UK betting and gaming update Hospitality and leisure July – September 2016

UK betting and gaming update is produced and distributed by EY quarterly. It is a digest of current news articles about the UK betting and gaming industry. We hope you find it both interesting and informative and we would welcome your feedback. If you would like any further information or would like to be included on our mailing list please let us know. Please contact: Cameron Cartmell Partner, Ernst & Young LLP (UK) EY EMEIA Hospitality & Leisure Leader Hospitality & Leisure +44 20 7951 5942 ccartmell@uk.ey.com

Grant Humphrey Director, Ernst & Young LLP (UK) Hospitality & Leisure +44 1582 643182 ghumphrey@uk.ey.com

Betting and gaming update: July – September 2016 EY 1

Q3 2016

Listed betting and gaming company share price information

Company Market cap (29 Sep 16)

Share price (29 Sep 16)

Share price (24 Jun 16)

Change in price

12-month high

12-month high date

12-month low

12-month low date

32Red (AIM) £126m £1.48 £1.31 13% £1.74 01 Mar 16 £0.72 01-Oct-15

888 Holdings £790m £2.20 £2.08 6% £2.34 08 Apr 16 £1.60 01-Dec-15

GVC Holdings £2,145m £7.34 £5.66 30% £7.69 20 Sep 16 £3.72 01-Dec-15

IG Group Holdings

£3,165m £8.65 £8.05 8% £9.60 18 Aug 16 £6.99 09-Feb-16

Ladbrokes £1,404m £1.39 £1.22 14% £1.62 26 Aug 16 £0.93 29-Sep-15

Paddy Power Betfair

£7,211m £87.31 £87.25 -0% £108.63 01 Feb 16 £74.73 14-Oct-15

Playtech £2,933m £9.19 £7.98 15% £9.24 26 Aug 16 £7.10 11-Feb-16

Rank Group £808m £2.07 £2.17 -5% £2.95 08 Jan 16 £1.99 27-Jun-16

Sportech £164m £0.80 £0.57 40% £0.81 21 Sep 16 £0.50 02-Mar-16

William Hill £2,608m £3.00 £2.76 9% £4.03 29 Feb 16 £2.52 04-Jul-16

Source: The above information is sourced primarily fromThomsonOne.com and additional publically available sources. Share price information is presented for the largest 10 listed UK betting and gaming companies by market capitalisation. The companies that constitute the largest 10 are refreshed every six months or when other major changes occur. Disclaimer: The currency referenced in the chart was left as stated in the original source material.

Betting and gaming index

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FTSE Travel & Leisure Index EY betting and gaming index

The EY betting and gaming (B&G) index has outperformed the FTSE Travel & Leisure Index in the last 12 months, primarily due to both positive growth in B&G company annual revenues, impacted by a shift towards new innovative online customer-focused platforms and consolidation in the market. The B&G index has bounced back positively subsequent to the dip experienced in the latter stages of Q2 following the announcement of Brexit. Consolidation among the B&G market has continued in Q3, with the Ladbrokes-Coral merger being approved by the Competition and Markets Authority (CMA) late in Q3, pushing Ladbrokes’ share-price to its 12 month high on 26 Aug 16. Additional consolidation in the market is expected after leading players previously admitted falling behind in the race for online growth.

The B&G index is a snapshot of the performance of the industry compared with the market as a whole. The index is a quick and simple guide: for example, it does not include private companies and small- or medium-sized companies. However, we hope that it proves a useful guide to the recent events and emerging trends.

Source: Thomson ONE Banker and other additional EY research. Index price data is as of the end of the last trading day of every week. Index prices are rebased to chart comparative performance of the indices over the last six months.

Betting and gaming update: July – September 2016 EY 2

Overview

The growth prospects in the betting and gaming market continue to be vast, with analysts viewing access to advanced online betting and gaming platforms to be the most significant driver of market growth. One of the most attractive features of online gaming platforms is its ability to reach a significantly larger and more targeted audience than traditional betting shops or casinos. With the emergence of smart phones and tablets among the ‘millennial generation’, operators are increasingly turning towards tablet advertising and new mobile applications to drive future growth.

