September 26, 2016

Time to Reconsider Ban on Sports Betting?

An advisory group put together by the American Gaming Association recently recommended ending the federal ban against sports betting.

Sports gambling outside of Las Vegas is currently prohibited by federal law, according to the Professional and Amateur Sports Protection Act of 1992. However, the time has come for an open and regulated sports betting market. “It’s time to reconsider that national ban,” said Tim Murphy, former deputy director of the FBI and Chair of the advisory group.

States should have the right to decide whether to offer sports betting, recently recommended the board. In a bid to repeal the current legislation the group is set to lobby on Capitol Hill.

The American Gaming Association formed in 2015 and was launched as an initiative to expose the massive illegal gambling market. Murphy, the former FBI Deputy Director, said findings will be shared with legislators and stakeholders “so we can at least spur the critical national dialogue on this topic and get people involved and give them insight into how and why this needs to be changed.”

September 20, 2016

Barton investigated for betting on a Celtic match with Betfair

Rangers midfielder Joey Barton is reportedly being investigated for alleged betting on a Celtic match with Betfair, that is said to have been placed on his personal account.

The Scottish Football Association does not allow players, coaches, club officials and referees to bet on any football globally.

Barton is already in hot water with his club after picking up a three week ban for a recent training ground bust up.

The row is said to have been with manager Mark Warburton after Rangers, who are sponsored by 32Red, suffered a heavy 5-1 defeat in the Old Firm derby. The bet in question was allegedly placed by Barton on Celtic to lose by at least three goals in their following match to Barcelona; a bet he’d have won if so as the Bhoys went on to be hammered 7-0.

The Gambling Commission are now believed to be investigating the matter, and that both Rangers and Barton have been notified that the probe has been launched.

The Commission will present its case to the SFA. The report will then be presented to compliance officer Tony McGlennan, and it’ll be McGlennan that will decide on the outcome for Barton.

New Online Gambling Licenses In Greece To Be Released in October

Greece’s new licensing system for online gambling operators is set to be implemented by October. Deputy Finance Minister, Trifon Alexiadis, confirmed that the new rules would be made public “within a month”.

In 2011, Greek ran an experiment by issuing 24 “temporary” licenses to online gambling sites. The licenses were later suspended as the Greek government aimed to increase the betting monopoly that OPAP had. The government then sold one-third of the stake of the company. Alexiadis explained that this was to stop worldwide gambling operators from making profit while evading Greek’s taxes.

The experiment also revealed that many operators were producing false reports of their revenues. The Hellenic Gaming Commission (EEEP) surveyed the operators on their revenues and turnovers. Alexiadis said that public documents from these operators showed discrepancies compared to declared revenues.

Alexiadis also stated that the newer regulations were more optimized and put a cap on how much operators could earn from Greek betters. New regulations required foreign payment providers to report to the Greek authorities thus making it easier to track financial transactions from users to foreign operators.

Interestingly, many operators might be reluctant to apply for a license as Greek has a massive 35% punitive tax rate on gambling revenue. OPAP, the current monopoly in Greek gambling has also fallen victim to the new tax and reported a decrease in profits of 36% in Q2 of this year. The company clarified that if it wasn’t for the tax, profits would have risen 2% instead.

The EEEP has also been making efforts to curb online gambling without authorization and has recently started blocking more and more sites. As of August, 847 sites have been blacklisted by the EEEP. At the beginning of this year, the number of blocked sites was nearly half that.

August 25, 2016

Playtech's share price and market capitalisation jump as group treats investors to €150m special dividend

Gambling software group Playtech's share price popped to a record high this morning after it announced it will treat shareholders to a bumper €150m special dividend.

Playtech said it will make the payout in December, though it has also hiked its interim dividend by 15 per cent to €0.11. The company said the boosts were in anticipation of higher growth and cash generation.

Revenue at the group was up 18 per cent to €338m in the six months to 30 June.

Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) reached €144m, a rise of 27 per cent.

Playtech's stock jumped around five per cent to over 944p on the news and took its market capitalisation above £3bn for the first time.

