Ladbrokes Coral was busy celebrating on Monday overcoming the “last significant hurdle” to its merger agreement. But the news that the company could only fetch £55.5m for the combined parcel of 359 shops it has offloaded to Betfred and Stan James will likely send shudders throughout the sector.
The shops sale was mandated by the Competition and Markets Authority (CMA) in the summer which said between 350 and 400 outlets needed to be sold in order to satisfy local competition issues from the merging of the two estates.
The disposal will see Betfred pick up 322 shops for a total of £55m while Stan James will pick up the rump of 37 shops for £0.5m. It leaves the Ladbrokes Coral combination with a total of 3,626, the largest estate in the UK, pushing William Hill into second place with 2,330 and with Betfred now rising to 1,688.
The shops in question generated an EBITDA contribution of £28.5m which translates to a multiple of around 2.2 times and analysts were quick to brand the price-tag as disappointing. Richard Stuber at Numis said he had previously pencilled in proceeds of circa £108m, based partly on speculation in the press that Boylesports would be willing to pay around £100m for the parcel.
Indeed, Gala Coral chief executive Carl leaver hinted that other bidders might have been willing to pay more for the shops but Ladbrokes Coral had opted for certainty in order to get the deal over the line and move towards final CMA clearance.
But as Paul Leyland, founder at gambling consultancy Regulus Partners, said the low multiple still reflects the long-term earnings decline at the high-street bookmakers and the potential impact of the Triennial Review of gaming machine stakes and prizes which is likely to be officially announced by the government within weeks.
The news of the divestment sent the analysts back to the drawing board with their valuations for high-street bookmakers. Simon French at Cenkos said the “very disappointing valuation” achieved or these shops “must raise significant questions over the appropriate medium-term multiple with which to value both the enlarged Ladbrokes Coral retail estate and that within William Hill”.
Stuber at Numis said the “risk to future retail cash flows has clearly increased over last few months”.
Although he said he appreciated the forced nature of the sale and cautioned that it couldn’t give a read-across the entire estate, he said it would be prudent to cut its valuation of the combined group’s high-street business from nearly six times EBITDA to a multiple of four times.
The news that it was Betfred and Stan James that had won the race for these divested shops will no doubt be a disappointment to many, including the failed bidders and other interested parties such as the British Horseracing Authority which had lobbied the CMA to ensure true competition by allowing for a new competitor to enter the high street.
As Leyland from Regulus said: “The divestment to two established UK high-street operators will no doubt satisfy the CMA requirement that the acquirers must be qualified. However, it also means that the merger will not create a challenger brand, nor is it likely to drive material change within the (increasingly stale) offer available to British licensed betting office customers, in our view.”
October 18, 2016
October 12, 2016
The End Of An Era: Atlantic City’s Trump Taj Mahal Closes Its Doors
Beginning with the closure of the Atlantic Club in January 2014, Atlantic City has seen the fat trimmed from its casino industry. The city has gone from 12 casino properties to just seven, following today’s closure of the Trump Taj Mahal.
The closure of Trump Taj Mahal is hitting people differently than the other four casinos that closed over the course of 2014 — Atlantic Club, Showboat, Trump Plaza, and Revel — due to the iconic nature of “The Taj,” which will forever hold a place in gambling history.
The Taj becomes an icon
Despite its persistent financial troubles, The Taj was the gambling destination on the East Coast for over a decade.
Its place in the pantheon of gambling destinations shouldn’t be overly surprising considering it was the first billion-dollar casino on the East Coast, and the only billion-dollar casino in Atlantic City for over a decade. Borgata, opened over a decade later, and just barely eclipsed the cost of the Trump Taj Mahal, coming in at a final cost of $1.1 billion.
In effect, The Taj was a Las Vegas Strip casino in Atlantic City.
The Taj poker room was the place to play poker, with poker players traveling from New York, Philadelphia, D.C. and Boston to grab a seat in the weekend games at The Taj. As popular as the poker room was, it was the movie Rounders that made The Taj poker room as well known in poker circles as the World Series of Poker, and really cemented its place in poker history.
The Taj tries to shoot the moon
As mentioned above, the beauty and impressiveness of the property hid Trump Taj Mahal’s big secret.
The casino was a financial disaster from the day it opened its doors in 1990, with only brief periods of prosperity in its two-and-a-half-decade history.
The Taj’s financial woes didn’t come about because the casino wasn’t busy, or because it was seen as lacking in any respect. The problem wasn’t execution; it was planning. The price tag to build it, and the interest rates on the bonds Donald Trump agreed to pay in order to get the necessary financing for the casino simply set the property up to fail. The Taj was doomed before it ever dealt a card or rolled a dice.
As Politifact has reported:
“He [Donald Trump] funded the construction of the $1 billion Trump Taj Mahal casino in Atlantic City, N.J., which opened in 1990, primarily with junk bonds at a whopping 14 percent interest. A year later, the casino was nearly $3 billion in debt, while Trump had racked up nearly $900 million in personal liabilities.”
In 1991, Trump Taj Mahal filed for the first of what would eventually be four bankruptcies:
Carl Icahn took control of the casino this year, and promised a $100 million investment in the property that many thought would breathe new life into the once opulent casino that had fallen into an extreme state of disrepair.
Icahn had recently turned around the Tropicana in Atlantic City, but a labor dispute resulted in a month-long strike, and with North Jersey casinos at least a possibility, Icahn decided to pull the plug and cut his losses.
