Competition in the Australian online betting services market, currently led by Paddy Power-Betfair, has intensified further with Ladbrokes-Coral owner GVC Holdings acquiring local player Neds International for a maximum A$95m (€60m).
The purchase — which will see an initial A$68m change hands — will close the gap between Ladbrokes and the Paddy Power-Betfair-owned Sportsbet brand, which leads Australia’s online market, with a 33% share.
GVC said it views Australia as a core market, adding that the Neds deal “proves, beyond all doubt, that GVC is here to stay in the Australian market”.
Davy analyst Michael Mitchell said the GVC deal may be small, but is “strategically interesting”.
“The combination of its Ladbrokes business with Neds International will create the number three player in the region. Australia remains a very attractive opportunity for corporate bookmakers. As the dust settles on what recently-announced point-of-consumption tax changes mean for the competitive landscape in Australia, a small number of sufficiently-scaled participants are emerging. There is now no doubt that GVC intends to be part of this group,” he said.
Paddy Power-Betfair has been busy building its US business, but chief executive Peter Jackson has said he would be keen on making further Australian bolt-on acquisitions as rising taxes effectively price smaller operators out of the market.
Paddy Power’s share price — down 16% over the past 12 months — dipped marginally yesterday.