GVC eyes Portuguese top spot with Bet.pt takeover

GVC Holdings has confirmed that it will return to Portugal by acquiring online sportsbook Bet.pt for an undisclosed sum. 

The FTSE100 betting group announced its latest acquisition as part of its Q3 2020 trading update, which saw GVC increase full-year EBITDA guidance to the £770-790 million range following a rapid recovery across all core regulated marketplaces.

In its trading statement, GVC outlined that its Bet.pt acquisition remained ‘consistent with its regulated market strategy’, as the operator seeks to establish a leading presence within a ‘market which is anticipated to more than double to around €450m by 2023’.

GVC had previously held a Portuguese market presence through its Bwin sportsbook brand but decided to withdraw from the market in 2015 following the approval of Portugal’s amended Gambling Bill, which instantly raised sportsbook turnover taxes from 8 to 16%.

Citing that Portugal’s new gambling tax regime had made its marketplace no longer viable, GVC departed the market alongside a raft of international operators including William Hill, bet365 and Ladbrokes.

A domestic incumbent, in 2016 Bet.pt was the second online sportsbook to be granted a new Portuguese sportsbook licence by regulatory agency Comissao de Jogos do Turismo (SRJI).

Four years on from its legislative overhaul, the Portuguese sportsbook marketplace has seen a number of international operators relaunch their services, including Betclic, Betano, Betway and 888Sports.

“We are pleased to welcome Bet.pt to the GVC Group having been impressed by the quality of the business and its significant growth since launch,” read the GVC statement. “This acquisition is in line with our strategy to grow in new, regulated markets and builds on our strong track record of buying local brands and building them into market leaders.

“Through access to GVC’s content, technology and digital marketing skills, we believe Bet.pt can build on it’s position as a market leader in Portugal.”  

GVC Boss Kenny Alexander In Surprise Departure

Kenny Alexander the boss of GVC the betting giant is leaving the company from tomorrow, Alexander who helped propel GVC into one of the biggest gambling companies in the world with deals to acquire Ladbrokes Coral among others.

His surprise departure means that Shay Segev who has worked for the company since 2016 and is currently the Chief Operating Officer will promoted to the top job. Segev has a wealth of experience coming previously from Playtech where he worked for 6 years as Chief Operating Officer also.

Alexander who has been with GVC for 13 years said: “I have spent the last four months working from home and reflecting on my future plans, and this feels like the right moment.”

GVC chairman Barry Gibson said of Alexander that he help create a “remarkable global business”, adding: “We will miss him, but we also understand his wishes to hand over the reins after such as long and successful stint at the top of the company.”

Tory MPs took £2,400 of Cheltenham Festival freebies days before coronavirus lockdown

Two Tory MPs accepted £2,400 worth of tickets to the Cheltenham Festival just days before the UK went into coronavirus lockdown.

It's feared the gathering of more than 250,000 people helped spread the virus widely across the country.

Shipley MP Philip Davies and former minister Caroline Nokes accepted eight tickets between them to the horse racing event from GVC Holdings, the sports betting giant which owns Ladbrokes and Coral.

Mr Davies accepted six tickets, worth £300 each, but refused to say whether he had used them.

He said: "I have absolutely nothing to say to the Daily Mirror."

Ms Nokes accepted two tickets, also worth £300 each.

She was photographed at the event, wearing a grey suit with pink checks and a shocking pink hat and matching scarf.

Both MPs registered the gifts with Commons authorities - stating they would have access to a VIP hospitality box during their visit.

Ms Nokes said: “I accepted the tickets and declared them in accordance with the rules, which clearly you can establish from the register of members’ interests.

“As you know it was prior to the lockdown being declared and there were no restrictions on movement.”

Ms Nokes added a number of other MPs also attended the races on the same day, including Shadow Security Minister Conor McGinn.

Mr McGinn confirmed he attended the event in his capacity as chair of the All Party Parliamentary Group on Racing.

He said: "I get an annual metal badge from the Racecourse Association which allows me admittance to race meetings across Britain over the course of the year, including Cheltenham, which is owned by the Jockey Club."

Mr McGinn registers the badge as a benefit with Commons authorities at the start of each year.

He added: "I’m heavily involved in horse racing, not least because Haydock Park Is in my constituency. It is currently being used as a COVID-19 testing site for NHS staff in the North West."

Professor Sir David King said yesterday (WED) that the government had waited too late to ban large gatherings like Cheltenham, and that delay had cost lives.

He told LBC Radio: “Imagine, 16th March (sic), having a horse race go on with a massive crowd at Cheltenham.

“We didn’t manage this until too late and every day’s delay has resulted in further deaths in the United Kingdom.”

The Cheltenham Festival ran from Tuesday, March 10 to Friday, March 13.

At the time, Boris Johnson was still holding out on banning large gatherings, despite Scotland issuing such an order on March 12.

The Government eventually banned gatherings of more than 500 people the following weekend.

The Organisers of the horse racing festival defended their decision to go ahead when concerns were raised that attendees had reported symptoms after the event.

Comedian Lee Mack tested positive for Covid-19 after spending two days at the festival - with a friend reportedly saying he believed he caught it from a driver on his way to the event.

And the Times reported Andrew Parker Bowles, the former husband of the Duchess of Cornwall said he believes he “probably got it on the Wednesday or Friday I attended Cheltenham”.

