Power 50 – 2016

EGR Global

 

Welcome to the EGR Power 50 rankings of the online gambling industry’s most powerful operators. Please note, the following list was compiled last November and all financial numbers quoted are for 2016.

 

Once again we’ve been assisted in compiling our ranking by leading accountancy firm BDO. BDO’s deep knowledge and expertise of the industry has helped us collaboratively develop a proprietary model which accurately assesses and compares the financial strength of operators. This model looks beyond headline profits and revenues, deeper into operators’ stability, strength and growth trajectories.

 

We look long and hard at the less obvious sides of businesses – in areas such as geographic reach, product development and marketing strategy – to form an opinion of which operators hold the most power.

 

Of course, this is not always straightforward, especially given the private nature of some firms, but with invaluable insights from a group of industry experts, and relationships with the operators themselves, we are able to paint as accurate a picture as possible.

 

The result of all this is a comprehensive snapshot of the online gambling industry today. However, this list is by no means a prediction of the future performance of these companies. Consolidation and regulation can very quickly change the competitive landscape so we will have to wait and see how operators play their hand before seeing the impact on next year’s Power 50.

 

Click here for additional information on each company listed in the rankings (subscriber-only content).

01: Bet365 (01)

Bet365 Stoke City

Financials: Top of the pile with a 5% increase in revenues to £1.55bn and 10% rise in profits to £448m in year to March.

Geographic reach: Leads the field in a number of European countries such as Italy and Spain, and beginning to gain ground in Australia.

Strategy & impact: Firm leads by building scale on back of competitive margins and fast delivery of innovative products.

Influence & leadership: Bet365 is simply the firm most sportsbooks look up to, particularly around the area of in-play.

02: Paddy Power Betfair (N/A)

Paddy Power Betfair

Financials: The enlarged company saw growth in both legacy businesses with pro-forma H1 revenues up 20% to £612m and EBITDA up 34% to £140m.

Geographic reach: Company is largely UK and Ireland focused, firm is leader in Australia, has growing business in the US but wobbled in Italy.

Strategy & impact: Firm focused on integration of two businesses to deliver best of breed. Brands to remain distinct.

Influence & leadership: Few true rivals on exchange and leading fixed-odd brand, combined firm should strike fear in competition

03: GVC Holdings (08)

GVC brands

Financials: Pro forma NGR up 8% to €442m with clean EBITDA of €91.2m. Early growth in bwin brands promising.

Geographic reach: Spread far and wide and is particularly strong in Germany, South America and Eastern Europe.

Strategy & impact: Acquisition of bwin.party described as “transformative”. Building B2B business with addition of Betfred.

Influence & leadership: Kenny Alexander highly rated with firm quickly gaining a reputation for turning around failing businesses.

04: Amaya (02)

pokerstars-set-to-launch-in-czech-republic

Financials: H1 revenues increased 8% and EBITDA 12% with poker stabilising after posting an 11% revenue dip in Q1.

Geographic reach: Where isn’t Amaya? Firm operates in most major markets and recently made its return to the US.

Strategy & impact: Diversification has been a key element with the expansion into casino and sportsbook, coupled with poker innovation.

Influence & leadership: New CEO Rafi Ashkenazi well-respected. His emergence as a multi-vertical operator illustrates the direction the industry is moving.

Joint 05: Kindred Group (06)

Henrik Tjärnström CEO of Kindred Group

Financials: Strong with H1 revenues up 51% to £249m with EBITDA up 48%. Business saw growth across all core verticals and markets.

Geographic reach: A major player in the Nordics but Western Europe now its largest market. Yet to make splash Down Under.

Strategy & impact: Focus on in-house tech and completion of bolt-on acquisitions has paid off .

Influence & leadership: Operator goes quietly but effectively about its business. How it handles move to regulated markets will be key.

Joint 05: William Hill (03)

William Hill

Financials: Issued a profit warning in March. H1 online profits down 33% to £43.4m and net revenue declined 3% to £277.2m.

Geographic reach: UK makes up bulk of business but has seen recent growth in Italy and Spain. Australia overhaul yet to pay off.

