ALTHOUGH I’m sure it’s only hysterical middle-Americans who think all gaming chiefs are the new gangsters, on my way to Victor Chandler’s headquarters in Gibraltar I begin to understand their suspicions.
Clutching the address of the eponymous bookmakers, I’m guided through a labyrinth of tiny, dusty alleys by locals who seem to think it strange I don’t know “Victor’s”.
I’m led to a tired, unmarked 1960s tower block with peeling walls and a slow, rickety lift. On the sixth floor, the tobacco smoke thickens into a veil above a basic reception room.
“I’m Victor,” says a deep gravelly voice. He’s tall, tanned, with wiry hair, puffy eyes and white suede shoes. His office, which looks across the sea to Africa, is covered in racing photos and trophies. While I chirp about the view, he settles in a chair and smokes in silence.
So this is the godfather of gambling, the man whose assault on betting traditions — and laws — around the world has resulted in a business with a £1 billion turnover.
It has also made him controversial. By pioneering telephone betting, which has now ballooned into a multi-billion-dollar industry, he has fuelled the row on remote betting that culminated two weeks ago in the arrest in Dallas of David Carruthers, now former chief executive of AIM-listed Betonsports.
But to no-nonsense Chandler, the case is simple: “Betting over the telephone in the US is illegal. Everyone knows it, there’s never been any doubt. Carruthers did advertising campaigns on US TV and had a marketing office with staff there. He was rubbing their noses in it. I thought it was mad.”
As he gets talking, Chandler’s hard-man image softens. He is funny and charming and not shy of being candid. He admits that he was “shocked” by the arrest if Carruthers — not just because of its suddenness but mostly because he has spent the past year preparing to launch in America.
“We’ve done all the research in terms of technology and marketing,” he says. “Every gaming company wants to go there: it has a huge population that loves betting, is tech-savvy and has the disposable income.
“But we’ve stopped plans for the moment. America is a frightening place. I guess you’d say we’ve had a lucky escape.”
It’s doubly fortunate because Carruthers’ arrest has forced a sharp reassessment of the industry in which Victor Chandler looks likely to come out on top. Because the company has no exposure to America — it has a thriving business in Europe and Asia — it has become a hot bid target. Rival companies with big American exposures such as Party Gaming and 888, also based in Gibraltar, could be interested.
One analyst says: “Party Gaming is mostly poker-based, which is definitely legal. But over 75% of the trades come from the US. It still looks a bit overexposed. Clearly Victor Chandler is desirable since it would balance this.”
“We have had a couple of approaches,” says Chandler. “In the past weeks we’ve been called by three private-equity firms — two in Britain and one in the Far East.”
He refuses to be drawn on any details, except to say there hasn’t been “anything formal at all” and that “everything has a price”. But if he does sell out, not only would he reap a vast windfall — the company is thought to be worth about £400m — he would also be ending a long family tradition.
“I’m a fourth-generation bookie,” says Chandler. “This year is the 60th anniversary of the business.”
As a result, despite his sometimes working-class mannerisms, Chandler had a very comfortable upbringing of country houses, horses and public school. But it wasn’t always smooth. “I was expelled from Highgate, my father’s alma mater,” he says. “I was caught for the third time climbing out of the window to go clubbing.”
Aged 15, Chandler was moved to Millfield, the boarding school in the depths of Somerset. To remove the temptation of clubbing, perhaps? “My father met the headmaster in a casino,” says Chandler. “Letting me into Millfield was probably the only way of dealing with his debts!” Whatever the truth, it was the start of a firm friendship between the headmaster and his headstrong charge, and one Chandler remembers fondly. “Once another master saw me coming out of the betting shop in the village and reported me to the headmaster. He just said, ‘What do you expect? His father is a bookmaker, he has to check the results.’”
Despite his enthusiasm for horseracing, Chandler says: “I never had any interest in going into the business.” Instead he went to Switzerland to train as a chef. But it didn’t last long.
“I was working in Majorca aged 22 when I got a call from my mother saying my father had died,” says Chandler. “He’d been ill for about six months but it was very sudden.
“I thought he was going to leave lots of money but he didn’t. He’d been trying to run the business but actually things were a bit of a mess.
