We’ve now entered the age of the giant bookmaker.
On its own this statement doesn’t make much sense. However, when we account for the development of the betting industry in recent times you can see it’s an accurate comment.
The betting industry has been going through a huge shift in the past 5 years and so, more and more companies have begun depending on online stores for the majority of their custom. High street shops are no longer as successful as their online counterparts. Thanks to this, we have seen a swathe of bookies shut down a large percentage of their high street stores, leading to 100s of lost jobs. It doesn’t stop there.
We’ve now entered an age where giant bookies are dominating the industry. And these giant bookmakers are still growing! They acquire the smaller betting companies and merge with other giants, leading to the super giants we have nowadays.
In this article we’ll look at how the betting industry has changed, how large bookies are beginning to dominate the marketplace and how this will affect our matched betting.
Giant bookie examples
GVC and Ladbrokes Coral
One company that highlights the progression of the industry in recent times is GVC Holdings. Founded in 2004, GVC Holdings initially acquired CasinoClub, however after this first acquisition the company went stagnant for a while. Now rejuvenated, it owns many brands including Bwin, Betboo, Foxy Bingo and Foxy Casino. Revenue for 2016 was a whopping £843 million, which is not surprising given the size of this company.
GVC Holdings is about to get even bigger as it has agreed the takeover of Ladbrokes Coral. The two companies have settled on a sum of around £4 billion, depending on the outcome of the triennial gambling review. The outcome of the review could potentially affect the profitability of Ladbrokes Coral, therefore making it less valuable.
Overall, GVC will become the largest betting company in existence.
PaddyPower Betfair
A second global gambling giant is PaddyPower Betfair. PaddyPower and Betfair merged in 2016 to form what was the worlds biggest bookie.
They employ over 7,500 staff and had revenue of £1.5 billion in 2016. Overall, a massive company that aptly fits the title ‘giant bookie’.
These two behemoths of the gambling industry will now be in deep competition with each other as they look to take control of the marketplace.
Industry scrutinising
It’s no secret, the betting industry is coming under ever increasing pressure from the Gambling Commission and other groups in the aim of making the industry more transparent. 2017 saw a number of bookies being fined record amounts for different reasons. In particular, 888Sport were fined £7.8 million for failing to protect problem gamblers.
One of the key reasons bookies are joining forces is to cope more effectively with scenarios such as these. Obviously fines and tighter scrutinising have a greater impact on smaller companies. It could potentially cause them financial issues and lead to them closing down. Larger companies can cope better with these hard times due to larger cash reserves.
The increasing pressure has made it essential for betting firms to get involved in social responsibility initiatives. This obviously digs into the overall profit of a company. Whilst you could argue, these initiatives will be proportionate to the size of the company, there are still certain obligations every bookie must comply with.
The UK is one of the only places where there are virtually no laws tying betting companies down. Everywhere else in Europe have considerably tighter restrictions on what is allowed. Because of these lax restrictions the bookies are able to make more profit in the UK and are hoping the rules don’t change.
Theoretical mergers
Smarkets – PaddyPower Betfair
The next big merger could be between Smarkets and PaddyPower Betfair. PaddyPower Betfair may see it as advantageous to take over Smarkets. Since Betfair and Smarkets are in direct competition PaddyPower Betfair may see a merger as a way to increase their profitability. This merger would ensure that Betfair and Smarkets work together instead of against each other in the betting exchange marketplace.
Unfortunately, a merger is unlikely to interest Smarkets. Smarkets have come into the industry with modern ideologies and to compete directly with more old-fashioned bookies like PaddyPower is not their aim. You can read all about the differences between Smarkets and Betfair here.
William Hill – Bet365
A second theoretical merger could be William Hill and Bet365. These are two of the largest standalone bookies in the business. Because of their size, if they merged it would create another giant bookmaker. Much the same as the Smarkets – PaddyPower Betfair theoretical merger this would decrease the competition between the two companies. They would effectively be buying out their competition.
A merger between William Hill and Bet365 might work because it would mix William Hill’s hight street prowess with Bet365’s online expertise.
Giant Bookies and Matched Betting
Matched bettors are great fans of giant bookies. They’re the ones with all the surplus cash that they can spend on marketing and promotions to gain new customers. These offers are exactly what we need, therefore this makes giant bookies perfect for matched betting.
All in all, smaller bookies will find the coming months and years harder and will therefore reduce their marketing budget in the aim of cost cutting. We will certainly lose a few smaller bookies that can’t stay competitive.
The surplus cash is evident with bookies like Ladbrokes Coral. Since the two are no longer competing with each other and instead working together they are able to eliminate the costs of trying to outperform each other. Therefore they have this cash surplus available, and they use it wisely, enticing new customers with free bets and incentives.
This is where matched betting comes in. We take advantage of these free bets and make a guaranteed profit risk and tax free. Why not start making money online with no risk matched betting today.