Stake & prize review


Minister John Penrose has announced his intention to carry out a review of stake and prize limits for gaming machines covered by the Gambling Act 2005 and to reintroduce periodic reviews of stakes and prizes. Speaking at the BACTA AGM, Penrose said: “It’s been a long time since we had a review of stakes and prizes and so I want to kick start the process. I’ll be writing shortly to all members of the industry asking for their feedback on what the review should look like and the best process to follow.”


THE 51ST SCHEME IS ESTIMATED TO YIELD £72.4M FOR RACING


Sportingbet drops Turkey but takes Denmark


Not content to wait around for Ladbrokes to make an offer, Sportingbet has been doing its own wheeler dealing. SPORTINGBET


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portingbet has snapped up the entire issued share capital of both Danbook Limited and Scandic Bookmak- ers Limited for a combined £8.5m.


Danbook and Scandic are both focused on the Danish market, where they offer cus- tomers a full range of fixed odds sports betting, casino, poker and games. Denmark has passed regulatory legisla- tion that comes into force on 1 January 2012, with the first licences due to be issued on 15 December 2011.


Sportingbet views this regu- latory framework as represent- ing a commercially viable opportunity, and has already applied for a licence. The com- bination of Danbook and Scandic with the existing Danish businesses of Sporting- bet and the recently acquired Centrebet will transform Sport- ingbet into one of the largest players in the Danish market. Sportingbet chief executive Andrew McIver said: “These acquisitions emphasise Sport- ingbet’s commitment to gener- ating revenue from regulated markets. We have already demonstrated our ability to deliver strong growth in licensed territories such as Australia and we are excited by the opportunity that Denmark represents.”


One unlicensed territory that Sportingbet has exited though is Turkey, where it has sold all its Turkish language website and associated offshore assets for a minimum consideration of £125m, subject to agreement by Sportingbet shareholders. Sportingbet’s Turkish lan- guage website, www.super- bahis.com, and associated


ANDREW MCIVER: ‘GENERATING REVENUE FROM REGULATED MARKETS’


floundered with an approach. A statement to the stock market revealed that the two boards agreed to end discus- sions as’ the parties were unable to agree either a suit- able structure or one that deliv- ered sufficient value to shareholders in a meaningful timeframe’.


offshore assets generated NGR of £49.0m in the last financial year, representing 24 per cent of the group total, and operating profit (before central costs) of £35.2m. The business has been bought by East Pioneer, a new Netherland Antilles company owned by Sigma Corporate Management Inc. The obliga- tions of East Pioneer under the disposal agreements are guar- anteed by GVC Holdings, whose subsidiary, GVC Sports will provide East Pioneer with those services required to enable East Pioneer to operate the business in the same way in which it is currently operated by Sporting- bet. The support services to be provided by GVC Sports to East Pioneer will include sports book and back end functional- ity. In consideration for provid-


scheme without bothering DCMS ministers this time around.


Levy Scheme, but it is dis- appointing overall and deeply frustrating that its terms can be imposed on racing by the Bookmakers’ Committee and independ- ent members of the Levy Board.


“The sport does have a degree of certainty moving forward, and can immedi- ately finalise the 2012 Fixture List, but our return from the betting industry remains far lower than our commercial value, and the Levy remains unreflective of the modern betting envi- ronment. Offshore opera-


tors and the failure to address betting exchanges’ different business model are still costing racing vital revenues.” Betfair’s contribution of £6.5m is equal to what it would be if it was based in the UK. Executive Martin Cruddace said: “Notwith- standing the three repre- sentatives of racing, led by Paul Roy, inexplicably voting against the pro- posal, I sense a real shift in the willingness of the book- making industry to work constructively with racing, as evidenced by guarantee


of the traditional book- makers and our substan- tial contribution of £6.5m. “In order to properly demonstrate this new desire to co-operate, it is imperative that all off shore bookmakers make proper donations to the HBLB in respect of levy they would otherwise have to pay, if on shore. If other off shore operators fol- lowed suit the £72.4m becomes circa £90m.” Cruddace also took the opportunity to ridicule Roy’s willingness to risk up to £3m of prize money


in challenging the Levy Board’s decision not to pursue exchange users for Levy payments, with the help of William Hill. He said: “On a positive note, perhaps Mr Roy can per- suade Mr Topping over the candlelit dinners that will inevitably follow, as they discuss their litigation, that as the boss of the largest non-levy paying bookmaker (William Hill.com) Mr Topping should pay the millions he is saving in the levy to horseracing, thereby fol- lowing Betfair’s lead.”


ANALYSIS


The three government appointed members of the Levy Board have been moved to release their own statement on the 51st Levy Scheme and why they chose to support it against racing’s wishes. It commented: “The total yield in the 51st Levy Scheme period is estimated by the Bookmakers’ Committee to show a 22 per cent increase compared to the 49th Scheme’s £59.5m. The terms of the 51st Levy Scheme also build on the progress made in the 50th Levy Scheme. We believe that this deal is fair to Racing and Betting at a time of significantly enhanced revenues through the sale of media rights.”


BettingBusinessInteractive • NOVEMBER 2011 3


ing these services, GVC Sports will be entitled to a monthly fee. McIver commented: “Fol- lowing this disposal, Sporting- bet will derive the large majority of its earnings from regulated territories. The pro- ceeds from the sale of this unregulated income stream will be used to drive forward the rest of the group. We have clearly shown our strategic intent and look to the future with confidence. The group’s future is underpinned by the quality of our best in class global sportsbook and diversi- fied business model.”


The three deals demonstrate that Sportingbet has not waited for Ladbrokes to make an offer to buy the company, which is fortunate given that the major bookmaker has once again


Sportingbet has also announced annual results for the 12 months ending 31 July with EBITDA up 11 per cent to £51.4m. McIver commented: “This has been a year of signifi- cant progress for the Ggroup both in terms of financial per- formance and corporate devel- opments. The benefits of operating across a broad geo- graphical base were demon- strated with strong growth in our Emerging Markets divi- sion, Australia and some of our European territories, offset- ting the economic weakness in Greece and Spain. “With the acquisition of Cen- trebet in Australia and the passing of regulations in two of our largest European markets, Greece and Spain, Sportingbet is now well positioned to max- imise the opportunities avail- able to it as the global online gaming market continues to develop and regulate.


“Our overall strategy of pro- viding a first class sports betting product offering cus- tomers an unprecedented number of betting opportuni- ties at all times of the day, remains unchanged. This is underpinned by our propri- etary best-in-class in:play offer, superb trading team and focus on giving customers what they want especially in new growth areas such as mobile.”


ACTION IMAGES / JULIAN HERBERT LIVEPIC


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