Sportingbet to Sell Turkey Unit and Boost Regulated-Market Sales
Oct. 14 (Bloomberg) -- Sportingbet Plc, an online sports betting company, said it agreed to sell its Turkish-language website to East Pioneer Corp. for at least 125 million pounds ($197 million) to increase its revenue from regulated markets.
East Pioneer has a service agreement with Isle of Man-based GVC Holdings Plc, Sportingbet said in a statement on Regulatory News Service.
This week, Ladbrokes Plc ended takeover talks with Sportingbet in part because of concerns about possible liabilities linked to its presence in Turkey, where Internet gambling is not licensed. Today Sportingbet said the sale will push the proportion of its revenue from regulated markets to half, and later to as much as 70 percent.
“Following this disposal, Sportingbet will derive the large majority of its earnings from regulated territories,” Chief Executive Officer Andrew McIver said in the statement. “The proceeds from the sale of this unregulated income stream will be used to drive forward the rest of the group.”
At first, the sale and move toward regulated markets will cut profit as the company seeks to comply with rules and taxes in the licensed markets, Sportingbet said. Later, profit may grow even though costs will be higher.
Earlier this week, Sportingbet acquired two Danish gambling companies to expand in Denmark, which starts licensing online betting on Jan. 1.
The Turkish sale price is based on Sportingbet receiving a portion of the profit for at least three years.
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