We have summarised below a brief round-up of activity within the betting and gaming market.

B&G: the M&A merry go round continues

The transformation of the betting and gaming market has continued through the quarter, with more potential game changing deals on the horizon. The landscape by the end of the year will be a very different one to that at the close of 2014 following two years of intense activity — it will be interesting to see what the next moves will be.

Three of the large transactions announced in 2015 have completed in 2016: the Paddy Power Betfair merger, GVC’s acquisition of bwin.party and the Ladbrokes-Coral merger. The latter completed following the sale of 360 betting shops, predominantly to Betfred and Stan James. These deals have fundamentally altered the competitive landscape of the betting and gaming environment.

As in other sectors, the current weakness of Sterling against other major currencies will help to fuel inbound activity, with UK assets now comparatively cheaper.

New activity in the quarter included Playtech’s acquisition of Best Gaming Technology (BGT) in July for circa €138m, Stride Gaming’s acquisitions of three online bingo operators in July for a combined value of c.£70m, Burlywood Capital’s acquisition of the Football Pools in September for c.£97m and Intertain’s intended UK IPO.

It is William Hill that is now at the forefront of current talks, having rebuffed a joint approach from 888 Holdings and Rank Group, and at the time of writing having entered merger talks with Amaya. Whether this deal proceeds (there are a number of other reported suitors), the one thing that is clear is that the landscape will continue to transform in order to both boost competitive position and provide the required synergies to offset the growing tax burden.

Operators wishing to discuss their position in more detail can contact: Grant Humphrey (Ernst & Young LLP (UK), Director, Transaction Advisory Services, +44 1582 643182, ghumphrey@uk.ey.com).

Betting and gaming update: July – September 2016 EY 3

Company and industry news

The financial results and trading updates illustrated below highlight a number of key themes, which are replicated by many. Companies are beginning to see the benefits of continued investment in online gaming platforms and the enhanced relationships with a number of gaming technology providers.

On a consolidation level, GVC Holdings (acquirer of bwin.party) and Paddy Power Betfair (Paddy Power Betfair merger) expressed positivity regarding integration of the respective businesses and illustrated that they were beginning to realise the positive effects of the expected synergies estimated at deal completion.

Financial results and trading updates

► 32Red announced results for the six months ended 30 June 2016, achieving record revenue performance in 1H16 with Total Net Gaming Revenues up by 63% as compared to last year. EBITDA was at £4.5 million (258% higher than the previous comparable period). Ed Ware, Chief Executive, commented, “We are delighted to report a record revenue and profitability performance for 32Red in the first half of 2016 which has been driven by strong growth across our business and brands. We are also delighted to announce today the renewal of our contract with Microgaming. We have enjoyed a long and strong partnership with one of the world leaders in digital gaming expertise and are very excited to have strengthened our relationship in a way that provides 32Red with further opportunities to invest in and develop our business.”1

► 888 Holdings’ last communicated financial results were for the half year ended 30 June 2016. 888 Holdings achieved like for like (LFL) B2C revenue growth of 21% to $229.5 million (from $189.6 million in H1 2015), with Casino revenue up 31% to $137.4 million and strong sport growth of 63%. Itai Frieberger, Chief Executive, commented, “888 has delivered a very encouraging performance in H1 2016, resulting in a 19% increase in Group Revenue to a record $262.0 million. This strong outcome was driven by outstanding momentum at 888Casino and 888Sport where we achieved impressive revenue increases of 31% and 63% respectively. In line with our strategic focus, we have made further excellent progress developing 888 in regulated markets and have grown regulated revenue by 29% against the prior year, reflecting strong performances in the UK, Spain and Italy as well as 888's recent successful launch in Denmark.”2

