GVC Holdings says it plans to temper its acquisition of companies in its UK stronghold, pending further developments in that country’s fluid regulatory situation.
GVC is the new parent company of Ladbrokes, Coral and Gala Interactive among other brands.
Speaking to the Reuters news agency, GVC chief executive Kenneth Alexander said the company is quits for the UK regarding new acquisitions.
“We bought Ladbrokes Coral and we are done for the UK.
“Ladbrokes is what we wanted, we got them and we are the biggest in the UK when the deal closes so we don’t need anything more here.”
FOBT continues to cloud UK situation
The pending clampdown by the United Kingdom Gambling Commission (UKGC) on fixed-odds betting terminals (FOBTs) promises to trigger closures of some betting shops under the Ladbrokes brand, just as it is likely to do for other land-based books.
On 9 March, London’s Financial News reported that GVC could close between 800 and 1,000 Ladbrokes shops under the most severely restrictive scenario – one that would see the UKGC slash the maximum FOBT wager from its current £100 maximum.
Other possibilities exist as well. According to the UKGC, the FOBT maximum-bet cap will be cut, but how severely remains undisclosed pending final evaluation. The four caps being bandied range from £2 to £50, and both GVC and Ladbrokes accounted for those possibilities when their merger was announced last year.
The two firms created a variable-value deal that will range between £3.2bn and £4bn when complete, depending on the cap.
Alexander told the Financial Times that GVC was itself well shielded from the pending FOBT ruling because of the way the Ladbrokes deal was structured, but that mattered little to the fate awaiting individual Laddies locations. “Shops would close and it would mean people being made redundant,” Alexander said.
Industry watchers project that as many as 3,000 of the UK’s 9,600 betting shops are likely to close if the most extreme FOBT cutback, to a £2 cap, is imposed.
The terminals have become a hot-button target of the UK’s anti-gambling forces after the publication of several high-profile stories about addictive gambling tied to play on the machines, which in turn have provided a growing slice of land-based betting shops’ revenue.
GVC seeks other opportunities
GVC’s buyout of Ladbrokes brought the online giant into that heated mess, for better or for worse, even though it’s the established brands such as Ladbrokes and William Hill that have taken the largest public hits.
Laddies announced on 8 March that the takeover had received near-unanimous shareholder approval. With margins such as 99.7% voting “yes” the deal moves to the UKGC for its regulatory go-ahead.
Although GVC will be on the sidelines regarding UK mergers and acquisitions for the foreseeable future, it’s still eyeing opportunities elsewhere. It’s only been a couple of days since the company announced its acquisition of CrystalBet, a smaller online sportsbook catering to the former USSR republic of Georgia.
The CrystalBet pickup is relatively minor compared to GVC’s other deals in recent years, which included the pickup of brands such as Sportingbet and Foxy Bingo, plus the broad bwin.party family of sites. GVC has emerged as the largest winner in the wave of mergers and acquisitions that has swept the global gambling industry over the past several years.
GVC’s Alexander, however, still thinks there’s some deal-making to come in the still-consolidating UK market, even if GVC itself isn’t involved.
“I expect there would be some more deals in the next 12 to 18 months in the UK,” he told Reuters.