“But things started to change at the end of the 1970s and betting began to pick up again,” he says. “I remember Ascot 1977 being a great year. All the betting was done on horses and at racecourses to avoid tax (paid in betting shops). We had a great time, we could take £1m on a Windsor evening meeting.”
Even so, Chandler says his life in the gaming industry didn’t really kick off until the football World Cup finals of 1994 which, he says, “changed everything”.
“This guy turned up in my office with £1m, saying he was acting on behalf of a Chinese businessman who wanted to bet on the World Cup. He left £700,000 at the office and went off to the racecourse with £300,000. I’d never seen anything like it. At the time Premier League football was being screened across China for the first time. I saw the light.”
Chandler began researching how he could take bets from them without the Chinese having to travel. He started looking off-shore in Antigua, Costa Rica, Guernsey and Jersey.
“We eventually chose Gibraltar, which was helpful to be in the same time zone as English football,” says Chandler. “We started for the 1996 European Cup. There were eight of us: two phone lines, the rest on mobiles and faxes. Money was coming in so fast we couldn’t quite keep track of it. We just didn’t have the bodies . . . corporate governance wasn’t all it could have been.”
Chandler scrambled to hire staff, and by the time he had his next brainwave he was ready.
“It was a few years later when someone showed me that Irish bookmakers were advertising in the British press,” he says. “It seemed so simple, but this had never occurred to us.”
Chandler sold the London office and moved all the operations to Gibraltar where he hired telephonists and an IT expert to develop an online offering.
The offer — over-the-phone tax-free betting (it avoided the 9% betting tax and instead customers paid a service charge of only 3% to Victor Chandler) — was launched in 1999 in a blaze of publicity.
The result was mayhem — not just with the punters but with rivals, moral commentators and a particularly vexed chancellor of the exchequer.
Within months Ladbrokes, which ran a casino in Gibraltar, started offering bets; Coral moved to Gibraltar and William Hill moved to Malta. Chandler was the talk of the town:
“When I met Princess Anne at a charity event, she said, ‘So you’re the man who has lost the chancellor so much money.’ It was a sign that the issue was being talked about,” he laughs.
Facing the emigration of the betting industry, and its revenues, the chancellor, Gordon Brown, was forced to abolish the tax in his next budget.
So what about all these problems in America? “The simple fact is that people will always find a way to gamble,” says Chandler. “When they work this out, like the UK did, governments will prefer to legalise, regulate and tax it. This is just the start.”
Vital statistics
Born: April 18, 1951
Marital status: married with two sons
School: Millfield, Somerset
First job: catering
Salary: undisclosed
Homes: Gibraltar and Spain
Car: BMW
Favourite book: Neck or Nothing, The Extraordinary Life and Times of Bob Sievier, by John Welcome
Favourite music: Leonard Cohen
Favourite film: The Producers
Favourite gadget: saddlebag
Last holiday: Bali
Victor Chandler's working day
VICTOR CHANDLER is not an early morning person. The bookmaker rarely gets to the office in Gibraltar before 10am or 10.30am.
The first part of the day is taken up with meetings and paperwork. Chandler usually does this from his office, which is on the sixth floor and has long views across the Straits of Gibraltar to North Africa. “I like to be free in the afternoons for the racing,” says Chandler.
This involves either being in the company’s trading room with those taking the bets, or just watching the racing on the television. Chandler may then have a couple of other meetings, but he says: “I try to leave the office by 7pm — which happens on a good day.”
Downtime
COMING from a long line of bookmakers, it is perhaps no surprise that Victor Chandler’s “No 1 relaxation activity” is horse riding. He has ridden since he was a small boy and keeps several horses in Spain. “I love riding one of my horses in the campo (countryside),” he says. Living and working in Gibraltar, Chandler also enjoys going out on boats or swimming and relaxing on the beach.
He says: “Now I have a young family I like to spend as much of my leisure time as possible with them. Fortunately, my eldest son also enjoys riding, so we can go off together.”
The bookmaker is very social and likes to “wine and dine” at the end of the day, “either in a good restaurant or entertaining at home”.