► Gala Coral announced its results for the twelve week period ending 02 July 2016, reporting 10% increase in net revenue over the previous year to £264 million. EBITDA stood at £57.7 million (13% higher than the previous comparable period). Carl Leaver, Chief Executive, commented, “EBITDA for the quarter was 13% ahead of last year, driven by continued strong growth in Coral.co.uk and Eurobet.it, a good machines performance in Coral Retail and a positive Euro 2016 football championship. Year-to-date, EBITDA was up 15%, or 32% ahead on an underlying basis (adjusting for incremental regulatory costs).”3

► GVC Holdings announced its interim results for the six months ended 30 June 2016. The Net Gaming Revenue was up by 223% as compared to 2015. The clean EBITDA was up by 258% to €91.2 million. Kenneth Alexander, Chief Executive of GVC, commented, "I am delighted to report another period of significant growth. It is GVC’s combination of hardworking, talented people and unique proprietary technology platform that has allowed us to achieve so much in such a short period. The group operates in a highly competitive, increasingly regulated and taxed environment, GVC has never been

1 Interim Report for 6 months ended 30th June 2016, 32Red Plc website, http://www.32redplc.com/~/media/Files/T/Thirty-Two-Red/documents/reports-and-presentations/2016/interim-report-for-six-months-ended-3-june-2016.pdf, accessed 22 September 2016 2 888 Holdings H1 2016 Financial Results, 888 Holdings website, http://otp.investis.com/clients/uk/888holdings/rns/regulatory-story.aspx?cid=1095&newsid=777953, accessed 22 September 2016 3 “Financial results Q3 FY16,” Gala Coral website, http://www.galacoral.co.uk/~/media/Files/G/Gala-Coral/reports-and-presentations/quarterly-report/financial-results-q3-fy16.pdf, accessed 22 September 2016

Betting and gaming update: July – September 2016 EY 4

better placed to face these challenges. Indeed, we believe the organic growth potential of the Group is now greater than originally anticipated at the time of the bwin.party transaction acquisition.”4

► International Game Technology (IGT) announced interim results for the second quarter ending 30 June 2016. Total consolidated revenue was up by 1% compared to previous year, and reached US$1,285 million reflecting strong lottery performance, particularly in Italy and North America. Marco Sala, Chief Executive, commented, “Robust growth in our global lottery operations, notably in Italy and North America, and the resilience of our global gaming business are the key takeaways from our second quarter results. Service revenues, which account for the bulk of our business and are mostly supported by long-term contracts, rose a solid 6% at constant currency in the period. We are making good progress implementing our strategy of developing innovative content and technology that we can leverage across gaming platforms and around the world. We look forward to showcasing the full scope of our new gaming and lottery offerings at high-profile trade shows later this fall.”5

► Ladbrokes announced the results for the half year ending 30 June 2016, reporting 13.1% increase in revenue over the previous year. Jim Mullen, Chief Executive, commented, “These strong numbers show customers are responding positively to the new strategy at a time when the sporting gods have generally been on our side and we’ve enjoyed some helpful bookmaker friendly results. This combination has helped boost profits in the first half of the year. History would strongly dictate that such a run of results in our favour would see customer staking suffer, but encouragingly these numbers firmly buck that trend and combine strong staking and a good margin. However, 130 years of experience in sports betting has shown us that we will endure a run of customer friendly results and margins will normalise. Despite this assumption on results and our intention to continue investing in marketing, we have slightly increased our full year expectations.”6

► Paddy Power Betfair published interim results for the six month period ended 30 June 2016. Revenues were up 18% to £759 million, in particular online revenue grew 20% to £440 million, Australia revenue grew 17% to £129 million, US revenue grew 16% to £43m and Retail revenue was up 12% to £147 million. Paddy Power Betfair reported an increase in EBITDA of 31% to £181 million. Breon Corcoran, Chief Executive, commented, “Paddy Power Betfair has sustained good momentum through a period of considerable change. The restructuring is now largely complete and the merger synergies are being delivered ahead of schedule”.7

