iGB Diary: GVC-bwin, Going binary, Fantasy reg, Only gorilla in town
Happy Friday igaming execs! Hot off the press GVC is looking to buy (parts of) bwin party. It worked with Sportingbet, so if it ain't broke... are you going binary? Fantasy sports regulation debate is bound to come up again and PokerStars, your friendly poker gorilla.
Hot off the press GVC has tabled a reverse takeover bid for bwin party. The latter’s market value was £730m at the time of writing and its share price was up 5%. It “has received revised proposals (including from GVC Holdings PLC) regarding a variety of possible business combinations”. It would be fascinating to know what GVC has offered and which parts of bwin it wants (bookmaking is GVC boss Kenny Alexander's core business). The company took on Sportingbet’s unregulated-grey markets when Wililam Hill acquired it in 2013 and, to be honest, has been ‘smashing it’ since. bwin refused to speculate any further this morning but its strategy of going after regulated markets is well known. Thus it would be a huge surprise if GVC opted to buy the whole of bwin, especially when its partial buy out of Sportingbet has been so successful.
Everyone’s going binary
Does it feel like the igaming industry is going either forex or binary at the moment? Former PKR chief executive Malcolm Graham joined mobile binary specialist GameTech in February, while Playtech has taken up its option to buy Avatrade and will look to roll out financial platforms to its licensees following its acquisition of TradeFX. So the headlines are all about the vertical and as iGB's very own Financial Partners Expo shows the sector is flying right now (see what you've done there, very good, Ed). However from a B2B perspective it’s worth wondering how much cross-over (paywall) there really is between ‘classic’ igaming operators offering sportsbook, casino etc. and financial betting; and would it cannibalise those companies’ core products? What’s undeniable is that the similarities between trading shares on the stock market and sports betting are striking. We’ve always said it, the banks should have let bookies look after their money, it would have avoided a lot of stress since 2008!
Any excuse to show some Earth Wind and Fire in their funk/disco prime is good for the Diary and since fantasy sports betting/daily fantasy sports are making so much noise at the moment… but what of regulation we hear you ask. In the UK most FSB/DFS providers and operators are licensed by the Gambling Commission but not in other EU markets or, of course, the US; which leaves MGM boss Jim Murren incredulous (paywall). The US scenario is affected by the illegality of sports betting in 49 of its 50 states, the fact that investors like the lack of DFS regulation or that NBA Commissioner Adam Silver is keen on betting. Moving forward it seems inevitable that the topic of FSB/DFS regulation will reappear at some point. Anyway, it’s Friday so enjoy Phil Bailey (without Phil Collins) in finest falsetto action.
Only gorilla in town
So PokerStars now owns 66% of the online poker market. Some might have thought the figure to be higher, but it still represents two thirds of the market and remember that PartyPoker in its pre-UIGEA prime owned around 50% of the market. The scene has changed beyond recognition since then and regulatory and legal costs mean operators have to deal with a very different environment. And when that happens, affiliates are often first in line in taking the hit when it comes to cost cutting, as PokerStars made clear a couple of weeks ago. The poker giant told affiliates that from 1 June it would only pay commission for players recruited in the past two years. This is to “ensure that the PokerStars affiliate program rewards affiliates who join PokerStars in introducing the game to new audiences, rather than the current program which disproportionately pays affiliates for rake generated by existing players”. Unsurprisingly many affiliates are unhappy about the new set up and feel the role they play in promoting poker is simply ignored. Meanwhile Stars, understandably, wants to focus on acquiring newer and fresher players. Of course this is a lot easier to do when you control two thirds of the market.
Have a great weekend!