iGaming Daily

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I think the reality is that you have evoked and it is trying. It is doing everything it can to kind of put control costs first. We've seen this in closing around 250 UK retail shops. However, the debt from 2026 onwards to 2018 is just engrossing all bottom line or bottom line benefits. As the close of April, Evoke PLC published its much anticipated full year 2025 results. The delay in disclosing full year 2025 accounts is due to Evoke's board revising all options related to the future of its embattled business and its survival. The disclosure brings little to light as despite metric growth, Evoke Businesses anchored to corporate loss of £550 million. So as the clock ticks on Evoke's survival, What options remain for the Heritage PLC to continue? And in what shape or form will it emerge from ongoing negotiations? That we will discuss on today's episode of iGaming Daily brought to you by OptiMove, the creator of positionless marketing and number one player engagement solution for iGaming and sports betting operators. I'm Fernando Nott, Media Manager for SVC and your host for today, where I'm joined by the greats, uh Editor-in-Large, Ted Memir. How are you today? Very well, Fernando. Glad to be back from Malta and jumping on the podcast. Yeah, I see you're a little uh tanned over there. And then we also have another great Patrick Killeen. Patrick, how are you today? Yeah, I'm good, thanks. Unluckily, I didn't get to go to Malta this time, but I don't think I'd have got much of a tanner anywhere near as much as did. So, yeah, probably. So how was Malta, Ted? Very interesting, very good. The show was fantastic. I think one of the best we've done and we got a lot of very good content coming from the floor. So yeah, I'm to hit up some good news stories coming up. Yeah, absolutely. And I bet a lot of people were discussing evoke because long overdue they have finally published, like we said, their full year 2025 accounts. So Ted, what do the headline metrics tell us about the true state of the business? Yes, just looking at my notes, look, the numbers tell us what The market already knows, know, evoke is a PLC in distress. And from what it looks like, it's currently struggling for a lifeline. So look, let's just go through, through the numbers. Yeah. Look, leadership can point to 2 % growth in annual income that takes us to 1.7 billion in gross revenues. But as, but it's not fooling anyone, man, as the analyst noted. that this actually represents a real decline in terms of decline versus kind of UK inflation. And even if you kind of adjust the figures in taking kind of a weak sports margin, seen at Q4, evokes growth is struck at kind of 5 % year on year. And I think the sentiment here is that this is not really moving the dial for the PLC. It's a simple story here and I think what the analysts really seen evoke is that any terms or any kind of proceeds towards a return to growth are stuck in this kind of cycle of doom against kind of high, high debt interest repayments. So as you see kind of any incremental gains are wiped out and there has kind of minimal impact on the, the bottom line of the business. It's a long, long road in terms of pointing towards a recovery. Well, speaking of recovery, we all know that Evoke is some life support and has been for some time. But do these figures point to any credible path of survival for the PLC? Well, I suppose since the they initially saw thought that there was going to be an impact of 125, 230 million because of the UK tax increases, they're saying that that's going to be slightly lower now. We obviously know about talks with Bally's intro a lot. I spoke last week about how they have kind of revived the star, which is, you know, the Australian land based casinos. And we know William Hill, despite closing around 270 shops has a big presence on the UK high street. They've got over a thousand shops. there's, you know, there's potential there, but I think as Ted says, it's not just a quick fix. It's going to be a long old path to recovery. you know, that offer of 50 people share hasn't even been accepted yet. So there's, there is still quite a. quite a lot of doubt over the business. mean, I'd say let's not focus on the deal that's going to come down later in the podcast. But for me, it's just, if you look at it on the numbers, it's a very narrow pathway. And yes, look, it's cash generations about that have increased to 310 million. However, this is just consumed by an annual interest rate of 180 million on bottom line accounts. Again, this time comes at a point where all investors. are looking at the profitability of UK businesses. And what does that mean for Evoke, especially its William Hill assets? mean, how do you then incorporate that as an M &A and send it to investors and say, please, please back this deal? There are so many handwins for this company to adjust to. And where specifically do you see the positives for Evoke? Where can the company point to to say, hey, this is uh the path where we have we have to focus on to to improve our survival prospects. So are there any of them and then where are they? OK, so I'm doing my notes with podcasts and honestly, think Fernando this is the most difficult question. I look, I mean, I don't, you know. um I don't want to belittle this matter. It's not fun for a PLC to be in this position, right? So it's like, look, where do you look to? And again, you've got to go back to the numbers. It's all about what can you add and what is going down the bottom line that is disengaged from this debt. The only thing here is its international unit, increased revenues to $600 million, up 10%. So it's going to touch on the double digit growth and also kind of gaining market share in the countries of Romania and Spain. So that could