eGaming Review Power 50 2014: 30 to 11

For yesterday’s countdown from 50 to 31, please click here.

30. RANK INTERACTIVE

[29]

A new CEO in the shape of former William Hill Online boss Henry Birch, coupled with a doubling of investment in digital product and marketing for 2014/15, suggests a bright future for Rank’s online business. In a FY 2013 report revealing flat online revenues, a 43% increase in mobile revenues was a highlight. However, Rank’s flagship Mecca Bingo business proved a drag on growth as revenues fell 4% to £58.9m. The firm’s Grosvenor Casino has arguably failed to live up to its potential and is yet to make a material contribution. However, revenues from the brand increased 38% year-on-year to £13.5m, boosted by a 43% increase in customers to 50,000. A major platform change, thought to be involving Mecca Bingo, is imminent.

29. LEOVEGAS

[37]

A name now synonymous with mobile casino, LeoVegas has continued to punch above its weight during 2014. In January it made its first big international play with a multi-million pound marketing push into the UK, including collaborations with The Mirror and Sun newspapers. Figures seen under NDA show the operator achieved rapid growth in active players and turnover in the past 12 months. A wider variety of content has no doubt played a part in its growth but more investment in brand will be needed to keep pressure on the big players. Its international expansion makes it one to watch, as does its deep understanding of mobile gaming, a key battleground in 2015.

28. SVENKSA SPEL

[28]

While the decline of Sweden’s regulated gambling market in H1 2014 saw Svenska Spel’s profits dip 6% in the six-month period, online revenues rose by 5%. Interactive revenues now account for 17% of the monopoly operator’s overall business, a figure which could rise if its plans to launch an online casino are given the go-ahead by the country’s government and it can directly take on the private operators active in the Swedish casino market. Poker continues to produce poor results, with revenues dropping 11% in H1. Future growth is dependent on a number of factors out of its control, including whether the Swedish regulator continues to restrict its marketing efforts, as well as when – or if – the government opts to introduce an open licensing framework, thus ending its poker and sports betting monopoly. For now it remains a significant headache for any operator targeting Sweden.

27. DAFABET (ASIAN BGE)

[19]

Dafabet remains one of the largest deposit business in the Asian region focused on sportsbook and casino verticals, and its headline sponsorship of Aston Villa in the UK ensures it retains strong visibility both in Europe and within Asia. Licensed in the Isle of Man and the Philippines, the firm has one of the highest mainstream profiles of the private Asia-facing operators with headline sponsorship of international snooker, and it recently signed up Portuguese international Luis Figo as a brand ambassador. It’s a well-diversified firm with parent company Asian BGE operating three Japan-facing casino brands and its ultimate parent Asian Logic operating the Asian Poker Tour, as well as Philippines land-based operator Mega Sports World.

26. BETFRED.COM

[30]

The departure of MD Chris Sheffield is a big loss but there are reasons for highly-rated replacement Rakesh Chablani to be cheerful. Betfred’s 2013 financials showed a 42% rise in online profits to account for around 10% of the group total, and it has punched above its weight with its range of mobile products – 70% of Betfred’s sportsbook turnover during the World Cup came via mobile devices. However, despite heavy investment in above the line marketing, it has arguably struggled to perfect its brand voice and more work needs to be done. The success of a mobile-first Australia launch is as yet unknown.

25. 12BET

[20]

Another predominately Asia-facing operator that saw good growth in the previous 12 months. The Isle of Man-based business took the decision to pull its UK-facing sportsbook, but will retain a UK-facing casino and its sponsorship of Premier League team Hull FC. Its presence outside of Asia is minimal, but it continues to generate substantial revenues from the Asian market and is a major player in what remains one of the fastest growing and profitable sectors for unregulated egaming. But increasing questions over egaming in Asia and the visibility over operations in the region see all the private Asia-facing firms drop in this year’s rankings.

24. TABCORP

[22]

The former Australian monopoly recorded an 18% year-on-year rise in full-year digital turnover in FY 2013, and has executed a shift to a multi-channel sportsbook brand well. Mobile devices now account for 54% of turnover, up from 35% in the previous year. With 44% of total market share, including retails, Tabcorp will benefit from the market’s underlying growth but must continue to modernise as competition from corporate bookies such as Sportsbet and William Hill Australia increases. But it remains arguably the most powerful operator in the increasingly important Australian market.

