EGR Power 50 2020: GVC Holdings/Entain (3)
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3. GVC Holdings/Entain (2)
FINANCIALS: Q3 performance capped 19 quarters of double-digit NGR growth. Due to coronavirus, NGR fell 11% year-on-year to £1.62bn as profits dipped 14%
STRATEGY & IMPACT: An acquisition-hungry business that doesn’t hesitate to pull the trigger for the right target. RG and sustainability at the heart of the company’s future
GEOGRAPHIC REACH: Europe, Africa and Latam highlighted as new opportunities. Will be a protagonist in the regulated German and Brazilian markets
INFLUENCE & LEADERSHIP: CEO Shay Segev had big shoes to fill following Kenny Alexander’s exit, but both Segev and CFO Rob Wood know the business and the industry inside out
This year has been dominated by two big developments at the FTSE 100 giant, the most recent being the unveiling of a new name and rebrand from GVC Holdings to Entain PLC. Far more seismic, though, was a changing of the guard at the top in July with the sudden departure after 13 years of Kenny Alexander, who revealed lockdown had caused him to reassess his priorities.
The tough-talking, gregarious Scot is credited with steering GVC from a £26m start-up with one German online casino to what is now a £6bn international giant with 20-odd brands and 24,000 employees, including 3,000 engaged in tech. Alexander’s immediate successor as CEO was his heir apparent in the shape of the more reserved but equally capable and experienced COO Shay Segev.
Segev, who was instrumental in the complex integrations of Ladbrokes Coral and bwin.party, soon followed the GVC playbook with the bolt-on acquisition in October of Portuguese operator Bet.pt for an upfront fee of €50m. The 44-year-old Israeli has set the operator on the path of prioritising long-term sustainability over short-term gains, including eradicating grey-market exposure. Currently, 96% of revenue is derived from regulated or regulating markets, but GVC has vowed to make it 100% by the end of 2023.
Exiting unregulated markets, combined with the launch of its Advanced Responsibility & Care programme, is expected to contribute to a £20m dent in 2021 EBITDA, yet key markets are opening up. Germany, which accounted for 15% of NGR in 2019, is in the process of regulating, albeit with restrictions, while GVC’s Sportingbet and Betboo brands are in a strong position to capitalise on legal sports betting in Brazil. There are also promising developments in Canada.
In the US, GVC and MGM’s $450m JV has been fast making up ground on rivals with the BetMGM product after a ponderous start. The affiliate deal with Yahoo Sports and the signing of Hollywood actor Jamie Foxx as brand ambassador is helping to broaden the sportsbook’s reach. BetMGM is currently available in nine states and claims to have captured 17% of the US online sports betting market. However, the bold ambition is to become the market leader. Whether this materialises remains to be seen, but so far, GVC and Segev are proving there is life after ‘King Kenny’.