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Chinese Game Developer KongZhong $KZ to Be Acquired by CEO Wang for $299M

Chinese Game Developer KongZhong $KZ to Be Acquired by CEO Wang for $299M

WAR SAGA brand, which includes games such as World of Tanks, World of Warplanes and World of Warships. The company has the exclusive publishing rights for World of Tanks, World of Warplanes and World of Warships, Guild Wars 2, Auto Club Revolution, Blitzkrieg 3 and other titles in Mainland China. The proposed purchase price of $0.18875 per ordinary share, or $7.55 per American depositary share (ADS, representing 40 ordinary shares), represents a premium of 17.8% to the closing price of KongZhong’s ADSs on August 24, 2016, the last trading day prior to the announcement of a revised going-private proposal, a premium of 29.0% to the average closing price of KongZhong’s ADSs during the 90 trading days prior, and a premium of 13.4% to the closing price of KongZhong’s ADSs on November 30, 2016. KongZhong’s board of directors approved the deal and recommended that its shareholders approve the deal, which is subject to customary closing conditions. Wang, IDG-Accel China Growth Fund II LP, and IDG-Accel China Investors II LP, which own 24.7% of the voting rights have agreed to approve the deal. At closing, KongZhong will become a privately-owned company and its ADSs will no longer be listed on NASDAQ. Duff & Phelps LLC is serving as independent financial advisor to KongZhong’s Special Committee, Skadden, Arps, Slate, Meagher & Flom LLP is serving as independent U.S. legal counsel to the Special Committee and Maples and Calder LLP is serving as independent Cayman Islands legal counsel to the Special Committee. Davis Polk & Wardwell LLP is serving as U.S. legal counsel to Wang’s investor consortium and Walkers is serving as Cayman Islands legal counsel to the investor consortium. Sullivan & Cromwell LLP is serving as U.S. legal counsel to KongZhong.]]>

PokerStars Owner Amaya $AYA in $6B Merger Talks With William Hill $WMH

PokerStars Owner Amaya $AYA in $6B Merger Talks With William Hill $WMH

Amaya Inc. (NASDAQ: AYA; TSX: AYA) and London-based William Hill plc (LSE: WMH), said “they are in discussions regarding a potential all share merger of equals,” that would would create “a clear international leader across online sports betting, poker and casino.” Amaya, the world’s biggest publicly listed online gambling company and owner of PokerStars, the world’s largest real-money online poker network, had retained Barclays Bank as its financial adviser to explore a sale, as reported by ExitHub earlier this year. Founded in 1934, William Hill is one of the world’s leading betting and gaming companies, employing more than 16,000 people in nine countries, including the UK, Gibraltar, Israel, Bulgaria, Italy, Spain, the US, Australia and the Philippines. In addition to its online sportsbook operations, the company offers online casino games, ‘skill games’, online bingo and online poker. Citigroup Global Markets and Macquarie Capital are acting as financial advisers to William Hill, which in recent months has been evaluating options to accelerate its strategy of increasing diversification by growing its digital and international businesses. In August, the British bookmaker rejected a takeover bid from its rivals 888 Holdings and Rank Group. GSO Capital Partners, the credit arm of private equity firm Blackstone Group (NYSE: BX), holds a stake of 19.99% in Amaya. GSO was a major financial backer of Amaya’s $4.9-billion buyout of Oldford Group Ltd and its Isle of Man-headquartered Rational Group Ltd, the owner and operator of the PokerStars and Full Tilt Poker brands, in August 2014. Several parties, including sports betting and gaming company GVC Holdings, as well as David Baazov, considered the “king of online gambling” who resigned under pressure as chairman and CEO of Amaya, were interested in acquiring the company. In late March, Amaya said that its founder Baazov was taking a voluntary leave “to focus on preparing an offer to acquire Amaya and to avoid a distraction for the company while he responds to certain allegations made against him by the Autorité des marchés financiers (AMF), the securities regulatory authority in Quebec.” In August, he permanently resigned all positions at Amaya. “Amaya remains focused,” said the company’s recently appointed CEO Rafi Ashkenazi. “We attracted new customers to PokerStars, continued to introduce changes to improve the overall poker experience, expanded our online casino