Downturn will test U.K. gambling firms

"The industry has changed greatly since the recession of the early 1990s, so the current economic downturn will provide the first test of whether the new revenue streams will prove resilient.

"Will the growing proportion of middle-income gamblers continue to bet when household budgets are stretched and discretionary spending is limited?

"...During the last recession, analysts say, there was no material decline in British betting revenue. Although profits did fall across the industry, the decline was mainly the result of increasing costs as wages and rents rose and inflation increased. This time, Britain has been hit by a global economic slowdown that started more than a year ago with mortgage problems in the United States.

"...Executives at Ladbrokes and William Hill, the sector's two biggest companies, have emphasized the resilience of the industry.

"...But the Irish bookmaker Paddy Power, which also has shops in Britain, gave the first indication in August that the consumer slowdown could be having an impact..."