New times at GVC Holdings
The new management of GVC Holdings presented this November its strategy on sustainability, growth and innovation. Among the measures presented, its corporate name change, its exit from unregulated markets by 2023 and its strong commitment to e-sports, markets such as the American and responsible gambling stand out.
In addition to a new corporate identity, the Douglas, Isle of Man-based company is committed to having 100% of its operations in regulated markets by the end of 2023. © FrankWinkler/Pixabay
On November 12, GVC Holdings made public on its website the content of its new sustainability, growth and innovation strategy . After 13 years of unstoppable growth, the current management of GVC Holdings at the hands of Shay Segev is leaning towards a sustainable growth under the corporate name Entain plc .
With this new strategy, the company, owner of major brands in the gambling and sports betting industry such as bwin, Ladbrokes and PartyPoker, has set itself the objective of limit your operations to legalized markets or in the process of regularization . According to the company, 96% of its current revenue comes from nationally regularized markets.
The company is aiming to increase by three points by the end of 2020 and reach 100% by the end of 2023 . Entain would be willing to collaborate with the authorities in those markets in the process of regularization to propose a system with high standards of regulation. In the event that the regularization did not seem viable, the company would put a stop to those markets in question.
The US market is crowned as the company's top priority to ensure its sustainable growth. Roar Digital, the joint venture that GVC Holdings and MGM Resorts established in 2018 to operate in the United States, was holding licenses to operate in Colorado, Indiana, Nevada, New Jersey, Tennessee and West Virginia. BetMGM, the platform resulting from this strategic cooperation, has a 18% market share in the states in which it is regulated .
Other emerging markets such as Mexico and Colombia , regulated by national entities, would also fall within Entain's expansion plans through organic opportunities or mergers with local companies.
“Today marks an exciting milestone in the history of the group, as well as an important step in our ambition to become the world leader in sports betting and gambling. With our new corporate identity, we will continue to use our unique technology platform to foster the exceptionally powerful momentum we are having in our current markets, grow in new markets, reach new audiences, improve the user experience and provide advanced levels of player protection.” – Shay Segev , chief executive officer of Entain plc. in official statement
Committed to supporting local communities, the company would create its own foundation, Entain Foundation, with an initial endowment of 100 million pounds sterling in the next five years, and aimed at offering support programs for individuals and grassroots organizations linked to sports. With this initiative, the company expects a reduction of 40 million pounds sterling in the gross exploration result by 2021.
In the words of its executive director, it would not be seeking to maximize short-term profitability, but rather what the company would be looking for is to build long-term .
Time for changes in the sector
The casino and sports betting industry has not stopped growing up in Europe . The online modality has been the lifeboat of a sector that has been economically suffocated by the temporary closure of casinos and gambling halls during the coronavirus crisis .
The new restrictions in regularized markets such as Sweden, the United Kingdom, Denmark or New Zealand to alleviate the increase in cases of gambling addiction among users, especially in times of confinement, concern the industry, who fears that the now disproportionate advantage of unlicensed sites over legal ones in terms of games and bonuses incite a greater number of players to opt for unregulated pages.
The cancellation of the sports events that attracted so many bettors led the sector to reinvent itself and offer new markets to bet on . In this sense, under Segev, who would be an avid of computer games, Entain would begin to take the first steps to open up to the world of e-sports with great possibilities.
The Turkish passion of GVC
Kenneth Alexander resigned in July of this year as CEO to devote more time to his family, as he would have declared, after more than a decade at the helm of GVC Holdings. Under Alexander's leadership, GVC Holdings experimented its biggest growth phase with acquisitions valued at more than 5,000 million pounds sterling . It was at this time that the company bought brands such as Ladbrokes Coral and took over its competitor bwin.party.
Segev denied that his departure from irregular markets was related to the investigation that continues to be opened against the company. The department of “Her Majesty's Revenue and Customs" (HMRC for its acronym in English), in charge of tax collection in the United Kingdom, opened an investigation to clarify payments derived from online gambling in Turkey, a country where this economic activity is illegal. In July 2020, the company expressed its surprise and dissatisfaction with the HMRC's decision to expanding the scope of the investigation for a possible corporate crime by companies within the GVC group.
In 2011 GVC acquired Sportingbet, an operation that in a short time began to generate a third of the company's revenues. In 2017, the group announced the transfer of its business in Turkey for, in theory, 150 million pounds sterling, to Rospo Malta, a company that later became known to belong to Ron Watss, a partner of Kenneth Alexander. In a press release in July , the group claimed not to be aware of the details of the investigation and to be in a position of absolute cooperation with HMRC to provide the necessary information.
Segev would have assured that this matter was part of the past , but the truth is that, according to unofficial sources, the investigation may remain open for a while.