Closure of the Taj Mahal may not be the end
Atlantic City’s capacity to support 12 casino properties was an open question well before neighboring states got into the casino business.
Once casinos started popping up on all sides of New Jersey, the question being asked wasn’t if Atlantic City could support 12 casino properties. Rather, it was “how many casinos need to close in order for Atlantic City’s casino industry to right-size itself?”
The current number of operational casinos in Atlantic City is seven. Developer Glenn Straub is trying to reopen Revel (which has been rebranded to TEN), which would bring the number of operational casinos in Atlantic City back up to eight. That may or may not be a viable number.
Some analysts think the market could support as many as eight casinos depending on other circumstances in the city and beyond. Others feel the proper number is no more than five or six casino properties, and even less if casinos are built in the northern part of the state in the coming years.
What happens next?
What happens to these shuttered casino properties will dictate the future of the once popular resort town.
Showboat has been green-lighted to reopen as a non-gaming hotel. If Trump Plaza, Atlantic Club, and Trump Taj Mahal can be repurposed in somewhat similar ways, it could be a boon for the city and its remaining casinos, all of which have seen operating profits rise since the 2014 casino contraction.
There are any number of uses for these massive properties:
They could be:
The closure of Trump Taj Mahal is hitting people differently than the other four casinos that closed over the course of 2014 — Atlantic Club, Showboat, Trump Plaza, and Revel — due to the iconic nature of “The Taj,” which will forever hold a place in gambling history.
The Taj becomes an icon
Despite its persistent financial troubles, The Taj was the gambling destination on the East Coast for over a decade.
Its place in the pantheon of gambling destinations shouldn’t be overly surprising considering it was the first billion-dollar casino on the East Coast, and the only billion-dollar casino in Atlantic City for over a decade. Borgata, opened over a decade later, and just barely eclipsed the cost of the Trump Taj Mahal, coming in at a final cost of $1.1 billion.
In effect, The Taj was a Las Vegas Strip casino in Atlantic City.
The Taj poker room was the place to play poker, with poker players traveling from New York, Philadelphia, D.C. and Boston to grab a seat in the weekend games at The Taj. As popular as the poker room was, it was the movie Rounders that made The Taj poker room as well known in poker circles as the World Series of Poker, and really cemented its place in poker history.
The Taj tries to shoot the moon
As mentioned above, the beauty and impressiveness of the property hid Trump Taj Mahal’s big secret.
The casino was a financial disaster from the day it opened its doors in 1990, with only brief periods of prosperity in its two-and-a-half-decade history.
The Taj’s financial woes didn’t come about because the casino wasn’t busy, or because it was seen as lacking in any respect. The problem wasn’t execution; it was planning. The price tag to build it, and the interest rates on the bonds Donald Trump agreed to pay in order to get the necessary financing for the casino simply set the property up to fail. The Taj was doomed before it ever dealt a card or rolled a dice.
As Politifact has reported:
“He [Donald Trump] funded the construction of the $1 billion Trump Taj Mahal casino in Atlantic City, N.J., which opened in 1990, primarily with junk bonds at a whopping 14 percent interest. A year later, the casino was nearly $3 billion in debt, while Trump had racked up nearly $900 million in personal liabilities.”
In 1991, Trump Taj Mahal filed for the first of what would eventually be four bankruptcies:
- The second bankruptcy occurred in 2004 (Trump Hotels and Casinos Resorts);
- The third in 2009 (Trump Entertainment Resorts);
- The fourth in 2014 (Trump Entertainment Resorts).
Carl Icahn took control of the casino this year, and promised a $100 million investment in the property that many thought would breathe new life into the once opulent casino that had fallen into an extreme state of disrepair.
Icahn had recently turned around the Tropicana in Atlantic City, but a labor dispute resulted in a month-long strike, and with North Jersey casinos at least a possibility, Icahn decided to pull the plug and cut his losses.
Closure of the Taj Mahal may not be the end
Atlantic City’s capacity to support 12 casino properties was an open question well before neighboring states got into the casino business.
Once casinos started popping up on all sides of New Jersey, the question being asked wasn’t if Atlantic City could support 12 casino properties. Rather, it was “how many casinos need to close in order for Atlantic City’s casino industry to right-size itself?”
The current number of operational casinos in Atlantic City is seven. Developer Glenn Straub is trying to reopen Revel (which has been rebranded to TEN), which would bring the number of operational casinos in Atlantic City back up to eight. That may or may not be a viable number.
Some analysts think the market could support as many as eight casinos depending on other circumstances in the city and beyond. Others feel the proper number is no more than five or six casino properties, and even less if casinos are built in the northern part of the state in the coming years.
What happens next?
What happens to these shuttered casino properties will dictate the future of the once popular resort town.
Showboat has been green-lighted to reopen as a non-gaming hotel. If Trump Plaza, Atlantic Club, and Trump Taj Mahal can be repurposed in somewhat similar ways, it could be a boon for the city and its remaining casinos, all of which have seen operating profits rise since the 2014 casino contraction.
There are any number of uses for these massive properties:
They could be:
- converted to housing;
- turned into a non-gaming entertainment complex;
- turned into shopping malls with retail and dining options.
- The key is finding a way to repurpose these buildings so they’re not an eyesore on the Atlantic City skyline, or a depressing reminder of the city’s lost glory.
