he Brazilian off and on approach to regulating gambling appears to be on again after a special review committee for the Brazilian Senate progressed the legislative agenda for a regulated national betting industry.
The idea of regulating gambling in a country that banned bingo reletively recently in 2007 was mooted earlier this year as the government faced a fiscal crunch.
Bill 186 has now been approved by the Special Committee on National Development, with the body reportedly including research on the prospect of opening a legalised national online gambling framework.
The committee’s findings, which includes the potential for 35 casinos in the country, will now be open for discussion to members of the Brazilian senate.
In light of its progress, Brazil’s pro-gambling lobby has stated that any new national gambling framework still faces a long road to becoming a reality, betting consumers and campaigners should therefore remain objective about the country adopting a legalised agenda in the near future.
2015 has seen Brazil suffer a financial ‘annus horribilis’ as the country sees its worst economic growth performance in 25 years. Furthermore this week the Moody Investor Service downgraded Brazil investment grade to ‘Junk Status’.
Close associates of President Dilma Rousseff have publicly stated that the government are willing to implement a new national gambling framework as state public funding initiatives appear to be “cash-strapped”.
However Rousseff critics have pointed out that the government are in no way prepared to act on their ‘easy rhetoric’, as any talk of progress on a national gambling agenda is met with in-action.
Leading Brazilian political figureheads have agreed that the government can no longer afford to ignore a potentially regulated industry that could raise an estimated R$ 23 billion (£4 billion) in taxes. Furthermore all political parties appear to agree that at present national gambling laws are simply out of date with modern consumer habits.
Brazil’s slow progress towards even reviewing its gambling framework has left many commentators cynically questioning whether any government would want to pass a national gambling framework which will potentially have to satisfy multiple stakeholders; at intra-state level, national sporting bodies, federal police and a divided senate.
December 10, 2015
Betfred looking at 500 betting shop sale off
With the Ladbrokes and Coral deal moving forward with the £2.3 billion merger, Betfred are looking to possibly snap up some 500 betting shops from the newly combined betting firm that Betfred believe will have to be sold to allow the deal through the Competitions Commission.
Currently Ladbrokes and Coral have a combined estate of 4,000 sites and to get the deal through the competition commission the business believes it will have to shed some 500 betting shops and that’s where Betfred hope to profit.
Fred Done, who founded the business with his brother Peter 48 years ago, told The Sunday Telegraph he would “absolutely” be willing to talk to the bookmakers about buying sites offloaded to gain regulatory approval for the deal.
“We operate just short of 1,400 shops, another 400 or 500 shops wouldn’t be a problem to run,” he said. “If somebody knocks at my door and says: ‘Fred, do you want to buy some of these shops?’, I’d like to sit down with Coral and Ladbrokes and have a discussion with them.”
Most analyst’s say that with the merged company having some 45% share of the market by the number of betting shops and 47% share of total revenues in betting shops in the UK many say that a sale of some 500 shops will have to happen to reduce that share percentage.
However Betfred think there will be competition for those shops from Paddy Power, private equity firms and foreign buyers.
Currently Ladbrokes and Coral have a combined estate of 4,000 sites and to get the deal through the competition commission the business believes it will have to shed some 500 betting shops and that’s where Betfred hope to profit.
Fred Done, who founded the business with his brother Peter 48 years ago, told The Sunday Telegraph he would “absolutely” be willing to talk to the bookmakers about buying sites offloaded to gain regulatory approval for the deal.
“We operate just short of 1,400 shops, another 400 or 500 shops wouldn’t be a problem to run,” he said. “If somebody knocks at my door and says: ‘Fred, do you want to buy some of these shops?’, I’d like to sit down with Coral and Ladbrokes and have a discussion with them.”
Most analyst’s say that with the merged company having some 45% share of the market by the number of betting shops and 47% share of total revenues in betting shops in the UK many say that a sale of some 500 shops will have to happen to reduce that share percentage.
However Betfred think there will be competition for those shops from Paddy Power, private equity firms and foreign buyers.
Australia should not ask tech firms to block illegal gambling sites
As the Australian government look at ways of blocking illegal online gambling sites offering their services to Australians, many of the leading online companies say it is impossible to block those sites.
Twitter, Facebook and Google all said to wagering review chairman Barry O’Farrell it is impossible to block offshore online gambling sites and the government should not burden the online tech companies to help to do this.
“We consider there to be fundamental flaws and significant practical difficulties with any attempts to filter the Internet such that it may not be possible to automatically block content,” the companies said in a joint submission to the government under their Digital Industry Group association. “Who would determine whether a service is illegal and would entire websites be blocked if there are both legal and illegal services on the website?”.
Figures show that Australian nationals gamble some $24 billion a year and it is estimate $1 billion is to offshore illegal gambling sites that the government want to stop.
The government want tech companies to install web filtering to block these sites but in a joint statement to the review board the companies say it is unworkable.
