April 28, 2016

Bookies Vow Never Again as 5,000-1 Leicester Closes on Title

William Hill Plc and other bookmakers gave better chances to finding Elvis Presley alive (2,000-1) or discovering the Loch Ness monster (500-1) than to Leicester City F.C. winning this season’s English Premier League soccer title. It won’t make that mistake again.

On Sunday, the Foxes of Leicester City could capture their first Premier League title in their 132-year history - with early bets at 5,000-1 odds.

If the team’s core of unknown and journeyman footballers defeat 20-time champion Manchester United, William Hill would lose 2 million pounds ($2.9 million), according to company spokesman Rupert Adams. The bookmaker took 58 pounds in bets on Thai-owned Leicester City at odds of 5,000-1, and would have to pay out 750,000 pounds to gamblers who bet later in the season when the odds dropped to 1,500-1.

“We are going to lose 2 million quid when Leicester win it,” Adams said in a phone interview. “As it stands, the biggest price for anyone next year is 1,000-1.”

William Hill represents about 20 percent of the U.K. betting market, meaning a Foxes victory will cost bookmakers across the country about 10 million pounds, Adams said. And even celebrities could be getting a payout. Actor Tom Hanks this week said he bet 100 pounds on the Foxes, and now stands to win 500,000 pounds if Leicester City wins.

But the Leicester City Miracle isn’t all bad news for bookies. Until Christmas, the Foxes upset the odds week after week by beating teams they were supposed to beat - and ruining several so-called accumulator, or parlay, bets in which gamblers select a slate of results over a weekend of games.

The market for preseason betting will also grow by as much as five times next season, said Alex Donohue, a spokesman for Ladbrokes Plc, which with William Hill operates half of the U.K.’s licensed betting shops. His company faces a similar 3 million-pound payout to bettors. Each company took about 1 million pounds worth of bets on the Premier League Title winners.

“Next year it will be colossal,” Donohue said. “Imagine if you support Bournemouth or Norwich or Crystal Palace, you’ll think if Leicester can do it why can’t we. I’m sure there will be incredible volume from next season.”

In Ladbrokes’ 130-year existence, the company has never paid out bets on odds of 5,000-1. The company accepted 47 bets at 5,000-1, and 23 of them are still live, with others deciding to cash out.

For William Hill, the bookmaker’s previous biggest payout was 125,000 pounds in 2013 - to a man who bet 13 years earlier that his grandson would play for the Wales national soccer team. That player, Harry Wilson, was just 16 when he went on as a substitute in a game against Belgium.

“This is a genuine black-swan event,” Donohue said. “If you simulated the Premier League 5,000 times, Leicester should win it once. We’re not going to be around for another 5,000 Premier Leagues to see if that’s the case, but we stand by the fact that our odds-compilation process was correct and robust.”

The club is owned by Vichai Srivaddhanaprabha, the Thai founder of the King Power duty free company.

Gala Coral rings changes after AML failures

Gala Coral said it has instigated changes across its anti-money laundering (AML) and social responsibility (SR) policies after failures identified by the UK Gambling Commission (UKGC) cost it almost £850,000 (€1.1m/$1.2m).

The UK gaming operator, which runs Coral, Grosvenor Casinos and the Gala Bingo website, has acted after it failed to deal adequately with a customer who fraudulently spent more than £800,000 with the company between 2012 and January 2015 and is now serving a three-year prison sentence.

After an investigation, the UKGC concluded that the identified issues highlighted by this customer indicated wider systemic faults with Gala Coral Group’s approach to AML and SR at the relevant time.

The UKGC found that Gala Coral failed to appropriately assess customer risk and obtain adequate information with regard to customers’ source of funds or source of wealth. It also did not utilise open source internet resources effectively or effectively use account information to identify potential problem gamblers.

The gaming operator has returned the customer’s gross gambling yield of £846,000 to the vulnerable adult that he stole from and has made a number of improvements to its procedures over the course of the last year.

“These improvements included new tools to enhance customer checks, increased headcount in our anti-money laundering team and improved training for retail and online customer-facing colleagues,” a Gala Coral spokesperson said. “We also intend to submit our AML and SR policies to a review by a third party.

