iGaming Daily

Andrew McCarron (00:01.646)
Welcome back to our Gaming Daily. We hope you all had a great Christmas break and a good new year. So as we get started with January, we're going to take a look back on some late breaking news from 2024, which carries some intriguing narratives for proceedings for the UK gambling industry in particular in 2025. But before we get into all of this, a quick word for our sponsor OptiMove.

Optimove is the number one CRM marketing solution for the iGaming market. So to start with, the NHS issued a warning on festive temptations, they put it, leading to some public anxiety around problem gambling. However, some eyebrows were raised at the NHS as tone and messaging around gambling, particularly as it prepares to take on some very important forthcoming responsibilities as the chief commissioner for the treatment of

problem gambling and gambling harm in 2025. Elsewhere, there's also been a cooling off period for industry deal makers as lottery giant Allwin announced the 300 million investment to acquire a 51 % stake in Novibet in doing so further diversifying its business. So we had the M &A bells ringing late in 2024, but what does this tell us about upcoming deals and valuations in 2025?

I'm Ted Orme Clay, one of SPC's editors, and I'm joined by my fellow editor and fellow Ted, Ted Memmier, once again. The boys are back in 2025 to talk about some of these, some of these big topics. So how's it going, Ted? How was your, how was your Christmas and new year? Lots of festivities, lots of fun. Yes, lots of festive activities, very busy, lots of cooking, lots of driving. I did everything this Christmas.

I'll break that. Yes, I am for the Memwear household. Yeah. I give my mother a rest, but this year we had the Japanese side of my family visiting. So we increased head count, we doubled head count and a bit of stress, I'd say.

Andrew McCarron (02:22.196)
I couldn't have been any more opposite. I had absolutely no cooking responsibilities at all this year. I don't think I cooked for about eight days straight, to be honest. It's like the laziest I've been in a long while, but you it's Christmas. I've afforded myself some laziness and now I'm back on healthy living, healthy eating and you know, plenty of vegetables.

Anyway, don't worry Ted, I'll be having words with the Orme Clay residents. Yeah, you want to pass on some of your skills and responsibilities to me, I'm sure. I'm not saying I'm a good cook, I'm just saying I cook.

Andrew McCarron (03:10.638)
And right with that out of the way, we'll get onto the NHS story. So Ted, you broke this for us as ISBC News over the Christmas period. I remember this is something that I've done. I've covered a little bit in the past back when I was working on SPC News. Obviously the NHS is preparing to take on responsibilities as the provider of problem gambling treatment in the UK and deciding where fundraising from the RET level will go, I believe.

Could you just give us a bit of a breakdown? In fact, you're updating both the listeners and myself on this one. What was the NHS's statement about and what was the reaction to it during Christmas? So on the 27th of December,

The NHS England's top physicians, Dr. Max Gaskell, who heads the NHS Northern Gambling Service and Claire Murdoch, who's head of treatment and treatment services for the NHS, they issued a notice on what was infested anxieties over problem gambling, particularly in relation to the patient demand for care. And it referenced stats from

2023 about what is essentially the NHS seeing a doubling of almost 20,000 patients referred to gambling treatment support in the past year or in 2023. the statement kind of raised the eyebrows because it was essentially the kind NHS's first statement since the decision by the government to transfer the kind of the rent levy over

to the NHS and under its domain in which it will kind of now be the chief commissioner of treatment services and treatment support for UK gambling. And I think kind of people, a lot of kind of observers were kind of taken aback by why it kind of gone with this statement as its lead and also kind of the wording and...

Andrew McCarron (05:23.724)
the context of it. So using stuff as like a perfect storm of temptation and also where it was kind of pinpointing in the floors of treatment support for gambling. So I think we come over the Christmas period to a point where the industry is looking at much closer at the NHS and what it has to say about problem gambling. And it's also trying to get kind of

more insights into kind of its development in 2025. And I think this kind of sent kind of mixed connotations about what it wants or how it's going to proceed with its duties.

Andrew McCarron (06:07.928)
So Ted, taking look back at this and also taking a look forward, I guess, what do you think the main purpose of the NHS message was? Do you think this was just sort of a public service announcement, cautioning people and warning people about the risks of gambling harm and problem gambling, particularly at this time of year, which is often has a lot more financial burdens involved for a lot of people?

Or do you think this was a PR statement, uh, sort of signaling the health services intent and, uh, approach to problem gambling as it prepares to take on this new remit? You see, I think you're kind of pointing out the, uh, where the confusion is led. Um, every kind of Christmas we do kind of expect a warning or a public service announcement on gambling harms and

kind of the exposure to problem-gambling during a period of high intensity in football matches and in horse racing. However, I think what caught the industry off guard was the way the message was worded. It's referenced the stats that were in, you know, two years old. And also, again, going back to we're now entering a period where the structures of treatment support

and how gambling harm is researched are going to completely change in 2025. And is this the appropriate message that the NHS should be sending when it is about to become the chief commissioner? Also, I think that as stated before, there are kind of anxieties all around with kind of wider stakeholders on the transfer of duties in the problem gambling structure for the UK.

