Betting group GVC to change name and exit unregulated markets

Shay Segev, who took over in July, told the Financial Times the new name marked a change of direction for the company, which has previously been associated with big acquisitions and a buccaneering attitude to offering gambling in markets where it is not yet regulated.

The group, which will retain its main brands, will now focus on launching in “50 or 60” regulated markets, such as Mexico and countries in central Europe and Africa, as well as moving into “other types of interactive entertainment”, Mr Segev said.

“We are not looking to maximise our profitability in the short term but build a proper industry in the long term and that means making some sacrifices,” he added.

The overhaul comes at a crucial time for UK gambling, which is under increasing pressure from campaigners and regulators to improve its record on betting addiction.

A review of the UK’s gambling legislation is due to be announced in the coming weeks, with operators potentially facing stringent curbs on marketing and the requirement to enforce limits on bets.

It does, however, come as more governments clamp down on gambling, putting revenues from unregulated markets at risk.

GVC, or Entain from Thursday, makes 96 per cent of its revenues in markets that are either regulated or in the process of regulating. Increased investment in technology to prevent problem gambling and withdrawing from unregulated markets by 2023 would hit earnings by around £40m next year, it said.

However, the company expected to beat its earnings forecast by about £50m in 2021, due in part to a surge in online gambling during the pandemic. Operators hope this trend will outlive the crisis.

A senior executive at a rival firm said Mr Segev, who has a degree in computer science, was well placed to take advantage of the shift towards digital gaming and that he was “very much considered to be the operational guy that took Kenny’s vision and made it happen”.

Mr Segev wants to take a lead in the US, where sports betting was made legal following the overturn of a federal ban in 2018.

“It’s a crowded marketplace with cheap money to lure customers in and I don’t understand what BetMGM’s point of differentiation is,” said Simon French, a partner at the consultancy, Bixteth Partners.

Mr Segev said BetMGM was the only US company with its own technology and that its access to the 34m customers in MGM’s loyalty programme set it apart.

The company will also look to make an acquisition in the esports sector.

“E-sport will be massive and we want to start to make this baby step to invest into these future new audiences as well,” said Mr Segev, an avid player of computer games.

Unlike his predecessor, however, Mr Segev is not one to bet wildly on sports, preferring to spend an hour playing blackjack in the evening.

“Kenny was an encyclopedia of sport. I cannot compete,” he admitted.