A spokesperson said: “The Festival concluded three weeks ago and went ahead under the clear and ongoing guidance from the government and its science experts throughout, like other popular sports events at Twickenham [and] Murrayfield, 10 Premier League matches and the Uefa Champions League [between Liverpool and Atlético Madrid] at Anfield that same week.

“We promoted the latest public health advice and introduced a range of additional hygiene measures at the event, including hundreds of hand sanitiser dispensers and extra wash basins.”

GVC Holdings holds vote on relocating the firm’s management control and tax residence

The governance of GVC Holdings has this morning confirmed that it has scheduled an ‘extraordinary general meeting’ on 6 February (9 am CET), to vote on relocating the firm’s management control and tax residence from the Isle of man to its UK headquarters.

GVC Holdings was incorporated as an Isle of Man enterprise in 2010, in which it maintained its management control benefitting from a more suitable tax regime for its business purposes.

However, publishing its EGM document, GVC reveals that certain Isle of Mann governance conditions have become a constraint with regards to how and where the Directors are able to manage the Company.

GVC details that directorial restrictions have led to ‘administrative burdens’, related to among other things requiring that Board meetings be conducted outside of the UK and limiting who the Company is able to appoint to the Board as Chairman.

Should GVC transfer its management control to the UK, the FTSE firm would be able to remove existing corporate directorial restraints.

Further benefits underlined by GVC governance details that the company would benefit from improved internal/external corporate communications, whilst improving its logistical capacities managing the company from the UK, which in turn would reduce corporate costs.

Closing its statement, GVC details that changes to tax regimes across its operating markets underscore that there is no longer a significant benefit in being tax resident in the Isle of Man

“The Board believes that if the Company becomes UK tax resident, this should have no material adverse impact on the GVC group’s effective tax rate or tax cash outflow for the foreseeable future.” – GVC details in its EGM statement.

Spanish Betting Sites Agree to Voluntary New Advertising Code

Gambling operators in Spain have agreed to a new voluntary code of conduct on advertising in a bid to avoid tougher, mandatory rules which could be imposed by the government. Taking effect from January 2020, the regulator has approved the new rules but it’s too early to tell whether the tough coalition government will think they’ve gone far enough.

The advertising legislation was created by online betting trade association in Spain, JDigital and has been given the green light for launch on 15 January 2020 by regulator, Dirección General de Ordenación del Juego (DGOJ).

Adopting a responsible approach

The new code of conduct largely mimics the legislation in other country which calls upon betting firms to take a responsible approach when considering their advertising campaigns. This includes not showing images of anyone who appears to be under 25, refraining from celebrity endorsements with a large youth fanbase and not using any professional athletes to promote gambling. The message of responsible gambling must also be prominent in any type of advertisement.

Other limitations include a restriction on the number of bonus offers which are made but they don’t go as far as restrictions in place in other countries. For example, in the UK there is a “whistle to whistle” block on advertising which prevents any promotional ads being shown during competitive events.

Some of the members of the Jdigital online betting group include Bet365, The Stars Group and GVC Holdings together with local operators such as R Franco and Luckia. The operators will be hoping that the new code will pacify a government which had previously threatened a tough clampdown on all gambling ads in a move backed by the country’s ombudsman.

New coalition government

Elections last week couldn’t produce an outright majority in government so a coalition has been struck up between the PSOE ruling party and UP, the party that campaigns against austerity. The UP has been particularly vocal in its opposition of gambling and given the chance would restrict operators in any way possible.

However, UP have had their own recent scandals. During their election campaign they showed an individual who claimed his life had been ruined by bookmakers and betting, and was now destitute. Super-sleuths soon tracked down the man online after he uploaded a video from his recent skiing holiday, throwing doubt on the “testimony” that he had provided about the damage done by gambling.

Ladbrokes Coral fined £5.9 million

The company that own Ladbrokes Coral has been issued a fine of £5.9 million for failing to protect vulnerable customers and for failing in its anti-money laundering duty.

The Gambling Commission stated that over a three-year period, Ladbrokes Coral failed to put in place effective safeguards that would “prevent customers suffering gambling harm”.

As part of its verdict, it citied one customer who had lost £98,000 and had asked Coral to stop sending further promotional communication. This customer had 460 attempted deposits declined but were still able to lose this sum of money two and a half years later.

Another customer spent over £1.5million over three years, accessing their account 10 times a day and losing £64,000 in a four-week period. Yet despite this, nothing was done to prevent them from accessing the site.

The Commission stated that Coral “did not ask the customer to evidence their source of funds and could not provide evidence of any social responsibility interactions being carried out”.

However, the firm failed to carry out “social responsibility interactions”.

The problems are said to have occurred between November 2014 and October 2017, after GVC Holdings had bought Ladbrokes Coral.

As a result, they will now pay £4.8 million and divest £1.1million “gained from customers as a result of failings”.

Richard Watson, executive director of the Gambling Commission, said: “These were systemic failings at a large operator which resulted in consumers being harmed and stolen money flowing though the business and this is unacceptable.”

Caesars races to cash in on NJ, Mississippi sports betting market

Casino operator Caesars Entertainment Corp. (CEC) officially joined its rivals in the sports betting market derby, right on the heels of one Atlantic City casino that has started taking sports bets this week.

Bally’s Wild Wild West have started accepting sports bets on Monday morning, while its sister casino Harrah’s Resort will open its doors to punters on Wednesday, according to CEC. This makes the twin gambling facilities the third and fourth casinos to offer sports betting in Atlantic City.