The jump means it is now the second largest gambling company in the UK in terms of market capitalisation, behind only the merged behemoth Paddy Power Betfair.

Its stock was trading around four per cent higher at the time of writing to 934.7p.

In the first half of this year Playtech continued to push forward with its M&A strategy by acquiring Swedish software firm Quickspin in May for €24m and buying up 90 per cent of Best Gaming Technology for €138m in July.

Chief executive Mor Weizer told City A.M. Playtech remains an "opportunistic and highly acquisitive company".

However, it is not aiming to join the wave of high-profile mergers, such as those between Paddy Power and Betfair and Ladbrokes and Gala Coral, anytime soon.

"Given the health pipeline of M&A in discussion we expect to remain busy and active in the coming quarters. We would never say never to a merger – every opportunity would be considered – but we intend to be the group leading the consolidating rather than being consolidated by others.

"We are very much focused on certain companies that can add to our capabilities at the moment and help us target greater international expansion," Weizer said.

Playtech supplies some of the most profitable bookmakers in markets such as the UK and Spain, including Betfred, Codere, Coral, Ladbrokes, Paddy Power Betfair and William Hill.

However, Weizer said the company intends to be "the most important B2B provider" in the gambling industry in the key regulated markets of the Czech Republic, Slovakia, Poland, the Netherlands and Mexico, among others.

It said it is "locking in" future growth in its gaming division, after announcing important new licensees this year including PokerStars and SunBets, as well as a slew of contract renewals that now put seven of its top 10 licensees on contracts with at least three years remaining.

Weizer told City A.M. he expects Playtech's casino and sports products to generate the most growth in the coming quarters, while mobile will be the group's most lucrative channel. Mobile growth grew 29 per cent in the first half in total and generated 54 per cent of UK revenues.

Chairman Alan Jackson said:

"Playtech has made significant progress in 2016 as we have delivered on our strategic objectives. The gaming division continues to deliver strong growth, driven by our industry-leading casino offering.

Given this progress, we remain confident of strong growth in 2016 and beyond."

August 24, 2016

Merger costs leave Paddy Power Betfair with £47.5m loss

Merger costs left Paddy Power Betfair with a £47.5 million sterling (€55.4 million) loss at the end of June.

The group also announced that that Paddy Power co-founder Stewart Kenny, who as chief executive led the Irish bookie’s flotation in 2001, is stepping down from the board.

Paddy Power Betfair said on Wednesday that revenues grew 18 per cent to £759 million in the six months ended June 30th from £642 million million during the same period last year.

Operating profits grew 39 per cent to £147.6 million from £106.5 million over the same period.

However, a charge of £195.1 million for the cost of merging Paddy Power and Betfair to create the group in February, left it with a £47.5 million loss.

That included £49 million for integrating the two businesses , which is likely to have cost a total of £65 million by the year’s end, and £50 million in fees and duty.

Chief executive, Breon Corcoran said that the restructuring that followed the merger of Paddy Power and Betfair in February is now completed and that savings are being delivered ahead of schedule.

Paddy Power Betfair now believes that the merger will cut the enlarged group’s costs by £65 million, £15 million more than originally expected, with the full benefit of this kicking in next year.

The group expects that earnings for the full year will be between £365 million and £385 million, 22 per cent to 25 per cent more than the £296 million total that the two businesses generated in 2015.

Its accounts treat the group’s figures as if Paddy Power and Betfair had always been merged.

In the first half, its on-line division, including Paddy Power and Betfair in Ireland, Britain and Europe, earned £140 million in operating profits, 40 per cent more than during the same period last year.

Its 603 Paddy Power betting shops in Britain and Ireland grew profits by 21 per cent to £23 million.

A sharp rise in costs left operating profits from Sportsbet in Australia trailing by 12 per cent at £26.1 million.

Product fees, inflation and an increase in jobs combined to drive the increase in costs. The group expects this to ease in the second half.

Profits at its US division, which includes of the horseracing and betting network, TVG and Betfair Casino, increased by more than 153 per cent to £2.9 milion.

Mr Corcoran pointed out that its industry remained highly competitive and was subject to regulation and economic conditions.

