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The Greek lottery operator, the gaming operator bally Intralot has reached an agreement to buy Evoke, is the parent company for a range of internationally known gambling brands including william Hill and eight eight eight Casino. Joining us now for more is Robson Reeves, CEO of Bally's Intralot, who joins us now after the fresh announcement just today of this m and A deal. Welcome to Bloomberg Radio. Very pleased to have you on. Just tell us about the motivation
behind this acquisition. Why this purchase? Why now?
Well, we've chosen to acquire Evoke. We want to become a very dominant European player. We've been highly concentrated in the UK market actually of Bally's Intralot as a B two C provider, and this allows us to become a podium per position operator across six core markets in Europe. We become the number two operator in the UK and this gives us the diversification we always wanted with Italy, Spain, Romania and Denmark and will continue to expand internationally. These
are great regulated markets and I love regulation. We believe that the partnership that we have with our regulators is critical to future growth forever.
More right, and this acquisition, you know, valuing the company at fifty two pence to share, it's about a twenty percent increase to the company's closing price yesterday total xpvalue of two hundred and forty three point one million pounds.
But of course if it used to be worth a lot more, and it has had a tricky couple of years, you go back to twenty twenty one and it was worth more than a billion pounds, what do you think that you would be able to do with a Vogue that is going to help turn this around, to help make it more profitable.
Well, if you look at our business and compare us to Evoke operating EBITDA margins, it's above forty percent and there sits at approximately twenty percent, and there's large similarities there. So we'd obviously have to look at the cost structure, would look at how they spend marketing money. This tax increase that recently was introduced in the UK has obviously caused challenges for various operators with lower margins, so I
expect consolidation. Our technology is very powerful, we have a lot of data and we build I would say, very good models which retain customers well by allowing them to spend affordably for the long term. It's meant that our growth in margin and profitability has been consistent every year for since I can remember.
Yeah that you know you're talking about the gross gaming yield tax that the UK has. Basically is not a tax on winners or the individuals, a tax on the businesses, isn't it. I mean, why are you prepared to take on this increase burden in terms of the gambling tax burden and also the risks that may become with a government that is in flux, that might see a more left leaning government.
This tax increase, it was a surprise to us all how much it's increased by. With our margins being at least ten percentage points above any of our peers, it puts us in a very strong position. If there were further tax increases, I think there'd only be one operator left. Very lots of companies will go under. There'll be lots of job losses from the long tail. This I viewers really acquiring a voke in order to become the business that we always wanted to become. Which was for far
more diverse, so we are we're not rescuing them. It actually transferm warms us into the business we wanted to become. But I do expect many smaller operators to leave the market because it's simply unsustainable. You should understand that this tax at forty percent in ee gaming isn't a tax on profits. It's a revenue based tax, which is significant.
And of course much of your business is now taking place online. It's a very fast growing profitable area. But there are also you know, hundreds of many physical shops of from William Hills on high streets around the country. How important are they to your business model? How core do you see them moving forward?
I viewed them very much as a great bit of signage that we have presence throughout the country. They are places where many people engage again nationally, so there's different
audiences who go who go there. William Hill have already come up with a plan and Avok have already come up with a plan to reduce the number of stores because they need to rationalize that footprint because not only taxes increase, there's been other costs associated with the employment, which has meant that many of these shops are not profitable. I hope that we can keep the high street alive. We've seen a mass reduction in the high street in all industries over the years, so I don't have any
intention to change that. We believe we can fix the UK online business and we get these other attractive assets alongside.
It would be fair to say that the high street stores are not cause your plans for a Vogue and william Hill moving forward.
We believe in omnichannel, we believe in having presence physically as well as online. But I would say to make this deal work for us, they are not core.
Okay, look, A think it's very interesting what you've told us about about the agreement and sort of understanding how you see this M and A I think is fascinating. I want to put one other. You know, one of the tough points I suppose Labour's Dawn Butler. You know she's one of the key campaigners trying to get rid of UK high street betting shops. She's talked about that quite frequently. What would your response be to that sort
of political view on your business. You know, she's argued quite strongly that these sorts of shops breed poverty and addiction. What would be your response to that.
I think a lot of people spend very sustainably. They spend sensibly. We only hear from the perspective of people who unfortunately have developed gambling problems. You should actually look at the large audiences who partake in gambling very safely and they enjoy it. It's a pastime. Most people don't consider betting on the lottery gambling. It is gambling. It's a form of gambling. Similarly, there's other products which everyone partakes in, like the Grand Nash and so on, so
people can engage in gambling safely. And I believe that we should really focus on what the full domino effects of some of these decisions are. There is significant employment and significant tax generated by people having jobs, you know, in these stores. William Hill employ over eight thousand people across their retail footprint.