Strategy & impact: The firm has put technology and international expansion at heart of strategy – may accelerate through M&A.

Influence & leadership: Despite a tough year, Hills remains a major force but may benefit from fresh pair of eyes with new CEO Firm continues to be a major force in the UK.

07: Sky Betting & Gaming (07)

Richard Flint, Sky Betting & Gaming

Financials: In rude health with revenues up 51% to £376.3m for year to June. Gaming grew 36% and sportsbook 64%.

Geographic reach: Focused predominantly on UK market but recently launched in Italy and plans to expand into Germany.

Strategy & impact: Positioning itself largely as a technology company and is thought to be inching closer to a public listing.

Influence & leadership: Firm has benefited from consistency with CEO Richard Flint having run the ship since its formation. An IPO awaits.

08: Ladbrokes Coral (N/A)

Ladbrokes Coral Victoria office

Financials: H1 digital revenues at Ladbrokes up 41% to £158.1m, while Gala Coral posted a 19% increase in Q3 net revenues.

Geographic reach: UK by far its biggest market but firm will have top three position in Italy and rapidly growing business in Australia.

Strategy & impact: Dual brand strategy opens up reactivation potential while continued transfer of retail customers to online will be key.

Influence & leadership: Jim Mullen will lead the combined firm despite the company losing out on the respected Carl Leaver in 12 months’ time.

09: 888 Holdings (10)

888 Holdings

Financials: Year started well with revenues up 19% to US$262m (£200m) in H1 2016, adjusted EBITDA up 8% to $44m (£34m).

Geographic reach: Continues with expansion across regulated markets in Europe and in a strong position should US ever open up.

Strategy & impact: Failed M&A attempts illustrated desire to buy a sportsbook. CRM and digital marketing capabilities key to success.

Influence & leadership: Itai Frieberger is considered one of the best operators in the industry, while the firm continues to beat the drum for further US regulation.

10: Betsson Group (09)

Ulrik Bengtsson, Betsson Group

Financials: Revenues up 13% in H1 to £180m but organic growth just 2% following poor margin in Q2 and investment into UK.

Geographic reach: While strong in Nordics firm also large player in Netherlands and Georgia following recent acquisitions.

Strategy & impact: Firm has taken a multi-brand strategy with, in most cases, two brands in each market. Technology a big focus.

Influence & leadership: Leads on in-house technology and recently built hub in London. Firm is still to prove itself in Western European markets.

11: BetVictor (16)

 

12: Hong Kong Jockey Club (14)

 

13: Jackpotjoy (12)

 

14: SBOBET (19)

 

15: Stride Gaming (31)

 

16: Betway (21)

 

17: 12BET (28)

 

18: Lottomatica (26)

 

19: Rank Group (25)

 

20: Pinnacle (38)

 

21: Fortuna (20)

 

22: 32Red (now part of Kindred Group) (32)

 

23: Betclic Everest Group (15)

 

24: Dafabet (Asian BGE) (23)

 

25: Sisal (41)

 

26: Tombola (27)

 

27: Cherry (N/A)

 

28: Lottoland (N/A)

 

29: Gamesys (17)

 

30: MFortune (33)

 

31: LeoVegas (24)

 

32: Tabcorp (34)

 

33: Paf (30)

 

34: Casumo (48)

 

35: 188BET (35)

 

36: Mr Green (29)

 

37: Zeal Network (46)

 

38: Gaming Innovation Group (43)

 

39: Panserve (Marathonbet) (37)

 

40: Svenska Spel (N/A)

 

41: Gaming Realms (44)

 

42: The Sun (39)

 

43: Francaise des Jeux (N/A)

 

44: Snaitech (40)

 

45: Danske Spil (47)

 

46: Betfred (36)

 

47: BGO Entertainment (47)

 

48: BoyleSports (49)

 

49: Sporting Index (N/A)

 

50: Webis (N/A)

 

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A huge thanks to our partner BDO for their hard work in helping us compile the 2016 Power 50. BDO is the world’s fifth largest accountancy and business advisory firm and one of the leading service providers to the egaming sector.