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Last Updated: Wednesday, 9 January 2008, 23:33 GMT
New Football Pools seeks home win
By Gavin Stamp
Business reporter, BBC News, Liverpool

A pools winner from the 1930s
Early pools winners tended to take their good fortune in their stride

For a business so intimately associated with Liverpool, it is the ultimate irony that the Littlewoods Football Pools was actually born in Manchester.

Many a footballing rivalry has been played out between the two cities since three Manchester men handed out the first Littlewood's pool betting coupons outside Old Trafford in 1923.

The game, which challenged people to predict the results of top football matches, was far from an overnight success.

It was a huge gamble for John Moores when he decided to buy out his two partners a couple of years later.

His faith in the game's ability to capture the public imagination and fire the dreams of those playing it was eventually vindicated.

'Iconic business'

The man who has now inherited Mr Moores' mantle speaks in almost reverential tones about the game's history.

"It is a classic, iconic business," says Ian Penrose, chief executive of gaming firm Sportech, which bought the pools business from the Moores family in 2000.

"It is almost part of the social fabric of the country."

But he knows there is no room for sentiment as he seeks to turn around a business whose fortunes have nosedived in the past 15 years.

Ian Penrose, chief executive of Sportech
A lot of people say 'is the pools still going?' Hearing that phrase is a disappointment but it shows the opportunity
Ian Penrose, Sportech chief executive

In 1994, just before the arrival of the National Lottery, 10 million people - one in three of the adult population - were filling in a coupon every week.

But two weeks after the Lottery's launch, more than two million players had deserted.

This continued to the point at which, at the start of this year, there were little more than 500,000 weekly participants.

"A lot of people say 'is the pools still going?'," he admits. "Hearing that phrase is a disappointment but it shows the opportunity. It shows we do have amazing awareness."

The task it faces in recapturing the public spotlight is borne out by a visit to Everton, a footballing heartland not far from Sportech's headquarters in the Walton area of the city.

Sportech is a gaming partner of the Premier League club but one newsagent in the shadow of its Goodison Park ground thinks it will be very hard to revive interest in the pools.

"It went out of fashion when the Lottery came along," says Muhammad, from Merseyside News, which collects 50 in weekly pools wagers, a fraction of its Lottery turnover.

"It is the same people who play every week, mainly pensioners."

Vernons' boost

While recognising the scale of the challenge, Sportech's boss is far from despondent and believes several important trends are moving in the pools' favour.

Just last month, City regulators approved Sportech's 51m acquisition of Liverpool-based rival Vernons Pools, which will add an extra 250,000 customers to the business.

LITTLEWOODS POOLS FACTS
Actress Joanna Lumley helps a pools winner celebrate in the 1990s
Only 35 of 4,000 coupons were returned on the first day
The pools employed 10,000 people by the early 1930s
By the mid 1960s, it had 14 million weekly players
Ex-detectives were used to validate winning claims
The pools has created more than 100 millionaires
The biggest win, to date, was the 2.92m scooped by a Manchester syndicate in 1994

Having bought the Zetters business in 2003, Sportech has a clean sweep of the main pools games and plans to rebrand the trio as the 'New Football Pools' in time for next season.

"Buying Vernons was a key part of our strategy," Ian Penrose says. "It allows us to speak with one voice against the one voice of the Lottery and the bookmakers."

In the post-war years, the pools became associated with rising levels of affluence and consumer abandon, no more so then when Viv Nicholson famously pledged to "spend, spend, spend" the 152,319 that her husband won on the game in 1961.

But while the pools increased its jackpot to more than 2.25m in 1994, it was soon eclipsed - in terms of financial muscle - by the Lottery.

New games

While the creation of a single pools brand will allow it to increase the size of payouts, Sportech's focus is more on making the pools easier and more enjoyable to play.

It has launched a new game based on Premier League fixtures only and has plans for a similar competition around the Champions League.

The pools' traditional customer is pushing 60, typically spends about 2 a week and often chooses the same permutations whatever the fixtures.

Sportech has its eye on a younger player who, while not a heavy gambler, is more likely to see the game as a test of skill to be played against friends and colleagues.

"We are looking for people who may have become a bit disaffected with the Lottery, occasionally may have a bet but, more particularly, are the classic Fantasy Football enthusiast," Ian Penrose stresses.

The home changing room at Anfield
The shirt names may have changed but the pools remains the same

Seeing transactional capability as one of its main weaknesses, Sportech has outsourced its back-office and processing systems to make the operation more competitive.

It has also hired a firm of consultants to cast a similarly hard-headed eye over the firm's "collector network", the old-fashioned but enduring tradition by which 250,000 customers hand over coupons in their own homes to 12,000 volunteers and pay for them.

Less than 1% of customers currently play online and while there is potential for growth in sales via mobiles, handheld machines and touch-tone screens, Mr Penrose believes there is a future for door-to-door collections "in the medium term".

Sportech is also keen to tap into the insatiable overseas interest in English football, seeking to attract new players in eastern Europe and the Far East

The firm believes its highly regulated business model, where a share of its taxable profits has historically been reinvested in football projects and community sports schemes, will appeal to governments being deprived of massive amounts of revenue by illegal gambling.

Underdog status

More than 3m is being spent on relaunching the game this summer and its profile will be boosted by a deal with Ladbrokes to distribute the game in 1,700 betting shops.

An employee of Merseyside News holds a copy of the pools form
Will pools coupons still be sold in newsagents in a few years time?

Like a once-great club which has dropped down the football pyramid, it would be all too easy to think the odds are stacked against the pools.

But like the manager of any team, Ian Penrose knows a few good results will build confidence and the "magic million" customer mark could soon be within range.

"I don't deny this will be a challenge," he says of the future.

"But at a time when both betting and football have never been more popular, maybe things have come full circle and it is time to rejuvenate the game."



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