By Paul Nicholson
August 26 – Consolidation in the betting market is continuing with Irish bookmaker Paddy Power and betting exchange Betfair set to merge in a multibillion euro creating a combined business of more than €1.5 billion annually.
Recently bookmakers Ladbrokes and Gala Coral merged to create a £2.3 billion betting group, and there is currently a battle on between 888 and GVC Holdings who are in a bidding war for online gambling firm Bwin.party Digital Entertainment.
When it comes to football, Paddy Power has a different marketing approach to other gaming company rivals preferring to run its own media campaigns, usually based around humourous and often edgy ads, as opposed to partnering with clubs and leagues as official sponsor.
The company funded David Ginola’s run at the FIFA presidency, one campaign that probably didn’t go to plan. But most of their ads have hit the mark with punters and the company says that its operating profit is up 68% for the first six months of the year.
In contrast Betfair have been more prepared to work with clubs, having Premier League deals with Arsenal and Sunderland and, until this season, Liverpool.
In terms of company valuation, Paddy Power is the larger of the two firms with a market capitalisation of £3.46 billion, versus £2.43 billion pounds for Betfair, which has seen its shares rise by 140% in a year on the back of strong revenue growth.
The combined company would have revenues of more than £1.1 billion. The rationale for the merger is that it would bring greater economies in acquiring new customers and would broaden the base of the business.
The companies have also identified opportunities to expand in Europe, the US and Australia.
Contact the writer of this story at moc.l1734830199labto1734830199ofdlr1734830199owedi1734830199sni@n1734830199osloh1734830199cin.l1734830199uap1734830199