William Hill's Swedish Takeover Comes With Bonus Brexit Base
(Bloomberg) -- British bookmaker William Hill Plc.’s takeover of a Swedish online gaming company comes with a ready-made post-Brexit base so it can keep operating across the European Union.
The 242 million-pound ($309 million) acquisition of Mr Green & Co. announced on Wednesday will give William Hill a “ready-to-go international hub” in EU member Malta, Chief Executive Philip Bowcock said in an interview.
Gibraltar, a small British-owned territory on Spain’s southern tip, will leave the bloc along with the U.K. next year, posing a potential threat to its role as a betting hub. Gibraltar may account for about a fifth of annual global online gaming revenue of about 40 billion euros, according to estimates by H2 Gambling Capital.
“Because we’re now no longer going to be part of the EU we cannot procure or provide services into EU countries from Gibraltar,” Bowcock said. “When this transaction happens we’ll just move the operations out of Gibraltar and into Malta.”
The company had operations in Gibraltar because, before the U.K. Gambling Act, there was no legal framework for gambling in mainland U.K., a spokesman said by phone. It was planning to open its own post-Brexit sales office in Malta but has scrapped those plans and will instead use Mr Green’s facilities on the Mediterranean island. Those offices currently employ about 300 people.
Gibraltar will remain a site for William Hill work such as IT development, the company said.
Mr Green operates in 13 territories from the Malta base, which is already a growing hub for online gambling, and that “gives us a natural place in which to put” William Hill’s own international hub, Bowcock said by phone.
The Swedish deal is part of an effort by Britain’s second-biggest betting company to become less reliant on its home market after industry growth slowed and the government, under public pressure to address problem gambling, moved to regulate the business more heavily.
Britain’s government is preparing to cut maximum stakes on popular fixed-odds betting machines from 100 pounds to 2 pounds in October next year and jack up online gambling taxes from 15 to 21 percent under plans announced by the country’s finance minister on Monday.
William Hill says it will have to close hundreds of betting shops as a result.
The Mr Green takeover will boost William Hill’s international sales to about 21 percent of the total from about 14 percent currently, Bowcock said.
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