offering and continued to invest in our emerging online sportsbook.” Amaya is a leading provider of technology-based products and services in the global gaming and interactive entertainment industries. Amaya owns gaming and related consumer businesses and brands including PokerStars, Full Tilt, BetStars, StarsDraft, the European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour and the Asia Pacific Poker Tour. Its brands have more than 100 million cumulative registered customers globally and collectively form the largest poker business in the world, comprising online poker games and tournaments, live poker competitions, branded poker rooms in popular casinos in major cities around the world, and poker programming created for television and online audiences. Amaya also offers non-poker gaming products, including casino, sportsbook and daily fantasy sports. Amaya and its group companies have various gaming and gaming-related licenses or approvals throughout the world, including from the United Kingdom, Italy, France, Spain, Estonia, Belgium, Denmark, Bulgaria, Greece, Ireland, Romania, the Isle of Man, Malta, the State of Schleswig-Holstein in Germany, the Provinces of Quebec and Ontario in Canada, and the State of New Jersey in the United States. The company was founded in 2004 and it has nearly 2,000 employees. ONLINE GAMBLING AND GAMING M&A ACTIVITY A few  days ago, Philippine billionaire Roberto “Bobby” Ongpin, the former chairman and controlling shareholder of PhilWeb Corp. (PSE: WEB), a leading gaming technology provider in the Asia Pacific region, sold his 53.76 percent stake in the company to Gregorio Maria “Greggy” Araneta III, the son-in-law of the late dictator Ferdinand E. Marcos. Ongpin himself was a former Minister of Trade and Industry during the Marcos administration in the 1970s. The move came after the new Philippine President Rodrigo Duterte, who took office on June 30 after running on a platform to clean up the country, specifically named Ongpin in a speech in early August, as one of the “oligarchs that are embedded in the government” who he literally said he plans to “destroy.” The recent wave of M&A is likely to continue as operators look to become bigger and more diversified to offset rising costs and compete more effectively. In late May, private equity firm CVC Capital Partners acquired Italian gaming and payments operator Sisal Group SpA from private equity firms Apax Partners, Permira and Clessidra for €1 billion. In April, Las Vegas-based NYX Gaming Group Limited (TSX-V: NYX) agreed to acquire OpenBet (OB Topco Ltd), the #1 regulated digital gaming supplier globally, from private equity firm Vitruvian Partners LLP, its co-investors and management, for £270 million. As part of the deal, William Hill and SkyBet, owned by CVC Capital and Sky plc, were said to have invested £80 million and £20 million, respectively. Earlier this year, CVC Capital acquired a majority stake in German gaming company Tipico for close to €1.5 billion ($1.68 billion). In December 2014, CVC acquired Sky Betting and Gaming for £800 million, consisting of five core brands Sky Bet (sports betting), Sky Vegas (online in-browser casino), Sky Casino (premium online casino, live table games), Sky Poker (online poker) and Sky Bingo (online bingo). CVC also made previous investments in William Hill (2002 IPO exit, at 314% ROI) and the IG Group, a digital trading and betting platform. “Sports betting contributed substantially to Sisal’s revenues (in 2015), with the Italian market growing by 24.7 percent compared with 2014,” said gaming industry analyst Joss Wood. “The March (2016) revenue figures issued by regulator AAMS show Sisal ranked fourth for online sports betting with monthly revenue of €23.4 million ($26.8 million).” “Gaming companies with a larger online presence are likely to see higher revenue and EBITDA growth over the next 12-18 months than those more focused on traditional land-based business, as the gradual shift online continues, mobile phone and tablet penetration rises, and fast-growing demand for online games increases,” said Moody’s vice president and senior analyst, Donatella Maso. UK-based William Hill Plc has the biggest online exposure by revenue, while pure online operator Sky Bet (Sky Betting & Gaming) has the most significant presence by percentage of total revenue. Conversely, Ladbrokes Plc is one of the largest gaming companies in the UK but its digital division still lags its peers and it reported negative EBIT in 2015, according to Moody’s. While SNAI SpA’s