Those tech giants also have big concerns around its own legal liability should it move to cut access to commercial websites.
“We have concerns around legal liability in preventing access to commercial websites and question what safe harbours would be provided. In addition, internet filters can be easily circumnavigated and information about how to use virtual private networks (VPNs) is widely available. There is no existing legal precedent in Australia requiring Internet companies that are not ISPs to filter access to websites,” the note to the review board says.
Twitter, Facebook and Google all said to wagering review chairman Barry O’Farrell it is impossible to block offshore online gambling sites and the government should not burden the online tech companies to help to do this.
“We consider there to be fundamental flaws and significant practical difficulties with any attempts to filter the Internet such that it may not be possible to automatically block content,” the companies said in a joint submission to the government under their Digital Industry Group association. “Who would determine whether a service is illegal and would entire websites be blocked if there are both legal and illegal services on the website?”.
Figures show that Australian nationals gamble some $24 billion a year and it is estimate $1 billion is to offshore illegal gambling sites that the government want to stop.
The government want tech companies to install web filtering to block these sites but in a joint statement to the review board the companies say it is unworkable.
Those tech giants also have big concerns around its own legal liability should it move to cut access to commercial websites.
“We have concerns around legal liability in preventing access to commercial websites and question what safe harbours would be provided. In addition, internet filters can be easily circumnavigated and information about how to use virtual private networks (VPNs) is widely available. There is no existing legal precedent in Australia requiring Internet companies that are not ISPs to filter access to websites,” the note to the review board says.
December 07, 2015
Bearded Bucks: Minnesota Lottery Goes Hipster with Artist Chuck U
Bearded Bucks scratch-off cards from the Minnesota Lottery represent the peak of hipster state lottery operations. Not only can players win $10,000 by scratching off the beard of a lumbersexual to find craft beers and bird silhouettes but losers can also enter that card to win an art print signed by hipster artist favorite Chuck U.
Minneapolis-based ad agency Olson pitched the idea “and worked with the artist on the design of the ticket, which is unique and, given the number of bearded, plaid-wearing men in Minnesota this time of year, undeniably on-trend,” said Vicki Holets, Minnesota Lottery Marketing Manager
The Lottery is well aware it is satirizing Minnesota’s many hipsters. Its dedicated Bearded Bucks page begins, “Ladies and gentleman, hipsters and dudes, it’s time to get your beard on!” And, of course, there is the winning bird silhouette.
Why a bird, those unfamiliar with hipster icons might ask? Because, “putting a bird on it!” is what hipsters do. Kind of the same way craft beer is hipster. Speaking of craft beer…
And to promote Bearded Bucks, the Lottery went on a Tour De Beards that included craft breweries across Minneapolis-St. Paul. It also started a “Chancetaker” series, featuring Minnesotans like the co-founder of craft beer brewery Tin Whiskers, which also held a Lottery-sponsored beard contest in October.
And then there are the recent TV commercials best described as a combination of Wes Anderson scenes, Tumblr memes and Geico commercials.
“Customers have liked Bearded Bucks,” said Holets of the game’s reception. “The game is performing slightly above average for a $2 ticket, which we attribute to regular players liking the game and new customers trying out an eye-catching product.”
Hipster themes in state lottery communications are not new—18 months ago, New York flirted creatively with hipster stereotypes for its “Bejeweled” game.
But being a true hipster means being able to say you were into it before it was cool—and the Oregon Lottery can brag that it was doing hipster lottery back before it was cool. It even put a bird on it.
The Lottery is well aware it is satirizing Minnesota’s many hipsters. Its dedicated Bearded Bucks page begins, “Ladies and gentleman, hipsters and dudes, it’s time to get your beard on!” And, of course, there is the winning bird silhouette.
Why a bird, those unfamiliar with hipster icons might ask? Because, “putting a bird on it!” is what hipsters do. Kind of the same way craft beer is hipster. Speaking of craft beer…
And then there are the recent TV commercials best described as a combination of Wes Anderson scenes, Tumblr memes and Geico commercials.
“Customers have liked Bearded Bucks,” said Holets of the game’s reception. “The game is performing slightly above average for a $2 ticket, which we attribute to regular players liking the game and new customers trying out an eye-catching product.”
Hipster themes in state lottery communications are not new—18 months ago, New York flirted creatively with hipster stereotypes for its “Bejeweled” game.
But being a true hipster means being able to say you were into it before it was cool—and the Oregon Lottery can brag that it was doing hipster lottery back before it was cool. It even put a bird on it.
Nonetheless, the Minnesota Lottery has no intention of giving up on hipsters—Holets says it will “absolutely” do more “hipster” lottery promotions. “We had a blast promoting this game at craft breweries and other plaid-friendly locations, so we are working on new products that will appeal to that audience.”
Meanwhile lottery hipsters will have to vie with the lottery undead. Oregon Lottery’s latest theme is trendy zombies.
