BetMGM Part Owner GVC To Attempt Corporate Metamorphosis
GVC Holdings has unveiled a new corporate identity. Pending shareholder approval, it will discard its current name before the year’s end, and go by Entain instead.
In the US, GVC jointly owns and operates Roar Digital and the BetMGM brand, in partnership with MGM Resorts International. With the new identity, it will look to position itself more recognizably within the wider sports and entertainment industry.
The company also plans to turn over a new leaf in terms of compliance. It has pledged to pull out of all gray markets and operate solely in regulated ones going forward. It will also focus on using new technologies to protect its customers.
Today, we launch our new vision for the future to revolutionise our industry. We aim to do so by
-Maintaining a world leader status in responsible gaming
-Launching the Entain Foundation
-Using advanced technology to build safer play for allA new direction needs a new name. pic.twitter.com/vSHnYLPaMB
— GVC Holdings PLC (@GVCHoldings) November 12, 2020
New direction for GVC under new leadership
“Today marks an exciting new chapter for the Group, and an important step forward in achieving our ambition of being the world leader in sports betting and gaming,” said GVC CEO Shay Segev.
“Under our new corporate identity, we will continue to use our unique technology platform to grow in both existing and new markets, innovate, reach new audiences, enhance the customer experience, and provide industry-leading levels of player protection.”
The new strategy signals a significant change in messaging for GVC under its new leadership. Segev took over the top job from Kenny Alexander in July.
Under Alexander, GVC was known for its aggressive M&A strategy and activity in legally murky markets like Turkey. Although it disposed of its business interest in that country, it didn’t do so quickly enough for some regulators. This has gotten the company into hot water with the Nevada Gaming Commission and the UK tax authorities.
That aspect of GVC’s business had a lot to do with the character of Alexander himself. He is a gambler of the old school who owned racehorses and memorably turned up for an investor call with too little sleep and a pocket full of poker chips from the night before.
Conversely, the new identity appears to be an attempt to position Entain as a more grown-up company. In this regard, it may be attempting to follow in the footsteps of Flutter, the conglomerate that now owns FanDuel, Fox Bet and PokerStars, among other brands. Both companies are listed on the London Stock Exchange, yet Flutter trades on a significantly higher earnings multiple.
Entain to adopt sustainability charter
As part of this makeover, Entain announced a new “sustainability charter.” The commitments it will take on include the following:
- A commitment that 100% of the Group’s revenue will come from markets that are nationally regulated by the end of 2023, and 99% from regulated or regulating markets by the end of 2020,
- Launching the Advanced Responsibility & Care (ARC) program. This uses proprietary technology to enhance player protection through additional checks as well as improved monitoring and interventions,
- Embedding responsible gambling into exec remuneration policy, and
- Pursuing the highest standards of corporate governance.
Green field opportunities
While the commitment to regulated markets sounds dramatic, in practice the shift should not be too onerous. At the end of 2019, GVC said 96% of its revenues came from regulated or regulating markets. Getting to 99% and from there to 100% will be a matter of attention to detail.
Within the US, GVC pointed to BetMGM as its number one strategic priority going forward. The brand currently has an 18% share of markets where it is live, according to GVC.
The group also pledged to seek out new audiences, notably esports fans.
“New technology-enabled forms of entertainment are constantly emerging. We intend to be at the forefront of capturing them,” the company said.
“For instance, esports and digital gaming are becoming the hub for a rapidly growing audience out of which are evolving new betting markets, and we see significant potential for us in this area.”
Financial markets seemed somewhat unconvinced by the new strategy. Shares fell 2% in London today, perhaps anticipating the costs of compliance and loss of certain markets.
You may also like...
