There is no place for the small in the global online gaming market. Becoming larger is the great obsession of the companies that manage emotions of millions of poker players, casino bettors and sporting events gamblers worldwide. Profits in Europe have fallen mainly by the new law that from this year requires them to pay VAT in the country from which the player resides in place of where the company is located, as it was before. More than 30 companies settled down in Gibraltar and other locations of low tax burden have seen their expenses multiplied.
The dance of mergers and acquisitions is up and has joined in the last month and a half some of the major companies in a sector in which British firms exercise an undisputed leadership. In that period, Ladbrokes and Gala Coral have created one of the largest betting companies in the UK, valued at 3,250 million euros, Paddy Power Irish joined its name to the British Betfair and added a turnover of 1,500 million, the same GVC amount used to acquire Bwin.party, which had a practically closed agreement with 888 Holdings, all of them British companies.
The most eloquent in expressing its intention to expand its business has been Brian Mattingley, CEO of 888 Holdings, based in Gibraltar. In what resulted in the loss of the battle for control of Bwin after months of negotiations. “We will make acquisitions to strengthen our sports betting segment,” he said. In February the company rejected an offer from William Hill for more than 950 million as it was insufficient.
William Hill is just another company that has been left out of the frenzy of mergers and acquisitions. That solitude not only has implications in its annual accounts for the lack of synergies, also in its share price: the British bank HSBC recommended Thursday to sell its shares in the absence of measures to promote their business through the merger game. The financial institution also questions the decision of William Hill to increase investment in marketing, an area in which spending cuts expected in its newly merged rivals. “Size is increasingly important as it allows spending on marketing and product development to reach more customers and that translates into a higher return on investment,” said a spokesman for Betfair.
