BSkyB, Ladbroke link up

July 12, 2001 Posted: 1231 GMT

LONDON (CNN) -- UK-based pay-TV group British Sky Broadcasting and Hilton's betting arm Ladbroke have formed a joint venture to operate a betting business.

The companies, two of the UK's biggest players in the leisure sector, are aiming to exploit the growing demand for Internet, interactive and telephone gaming and betting.

The pair said in a statement on Thursday they expect the 50:50 joint venture to be "profitable from its launch, debt free and cashflow positive."

The business for betting on televised sports will link to Sky channels, with bets placed through Hilton Group's Ladbrokes (HG). Hilton's Vernons pools business, a weekly bet on Saturday football matches, will also be part of the venture with BSkyB's (BSY) Surrey Sports, the companies said.

The venture will have exclusive rights for five years to offer interactive sports betting on Sky Sport Extra and some other Sky Sports channels on Sky Digital, with non-exclusive rights for a further five years.

Ladbrokes will give BSkyB £30 million ($43 million) and on-going payments linked to betting volumes and profitability.

Hilton Group's Chief Executive David Michels said: "Linking innovative betting opportunities to live broadcasting is a compelling proposition.

"This partnership means Ladbrokes and BSkyB will be the first companies in the world to develop betting via interactive television to its full potential."

BSkyB shares were up 3.2 percent in London after the announcement, with Hilton Group showing a 1.7 percent gain.

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