked to tap into the South American market but the headache of payment systems stifled his chances. “There are rules in our business: first you get your product right – the functionality of your website and range of products – and then you get your payments in line, but we couldn’t do this is in South America because there is not the culture of credit and debit cards. Until you get this right it’s a waste of time marketing the business.” Chandler says bettors don’t want to hang around trying to get their accounts funded. “People want immediate gratification; we are similar to the porn sites in that people don’t wait. If they can’t pay for what they want and get that immediate gratification then you may as well not be in business.”
Both Chandler’s BlackBerry and Sony Ericsson mobile phones intermittently beep and vibrate during the interview but he chooses to politely ignore them and we continue. Back in the late 1990s, Victor Chandler’s Gibraltar office only accepted telephone bets. Internet betting was in its infancy. “The internet was embryonic, “ says Chandler, “the only thing on the internet were casinos.” Today, Victor Chandler’s website handles more than 90 percent of all bets.

“Technology has changed the business more than anything else,” the boss acknowledges. It’s not just sports markets on offer either; customers have access to an online casino, games and financials. “We are becoming more an entertainment business,” he explains. “Although we have people who have bet with us 40 years and fourth generation families betting with us, the core of the business is not that [sports] – its about entertainment and providing a product with live betting 24/7, because the world is changing.”

And like most of his rival sites, Victor Chandler’s boasts online poker – a game born out of the spit and sawdust saloons of the Wild West that has exploded in popularity due to the internet. Nowadays, players can battle it out over the virtual felt 24/7 without ever leaving their living rooms. Chandler dismisses suggestions that the poker bubble has burst, although there is little argument that the game’s surge in popularity from five or six years ago has fizzled out. “There is no doubt we have reached a plateau and the cost of acquiring customers for poker has gone up and up. We don’t make a lot of money out of poker [players pay a rake, or fee, on pots won] and I don’t think anyone does.” With poker stalling, the gaming industry is looking for the next hot betting medium. “What I would like to know is what the next poker will be, because there will be something, whatever it is, and it will grab the public’s imagination.” Chandler himself has been a fan of the game since long before the internet. “I have played five-card stud all my life but I wish I had time to play more. I have played a few tournaments recently and was beaten in the final at Fifty [a London casino] by a 21-year-old, which nearly killed me. Earlier, I knocked his father out of the game and then he beat me,” a crestfallen Chandler recalls.

While poker is a hobby, bookmaking is in Chandler’s blood – his grandfather William having established the business almost 65 years ago, as well as Walthamstow Greyhound Stadium, before it passed to Victor Chandler snr. At 15, Victor Chandler jnr was expelled from school for climbing out of a window at night to meet his girlfriend but his father managed to get him in at Somerset boarding school Millfield – a school renowned for its sporting prowess rather than academic achievements. “The headmaster was one of my father’s punters,” Chandler reveals with a mischievous smile. However, he had no intention of continuing the family dynasty. “I was hell-bent on doing something else because any son wants to get away from his father and prove himself.” Chandler had visions of becoming a chef so enrolled at catering college in Switzerland. When that didn’t work out he upped sticks to Spain in his early twenties to work for a management consultancy company. Not long after, his father fell ill and died at 52, leaving Chandler jnr holding the reigns to the business at the tender age of 24. He also had the pressure of supporting his mother and two school-age sisters.

This serendipitous takeover was more a case of necessity rather than any pressing desire. “It was circumstances that got me into the business rather an aptitude or wish to be in the business,” he concedes, leaning back into his chair and sliding his black-flamed specs up on his silver locks. “When I took over the business back in 1974 it was a recession, don’t forget. My accountant at the time sat me down and said ‘Do you know the business is insolvent?’ I said ‘What does that mean?’ and he said ‘You’re skint.’” Chandler sold a few shops to the big high street chains to get some cash in the bank and it “went from there” as he concentrated on attracting clients with deep pockets. He came close to selling the business to Playboy Enterprises in 1976 but stuck with it and made the most of taking tax-free bets at the racetracks (betting shop wagers were taxed). At Royal Ascot in 1977 he won UK£100,000.

People power

Many of the people in the company’s management positions have been with him since the early days. “Everyone in the top jobs, except the IT Director, has come through the business and it’s great to see people grow up with us and have such an in-depth knowledge.” Chandler is still very much hands-on when it comes to the day-to-day running of the company. He says his typical day varies a great deal but he makes sure he attends all the management updates. “We get together three times a week – Monday, Wednesday and Friday. It’s a good chance to catch up and I learn so much. Sometimes the meetings last 15 minutes, other times two hours depending on whether a bottle of wine comes out or not.”

Away from the office, Chandler enjoys the racehorses he owns as well as breeding horses for dressage competitions. He has a property portfolio in London, Gibraltar and Spain (including his finca that he snapped up for £1 million four years ago with his Korean wife, Susan) and has always been a keen art collector. In fact, artist Lucian Freud is a good friend of the bookie – he even once painted Chandler’s portrait in oils, although Chandler denies this was done to pay off a gambling debt. His busy schedule curtails his art collection, though. “I used to go to a lot of auctions and galleries once a week whereas today I go to one or two a year. My life and my focus has changed because of my kids (Chandler has three young children aged 13, six and 18 months)”.

With his busy life outside of running his business, as well as coming close to selling the company again in 2000 to sports media group Enic, does he have any plans to retire? “I would die of boredom if I wasn’t working,” he quickly ripostes. “It would drive me insane.” With that, my time is up and Chandler exits for an important lunch appointment – leaving Business Management to pick up the £8.50 tab for his thimble-sized coffee and bottle of water. Bookies aren’t renowned for their generosity, and it would appear filthy rich ones are no different.

Marketing, Victor’s way

In an industry dominated by faceless corporations, Chandler is a larger than life character who deliberately promotes his business as a ‘bookmaker versus punter’ operation. Indeed, the idea that customers are placing bets directly with the man himself is leveraged to a competitive advantage. “Myself and the marketing team are very conscious of the fact that we are different to everyone else. It has given us an edge, especially in Asia where they like to see someone standing up and who is accountable for debts owed.” The name of the company was switched to VC Bet in 2004 but later reverted to Victor Chandler in a bid to re-establish the man behind the brand.

On YouTube you will find witty advertisements for Victor Chandler; one such clip features grainy black and white footage of packed crowds enjoying a day at the races back in the 1950s. The camera pans around and you see Chandler’s head superimposed on a bookmaker in a trilby. The voiceover from the man himself states, “Victor Chandler, the punters’ bookmaker for over 60 years.” Clients can also email Chandler directly and he has his own Twitter page dedicated to odds, offers and his opinions on sports. So is he or his marketing team behind the tweets? “I can’t discuss that.” he retorts with a husky guffaw.