GVC makes Scandinavian play with joint-venture
Company acquires a 15% stake in Betit Holdings for 3.5m with call option for remaining balance
GVC Holdings is making a play for the lucrative Scandinavian online gaming market after investing 3.5m for a 15% stake in Betit Holdings, a newly formed joint-venture with Malta-based Betit Securities.
Betit Holdings commenced operations in December 2013 and operates the casino brand Thrills.com and Superlenny.com, a Scandinavian-focused sportsbook. After the first five months of trading, average daily revenues had risen to excess of 40,000 with around 1,600 players per day.
The deal, which is subject to approval from the Lotteries & Gaming Association of Malta, also awards GVC with a call option to acquire the balance of the outstanding shares, however, this option can only be exercised between 1 July 2017 and 30 September 2017.
Betit Securities is majority held by venture capitalist business Optimizer Invest, a company owned and operated by e-gaming veterans Henrik Persson, Andre Lavold and Mikael Harstad.
Together the trio has launched and grown a succession of successful businesses such as Nordic Gaming Group, Betsafe.com and BestGames Holdings.
And the deal opens the door to the Scandinavian market for GVC, a region in which the company’s brands thus far has little presence but has long been a target for the company.
“The lucrative Scandinavian market has been on our radar for some time and we are delighted to be working with the entrepreneurial team at Betit who have a proven track record in the Scandinavian egaming markets, and have already grown the business from a standing-start five months ago to generating revenues of over 40k per day now,” GVC chief executive Kenny Alexander said.
“By entering into this joint venture, we believe that GVC can diversify its revenue streams and significantly enhance the future dividend prospects and valuation of the Group for a minimal initial outlay and is similar to what has been achieved through GVC’s Betboo acquisition in Latin America,” he added.
According to estimates by Swedish state-owned operator Svenska Spel, online gaming turnover in Sweden alone topped SEK6.2bn (750m) in 2013.
As well as expanding geographically, the deal will also increase GVC’s grey market derived revenues, with Denmark the only Scandinavian country to operate a fully regulated framework.
The news comes as GVC also offered a Q2 trading update with daily revenues for the 41 days up to 11 May up 8% sequentially and 11% year-on-year to 601,000.
Mobile GGR doubled compared to the same period last year to a daily average of 108,000, 18% of total revenues.
GVC’s share price was up 11p to 433.5p after early morning trading.