Approve of it or not, gambling is among the service industries at which Britain excels. Viewers of the World Cup, cricket or any other sport are bombarded with the opportunity to lose hard earned cash.
Ascot is the stuff of royal parades and new soap operas. But the digital revolution has seen the great names of blood-stock racing, Ladbrokes and Coral, playing second fiddle as branded offshoots of FTSE 100, GVC.
Having conquered the UK and become a big player across Europe, GVC and its ambitious boss Kenny Alexander have set their sights on the newly opened £7.5billion American sports-betting industry.
The field heads into the first turn of the Kentucky Derby. Europe GVC and its ambitious boss Kenny Alexander have set sights on the newly opened £7.5bn American sports betting industry
Sensibly GVC is not going it alone and is ploughing £75million into a joint venture with casino giant MGM Resorts.
The aim is to take GVC’s expertise into at least 15 American states after the Supreme Court ruling which lifted the cloud over on-line sports betting.
The aim of the joint venture is to bring together MGM’s brands, sports knowledge and connections with GVC’s gee-whizz technology.
The two companies also will work together on casino betting and online poker GVC’s deal follows the decision of Paddy Power to join with Fanduel, a fantasy-sports company.
The British assault on the US is a far cry from when UK gaming executives feared to step foot in America after a number were arrested by the FBI on wire-fraud charges.
There is no shortage of sports for GVC-MGM to offer odds on, ranging from horse racing to baseball. Each major league team plays a remarkable 162 games per season.
The opportunity was recognised by GVC investors with the shares surging 5.4 per cent in latest trading.
But there are also risks. The US Justice Department has long been cautious about gaming and its association with organised crime and money laundering.
There is also a cultural obsession with match fixing dating back to the 1919 World Series when Shoeless Joe Jackson was infamously nobbled, found out and banned for life.
GVC may have the gaming software but could be challenged by compliance. It also places its own intellectual property at risk.
If sports gambling is as profitable as projected, it looks unlikely that America’s big casino companies will let the British outfits eat their cake.
As the US firms develop their own technology, the UK upstarts could soon find themselves at the back of the queue.
GVC boss Alexander shouldn’t give up the day job just yet.
Anyone looking for evidence that gambling can leave you bad place need look no further than Freddy David, managing director of defunct HBFS. He has been jailed for six years and banned as a company director for a decade.
Much of the money that David spirited away was wagered on his betting habit. He spent £15.6million on gaming websites, losing £240,000 in one day alone.
New industry self-regulator Gamstop was too late to curb David’s excess.
The HBFS boss was a poor person’s Bernie Madoff, operating a Ponzi scheme from his offices in Borehamwood, Herts in contrast to Madoff’s glamorous setting of the Palm Beach Country Club.
Madoff preyed on friends in his community and was sufficiently convincing to include among victims the Holocaust survivor and Nobel Prize winner Elie Wiesel.
The attraction of the Madoff funds was regular, above average returns rather than super-charged profits. David was similarly modest about pay-outs offering returns of 4 per cent to 8 per cent in a period of super-low interest rates.
As with all Ponzi schemes, new money coming in was used to pay the interest to existing investors while the capital was transferred into private accounts using forged documents. David’s scheme deprived victims of millions rather than the tens of billions extracted by Madoff. But the bitterness among the friends he betrayed will never be assuaged.
Wiesel proposed that Madoff spend his imprisonment watching a repeating video with images of his victims. David should face the same.
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