revenues have surpassed Sisal’s following its acquisition of Cogemat SpA and it has gained leadership positions in retail sport and horse betting, “Sisal will remain more profitable mainly due to its more favorable product mix,” Maso said. SNAI is Italy’s second-largest gaming company after International Game Technology. SNAI is also the leader in sports and horse betting and the third-largest concessionaire of amusement with prize machines and the second-largest of video lottery terminals by turnover. The online sector’s fundamentals are expected to remain positive for at least the next two to three years, which will support high single-digit growth rates despite regulatory and tax pressures. Potential legalization of online gambling or further liberalization of the rules that already govern it in some European markets and US states offer growth opportunities for large online gaming operators, which could offset uncertainty in regulatory regimes. Europe, in particular, continues to see the creation of an increasing number of new regimes that permit licensed and regulated betting, notably through interactive platforms, and which is gradually removing the once dominant monopolistic approach favoring the lottery sector, according to the European Gaming & Betting Association (EGBA). The continuing growth of professional sport and associated betting markets on a global scale, as a direct result of consumer demand driven by technological advances, has provided both business sectors with clear fiscal benefits and further strengthened their symbiotic relationship, says the EGBA. This has manifested itself in a range of mutually beneficial commercial ventures through direct sponsorship of sporting events, sportspeople and clubs, along with numerous indirect benefits to both products from media advertising deals around sport (where legislative frameworks permit). In recent years, online gaming markets — including sports betting, poker, casino, bingo, lottery — have grown rapidly to €36.9 billion in 2014 from approximately €6.6 billion in 2003, and are expected to grow to approximately €42.8 billion by the end of 2018, says Moody’s. The online gambling sector offers growth opportunities for European gaming companies in 2016-17 versus traditional brick-and-mortar operations, despite likely pressure from increasing taxes and regulation, says Moody’s. Last year, the UK became the biggest hub for gambling M&A, as reported by ExitHub. The betting sector has seen a string of deals, as companies respond to higher tax bills in Britain, tighter regulation, growing competition, and rising use of mobiles and tablets. In the summer of 2015, bookmakers Ladbrokes and Coral agreed to a £2 billion merger, which was quickly followed by a £5 billion merger between Paddy Power and betting exchange Betfair, creating a gambling behemoth. It was followed a month later by the conclusion of GVC’s drawn-out battle against Israeli online gambling company 888 to buy Foxy Bingo-owner Bwin.Party for more than £1 billion. Photo: David Baazov, founder and former chairman and CEO of Amaya.]]>

Malone's Liberty Media to Acquire Formula One from CVC, Ecclestone for $4.4B

Malone's Liberty Media to Acquire Formula One from CVC, Ecclestone for $4.4B

reported by ExitHub earlier this week. The deal is based on an equity value of $4.4 billion and an enterprise value of $8 billion. Liberty Media owns interests in a broad range of media, communications and entertainment businesses, which are attributed to three tracking stock groups, the Liberty SiriusXM Group, the Liberty Braves Group, and the Liberty Media Group. The F1 acquisition price comprises cash and newly issued shares in the Liberty Media Group tracking stock (LMCK), and a debt instrument convertible into shares of LMCK. The acquisition will be effected by Liberty Media acquiring 100% of the shares of Delta Topco, the parent company of Formula One. Liberty Media has completed the first tranche of the deal by acquiring an 18.7% minority stake in F1 for $746 million in cash. CVC Funds will continue to be the controlling shareholder of F1 until final completion of the deal. The completion of the acquisition is subject to certain conditions, including the receipt of certain clearances and approvals by antitrust and competition law authorities in various countries, certain third-party consents and approvals, including that of the FIA governing body of F1, and the approval of Liberty Media’s stockholders. The deal is expected to close by the first quarter of 2017. After completion of