“Gala Coral remains fully committed to working with the Commission and the broader industry to strengthen existing controls and to ensure that responsible gambling remains at the core of our business.”

The UKGC has warned operators to remember that under the Gambling Act 2005 their licence depends on taking appropriate steps to “keep crime out of gambling”.

Richard Watson, programme director at the UKGC, added: “We expect the industry will learn the lessons from this case, as it is their responsibility to keep crime out of gambling and protect vulnerable people from harm.

“We know that Gala Coral have reflected heavily on this case and have assured us of actions they have taken to address the failings. Operators must proactively monitor customers to keep gambling safe and free from crime.”

April 22, 2016

Ladbrokes attacks rivals for 'losing their minds' at Cheltenham

The boss of Ladbrokes has launched an extraordinary attack on his bookmaking rivals by slamming the “race-to-the bottom offers” they offered during what was the worst Cheltenham Festival in “living memory”.

Jim Mullen, chief executive, fired the broadside as Ladbrokes unveiled first-quarter results that showed the company was able to weather the Cheltenham storm in part because favourable football results offset its horseracing losses. But he was critical of other bookies, whom he claimed had “abandoned bookmaking principles” in pursuit of punters.

“There were some real race-to-the bottom offers which was a race we were not going to get involved with,” he said. “The difference in offers between Cheltenham and Aintree highlighted the fact that some of the sector lost their mind during that festival.”

The bookmaking industry, which fared better at this month’s Aintree Grand National meeting, is estimated to have lost more than £60m during Cheltenham in March after a host of favourites galloped home. Less than a week after the festival finished, William Hill, Ladbrokes’ bigger rival, rattled investors by sounding a profit warning that it partly blamed on the racing results.

Mr Mullen claimed that as “a well-managed, well-governed business” Ladbrokes had expected to suffer heavy losses at Cheltenham. In what appeared to be a thinly veiled reference to William Hill he added: “We managed to absorb it, therefore after the Cheltenham Festival we didn’t have to go back to analysts and investors.”

A William Hill spokesman said: “Bigger companies will suffer a bigger impact when events like Cheltenham go against you – and as one of the bigger players in the market we did see a bigger impact.”

William Hill also blamed its profit warning on new anti-problem gambling measures that allow online punters to take short time-outs or longer exclusions from betting. Ladbrokes, however, said the impact of those measures had not taken it by surprise.

“That’s all been fully blended into our numbers, that’s why we don’t talk about it,” Mr Mullen said. “It’s well within the plan and we’ve managed the business accordingly.”

He warned that if Leicester City, which were 5,000-1 outsiders at the start of the football season, keep up their current form and win the Premier League it will cost Ladbrokes about £3m. Despite that, shares in the bookie rose 4.6pc to 121.9p after it pleased investors with its first-quarter numbers that showed the turnaround plan Mr Mullen started last year is on course.

Ladbrokes, which last year suffered its first annual pre-tax loss in a decade, said net revenue was up 10.6pc in the three months to the end of March, including a 36.5pc surge in digital revenues, an area Mr Mullen hopes to grow.

Key to Ladbrokes’ future is its ambitious £2bn tie-up with rival Coral, which is being investigated by the Competition and Markets Authority (CMA) and could be blocked because the merged company will have too many betting shops. The CMA had been due to issue its provisional findings this month but has now delayed publication until mid-May.

“I think they’re being thorough,” Mr Mullen said of the postponement. “The most important thing to me is the relationship [with the CMA], that’s still strong.”

Ladbrokes has almost 300 shops in Belgium, where the government has suggested gaming taxes might be hiked.

“I was in Belgium on Monday, meeting with the team,” the Ladbrokes chief said. “We’re fully prepared, ready for an appeal if need be, ready to offer other counter proposals.”

April 21, 2016

Everest Poker to close in France

Online gaming firm Betclic Everest Group is to close one of its French poker sites Everest Poker by the end of May this year.

The French based operator has struggled to increase Everest Poker share of the market ever since Betclic bought the site for $100 million from Giga Media back in 2009. Although well known internationally Everest Poker has not found the success it had hoped for in the ever contracting French online market place.

Although Everest Poker will remain operational to players outside France all French players on the site will be able to withdraw their funds or transfer over to Betclic Everest Group’s other poker site in France BetClic Poker.