23. PAF

[2013 position: 18]

The Åland-based operator reported a 7% YoY rise in online turnover to €73m for 2013. Its casino business is of large enough scale to retain a top 25 place, but numbers seen by eGR suggest a higher placing would be unwarranted at the current time. Its socially responsible ethos is admirable and it continues to set standards in this respect in what is becoming a more important part of the business to all serious operators. Its focus remains very much on the Nordic markets where competition is fierce and Paf’s differentiated product allows it some stand-out.

22. BETVICTOR

[16]

The firm’s sale to major shareholder Michael Tabor saw CEO Michael Carlton ousted without a replacement, and founder Victor Chandler leave the business. The upheaval appears to have prevented some progress, with a planned bingo launch put on the backburner and a sports betting partnership with The Sun newspaper pulled at the last minute. A review of the business is now surely underway and its international profile will likely be part of this. But it retains a number of strengths including a strong brand, growing UK football revenues and an impressive mobile business. An important 12 months lie ahead.

21. BETCLIC EVEREST GROUP

[27]

Group CEO Isabelle Andres has steadied the ship after a period of organisational restructuring and has revenues heading in the right direction with an expected E35m of EBITDA in 2014 from revenues of around E300m. A new division created to grow its casino and poker business will see greater emphasis placed on the verticals, while a revamped sportsbook products for Betclic and Expekt late last year, were launched more than doubling its in-play offering. The firm is looking to expand internationally through its Everest and Monte Carlo brands beyond its French stronghold and if it can successfully transition into a truly pan-European operator in the next 12 months it will likely be fighting for a much higher position in the 2015 rankings.

20. LADBROKES

[23]

This year had the feeling of a fresh start for Ladbrokes, with a new, high-profile sportsbook marketing campaign and mobile product suite just two elements of a much-needed overhaul. Its shift to Playtech was delayed but finally completed in March, and outgoing CEO Richard Glynn claims it is poised for growth. Online profits, however, continue to plummet. H1 2014 EBITDA fell 72% YoY to £3m despite a rise in online sportsbook revenues and a robust mobile performance. Gaming revenues are in freefall and it must arrest that decline quickly. Internationally, good things are being said about the Australia launch, while its Spanish JV Sportium has claimed a not-too-shabby 6% market share. While financial results are worse than those from twelve months ago, its rise in the rankings reflects a company braced for something of a comeback.

19. INTERTAIN

[n/a]

A year ago Intertain didn’t exist, but it has acquired two established brands in the shape of InterCasino and Costa Bingo over the past year and already sits in the top 30 in terms of pure financial rankings. What Intertain represents is a large corporate entity capable of raising significant funds for future acquisitions as its $89m purchase of Vera+John proved. And the panel expects more activity in this area in 2015. It has big plans for both InterCasino, which it hopes to restore to former glories, and the successful Costa Bingo brands, but this is far from the extent of its ambitions. This is one firm to watch during 2015.

18. SBOBET

[15]

Another top 20 placing for SBO as it continues to generate significant revenues from Asia, with its financial ranking rising slightly this year on the back of strong results. Its decision to pull out of the UK market following the introduction of the new point of consumption legislation was not a surprise, and it retains its Isle of Man licence for its international operations. Its visibility outside of Asia is likely to dip without the ability to advertise in the UK and on the Premier League specifically, but it continues to be a very powerful operator in the Asian market and this shouldn’t impact its business to any significant degree.

17. MR GREEN

[26]

The online casino operator has made solid progress during 2014 and posted a 45% year-on-year rise in profits for the first six months to £6.6m. An international expansion strategy has seen Mr Green launch in various European markets as it aims to reduce its reliance on the Nordics, where it still derives more than half of its revenues. The strength of its brand means it can be a threat to major casino operators in just about any market, and a substantial investment in mobile is also paying off as the channel now contributes a quarter of GGR. The group has stated it will continue to look at further acquisitions with female-focused Garbo and Social Thrills two additions to the fold during the period.

16. LOTTOMATICA

[14]

The Italian giant remains a market leader in casino and sports betting in Italy, despite an influx of competition in recent years. Lottomatica is the largest Italian operator in terms of financial scale by some margin and the GTECH subsidiary continues to invest in product in order to grow in a restrictive operating environment. The likes of bet365, William Hill and Paddy Power are starting to erode its market share, but the Lottomatica brand is fighting back in all verticals and it remains hugely popular in Italy.