Bally’s temporary sportsbook operation inside Wild Wild West reportedly has 30 leather chairs placed right in front of three large television screens and five smaller screens. Bally’s has converted its shuttered cashier windows to sports wagering windows. Harrah’s sports wagering space looks quite similar to Bally’s, although Harrah’s only has 28 leather chairs, six high-top tables and five screens for viewing.

CEC also plans to bring sports betting in Mississippi by mid-August through its casino properties, Horseshoe Tunica and Harrah’s Gulf Coast resorts.

The casino operator’s announcement came a day after its rival MGM declared it will create a $200 million sports betting and online gaming joint venture with UK-based GVC Holdings, one of the world’s largest bookmakers.

CEC has tapped gambling technology provider Scientific Games Corporation (Sci Games) to provide its OpenBet sportsbook platform in New Jersey and Mississippi. CEC President and Chief Executive Officer Mark Frissora described its partnership with Sci Games to be strategic since the casino operator also plans to roll out mobile sports betting throughout New Jersey and Mississippi.

Frissora pointed out that the recent U.S. Supreme Court decision to repeal the Professional and Amateur Sports Protection Act of 1992 allows CEC to expand its “sports betting digital and mobile offerings into new markets.”

One of the advantages that CEC have against its rivals in Atlantic City is its experience operating sportsbooks in Las Vegas, according to Frissora.

“We recognize that our customers expect exciting new experiences, which is why we will continue to offer new products through our mobile and digital platforms and inside our properties,” Frissora said in a statement.

GVC gets bigger, more impressive, and more unwieldy

GVC is certainly becoming a very large company, now that regulators have approved its deal to acquire Ladbrokes Coral. The ever wily GVC is being praised for its genius move of offering Ladbrokes a sliding contingent offer based on whatever the politicians in the House of Commons decide will be the maximum safe allowable bet at fixed odd betting terminals that makes up so much of Ladbrokes’ revenues, and that will end the problem of gambling addiction once and for all. Having covered all the bases before the pitch was even thrown, GVC made an offer that Ladbrokes Coral couldn’t refuse.

GVC’s latest acquisition follows its last-minute sniping of 888 for bwin.party, which itself merged in 2011, rather unsuccessfully. Now with Ladbrokes Coral, GVC is effectively, GVC Ladbrokes Coral bwin.party and friends. Plus a bunch of other satellites that GVC has gathered recently including a Greek gaming company called Zatrix, and Georgian firm called Mars LLC, or the Crystalbet Acquisition. Greece and Georgia. Hmm….

It’s been rather impressive how GVC has managed to accomplish all this roll-up without leveraging itself up the wazoo. Its debt, before the merger with Ladbrokes Coral at least, was only £300M, just over 10% of its market cap. With all the acquisitions it has splurged on, it could be considered something between miraculous and sleight-of-hand.

There is an answer as to how GVC has managed to do all this, but before I just blurt it out, let me say GVC has proven me wrong time and time again. Its share price just keeps marching on higher and higher, despite a less-than-conservative business model, dangerous markets, and, of course,losing money. GVC has lost £178M over the last two years, and £284M overall since its founding.

So how did they do it? It’s something of a self-fulfilling positive feedback loop driven by rising equity. Take the latest deal with Ladbrokes Coral. 32.7 pence in cash and 0.141 GVC share per Ladbrokes share amounts to £625M in cash and the rest paid in issued equity. The higher GVC shares go, the more attractive and valuable are its share-based offers for potential buyouts, the more it can rely on just gifting shares to those it merges with and the happier its partners are to receive those shares. And the more GVC acquires, the bigger it looks, the more excited shareholders become, the higher its stock goes, which feeds right back into the loop for the next acquisitions.

The question is, what good are the acquisitions for besides creating a giant gambling umbrella organization with GVC at the head? What is the glue that will keep all these moving parts together besides being all loosely in the gaming industry? Do they function together, or are they just an impressive gathering of names that executives can list off regarding how much market share in whatever segment is under their control?

It sort of reminds me of the AOL-Time Warner merger of 2000, though not as blatant in its merger-for-the-sake-of-a-merger nature. Yes, different segments of the gambling market are related, and there might be some cost-savings and efficiencies that can be found here and there thanks to it all being under common ownership, but is there anything really compelling about the fact that Ladbrokes Coral Group and GVC are now owned by the same people? Maybe there is something compelling to a sharper eye, but nothing really stands out all that obviously to my average vision. Perhaps the fact that I can’t see it is the reason I’m not at the top of the industry making all the important decisions.

Skeptical about this assessment? Me, too. GVC has gone much higher for much longer and impressed far more investors than I ever anticipated, and good for them. But listen to what the UK regulators at the Competition and Markets Authority had to say when approving this deal. It relegated a foundational brand of British betting culture since the 19th century to a subsidiary of what is turning out to be a modern roll-up behemoth.

GVC has a small presence in the UK and only offers services online. The Competition and Markets Authority has found that GVC and Ladbrokes are not close rivals and there are many other providers of betting and gaming services online. The CMA looked closely at betting services for individual sports and individual games but found that, in all cases, there will be enough rivals to the merged entity to prevent price increases or a reduced quality of service as a result of the merger.

If they are not close rivals then what is the point of merging? Can sports betters in Germany and Italy have any impact on FOBT gamblers at betting shops in the UK? Yes, there will be some efficiencies and synergies and overlap, but really, Ladbrokes Coral and GVC are two different companies. They just happen to be under the same umbrella now.