So I don't think it was a PR. I don't think it was a public service announcement, but at the same time, I don't think that it was a warning. It was just very confused messaging by top physicians.

Andrew McCarron (08:17.134)
Do you think, I know you mentioned the use of some two years old stats there. Do you think this kind of highlights the importance that we, the UK needs a bit of, do you think we need a bit of an upgrade on how we monitor gambling harm and how we record it in order to better inform how public bodies like the NHS, but then I guess also the gambling commission and other agencies like that, approach how this issue can be tackled more efficiently? Yes.

Look, mean, problem gambling will always be the central conflict for the gambling issue. And how that is interpreted is really down to how you convey the stats. Now, part of the issue with that statement was that immediately the UK press kind of gathered on that as in, these are the NHS's direct concerns. Those have been kind of long existed. And I think even the conversation back now has kind of moved on from the stats that they were using to.

what is applicable and how do we kind of proceed to actually get better treatment and get kind of more direct interventions on problem gambling. It's, you know, I've got no problem with a festive message on anxieties about the festive period. However, I don't think it's reflective of where kind of the stakeholders involved in the RET and also in the kind of the frontline of gambling harm prevention are.

So yes, we need to kind of prioritize kind of better messaging all around for the gaming industry and the challenges it faces. And I just don't think that the NHS did that this Christmas.

There's been a lot of concerns as well. mean, from what I remember from writing on SPC news about this topic, like about over a year ago now actually. So maybe my memory is a little hazy, but there were a lot of concerns weren't there raised around the time that it got announced that the NHS would be taking on these duties about whether or not it sort of, this would be another burden for the health service after years of.

Andrew McCarron (10:20.632)
cut back so over the pretty much over a decade and then after feeling the impact of the COVID-19 pandemic, which as we all know was quite a difficult period for the NHS. It was very overstretched and dealing with a huge surge in demand. Whether or not, you know, after all this, whether or not the health service is really prepared to take on yet another duty and one that will require a lot of extensive research and

operation of various clinics. know there's clinics across the UK and there's plans to open quite a few more of them, is there not? So I'm sure those concerns are probably still abounding. in sort of amidst all of this, how do you think we're going to, how do you think we'll move forward by the industry and the government with monitoring how the NHS develops with regards to the RET levy and its new duty of care on problem gambling?

The NHS got what it asked for. It wanted to be chief commissioner and it wanted kind of a clear detachment from gaming and that happened and that was granted by the government. So I think we're coming into 2025 where that is the kind of first phase of how that structure and how that network will be transformed under its new kind of the NHS new guidance and also its treatment of the kind of structural support offered by, you know,

third party partners and whether that kind of leads to all round improvements again and how those kind of improvements are factored in and what conditions we keep on kind of returning to just as you're right, what a kind of political animal the NHS is and the pressures that it's under and also it's under pressures to know, feedback figures.

to on what is essentially, you know, a very hard addiction to determine and to kind of process. I think the anxiety is going to be felt this year and it's going to be kind of a critical phase between the industry and its wide relationships with political organizations such as the NHS and the gambling commission.

Andrew McCarron (12:38.764)
Welcome back to today's episode of iGaming Daily with myself and Ted Memmier, the two Teds. And we're here to talk about another dynamic duo, I believe, as the pan-European lottery giant, Allwin, has further diversified its business portfolio with an acquisition of Novibet. So Ted, again, I think you were the one to break this news for us on SBC News over the past couple of weeks.

Could you just give us a breakdown of what the dynamics of this deal are and what some of the reactions to it have been? Yes. No, no kind of rest period for industry deal making as on the last day, second last day of the year, all when announced that it would proceed with a 330 million pound investment to acquire 51 % stake in NoviBet. The deal kind of looks to refresh.

Allwin's online gambling portfolio kind of diversified further away from lotteries. And it's also an interesting deal because NoviBet has been a company that since 2022 has been rumored to either pursue an IPO or pursue a merger with another kind of gambling entity. So it's as if kind of to

know, its journey is kind of being resolved, it's going to come under kind of Owens ownership. But they are two very kind of different businesses. And I think a lot of eyes will be on kind of how the the the integration develops.

What do you think Orwind's primary objective is here? Because as we said before, they're traditionally a lottery company, they? obviously one of the biggest developments for them in recent years was securing the operating license for the next 10 years for the UK national lottery. So what do you think their objectives are here? Do you think we're going to see Orwind start expanding even more into other areas of the gambling industry, betting and gaming in particular, obviously?

