Only a few weeks ago, the UK bookmaker Ladbrokes Coral and the Isle of Man-based gambling group GVC Holdings announced they reached an agreement on their merger negotiations. As revealed by the two companies at the time, Ladbrokes Coral is to be taken over by its online gambling rival GVC in a deal that was estimated to up to £4 billion.
The announcement came only two weeks after it became clear that the two companies had entered in “detailed” negotiations over a possible merger deal. The deal follows two previous attempts for a merger, which were unsuccessful at the time. Now, the merger comes at a time when the UK gambling sector has been aimed to consolidate in order for the operators to be more resistant to the pressure which local gambling regulators have put them under. Over the last few years, the UK Government and gambling regulatory authorities have imposing tighter control on gambling companies, and most recently controversial fixed-odds betting terminals (FOBTs) have been put under fire.
After the takeover is finalised, GVC Holdings is to hold a stake of approximately 53.5% in the global gambling giant to be created.
A few days ago, the gambling giant GVC Holdings posted its trading update for the last fiscal quarter and the full year ended on December 31st, 2017. The company revealed a stable increase of its fourth-quarter net gaming revenue (NGR), saying it has reached a record high since the acquisition of bwin.party in February 2016.
GVC-Ladbrokes Merger Effects on Isle of Man’s Economy
The massive takeover deal reached by the two companies is important not only for the UK gambling market, but also for the economy of Isle of Man. According to some market analysts, such as the gambling expert Warwick Bartlett, the island’s economy and more specifically its online gaming industry could draw benefit from the merger of the two gambling giants.
After the announcement of the takeover was made in December, Mr. Bartlett, who serves as CEO of the Global Betting and Gaming Consultants (GBGC), commented on the news for local media, saying that Isle of Man provided the certainty which gambling operators needed. According to Mr. Bartlett, the takeover deal between GVC Holdings and Ladbrokes Coral could help the island’s economy which has been facing certain difficulties over the last half a decade.
For the time being, the Isle of Man offers a favourable tax regime to gambling companies, so the fact that the local government welcomes such operators to the territory would be beneficial for both the companies and the local economy. Another as an advantage by some gambling operators is the fact that the island is currently not a member of the European Union, which is a good thing for the companies that do not want to comply with the rules imposed by the EU.
- Author
Olivia Cole
