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L&G sells off Betshop chain to Newco


eisure & Gaming is set to become an investment-only shell after agreeing to sell its Betshop betting chain for an initial 3.4m euro (£2.9m) to Newco, a company established and backed by Grupo Pefaco which has gambling operations in Spain and Africa. The shareholders of Newco include Gabriel Chaleplis, who is also a director of Betshop.

The sale has come about after it emerged that L&G could no longer afford to run the business, with this lack of cash affecting the profitability of Betshop during the World Cup. L&G will receive a minimum of 3.4m euro (£2.9m), being the initial consideration and the repayment of intercompany debt. The company has liabilities and termination costs of 2.0m euro (£1.72m). This will leave the firm with just 0.9m euro (£770,000) of cash on disposal plus a further 0.6m euro (£517,000) due on 31 December 2011. In addition, the company will

have a contingent right to receive the deferred consideration of up to 3.0m euro (£2.58m).

At the time of its acquisition by L&G in 2006, the Betshop operating subsidiary was largely dependent on the outcome of soccer results in the Italian leagues. It was clear that diver- sification was necessary to reduce the business risk. With limited resources, however, the diversification process has been slow as limited funds were available after the repayment of historic credi- tors and bank debt. The threat of liti- gation from the US in connection with the historic activities of L&G involv- ing US customers following the passing of the UIGEA has precluded the company from pursuing corpo- rate deals and hampered fund raising. In 2008 and 2009, the company was profitable, though increasing compe- tition, the need for diversification and delays by the Italian regulators in

allowing further products meant the company was susceptible to bad results in its core business. In the first half of 2010, football results were unfavourable and sports margins were below expectations.

Since suspension in the trading of the firm’s shares on AIM in May, the company has undertaken a detailed review of its operations, outlook and cash flows. The board concluded that without a significant injection of funds to enable the company to trade through the next 12 months, further investment in products and geo- graphic expansion and the ability to incentivise management, it would continue to be materially reliant on the outcome of Italian sports results. The directors recommended the disposal to shareholders on the grounds of it representing the best opportunity to maintain the company as a going concern, albeit as an invest- ing company.

ZEturf attracts private finance F


rance-facing pari- mutuel betting firm ZEturf has raised 9m

euros (£7.7m) by obtaining investment from a private equity firm. IDInvest Part- ners (formerly AGF Private Equity) has demonstrated

its confidence in the Malta- based bookmaker and the potential its pool-betting model has in a newly dereg- ulated French gambling market.

In 2009, ZEturf recorded turnover of 150m euros

(£127.9m), up 45 per cent on 2008 levels, and the site cur- rently totals more than 150,000 active users. ZEturf CEO Emmanuel de Rohan Chabot commented: “The confidence of the IDInvest teams gives our develop- ment strategy a boost. This new financing will allow ZEturf to strengthen its mar- keting capabilities in order to continue the strong growth posted by the site each year, and to develop its customer-branded service offer for operators.”

Chabot had been actively seeking out bookmaking


42 BettingBusinessInteractive • OCTOBER 2010

partners ahead of the liber- alisation of the French gaming laws as his firm already boasted liquid betting pools for French horseracing, but has now taken the private finance route to make the most of its new French licence. Matthieu Baret, a partner at IdInvest Partners, added: “Opening up horserace betting in France to the com- petition is a fantastic oppor- tunity for ZEturf, which has now reached a customer base and critical size allow- ing it to provide a mutual betting offer [an alternative to conventional actors], either directly or customer- branded, that is simple, credible and effective.”

Brand Vir as an ent

Virgin Games CEO Simon Burridge disc iGaming Congress and Expo taking plac


s there a better entertainment brand than Virgin in the e- gaming sphere

at the moment? What advantages does this give you over the pure gambling brands?

The question of whether we are the best

entertainment brand in the e-gaming sphere is not really one for me to answer. Like respect, such an accolade is earned rather than claimed. Nevertheless, if one looks at the e-gaming brands in the round, there aren’t many ‘entertainment’ brands as such. Sky is obviously one, but otherwise the major players are either pure gambling brands like Ladbrokes and Paddy Power or specific e- gaming entities like PartyGaming or 888.

Is there actually much difference between entertainment and gambling?

In a sense, it depends on one’s definition of entertainment. Officially, it

is something which is enjoyable, gives pleasure, is fun, and provides recreation and relaxation, or distraction. In that respect, arguably all brands involved in the sector would claim to offer entertainment, not least of all because advertising standards restrict the proclamation of the more obvious ‘benefits’.

Perhaps, the differential between the brands which are entertainment as opposed to gaming is more perceptual than prescriptive, in as much as they actively promote the fun of gaming rather than the potential fiscal benefits. Most sites attempt to show gaming as a means of enjoyment, relaxation, spectating and social interaction with minimal skill or effort being required on the part of the customer, but nevertheless, strictly within the means of the customer. They also offer the added bonus of taking home a prize as a consequence of playing rather than the more

“Gaming has always been a recreational activity”


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