Britain has had a long history with sports betting, and when bookmakers first began being able to open shops on the high streets in 1961 following the introduction of the 1960 Betting & Gaming Act, stores were appearing at a rate of one hundred per week. These became one of the country’s most well-renowned attractions, with punters heading out frequently to place their bets on horse races and so on. Throughout the years, a number of big names popped up in the land-based scene, including William Hill, Ladbrokes, Coral and Victor Chandler.
However, can it be said that in recent years, the British bookmaker has been cast aside in favour of foreign investment companies taking over? Several brands that were founded and went through exponential growth in Britain have since entered into mergers with foreign companies, and some have been completely consumed by them altogether. With just one or two big brands remaining as 100% British sportsbooks and smaller independents dying out, could it really be that the end of the British bookmaker is nigh?
We’ll be taking a look into the recent takeovers of different betting companies and what they have resulted in. Plus, why have these acquisitions happened? Has there been a huge effect on the British betting industry since?
Mergers and Acquisitions Throughout the Years
While it is true that mergers and acquisitions in the sports betting world aren’t specifically a new thing, the more recent ones have been the ones that have featured big-name brands. Yet, back to the year 2000, the Sports Internet Group was acquired by BskyB (which now operates as Sky Betting and Gaming). And while this is a British-based company, it is owned by Canadian organisation, The Stars Group. That being said, while this is one of the highly known companies within the country, it’s not really known for its betting options, and more so for its television and media services.
Other mergers and acquisitions throughout the past 20 years have included:
- Flutter.com merging with Betfair in 2001
- Maria Holdings acquired by Unibet in 2007, which became the Kindred Group in 2016
- Sportsbet.com.au acquired by Paddy Power in 2010
- Sky Betting and Gaming acquired by CVC Capital Partners in 2015
- Open Bet acquired by NYX Gaming in 2016
- Ladbrokes merged with Gala Coral in 2016 to become Ladbrokes Coral
- Betfair merged with Paddy Power in 2016, which became Flutter Entertainment in 2019
- 32Red acquired by Kindred Group in 2017
- Crownbet, Sky Bet and William Hill Australia acquired by The Stars Group in 2018
- The Stars Group acquired by Flutter Entertainment in 2020
That’s just a small sample of the takeovers and mergers that have taken place over the past couple of decades, too. Some of those were simple merges that resulted in a bigger UK-based brand, although others in that list (and ones that have yet to be mentioned) have resulted in takeovers by companies from other countries.
Major Mergers Are Fairly Recent
While mergers of large betting companies have been fairly commonplace since the government allowed sports betting shops onto the high street in the 60s, major events in this sphere have not occurred since relatively recently. This has been driven in part by the much higher revenues that have been seen through remote gambling.
With the UK having had legalised betting for a long time its companies have become world leaders in the market. Many of these companies have grown dramatically since in the internet age becoming massive public entities. This has made them attractive for cash rich investment groups from the US and other countries, in the same way other British industries have been picked apart by bigger foreign companies.
The Paddy Power and Betfair brands actually operated quite happily alongside one another. However, it was in 2016 that it was confirmed that the two brands would merge and become Paddy Power Betfair. The reason for this? Online betting activities. While high street stores saw their attendance levels (and subsequently, their revenue) drop, online sites witnessed a spike in activity instead. Therefore, it was an ideal situation for Paddy Power to protect its own name by merging with the Betfair site, which had introduced its own Exchange system.
The other example of a large merger that we would like to draw your attention to is GVC’s decisions to purchase Ladbrokes Coral. That occurred in 2018, which was just a short time period after Ladbrokes and Coral had merged together themselves. GVC is a British sports betting and gambling company though, so this kept the brands under the British banner, and they still operate under the Ladbrokes Coral name.
The US Sports Betting Market Triggers a Race
Coral and Ladbrokes remain as part of GVC as noted, but Paddy Power Betfair, following their own merger, has become a part of The Stars Group and then Flutter Entertainment. That was a £10 billion deal that went through in 2019, and it was agreed upon with one eye towards the new and rapidly expanding US market for sports betting. It went on to create the world’s largest online betting company as far as revenue is concerned. And Flutter shareholders gained a 55% majority of an online gaming group that would have had combined revenues of £3.8 billion in 2018.
Investors pretty much immediately gave their approval to the all-share takeover, and it sent shares in Flutter up by 20%. At the same time, the deal involved a tie-up with the US broadcaster Fox Sports, and this is already the betting partner for the Canadian-based TSG. Within that deal, Fox Sports gained the right to acquire 18.5% of Flutter’s US fantasy sports business FanDuel from 2021.
Flutter purchased FanDuel in 2018 in a bid to establish its own US bulkhead following the US Supreme Court’s decision to overturn the PASPA law. That gave each of the 50 states the possibility of legalising sports betting within, which is something that they didn’t have before.
