Ladbrokes – the world’s largest bookmaker – has long been the Hilton Group’s most successful and fastest growing venture. After the 2001 terrorist attacks in New York and the 2005 London bombings, the hotel chain’s profits were cushioned from the decline in tourism by the large profits generated by its gambling business. Today Ladbrokes contributes 60 percent of the Hilton Group’s profits and further plans for expansion are already underway for 2006.

Speculation that the Hilton Group had been approached by sources interested in purchasing Ladbrokes was confirmed in a recent statement by Hilton spokesman Alex Pagett. The company had been focusing on the planned sale of its international hotels division to U.S. based Hilton Hotels Corporation. Rumors that the company’s gambling business was also up for grabs were fuelled by a sharp increase in the Hilton Group’s share price, along with a Financial Times report naming gambling firms CVC Capital Partners Ltd, BC Partners Ltd, and Blackstone Group LP among those interested in Ladbrokes.

Despite the rumors, the Hilton Group was quick to emphasize that its current negotiations focus strictly on its hotel deal. “Hilton Group remains focused on concluding negotiations with Hilton Hotels Corp. in relation to the sale of the Hilton international hotels division for the benefit of shareholders,” the company stated.

Industry analysts estimate that a Ladbrokes sale could yield three to four billion pounds sterling in the current financial climate. A similar deal concluded recently between Gala Group Holdings PLC and Chapterhouse Capital Partners resulted in the sale of Coral Eurobet to the Gala Group for 3.8 billion pounds.

With the sale of its hotel interests, the Hilton Group becomes primarily a gambling firm. Its shares rose 2.8 percent on the London Stock Exchange recently and have increased by 29 percent overall this year alone, giving the company a total value of 5.88 billion pounds.

Further increases in the profits made by the British gambling industry are expected over the next five years. According to West Bromwich’s Global Betting and Gaming Consultants, the industry will be valued at 11 billion pounds by 2010, an increase of 33 percent on the current figure.

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