Ladbrokes expects to see payback this year from a £50m sterling investment in an online business that had failed to keep pace with rivals.
While growing numbers of people are gambling via smartphones and tablet computers, Ladbrokes has been hit by delays upgrading its technology.
It has lost ground to UK market leader William Hill in online and faced competition from smaller rivals.
A strong performance from high street betting shops helped Ladbrokes report an 8% rise in operating profit to £206m sterling for 2012, compared with a forecast for £204m.
But profits from its digital division fell 39% to £32m last year as it spent on marketing and technology, Ladbrokes said today.
The company also said it was now seeing evidence it was making up for lost time in online, and expected new sports betting and mobile platforms to be launched in the first half of 2013.
"We are starting to see some moderately encouraging signs of payback," chief executive Richard Glynn said. Growth in digital revenues and earnings should be stronger in the second half of 2013, he added.
Ladbrokes has benefited from inconsistent performances by the likes of English Premier League soccer clubs Arsenal, Chelsea and Manchester City, who all attract heavy bets and have disappointed fans and punters alike this season.
Revenues in the first six weeks of 2013 rose 7.2% in what Ladbrokes said was a promising start to the year.
The company operates more than 2,000 high street shops in Britain and plans to open another 100 this year, adopting a dual retail and online strategy that William Hill has also been pursuing.
Ladbrokes has 213 shops in the Republic and 79 in Northern Ireland.
The company agreed last month to buy the Dermot Desmond-controlled online betting exchange Betdaq for €30m as part of its online expansion.
Although the deal was small, investors welcomed the swift agreement after Ladbrokes had failed in talks with other targets in the sector.
Ladbrokes shares have risen almost 50% over the past six months on hopes it can finally come up with a compelling online strategy.
