888 to target PoC casualties
CEO Brian Mattingley says UK re-regulation will see a "shakeout" of the industry with consolidation likely
888 is drawing up a list of potential acquisition targets which it believes may struggle to survive once the British government implements its planned 15% tax on UK-derived profits.
The firm’s chief executive Brian Mattingley, who this morning announced a 30% increase in full-year profits before tax of US$53.2m, told eGaming Review that the re-regulation of the UK market and subsequent 15% Point of Consumption (PoC) tax would result in industry consolidation.
And although Mattingley ruled out acquiring operators in their entirety, he said the company had been busy running the rule over which books of business could become available as a consequence of the tax.
“I don’t think it’ll be traditional M&A,” Mattingley said. “I can’t see us buying businesses but what I can see us doing is spending cash on acquiring customer lists from those operators that will not be able to trade after PoC.
“We have a team who continually work in terms of corporate finance on lots of things and I don’t think we will be slow in coming forward in identifying targets.”
The UK government last week confirmed the expected news that the gross profits tax will be set at 15% and introduced in December, with the regulatory framework expected to go live at some point in the summer.
And Mattingley feels the industry has been left underprepared for what is to come and accused UK authorities of failing to provide operators with detailed tax and compliance information.
“I’m a little bit disappointed that we are this close [to implementation] yet a lot of work has to be done in these environments to get it right and I’m not sure that there is that detail available to us yet,” Mattingley said.
“I don’t know whether the DCMS or the Gambling Commission have actually published yet what the details are of being compliant – I know HMRC haven’t given details of what they expect in terms of reporting to get tax collected,” he added.
Elsewhere, Mattingley said the operator continues to monitor developments in the US and that the recent creation of an inter-state liquidity pooling arrangement between Nevada and Delaware had created “significant interest from other states”.
He hailed the progress 888 had made in the US during 2013 “ it is the only operator to have a presence in all three regulated states “ particularly in New Jersey where it continues to tussle with bwin.party to be the market-leading poker and casino platform.
“We have been in New Jersey for three months where we were completely unknown “ we pulled out of the US in 2006 when we weren’t even known as 888, we were known as Pacific Poker,” he said.
“We have taken our market share from zero to 20% in three months – that is great testimony to the marketing prowess of 888.”
Mattingley also said the company will continue to focus on Spain and Italy, with its new Kambi-powered sportsbook expected to launch in the former before this summer’s football World Cup.