Not so fast Oregon, the student has become the master. Minnesota Lottery’s got its own zombie-themed lottery game. This one is a partnership with AMC’s The Walking Dead.
Meanwhile lottery hipsters will have to vie with the lottery undead. Oregon Lottery’s latest theme is trendy zombies.
December 01, 2015
Prague to close down gambling arcades
The Prague City Assembly has voted to close all the 212 gambling sites that are overtaking the cities streets say lawmakers. The new legislation does not affect the 101 casinos within the city but the cafe or slot arcade style gaming centres.
The new law will take effect in January 2016 with a gradual closure of the gambling sites which some say could take a year or even more to happen.
“The operation of gambling is connected with a number of sociological and pathological phenomena,” Mayor Adriana Krnacova said.
Proposals were put forward back in 2008 to draw back the number of slot machines in the city from 8,358 to 2,724 however this did not happen and the new legislation hopes to address this.
The new law will take effect in January 2016 with a gradual closure of the gambling sites which some say could take a year or even more to happen.
“The operation of gambling is connected with a number of sociological and pathological phenomena,” Mayor Adriana Krnacova said.
Proposals were put forward back in 2008 to draw back the number of slot machines in the city from 8,358 to 2,724 however this did not happen and the new legislation hopes to address this.
November 26, 2015
Punters’ forum to tackle bookies on restricting and closing accounts
The newly created body that represents racing’s punters is to tackle bookmakers over the way firms close and restrict the accounts of successful gamblers. The issue has been a hot topic in racing’s corner of the social media world for months on end and concern that it may be undermining the sport’s appeal has spread as far as the corridors of the British Horseracing Authority.
“That’s certainly far and away the thing that’s been brought up most with us,” said Simon Rowlands, a Timeform veteran who chairs the Horserace Bettors Forum (HBF) and has been gathering the views and concerns of punters since the summer. As the Forum’s second meeting drew to a close this week, he said: “We’re not imagining that people will dance to our tune but we’ve got a few recommendations. We will be contacting bookmakers and running those ideas past them.
“Punters should know in advance what sort of activity is likely to get them restricted or closed and ideally should have a right of review if action is taken against them. The individual suddenly being knocked back is an existing or potential customer of horse racing, not just of the bookmaker in question, after all.”
Rowlands and his colleagues are concerned bookmakers are putting too much faith in “rigid trading algorithms” designed to highlight “arbitrageurs”, whose business is seen as unprofitable and unattractive by the betting industry. The fear is many of what may be termed “innocent punters” are being denied a bet for no good reason.
A “more nuanced approach” is called for by Rowlands, who added: “Should anyone be prevented from betting £100 on the Grand National just because they successfully arbed a bet on football? Racing needs that turnover and that engaged customer.
“We would also like to establish the magnitude of the problem of restrictions and closures, which would require assistance from within betting. Judged by HBF’s mail bag, it is a major concern for many punters of many different kinds but that is not sure to be representative.”
Officials at the British Horseracing Authority acknowledge account closures and restrictions as a matter of concern but feel there is little chance of a positive response, should they try to tell bookmakers how to handle their business, particularly in the present climate of tension between racing and betting over funding. So it will be up to the HBF to press racing’s case.
The Forum was set up in August as the result of a determination by the BHA’s new chief executive, Nick Rust, that punters should be given a public voice. Its first two meetings have been at the BHA’s London office but they will be elsewhere from this point as the HBF moves to assert its independence, which will also involve the creation of its own website.
“There are certain things we would want to make statements on that may not necessarily represent BHA policy,” said the HBF’s Jason Brautigam, the chief executive of British Dressage in his day job. “If it appears on their website, there’s implicit endorsement, so we’ve got to try to make sure the two are seen as slightly separate.”
The Forum’s nine members, all unpaid, still seemed enthused about the project of advancing the interests of racing punters as their lengthy discussion ended on Monday, more than one voice insisting this will not be “just another talking shop” and that they hope to have real influence over time.
“It’s not going to happen in five minutes but we all knew that in the first place,” said Steven Tilley, a local councillor. “The amazing thing is, you’ve got a whole group of people who bet, all who are opinionated and all of whom actually seem to get along together and seem to be coming up with a consensus view a lot of the time, which I think is amazing. We’re a group of contrarians here and yet we’ve managed to get a consensus.”
“That’s certainly far and away the thing that’s been brought up most with us,” said Simon Rowlands, a Timeform veteran who chairs the Horserace Bettors Forum (HBF) and has been gathering the views and concerns of punters since the summer. As the Forum’s second meeting drew to a close this week, he said: “We’re not imagining that people will dance to our tune but we’ve got a few recommendations. We will be contacting bookmakers and running those ideas past them.