October 11, 2016
In poker terms, Amaya is offering William Hill a marginal hand
When William Hill threw out a cheeky three-way merger proposal from the Rank Group and 888 Holdings a couple of months ago, its chairman, Gareth Davis, explained robustly that the bookmaker would not be doing a deal based on “risk, debt and hope”.
Quite right, too. Life has become tougher for William Hill over the past year, and it has lost its chief executive on the way, but there was no reason to panic.
But now comes a deal the board wants to look at – a potential “merger of equals” with Amaya, the Canadian company whose PokerStars website dominates the world of online poker. But, using Davis’s own yardsticks, the appeal looks wobbly at best.
On risk, Amaya brings at least two big ones. The more obvious is a $870m (£704m) penalty in the US state of Kentucky. Amaya is probably correct in thinking it will not end up paying anything like that sum, but one can never be sure given US authorities’ past (baffling) attempts to combat online poker.
The other risk is that William Hill ends up with too much exposure to unregulated markets, meaning those where gambling is either banned or the rules are so unclear that your local operation can legislated out of existence. At the moment, William Hill’s exposure to unregulated territories is an admirably low 5%. After a merger with Amaya, the ratio would rise to about a quarter of the business. Big difference.
On debt, Amaya would bring a bundle. The combined group’s borrowings would be about 3.5 times the top-line profits. Historically, William Hill has aimed for under two times. If high levels of debt are not your bag, Amaya is a strange choice of partner.
The hope element is that cross-selling will do wonders for both companies – that Amaya’s poker players will want to bet on sport with William Hill, and vice versa. That seems plausible, but the degree is untested.
Add it up and we can agree that Amaya looks a better gamble than the complex Rank/888 proposal, where the debt ratios would have been even higher. The Canadian company is a fearsome generator of cash and it is digital and international – qualities prized by William Hill. All the same, there’s a whiff of desperation in the idea that an overdose of online poker, a game that’s barely growing these days, is the thing to fire up William Hill.
Note the limp reaction in the share price, up just 3%. In poker terms, Amaya is offering a marginal hand. William Hill’s investors may fairly feel the self-help cards are stronger.
Quite right, too. Life has become tougher for William Hill over the past year, and it has lost its chief executive on the way, but there was no reason to panic.
But now comes a deal the board wants to look at – a potential “merger of equals” with Amaya, the Canadian company whose PokerStars website dominates the world of online poker. But, using Davis’s own yardsticks, the appeal looks wobbly at best.
On risk, Amaya brings at least two big ones. The more obvious is a $870m (£704m) penalty in the US state of Kentucky. Amaya is probably correct in thinking it will not end up paying anything like that sum, but one can never be sure given US authorities’ past (baffling) attempts to combat online poker.
The other risk is that William Hill ends up with too much exposure to unregulated markets, meaning those where gambling is either banned or the rules are so unclear that your local operation can legislated out of existence. At the moment, William Hill’s exposure to unregulated territories is an admirably low 5%. After a merger with Amaya, the ratio would rise to about a quarter of the business. Big difference.
On debt, Amaya would bring a bundle. The combined group’s borrowings would be about 3.5 times the top-line profits. Historically, William Hill has aimed for under two times. If high levels of debt are not your bag, Amaya is a strange choice of partner.
The hope element is that cross-selling will do wonders for both companies – that Amaya’s poker players will want to bet on sport with William Hill, and vice versa. That seems plausible, but the degree is untested.
Add it up and we can agree that Amaya looks a better gamble than the complex Rank/888 proposal, where the debt ratios would have been even higher. The Canadian company is a fearsome generator of cash and it is digital and international – qualities prized by William Hill. All the same, there’s a whiff of desperation in the idea that an overdose of online poker, a game that’s barely growing these days, is the thing to fire up William Hill.
Note the limp reaction in the share price, up just 3%. In poker terms, Amaya is offering a marginal hand. William Hill’s investors may fairly feel the self-help cards are stronger.
September 26, 2016
Time to Reconsider Ban on Sports Betting?
An advisory group put together by the American Gaming Association recently recommended ending the federal ban against sports betting.
Sports gambling outside of Las Vegas is currently prohibited by federal law, according to the Professional and Amateur Sports Protection Act of 1992. However, the time has come for an open and regulated sports betting market. “It’s time to reconsider that national ban,” said Tim Murphy, former deputy director of the FBI and Chair of the advisory group.
States should have the right to decide whether to offer sports betting, recently recommended the board. In a bid to repeal the current legislation the group is set to lobby on Capitol Hill.
The American Gaming Association formed in 2015 and was launched as an initiative to expose the massive illegal gambling market. Murphy, the former FBI Deputy Director, said findings will be shared with legislators and stakeholders “so we can at least spur the critical national dialogue on this topic and get people involved and give them insight into how and why this needs to be changed.”
Sports gambling outside of Las Vegas is currently prohibited by federal law, according to the Professional and Amateur Sports Protection Act of 1992. However, the time has come for an open and regulated sports betting market. “It’s time to reconsider that national ban,” said Tim Murphy, former deputy director of the FBI and Chair of the advisory group.
States should have the right to decide whether to offer sports betting, recently recommended the board. In a bid to repeal the current legislation the group is set to lobby on Capitol Hill.
The American Gaming Association formed in 2015 and was launched as an initiative to expose the massive illegal gambling market. Murphy, the former FBI Deputy Director, said findings will be shared with legislators and stakeholders “so we can at least spur the critical national dialogue on this topic and get people involved and give them insight into how and why this needs to be changed.”