the acquisition, Liberty Media will own Formula One and it will be attributed to the Liberty Media Group which will be renamed the Formula One Group, and will remain based in London. The consortium of sellers led by CVC will own approximately 65%(1)(3) of the Formula One Group’s equity and will have board representation at F1 to support Liberty Media in continuing to develop the full potential of the sport. In addition, a CVC representative will be joining the Liberty Media Board of Directors. Chase Carey, a former DirecTV and News Corp. executive, who continues to serve on the board of Rupert Murdoch’s 21st Century Fox and Sky plc, the owner of Sky News, has been appointed by Delta Topco and will serve as the new chairman of Formula One, succeeding Peter Brabeck-Letmathe, who will remain on F1’s board as a non-executive director. Bernie Ecclestone will remain Formula One’s CEO. Greg Maffei, president and chief executive of Liberty Media, said: “We are excited to become part of Formula One. We think our long-term perspective and expertise with media and sports assets will allow us to be good stewards of Formula One and benefit fans, teams and our shareholders. We look forward to working closely with Chase Carey and Bernie Ecclestone to support the next phase of growth for this hugely popular global sport.” Chase Carey, chairman of Formula One, said: “I am thrilled to take up the role of chairman of Formula One and have the opportunity to work alongside Bernie Ecclestone, CVC, and the Liberty Media team.” Bernie Ecclestone, chief executive of Formula One, said: “I would like to welcome Liberty Media and Chase Carey to Formula One and I look forward to working with them.” Donald Mackenzie, Co-Chairman of CVC, commented: “We are delighted Chase Carey is joining Formula One as its new Chairman and that he will be working alongside Bernie Ecclestone. Chase’s experience and knowledge of sport, media and entertainment is as good as it gets and we are very pleased to secure his services. Bernie has been a wonderful CEO for us over the last 10 years.” In the acquisition the selling stockholders will receive a mix of consideration comprising: $1.1 billion in cash, 138 million newly issued shares of LMCK and a $351 million exchangeable debt instrument to be issued by Formula One and exchangeable into shares of LMCK. In the 1970s, Ecclestone rearranged the management of Formula One’s commercial rights and is widely credited with transforming the sport into a multi-billion-dollar business. CVC Capital gained control of the F1 group in 2006 in a leveraged buyout funded with two loans – $965.6 million from its Investment Fund IV and $1.1 billion from RBS, turning the firm into the biggest winner in the history of the Formula One grand prix, a popular segment of the sports betting market. Over the past decade CVC has halved its stake to 35.5% and reaped a $4.4 billion reward. That has given it a 351.8% ROI and its remaining 35% stake controls the voting rights of F1’s Jersey-based parent company, Delta Topco. “This gives the stake a valuation of up to $8 billion – and if CVC achieves that price, it will push ROI to over 1,000%, making it the most profitable deal in the investment house’s 34-year history, said The Guardian, adding that CVC “made more from F1 than any other owner in the sport’s 65-year history, including Bambino, the family trust of its chief executive, Bernie Ecclestone,” who holds 5.3% whith his Bambino Trust holding another 8.5%. U.S. asset management firm Waddell & Reed (NYSE: WDR) is said to hold a 20.9% stake in F1. “Norways’s Norges sovereign wealth fund owns around 4.4% of the company whilst J.P. Morgan has a 3.1% stake,” said Forbes auto-racing contributor and Formula Money co-author Christian Sylt, who added that “a further 3% is owned by the Texas Teachers’ pension fund with around 2.9% in the hands of money manager BlackRock.” F1’s governing body, the Fédération Internationale de l’Automobile (FIA) has a 1% stake, according to The Guardian, and the remaining 4.5% of Delta Topco is held by advisers and management. F1’s parent company has revealed that “its operating profits accelerated by $76.3m to $329.9m last year as a fall in the value of sterling reduced its costs,” according to The Telegraph. “Recently-released accounts for Luxembourg-based Delta 2 show that in the year-ending December 31 2015 total costs were down $77.5m to $1.3bn on revenue of $1.7bn.” “Delta 2’s revenue is derived from four main sources – sponsorship, corporate hospitality, TV rights and race hosting fees