What I’m worried about is what happens to GVC’s various disparate parts when the equity bull that has been fueling this motley collection of gaming and betting firms comes to a halt? It’s the acquisitions that have been fueling the stock price.It hasn’t been the money, since none much has been made yet. It’s the promise of higher earnings through the excitement of mergers and acquisitions that has fueled much of this run and may continue to do so yet. Who knows for how much longer though.

When I think of GVC Ladbrokes Coral bwin.party Zatrix Mars LLC, I think of all these separate firms that have merged together though I don’t understand exactly why, other than for the money of the deal.

So will this merger help? I don’t quite see how it could hurt exactly, but I don’t see how it really changes all that much for the positive either, aside from GVC getting to show everyone how big it is and how much it owns now.

Final Hurdle Cleared For Ladbrokes Coral GVC Deal

The Competition and Markets Authority (CMA) has given the green light to the Ladbrokes Coral GVC deal after the competitions watchdog said “the deal does not give rise to competition concerns”.

It added that they are not close rivals and there are many other providers of betting and gaming services online”.

The CMA said its probe “looked closely at betting services for individual sports and individual games but found that, in all cases, there will be enough rivals to the merged entity to prevent price increases or a reduced quality of service as a result of the merger”.

With the rubber stamp the deal which will see GVC take a 53% controlling stake in the betting firm with GVC Chief Executive Kenneth Alexander taking the top job.

At present the takeover deal is valued at £3.2 billion but will rise with add-ons and performance. It was only last November Ladbrokes acquired Gala Coral in a £2.3 billion merger now GVC is moving in to take control of them both.

GVC and Ladbrokes Coral believe the tie-up will help make £100 million a year in cost cutting helping to improve shareholder value. Ladbrokes Coral has over 25,000 employees working in retail and online and GVC has 2,800 employees in Europe and globally for its online brands.

GVC drops Turkey operations amid merger rumor with Lads Coral

UK-listed online gambling operator GVC Holdings has disposed of its Turkish-facing business, fueling speculations that it will once again attempt to acquire UK rival Ladbrokes Coral Group.

In a regulatory filing, GVC announced that it sold Headlong Limited to Ropso Malta Ltd., a company backed by investors who run the operation’s IT, for €150 million ($174.9 million).

Headlong accounts for 9 percent of GVC’s net gaming revenues. The Turkish-facing company and its associated business had gross assets of €21 million ($24.47 million) as of December 31, 2016 while its estimated earnings before interest, tax, depreciation, and amortization totalled €35 million ($40.77 million).

GVC drops Turkey operations amid merger rumor with Lads CoralBoth GVC and Ropso Malta agreed that the payment will be payable on a monthly basis and in a span of five years. They also agreed that transitional service arrangements will take place for no longer than six months following the completion.

With the disposal of Headlong, GVC’s revenue from “grey” markets will fall to around 25 percent.

“The decision to sell Headlong and associated businesses has been taken against a backdrop where, in an increasingly maturing and regulating online gaming world, the Board has concluded it is now appropriate for GVC to further increase its focus on regulated markets,” GVC said in a statement. “In addition, the Board believes that the Disposal will increase the attractiveness of the Group to investors and potential consolidation partners.”

The sale of Headlong, however, has revived rumors that GVC is attempting to acquire Ladbrokes for the third time since last year, according to The Evening Standard.

One of the contentious issues that both GVC and Ladbrokes are reportedly trying to iron out is the former’s businesses in unregulated markets like Turkey. Though profitable, unregulated markets are unstable and subject to sudden clampdowns.

Ladbrokes is basically telling GVC that if the company wants a marriage, then the former has to say bye-bye to unregulated markets.

Partypoker owner GVC in the mood for more deals

The lack of a major sporting tournament this year has failed to knock the owner of online gambling brands Sportingbet and Bwin, as the acquisition-hungry firm said it would not rule out another deal.

GVC, which was catapulted into the FTSE 250 on the back of its most recent deal to buy Bwin, feels it is now in a position to seek out another rival in spite of completing two major deals in three years.

“The organic opportunity is significant, whilst we are also well positioned to pursue further acquisition opportunities should they arise,” chief executive Kenny Alexander said.

He added the amount the company spends on marketing would return to more normal levels at the end of the year meaning he was confident about the group’s potential performance.

The business freed up some cash earlier this year after refinancing a short-term loan from Cerberus Business Finance it had used to fund the Bwin acquisition. It agreed a €320m (£280m) lending deal with investment bank Nomura, comprising €250m to pay Cerberus the remainder it owed them, and a €70m credit facility.

In the six months to June 30, GVC saw net gaming revenue - the amounts staked minus winnings - rise 10pc to €484.8m. This was higher than the 7pc growth rate of the comparable year in spite of that period benefiting from the first few weeks of the 2016 European football championships.

While sports betting was down in terms of the amount of wagers being made by customers, its gaming brands more than took up the slack, with a 17pc rise in net gaming revenue to hit €1m per day.

The rise in customers within its gaming division has been helped by the Bwin acquisition, which completed in February last year, as Partypoker and other casino brands enticed players. The firm bought Sportingbet in March 2013.

PartyPoker to return to 21 online gambling markets under GVC

PartyPoker returns to 21 new online gambling markets including jurisdictions it exited as part of its “volume to value” strategy.

PartyPoker has begun operating in a number of new national markets after GVC Holdings completed its deal to buy bwin.party.

