The Gambling Commission cites “systematic failings” at Ladbrokes Coral between 2014 and 2017.
Six online casino brands under GVC Holdings have exited the UK gambling market just before the close of 2017, not long after the online gaming giant announced its official takeover of Ladbrokes Coral.
Owned and operated by Gaming VC, 50Stars Casino, Carnival Casino, Club Dice Casino, Casino King, Noble Casino and Magic Box Casino have stopped accepting UK players as of 28 December, 2017.
Two other brands, Casino Las Vegas and S Casino, will continue to operate in the United Kingdom until 31 January, 2018, but all other casinos and sports betting sites operated by GVC’s Bwin.Party brand will remain active in the UK.
The exits coincide with recent intense regulatory scrutiny from the UK government and only a month after GVC sold Headlong Limited and its Turkish-based operations, effectively removing itself from unregulated grey markets ahead of its costly merger bid with Ladbrokes Coral, most likely to ease stakeholder concerns while adding a healthy £134 million to its takeover fund.
The Isle of Man-based company have since secured a £4 billion deal with Ladbrokes Coral to create one of the biggest gambling groups in the world, continuing the trend of high-profile acquisitions of industry giants in recent years.
“The creation of one of the world’s largest listed sports betting companies, combining a portfolio of established brands, proven technology and leading market positions in multiple geographies, is a truly exciting prospect,” GVC Chief Executive Kenny Alexander said in a statement.
GVC Holdings will own 53% of the newly combined organisation once the deal is closed within the first half of next year, pending regulatory and shareholder approval.
Alongside their already strong foothold in the online market, GVC will have the biggest slice of the betting market in the region, including Ladbrokes’ 4,000 land-based betting shops in the UK, in addition to its significant presence in Australia, Germany and Italy.
The Ladbrokes name, meanwhile, will live on as another brand under GVC’s various businesses, which include Bwin, Foxy Bingo, Party Poker and SportingBet.
The successful buyout follows a string of earlier offers to Ladbrokes Coral in the last few years. In August, Ladbrokes reportedly rejected a £3.6 billion takeover offer because of a disagreement over the value of each company.
In 2016, GVC also proposed a merger, but Ladbrokes was in the middle of completing their £2.2 billion merger with Coral. Previous talks reportedly broke down due to GVC’s interests in unregulated markets, which it has since reduced significantly.
GVC, Ladbrokes Coral and the FOBT review
While GVC and Ladbrokes Coral are set to create another gaming giant, other industry heavyweights are quietly awaiting the British government’s Fixed Odds Betting Terminals (FOBT) review before making their own announcements.
Earlier this year, the Department for Digital, Culture, Media & Sport (DCMS) outlined four possible options on cutting maximum stakes of FOBTs, ranging from £50 to £2 per spin. The FOBT review officially began its 12-week consultation period of these reductions from October 30, the outcome of which will be announced in the second half of January, according to Reuters.
The potential reform is expected to see UK legislators reduce maximum betting stakes from £100 to the lowest proposed stakes of £2.
These land-based betting machines generate significant revenue for UK bookmakers including Ladbrokes and William Hill. Approximately 54 per cent of retail revenue for these operators come from FOBTs, but increased concerns about problem gambling in the country have pushed the United Kingdom Gambling Commission to take action.
Both GVC and Ladbrokes Coral confirmed they had agreed on a contingent offer between £3.2 billion and £4 billion, depending on the outcome of the impending UK government review, with GVC re-affirming it would make good on the deal even if FOBTs received a maximum cut in stakes.
Analysts have estimated Ladbrokes Coral would lose a whopping £449 million in gaming machine revenues in 2018 if the reduction is enforced.
Whatever the outcome of the FOBT review, GVC looks set to solidify its market position with its strong online business assets and Ladbrokes Coral will still get at least £3.2 billion. Other high street bookmakers and brick-and-mortar operators won’t be so lucky, and will most likely face heavy losses and increased consolidation in 2018.