Betting Business Bulletin 11th December 2017
GVC and Ladbrokes Coral confirm takeover
The timing was a surprise but the news wasn’t when it was revealed last week that GVC Holdings was in detailed talks about a takeover worth up to £3.9 billion with Ladbrokes Coral.
The two companies have been linked for some time but it had been thought news of any deal would emerge after the government had provided clarity over its plans for FOBT stakes next year.
Instead the final price GVC will pay depends on the government’s final decision. Should the maximum stake be slashed to £2 from £100 then GVC would pay £3.1bn for Ladbrokes. The price would rise with the maximum stake up to £3.9bn should the government decide on a £50 level.
If a deal is completed, the resulting group would become one of the largest in the gambling industry, propelling it into the FTSE 100 with a market capitalisation of around £5.3bn, more than Marks and Spencer.
GVC chief executive Kenny Alexander, who would take up that role in an enlarged group, said in a conference call after the news was announced: “I am relishing the opportunity to become CEO of the enlarged group. I think we have got fantastic people at senior management level on both teams, great technology, great brands and we have got a fantastic opportunity.
“It would be a very, very brave man or woman who would bet against us delivering shareholder returns based on our historical performance. I think we have done it before and I think we are definitely going to do it again.”
Alexander added there would be no rebranding after the deal, with the separate Ladbrokes and Coral names continuing.
GVC is required to announce a firm intention to make a bid end of business on January 4. Shares in Ladbrokes Coral soared by 29 per cent on the of the news to 175.1p, while GVC’s share price rose five cent to 954.5p.
Analysts at Davy Stockbrokers said: “The proposed merger of GVC and Ladbrokes Coral makes sense strategically. It diversifies both, it creates an online and retail gaming company of enormous scale and should lead to material synergies.”
Harrison to leave Gambling Commission
There was surprise news from the gambling industry regulator last week when it was announced that Sarah Harrison was to leave in February to take up a senior role with the Department for Business, Energy and Industrial Strategy.
Harrison was credited with giving the Gambling Commission far more teeth in her time as chief executive.
She said: “I’m proud of the work that all at the commission have delivered together. I’m very confident that as the commission delivers its new strategy it will go from strength to strength and will continue to make gambling in Britain fairer and safer.”
The commission said the search for Harrison’s successor was already under way. Neil McArthur, the commission’s chief counsel and executive director, will be appointed as acting CEO from February 28 until the permanent replacement can take up the post.
Lampard rebuke for gambling industry
Delegates at GambleAware’s fifth annual harm minimisation conference last week heard a hard-hitting speech from the charity’s chair Kate Lampard, who said the gambling industry faced an “existential threat” and that a “massive change in attitudes” was needed.
Lampard, a former barrister who was appointed by the department of health to oversee its investigation into the activities of Jimmy Savile, and who headed an investigation into allegations of abuse at Yarl’s Wood immigration removal centre, joined GambleAware in June last year.
She said: “I didn’t think I was easily shocked, but I must say I was at the very least surprised by the first impressions this industry offered me.
“Some in very senior positions seemed upset that an independent charity might voice its concerns about the impact their business was having on vulnerable people.”
Lampard added: “It seems that public opinion represents a serious existential threat to the future success of the gambling industry in Britain,” citing Gambling Commission figures which have shown declining public trust in the sector.
“This isn’t a good place to be,” she went on. “My experience of the industry thus far is that it’s not wholly undeserving of all the flak it gets.”
Gambling minister Tracey Crouch also spoke at the conference, telling the industry it needs to take a hard look at the advertising it produces, while the voluntary system operators use to tackle problem gambling is in the “last chance saloon”.
The government is in the midst of a consultation on its gambling review, which included the announcement of a television campaign to highlight the risks from gambling, a move to which Crouch gave her backing.
She added: “I urge all of you here who are responsible for advertising to take a hard look at what you’re producing. As you’ll be aware, there are strict controls on what gambling advertising can show, and indeed when it can show it, but it’s still very unpopular.
“In a world where every smartphone provides an opportunity to gamble, you need to be more careful than ever that your adverts are responsible and don’t push the boundaries.”
Hills and Scientific Games agree deal
Peace has broken out between William Hill and Scientific Games after Hills dropped their opposition to SG’s takeover of NYX Gaming Group.
Last year William Hill and Sky Bet teamed up to invest £100 million in NYX after NYX had bought betting industry software provider OpenBet for £270m.
In September it was announced that NYX had accepted a bid from Las Vegas-based Scientific Games, a move which prompted William Hill to try to block the deal. In turn, NYX and Scientific Games launched litigation against the British company.
However, that has now been dropped after William Hill announced they had reached agreement with Scientific Games to unconditionally support the proposed acquisition of NYX.
William Hill chief executive Philip Bowcock said: “These agreements safeguard William Hill’s technology roadmap and relationship with NYX and end all legal action between the parties.”
Both sides have been closely following developments in the US that could lead to the widespread legalisation of sports betting.
On Monday, the US Supreme Court heard evidence in New Jersey’s legal challenge to the 1992 Professional and Amateur Sports Protection Act (PASPA) which bans sports betting in all but a handful of states. A verdict is expected by next summer but observers said there seemed to be a majority among the nine justices in favour of New Jersey’s case.
HBF launches betting charter
The Horseracing Bettors Forum launched a ten-point betting charter last week featuring among them calls for protection of punters’ funds and minimum bet commitments.
The charter, which the HBF has arrived at after discussion with various parties, including a number of receptive bookmakers, has the support of the BHA and bids to define reasonable and constructive objectives to which those involved in betting can aspire – to their mutual benefit.
HBF chair Simon Rowlands said: “The betting charter is an attempt to define and recognise good practice in the betting environment, and is the product of a considerable amount of discussion, including with co-operative bookmakers.”
BHA executive director Will Lambe welcomed the charter, adding: “Bettors are a key customer group of British racing, and the BHA continues to support efforts to help to deliver both improved practices and other initiatives, including greater transparency and data provision on our part, which can grow interest in betting on British racing.”