September 20, 2016
Barton investigated for betting on a Celtic match with Betfair
Rangers midfielder Joey Barton is reportedly being investigated for alleged betting on a Celtic match with Betfair, that is said to have been placed on his personal account.
The Scottish Football Association does not allow players, coaches, club officials and referees to bet on any football globally.
Barton is already in hot water with his club after picking up a three week ban for a recent training ground bust up.
The row is said to have been with manager Mark Warburton after Rangers, who are sponsored by 32Red, suffered a heavy 5-1 defeat in the Old Firm derby. The bet in question was allegedly placed by Barton on Celtic to lose by at least three goals in their following match to Barcelona; a bet he’d have won if so as the Bhoys went on to be hammered 7-0.
The Gambling Commission are now believed to be investigating the matter, and that both Rangers and Barton have been notified that the probe has been launched.
The Commission will present its case to the SFA. The report will then be presented to compliance officer Tony McGlennan, and it’ll be McGlennan that will decide on the outcome for Barton.
The Scottish Football Association does not allow players, coaches, club officials and referees to bet on any football globally.
Barton is already in hot water with his club after picking up a three week ban for a recent training ground bust up.
The row is said to have been with manager Mark Warburton after Rangers, who are sponsored by 32Red, suffered a heavy 5-1 defeat in the Old Firm derby. The bet in question was allegedly placed by Barton on Celtic to lose by at least three goals in their following match to Barcelona; a bet he’d have won if so as the Bhoys went on to be hammered 7-0.
The Gambling Commission are now believed to be investigating the matter, and that both Rangers and Barton have been notified that the probe has been launched.
The Commission will present its case to the SFA. The report will then be presented to compliance officer Tony McGlennan, and it’ll be McGlennan that will decide on the outcome for Barton.
New Online Gambling Licenses In Greece To Be Released in October
Greece’s new licensing system for online gambling operators is set to be implemented by October. Deputy Finance Minister, Trifon Alexiadis, confirmed that the new rules would be made public “within a month”.
In 2011, Greek ran an experiment by issuing 24 “temporary” licenses to online gambling sites. The licenses were later suspended as the Greek government aimed to increase the betting monopoly that OPAP had. The government then sold one-third of the stake of the company. Alexiadis explained that this was to stop worldwide gambling operators from making profit while evading Greek’s taxes.
The experiment also revealed that many operators were producing false reports of their revenues. The Hellenic Gaming Commission (EEEP) surveyed the operators on their revenues and turnovers. Alexiadis said that public documents from these operators showed discrepancies compared to declared revenues.
Alexiadis also stated that the newer regulations were more optimized and put a cap on how much operators could earn from Greek betters. New regulations required foreign payment providers to report to the Greek authorities thus making it easier to track financial transactions from users to foreign operators.
Interestingly, many operators might be reluctant to apply for a license as Greek has a massive 35% punitive tax rate on gambling revenue. OPAP, the current monopoly in Greek gambling has also fallen victim to the new tax and reported a decrease in profits of 36% in Q2 of this year. The company clarified that if it wasn’t for the tax, profits would have risen 2% instead.
The EEEP has also been making efforts to curb online gambling without authorization and has recently started blocking more and more sites. As of August, 847 sites have been blacklisted by the EEEP. At the beginning of this year, the number of blocked sites was nearly half that.
In 2011, Greek ran an experiment by issuing 24 “temporary” licenses to online gambling sites. The licenses were later suspended as the Greek government aimed to increase the betting monopoly that OPAP had. The government then sold one-third of the stake of the company. Alexiadis explained that this was to stop worldwide gambling operators from making profit while evading Greek’s taxes.
The experiment also revealed that many operators were producing false reports of their revenues. The Hellenic Gaming Commission (EEEP) surveyed the operators on their revenues and turnovers. Alexiadis said that public documents from these operators showed discrepancies compared to declared revenues.
Alexiadis also stated that the newer regulations were more optimized and put a cap on how much operators could earn from Greek betters. New regulations required foreign payment providers to report to the Greek authorities thus making it easier to track financial transactions from users to foreign operators.
Interestingly, many operators might be reluctant to apply for a license as Greek has a massive 35% punitive tax rate on gambling revenue. OPAP, the current monopoly in Greek gambling has also fallen victim to the new tax and reported a decrease in profits of 36% in Q2 of this year. The company clarified that if it wasn’t for the tax, profits would have risen 2% instead.
The EEEP has also been making efforts to curb online gambling without authorization and has recently started blocking more and more sites. As of August, 847 sites have been blacklisted by the EEEP. At the beginning of this year, the number of blocked sites was nearly half that.
August 25, 2016
Playtech's share price and market capitalisation jump as group treats investors to €150m special dividend
Gambling software group Playtech's share price popped to a record high this morning after it announced it will treat shareholders to a bumper €150m special dividend.
Playtech said it will make the payout in December, though it has also hiked its interim dividend by 15 per cent to €0.11. The company said the boosts were in anticipation of higher growth and cash generation.
Revenue at the group was up 18 per cent to €338m in the six months to 30 June.
Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) reached €144m, a rise of 27 per cent.
Playtech's stock jumped around five per cent to over 944p on the news and took its market capitalisation above £3bn for the first time.
The jump means it is now the second largest gambling company in the UK in terms of market capitalisation, behind only the merged behemoth Paddy Power Betfair.