which are believed to be the biggest cash generator coming to around $715m annually,” The Telegraph added. Headquartered in Luxembourg, CVC Capital Partners is one of the world’s leading private equity firms. Founded originally in 1981 as the European arm of Citicorp Venture Capital, the CVC Group today employs some 300 people throughout Europe, Asia and the US. The firm was spun out from Citicorp in 1993, as an independent private equity firm. The CVC team’s local knowledge and extensive contacts underpin a proven track record of over 30 years of investment success. CVC manages capital on behalf of over 300 institutional, governmental and private investors worldwide, having secured commitments of more than US$71 billion in private equity, credit and growth funds. M&A ACTIVITY AND GROWTH OUTLOOK IN RELATED EUROPEAN SPORTS-BETTING AND GAMING INDUSTRY CVC has a strong track record in the closely related sports-betting and gaming industry through its strategic investments in Sky Bet (UK), as well as its previous investment in William Hill. Three months ago, CVC acquired Italian gaming and payments operator Sisal Group SpA from private equity firms Apax Partners, Permira and Clessidra for €1 billion. Earlier this year, CVC Capital acquired a majority stake in German gaming company Tipico for close to €1.5 billion ($1.68 billion). In December 2014, CVC acquired Sky Betting and Gaming for £800 million, consisting of five core brands Sky Bet (sports betting), Sky Vegas (online in-browser casino), Sky Casino (premium online casino, live table games), Sky Poker (online poker) and Sky Bingo (online bingo). CVC also made previous investments in British sports betting operator William Hill (2002 IPO exit, at 314% ROI) and the IG Group, a digital trading and betting platform. “Sports betting contributed substantially to Sisal’s revenues (in 2015), with the Italian market growing by 24.7 percent compared with 2014,” said gaming industry analyst Joss Wood. “The March (2016) revenue figures issued by regulator AAMS show Sisal ranked fourth for online sports betting with monthly revenue of €23.4 million ($26.8 million).” “Gaming companies with a larger online presence are likely to see higher revenue and EBITDA growth over the next 12-18 months than those more focused on traditional land-based business, as the gradual shift online continues, mobile phone and tablet penetration rises, and fast-growing demand for online games increases,” said Moody’s vice president and senior analyst, Donatella Maso. UK-based William Hill Plc has the biggest online exposure by revenue, while pure online operator Sky Bet (Sky Betting & Gaming) has the most significant presence by percentage of total revenue. Conversely, Ladbrokes Plc is one of the largest gaming companies in the UK but its digital division still lags its peers and it reported negative EBIT in 2015, according to Moody’s. While SNAI SpA’s revenues have surpassed Sisal’s following its acquisition of Cogemat SpA and it has gained leadership positions in retail sport and horse betting, “Sisal will remain more profitable mainly due to its more favorable product mix,” Maso said. SNAI is Italy’s second-largest gaming company after International Game Technology. SNAI is also the leader in sports and horse betting and the third-largest concessionaire of amusement with prize machines and the second-largest of video lottery terminals by turnover. The online sector’s fundamentals are expected to remain positive for at least the next two to three years, which will support high single-digit growth rates despite regulatory and tax pressures. Potential legalization of online gambling or further liberalization of the rules that already govern it in some European markets and US states offer growth opportunities for large online gaming operators, which could offset uncertainty in regulatory regimes. Europe, in particular, continues to see the creation of an increasing number of new regimes that permit licensed and regulated betting, notably through interactive platforms, and which is gradually removing the once dominant monopolistic approach favoring the lottery sector, according to the European Gaming & Betting Association (EGBA). The continuing growth of professional sport and associated betting markets on a global scale, as a direct result of consumer demand driven by technological advances, has provided both business sectors with clear fiscal benefits and further strengthened their symbiotic relationship, says the EGBA. This has manifested itself in a range of mutually