“Punters should know in advance what sort of activity is likely to get them restricted or closed and ideally should have a right of review if action is taken against them. The individual suddenly being knocked back is an existing or potential customer of horse racing, not just of the bookmaker in question, after all.”
Rowlands and his colleagues are concerned bookmakers are putting too much faith in “rigid trading algorithms” designed to highlight “arbitrageurs”, whose business is seen as unprofitable and unattractive by the betting industry. The fear is many of what may be termed “innocent punters” are being denied a bet for no good reason.
A “more nuanced approach” is called for by Rowlands, who added: “Should anyone be prevented from betting £100 on the Grand National just because they successfully arbed a bet on football? Racing needs that turnover and that engaged customer.
“We would also like to establish the magnitude of the problem of restrictions and closures, which would require assistance from within betting. Judged by HBF’s mail bag, it is a major concern for many punters of many different kinds but that is not sure to be representative.”
Officials at the British Horseracing Authority acknowledge account closures and restrictions as a matter of concern but feel there is little chance of a positive response, should they try to tell bookmakers how to handle their business, particularly in the present climate of tension between racing and betting over funding. So it will be up to the HBF to press racing’s case.
The Forum was set up in August as the result of a determination by the BHA’s new chief executive, Nick Rust, that punters should be given a public voice. Its first two meetings have been at the BHA’s London office but they will be elsewhere from this point as the HBF moves to assert its independence, which will also involve the creation of its own website.
“There are certain things we would want to make statements on that may not necessarily represent BHA policy,” said the HBF’s Jason Brautigam, the chief executive of British Dressage in his day job. “If it appears on their website, there’s implicit endorsement, so we’ve got to try to make sure the two are seen as slightly separate.”
The Forum’s nine members, all unpaid, still seemed enthused about the project of advancing the interests of racing punters as their lengthy discussion ended on Monday, more than one voice insisting this will not be “just another talking shop” and that they hope to have real influence over time.
“It’s not going to happen in five minutes but we all knew that in the first place,” said Steven Tilley, a local councillor. “The amazing thing is, you’ve got a whole group of people who bet, all who are opinionated and all of whom actually seem to get along together and seem to be coming up with a consensus view a lot of the time, which I think is amazing. We’re a group of contrarians here and yet we’ve managed to get a consensus.”
November 24, 2015
Teddy Sagi’s Playtech Losing Two Major Acquisitions In One Day
Major London listed gambling software company Playtech may have suffered a double reverse as it has been forced to cancel one major acquisition, with a second also, seemingly, headed for the rocks. The two deals were intended to help diversify the company away from its existing business which, while still profitable, may be facing pressures in the future if its gambling company customers start to develop their own software for their casinos.
The UK’s financial regulator is the FCA, or Financial Conduct Authority, which has to this point refused to permit Playtech’s previously announced deal to acquire Plus500, a junior London listed company, for about $700 million to go through citing certain concerns, according to a press release put out by Playtech earlier today. Cyprus financial regulators, who also have jurisdiction, have earlier already approved the transaction.
Plus500 are in the business of enabling trading for contracts for difference, or CFDs, which is a form of speculation on movements in the prices of equities without owning the underlying security. With substantial leverage available the prices of CFDs can fluctuate widely, and carry significant risk therefor and these are products generally suitable for sophisticated investors as a result. In addition to covering equity CFDs, the company trades CFDs for other financial markets including commodities and foreign exchange.
As a company engaged in such financial products, within the UK Plus500 is regulated by the FCA who, it is said by a number of news media today, may indeed be worried by the background of Playtech’s founder, and major shareholder, Teddy Sagi. Though he no longer sits on its board of directors Sagi, who still owns around 30 percent of Playtech, was apparently convicted of fraud in Israel some twenty years ago.
In addition, some analysts have noted, the FCA may have been legitimately nervous of Playtech’s lack of knowledge and experience in the CFD business itself, which occupies a fairly esoteric and specialized corner of the financial marketplace.
Israeli financial newspaper Globes reports that, after extensive representations to the FCA over the last few months, the deal finally may have cratered over demands by the FCA to significantly reduce Sagi’s personal financial holding in Playtech as a condition for approval, though this is unconfirmed.
Since it never rains but it pours, another currently pending Playtech acquisition, to buy a second, smaller, broker of CFDs, the Dublin based trader Ava Trade, for $105 million also appeared near to collapse today after, Playtech said in the same press release, concerns stated by the Central Bank of Ireland back in October.
Playtech has stated it will not incur any penalties relating to these set-backs, except to have to give up a $5 million non-refundable deposit it has made for the second, Ava Trade, deal in the event it also collapses as well.
Clearly regulators are very sensitive these days to which entities can play in the financial services game and have raised the bar, it seems, in this case to block an entity controlled currently by a complete outsider to the industry, and someone who clearly has something of a checkered past moreover.