Its stock was trading around four per cent higher at the time of writing to 934.7p.
In the first half of this year Playtech continued to push forward with its M&A strategy by acquiring Swedish software firm Quickspin in May for €24m and buying up 90 per cent of Best Gaming Technology for €138m in July.
Chief executive Mor Weizer told City A.M. Playtech remains an "opportunistic and highly acquisitive company".
However, it is not aiming to join the wave of high-profile mergers, such as those between Paddy Power and Betfair and Ladbrokes and Gala Coral, anytime soon.
"Given the health pipeline of M&A in discussion we expect to remain busy and active in the coming quarters. We would never say never to a merger – every opportunity would be considered – but we intend to be the group leading the consolidating rather than being consolidated by others.
"We are very much focused on certain companies that can add to our capabilities at the moment and help us target greater international expansion," Weizer said.
Playtech supplies some of the most profitable bookmakers in markets such as the UK and Spain, including Betfred, Codere, Coral, Ladbrokes, Paddy Power Betfair and William Hill.
However, Weizer said the company intends to be "the most important B2B provider" in the gambling industry in the key regulated markets of the Czech Republic, Slovakia, Poland, the Netherlands and Mexico, among others.
It said it is "locking in" future growth in its gaming division, after announcing important new licensees this year including PokerStars and SunBets, as well as a slew of contract renewals that now put seven of its top 10 licensees on contracts with at least three years remaining.
Weizer told City A.M. he expects Playtech's casino and sports products to generate the most growth in the coming quarters, while mobile will be the group's most lucrative channel. Mobile growth grew 29 per cent in the first half in total and generated 54 per cent of UK revenues.
Chairman Alan Jackson said:
"Playtech has made significant progress in 2016 as we have delivered on our strategic objectives. The gaming division continues to deliver strong growth, driven by our industry-leading casino offering.
Given this progress, we remain confident of strong growth in 2016 and beyond."
Playtech said it will make the payout in December, though it has also hiked its interim dividend by 15 per cent to €0.11. The company said the boosts were in anticipation of higher growth and cash generation.
Revenue at the group was up 18 per cent to €338m in the six months to 30 June.
Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) reached €144m, a rise of 27 per cent.
Playtech's stock jumped around five per cent to over 944p on the news and took its market capitalisation above £3bn for the first time.
The jump means it is now the second largest gambling company in the UK in terms of market capitalisation, behind only the merged behemoth Paddy Power Betfair.
Its stock was trading around four per cent higher at the time of writing to 934.7p.
In the first half of this year Playtech continued to push forward with its M&A strategy by acquiring Swedish software firm Quickspin in May for €24m and buying up 90 per cent of Best Gaming Technology for €138m in July.
Chief executive Mor Weizer told City A.M. Playtech remains an "opportunistic and highly acquisitive company".
However, it is not aiming to join the wave of high-profile mergers, such as those between Paddy Power and Betfair and Ladbrokes and Gala Coral, anytime soon.
"Given the health pipeline of M&A in discussion we expect to remain busy and active in the coming quarters. We would never say never to a merger – every opportunity would be considered – but we intend to be the group leading the consolidating rather than being consolidated by others.
"We are very much focused on certain companies that can add to our capabilities at the moment and help us target greater international expansion," Weizer said.
Playtech supplies some of the most profitable bookmakers in markets such as the UK and Spain, including Betfred, Codere, Coral, Ladbrokes, Paddy Power Betfair and William Hill.
However, Weizer said the company intends to be "the most important B2B provider" in the gambling industry in the key regulated markets of the Czech Republic, Slovakia, Poland, the Netherlands and Mexico, among others.
It said it is "locking in" future growth in its gaming division, after announcing important new licensees this year including PokerStars and SunBets, as well as a slew of contract renewals that now put seven of its top 10 licensees on contracts with at least three years remaining.
Weizer told City A.M. he expects Playtech's casino and sports products to generate the most growth in the coming quarters, while mobile will be the group's most lucrative channel. Mobile growth grew 29 per cent in the first half in total and generated 54 per cent of UK revenues.
Chairman Alan Jackson said:
"Playtech has made significant progress in 2016 as we have delivered on our strategic objectives. The gaming division continues to deliver strong growth, driven by our industry-leading casino offering.
Given this progress, we remain confident of strong growth in 2016 and beyond."
August 24, 2016
Merger costs leave Paddy Power Betfair with £47.5m loss
Merger costs left Paddy Power Betfair with a £47.5 million sterling (€55.4 million) loss at the end of June.
The group also announced that that Paddy Power co-founder Stewart Kenny, who as chief executive led the Irish bookie’s flotation in 2001, is stepping down from the board.
Paddy Power Betfair said on Wednesday that revenues grew 18 per cent to £759 million in the six months ended June 30th from £642 million million during the same period last year.
Operating profits grew 39 per cent to £147.6 million from £106.5 million over the same period.
However, a charge of £195.1 million for the cost of merging Paddy Power and Betfair to create the group in February, left it with a £47.5 million loss.
That included £49 million for integrating the two businesses , which is likely to have cost a total of £65 million by the year’s end, and £50 million in fees and duty.
Chief executive, Breon Corcoran said that the restructuring that followed the merger of Paddy Power and Betfair in February is now completed and that savings are being delivered ahead of schedule.
