Paddy Power shares rise on Oz talk
Reports suggested that the group has held talks to explore a possible tie-up with Melbourne-based CrownBet, the online betting unit of Australian casino giant Crown Resorts.
The Australian online betting company is seen as being a target for industry players with a UK presence seeking to expand their international operations in order to offset tougher regulations in Britain.
A spokesperson for Paddy Power-Betfair declined to comment but the news followed an earlier statement by British betting firm William Hill saying that it has held “very preliminary” discussions, itself, with CrownBet about a potential merger with the UK bookie’s Australian unit.
“There is no certainty that these preliminary discussions will lead to any transaction,” William Hill said in a statement to the London Stock Exchange.
Crown Resorts admitted that it is in discussions about its 62% holding in CrownBet without providing further details.
Speculation is growing that UK-focused gambling companies are set to embark on a round of consolidation to offset the threat of stricter regulation and diversify their operations.
Last month, the British government outlined proposals to cut the maximum stake on gambling machines in betting shops, a move that would hit an important source of bookmakers’ revenue.
Ladbrokes-Coral held unsuccessful deal talks with online rival GVC this year and a spate of deal-making among British companies is expected once the UK government makes a decision on gambling machine stakes.
William Hill entered the Australian market four years ago when it bought Sportingbet and tomwaterhouse.com but its operations have since struggled. Earlier this week it posted a 5% decline in amounts wagered at its Australian division between the end of June and late October. Its share price was marginally down yesterday.
Earlier this month, Paddy Power-Betfair reported a 9% annualised rise in third quarter revenues to £440m (€502m) and a 7% increase in underlying earnings to £121m.
While online revenues were down 3%, year-on-year, and gaming revenue remained flat, the group saw growth in its main geographical locations with Australia-based revenues —via its Sportsbet online subsidiary — ahead by almost 30%.