The UK’s financial regulator is the FCA, or Financial Conduct Authority, which has to this point refused to permit Playtech’s previously announced deal to acquire Plus500, a junior London listed company, for about $700 million to go through citing certain concerns, according to a press release put out by Playtech earlier today. Cyprus financial regulators, who also have jurisdiction, have earlier already approved the transaction.
Plus500 are in the business of enabling trading for contracts for difference, or CFDs, which is a form of speculation on movements in the prices of equities without owning the underlying security. With substantial leverage available the prices of CFDs can fluctuate widely, and carry significant risk therefor and these are products generally suitable for sophisticated investors as a result. In addition to covering equity CFDs, the company trades CFDs for other financial markets including commodities and foreign exchange.
As a company engaged in such financial products, within the UK Plus500 is regulated by the FCA who, it is said by a number of news media today, may indeed be worried by the background of Playtech’s founder, and major shareholder, Teddy Sagi. Though he no longer sits on its board of directors Sagi, who still owns around 30 percent of Playtech, was apparently convicted of fraud in Israel some twenty years ago.
In addition, some analysts have noted, the FCA may have been legitimately nervous of Playtech’s lack of knowledge and experience in the CFD business itself, which occupies a fairly esoteric and specialized corner of the financial marketplace.
Israeli financial newspaper Globes reports that, after extensive representations to the FCA over the last few months, the deal finally may have cratered over demands by the FCA to significantly reduce Sagi’s personal financial holding in Playtech as a condition for approval, though this is unconfirmed.
Since it never rains but it pours, another currently pending Playtech acquisition, to buy a second, smaller, broker of CFDs, the Dublin based trader Ava Trade, for $105 million also appeared near to collapse today after, Playtech said in the same press release, concerns stated by the Central Bank of Ireland back in October.
Playtech has stated it will not incur any penalties relating to these set-backs, except to have to give up a $5 million non-refundable deposit it has made for the second, Ava Trade, deal in the event it also collapses as well.
Clearly regulators are very sensitive these days to which entities can play in the financial services game and have raised the bar, it seems, in this case to block an entity controlled currently by a complete outsider to the industry, and someone who clearly has something of a checkered past moreover.
November 19, 2015
mybet to raise €5m to fund sports betting expansion plans
German gaming operator mybet Holding intends to raise €5m through the issue of a new convertible bond, with proceeds to be used for the expansion of the company’s marketing and technology platform.
mybet will issue a bond with conversion right in the maximum total nominal value of up to €5m. The measure is still subject to a final management board resolution, which will also specify the details of the issuance and the terms of the bond.
It will also need the consent of the company’s supervisory board later this month.
The operator said that it will use the proceeds for the expansion of its marketing and technology platform, including expanding the betting range, acquiring new customers through increased marketing activities, and for advertising of games in the wider context of the UEFA European Championship in 2016.
The convertible bond is expected to be issued in December and have a term of five years.
During the term the bondholders have the irrevocable right, within certain conversion periods, to convert debentures into no par value shares of mybet, each representing a notional share of the capital stock of €1.00. The convertible bond is to attract interest at a rate of 6.25 per cent per annum on its nominal value.
The issue amount, taking into account the present share price, will represent 100 per cent of the nominal amount and will be €100.00 per debenture. The convertible bond is to be collateralised by the pledging of shares of pferdewetten.de, which is owned by mybet.
mybet will issue a bond with conversion right in the maximum total nominal value of up to €5m. The measure is still subject to a final management board resolution, which will also specify the details of the issuance and the terms of the bond.
It will also need the consent of the company’s supervisory board later this month.
The operator said that it will use the proceeds for the expansion of its marketing and technology platform, including expanding the betting range, acquiring new customers through increased marketing activities, and for advertising of games in the wider context of the UEFA European Championship in 2016.
The convertible bond is expected to be issued in December and have a term of five years.
During the term the bondholders have the irrevocable right, within certain conversion periods, to convert debentures into no par value shares of mybet, each representing a notional share of the capital stock of €1.00. The convertible bond is to attract interest at a rate of 6.25 per cent per annum on its nominal value.
The issue amount, taking into account the present share price, will represent 100 per cent of the nominal amount and will be €100.00 per debenture. The convertible bond is to be collateralised by the pledging of shares of pferdewetten.de, which is owned by mybet.
November 18, 2015
Billionaire investor opposes £2bn Ladbrokes merger with Coral
Dermot Desmond, the Irish billionaire and an investor in Ladbrokes, has urged shareholders in the troubled bookmaker to oppose its £2bn merger with rival Coral less than a week before they are due to vote on the deal.
Mr Desmond, who is thought to own at least 1pc of the bookie, has written an open letter to other shareholders in which he described the deal as “the death of Ladbrokes as an independent company”. He said that investors should vote against the merger at Tuesday’s general meeting and should call on Ladbrokes to hire an independent investment bank to help it “review all strategic options” open to it in “a very active M&A market”.
