Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The Greek lottery operator, the gaming operator bally Intralot has
Speaker 2: reached an agreement to buy Evoke, is the parent company
Speaker 2: for a range of internationally known gambling brands including william
Speaker 2: Hill and eight eight eight Casino. Joining us now for
Speaker 2: more is Robson Reeves, CEO of Bally's Intralot, who joins
Speaker 2: us now after the fresh announcement just today of this
Speaker 2: m and A deal. Welcome to Bloomberg Radio. Very pleased
Speaker 2: to have you on. Just tell us about the motivation
Speaker 2: behind this acquisition. Why this purchase? Why now?
Speaker 3: Well, we've chosen to acquire Evoke. We want to become
Speaker 3: a very dominant European player. We've been highly concentrated in
Speaker 3: the UK market actually of Bally's Intralot as a B
Speaker 3: two C provider, and this allows us to become a
Speaker 3: podium per position operator across six core markets in Europe.
Speaker 3: We become the number two operator in the UK and
Speaker 3: this gives us the diversification we always wanted with Italy, Spain,
Speaker 3: Romania and Denmark and will continue to expand internationally. These
Speaker 3: are great regulated markets and I love regulation. We believe
Speaker 3: that the partnership that we have with our regulators is
Speaker 3: critical to future growth forever.
Speaker 1: More right, and this acquisition, you know, valuing the company
Speaker 1: at fifty two pence to share, it's about a twenty
Speaker 1: percent increase to the company's closing price yesterday total xpvalue
Speaker 1: of two hundred and forty three point one million pounds.
Speaker 1: But of course if it used to be worth a
Speaker 1: lot more, and it has had a tricky couple of years,
Speaker 1: you go back to twenty twenty one and it was
Speaker 1: worth more than a billion pounds, what do you think
Speaker 1: that you would be able to do with a Vogue
Speaker 1: that is going to help turn this around, to help
Speaker 1: make it more profitable.
Speaker 3: Well, if you look at our business and compare us
Speaker 3: to Evoke operating EBITDA margins, it's above forty percent and
Speaker 3: there sits at approximately twenty percent, and there's large similarities there.
Speaker 3: So we'd obviously have to look at the cost structure,
Speaker 3: would look at how they spend marketing money. This tax
Speaker 3: increase that recently was introduced in the UK has obviously
Speaker 3: caused challenges for various operators with lower margins, so I
Speaker 3: expect consolidation. Our technology is very powerful, we have a
Speaker 3: lot of data and we build I would say, very
Speaker 3: good models which retain customers well by allowing them to
Speaker 3: spend affordably for the long term. It's meant that our
Speaker 3: growth in margin and profitability has been consistent every year
Speaker 3: for since I can remember.
Speaker 2: Yeah that you know you're talking about the gross gaming
Speaker 2: yield tax that the UK has. Basically is not a
Speaker 2: tax on winners or the individuals, a tax on the businesses,
Speaker 2: isn't it. I mean, why are you prepared to take
Speaker 2: on this increase burden in terms of the gambling tax
Speaker 2: burden and also the risks that may become with a
Speaker 2: government that is in flux, that might see a more
Speaker 2: left leaning government.
Speaker 3: This tax increase, it was a surprise to us all
Speaker 3: how much it's increased by. With our margins being at
Speaker 3: least ten percentage points above any of our peers, it
Speaker 3: puts us in a very strong position. If there were
Speaker 3: further tax increases, I think there'd only be one operator left.
Speaker 3: Very lots of companies will go under. There'll be lots
Speaker 3: of job losses from the long tail. This I viewers
Speaker 3: really acquiring a voke in order to become the business
Speaker 3: that we always wanted to become. Which was for far
Speaker 3: more diverse, so we are we're not rescuing them. It
Speaker 3: actually transferm warms us into the business we wanted to become.
Speaker 3: But I do expect many smaller operators to leave the
Speaker 3: market because it's simply unsustainable. You should understand that this
Speaker 3: tax at forty percent in ee gaming isn't a tax
Speaker 3: on profits. It's a revenue based tax, which is significant.
Speaker 1: And of course much of your business is now taking
Speaker 1: place online. It's a very fast growing profitable area. But
Speaker 1: there are also you know, hundreds of many physical shops
Speaker 1: of from William Hills on high streets around the country.
Speaker 1: How important are they to your business model? How core
Speaker 1: do you see them moving forward?
Speaker 3: I viewed them very much as a great bit of
Speaker 3: signage that we have presence throughout the country. They are
Speaker 3: places where many people engage again nationally, so there's different
Speaker 3: audiences who go who go there. William Hill have already
Speaker 3: come up with a plan and Avok have already come
Speaker 3: up with a plan to reduce the number of stores
Speaker 3: because they need to rationalize that footprint because not only
Speaker 3: taxes increase, there's been other costs associated with the employment,
Speaker 3: which has meant that many of these shops are not profitable.
Speaker 3: I hope that we can keep the high street alive.
Speaker 3: We've seen a mass reduction in the high street in
Speaker 3: all industries over the years, so I don't have any
Speaker 3: intention to change that. We believe we can fix the
Speaker 3: UK online business and we get these other attractive assets alongside.
Speaker 1: It would be fair to say that the high street
Speaker 1: stores are not cause your plans for a Vogue and
Speaker 1: william Hill moving forward.
Speaker 3: We believe in omnichannel, we believe in having presence physically
Speaker 3: as well as online. But I would say to make
Speaker 3: this deal work for us, they are not core.
Speaker 2: Okay, look, A think it's very interesting what you've told
Speaker 2: us about about the agreement and sort of understanding how
Speaker 2: you see this M and A I think is fascinating.
Speaker 2: I want to put one other. You know, one of
Speaker 2: the tough points I suppose Labour's Dawn Butler. You know
Speaker 2: she's one of the key campaigners trying to get rid
Speaker 2: of UK high street betting shops. She's talked about that
Speaker 2: quite frequently. What would your response be to that sort
Speaker 2: of political view on your business. You know, she's argued
Speaker 2: quite strongly that these sorts of shops breed poverty and addiction.
Speaker 2: What would be your response to that.
Speaker 3: I think a lot of people spend very sustainably. They
Speaker 3: spend sensibly. We only hear from the perspective of people
Speaker 3: who unfortunately have developed gambling problems. You should actually look
Speaker 3: at the large audiences who partake in gambling very safely
Speaker 3: and they enjoy it. It's a pastime. Most people don't
Speaker 3: consider betting on the lottery gambling. It is gambling. It's
Speaker 3: a form of gambling. Similarly, there's other products which everyone
Speaker 3: partakes in, like the Grand Nash and so on, so
Speaker 3: people can engage in gambling safely. And I believe that
Speaker 3: we should really focus on what the full domino effects
Speaker 3: of some of these decisions are. There is significant employment
Speaker 3: and significant tax generated by people having jobs, you know,
Speaker 3: in these stores. William Hill employ over eight thousand people
Speaker 3: across their retail footprint.