GVC embarks on strategy to own retail tech journey
FTSE 100 operator developing SSBTs in-house to reduce product strain on overall NGR
GVC is investing heavily in its land-based portfolio as it bids to power the retail customer journey with proprietary technology.
The operator – which will rebrand to Entain in December – has already rolled out its own point of sale system in Coral shops with Ladbrokes locations to follow in 2021.
According to chief executive Shay Segev, GVC is also developing proprietary self-service betting terminals (SSBTs) to deploy across its bricks-and-mortar environment in the future.
“We plan to extend to other tech in shops including SSBTs,” Segev told analysts on 12 November. “This project is ongoing and we are not going to rush into it.
“It is hard to estimate [when the project will be complete] but I would say around 12-24 months before everything is fully operational,” he added.
SSBT machines in Ladbrokes and Coral shops are currently provided by Playtech BGT Sports.
Segev revealed GVC employs more than 3,000 tech developers which allows the operator to own the entirety of its online technology – a strategy he is keen to replicate across retail.
“We have the capability to develop technology and we own 100% of our tech in the digital space which is a core point of DNA for us,” said the Israeli.
GVC CFO Rob Wood suggested tech and product costs impact annual net gaming revenue (NGR) to the tune of 7% or 8%, a figure which could be lowered by reducing dependence on suppliers.
“That figure compares favourably to our competitors who pay double digits for those services,” said Wood. “But we can scale beyond that to get the percentage down even further over time.”
One City analyst questioned whether investing in retail was wise due to the trend of customers migrating online with shops closed as a result of the Covid-19 pandemic.
“Retail is quite a core part of our business – it is performing well and we see it contributing for years to come,” replied Segev. “It provides £100m of free cash for our business and gives us a long-term advantage of marketing via the brands [in shops].
“We ran a pilot for shops of the future in 2019 which was interesting and the industry is heading in that direction, so I do see long-term sustainability for retail.
“There might be some adjustments, but the future will tell us more,” he added.
Despite his belief in retail, Segev confirmed GVC had no desire to bid for William Hill’s shops should they become available in the aftermath of its £2.9bn takeover by Caesars Entertainment.
“Never say never,” said Segev, when asked if GVC would look at a deal for Hills’ online-focused non-US assets. “We have a strong track record of integrating and acquiring businesses and creating synergies.
“We’d do it if it accelerated value for our shareholders, but we would not be interested in the retail business. We might look into the digital business, but it is not a high priority on our list,” he concluded.