Stoke's Britannia Stadium to be called 'bet365 Stadium' from 2016-17

Stoke City have announced that the Britannia Stadium will be known as the bet365 Stadium from the start of the 2016-17 Premier League season.

The club are owned by bet365, the world's largest online gambling company, and have signed up to an initial six-year stadium naming rights agreement as well as a three-year extension to their shirt sponsorship deal.

"The Premier League is constantly evolving and to ensure that Stoke City remain as competitive as possible it's important we explore as many ways as possible of generating revenue," Stoke City chief executive Tony Scholes said.

"As supporters are no doubt aware the Britannia brand no longer exists and it was important that we attracted a new stadium naming rights partner.

"The Premier League is watched around the world and bet365 are a truly global company. We are delighted that we have been able to reach an agreement with them over the stadium naming rights for an initial six year period, along with the extension of their shirt sponsorship agreement.

"bet365 are taking over from Britannia and I would like to take this opportunity to thank Britannia and the Co-operative Bank for their tremendous support over the past 19 years.

"We also felt the time was right to redevelop the corner of the ground between the DPD and Marston's Pedigree Stands. Planning permission has been in place for some time but it was important we carried out the work when we felt the Club was ready for an increase in seat capacity."

John Coates, joint chief executive of bet365 and vice-chairman of Stoke City, added: "We have been looking to extend our portfolio of sports sponsorship and entering into a stadium naming rights agreement with Stoke City seemed a natural fit, especially as the city of Stoke-on-Trent is home to bet365.

"We are looking forward to what we hope will be a successful future for both the Club and bet365 with both organisations working closely together."

The Britannia Stadium has been the club's home since they left the Victoria Ground in 1997.

April 20, 2016

Paddy Power Betfair falls after negative broker comments

The merger of Paddy Power and Betfair has seen the combined company join the FTSE 100, but analysts at Credit Suisse believe its share price performance has been overdone.

Two months after the merger, which was completed at the start of February, Paddy Power Betfair announced 650 job cuts, but Credit Suisse says cost cutting is not the best reason for combining the two businesses. Analyst Ed Birkin said:

We feel that cost synergies alone are a poor rationale for M&A in a growth industry such as online gaming. Furthermore, we believe that scale is not as important as many believe, and is no indication of potential market share gains. With regards to Paddy Power and Betfair, as both companies already had strong brands, high quality management teams and good product/technology offerings, we question the extent of the benefits from a merger.

We think the post-merger share price reaction has been overdone and, given the integration risk and limited revenue synergies, we initiate with an underperform rating and 8,650p target price (c.9% downside potential).

The valuation looks expensive versus peers, with only 15% of the current enterprise value of Paddy Power Betfair being generated by cash flows over the next five years, compared to 29% for William Hill and 28% for Ladbrokes, on our numbers.

The negative comments have helped send the company’s shares down 250p to £90.80. Birkin said there was potential for increased earnings from the the merger but said:

The consensus view on Paddy Power Betfair is that its scale will allow it to make significant market share gains and achieve strong operational gearing.

By contrast, we show that:

- Market share gains are very difficult to achieve in the UK, and Paddy Power/Betfair has consistently underperformed the market on a pro-forma view 2010-2014.

- Operational gearing is difficult in the online gaming space. While both companies showed underlying operational gearing last year, we think this was due to one off cost savings to offset the point of consumption tax rather than it being sustainable on a multi-year view. We use the case study of William Hill Online, where the company has seen little if any operational gearing, in a period where revenues have almost trebled.

- Revenue synergies will likely be relatively immaterial – the company has guided to the cost synergies of the deal, but there has been significant market focus on potential revenue synergies. By contrast, we do not think the deal has the potential to generate significant revenues synergies – in part due to the desire to keep the brands differentiated.

Is Major League Baseball Ready To Embrace Sports Betting?

here is a new player in the realm of sports data and analysis, which comes by way of a merger between two notable technology companies – SportingPulse and Betgenius. The result is Genius Sports, a London-based data-driven solution provider for sports, media and regulated betting markets, employing over 750 people across 10 locations worldwide.

