Betting Business Bulletin 18th December 2017
GVC shareholders unhappy about executive pay
GVC Holdings suffered a hiccup in their apparently serene progress to the high table of the betting industry last week thanks to shareholder disquiet over executive pay.
More than a quarter of those who took part voted against approving GVC’s updated directors’ remuneration policy and the annual and deferred bonus plan at an extraordinary general meeting just one week after it was confirmed GVC were in takeover talks with Ladbrokes Coral.
Chief executive Kenny Alexander received a remuneration package of nearly €22.2 million (approx £19.5m) in 2016, 79 per cent of which was due to the company’s share price driving up the value of share options.
Jane Anscombe, the chair of GVC’s remuneration committee, said: “The remuneration committee, through the extensive shareholder consultation exercise, knows why certain shareholders voted against the resolutions.
“The principal reason was that some shareholders disagreed with the remuneration committee’s view that the maximum incentive levels proposed were necessary to incentivise and retain the company’s high-performing management team, in a market where experienced and successful management are rare.
“The remuneration committee will re-engage with dissenting shareholders to discuss further their concerns and explore how in operating the new remuneration policy they may be addressed, whilst not prejudicing the success of the company or jeopardising the majority shareholder view.”
Commission concern over children and gambling
The Gambling Commission last week said new research raised concerns that children were experiencing gambling through new technology that does not have the same level of protections or responsible gambling messages as regulated gambling products.
For once it was not the traditional gambling industry coming under fire.
The report also showed that the most common forms of gambling among children – bets between friends, playing fruit machines in pubs and clubs, and buying National Lottery scratchcards – were happening in locations that do not need to be regulated to provide gambling.
Gambling Commission executive director Tim Miller said: “We require gambling operators to have strong protections in place to prevent children from accessing their products and are actively reviewing how some, like age verification, can continue to be strengthened.
“However, it is clear that many children’s experiences of gambling-style activities are coming from the playground, the games console or social media rather than the bookmaker, the casino or the gambling website.
“That’s why it is essential that we work across industries and with parents so that together we can protect children and encourage those that choose to gamble in adulthood to do so safely.”
RGA calls for statutory levy
The Remote Gambling Association (RGA) last week confirmed it would urge the government to introduce a statutory levy to replace the current system of voluntary funding for research, education and treatment of problem gambling.
The current voluntary funding system, which is overseen by GambleAware, has been falling short of the target set to finance the National Responsible Gambling Strategy, leading to calls for a statutory system to be imposed.
The RGA had previously said it was not opposed in principle to the introduction of a statutory levy but has now taken the decision to proactively seek its introduction, for which there is already a reserve power in the Gambling Act 2005.
RGA chief executive Clive Hawkswood said: “There has been much to commend in the voluntary funding system, but if we are to combat problem gambling to the best of our ability and to minimise gambling-related harm, then now is the time for change and for a fresh start. We are all disappointed that the current system has been the subject of so much criticism and has struggled with fundraising, but we need to put that behind us.
“We have acknowledged the problem and put forward a long-term solution. We believe everyone’s efforts should now be focused on bringing this change about. For the industry this should be seen as an opportunity rather than a threat.
“More funding is needed if we are to fulfil our responsibilities to everyone in this country who gambles, and especially those who are affected by problem gambling. A statutory levy will ensure the right funds are raised in a fair and open process and, crucially, that they are allocated in a way that is transparent, independent and achieves measurable benefits.”
888 on course
Online gaming company 888 is on target to meet market expectations according to a pre-close trading update issued last week.
The firm said this had been achieved despite increased regulatory focus, especially in the UK.
888 were hit by a record £7.8m penalty by the Gambling Commission this year.
Chief executive Itai Frieberger said: “888 has continued to develop its position in European regulated geographies, further diversified the business and maintained a firm focus on enhancing operational efficiencies.
“A major focus in 2017 has been on ensuring that 888 is leading the way in terms of compliance and responsibility. This is an ongoing process of continuous improvement and I am confident that 888 is well positioned as the regulatory focus on the industry continues to become tighter, particularly in the UK.
“888 is an agile business with an entrepreneurial culture and team and we have successfully adapted to opportunities and challenges during 2017. Our progress has again been underpinned by the strength of 888’s proprietary technology as well as the group’s core expertise in CRM [customer relationship management], marketing and business analytics. With these qualities, 888 remains well positioned for future growth.”
What’s happening this week
On Thursday shareholders are set to meet in Las Vegas to approve the acquisition of OpenBet’s owner NYX Gaming by Scientific Games.
William Hill recently dropped their opposition to the deal and Sky Bet, who like William Hill are a shareholder in NYX, are also supporting the acquisition.
Sky Bet chief executive Richard Flint said: “We believe that the acquisition of NYX by Scientific Games delivers great value for us as a shareholder in NYX, and we look forward to continuing to work with a combined Scientific Games and NYX as more jurisdictions around the world look to legalise sports betting and online gaming.”
The following day Australian giants Tabcorp and Tatts Group will complete their Aus$11 million (£6.3m/€7.1m) merger.