January 17, 2019 / 10:36 AM / 6 months ago

Britain's GVC confident of U.S. bet despite DoJ curb call

(Reuters) - Britain’s GVC Holdings (GVC.L) expects the United States to be profitable, despite a Department of Justice call for wider restrictions on all gambling on the internet.

Shares in GVC’s rivals William Hill (WMH.L), Paddy Power Betfair PPB.I and 888 (888.L) fell on Tuesday after the U.S. regulator reversed its 2011 opinion that made only online sports betting illegal under the Wire Act.

“Whilst the decision a couple of days ago might affect some inter-state stuff, maybe affect poker to a degree, for sports betting we don’t see it having any impact,” GVC Chief Executive Officer Kenneth Alexander said on Thursday.

GVC has expanded rapidly and last year set up an online betting platform in the United States with hotel and casino operator MGM Resorts International (MGM.N).

“The U.S. will open up over the next few years and with the JV that we have done with MGM, we think we are very well positioned to grab market share ... we think the U.S. will be a very profitable market for us,” Alexander told Reuters.

GVC, which offers sports betting, casino, poker and bingo and has licenses in more than 20 countries, said it expects full-year underlying core earnings to be ahead of market consensus, boosted by strong growth in its online business.

Isle of Man-based GVC also expects underlying core earnings on a proforma basis of between 750 and 755 million pounds for the year ended Dec. 31. Analysts on average expect core earnings of 735 million pounds, Refinitiv Eikon data shows.

GVC said it was well placed for 2019, also helped by the integration of high-street brand Ladbrokes Coral.

(GRAPHIC: British bettings firms: A story in deals - tmsnrt.rs/2RLm58D)

Online gaming revenue at GVC rose by 15 percent in the fourth quarter, despite a 3 percent fall in like-for-like retail gaming revenue in Britain during the period.

“While major regulatory change on both sides of the Atlantic has commanded investor attention in recent months, these results bring a timely reminder of GVC’s credentials,” George Salmon, analyst at Hargreaves Lansdown, said.

The company’s shares rose by as much as 5.5 percent in early trading, but were up just 1 percent at 677 pence at 0928 GMT.

Alexander said GVC would not buy any big assets this year, but will look at smaller bolt-on deals.

Reporting by Tanishaa Nadkar and Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta and Alexander Smith

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