“I was a poor boy from a poor family,” he told the audience [cue Bohemian Rhapsody by Queen]. "After graduating from Wolverhampton Polytechnic and working as a marketing assistant for a couple of years, I bought my first betting shop. It was 4 July, 1984 – my very own Independence Day. The shop wasn’t even in a decent location, it was down a back-alley. But I did pretty well out of it and sold it to Tote. Then the tax man came calling and I learned about capital gains tax, so I rolled that business over and bought more stores."
Blandford discovered the internet in the nineties and launched Sportingbet.com in 1998, setting up the business on Alderney, the third largest of the Channel Islands, to avoid betting tax. While he admits that “customers had to pay by cheque and bank wire transfers at first”, the company floated on OFEX within a year, raising an initial £1.6m, which helped fund the company’s entry into the States. It moved to the AIM market in 2001, raising £18m.
The business started to catch the attention of politicians Stateside. On 30 September 2006, the US Senate passed the SAFE Port Act, which contained a section referred to as the Unlawful Internet Gambling Enforcement Act of 2006. Sportingbet’s chairman Peter Dicks was arrested for the crime of accepting a $5 bet from a state trooper in Louisiana.
“Over 60 per cent of our profits were wiped out in one fell swoop,” explained Blandford. “Within 13 days, we’d sold our US operations for $1, our brokers and lawyers had resigned and we’d refocused our entire business model on Europe and Australia.”
Sportingbet survived. In fact, it prospered. The following year, it made £7m. In 2008, it pocketed over £20m. This year, profits are set to hit £30m.
Blandford stepped down from his role as executive director in June 2007 although he still retains a three per cent shareholding. Now he’s using his experience – and cash – to help other startups. So far he has invested £10.6m in 15 firms. “Today, that investment would be valued at around £10.5m. I’m not anticipating any short-term exits.”
He says his worst investment to date was a company called XDM Software. “It was my friend’s business,” he said. “The CEO appointed herself as CFO. She had opinions on everything and no experience in business. Put it this way, she wasn’t the one I met when I agreed to invest in the company.”
[Cue Devil Woman by Cliff Richard]“That business wound up last week.”
Blandford reckons that the killer sectors over the next year will be proprietary trading systems, hi tech security, mobile applications and property, "especially distressed opportunities and student housing".
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