New CEO Shay Segev says GVC aims to be “the most responsible operator in the industry” as he outlines a blueprint for growth.
UK.- Shay Segev, the new Chief Executive of GVC Holdings, has outlined the business’s four key priorities to drive growth.
He made the announcement as the operator published first half results, showing an 11.2 per cent drop in revenue year-on-year, with online growth failing to make up for drops in UK and European retail revenue due to the Covid-19 pandemic.
Segev said GVC’s four priorities for future growth would be leading the US market, organic growth, expanding into new markets and honing a reputation as the “most responsible operator” in the industry.
To those ends, GVC has already reduced TV advertising, implemented metrics to track player behaviour and created a dedicated team to intervene when it detects signs of players gaming being out of control. It has also introduced a function to set voluntary stake limits.
Regulated or soon-to-be regulated markets already accounted for 96 per cent of revenue in 2019, and the proportion is set to rise further.
Segev, who took over as CEO last month, said: “Our industry-leading technology will enable us to grow responsibly and sustainably, using our data-driven customer insights to ensure all of our customers have an enjoyable and safe experience while gaming with us.
“It is clear there is no one single silver bullet for tackling the issue, but behaving responsibly is a fundamental part of our DNA. We cannot be a sustainable business without being a responsible one.”
In terms of markets, the US is GVC’s top priority. Segev said the country represents GVC’s “single biggest growth opportunity” and estimated the US betting and iGaming market will be worth around $20.3billion by 2025, with legal betting accounting for $13.5billion and online gaming $6.8billion.
He said GVC’s joint venture with MGM Resorts – BetMGM – had everything it needed to take a leading position across the US.
It already has access to 21 states, representing 51 per cent of potential players in regulated markets, and has gone live in seven with four more launches expected by the end of the year.
GVC estimates that New Jersey alone will generate online revenue of $130million for the year. It also expects customer acquisition costs to be cut to between zero and $150 due to a stream of partnerships with Yahoo Sports, the National Basketball Association and other sports teams and through integration with MGM’s M Life Rewards programme.
Segev said: “Combined with the appeal of our products, the strength of our offer, and our outstanding digital marketing and customer retention tools, we expect these to result in highly desirable payback metrics and strong customer retention as BetMGM works towards market leadership across the US sports and online gaming market.”
GVC’s other priorities are organic growth in existing markets, driven by its technology, and expansion into new markets.
Segev said there still remained another 50 regulated or soon-to-be regulated markets with a total population of 1.3 billion and potential gross gaming revenue of $45billion that GVC would aim to tap into, possibly through M&A activity if suitable targets emerge.
He said: “We can enter many of these markets with internationally recognised brands such as bwin and PartyPoker, which can be operated from our existing regional businesses using our unique proprietary technology platform, enabling relatively low cost entry.”
GVC saw net gaming revenue for the six months ending June 30 fall to £1.62billion, down 10.7 per cent from the same period in 2019. Most of that came from the growing online business, which saw revenue of £1.21billion, up 19 per cent on H1 2019.
Of that, £752.6million came from iGaming, up 31.0 per cent, as GVC estimates that 40 per cent of Gala Bingo players migrated online from retail. NGR from online sports betting rose 4.8 per cent to £484.5million.
In retail, UK revenue dropped 52.6 per cent to £277.9million, with retail outlets closed from mid-March to June 15. Stakes declined 54.5 per cent year-on-year to £724.8million.
Revenue from machines, which was already down on 2019 before the pandemic due to the introduction of £2 stake limits, dropped 57.2 per cent to £133.5million.
European retail revenue from shops in Belgium, Ireland and Italy declined 47.6 per cent to £75.5million.
Segev said: “Given the unprecedented trading environment, GVC has delivered an encouraging performance in the first half, underlining the strength of our diversified business model and the expertise, adaptability and dedication of our people.”