“Our strong market positions, increased scale and enhanced capabilities position us well for sustainable, profitable growth,” he said.

Mr Kenny co-founded Paddy Power in 1988 and was chief executive until 2002, the year after it launched on the Dublin stock market, and chaired it for a further year.

Current chairman, Gary McGann, noted Mr Kenny was retiring after many years of service to the company. “We wish him every success in the future and thank him for his incredible contribution to this business,” Mr McGann said.

August 19, 2016

William Hill takeover bid collapses

An ambitious £3.4bn bid for William Hill has collapsed after the bookmaker refused to open talks with suitors Rank Group and 888 over what would have been a highly-complex, three-way deal.

Rank, the owner of Grosvenor casino and Mecca bingo halls, and online gambling company 888 made two offers for the bookie, of 394p-a-share and 364p, but both were dismissed by William Hill as too low and “highly opportunistic”. In the light of William Hill’s refusal to engage, the pair have dropped their approach, which had been dogged all along by stock market scepticism the deal was too complicated to pull-off and required too much debt.

A Takeover Panel deadline requiring the bidders to make a formal offer or walk away was due to expire on Sunday.

“We strongly believe that the transaction would have created significant value for all three sets of shareholders,” said Henry Birch, the boss of Rank. Itai Freiberger, 888’s chief executive, added that he was “disappointed” William Hill “did not share our vision”.

The mooted deal would have involved Rank merging with 888 to buy the bookie. Mr Birch would not comment on whether a deal between the two bidders was still on the cards, although he did say that “we’ve enjoyed working with 888”.

William Hill had publicly clashed with the bidders and disputed the value of the offers they had submitted. Gareth Davis, the bookie’s chief executive, said today that it would focus on its stand-alone turnaround strategy, adding that Rank and 888’s offer “fell down on value, risk, strategy and leverage”.

In a fillip to investors, he also said the company had enjoyed a “good start” to the second-half of the year and that annual operating profits were now expected to be at the top end of the £260m to £280m range.

However, William Hill remains isolated. Rivals Ladbrokes and Corals are merging and Paddy Power and Betfair have combined to create a gambling giant.

There has been speculation that CVC, the private equity giant that used to own William Hill and now owns Sky Bet, could make a bid for the bookie. But Berenberg analysts said today that they doubted William Hill would draw another suitor, arguing that “a private equity fund would need to re-leverage” the company “very substantially”.

William Hill shares, which had faded in recent days amid speculation a deal would fail, fell a further 4.7p to 303.1p. 888 rose 4.75p to 205p and Rank slid 2.3p to 221.6p.

August 01, 2016

South Korea's Ongoing Battle Against Match-Fixing

It was a plan as clever and successful as Harry Kane taking England’s set-pieces. In May 2012, former South Korea international Kim Dong-hyun was broke and desperate. He enlisted the help of Yoon Chan-so, an ex-pitcher for baseball team Seoul LG Twins and also down on his luck. The plot was hatched.

The pair stole an SUV in the swanky southern Seoul area of Gangnam to tail a swankier BMW. The masked former footballer took the car at knife-point with the owner forced into the passenger seat. She managed to escape at traffic lights, hail a taxi and give chase, all the while reporting her location to the police. The boys in blue soon arrived and caught the hapless former athletes who were, by then, on foot.

Kim’s money issues arose when he was banned for life from playing football owing to his role in a massive match-fixing scandal that came to light in 2011. The ex-striker, who is still just 32, had been a main mover, recruiting younger players to do the bidding of Chinese and Korean gangs.

The other high-profile star of those found guilty was Choi Sung-kuk. The photographs of the diminutive winger, once known as the ‘Little Maradona’ who came close to joining Sheffield United, turning up for work the following year as a hospital receptionist were poignant.

As sad as it was, there was much worse. Two killed themselves as the scandal unfolded, dominating the sports media for weeks. One was Jung Jong-kwan, a former Jeonbuk midfield player, who wrote of his shame in what seemed to be a suicide note found by his body in May 2011. Since the scandal broke, Jung had been working closely with league officials who were devastated at his death. Five months later, Lee Soo-cheol, who had been head coach of K-League team Sangju Sangmu, was found dead in another apparent suicide. Lee had been indicted of blackmailing the parents of a player who was involved in match-fixing.