Because Genius Sports is a merger, it is not starting its business operations from scratch. It begins with a bounty of partners, including more than 100 leagues and sporting federations such as the English Premier League, La Liga, Major League Baseball, ATP, WTA, FIBA/IBF and over 150 basketball leagues worldwide.

The mix between SportingPulse and Betgenius will be an item to follow, as Betgenius has worked with many international bookmakers and lottery operators in driving turnover, increasing margins and acquiring consumers. Its clients include Paddy Power Betfair, Sky Betting & Gaming, Betsson and Intralot. Major League Baseball, now a client of Genius Sports alongside the aforesaid bookmakers, has traditionally been an ardent opponent of legalized sports betting across the United States, but even that may be changing.

“What I’ve said about legalized gambling is that the landscape is changing and that baseball, during this offseason, principally will take a look at its relationships with legalized gambling — whether it’s sponsorship, whatever — and re-evaluate given that the country has changed in terms of its approach to legalized gambling,” said MLB Commissioner Rob Manfred in November 2015.

Earlier in 2015, Manfred said that MLB needs to give “fresh consideration” to legalized sports betting, and that it is important for there to be a conversation between him and MLB owners about what MLB’s institutional position will be.

ports betting largely remains illegal across the U.S. despite illegal gambling being at an all-time high. The results of Manfred’s offseason discussions are unknown, along with whether there will be a change in MLB’s institutional position. However, MLB is now a partner alongside numerous sports betting and lottery entities that look to Genius Sports to improve customer performance and drive profits.

“Genius Sports has a new name and a new look, but our mandate, mission and values remain the same,” said Nick Maywald, founder of SportingPulse and now Genius Sports’ CCO. “We believe the collection, protection and commercialisation of sports data is critical to the future success and growth of the sports industry. We understand that as a leading sports data and technology provider, we must build on our reputation as a trusted partner to the sports industry with innovation, intelligence and integrity.”

One of the popular products offered by Betgenius (and now Genius Sports) has been “Sportsbook Management,” which includes a sportsbook manager that is promoted as a vehicle to increase a bookmaker’s revenues and automate 195,000+ events per year with event creation, pricing and resulting included therein. “It’s a product respected by the entire industry,” said the editor of OnlineCasinoReports.com. “Data points cover over 4,500 events per month.”

Perhaps MLB is not any closer than it has ever been to accepting the potential of legalized gambling on its product outside of Nevada. It has used SportingPulse’s services to monitor and protect its sport as well as to prevent and manage integrity concerns associated with match-fixing and betting-related corruption. SportingPulse’s merger with Betgenius could be nothing more then a coincidence for the league, but it also has the potential to further educate Manfred and other MLB executives on why sports betting should not pose a problem for the integrity of the sport, especially if the league is equipped with a vehicle focused on killing corruption and maintaining integrity.

An event at the U.S. Capitol Visitor Center this Wednesday will focus on sports betting and integrity with a briefing titled, “The World of Sports Betting and Safeguarding Sports Integrity.” Mark Locke, newly named CEO of Genius Sports, is listed as a panelist at the discussion to be focused on the global issues, opportunities and public opinion associated with legal and regulated sports betting. Maybe a transcript of the event will appear on Manfred’s desk come Thursday morning.

April 19, 2016

Czech government nears proper online gambling laws

The Czech government is slowing moving towards legalising online gambling in the country and at the same time preparing to hunt down and close any illegal offshore online gambling firms.

With the new tax on slot machines coming into effect shortly at 28% to 35% and sports betting and lotteries paying 23%, these taxes separate from corporation tax which is 19% expected to go through parliament and be signed by the Czech President.

With the current online laws inadequate for purpose these laws need to be updated and regulated before a proper framework for allowing operators to be correctly licensed by the State Supervision of Gambling and Lotteries Department of the Ministry of Finance, of which there are five licensees currently in operation Sazka, Synot Tip, Chance, Fortuna and Tipsport. However these operators have been highly critical of the current tax laws which have restricted their growth.

It is expected that new online gambling laws and a framework for regulators to work with will be present in early 2017.

Metalist Kharkiv Dissolve First Team after Match-Fixing Scandal

The uncertainty at Metalist Kharkiv continues. On April 18 the Ukrainian Premier League team—they are currently tenth on the table—announced that they had fired head coach Aleksandr Sevidov.