Paddy Power Betfair now believes that the merger will cut the enlarged group’s costs by £65 million, £15 million more than originally expected, with the full benefit of this kicking in next year.
The group expects that earnings for the full year will be between £365 million and £385 million, 22 per cent to 25 per cent more than the £296 million total that the two businesses generated in 2015.
Its accounts treat the group’s figures as if Paddy Power and Betfair had always been merged.
In the first half, its on-line division, including Paddy Power and Betfair in Ireland, Britain and Europe, earned £140 million in operating profits, 40 per cent more than during the same period last year.
Its 603 Paddy Power betting shops in Britain and Ireland grew profits by 21 per cent to £23 million.
A sharp rise in costs left operating profits from Sportsbet in Australia trailing by 12 per cent at £26.1 million.
Product fees, inflation and an increase in jobs combined to drive the increase in costs. The group expects this to ease in the second half.
Profits at its US division, which includes of the horseracing and betting network, TVG and Betfair Casino, increased by more than 153 per cent to £2.9 milion.
Mr Corcoran pointed out that its industry remained highly competitive and was subject to regulation and economic conditions.
“Our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth,” he said.
Mr Kenny co-founded Paddy Power in 1988 and was chief executive until 2002, the year after it launched on the Dublin stock market, and chaired it for a further year.
Current chairman, Gary McGann, noted Mr Kenny was retiring after many years of service to the company. “We wish him every success in the future and thank him for his incredible contribution to this business,” Mr McGann said.
The group also announced that that Paddy Power co-founder Stewart Kenny, who as chief executive led the Irish bookie’s flotation in 2001, is stepping down from the board.
Paddy Power Betfair said on Wednesday that revenues grew 18 per cent to £759 million in the six months ended June 30th from £642 million million during the same period last year.
Operating profits grew 39 per cent to £147.6 million from £106.5 million over the same period.
However, a charge of £195.1 million for the cost of merging Paddy Power and Betfair to create the group in February, left it with a £47.5 million loss.
That included £49 million for integrating the two businesses , which is likely to have cost a total of £65 million by the year’s end, and £50 million in fees and duty.
Chief executive, Breon Corcoran said that the restructuring that followed the merger of Paddy Power and Betfair in February is now completed and that savings are being delivered ahead of schedule.
Paddy Power Betfair now believes that the merger will cut the enlarged group’s costs by £65 million, £15 million more than originally expected, with the full benefit of this kicking in next year.
The group expects that earnings for the full year will be between £365 million and £385 million, 22 per cent to 25 per cent more than the £296 million total that the two businesses generated in 2015.
Its accounts treat the group’s figures as if Paddy Power and Betfair had always been merged.
In the first half, its on-line division, including Paddy Power and Betfair in Ireland, Britain and Europe, earned £140 million in operating profits, 40 per cent more than during the same period last year.
Its 603 Paddy Power betting shops in Britain and Ireland grew profits by 21 per cent to £23 million.
A sharp rise in costs left operating profits from Sportsbet in Australia trailing by 12 per cent at £26.1 million.
Product fees, inflation and an increase in jobs combined to drive the increase in costs. The group expects this to ease in the second half.
Profits at its US division, which includes of the horseracing and betting network, TVG and Betfair Casino, increased by more than 153 per cent to £2.9 milion.
Mr Corcoran pointed out that its industry remained highly competitive and was subject to regulation and economic conditions.
“Our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth,” he said.
Mr Kenny co-founded Paddy Power in 1988 and was chief executive until 2002, the year after it launched on the Dublin stock market, and chaired it for a further year.
Current chairman, Gary McGann, noted Mr Kenny was retiring after many years of service to the company. “We wish him every success in the future and thank him for his incredible contribution to this business,” Mr McGann said.
August 19, 2016
William Hill takeover bid collapses
An ambitious £3.4bn bid for William Hill has collapsed after the bookmaker refused to open talks with suitors Rank Group and 888 over what would have been a highly-complex, three-way deal.
Rank, the owner of Grosvenor casino and Mecca bingo halls, and online gambling company 888 made two offers for the bookie, of 394p-a-share and 364p, but both were dismissed by William Hill as too low and “highly opportunistic”. In the light of William Hill’s refusal to engage, the pair have dropped their approach, which had been dogged all along by stock market scepticism the deal was too complicated to pull-off and required too much debt.
A Takeover Panel deadline requiring the bidders to make a formal offer or walk away was due to expire on Sunday.
“We strongly believe that the transaction would have created significant value for all three sets of shareholders,” said Henry Birch, the boss of Rank. Itai Freiberger, 888’s chief executive, added that he was “disappointed” William Hill “did not share our vision”.
The mooted deal would have involved Rank merging with 888 to buy the bookie. Mr Birch would not comment on whether a deal between the two bidders was still on the cards, although he did say that “we’ve enjoyed working with 888”.
William Hill had publicly clashed with the bidders and disputed the value of the offers they had submitted. Gareth Davis, the bookie’s chief executive, said today that it would focus on its stand-alone turnaround strategy, adding that Rank and 888’s offer “fell down on value, risk, strategy and leverage”.
In a fillip to investors, he also said the company had enjoyed a “good start” to the second-half of the year and that annual operating profits were now expected to be at the top end of the £260m to £280m range.
However, William Hill remains isolated. Rivals Ladbrokes and Corals are merging and Paddy Power and Betfair have combined to create a gambling giant.