It was a mess. Few could believe what was unfolding. At first fans refused to do so, criticising journalists for reporting what was going on. As time passed, it became apparent that this was something serious. Players that had initially issued denials started to spill the beans. Soon the government threatened to cancel the K-League, the oldest professional league in Asia, if something wasn’t done.

In the end, over 50 players and coaches, past and present, were found guilty of rigging results. Authorities got busy. Players were banned for years or life. Law enforcement agencies were involved too.

The Korea Football Association knew that, as well as tough punishments, there was a need to educate. In the past there had been complacency, ignorance and naivety. In the future, there could be no such excuses. Young players and coaches were sent to an institution near the central city of Daejeon. International observers were impressed with the program and there has been continued efforts to monitor and investigate.

So any new hints of trouble are taken seriously and when it involves the best team in the country, very seriously indeed.

Jeonbuk Motors have been dominant in South Korea in recent years. A first league title came in 2009, and this season should see a third championship in succession. Throw in more appearances in the Asian Champions League than any other team and an upcoming quarter-final in the tournament, Jeonbuk are one of the biggest teams on the world’s biggest continent. They are also currently under investigation for bribing referees.

In 2015, the former CEO of Gyeongnam FC Ahn Jung-buk, a well-known football figure, was found guilty of bribing referees in order to help his team avoid relegation. It didn’t work.

One of those referees found guilty claimed in May that he had also received money (not much — about $800) from a scout who worked for Jeonbuk.

This was to fix matches in 2013, the one season since 2012 when the team did not win the title. The club says that the scout was working on his own initiative and without Jeonbuk’s knowledge.

Head coach Choi Kang-hee has been in charge since 2005. His 12 years in Jeonju were punctuated by an 18-month spell with the national team from 2012 to 2013 (he didn’t want to take the job but the KFA took him drinking and drinking and drinking until he said yes).

So Choi wasn’t in charge at the time of the said crimes but said in June he will take responsibility if guilt is established. That would probably mean resignation but the club’s general manager Lee Chul-geun said that he is the one who should go instead of Choi. Regardless, punishment is likely.

Gyeongnam, now in the second tier, were given a ten-point deduction. The same sanction would see Jeonbuk move to second, just two points off the pace and still favourites to win the title.

For fans, this kind of thing is troubling. Since the original football scandal, there have been issues with other codes too –baseball, basketball and volleyball.

This does not necessarily mean that Korea’s sports scene is any dodgier than others. After 2011, the country is more aggressive and pro-active at investigating sport corruption than than most — in Asia at least. The first step to dealing with a problem is to acknowledge that there is one in the first place. Many do not.

That may be a small consolation for Jeonbuk fans but short-term pain for them may help to provide long-term gain for Korean football, and sport, in general.

July 26, 2016

William Hill is lukewarm on ambitious three-way merger deal

William Hill has fired a shot across the bows of suitors Rank Group and 888 amid scepticism that the pair would be able to pull off an ambitious three-way tie-up with Britain’s biggest bookmaker.

Rank, the operator of Grosvenor casinos and Mecca bingo halls, and online gambling business 888 are eyeing a consortium approach for struggling William Hill, in what would mark the latest deal to shake-up the gambling industry.

The potential bid leaked at the weekend, forcing the high street bookie to confirm today that it had received “a highly preliminary approach” that did not set out price or other terms.

William Hill said it would “listen to and consider any proposal which might be forthcoming”, but it also warned that it was “not clear” that a tie-up with Rank and 888 would “enhance” its “strategic position or deliver superior value”.

Analysts were similarly cautious about the prospects for a deal, given the complexity of a consortium bid. William Hill shares initially leapt as much as 12.8pc but only closed up 4.8pc at 328.8p as investors tempered their excitement about a tie-up as the day wore on.

Simon French, an analyst at stockbroker Cenkos, warned that “it is not immediately apparent” that 888 and Rank have the “skill set” to revive William Hill’s troubled online sportsbook or its estate of about 2,300 betting shops.

