MGM Resorts has hinted that it may return with another bid for Ladbrokes owner Entain after last month’s £8 billion offer was rebuffed. The US firm decided against returning with an improved offer, and it is now prevented from mounting another takeover bid until 2022 under the Companies Act 2006.
Yet Bill Hornbuckle, chief executive at MGM, gave a strong hint that another bid would be forthcoming when he delivered the firm’s full-year earnings presentation this week. “We’re in a quiet period now. We’ll have to see what happens. But I will say this: MGM intends to play in this space on a substantive and significant level on a global basis.”
The Entain board rejected MGM’s last bid, arguing that it undervalued the company and questioning the strategic rationale for a merger. The companies have launched a successful joint venture, BetMGM, in the United States, blending the MGM brand with Entain’s operational expertise.
Meanwhile, Entain is continuing its efforts to buy Baltic-facing betting operator Enlabs. Entain bid SEK 2.8 billion for the firm. Shareholders owning 42.2% of Enlabs have backed the deal, but fellow shareholders representing 10.7% of Enlabs rejected it, claiming the offer “materially undervalues” the business, and concluding that the acquisition represented a good deal for Entain, but not for Enlabs minority shareholders.
Entain has extended the acceptance period for its proposed acquisition from February 18 to March 18. “The offer and the acquisition of Enlabs is conditional on, among other things, the receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, including from competition authorities and gaming authorities, in each case on terms which, in Entain’s opinion, are acceptable,” it said.
Paddy Power and Betfair owner Flutter Entertainment says the gambling industry is responding to concerns around addiction. This week sees the close of the Gambling Commission’s consultation on customer interaction, which forms a significant part of the UK government’s plans to overhaul the Gambling Act.
Writing in City AM, Flutter chairman Ian Proctor said: “We have developed a new framework which we believe gets the balance right and are calling it the Affordability Triple-Step – setting out three layers of protection to ensure we can step in and protect the most vulnerable.
“Firstly, we believe that our customers’ affordability journey should begin at registration where we will apply appropriate spend limits for customers with financial red flags; this is the start of our risk-based approach, using data to ensure we don’t put unnecessary barriers in the way of the majority of customers while taking action for customers that might benefit from set limits.
“Our second layer is ongoing and real-time monitoring of all customers through our Safer Gambling Controls. We’re proud of the progress that’s been made at Flutter, and by the wider industry, to take innovative steps to monitor and protect our customers. Through this we can intervene when we see concerning behaviour.
“Finally, we acknowledge the need for a spending backstop if, on the rare occasion, the first two layers of protection miss someone at risk of harm. This will ensure runaway losses cannot rack up and we have a mechanism to intervene at the right time. This backstop should be bespoke and tailored to different customers and set by operators to represent the breadth and diversity of their customer bases. There should be lower backstops for younger customers as generally they have lower affordability and higher risk of potential harm.”
William Hill chief executive Ulrk Bengtsson warned the government not to take the threat of the black market lightly when conducting its review. “An evidenced-based and sensible review we think can be very good for the industry,” Bengtsson told SBC News. “I do realise we have a huge obligation to make sure our customers play within their means.
“We should do a reasonable amount of affordability checks, but it can’t be to the extent where it is so intrusive that we force these people out. So it’s all about finding the right balance to keep the customers in the UK ecosystem; to keep them safe, to secure the tax base and to secure the industry.”
A report from PwC, commissioned by the Betting & Gaming Council found that the number of Brits using illegal bookmakers has increased from 210,000 to 460,000 over the past two years. “We just need to realise that this is real and this exists,” said Bengtsson. “These figures appear to have increased because of the tighter regulations introduced over the last couple of years.
“While lawmakers need to be applauded for [having a market leading gambling regime] you need to be very careful that when you re-do the legislation that you don’t end up where most of the other regulators have ended – with up to 20% of the market being controlled by offshore companies. I think that would be a very, very bad outcome for this review and I don’t think that politicians, the treasury or the anti-gambling lobby want that. We don’t want that and neither do the customers. No-one wins in that scenario other than shady operators.”