Bwin’s online poker room has written to affiliates asking them to estimate the number of first time depositors they anticipate in each market.

New sign-ups from 18 countries in EU and South America served by bwin.Party were blocked in April 2013. The decision was likely a mix of regulatory concern and simple cost analysis. The remaining countries may represent markets either too small or simply unprofitable for bwin.party to maintain operations in.

Many EU countries on the list curbed or prohibited online poker such as Greece, Poland, Romania, Cyprus and Hungary. Finland and Serbia, on the other hand, had a small regulated online poker markets.

South American countries — Argentina, Brazil and Colombia — were also blocked same with three former Soviet Republics Armenia, Belarus and the Ukraine.

Many of the markets that PartyPoker is re-entering are expected to introduce online poker licensing systems such as Colombia, which opened a consultation on launching a regulated online gambling market. Brazil has approved a legislative attempt to legalize online sports betting, casino and bingo games last year.

Bwin.party group head of partypoker and Cashcade Tom Waters confirmed the news to EGR, saying that it had re-opened in a “limited number of regulated territories” following a “thorough review” of PartyPoker’s operations.

“Along with other operators in the industry, we do accept gameplay from customers based in yet to be regulated territories where customers are not prevented from accessing online gaming products,” said Waters. “We have re-opened registration for a number of markets and could potentially look to do more if the commercials support it.”

GVC looks to offload parts of Bwin's payments division

Online gambling company GVC is likely to sell parts of Bwin.Party’s payments business this year and has held early talks with payments processing firms.

Kenny Alexander, the chief executive of GVC, said that after the £1.1bn Bwin takeover he would probably offload small parts of its Kalixa division.

Kalixa is a payments services business and the bulk of its work is for Bwin. However, the subsidiary - which began as Bwin’s internal payments department - has grown and now also manages transactions for other companies such as retailers.

Mr Alexander said he was most likely to sell the parts of Kalixa that handle external processing to another payments business.

“We’ll probably look at maybe disposing of bits of that,” he said. “We’ve had very early discussions.”

The GVC boss dismissed suggestions he might sell Bwin’s Foxy Bingo brand, describing it as “a cracking business”.

GVC is today expected to signal its intention to make further acquisitions with the appointment of a well-regarded City analyst as its head of investor relations and corporate strategy.

Nick Batram, who focuses on the gaming and leisure industries for stockbroker Peel Hunt, is to join GVC and part of his role will be to help it to find new M&A targets.

Mr Alexander said that GVC will probably start to look at fresh bid targets in a year, after the Bwin deal.

The gambling chief also said GVC would also probably sign up to the horseracing industry’s controversial new funding scheme, becoming an “authorised betting partner” of the British Horseracing Authority.

Such partners agree to three-year deals to pay a proportion of their racing revenues to the industry. Several bookmakers that already pay the racing levy on their betting shop estates oppose the new funding arrangements

Betfair and Paddy Power agree terms for £5bn merger to create online gambling giant, but job losses on the cards

Gambling group Betfair and rival Paddy Power have agreed the terms of a £5billion merger to create a new Dublin-based online gaming giant to be called Paddy Power Betfair.

On completion of the merger, Paddy Power shareholders will own 52 per cent of the new entity, while Betfair shareholders will hold 48 per cent.

The merger will result in the creation of one of the world's biggest online gambling groups, with 7,000 staff and approximately £1.2billion in sales.

But with plans for around £50million in annual cost savings, job losses could be on the cards if the merger goes ahead, the firms warned.

The companies said that while no decisions on job losses have been taken, there is potential for cutbacks in some operational and support functions, which 'may involve some headcount reduction.'

Gerald Corbett, Betfair's chairman, said: 'The combination makes huge strategic sense by bringing together two industry leading and successful businesses and providing enlarged scale, capability and distinctive, complementary brands.

'Under the guidance of a strong and proven combined management team, this merger truly represents an attractive opportunity for both Paddy Power and Betfair to enhance their position in online betting and gaming and to deliver synergies, customer benefits and shareholder value.'

The deal - dubbed 'Betty Power' in the industry - will bring together Paddy Power's 336 shops in the UK and 252 stores in Ireland with Betfair's online betting exchange.

According to industry data, the new group would enjoy a 16 per cent share of the UK online gambling sector, surpassing that of the soon to be merged Ladbrokes Coral Group on 14 per cent, as well as current market leader William Hill and privately-owned Bet365.

Both companies will continue to run separate brands in the UK, Ireland and Italy after the merger.

Around 80 per cent of the newly merged group's annual revenues are expected to stem from online business.

Betfair boss Breon Corcoran will become the new group's chief executive and the firm will be listed on the London Stock Exchange and the Irish Stock Exchange.

The firms confirmed Paddy Power shareholders will receive a special dividend of £58million.

Shareholders are expected to vote on the deal in December, with the merger due to complete in the first quarter of 2016.

Against a backdrop of higher taxes in the UK and tighter regulation,the betting industry has seen a string of deals this year as firms bid to secure their slice of the competitive online gambling market.

Aside from the Ladbrokes and Gala Coral all-share deal agreed in July, GVC Holdings last week looked to have won a bidding war for online poker firm Bwin.party Digital Entertainment, squeezing out a rival bid from 888 Holdings.

Commentators have suggested that, as a result, a marriage of William Hill and 888 could now also be on the cards.

