Bookie owner shares surge
GVC Holdings shares leapt to a record high after it agreed to set up an online betting platform in the US with US hotel and casino operator MGM Resorts International.
GVC owns the Coral, Ladbrokes, and Sportingbet brands.
The announcement comes ahead of the American football season and as British betting companies look to capitalise on the US market after a US Supreme Court ruling in May lifted a ban on sports betting.
Bookmakers have also been assessing the impact of recently implemented UK gambling curbs.
The British government said in May it would cut the maximum stake on fixed-odds betting terminals (FOBTs) to £2 from £100.
“GVC appears to have struck gold by signing a 50/50 JV with arguably the biggest gambling brand in the US,” London-based broker Shorecap’s Greg Johnson said in a note.
GVC shares rose as much as 7.5% to a record high before retreating slightly to trade over 5% higher later in the session.
The shares have now jumped almost 55% in the past year to value the company at £6.33bn (€7.11bn).
The companies will initially invest $100m (€85.77m) each in the joint venture.
The companies will have a US headquarters, said GVC.
GVC said the joint venture would get access to 15 US states with a population of 90 million.
It added that the venture will get access to all US land-based and online sports betting while integrating both companies’ customer loyalty programmes.
“We are proud to join forces with GVC, the largest and most dynamic global online betting operator, with existing reputable and trusted operations in the US,” said MGM Resorts chief executive Jim Murren.
GVC had said last week that it was in advanced talks regarding a joint venture with MGM.
Sky News had also reported that the deal could pave the way for a merger between the two firms.
GVC, which has grown rapidly through acquisitions including the purchase of Ladbrokes late last year, has been looking to expand in the US.
That decision came after the US Supreme Court paved the way to legalise sports betting.
The company said in July that it expected to post full-year results in line with expectations.
Paddy Power-Betfair last May confirmed it too was going into the US market.
It said it bought US fantasy sports firm FanDuel following the US Supreme Court ruling.
