Today, gambling operator GVC Holdings officially announced that it reached an agreement to buy the UK bookmaker Ladbrokes Coral Group for a prize amounting to up to £4 billion. The two companies are to join forces at a time when both of them have been looking for consolidation in the UK market, which is seeking more and more operations shifted online, not to mention the expected crackdown on the local gambling industry and the tighter regulatory control imposed on operators.
GVC Holdings, which currently owns a number of gambling brands such as bwin, Sportingbet and Foxy Bingo, shared that the final price it would pay for all Ladbrokes assets depends on the final result of the Department for Culture, Media and Sport’s review into fixed-odds betting terminals (FOBTs), which have been some of the main drivers for operators such as Ladbrokes Coral, but have caused a lot of controversy in the market, suffering strong criticism by local gambling authorities and some charity organizations.
At the end of October, the afore-mentioned governmental department revealed its intentions to reduce the maximum stake allowed on fixed-odds betting machines over the rising concerns that FOBTs fuel gambling addictions among UK players. After the DCMS published its UK gambling industry and FOBTs report, the Department provided a 12-week consultation period to consider possible options for FOBTs’ maximum stake reduction. The country’s Government has been taken into consideration the stake reduction, with suggestions for that varying from £50 to £2.
Currently, fixed-odds betting terminals allow customers to place a maximum stake of £100 every 20 seconds.
GVC-Ladbrokes Merger Could Spark Further Consolidation
The takeover deal reached between GVC Holdings and Ladbrokes Coral could be the spark that would light the fire towards further consolidation in the UK gambling sector.
The two companies chose the path to a merger deal to become more resistant to the ongoing changes that have been slowly but surely taking place in the British gambling industry. As mentioned above, the upcoming gambling market crackdown would make the regulatory control on the companies that operate in the sector even tighter. In addition, the traditional betting shops of Ladbrokes Coral have been suffering a decline because of the the rising popularity of digital gaming businesses. The deal, on the other hand, the merger would provide GVC Holdings with the chance to reach more potential customers offering them access to their online gambling platforms.
This is one of the largest merger agreements that has ever been seen by the UK gambling industry, following previous combinations such as the takeover deal of Paddy Power and Betfair and the one of Ladbrokes and Coral.
At the beginning of December, it became clear that GVC Holdings and Ladbrokes Coral had entered talks over a possible combination of the operators. The negotiations started only a few months after the companies saw similar talks failed in the summer. Now, the deal is expected to create a gambling behemoth that would would one of the largest gambling operators on a global scale.