► Playtech announced results for the six months ended 30 June 2016, reporting a strong financial performance with revenue and adjusted EBITDA up 18% and 27% respectively. Alan Jackson, Chairman, commented, “Playtech has made significant progress in 2016 as we have delivered on our strategic objectives. The Gaming division continues to deliver strong growth, driven by our industry -leading Casino offering. We have "locked-in" future growth with important new licensees signed and significant contracts renewed. Seven of our top 10 licensees are now on contracts which have at least three years remaining and our pipeline of new licensees and structured agreements remains strong. First half results from our Financials division reflect the full-impact of the transitioning of the business and improvements made due to regulatory changes with Markets now having the right platform for sustainable growth.”8

► The Rank Group announced its results for the year ended 30 June 2016. Revenue increased by 2% to £753.0 million in 2016, as compared to £738.3 million in the previous year. The EBITDA increased by 2% during the year to £128.2 million. Henry Birch, the Chief Executive, commented, “I am pleased to report a solid set of results with Group revenue up 2%, again recording like-for-like growth across all

4 “Interim results for the six months ended 30th June 2016,” GVC website, http://www.gvc-plc.com/archive/results/interim_2016.pdf, accessed 22 September 2016 5 “IGT Second Quarter 2016 Results,” IGT Group website, http://phx.corporate-ir.net/phoenix.zhtml?c=119000&p=quarterlyEarnings, accessed 22 Septembers 2016 6 “Interim Results for half year ended 30 June 2016,” Ladbrokes website, http://www.ladbrokesplc.com/~/media/Files/L/Ladbrokes-V2/results-presentations/2016/interim-results-2016.pdf, accessed 22 September 2016 7 Paddy Power Betfair Interim Results 2016, Paddy Power Betfair website, https://www.paddypowerbetfair.com/~/media/Files/P/Paddy-Power-Betfair/documents/interim-results-2016.pdf, accessed 22 September 2016 8 Playtech half year report 2016, Playtech website, http://playtech-ir.production.investis.com/~/media/Files/P/Playtech-IR/results-reports-webcasts/2016/2016-half-year-results-report.pdf, accessed 22 September 2016

Betting and gaming update: July – September 2016 EY 5

brands and channels in the year. This year we have focussed on delivering significant projects to ensure we have the right platform in place for future growth. This included the migration of our digital business onto a new platform, the rollout of an improved retail casino management system and investments into new generation machines in both our casino and bingo venues.”9

► William Hill announced its interim results for 26 weeks ending 28 June 2016. Group net revenue increased by 1% in during the period. Philip Bowcock, interim Chief Executive Officer of William Hill, commented, “We remain committed to our strategy of diversifying by expanding digitally and internationally. While the first half of 2016 has been challenging, William Hill is a strong business with three of our four core divisions performing well. Our Retail business is robust, the US operation continues to grow rapidly and the core metrics in Australia are moving in the right direction. We have taken considerable steps forward in executing online improvements but there is still a way to go. The refocused team has delivered substantial upgrades to the mobile Sportsbook customer experience, which is now back to competitive levels. Our recent investment in NYX / OpenBet and acquisition of Grand Parade further accelerate our ability to innovate at speed and enhance the customer experience moving forward.”10

9 “Full year results for the 12 months to 30 June 2016,” The Rank Group website, http://www.rank.com/en/investors/results--reports---presentations.all.year2016.html, accessed 22 September 2016 10 “2016 half year results,” William Hill Plc website, http://files.williamhillplc.com/media/4291/wmh-2016-half-year-results.pdf, accessed 22 September 2016

Betting and gaming update: July – September 2016 EY 6

Analysts views

► Citigroup upgraded Ladbrokes shares to “buy” from “neutral”. The broker also raised the bookmaker's target price to 180p from 125p, saying that these changes now account for Ladbrokes's merger with Coral.11

► Citigroup downgraded its investment stance on GVC Holdings to neutral from buy, but raises its target price to 675p from 580p. According to the broker, the enlarged GVC group has shown early success with its integration of bwin.party, with bwin's brands delivering revenue growth.12

