The Business reports that America’s MGM Mirage and Britain’s
Ladbrokes, two of the world’s largest gambling groups, have
started exploratory takeover talks with internet rivals decimated
by recent US Congress legislation banning online gambling.
MGM, the world’s second-largest gambling group, is understood
to have contacted a number of players in the sector, including poker
market leader PartyGaming, to discuss a takeover.
Though talks are at an early stage, bankers involved with MGM stressed
the US company’s interest was serious. Bankers stressed Las
Vegas-based MGM wants to buy a market leader and is considering a
move on any group created by a merger of PartyGaming and 888 Holdings,
which are said to be in negotiations, along with Sportingbet.
Rumors forced 888 to reveal its hand by issuing a statement to the
London Stock Exchange admitting it had been “very active”
and was talking to “more than one party”.
The Business also reports that one party involved in these talks is
Ladbrokes, which refused to comment except to say that it was watching
the situation. It has a popular online casino and poker website but
these are dwarfed by its sports betting arm. It has made no secret
of its desire to expand into European and Asian markets.
A brand clearly designed for the Asian market, 888 has no real sports
betting offering. It derived about half its revenues and profits from
the United States before that business was closed down but has been
developing other territories.
At interim results in September, its last financial announcement before
the American bombshell, 888 reported net gaming revenues had grown
61 percent in the UK and 16 percent in continental Europe. “The
truth is that everybody is talking to everybody else,”
said one source involved in discussions. “These things
are at an early stage – the US situation only developed a few
weeks ago.”
The move by Ladbrokes is in direct contrast to the bookie’s
two great rivals – Gala Coral and William Hill – who have
said they will not be acquiring online rivals.
Gala Coral is looking at buying the Tote, the state-owned pool betting
business, while William Hill chief executive David Harding has ruled
out any approaches.