There has been speculation that CVC, the private equity giant that used to own William Hill and now owns Sky Bet, could make a bid for the bookie. But Berenberg analysts said today that they doubted William Hill would draw another suitor, arguing that “a private equity fund would need to re-leverage” the company “very substantially”.
William Hill shares, which had faded in recent days amid speculation a deal would fail, fell a further 4.7p to 303.1p. 888 rose 4.75p to 205p and Rank slid 2.3p to 221.6p.
Rank, the owner of Grosvenor casino and Mecca bingo halls, and online gambling company 888 made two offers for the bookie, of 394p-a-share and 364p, but both were dismissed by William Hill as too low and “highly opportunistic”. In the light of William Hill’s refusal to engage, the pair have dropped their approach, which had been dogged all along by stock market scepticism the deal was too complicated to pull-off and required too much debt.
A Takeover Panel deadline requiring the bidders to make a formal offer or walk away was due to expire on Sunday.
“We strongly believe that the transaction would have created significant value for all three sets of shareholders,” said Henry Birch, the boss of Rank. Itai Freiberger, 888’s chief executive, added that he was “disappointed” William Hill “did not share our vision”.
The mooted deal would have involved Rank merging with 888 to buy the bookie. Mr Birch would not comment on whether a deal between the two bidders was still on the cards, although he did say that “we’ve enjoyed working with 888”.
William Hill had publicly clashed with the bidders and disputed the value of the offers they had submitted. Gareth Davis, the bookie’s chief executive, said today that it would focus on its stand-alone turnaround strategy, adding that Rank and 888’s offer “fell down on value, risk, strategy and leverage”.
In a fillip to investors, he also said the company had enjoyed a “good start” to the second-half of the year and that annual operating profits were now expected to be at the top end of the £260m to £280m range.
However, William Hill remains isolated. Rivals Ladbrokes and Corals are merging and Paddy Power and Betfair have combined to create a gambling giant.
There has been speculation that CVC, the private equity giant that used to own William Hill and now owns Sky Bet, could make a bid for the bookie. But Berenberg analysts said today that they doubted William Hill would draw another suitor, arguing that “a private equity fund would need to re-leverage” the company “very substantially”.
William Hill shares, which had faded in recent days amid speculation a deal would fail, fell a further 4.7p to 303.1p. 888 rose 4.75p to 205p and Rank slid 2.3p to 221.6p.
August 01, 2016
South Korea's Ongoing Battle Against Match-Fixing
It was a plan as clever and successful as Harry Kane taking England’s set-pieces. In May 2012, former South Korea international Kim Dong-hyun was broke and desperate. He enlisted the help of Yoon Chan-so, an ex-pitcher for baseball team Seoul LG Twins and also down on his luck. The plot was hatched.
The pair stole an SUV in the swanky southern Seoul area of Gangnam to tail a swankier BMW. The masked former footballer took the car at knife-point with the owner forced into the passenger seat. She managed to escape at traffic lights, hail a taxi and give chase, all the while reporting her location to the police. The boys in blue soon arrived and caught the hapless former athletes who were, by then, on foot.
Kim’s money issues arose when he was banned for life from playing football owing to his role in a massive match-fixing scandal that came to light in 2011. The ex-striker, who is still just 32, had been a main mover, recruiting younger players to do the bidding of Chinese and Korean gangs.
The other high-profile star of those found guilty was Choi Sung-kuk. The photographs of the diminutive winger, once known as the ‘Little Maradona’ who came close to joining Sheffield United, turning up for work the following year as a hospital receptionist were poignant.
As sad as it was, there was much worse. Two killed themselves as the scandal unfolded, dominating the sports media for weeks. One was Jung Jong-kwan, a former Jeonbuk midfield player, who wrote of his shame in what seemed to be a suicide note found by his body in May 2011. Since the scandal broke, Jung had been working closely with league officials who were devastated at his death. Five months later, Lee Soo-cheol, who had been head coach of K-League team Sangju Sangmu, was found dead in another apparent suicide. Lee had been indicted of blackmailing the parents of a player who was involved in match-fixing.
It was a mess. Few could believe what was unfolding. At first fans refused to do so, criticising journalists for reporting what was going on. As time passed, it became apparent that this was something serious. Players that had initially issued denials started to spill the beans. Soon the government threatened to cancel the K-League, the oldest professional league in Asia, if something wasn’t done.
In the end, over 50 players and coaches, past and present, were found guilty of rigging results. Authorities got busy. Players were banned for years or life. Law enforcement agencies were involved too.
The Korea Football Association knew that, as well as tough punishments, there was a need to educate. In the past there had been complacency, ignorance and naivety. In the future, there could be no such excuses. Young players and coaches were sent to an institution near the central city of Daejeon. International observers were impressed with the program and there has been continued efforts to monitor and investigate.
So any new hints of trouble are taken seriously and when it involves the best team in the country, very seriously indeed.
Jeonbuk Motors have been dominant in South Korea in recent years. A first league title came in 2009, and this season should see a third championship in succession. Throw in more appearances in the Asian Champions League than any other team and an upcoming quarter-final in the tournament, Jeonbuk are one of the biggest teams on the world’s biggest continent. They are also currently under investigation for bribing referees.
In 2015, the former CEO of Gyeongnam FC Ahn Jung-buk, a well-known football figure, was found guilty of bribing referees in order to help his team avoid relegation. It didn’t work.