► Canaccord Genuity raised 888 Holdings price target to 255p from 225p, while retaining its “buy” rating. Canaccord's Simon Davies says despite the recently failed joint bid with the Rank Group for bookmaker William Hill, 888 reverted to what it does best.13

11 “Citi Upgrades Ladbrokes After Coral Merger -- Market Talk”, Dow Jones Institutional News, 12 August 2016, via Factiva. 12 “Citigroup Downgrades GVC Holdings; Lifts Target Price -- Market Talk”, Dow Jones Institutional News, 15 July 2016, via Factiva. 13 “Canaccord Raises 888 Holdings Price Target -- Market Talk”, Dow Jones Institutional News, 31 August 2016, via Factiva.

Betting and gaming update: July – September 2016 EY 7

Strategic news

Contracts and agreements

► Paddy Power Betfair signed an agreement with the UK-based Daily Mirror to become its Saturday horse-racing sponsor for the 2016 season. The company will provide sponsored content within the weekly racing pull-out distributed inside the newspaper. Digital content and advertising will also feature in the sports section of the Mirror’s website and across the Mirror’s racing channels, including location-specific content for users of the Mirror’s mobile app. “This is a great partnership opportunity for Paddy Power Betfair given the rich heritage both we and the Mirror have in horseracing,” said Stephen Mault, head of marketing at Paddy Power Betfair.”14

► Sportech started exclusive discussions with Burlywood Capital to sell the Football Pools for £97.25 million on a debt-free/cash-free basis. This proposed disposal is an attractive opportunity for Sportech to realize the value of the pools. Moreover, it is in line with the company’s modernisation programme, since it continues to transition its business model.15

► International Game Technology’s subsidiary IGT Global Solutions Corporation, signed an initial 13-year contract with the Florida Lottery to provide a wide array of lottery solutions and services. Florida Lottery will use IGT's Aurora(TM) solution, which is highly-secure, robust, and flexible to meet its evolving requirements.16

► Nektan, a Gibraltar-based mobile gaming provider, has entered an asset transfer and simultaneous licensing agreement with Buckingham HMB, for three of the company's wholly owned gaming brands. Buckingham will pay the company a cash consideration of £1.75 million (US$2.29 million), with a further £200,000 for the

14 “Paddy Power Betfair signs racing sponsorship with UK’s Daily Mirror,” Gaming Intelligence, 23 August 2016, via Factiva. 15 “Sportech in talks to sell Football Pools for 97.25m pounds,” Ore Radiocor-Newswire International Edition, 13 September 2016, via Factiva. 16 “IGT Signs Contract With The Florida Lottery To Provide Wide Array Of New Lottery Solutions And Ongoing Services For 13 Years, Through 2031,” PR Newswire, 23 September 2016, via Factiva.

assets. The proceeds will be used for the group’s working capital requirements.17

► Rank Group entered an agreement with NetEnt AB, a developer of computer gaming software. Under the terms of the agreement with Rank, NetEnt will deliver its online casino games to the Grosvenor Casinos and Mecca brands of the Rank Group. Ciara Nic Liam, Head of Casino and Games at Rank Digital said, “We are thrilled to be adding NetEnt's award-winning game content to our Grosvenor and Mecca online brands. NetEnt has a proven track record in the UK market and we look forward to extending our offering with games from its portfolio that we know will resonate well with our players”. "18

► Pariplay, a gaming technology company, announced a partnership with Jumpman Gaming, a Guernsey, Channel Islands-based software company. Under the partnership, Jumpman Gaming’s entire portfolio of bingo brands will integrate with Pariplay’s FUSION content aggregator network, providing the operator with access to a wide range of online bingo, keno and casino games developed by Pariplay and other top-tier software providers.19

► Gala Coral and Ladbrokes have agreed to sell shops to proceed with their planned merger, as demanded by the UK (CMA). Earlier this year, the CMA said that the two operators must sell 350–400 land-based sites in the UK to one or more buyers to satisfy competition issues. Written comments are being invited from parties interested in acquiring land-based facilities.20

