UK: Sportech Takes on Lotto

London-based online sports betting provider Sportech has acquired Birmingham-based online lottery operator LOT.TO. The deal is designed to help optimize the international business of both providers following a restructuring phase.

"Our existing lottery product and sports betting capabilities are being significantly improved. In addition, this acquisition will effectively and efficiently support our digital development as well as our global para-mutuel capabilities."

No word yet on the financial details of the deal. What is clear, however, is that Sportech will henceforth have a "100 per cent stake in LOT.TO". In addition to consolidating its global gaming capabilities and services, Sportech also plans to expand its gaming services offering, particularly in relation to lotteries and betting, as well as player management systems provided on cloud-based iLottery platforms. UK-licensed online lottery company LOT.TO has already worked with gambling companies such as Lottoland, CelebPoker and media giants Sky and Virgin. Just two months ago, LOT.TO also announced a partnership with Danish online casino group https://casinoudenrofus.info/casinoer-uden-nemid/. The deal focused on the introduction of a new system called Sportradar Numbers Betting Online Solution. This is a new type of online payment system for fixed-odds betting, which is designed to guarantee easy and efficient deposit and withdrawal processing . The system will set "new standards", especially in terms of voice recognition. In addition, the software accepts a "large number" of currencies. In addition, Sportech also works with Sportradar.

Acquisition of "central value"

LOT.TO is particularly attractive to its new owner Sportech because of its international orientation. McGuire also sees the benefits of the acquisition, which in this context also refers to current developments in the global gaming market: the lottery market potential is of "central importance". McGuire provides some relevant and clear figures , the quote reads:

"We estimate that by 2020 the global gaming market will have annual sales of $635 billion, of which the lottery sector accounts for around 30 per cent. Our alliance with Lot.to will enhance our existing core lottery product and help us drive global growth and reach an ever-growing digital audience."

McGuire is also receiving support from LOT.TO co-founder Andrew Lindley, who has also taken a stance on the potential of the iLottery industry. The takeover has given both companies a technical edge over their competitors , in any case "no other gaming product has the same global appeal as lotteries". Lindley to the editorial:

"Our customers will benefit from the combination of our proven processing technology and Sportech equipment. Our innovative iLottery platform will provide a synergy of unique offerings. Together we can offer our customers a truly first-class omni-channel solution."

Restructuring at Sportech

Sportech first announced plans to take over LOT.TO last November, just days after the company issued a second loss warning for its shareholders for 2018 . Sportech shareholders had to come to terms with a minus 15 per cent because of losses due to a lack of sales. Richard McGuire stressed that adjusted EBITDA for 2018, excluding sports betting investments, is expected to be five to ten per cent below market expectations of €9.9m. However, the latest forecast confirms a 14 to 20 percent increase in adjusted EBITDA compared to the previous year. The projections are based, among other things, on planned expansions in the US, where Sportech has a presence in Connecticut under the Sportech Venues brand. Sportech already has 16 horse racing and dog racing betting venues. In addition, the operator has obtained an exclusive license for phone and online services . Sportech CEO (outgoing) Andrew Gaughan recently commented on the overseas business:

"We are actively working with Connecticut and other US states to obtain sports betting rights as a licensed operator and we expect sports betting revenues to grow, especially in the second half of 2019."

New CEO

Incidentally, Andrew Gaughan resigned just eight months after his appointment as managing director, also last November. He wanted "to pursue other interests", he said in a personal statement. The 52-year-old joined Sportech in 2010 and became a board member in January 2017. Gaughan will be officially dismissed from the team later this month. In the meantime, CEO Richard McGuire has presumably taken over the running of the business.