Therefore, with a new and exceptionally lucrative market on the horizon, British bookmakers scrambled to get themselves together in order to enter into it. Now, Peter Jackson, who operates as the CEO of Flutter, is able to lead the combined business that will serve 4 million gamblers in 100 markets. This, he said, would help to “turbocharge” Flutter’s strategy of expanding into new markets. It already has a strong foothold across the United Kingdom, Ireland and Australia, too.
Sport betting is now legal in 11 of the American states, and it’s likely that more will proceed with official bills to legalise it, too. And William Hill has also sought out its own position in the US market.
Caesars Entertainment laid all of its cards on the table very recently when it laid out details of a potential £2.9 billion offer for William Hill to sell its non-US assets. The owner of the American gambling company finished due diligence and entered into advanced discussions with Hill over an offer that would be worth 272p per share. Caesars also owns the Playboy Club in London, but it faced stiff competition for William Hill, after interest was generated by the private equity firm Apollo.
However, due to the fact that the company already operated a joint venture with Hill, which allows the UK firm to run online sports betting operations through Caesars’ market. The CEO of Caesars, Tom Reeg said that the opportunity to combine the land-based casinos, the sports betting opportunities and online gaming in the states was “a truly exciting prospect”. Caesars warned William Hill that if it had gone ahead with the deal laid out by Apollo, it would lose the joint venture in Caesars casinos, too.
William Hill set up the company in the 1930’s and named it after himself. It became perhaps the most well known British bookmaker with the most shops but since the merger Caesars have said they will sell off the shops and online assets in Europe. This could mean the end of the William Hill name on UK high streets and the death of a British institution.
Which Brands Remain as 100% British Operations?
For the time being, there are just two brands that can really be considered as independent British operations. Online-only Bet365, which started out back in 2000 from a portacabin in Stoke-on-Trent, is already at a large enough level that it doesn’t specifically need to expand beyond its borders. That’s not to say that it won’t at some point, but it’s one of the UK’s largest names and isn’t likely to require any assistance from foreign-based brands as of the moment. The fact it has remained private is one of the biggest reasons it has remained independent.
The other more traditional and older name is Betfred, which was founded by Fred and Peter Done as a single shop in Salford in 1967. Similar to 365 it remains in private hands, which allows it to rebuff foreign investment companies. In 2004, the company’s turnover was over £3.5 billion, which had risen from £550 million in the previous year. It was in 2004 that Betfred also launched its own online sportsbook, providing sports betting, casino gaming, bingo, lotteries, online poker and virtual sports alongside.
September of 2017 saw Betfred celebrate its fiftieth year of business. Throughout those years, it has operated as the official sponsor of various sports teams as well, such as being the official betting partner of Manchester United from 2006 to 2013, sponsorship of the Scottish League Cup from May 2016, sponsorship of the World Snooker Championships from 2009 to 2012, and it started a three-year period as the main sponsor of rugby league’s Super League in 2016.
Of course, there’s nothing that says Bet365 or Betfred won’t also be gobbled up by foreign investors in due course. It does appear that the country has created a hugely popular industry, only to pretty much sell it off to the highest bidder, regardless of if they’re British or not. Companies like William Hill, Ladbrokes and so on simply became so large that they were easily acquired by huge US companies in most circumstances. Although, this is the case with many big-name industries, which have pretty much been swept up by large US investors throughout the years.
Ambitions Move from the UK to the US
It hasn’t really been a secret that the UK has been wanting to crack the US gambling scene for a while now. There’s only so much expansion that can take place within the UK and across Europe before companies become a bit restricted. However, there is a difference between offering your services to the US sports betting market and selling your entire company to US firms.
Unfortunately, throughout the years, very little ever came of the ambitions of these UK brands. However, the value of London-listed gambling firms like 888, Paddy Power Betfair and William Hill, went on a huge upsurge in 2019 following the removal of PASPA. Gambling executives rejoiced at this move. However, the ambition was almost instantly under threat as well, thanks to the Wire Act issue. That featured certain prohibitions which swept beyond sports gambling. And once execs learned of this, so did many others, leading to share prices dropping back to their former levels and below.
Due to that, these companies were left as ripe for the picking, so to speak. William Hill for example, saw its share price almost halve in the remainder of the course of 2019. Of course, Hill pushed itself to the forefront of efforts in cracking the US market, and that didn’t disappoint where the company itself is concerned. The only drawback to such was in the sense that Hill and others pretty much became US gambling companies, leaving the British side of things behind effectively.
Looking to the Future
How does the future look for the great British bookmaker? Well, considering that there are only two major bookies that can be considered as still being British now, it’s not the most impressive setup, one can say. Especially when it was pretty much flush with gambling companies throughout. Yet, it’s what always happens in today’s world. Capitalisation is a primary function of most countries, and if a business can be acquired or merged with another for a great price and a prospective future, then why wouldn’t it go for it?
Could new British bookmakers soon appear? Well, it’s possible, but the companies haven’t stopped operating in the UK, they’ve simply been taken over by foreign-based brands instead. Therefore, there isn’t really a space for them to open their doors and get a proper foot in the door because there are so many larger companies that would easily consume them in an instant. How does the future look for UK based gambling companies? Fairly bleak, if we’re honest!