GVC to implement €120m savings on bwin party, marketing to be refocused

GVC will implement cost synergies of €120m in the next 24 months as part of its restructuring of bwin party but chief executive Kenny Alexander has stated that the group’s focus will be to grow the business significantly and ensure return on investment.

Alexander’s comments follow news of GVC’s offer for bwin party being accepted by the company’s board this morning as it withdrew its previous recommendation for 888’s offer. The deal values bwin party at around €1.4bn (£1bn) and will be financed by a combination of cash and shares.

GVC will deliver the €120m synergies on the enlarged group by 2017, Alexander said, with around 60% of the cuts implemented throughout 2016; these will focus on marketing, staff and sourcing and IT.

Some of the synergies will be in poker and casino but most of them will occur on the sportsbook vertical. “There is lots of duplication (on the sportsbook side of the companies) and there will be greater synergies than 888 (could achieve) because we run our own sportsbook,” Alexander said.

“We’ve done it before with Sportingbet, we don’t believe there is significant cross-over (of customers having accounts with both operators) and believe our customers will have a better experience (on bwin) because it’s a better platform.”

GVC will move its betting business on to the bwin platform, “it’s better, more scaleable, has had significant investment over a long number of years and we think it’s one of the market leading platforms. We intend to develop and improve the product in coming years,” Alexander added.

In terms of marketing, many of bwin’s sponsorship agreements with some of the leading football clubs in Europe will be terminated.

“bwin’s sponsorship deals have built up the brand and its brand recognition in Europe is second to none but we think we can scale it back now and focus on growing the business.”

The GVC boss was quick to point out that the group had “no intention of exiting bwin from markets they are currently working in. The bwin focus is on regulated markets and we will focus investment in the (regulated) markets where we think we can get meaningful return on investment: where we think we can get good profits and ROI. It’s not difficult to see which regulated markets we’re talking about”.

GVC will maintain investments but will switch marketing activities from territories and channels where it believes returns are not significant. It will also intensify CRM efforts to optimise efficiencies.

Alexander added that he was looking forward to motivating and reinvigorating the bwin party staff, and that Norbert Teufelberger was staying on as a non-executive director would be a great boost to the group.

With regard to the group’s non-core assets, GVC will continue to run bwin party’s bingo business on the Dragonfish platform, and look to grow its online poker and casino sites and assets such as the World Poker Tour. “Obviously if there is an opportunity to dispose of assets in the interest of shareholder then we will look at them,” finance director Richard Cooper commented.

Bwin.party board accepts GVC takeover bid, withdraws 888 recommendation

The board of bwin.party this (Friday) morning accepted a takeover bid from GVC Holdings and withdrew its earlier recommendation to accept an offer from rival online gaming company 888 Holdings.

The buy-out offer from GVC of 25 pence in cash and 0.231 new GVC shares equates to about 129.64 pence per share in bwin.party, tagging the total value of the deal at just over £1bn (€1.4bn/$1.6bn).

The offer is at a 12.5% premium to bwin.party's closing share price on the London Stock Exchange on Thursday and a 45% premium to its stock price since the company first started receiving takeover proposals in May.

“In recommending the offer from GVC, the board has taken into account many factors including, but not limited to, the headline value per share and the consideration being offered, the level, timing and deliverability of the financial synergies to be generated and the enlarged Group's growth strategy in an increasingly competitive marketplace,” bwin.party chairman Philip Yea said.

“As a result of these and other factors, including the proven track record of GVC's management team in creating substantial value for shareholders, after a carefully managed and diligent review process, the board has withdrawn its recommendation for the 888 offer and is now advising bwin.party shareholders to vote in favour of the offer from GVC.”

Kenneth Alexander, chief executive officer of GVC, added: “GVC is the natural partner for bwin.party considering our strong sports betting and online gaming pedigree.

“Sports betting is in our DNA and leveraging GVC's experience of successfully acquiring and restructuring online gaming businesses, notably Sportingbet in 2013, we look forward to merging the two operations to deliver long term value for combined shareholders.

“GVC has been working closely with bwin.party's management and has identified many talented individuals with whom it looks forward to working to ensure the future success of the enlarged business.”

Bwin.party had accepted a £900m cash-and-share offer from 888 in July, despite being presented with a higher offer from GVC.

Earlier this week, bwin.party announced that it had received a revised takeover proposal from 888, but then GVC chairman Lee Feldman insisted that his company was “not prepared to walk away” if his company’s bid was rejected in favour of a lower offer from 888.

888 raises the stakes in Bwin bidding war

Online gambling company 888 has upped the stakes in its £1bn takeover battle with GVC by raising its bid for Bwin.Party.

Bwin, which offers poker, bingo and sports betting online, revealed on Tuesday that 888 had made a revised takeover proposal and that it was now evaluating the bid. It must weigh the offer against a competing proposal submitted by Sportingbet owner GVC, which is gate-crashing a deal already agreed between Bwin and 888.

The terms of 888’s revised cash-and-shares approach have not been not disclosed, although it is understood that the company has lifted the paper element of its offer to increase the value of its bid to around 115p a share. Bwin said the proposal came with “a number of pre-conditions” that are thought include an increase in the break fee to about 1pc of the overall deal value.

GVC, which is much smaller than Bwin and so would need to structure the deal as a reverse takeover, is understood to have made its latest cash-and-shares bid on Friday evening. The gambling group said its offer valued Bwin at 131p a share and a spokesman for GVC said the bid "is without conditions which 888 has now introduced".