be like a prominent uh unit that it can take out to market and it can say, look, this is one part of the narrative, right? But again, it's that kind of separation. It's been the case for this for two years with, you know, how do you separate kind of the growth factors of evoke versus its UK liabilities that are only going to increase from April onwards with uh that kind of 40 % RGT tax coming into play. of course, despite implementing cost controls, EBOC losses have doubled to 550 million pounds, Patrick. So why do you think EBOC is still taking such heavy hits? Yeah, so mean, this debt has increased to 2 billion. It's now embedded across the business. The priority will be paying back the bonds to shareholders. You've got a... a clear kind of gaping hole in the business and it's very hard to look for any sort of positives. You know, you've got the tax increases incoming this year as well, so it's still a long road to recovery really. I think Patrick's putting quite a PC picture on this. I think the reality is that you have evoked and it is trying. It is doing everything it can to kind of put... control costs first. We've seen this in closing around 250 UK retail shops. However, the debt from 2026 onwards to 2018 is just engrossing all bottom line benefits. This is a company that services debt above anything else and debt is all around it. And what about the analyst focus? Where are they looking at right now in terms of the box? survival strategy and how the business is being positioned for a potential sale, Ted? It's interesting here because um the investors, or sorry, the leadership of Evoke claims that the business is kind of sale ready now. I don't think the analysts are buying that. I think where the analysts are probing is the cash flow, how much of a runway Evoke will have till now, till the end of the year, and how does that kind of implement or affect its current position and options, right? That is it. And again, how is kind of if I can kind of play out the UK dynamics that are going to come in, the number one being the 40 % tax impacting its UK remote gambling revenues. Again, how does it impact kind of the bottom line performance? What will it bring in by the end of the year? And how does that kind of please the market? I think we're going to get on to kind of the M &A in part two, but it's easy here that the focus here is cashflow against card pressures. Yeah, absolutely. And of course we will have to go deep into the M &A side of things because it's an obvious route for Evoke's future. But right now we're going to do a very quick ad break and we will be right back with more iGaming Daily. Learn how OptiMove's positionless marketing is changing how iGaming teams operate. Discover how operators are using OptiMove's positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bet slips, and create engaging game-wide experiences. Learn more at OptiMove.com. And we're back with more iGaming Daily to continue discussing Evoke's struggles and their future, as Patrick has already teased in the first half. It has emerged that Ballis Interactive is a potential shooter for Evoke, but can you break down what we know about the offer so far, Patrick? Yeah, so it's Ballis Intralot. So the deal is of 50p per share, which equates to a valuation in and around the 225 million pound mark. Now, the key kind of thing that's come up since this offer a couple of weeks ago now is the debt, we spoke about William Hill's debt, but Bally's intro lot is also in around £1.5 billion worth of debt. So you're talking about, you know, a combined entity with a debt of £3.5 billion, which is, you know, there's going to be a lot of question marks raised there. I think what's kind of striking about this deal so far is that it's at 50p per share, but if you look at Evoke, share price now they're still hovering around the 35 P mark, which shows that there's kind of a lack of market confidence as well in this in this deal being completed. As I said before, Bally's corporation, sorry, their takeover of the star has kind of it's sparked a little bit of a turnaround in their business in Australia with their land based casinos. But again, they still look at I mean, Ted will jump in on this as well, but there's so many considerations and question marks over this deal, even since in the couple of weeks that it was announced that talks were taking place. Yeah, I agree. mean, I don't know if, you know, how to label Bally's approach. It is, know, evoke is, is it a distressed opportunity or is it a rather kind of a viable opportunity for Bally's to get kind of instant market share and just really significantly increase its access into the UK market. It comes with a massive risk that when you add two billion to a corporation in debt, you really are looking at kind of a changed operational structure. And then the integration of Evoque and its brands becomes kind of essential in how do they integrate. to an already very kind of complicated ballet and interlock arrangement, which, you know, hasn't integrated just yet. So again, it's one of these crazy deals that can only happen in one industry, that being gambling. And of course, it's a risk for ballets to take over Evoke, but what about Evoke's side? What about them? What about this offering? Does it look like a take it or leave it proposal from Bally's? Do they have room to negotiate for a better deal? Or is this effectively a do or die moment for a Boathead? I think you hit it on the nose. think it is time to do or die and take it or leave it offer by Bally's. mean, as a shooter, I think it knows what it's doing. that 200 million for that opportunity to gain a heritage UK brand and William Hill. And get significant market share in a market as competitive as the UK is worth it. The long-term risk, as Patrick mentioned, is that debt control and how