Andrew McCarron (14:55.342)
Well, I think that's what caught the eye because this is for Alwyn. This is an all out investment in, you know, the online gambling market. Novybet is Greece's second biggest bookmaker. And I think that what it views in its acquisition is that I think Alwyn is responding to market pressures in which it can no longer just rely on lottery as its principle.

field. think even with the larger conglomerates, as we have seen with FDJ, there is a pressure to participate in every market related to gambling. I think Alwyn sees that and for a 330 million pound investment, took, it decided to strike on NoviBet. You know, these deals are,

are there to be kind of engaged with and to kind of change the strategy and kind of outlook of these companies. And I think it does that for all win.

Andrew McCarron (16:01.774)
I find it interesting with Novibet because they obviously spoke to our colleague Martin, I believe it was for the, for a recent episode of the SPC Leaders Magazine. And they were reflecting on some of their past ambitions regarding a public listing. Obviously now they're going down the route of becoming part of a huge wider gambling conglomerate. You think that's kind of indicative of how significant &A can be for a company in its growth ambitions as in,

by being acquired that being a vehicle for growth, as opposed to securing a listing and gaining more investment through that through shareholding. Yeah. I mean, reflecting back on for two years, Navibet was prepping up an IPO in 2022 and 2023. And that kind of got canceled due to kind of, I think primarily kind of due to more to market changes.

However, I think when we look at any deal, any M &A, I think you've got to be reflective of what's happened in the past 12 to 24 months and kind of the changes that the market is seeing. think when NoviBets looked at an IPO, think SPACs were hugely in favor and they were carrying kind of US money. That market has now changed. I think that partnering with Orwin, you're getting a company there that has good cash reserves.

But that also can extend NoviBit to reach towards a higher platform, diversifying its business further from Greece into new markets. Orwin is the bigger fish. It has big ambitions. And I think that it's another company that has to kind of test its online credentials. I think it can do that through NoviBit.

Yeah, I mean, like you said, they're definitely securing quite a proven brand in this regard. Quite a solid player in the betting space and their desire to expand outside of lotteries and get involved in more markets. I know this is something you've already kind of touched on, but as you said, they're two very different companies. How well do think they'll complement each other? How well do you think they'll get along under this new structure?

Andrew McCarron (18:21.006)
I think here we've got to kind of really look at Orwin like, yes, Orwin has grown its business out of M &A's, but their strategic M &A's have been focused very much on NAM based lotteries. And it also has like a lot of moving dynamics, a lot of pressure faced on how it will kind of change or kind of reinterpret the national lottery in the UK. So that's still very much up in the air. did the first.

first phase integration last year, but still there's a lot of kind of narratives there. Also, them taking on an online business, are kind of its expectations and ambitions for Novabed and in which markets it can grow. I think Novabed itself kind of believes that in key markets, it has reached its peak. It now needs to kind of find fresh ground. I think that a lot of eyes will be on Orwind's

H1 statements to see how this progresses.

And then just starting to round things off a bit here, as you noted earlier on, this really shows that there's no break at all for industry deal makers. M &A is still as active as ever, even around what's usually a bit of a lull period for the industry and every other industry really around Christmas. This was a very late M &A in 2024. What do you reckon this indicates for 2025? Are we going to have just as much of an active year this year?

I'm going to solely talk on a European perspective. I think that in key markets, especially now that we're seeing kind of a regulatory settlement across kind of the UK, Italy, and even parts like France and Spain, I think that any business that has, you know, market share or has a stable brand is up for grabs in the European space by the bigger operators or the bigger conglomerates.

Andrew McCarron (20:20.03)
We always return back to just how hard it is for the bigger PLCs to secure market position, but also just to grow kind of revenues and earnings by percentage. This is now mature markets. I think everyone kind of knows the realities of growth, but they also, I was talking to Mark about this, is that I think kind of European M &A comes with a flavor of like, you know what you're getting out of these businesses.

And you know why you are executing these deals. I don't think that they're as venturous as what you get in other flavors such as North America or South America. But I think we're going to see a much more kind pragmatic approach to M &A. the what I'd like to, what I believe is going to be kind of the valuation of kind of the mid-size enterprises that are remaining in Europe.

Okay, thank you very much, Ted. Yeah. Very thorough breakdown of that. Thank you for looking into your crystal ball for us. We'll see how those predictions stack up. We could always place a bet on it if you want to see what happens. Call me Mystic Ted, yes. And I think that's it for that's it from us today. Obviously quite two quite big developments for our listeners and our online readers to keep an eye on the NHS with progress with the

new remit it's got as a problem gambling treatment overseer, one of the better term I guess in the UK and what could prove to be yet again another interesting year in the &A side of things. So I've been Ted. Thank you Ted for joining me. Thank you for all our listeners for tuning in and we'll catch you next time.