The latest twist in the takeover saga marks a success for Bwin’s board, which has effectively engineered a bidding war between 888 and Aim-listed GVC.

Although Bwin recommended an £898.3m offer - the equivalent of 104.09p a share - from 888 in mid-July, rival suitor GVC refused to concede defeat and made a takeover proposal worth about £1bn last month.

Bwin’s board and shareholders had concerns with GVC’s bid, including questions over whether the combined business will secure a main market listing on the London Stock Exchange and a New Jersey gambling licence. However, Bwin kept the takeover battle alive by working with GVC to overcome those worries.

Once satisfied with GVC's proposal, Bwin last Thursday incited another round of bids from both suitors by inviting the Sportingbet owner to make a formal offer on its “best terms”.

Bwin, which has been up for sale since last November, said it would now consult with its “key shareholders” over coming days to decide which of the two competing proposals is in investors’ “best interests”.

GVC Holdings states it will only re-bid for bwin.party if 888 increases current offer

Having placed its takeover bid past the £1.1 billion mark, UK news sources have stated that GVC Holdings governance could “walk away” from its ongoing battle with 888 Holdings for bwin.party Entertainment.

Speculation has been rife regarding the takeover of bwin.party and its two bidding rivals GVC and 888. Last week The Times reported that GVC Holdings and its bid advisor Cerberus Capital Management were considering bidding 130p per share for the operator.

However it appears that GVC Governance will only increase its cash and shares offer for bwin.party if 888 raises its current bid. Furthermore the London AIM listed operator is willing to turn its back on the takeover battle if 888 remains the recommended bidder with its current £908 million value of bwin.party assets.

London business analysts have noted that bwin.party and its advisors have played a clever game regarding its takeover position and the interest of the bidding parties. The underperforming operator has been marked as a game changing deal for both GVC and 888. The bidding operators have differing sets of plans for bwin.party should they manage to acquire the company.

Noting its vantage point, analysts and industry commentators have stated that it is likely that bwin.party governance will hold out for bid increases from both 888 and GVC. It is further noted that the operator will look to drag on bid negotiations which have been ongoing since this February, as governance looks to secure the best deal for shareholders.

How Wall Street Money Transformed Online Gambling Forever

In September 2013, New York money man Jason Ader, who runs SpringOwl Asset Management, flew to Israel to meet Ruth Parasol, the California-born former billionaire who played a big role in creating the online gambling industry. Parasol founded PartyGaming, which was the biggest online poker company in the world until it left the U.S. market after Congress passed new legislation in 2006.

Parasol had watched her company enter into a non-prosecution deal with U.S. prosecutors and her former partner, Anurag Dikshit, pay a $300 million fine and plead guilty to violating a U.S. law that the Justice Department no longer believes prohibits online poker or casino games. PartyGaming merged with Bwin Interactive, which specialized in online sports betting, to create publicly-traded Bwin.Party Digital Entertainment. But the Gibraltar-based company was flailing and Parasol, who still owned a big chunk of the company’s stock, was looking to sell a block of it, partly because of reasons related to her divorce to Russ DeLeon, who also owned a lot of shares.

Ader met Parasol in her house in the Israeli seaside town of Herzliya and DeLeon was there, too. Parasol wanted to meet the guy who was going to buy a portion of her shares. Parasol hadn’t run a gambling company in years, but Ader, a former Wall Street gaming analyst, was amazed by her knowledge of what was going on in the online gambling industry, particularly the evolution of games on mobile devices. Ader apparently passed Parasol’s test and ended up buying about half of her stake and much of DeLeon’s stock as well for some $100 million, making his firm Bwin.Party’s third-biggest shareholder.

These sorts of symbolic hand-offs have been reshaping the online gambling industry, moving it away from the bold risk-taking entrepreneurs who pioneered the business and putting new players in control, often in a way that represents a clean break from an era where the creators of the online gambling industry were bumping into governments and law enforcement, particularly in the U.S. Just like Michael Milken’s financings had backed Steve Wynn to remake Las Vegas years ago, the transformation of online gambling is being driven by Wall Street and some of the biggest names in finance, firms like Blackstone, BlackRock, Apollo, and Cerberus Capital Management. In the next few weeks, the reshaping of the online gambling industry will hit a new stage as a bidding war sparked by Ader for Bwin.Party comes to its conclusion.

Ader made an impact quickly. His block of Bwin.Party stock came with a board seat, but after he didn’t approve of the direction that Bwin Interactive’s co-founder, Norbert Teufelberger (who was once arrested at a press conference in France), was moving Bwin.Party as CEO, Ader successfully launched an activist campaign to reconstruct the board. He also helped push the board to hire Deutsche Bank to look for a company to buy Bwin.Party. By the summer of 2014, the company was in play.

At the same time that Ader was agitating for a sale at Bwin.Party, the credit division of New York-based Blackstone Group, the biggest private equity firm in the world, was preparing to back David Baazov, the then 33-year-old founder of tiny Amaya, to buy PokerStars, the world’s biggest online poker company. PokerStars, based in the Isle of Man, had been founded by Isai Scheinberg and his son, Mark Scheinberg, but they were ready to sell for the right price—in cash. The duo had run into legal problems after PokerStars continued to offer online poker in the U.S. after Congress passed the 2006 Unlawful Internet Gambling Enforcement Act. They always maintained PokerStars had operated legally in the U.S., but the company ended up paying $731 million to settle with federal prosecutors and still was having trouble returning to U.S. states like New Jersey that had opened up to online poker after the Justice Department reversed its position on the law government lawyers had used to go after it. Isai Scheinberg, who lives in the Isle of Man, had remained under indictment (Mark was never charged) and the Scheinbergs were ready to deal.