The move was made after Metalist suffered heavy defeats in recent weeks—a 5-0 derby loss against Dnipro Dnipropetrovsk on April 16, and an 8-1 defeat against Shakhtar Donetsk on April 1.

Following the game against Shakhtar, Tribuna reported that head coach Sevidov was taken to hospital. Sevidov then missed the derby against Dnipro Dnipropetrovsk, which ended in the above-mentioned 5-0 defeat.

Matchday.ua reported that sporting director Aleksandr Boytsan flew to Moscow to convene with Metalist’s controversial owner Sergey Kurchenko. Kurchenko is currently wanted for on corruption charges, as the businessman was closely associated to the former Ukrainian President Viktor Yanukovich, and therefore resides in Russian exile. Yet it appears that he still remains in control of his club.

Sevidov meanwhile learned about his dismissal while being in hospital where Tribuna reached the coach for a comment. “I am dismissed? The club must comment on the situation. I am in hospital for treatment. As you can see my health does not permit me to work as a coach at the moment.”

Yet the situation became even more bizarre as Tribuna would then state that the management had not only dismissed Sevidov, but was indeed in the process of firing all players from the first squad as well, effectively dissolving the club.

According to Tribuna, Metalist will dissolve the first team, and then finish the season with the second team under the leadership of youth team coach Aleksandr Prizetko. It has since emerged that the reason for these drastic measures are suspicions of match-fixing.

Ukrainian journalist Roman Bebekh told Matchday.ua that the match against Dnipro especially was under suspicion. Bebekh also claimed that Sevidov “knew what was going on”, and that his condition was due to the fact that he was under stress from the knowledge that his team had to throw the above-mentioned matches.

Bebekh also stated that one of the Metalist players told him before the Dnipro match that “they can fix the amount of goals needed for any bet.”

As a result of this scandal Metalist have now purged players from the first team of the club, and named 23 youth team players to the squad, which will face Stal Dniprodzerzhynsk for the first time this weekend.

Match-fixing is sadly a common phenomenon in Ukrainian football, as players from financially weaker clubs are forced to supplement their wages by throwing games for betting companies.

Most clubs in Ukraine either turn a blind eye to the problem, or even endorse it, as they can supplement the club’s budget by selling games. But Metalist, along with Zorya Luhansk, had already suspended players involved in match-fixing last December. Hence, club officials must have felt that the widespread culture of match-fixing among its players was unfixable and that the club needed to be rebuilt.

But together with the financial problems plaguing the club Ukraine’s biggest could seize operations at the end of the season. Making it likely that Kharkiv—Ukraine’s second largest city—will be without Premier League football next season.

April 17, 2016

UK watchdog may require Ladbrokes Coral sell 1K betting shops

The proposed merger of UK gambling giants Ladbrokes and Gala Coral Group may have hit a snag over how many retail betting shops the companies will be forced to sell.

The UK’s Competition Markets Authority (CMA) was expected to issue a provisional decision by April 18 on whether to permit the £2.3b Lads-Coral merger to proceed. On Thursday, City AM quoted sources saying that this timeline was now ‘highly unlikely.”

While the CMA’s final ruling on the merger is still expected to be released on June 24, City AM’s source claimed a potential hiccup had arisen over how many of the two operators’ combined 4k betting shops would need to be sold off to address competition concerns.

Scuttlebutt had it that the two operators would be required to reduce their retail presence by between 300 and 500 shops, but City AM claimed the CMA may require as many as 1k shops to be sold to smaller betting operators to ensure a healthy and competitive market for retail punters.

The CMA is expected to identify which shops give it the most competition concerns and the CMA is also believed to be insisting that the shops in question be sold rather than merely closed, public knowledge of which could put Lads-Coral in an unwanted ‘motivated seller’ position when it comes to negotiating prices for these shops.

The merger has been opposed by rival William Hill, whose high street dominance would be eclipsed should the Lads-Coral union receive the regulatory thumbs-up. The CMA’s reported insistence on a larger sell-off of shops may be a response to Hills’ objections, which claimed the market “may not be capable of establishing the third national force which would be lost as a result of this merger.”