Meanwhile, Davy analysts said that “questions relating to funding would need to be answered” because, even combined, 888 and Rank are still much smaller than the high street bookie.

While a deal between William Hill and 888 makes sense and a takeover was attempted by the former last year, the Davy analysts were more sceptical about the “strategic rationale” of combining a betting shop business with a casino and gambling operator like Rank.

Both 888 and Rank have dominant shareholders - the Shaked brothers at the former and Malaysian billionaire Quek Leng Chan at the latter – which analysts said further complicates a deal and could make a merger unattractive to Hill’s investors.

Under Takeover Panel rules, 888 and Rank have until August 21 to make a formal offer or walk away. It is possible that William Hill, left vulnerable after its board ousted under-performing chief executive James Henderson last week, now attracts a rival bidder.

888 shares rose 3.4pc and Rank slipped 0.5pc.

Britain's gambling industry is in the midst of consolidation, with Paddy Power and Betfair completing a merger earlier this year and Ladbrokes and Coral in the midst of securing regulatory approval for a tie-up.

The Competition and Markets Authority is expected to publish its final report into the Ladbrokes-Coral deal tomorrow. In May, it provisionally recommended they sell as many as 400 betting shops to assuage concerns about competition.

July 14, 2016

Betfred the favourite in race for Ladbrokes and Coral shops

The Sunday Times has reported that Betfred is nearing a deal to buy hundreds of betting shops, as the Ladbrokes-Coral merger enters the final stages of its UK Competition and Markets Authority (CMA) review.

As part of its merger completion, Ladbrokes-Coral has been forced to sell a significant number of betting shops in order to secure UK competition approval and close its £2.3 billion merger (first announced – June 2015).

In May the UK markets authority had ordered Ladbrokes and Coral governances to begin to sell off a number of its retail assets as its review had identified +600 areas across the UK where the merger could harm competition.

Manchester-based Betfred, Britain’s fourth largest highstreet bookmaker with a retail portfolio of 1400 shops, is reported to be willing to buy between 300-400 of Ladbrokes-Coral’s inventory.

The Sunday Times reports that led by Founder Fred Done, Betfred’s retail bid had edged out Irish competitor BoyleSports, whose founder John Boyle had viewed the retail sell-off of the Ladbrokes-Coral merger as an easy way of expanding BoyleSports in the highly saturated UK betting market.

The move by Betfred to increase significantly its retail betting portfolio may surprise some industry analysts. Filing its annual return for 2015 this month the bookmaker reported losses of £76 million.

Betfred governance stated that a tough 2015 had seen its operations readjust to new industry taxes with lower revenue margins.

Valve requests Counter-Strike gambling sites to ‘cease operations’

Valve is no longer permitting gambling sites to use its technology.

The company, which owns and operates the Steam distribution portal and popular games like Counter-Strike: Global Offensive, announced today that it is enforcing the rules of its Terms of Service for the application protocol that enabled gambling sites to operate. It will request that all gambling sites, like CSGO Lotto, Skings Gambling, and CS:GO Diamonds, to stop immediately.

Up until now, these sites have used the OpenID API (application protocol interface) to enable item-trading between a pool of players. Everyone could wager their various digital items — some worth upward of $1,000 — and then the winning team would take the spoils.

“Using the OpenID API and making the same web calls as Steam users to run a gambling business is not allowed by our API nor our user agreements,” Valve spokesperson Erik Johnson wrote in an update. “We are going to start sending notices to these sites requesting they cease operations through Steam, and further pursue the matter as necessary. Users should probably consider this information as they manage their in-game item inventory and trade activity.”

GamesBeat has reached out to Valve for further comment, and we’ll update this post with any new information.

These operations recently came under scrutiny following the revelation that popular YouTube personalities Trevor “TmarTn” Martin and Tom “ProSyndicate” Cassell founded and own a stake in the CSGO Lotto site they promoted on their video accounts without disclosing that relationship. Last week, a mother of one player filed a complaint in the Southern District of Flordia against CSGO Lotto, Cassell, Martin, and Valve alleging they collectively created a market that operates like an illegal casino.