With the backing of Blackstone’s credit division (which committed $1 billion) and New York-based BlackRock, the world’s biggest asset manager, Amaya bought PokerStars and its sister company, Full Tilt Poker, in a $4.9 billion cash deal in August of 2014. The deal would not have been possible without Blackstone’s credit division, known on Wall Street as GSO. Amaya was a small company. In fact, when Baazov first delivered to the Scheinbergs a $3 billion commitment letter on Blackstone’s letterhead, the Scheinbergs found it necessary to verify with Blackstone that the letter was authentic. “It was like them telling me, ‘Not to say that you guys forged it, but we got to talk to them directly,’ ”. The deal was also reliant on Baazov getting banks like Deutsche Bank and Barclays to lend against online gambling assets, the first such big loan ever.

The Amaya deal for PokerStars shocked the online gambling industry. One of the biggest impacts was felt by Bwin.Party, which traditionally ran PokerStars’ biggest competitor and saw its stock plunge in the aftermath of the announcement of the deal. The stock fell so sharply in the summer of 2014 that at one point Ader considered trying to find a way for his financial firm to purchase the whole company itself while moving the board to expand its search for the right buyer. “I didn’t like how the process was being handled, I had to push 888 (Holdings) which was a perfect strategic buyer, to get invited,” says Ader.

GVC Holdings, a small and publicly-traded online gambling company that focuses on so-called gray markets where laws are unclear, made a bid in May that was at one point backed by Amaya to buy Bwin.Party. Not long after GVC jumped into the ring, 888 Holdings, a publicly-traded Gibraltar company focused on online poker and casino games and founded by two sets of Israeli brothers, launched its own bid backed by JPMorgan Chase and Barclays, as two big banks once again committed to loan money against online gambling assets.

In July, 888 struck a deal to buy Bwin.Party for about $1.4 billion. The deal would create a serious rival for Amaya and Pokerstars, which currently dominate online poker outside of the U.S. But it’s not a done deal yet. GVC Holdings lost Amaya’s backing but gained new financial commitments from Cerberus Capital Management, billionaire Stephen Feinberg’s New York financial firm. As a result, GVC moved in August and submitted a slightly richer bid for Bwin.Party than the 888 deal, but GVC’s offer is largely a stock deal that would leave Bwin.Party shareholders holding stock in the riskier combined entity. For now, shares of Bwin.Party are up 40% in the last year. On the surface, it seems 888 is more likely to win out.

Wall Street money has not solved all of the online gambling industry’s problems. In the U.S., for example, still only three states—New Jersey, Nevada and Delaware— have regulatory regimes for online gambling and hopes that important states like California might usher in a new golden age of online gambling have so been disappointed. Even Amaya’s PokerStars has been yet unable to get back into New Jersey after just about one year of trying. There had been assumptions that such a reentry would be swift under a new Wall Street-backed ownership structure. Still, with big financial firm backing, the online gambling business looks a lot different today than it did just over a year ago.

888 agrees to buy Bwin.party for £898.3m

The company will pay Bwin.party shareholders 39.45p a share in cash and 0.404 new 888 shares for each share they own, beating a more valuable offer from GVC, which is backed by Canadian online group Amaya.

888, which in February rejected a takeover offer by William Hill, the UK’s biggest bookmaker, said it hopes to combine the companies’ digital gaming platforms and to become one of the leading operators in the global online gaming industry with combined annual revenues of roughly $1.1bn.

The deal will create a “strong player with the breadth of product, brands and geographic coverage to grow faster than either business would be able to achieve standalone,” Philip Yea, chairman of Bwin.party, said.

The enlarged group will have a strong position in sports betting, poker, casino and bingo, the companies said. 888 currently provides the technology that powers Bwin’s online casino games.

The offer represents a premium of 16.4 per cent on Bwin.party’s share price on May 14, the day before the company announced discussions about a possible tie-up. Bwin has been exploring a sale since November and its shares have fallen 10.67 per cent this year.

Bwin.party shareholders can elect to accept varying amounts of 888 shares and cash for each of their Bwin.party shares but the number of new 888 shares that will be issued will be fixed at around 341.6m. They will end up owning 48.9 per cent of the combined group.

Last week GVC confirmed it had offered 110p a share in cash and stock for Bwin, which would have valued the company at £906m. Its bid consisted of 45 per cent cash and 55 per cent in new GVC shares.

888 will finance the cash part of the takeover through a $600m term loan credit facility, the company said.

Bwin.party’s shares were down 0.9 per cent at 102p while 888’s were up 3 per cent at 165p in early London trading.

The new group is weighing whether to make bwin.party’s Studios B2B business into a standalone entity and potentially spin it off into a separate listed vehicle, with shares being distributed to 888 shareholders, the announcement said.

The companies said they estimated cost synergies achieved from the merger will amount to at least $70 million per year before tax by the end of the 2018 financial year.

Liz Catchpole, a bwin.party independent non-executive director and Martin Weigold, bwin.party’s chief financial officer, will join the 888 board as an independent non-executive director and a non-executive director.

Norbert Teufelberger, bwin.party’s chief executive, will provide consultancy services on the enlarged group’s sports-betting business.