The tie-up, which the two companies agreed in July, will create Britain’s biggest bookie by betting shops with the combined business potentially owning about 4,000 sites. As well as giving Ladbrokes, which has fallen behind its competitors in recent years, much-needed scale, it also gives the bookie access to privately-owned Coral’s well-regarded online business.
However, because the combined company would own so many shops the deal faces intense scrutiny from the competition regulator, which is likely to demand disposals. Investors have been unimpressed by the deal, with Ladbrokes’s shares initially jumping in June when it emerged the two bookies were in talks, but then slumping by 22pc. The stock was unchanged at 109.3p today.
“The real winners in this transaction are the Coral shareholders,” said Mr Desmond, who sold the Betdaq exchange to Ladbrokes for €30m in 2013. “Make no mistake – this is a zero premium acquisition of Ladbrokes by Coral.”
He said that the company could be forced by the Competition and Markets Authority to sell as many as 1,000 sites and that “the lost profits from any such disposed shops may outweigh the unspecified synergies which the proposed transaction is hoped to yield”.
A Ladbrokes shareholder said the bookie had been aware of Mr Desmond’s views but was confident the merger would receive enough shareholder support.
"We have had significant dealings with Mr Desmond as both a shareholder and a commercial partner over recent times,” he said.
“We note his views and are not surprised by them as he has been in extensive dialogue with the management team and not been afraid to talk of undertaking such action. As a shareholder he has a right to express his view and to vote accordingly at the EGM next week.
“We remain confident that shareholders see the attraction of the proposed deal and continue to work towards a successful conclusion to the deal."
The British gambling industry has been gripped by a wave of deal-making, with Paddy Power merging with Betfair and online gambling group GVC buying rival Bwin.Party. William Hill has been left on the sidelines.
Nick Batram, an analyst at Peel Hunt, said Mr Desmond’s intervention could encourage a bidder for Ladbrokes.
“It is contradictory in places and doesn’t really put forward much of an alternative plan, other than putting the group up for sale,” the analyst said of the letter. “However, it could just act as a catalyst to encourage others to join the fray, and a competitive situation should be good news for shareholders.”
Mr Desmond, who is thought to own at least 1pc of the bookie, has written an open letter to other shareholders in which he described the deal as “the death of Ladbrokes as an independent company”. He said that investors should vote against the merger at Tuesday’s general meeting and should call on Ladbrokes to hire an independent investment bank to help it “review all strategic options” open to it in “a very active M&A market”.
The tie-up, which the two companies agreed in July, will create Britain’s biggest bookie by betting shops with the combined business potentially owning about 4,000 sites. As well as giving Ladbrokes, which has fallen behind its competitors in recent years, much-needed scale, it also gives the bookie access to privately-owned Coral’s well-regarded online business.
However, because the combined company would own so many shops the deal faces intense scrutiny from the competition regulator, which is likely to demand disposals. Investors have been unimpressed by the deal, with Ladbrokes’s shares initially jumping in June when it emerged the two bookies were in talks, but then slumping by 22pc. The stock was unchanged at 109.3p today.
“The real winners in this transaction are the Coral shareholders,” said Mr Desmond, who sold the Betdaq exchange to Ladbrokes for €30m in 2013. “Make no mistake – this is a zero premium acquisition of Ladbrokes by Coral.”
He said that the company could be forced by the Competition and Markets Authority to sell as many as 1,000 sites and that “the lost profits from any such disposed shops may outweigh the unspecified synergies which the proposed transaction is hoped to yield”.
A Ladbrokes shareholder said the bookie had been aware of Mr Desmond’s views but was confident the merger would receive enough shareholder support.
"We have had significant dealings with Mr Desmond as both a shareholder and a commercial partner over recent times,” he said.
“We note his views and are not surprised by them as he has been in extensive dialogue with the management team and not been afraid to talk of undertaking such action. As a shareholder he has a right to express his view and to vote accordingly at the EGM next week.
“We remain confident that shareholders see the attraction of the proposed deal and continue to work towards a successful conclusion to the deal."
The British gambling industry has been gripped by a wave of deal-making, with Paddy Power merging with Betfair and online gambling group GVC buying rival Bwin.Party. William Hill has been left on the sidelines.
Nick Batram, an analyst at Peel Hunt, said Mr Desmond’s intervention could encourage a bidder for Ladbrokes.
“It is contradictory in places and doesn’t really put forward much of an alternative plan, other than putting the group up for sale,” the analyst said of the letter. “However, it could just act as a catalyst to encourage others to join the fray, and a competitive situation should be good news for shareholders.”
November 09, 2015
The Godfathers of Sports Betting
On Super Bowl Sunday of 1985, the FBI raided 43 locations across 16 states in an attempt to take down the Computer Group, maybe the most successful gambling syndicate of all-time. A round of follow-up indictments based on some off-kilter assumptions was all it took for the bane of sportsbooks everywhere to close up shop.