One of those referees found guilty claimed in May that he had also received money (not much — about $800) from a scout who worked for Jeonbuk.
This was to fix matches in 2013, the one season since 2012 when the team did not win the title. The club says that the scout was working on his own initiative and without Jeonbuk’s knowledge.
Head coach Choi Kang-hee has been in charge since 2005. His 12 years in Jeonju were punctuated by an 18-month spell with the national team from 2012 to 2013 (he didn’t want to take the job but the KFA took him drinking and drinking and drinking until he said yes).
So Choi wasn’t in charge at the time of the said crimes but said in June he will take responsibility if guilt is established. That would probably mean resignation but the club’s general manager Lee Chul-geun said that he is the one who should go instead of Choi. Regardless, punishment is likely.
Gyeongnam, now in the second tier, were given a ten-point deduction. The same sanction would see Jeonbuk move to second, just two points off the pace and still favourites to win the title.
For fans, this kind of thing is troubling. Since the original football scandal, there have been issues with other codes too –baseball, basketball and volleyball.
This does not necessarily mean that Korea’s sports scene is any dodgier than others. After 2011, the country is more aggressive and pro-active at investigating sport corruption than than most — in Asia at least. The first step to dealing with a problem is to acknowledge that there is one in the first place. Many do not.
That may be a small consolation for Jeonbuk fans but short-term pain for them may help to provide long-term gain for Korean football, and sport, in general.
The pair stole an SUV in the swanky southern Seoul area of Gangnam to tail a swankier BMW. The masked former footballer took the car at knife-point with the owner forced into the passenger seat. She managed to escape at traffic lights, hail a taxi and give chase, all the while reporting her location to the police. The boys in blue soon arrived and caught the hapless former athletes who were, by then, on foot.
Kim’s money issues arose when he was banned for life from playing football owing to his role in a massive match-fixing scandal that came to light in 2011. The ex-striker, who is still just 32, had been a main mover, recruiting younger players to do the bidding of Chinese and Korean gangs.
The other high-profile star of those found guilty was Choi Sung-kuk. The photographs of the diminutive winger, once known as the ‘Little Maradona’ who came close to joining Sheffield United, turning up for work the following year as a hospital receptionist were poignant.
As sad as it was, there was much worse. Two killed themselves as the scandal unfolded, dominating the sports media for weeks. One was Jung Jong-kwan, a former Jeonbuk midfield player, who wrote of his shame in what seemed to be a suicide note found by his body in May 2011. Since the scandal broke, Jung had been working closely with league officials who were devastated at his death. Five months later, Lee Soo-cheol, who had been head coach of K-League team Sangju Sangmu, was found dead in another apparent suicide. Lee had been indicted of blackmailing the parents of a player who was involved in match-fixing.
It was a mess. Few could believe what was unfolding. At first fans refused to do so, criticising journalists for reporting what was going on. As time passed, it became apparent that this was something serious. Players that had initially issued denials started to spill the beans. Soon the government threatened to cancel the K-League, the oldest professional league in Asia, if something wasn’t done.
In the end, over 50 players and coaches, past and present, were found guilty of rigging results. Authorities got busy. Players were banned for years or life. Law enforcement agencies were involved too.
The Korea Football Association knew that, as well as tough punishments, there was a need to educate. In the past there had been complacency, ignorance and naivety. In the future, there could be no such excuses. Young players and coaches were sent to an institution near the central city of Daejeon. International observers were impressed with the program and there has been continued efforts to monitor and investigate.
So any new hints of trouble are taken seriously and when it involves the best team in the country, very seriously indeed.
Jeonbuk Motors have been dominant in South Korea in recent years. A first league title came in 2009, and this season should see a third championship in succession. Throw in more appearances in the Asian Champions League than any other team and an upcoming quarter-final in the tournament, Jeonbuk are one of the biggest teams on the world’s biggest continent. They are also currently under investigation for bribing referees.
In 2015, the former CEO of Gyeongnam FC Ahn Jung-buk, a well-known football figure, was found guilty of bribing referees in order to help his team avoid relegation. It didn’t work.
One of those referees found guilty claimed in May that he had also received money (not much — about $800) from a scout who worked for Jeonbuk.
This was to fix matches in 2013, the one season since 2012 when the team did not win the title. The club says that the scout was working on his own initiative and without Jeonbuk’s knowledge.
Head coach Choi Kang-hee has been in charge since 2005. His 12 years in Jeonju were punctuated by an 18-month spell with the national team from 2012 to 2013 (he didn’t want to take the job but the KFA took him drinking and drinking and drinking until he said yes).
So Choi wasn’t in charge at the time of the said crimes but said in June he will take responsibility if guilt is established. That would probably mean resignation but the club’s general manager Lee Chul-geun said that he is the one who should go instead of Choi. Regardless, punishment is likely.
Gyeongnam, now in the second tier, were given a ten-point deduction. The same sanction would see Jeonbuk move to second, just two points off the pace and still favourites to win the title.
For fans, this kind of thing is troubling. Since the original football scandal, there have been issues with other codes too –baseball, basketball and volleyball.
This does not necessarily mean that Korea’s sports scene is any dodgier than others. After 2011, the country is more aggressive and pro-active at investigating sport corruption than than most — in Asia at least. The first step to dealing with a problem is to acknowledge that there is one in the first place. Many do not.
That may be a small consolation for Jeonbuk fans but short-term pain for them may help to provide long-term gain for Korean football, and sport, in general.
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