Big money in online gambling
27.02.2006The Observer newspaper took a bullish look at the online gambling space this weekend in a report that examined some of the big British names in the business, and how these are faring.
Predictably, Party Poker was highlighted as a profitable and successful business with major shareholders who have earned billions from the company's successful IPO last year and its subsequent activities.
Less high profile but nevertheless making "hundreds of millions of pounds" are the private equity backers and executives running Coral Eurobet and Gala Casinos, whilst the major Bet and Win acquisition deal on Ongame, and the GBP 250 millions it made for the Swedish founders is also flagged.
To those we would add other highly successful and well run groups like 888.com and Sportingbet, both definitely in the big league. And the forthcoming IPO of turnkey provider Playtech, which looks set to make mega-millions for its mainly Israeli principal shareholders.
Much of the article focuses on that highly respected British gambling group Ladbrokes, which becomes a standalone under that famous brand this week after parent Hilton Hotels UK sold off the UK hotels to it's US namesake for GBP 3.3 billion recently.
Now under the leadership of Chris Bell, the group allegedly rejected a massive GBP 3.7 billion offer from London venture capital firm CVC earlier this month (see previous reports). More offers could well be in prospect.
The Observer points out that with worldwide interest in sports soaring, it's spring time for the industry, and Internet-based technology is bringing more new markets within range. New machines - principally fixed-odds betting terminals - have increased revenue while British government legislation has relaxed strict gambling laws.
Interesting history surrounding major deals covered by the article includes the series of sales centring on Coral Eurobet.
The Observer reports that this firm is Britain's third largest bookie and that it has undergone three changes of ownership. From GBP 378 million six years ago it is now valued at GBP 2.1 billion after bingo and casino firm Gala swooped on it last year.
The combined group is expected to float within 18 months with a price tag over GBP 4 billion. Eight years ago, Gala, then a pure bingo firm, was bought out of Bass for just GBP 279 million. Along the way, fortunes have been made, principally for Gala chairman John Kelly, who engineered the firm's growth.