it reconfigures, know, values and evoke assets into one corporation and who actually buys, you know, who's actually going to invest in that company to become kind of a UK mammoth. Again, If I take it back to the evoke board, they're going to have to be very, very skillful if they can kind of prolong these negotiations and even get some wiggle room to kind of price up assets. I don't think that evoke in its current status wants to go to market or even like chop down divisions and say, look, we'll sell retail, we'll sell retail at one unit. international and other, I just don't think it has time on its side. Okay. And Patrick, you mentioned a few names in the first half, but are there any realistic prospect of competing leaders from emerging for evoke or parts of the business? mean, Ted just said they're not likely to split it up, but are other companies realistically interested in competing for an evoke bid? I don't know, there was talks of maybe Bette Fred weren't there, but nothing's really emerged since then. um It's, as Ted said, the opportunity is William Hill, Heritage UK brand, you know, even though 270 shops are closing, you've got uh a plethora of shops on the UK high street. Is there an opportunity in retail with, you know, that kind of portion being exempt from? The tax hikes, that's you. But I mean, retail betting, as we know, in the UK is down consistently. it's eh a, you know, it's, as Ted said, it's a buy that's a distressed kind of sale. are you, is anyone else willing to take on a business in this amount of trouble already? uh I look, I think that all leadership teams have looked at William Hill because it's a brand, it's got position. However, I think that when it comes to going on the table and showing your hand, that's a completely different matter. And I think that if you are a CEO of a gambling PLC, it's even going to cost you to show your hand to go for William Hill. So what's the trouble there? This is why I don't buy that bet for it. Upworld Sports would have looked at. I mean, I think they would have assessed the deal, but I don't think that on any terms they're willing to show their hand. Which I might be proven wrong, right? Is it just a case of Bally's trying to gain UK market share? Yeah, I don't at a discount rate. I think the terms are favourable to Bally's, but what Bally's has to sell, it's future enterprise. And of course, Evoke is in survival mode, but still it has PLC status. So does that leave room for a late stage lifeline or maybe an improved offer for Evoke? Here I kind of zone in your definition of kind of a lifeline. Because I mean, look, at least it's got an offer, right? So we know that this is being assessed. It might be the only one on the table. We don't know what this is going to look like in kind of two months time. However, look, I think that... In terms of a lifeline here, what we're looking at is like, know, will its assets survive? I think so. But I don't think that once if, you know, baddie's processes is this deal, it goes ahead. I don't think it's keeping the whole of evokes organization. think its immediate reaction will be to how it kind of consolidates debt. Also kind of renegotiated finance, but also has to return to the table with its investors and say, look, we're now kind of enlarging our UK business. How do we trim the fat off that? What key key units are we going to integrate? And again, I think that we will look this. I mean, I think this is going to be a very transformative deal for the UK. but not in terms of an expansion, but more in terms of kind of an entrenchment of what is happening across the board. It's a new era for everyone. I mean, as you say, Evoke still carries its BLC status, but it's been said that it was kind of being a bit light on Evoke, but their reputation in London as a listed company has kind of been tarnished over pretty much ever since the William Hill acquisition, right? Their losses are there for everyone to see, the debt's there for everyone to see. that them carrying PLC status even a positive at this point? Well, it's a nice generic term. It's quite interesting what you just said, Patrick, but um you also mentioned a change of era. So is this the end? game for a heritage BLC. And what does it tell us about UK gambling's current status? To a point, yeah. I think whoever owns Evogue, whichever assets they choose to keep, it always comes back to kind of what do you do with William Hill and what do you do with this very specific UK brand that doesn't translate internationally, that faces these very, very localized headwinds. How do you reset it to read to the state? Now this is going to be like the second or third owner that attend this. And I think like Patrick said, it can no longer just go back to saying like we're William Hill, we are high street presence. That just doesn't count in modern Britain. Yeah, I think that this, it is kind of a signal of an era and its transition. I think like, mean, the instant kind of issue to address would be the debt. And then as you say, which assets does it want to keep? You're probably thinking William Hill is the key driver of of Bally's making the offer. Endgame, I think. I'm with Ted in that it will probably will survive to an extent, whether or not This offer goes through really, but there's lot to address, to say the least. Definitely. We'll have to hashtag wait and see what happens. Will Bally's acquire Evoke ultimately? Will the land-based gambling industry in the UK change? Will Ted Memur maintain his stand coming back from Malta to Manchester? We'll have to wait and see for that. But that has been all for today's episode of iGaming Daily. Thank you very much, Ted, Patrick. Thank you very much to A.M.McDonald for producing this episode. I'm Fernando Nutt and to our listeners out there, we'll see you in the next one. Goodbye.