beneficial commercial ventures through direct sponsorship of sporting events, sportspeople and clubs, along with numerous indirect benefits to both products from media advertising deals around sport (where legislative frameworks permit). In recent years, online gaming markets — including sports betting, poker, casino, bingo, lottery — have grown rapidly to €36.9 billion in 2014 from approximately €6.6 billion in 2003, and are expected to grow to approximately €42.8 billion by the end of 2018, says Moody’s. The online gambling sector offers growth opportunities for European gaming companies in 2016-17 versus traditional brick-and-mortar operations, despite likely pressure from increasing taxes and regulation, says Moody’s Investors Service. The recent wave of M&A is likely to continue as operators look to become bigger and more diversified to offset rising costs and compete more effectively. Operators will also increasingly look to develop technology platforms in-house, such as William Hill’s Project Trafalgar, to limit their reliance on third-party providers and reduce customer acquisition and marketing costs, Moody’s added. Photo: (L-R) Bernie Ecclestone, CEO of Formula One Group, with Donald Mackenzie, Co-Founder and Co-Chairman of CVC Capital Partners.]]>

Roberto Ongpin to Exit Philippine Online Gambling Tech Leader PhilWeb

Roberto Ongpin to Exit Philippine Online Gambling Tech Leader PhilWeb

Forbes. Aside from PhilWeb, he is the chairman and CEO of real estate company Alphaland (ALPHA) and mining company Atok-Big Wedge Co (AB), and a director of San Miguel Corp. (SMC), PAL Holdings (PAL) and Petron Corp (PCOR). He’s also the chairman of Alphaland Balesin Island Club (ABICI). In Hong Kong, he’s a director of Shangri-La Asia and deputy chairman of the South China Morning Post, both listed on the Hong Kong Stock Exchange. He is also a director of UK-based Forum Energy PLC. His other past and present major holdings include Brixton Energy & Mining, Philex Petroleum, Philex Gold Holdings, Philex Gold Philippines, Silangan Mindanao Exploration Co., Silangan Mindanao Mining Co., and Petroenergy Resources. Since June 30, when they closed at P24.40, PhilWeb shares started plunging after Duterte ordered a stop to online gambling at his first cabinet meeting. The company’s shares closed at P6.72 on September 5, after the announcement of Ongpin’s official divestment plans and temporary departure from the Philippines. PhilWeb, originally known as South Seas Oil and Mineral Exploration Co. Inc. when it was founded in 1969, was renamed as South Seas Natural Resources Inc. in 1984. In 2000, it changed its business focus to become an Internet company and changed its name to PhilWeb.Com Inc., and was subsequently renamed as PhilWeb Corp. in 2002. In 2003, the company received a license from the Philippine Amusement and Gaming Corporation (PAGCOR) to launch e-Games Stations consisting of Internet cafes exclusively dedicated to casino games, which become its primary business. With PhilWeb’s technology patrons can choose from more than 300 casino games, including baccarat, blackjack, various slot machine games, video poker and sports-betting. PhilWeb’s subsidiaries include BigGame Inc., e-Magine Gaming Corp., PhilWeb Asia-Pacific Corp., PhilWeb (Cambodia) Ltd., and Guam Sweepstakes Corp., among others. There are reportedly 268 operating e-Games cafes across the Philippines, the majority of which are owned and managed by independent operators. “After having resigned as chairman of PhilWeb, and after having made several offers to PAGCOR, all of which have been either rejected or ignored, it has become obvious to me that, while I remain a shareholder of PhilWeb, there is no chance that PhilWeb will be allowed any favorable reception on any proposal to PAGCOR,” said Ongpin. “Regrettably, it appears that I have no other choice but to totally exit from the company for it to have a chance to survive.” ONLINE GAMBLING AND GAMING M&A ACTIVITY The move comes a few months after Montreal, Canada-based Amaya Inc. (NASDAQ: AYA; TSX: AYA), the world’s biggest publicly listed online gambling company and owner of PokerStars, said it hired Barclays to explore a sale, as its chairman and CEO David Baazov, considered the “king of online gambling,” was forced to resign amid accusations of insider trading. Three months ago, private equity firm CVC Capital Partners acquired Italian gaming and payments operator Sisal Group SpA from private equity firms Apax Partners, Permira and Clessidra for €1 billion. Earlier this year, CVC