15. GALA CORAL

[17]

A seriously impressive 12 months from Gala Coral sees it climb two places to 15th. Gala Interactive was the star performer with both its bingo and casino business generating significant revenues in the period through some innovative marketing, strong mobile products and impressive CRM. Coral also showed huge growth in its online sportsbook with the firm having a particularly profitable World Cup in terms of new acquisitions. Its Italian-facing brand Eurobet is also outperforming the market with gaming showing very positive signs. Talks of a sale or IPO have not died down, but the firm seems to be powering ahead regardless of these obvious distractions, and a launch of the Gala brand in Sweden demonstrates some international ambition.

14. PMU

[12]

Pari Mutuel Urbain’s (PMU) leading position in the French horseracing market, where it has been able to offer better odds than its rivals due to pooling its online and offline turnover until a recent Competition Authority ruling, is almost untouchable. And despite having to fight harder to retain the 85% market share in online horseracing, it has made plenty of other in-roads in the past 12 months. In its most recent financial results, PMU recorded a 3% decline in H1 2014 GGR to €140.1m despite reporting a 31% increase in online sports betting fuelled by a successful World Cup. Digital channels account for 60% of PMU’s growth in France, thanks in part to investment in mobile. Its PMU Sport app allows customers to bet on football, tennis or basketball, sign up for alerts and personalise the app, and has already been downloaded 200,000 times. Approximately 35% of all sportsbook bets were made on mobile during the 2013 financial year. But this lags some way behind the numbers operators are reporting in other European markets and is an area that requires additional focus.

An international B2C strategy is finally underway following the acquisition of Belgian operator Eurotiercé in April and the appointment of former banking exec Jonathan Bryden to the position of head of external international development. But it remains focused on its home market.

13. HKJC

[11]

A behemoth in terms of racing turnover, Hong Kong Jockey Club’s online revenues rose by around 15% in the year ended June 2014 with approximately HKD10bn in revenues generated through its online football betting operations and approximately 10 times that through racing.

Under pressure from unregulated operators in the region, HKJC has upped the ante in terms of technology during 2014, including building an impressive suite of mobile products. Other innovations include the Mobile Live Centre App, which offers customers live webcasts of selected football matches on mobile devices. The HKJC presents a challenge each year when assessing its rankings, as it is undoubtedly a powerhouse within the Asian region, but its influence on the rest of the sector remains small. It faces challenges to remain competitive with offshore sportsbooks but investment in technology is likely to ensure a leading role in region. It remains in our view the leading player in Asian sports betting.

12. GVC HOLDINGS

[24]

GVC is a firm seemingly at odds with the received wisdom that the only route to success is through a pure regulated markets approach. While GVC holds a number of regulated licences, including Italy, Germany, Denmark and the UK, it also derives a large amount of revenue from grey markets outside of the EU. Its H1 2014 results showed it generated €22m in EBITDA from €105m in net revenue, with a roughly even split between sports betting and gaming. The firm highlighted its Latin American-facing sports betting business as showing good growth, although it only represents 11% of current sports betting revenue. Its B2B business, which derives revenues from the Turkish market, contributed 32% in the period. But it was GVC’s acquisition and rapid turnaround of the non-Australian business of Sportingbet that may well have set the tone for future activity. GVC is looking to repeat the success of the deal and you wouldn’t bet against it stripping out costs and returning ailing businesses to profitability in other markets. The management is focused on generating profits for its shareholders first and foremost. There is no playing to the galleries here, and it’s an approach that has seen its share price rocket during 2014. And there is no denying GVC is making some firms question some dearly held market “truths”.

11. SKY BET

[09]

Sky Betting & Gaming drops two places, but it was another very strong year for the Leeds-based firm run by the highly rated Richard Flint. It ranked in the top 10 for financials and full year revenues of £183m were up 19% on the previous year, with all verticals showing growth in the period. Sky Bet ranked lower on reach and influence than some of its rivals due to its solely UK-focused operations. But there is no denying it is now a true power player in the UK market and has extended its reach beyond its core low-stakes demographic. Growth once more was driven by mobile where it has a comprehensive set of sportsbook and gaming apps. It has also worked well to bolster links to Sky Sports in the period and its headline sponsorship of the Football League showed real ambition in its marketing. It is as much a technology firm as a gambling operator and its HTML5 platforms have enabled rapid development of single sign-on. Its well differentiated gaming products have helped it derive strong revenues from casino. While its place on the list may have been threatened by more internationally focused operators, the acquisition by its parent company of Sky Italia and a majority share in Sky Deutschland could see that change and see it comfortably reclaim a top 10 position next time around.