WILL HILL'S ITALIAN VENTURE SOLD

4 July 2008

Intralot Italia acquires WHCI for Euro 5.5 million


The British bookie group William Hill's Italian joint venture with Codere Italia Srl. has been sold to Intralot Italia for Euro 5.5 million the company announced this week. The deal does not include the use of the William Hill brand name.

The proceeds of the deal will be shared equally between Will Hill and Codere.

Reporting on the sale to the Turkish company, The Guardian newspaper said that it represents a withdrawal by William Hill from the Italian market after only 18 months, writing off GBP 1 million in agreeing to sell the embryonic joint venture with Codere.

Intralot SA subsidiary Intralot Italia spa has acquired full ownership of William Hill Codere Italia Srl. (WHCI), thus further strengthening its position in the Italian betting market.

The deal brings to Intralot 55 additional licences for horseracing and sports betting points of sale that WHCI was awarded following a competitive process in 2006. In the same process Intralot acquired 33 percent of the total licenses for the large exclusive sports betting points of sale that were finally granted, or a total of 416 licenses and 164 additional licenses for non-exclusive points of sale.

The company will migrate the current internet operations of WHCI to its own assets.

Italy, along with parts of Spain, has been targeted by several British bookmakers as the Spanish government liberalised its betting shop industry. Gala Coral's Eurobet has 403 shop and kiosk licences in Italy while Ladbrokes has 142 licences and has acquired 25 already trading betting shops.

About 12 000 Italian licences were granted in 2006, adding to about 1 000 existing sites, but William Hill's joint venture with Spanish gaming firm Cordere won only 57. In announcing the sell-off, William Hill CEO Ralph Topping said the operation was "insufficient in scale to provide an attractive long-term return".

In a very short period of time, Intralot Italia has managed to rise prominence among the top three companies that currently operate in the highly competitive Italian betting market, while its market share is posting impressive increases in the market.

The deal also means that Intralot boosts its presence in the Italian horseracing betting market, since 20 of the WHCI licences are dedicated to that sport.

Intralot CEO, Constantinos Antonopoulos, commented: “Intralot optimizes and consolidates its position in the Italian market through this significant acquisition. The fact that we have managed to gain an impressive market share in such limited time inspires a clear vision; to continue our successful course to the top, offering more exciting gaming experiences to the Italian community.”

Intralot has a presence in 45 countries on 5 continents, with approximately 4 400 employees and revenues in 2007 of Euro 835,5 million in 2007.

Update: Topping has also reviewed William Hill's underperforming online poker operation, which is in line for change. The Will Hill poker business has struggled to increase player numbers as a major licensee of software firm CryptoLogic. The deal between the two comes up for renewal at the end of the year, and Topping could move the business to one of the other major poker networks, or seek a collaborative solution with smaller companies.

He is on record as believing that Internet gambling could generate as much as 30 percent of his group's gross win business in the future, and he has already overseen a switch in online sportsbetting software to Orbis, which will launch a new Will Hill sportsbetting website in November.

The Guardian opines that Playtech could be the Internet poker network of choice for Topping; the number of players on its iPoker network has overtaken numbers playing with PartyGaming's PartyPoker, making iPoker the third largest poker liquidity pool after PokerStars and Full Tilt despite its bar on US action.

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