Anyone with any money tied to the daily fantasy sports (DFS) industry—especially the people implicated in its most recent scandal, wherein Draftkings employees won hundreds of thousands of dollars on FanDuel using proprietary, inside info—would do well remembering the lesson of the Computer Group’s demise.
Gaming the system is one thing, getting away with it forever is quite another.
By now, it’s become obvious that the unregulated multibillion-dollar DFS industry is headed for a reckoning. Reports of employees at the two major DFS sites—DraftKings and FanDuel—using insider information to line their own pockets has led to increased state and federal scrutiny of not just the industry’s unregulated status, but also DFS’ iffy self-interpretation as a game of skill rather than gambling per the Unlawful Internet Gambling Enforcement Act.
All good cons come to an end. The brain behind the Computer Group can likely relate.
Before becoming the secret king of sports gambling, Michael Kent spent most of the 70’s in Pittsburgh working to build a better nuclear submarine with Westinghouse, a Pentagon contractor. He also played center field for the company softball team and began using company resources to analyze the team’s statistics.
However, the data Kent compiled wasn’t comprehensive enough to pump out the results he wanted, so he started digging into college football statistics and point spreads instead. By 1979, Kent had developed a predictive program built on seven years' worth of data. That same year, he quit his job with Westinghouse and moved to Las Vegas where he would put his program up against the sharpest bookmakers in America.
They never stood a chance.
While the most successful modern sports gamblers and DFS players rely on a style of gambling that is high-volume and data-first, Kent was a pioneer in his own time and bookmakers were unprepared for his strategy. Despite some occasional losses in the tens of thousands during his first year as a full-time gambler, Kent diligently continued updating his model and was soon turning a profit on both college football and college basketball wagers.
The only problem was the raging paranoia Kent felt whenever he had to carry around duffel bags full of money. This was 1980, after all, and cash-in-hand was the only currency known to gambling.
Ivan Mindlin, an orthopedic surgeon and heavy gambler, whom Kent had met through a mutual friend, became the solution. Kent proposed to Mindlin a 50/50 split of profits in exchange for Mindlin posting and collecting on bets while Kent remained the sole party entrusted with access to the program that informed the bets. And just like that, the Computer Group was born.
Kent was all too happy to focus on his program and Mindlin was all too happy to use his gambling world contacts to expand the scope of the operation beyond anything Kent had ever imagined. During the 1983 college football season alone, Kent claims that $23 million in wagers netted a profit of $3 million. But Kent was mostly kept in the dark on the Computer Group’s true scale by Mindlin, who surreptitiously opened offices in New York and Las Vegas, staffed by dozens of employees who used Kent’s data to make their own bets.
Rumors of profit in the tens of millions soon spread and those rumors eventually reached the ears of FBI agents. Those agents became convinced that the Computer Group was an illegal bookmaking operation working in concert with the Italian mafia to manipulate betting lines.
While the Computer Group’s high-volume betting style did rely in part on manipulating betting lines, the FBI’s suspicions were wrong. Still, the Super Bowl Sunday raids uncovered a far more easily proven bit of illegality: the Computer Group wasn’t paying any taxes on its winnings.
The raids also revealed that the operation was much bigger than Kent had assumed. He was under the false impression that the Computer Group was made up of himself, family, Mindlin, and a few others who helped Mindlin place bets. However, Mindlin, who kept Kent far away from the day-to-day operations, had built the Computer Group into something much bigger and he wasn’t cutting in his partner on those profits.
Kent’s desire to remain focused entirely on his gambling program even allowed Mindlin to con Sports Illustrated, which ran a credulous piece on the Computer Group in 1986 that claimed Mindlin had designed the Computer Group’s program himself. Nowhere in the story is Kent’s name even mentioned.
By then, Mindlin’s exploitation of Kent’s genius had left their relationship beyond repair. Kent secured his own legal representation, brought a civil lawsuit against Mindlin, and chose to cooperate with the FBI’s investigation in exchange for immunity.
With the information provided by Kent, the FBI soon realized that instead of busting the world’s biggest mafia-run illegal bookmaking operation, it had simply caught a few dozen gamblers using off-shore bank accounts to shield their winnings from taxation. Still, the Computer Group folded in 1987.
Kent went on to form a three-man gambling group with his brother and a friend that actually bothered to report its winnings to the IRS. He eventually left the gambling world altogether in the mid-’90s and now lives in seclusion. Mindlin still lives in Las Vegas and recently spoke at a sports betting conference. He claims he uses Kent’s program to this day and earns a good living as a full-time sports gambler.
In this case, the FBI made a fool of itself by pursuing a glorified conspiracy theory, but it did put an end to the tax-evading Computer Group. The syndicate had simply grown too big, too fast, and too reckless to avoid scrutiny.
The DFS industry—now the largest advertiser on TV and a multibillion dollar industry—might be no different.