Capital acquired a majority stake in German gaming company Tipico for close to €1.5 billion ($1.68 billion). In December 2014, CVC acquired Sky Betting and Gaming for £800 million, consisting of five core brands Sky Bet (sports betting), Sky Vegas (online in-browser casino), Sky Casino (premium online casino, live table games), Sky Poker (online poker) and Sky Bingo (online bingo). CVC also made previous investments in British sports betting operator William Hill (2002 IPO exit, at 314% ROI) and the IG Group, a digital trading and betting platform. “Sports betting contributed substantially to Sisal’s revenues (in 2015), with the Italian market growing by 24.7 percent compared with 2014,” said gaming industry analyst Joss Wood. “The March (2016) revenue figures issued by regulator AAMS show Sisal ranked fourth for online sports betting with monthly revenue of €23.4 million ($26.8 million).” “Gaming companies with a larger online presence are likely to see higher revenue and EBITDA growth over the next 12-18 months than those more focused on traditional land-based business, as the gradual shift online continues, mobile phone and tablet penetration rises, and fast-growing demand for online games increases,” said Moody’s vice president and senior analyst, Donatella Maso. UK-based William Hill Plc has the biggest online exposure by revenue, while pure online operator Sky Bet (Sky Betting & Gaming) has the most significant presence by percentage of total revenue. Conversely, Ladbrokes Plc is one of the largest gaming companies in the UK but its digital division still lags its peers and it reported negative EBIT in 2015, according to Moody’s. While SNAI SpA’s revenues have surpassed Sisal’s following its acquisition of Cogemat SpA and it has gained leadership positions in retail sport and horse betting, “Sisal will remain more profitable mainly due to its more favorable product mix,” Maso said. SNAI is Italy’s second-largest gaming company after International Game Technology. SNAI is also the leader in sports and horse betting and the third-largest concessionaire of amusement with prize machines and the second-largest of video lottery terminals by turnover. The online sector’s fundamentals are expected to remain positive for at least the next two to three years, which will support high single-digit growth rates despite regulatory and tax pressures. Potential legalization of online gambling or further liberalization of the rules that already govern it in some European markets and US states offer growth opportunities for large online gaming operators, which could offset uncertainty in regulatory regimes. Europe, in particular, continues to see the creation of an increasing number of new regimes that permit licensed and regulated betting, notably through interactive platforms, and which is gradually removing the once dominant monopolistic approach favoring the lottery sector, according to the European Gaming & Betting Association (EGBA). The continuing growth of professional sport and associated betting markets on a global scale, as a direct result of consumer demand driven by technological advances, has provided both business sectors with clear fiscal benefits and further strengthened their symbiotic relationship, says the EGBA. This has manifested itself in a range of mutually beneficial commercial ventures through direct sponsorship of sporting events, sportspeople and clubs, along with numerous indirect benefits to both products from media advertising deals around sport (where legislative frameworks permit). In recent years, online gaming markets — including sports betting, poker, casino, bingo, lottery — have grown rapidly to €36.9 billion in 2014 from approximately €6.6 billion in 2003, and are expected to grow to approximately €42.8 billion by the end of 2018, says Moody’s. The online gambling sector offers growth opportunities for European gaming companies in 2016-17 versus traditional brick-and-mortar operations, despite likely pressure from increasing taxes and regulation, says Moody’s Investors Service. The recent wave of M&A is likely to continue as operators look to become bigger and more diversified to offset rising costs and compete more effectively. Operators will also increasingly look to develop technology platforms in-house, such as William Hill’s Project Trafalgar, to limit their reliance on third-party providers and reduce customer acquisition and marketing costs, Moody’s added. Photo: Roberto V. Ongpin, Chairman of Alphaland and Atok-Big Wedge; Former Chairman of PhilWeb Corp.]]>