2017’s industry agenda and context has been dominated by the UK government’s pending October triennial review of industry gaming machine stakes and advertising standards. Industry leadership and investors eagerly await the government’s judgement in what has become a high stakes political battle.
Following 2015/2016’s mass industry consolidation, 2017 was initially marked as the ‘year of corporate integration and assimilation’, as sector stakeholders assessed the new conditions created by the inception of enlarged ‘M&A formed’ enterprises (Paddy Power Betfair, GVC Holdings, Ladbrokes Coral).
However, city analysts now believe that the sector’s ‘script has been flipped’ by the delayed triennial review, which will trigger a new ‘M&A condition’ for industry leaders seeking to survive on harsher business grounds.
Last week, The Financial Times reported that 15 anonymous senior industry executives had detailed ongoing ‘tie-up talks’, expecting a future flurry of deals which could come into play following the outcome of the UK regulatory review.
The first dish to be served on the industry’s new M&A menu will likely be GVC Holdings ambitious merger with FTSE rival Ladbrokes Coral. An M&A hungry GVC governance will likely make its third multi-billion £ bid to lure Ladbrokes Coral in a bid to create the ‘outright UK betting market leader’.
High intrigue will be placed on the reaction of Ladbrokes Coral investors towards a new merger with GVC, having only undertaken the initial stages of the new firm’s enlarged synergies and its new identity.
The constant merger speculation combined with the unknown effects of potential industry-wide regulatory reform, have made it ‘a strange time’ for city analysts trying gauge an accurate value for gambling enterprises and their assets, adding further concerns for gambling investors.
Entering unknown territory, UK betting leadership appears to be fixated on M&A as the ‘best tool for survival’, with all listed enterprises reported to be reviewing a number of potential combinations.
Under this nerve-wracking pretext, rumour is rife throughout the UK betting industry, as each week that passes industry stakeholders are fed continuous new M&A narratives be it William Hill – GVC, Jackpotjoy – 888; Hills + The Stars Group, and so on.
In these times of high stress, perhaps its best that the government hurry and serve its Prozac for the sake of all industry stakeholders