New British Law Prevent to US Takeovers

UK enacts new law to slow US buyout of British online gambling brands.

UK Enacts Law to Slow US Buyout of British Online Gambling BrandsFor more than fifteen years, North American’s largest gambling corporations cared little for their British colleagues. Big wigs like Caesars and MGM saw no benefit in the UK’s heavily restricted – and heavily taxed – online gambling industry. iGaming was largely prohibited in the US, and subject to provincial monopolies in Canada. But that business mindset has flip-flopped, spurred by the 2018 reversal of anti-sports betting laws in the US.

Last year, coinciding with the rapidly spreading state-by-state regulation of sports betting in America, Caesars Entertainment saw immense value in William Hill, taking charge for the meager cost of £2.9bn. Similarly, Canada’s The Stars Group (formerly Amaya) negotiated the acquisition of SkyBet, followed by a merger with Flutter Entertainment (formerly Paddy Power Betfair). Just last week, MGM Resorts International made an $11 billion bid for Ential Plc, parent of UK’s largest iGaming brands, Coral, Gala and Ladbrokes.

British corporations are concerned, and rightly so. They’ve been warning the government for years that restrictive laws would be a detriment to the region’s once illustrious gambling industry. Now that the presumed consequences are coming to fruition, the UK government is finally trying to do something about it – albeit a little late, and not exactly in the way companies were hoping.

New UK Law to Slow Takeover of British Online Gambling Firms

In November 2020, the UK government passed a piece of legislation called the National Security and Investment Bill. The new law, designed to protect British businesses following Brexit, requires foreign investors in UK assets or companies to notify the government in advance. Foreign companies must receive clearance to move ahead with investments, mergers or acquisitions within 17 specific categories of industry, ranging from advanced materials, to communications, to military and space technologies.

Some iGaming analysts would argue that the need for such laws wouldn’t have risen in the first place, had then-Prime Minister Teresa May heeded the warnings of William Hill chairman, Roger Devlin, in May 2018, just as the US was overturning PASPA. He cautioned Lady May that tighter restrictions on the gambling industry, such as decreasing the max wager on fixed odds betting terminals from £100 to just £2, would have a “catastrophic” impact on the UK’s gambling industry.

“Consolidation within our sector continues and I would also not want to see the impact of a disproportionate… outcome being a factor in the name of William Hill being added to the list of companies now in foreign ownership,” warned Devlin in his letter.

His estimation was spot on. The sweeping legalisation of sports betting in the US spurred North American gambling corporations to into action as one state after another began scripting legislation to launch retail and online sports betting operations. Most of these companies had little or no experience in sports wagering, leading them to look offshore for lucrative partnerships. Low and behold, their eyes continually fall upon the UK. No surprise, either, being the world’s most successful betting market.

Due to the highly restrictive nature of UK gambling laws – the very restrictions Devlin said would wreak havoc on the local market – British online gambling companies are struggling. The end result is a slew of big corporations in North America actively bidding bottom dollar for UK businesses. And far too often, shareholders are begrudgingly accepting those offers.

MGM Bid for Entain the Latest in Eye-Opening Problem

News that Entain Plc was likely to shift into international hands brought mournful reactions from industry figureheads. A senior executive at Entain told the local media he thinks it’s “really sad” what’s gong on in the industry. “I know we’re not very proud of betting and gaming in this country,” he said, “but it’s one of the industries where Britain leads the world.”

We learned this morning that Entain Plc has rejected MGM’s $11 billion bid. With that news came the equally surprising revelation that Entain CEO, Shay Segev, has resigned to take on a new role as co-CEO of the privately-owned global sports streaming platform, DAZN. Segev will continue to operate as Entain CEO for the next 6 months, or until a replacement is promoted, whichever comes first.

Best Overall Canadian Casino with Easy Deposits : Royal Vegas

CTA_CC

Royal Vegas, the leading Canadian gaming brand, are really going out of their way this month and offering a very lucrative offer to prospective players. Details inside.