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GVC to rebrand as Entain to reflect socially responsible future

| By Robert Fletcher
GVC Holdings has set out a new sustainable growth strategy that will see the business rebrand as Entain and commit to generating 100% of revenue from locally regulated markets by the end of 2023.

The operator said the new strategy will be driven by its proprietary technology platform and supported by a range of strategic initiatives, a number of which will launch immediately.  

Among the five sustainability ‘cornerstones’ was a proposal to rebrand the group as Entain plc, which GVC said would reflect the fundamental changes across business and the wider industry. The name change is subject to shareholder approval.

“Under our new corporate identity, we will continue to use our unique technology platform to build on the exceptionally strong momentum that we have in our existing markets, grow into new markets, reach new audiences, enhance the customer experience, and provide industry-leading levels of player protection,” GVC chief executive Shay Segev said.

The strategy will also see the business aim to generate all revenue from regulated markets by 2023. Currently, 96% of revenue is from markets that are nationally regulated or regulating, a figure that is expected to reach 99% by the end of 2020.

If it becomes apparent that regulation in markets is unlikely, it would seek to exit the jurisdiction, it added.

The business will look to further ramp up its focus on player safety and protection, with the launch of the new Advanced Responsibility & Care (ARC) programme. Additional customer checks will also be implemented across all customers, to better track potential harm.

These player protection efforts will become a key metric for company bonuses. From 2021 a responsible gambling metric will be incorporated into the group’s annual group wide bonus conditions.

In terms of improving corporate governance, GVC said its board and nominations committee would continue a commitment to bringing greater diversity to the group, with further changes to be made to the board’s membership in due course.

The final cornerstone of the GVC sustainability strategy is to continue recruiting, retaining and nurturing talent from across the industry, with a continued focus on diversity.

This part of the strategy will also include a commitment to wider communities with the launch of the new Entain Foundation, a programme that will donate £100m (€111.9m/$131.9m) over the next five years. This will include the new Pitching In programme, which supports grassroots sports and sportspeople.

“We are absolutely committed to pursuing the highest standards of corporate governance, to providing outstanding career development opportunities for our colleagues, and to supporting the communities in which we operate,” Segev said.

Looking at the growth aspects of the strategy, GVC split this into four strategic imperatives it said would significantly increase the scale of the group over the next three to five years.

These include the aim of becoming the leading operator in the US through its BetMGM joint venture with MGM Resorts, which it aid already has an estimated market share of 18% across the state in which the brand in active.

GVC also set out how it intends to grow within its core market, having identified “substantial headroom” for further growth in some existing markets. At the same time, the operator will seek to enter new, regulated markets through organic opportunities and M&A activity.

In addition, GVC will look to expand to new audiences, highlighting esports and digital gaming as focus areas. Both of these segments are becoming hubs for rapidly growing audiences, GVC said, which would in turn create new opportunities to grow market share.

“Our clear strategy of prioritising sustainability and growth will allow us to achieve these goals, thereby providing long-term value for all of our stakeholders,” Segev said.

Meanwhile, GVC has published a short trading update based on how the group’s new sustainability strategy will impact the business moving forward.

Earnings before interest, tax depreciation and amortisation (EBITDA) in 2021 are set to take a £40m hit, due to the impact of GVC exiting unregulated markets and the group rolling out new player protection initiatives.

However, this looks set to be more than offset by an expected £50m online trading benefit next year.

Last week, GVC warned that the temporary closure of betting shops in England could lead to a £27m decline in EBTIDA for the year. Coupled with restrictions in place across Europe, GVC said the overall fall in EBTIDA could reach £37.0m.

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