Anyone with any money tied to the daily fantasy sports (DFS) industry—especially the people implicated in its most recent scandal, wherein Draftkings employees won hundreds of thousands of dollars on FanDuel using proprietary, inside info—would do well remembering the lesson of the Computer Group’s demise.
Gaming the system is one thing, getting away with it forever is quite another.
By now, it’s become obvious that the unregulated multibillion-dollar DFS industry is headed for a reckoning. Reports of employees at the two major DFS sites—DraftKings and FanDuel—using insider information to line their own pockets has led to increased state and federal scrutiny of not just the industry’s unregulated status, but also DFS’ iffy self-interpretation as a game of skill rather than gambling per the Unlawful Internet Gambling Enforcement Act.
All good cons come to an end. The brain behind the Computer Group can likely relate.
Before becoming the secret king of sports gambling, Michael Kent spent most of the 70’s in Pittsburgh working to build a better nuclear submarine with Westinghouse, a Pentagon contractor. He also played center field for the company softball team and began using company resources to analyze the team’s statistics.
However, the data Kent compiled wasn’t comprehensive enough to pump out the results he wanted, so he started digging into college football statistics and point spreads instead. By 1979, Kent had developed a predictive program built on seven years' worth of data. That same year, he quit his job with Westinghouse and moved to Las Vegas where he would put his program up against the sharpest bookmakers in America.
They never stood a chance.
While the most successful modern sports gamblers and DFS players rely on a style of gambling that is high-volume and data-first, Kent was a pioneer in his own time and bookmakers were unprepared for his strategy. Despite some occasional losses in the tens of thousands during his first year as a full-time gambler, Kent diligently continued updating his model and was soon turning a profit on both college football and college basketball wagers.
The only problem was the raging paranoia Kent felt whenever he had to carry around duffel bags full of money. This was 1980, after all, and cash-in-hand was the only currency known to gambling.
Ivan Mindlin, an orthopedic surgeon and heavy gambler, whom Kent had met through a mutual friend, became the solution. Kent proposed to Mindlin a 50/50 split of profits in exchange for Mindlin posting and collecting on bets while Kent remained the sole party entrusted with access to the program that informed the bets. And just like that, the Computer Group was born.
Kent was all too happy to focus on his program and Mindlin was all too happy to use his gambling world contacts to expand the scope of the operation beyond anything Kent had ever imagined. During the 1983 college football season alone, Kent claims that $23 million in wagers netted a profit of $3 million. But Kent was mostly kept in the dark on the Computer Group’s true scale by Mindlin, who surreptitiously opened offices in New York and Las Vegas, staffed by dozens of employees who used Kent’s data to make their own bets.
Rumors of profit in the tens of millions soon spread and those rumors eventually reached the ears of FBI agents. Those agents became convinced that the Computer Group was an illegal bookmaking operation working in concert with the Italian mafia to manipulate betting lines.
While the Computer Group’s high-volume betting style did rely in part on manipulating betting lines, the FBI’s suspicions were wrong. Still, the Super Bowl Sunday raids uncovered a far more easily proven bit of illegality: the Computer Group wasn’t paying any taxes on its winnings.
The raids also revealed that the operation was much bigger than Kent had assumed. He was under the false impression that the Computer Group was made up of himself, family, Mindlin, and a few others who helped Mindlin place bets. However, Mindlin, who kept Kent far away from the day-to-day operations, had built the Computer Group into something much bigger and he wasn’t cutting in his partner on those profits.
Kent’s desire to remain focused entirely on his gambling program even allowed Mindlin to con Sports Illustrated, which ran a credulous piece on the Computer Group in 1986 that claimed Mindlin had designed the Computer Group’s program himself. Nowhere in the story is Kent’s name even mentioned.
By then, Mindlin’s exploitation of Kent’s genius had left their relationship beyond repair. Kent secured his own legal representation, brought a civil lawsuit against Mindlin, and chose to cooperate with the FBI’s investigation in exchange for immunity.
With the information provided by Kent, the FBI soon realized that instead of busting the world’s biggest mafia-run illegal bookmaking operation, it had simply caught a few dozen gamblers using off-shore bank accounts to shield their winnings from taxation. Still, the Computer Group folded in 1987.
Kent went on to form a three-man gambling group with his brother and a friend that actually bothered to report its winnings to the IRS. He eventually left the gambling world altogether in the mid-’90s and now lives in seclusion. Mindlin still lives in Las Vegas and recently spoke at a sports betting conference. He claims he uses Kent’s program to this day and earns a good living as a full-time sports gambler.
In this case, the FBI made a fool of itself by pursuing a glorified conspiracy theory, but it did put an end to the tax-evading Computer Group. The syndicate had simply grown too big, too fast, and too reckless to avoid scrutiny.
The DFS industry—now the largest advertiser on TV and a multibillion dollar industry—might be no different.
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