Regulation aiding gaming sector decisions – Laslop

Regulation aiding gaming sector decisions – Laslop

Tuesday, August 25, 2015
EiG speaker backs good governance as key to big deals

Intertain chief financial officer Keith Laslop believes that good regulation has been the key driver behind the consolidation trend in the gaming industry.

Laslop – who will be a speaker at this year’s EiG event in Berlin – told TotallyGaming.com that effective rules and regulations have allowed companies to operate with confidence and thus make long-term decisions and spend large amounts of money.

Slots and bingo specialist Intertain spent £370m (€521.7m/$578.4m) on Jackpotjoy and other Gamesys operations earlier this year, while Laslop also noted big international takeovers, such as Amaya’s $4.9bn purchase of PokerStars as evidence that the industry has moved on from the uncertainties of the Unlawful Internet Gaming Enforcement Act (UIGEA) era.

“I believe regulation - combined with the ensuing taxation - has kickstarted this period of market consolidation,” Laslop said.

“Regulation has allowed the financial industry, and specifically debt markets, to get more comfortable with the risks associated with online gaming, as no investor wants to be part of another UIGEA.

“Regulation in the UK has allowed CVC to be able to calculate future Point Of Consumption (POC) Tax for SkyBet, which allows them and their debt providers to get more comfortable with future cashflows.

“Banks were able to more accurately predict cashflows from PokerStars, which allowed Amaya to raise $2.9bn of bank debt to fund the Rational acquisition. Neither acquisition would have happened without access to debt.

“In the last year, banks/credit funds have become comfortable with the large and stable cashflows produced by the online gaming industry, even if we can’t offer them much in terms of physical collateral.”

Laslop also believes that the trend is far from over, explaining that it could take an economic event to change the industry’s course. 

He added: “As most large companies in the online gaming space have little debt on their balance sheets - a significant number have negative debt, or excess cash - I see the consolidation trend continuing until a macro-economic event happens that shuts down debt markets.”

Laslop will head a session entitled ‘Reacting to the market – how to reposition your business to remain competitive’ at this year’s EiG, and said that Intertain is hoping to link up with like-minded companies at the Berlin event.

He said: “We want to meet some great companies large or small that believe in our vision and want to join us in achieving it.”

EiG 2015 takes place at Arena Berlin from October 20-22. Visit www.eigexpo.com for further information.

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