On November 1st, 2016 the UK-based casino, betting and gambling operators Ladbrokes and Gala Coral finally managed to complete their long-awaited merger after months of negotiations, regulatory scrutiny and additional conditions imposed. The two brand’s merger created the biggest retail bookmaker on the territory of the UK, which is now known under the name Ladbrokes Coral Group Plc.
The combined company is now known as the largest retail bookmaker in the UK, with more than 3,500 betting outlets in Great Britain and Northern Ireland. Around 25,000 people are currently employed in the newly-formed entity’s operations in the country.
CMA and BHA Concerns
The proposed merger between Ladbrokes and Gala Coral provoked a lot of concern in the industry. The regulatory authorities in the country have expressed their anxiety from the fact that competition could be seriously hurt in some regions of the country.
First, it was the Competition and Markets Authority (CMA) which outlined the conditions under which Ladbrokes and Gala Coral would be allowed to finalise their merger agreement. The CMA asked the two companies to take certain measures in order to offset their domination in certain regions in order for the competition to be regulated.
The Competition and Markets Authority initiated the investigation of the planned merger in December 2015 and several moths later, in May 2016, announced that the two sports betting companies would be required to sell between 350 and 400 shops in order to complete the merger. The governing body revealed that there were a total of 659 local areas that have been identified as areas in which a substantial loss of competition may have been caused by the merger.
The British Horseracing Authority (BHA) also pushed the CMA to make sure certain measures are taken. In July 2016, the Chief Executive Officer of BHA Nick Rust wrote to the CMA to explain the BHA’s concerns related to the proposed merger between the two companies. He addressed the Inquiry Chairman of the deal, sharing that the members of the BHA were concerned about the future impact of the proposed, at that time, merger.
Still, apart from all obstacles for the two companies, they were given the green light by the Competition and Markets Authority after they completed all requirements in order for the deal to be finalised.
Ladbrokes-Coral Merger Effects on UK Gambling Industry
The combined entity instantly became the largest retail bookmaker in the UK. It managed to catch up with William Hill, which was the biggest bookmaking company in the country until recently, as the combined market value of Ladbrokes and Coral surpassed the one of William Hill.
Before the merger was finalised, Ladbrokes and Gala Coral were the second and respectively, the third largest bookmakers in the UK. At that time, Ladbrokes had a total of 2,150 betting shops in Great Britain and 77 betting outlets in Northern Ireland. Coral, on the other hand, owned 1,850 retail betting shops in the UK before the deal was completed.
Currently, the combined entity has a portfolio of more than 3,500 betting shops and employs staff of around 25,000 people. In addition, the UK is not the only country where Ladbrokes Coral Group is the largest retail bookmaker. It is also number one by market value in Ireland, Spain Belgium. In addition, the company will be well-presented in Italy thanks to the local division of Coral – Eurobet.
Of course, nowadays, when the international gambling industry is constantly growing and becoming more and more competitive, it will not be enough for Ladbrokes Coral Group to be a leading force among the land-based bookmakers. In fact, the combined company is to be one of the largest online betting operators in the world, as both brands have been recently enjoying strong growth in their digital divisions. What is more, the entity has revealed that it plans to keep the Ladbrokes’ and Coral’s betting websites independent and separate from each other.
The truth is that the two companies’ merger have been a long process due to the concerns of the UK Competition and Markets Authority (CMA) and British Horseracing Authority (BHA). As mentioned above, the companies were forced to sell 359 betting shops because the authorities were concerned about the competition in certain regions of the country, where Ladbrokes and Coral dominated the market. Now the merger unites two of the most popular and well-established betting brands not only in the UK, but also on a global scale.
Before the deal was finally closed, there have been speculations regarding the eventual effects of Ladbrokes-Coral merger in terms not only to the industry as a whole, but also in terms of the punters.
Nearly 400 betting outlets were sold by the two companies in order for the regulatory authorities in the country to give their consent for the merger to be finalised. After the sale, the competition rates in some regions are expected to get back to normal. There were different opinions on the question if the combined entity would prefer to merge their shops, too, or not. At this point, the company has not demonstrated such intentions and revealed it is to keep its brands separate as each of them had its own heritage and market presence.
With such a great brand recognition for both names, keeping them both intact makes a perfect sense, so it be wise of Ladbrokes-Coral to remain focused on consolidating each of the brands separately, so that there would not be too many duplicate roles for the group’s operations.
Ladbrokes Coral Group Future Strategy
After completing the merger, the combined group revealed its ambitions to consolidate its presence by becoming a key player not only in the UK, but also in every regulated global gambling market where it operates. The company clearly stated that as a combined group, it is currently the largest gambling operator on the territory of the UK, but it also has a strong international presence.
Thanks to the fact that Ladbrokes Coral Group operate in global betting and gaming markets, the company has a great number of opportunities for expansion. The combined entity also revealed its intentions to use the great variety of opportunities it has to generate further growth on a global scale.
Strategic Objectives
After the merger between Ladbrokes and Gala Coral was finalised, the combined Group shared its major strategic objectives, saying that the newly-formed company’s business strategy is based on bringing the combined strength and efforts of the two brands.
Investments are the first one of the key foundations of the company’s business strategy. Ladbrokes Coral Group revealed that the increased market value and overall scale of the company require large investments to be made in order for the company to stay ahead of its competitors. The Group will also follow a policy of constant improvements in terms of products and people.
The fact that both Ladbrokes and Gala Coral had a long history and great heritage turned out to be beneficial for the combined entity’s strategy for the future. Thanks to the long years of experience of the two operators before the merger completion, Ladbrokes Coral is now well-acquainted with the global casino, gaming and betting markets. This knowledge is planned to be combined with high-quality and seamless customer service through the entire range of company’s channels.
Opportunities for Growth
Speaking of its future strategy, Ladbrokes Coral Group also identified its most important opportunities for further growth.
The company sees online gaming and sports betting operations as a major opportunity for growth. According to the Group, it is exactly the online regulated markets that have been registering stable and rapid growth on a global scale, so the company should make sure it is well-placed there. Of course, the retail market of the UK is another key target of Ladbrokes Coral. After all, this is where the company is considered a leader in terms of multichannel offering.
International regulated gambling markets have always been in the scope of both Ladbrokes and Coral, so the combined company is to now remain focused on strong international growth. Expansion into new markets is also among the top priorities of the Group.
Ladbrokes Coral shared that it sees all its brands as a great combination in terms of company’s heritage, cash generation and customer loyalty. Although the two companies successfully merged, the combined entity’s managerial team intends to keep the Ladbrokes and Coral brands separate due to the fact that each of them has its appeal and presence in the market, and covers different segments of the market which could actually be a great advantage.
When it comes to efficiency, the combined operations of the companies offer the newly-formed entity the chance to use every brand’s knowledge and traditions, which on the other hand, would free up some cash for further investments.
- Author
Olivia Cole