► William Hill has signed a three-year partnership with Chelsea Football club to become the Premier League club's new official betting partner. William Hill will also

17 “Nektan to Sell Three Gaming Brands for up to GBP 1.95m in Cash,” M&A Navigator, 22 August 2016, via Factiva. 18 “NetEnt signs customer agreement with Rank Group,” MarketLine, 29 June 2016, via Factiva. 19 “Pariplay strikes deal with Jumpman gaming,” ENP Newswire, 7 July 2016, via Factiva. 20 “Ladbrokes, Coral agree to shop sales ahead of merger,” iGaming Business, 14 September 2016, via Factiva.

Betting and gaming update: July – September 2016 EY 8

have presence on Chelsea's pitch side advertising boards and across the club's digital platforms. Furthermore, William Hill acquired UK-based betting and gaming digital solutions company Grand Parade for £13.6 million (US$17.84 million) in cash and shares. Under the terms of the acquisition and as partial consideration, William Hill will issue 495,048 new ordinary shares of 10p each to Grand Parade.21

Market consolidation

► Stride, an online gaming operator in the UK, completed the acquisitions of gaming sites operators 8Ball and Tarco. In addition it acquired an online marketing company Netboost Media. The company’s share in the domestic online market has therefore, increased from 2% to more than 25%. The acquisitions are in line with the company’s growth strategy of taking advantage of consolidation in the gaming sector by expanding organically.22

► Playtech acquired Best Gaming Technology GmbH, an Austrian sports betting software and solutions for €138 million. The consideration was paid from Playtech's existing cash resources. The acquisition is expected to generate high single-digit earnings accretion for Playtech in the first full-year of ownership.23

► International Game Technology (IGT) acquired Hudson Alley Software, a US-based provider of lottery sales force automation (SFA) and lottery retailer engagement applications. Marco Tasso, SVP of IGT Global Product Marketing, Lottery, said on the acquisition, “The addition of OnePlace gives our customers a holistic set of tools to drive retail performance. Sales force automation

complements numerous other solutions, tools, and services IGT provides to our customers to drive retail performance. Now we can provide a more comprehensive

21 “William Hill Sign Three-year Betting Partnership With Chelsea Football Club,” PR Newswire, 5 August 2016, via Factiva, © 2016 PR Newswire Association LLC. All Rights Reserved.; “UK Bookmaker William Hill Acquires Betting, Gaming Software Firm Grand Parade,” M&A Navigator, 4 August 2016, via Factiva, © 2016, M2 Communications. 22 “UK’s Stride Gaming expands business with three acquisitions,” SeeNews France, 31 August 2016, via Factiva. 23 “PlaytechAcquires Austrian Sports Betting Software Firm Best Gaming Technology,” M&A Navigator, 18 July 2016, via Factiva, © 2016 CenturyComm Limited

offering to lotteries and their retail partners.”24

► 888 Holding and Rank Group joined hands and made two successive bids to acquire William Hill during the past few weeks. However, William Hill rejected both the bids of acquisitions. 888 Holding’s Chief Executive Itai Frieberger commented, “We are disappointed that the Board of William Hill did not share our vision of the combined businesses. We believe that there was compelling industrial logic for the combination of these highly complementary businesses, which in our view would have brought scale, diversification, and strong revenue and cost synergies, from which all shareholders would have benefitted.” 25

Financial

► Intertain will now be listed at the London Stock Exchange as the bingo brand Jackpotjoy. It will delist from the Toronto Stock exchange and expects that the move to FTSE will generate £430 million. Neil Goulden, Chairman of Intertain/Jackpotjoy said, “I am delighted to be chairing the Jackpotjoy Board at this exciting point in the company’s history. Under Andrew McIver’s leadership, supported by Keith Laslop, and with a high-calibre management team and a well-balanced board, Jackpotjoy is now seeking to comply with the highest standards of UK corporate governance.”26

IT and online

► GVC Holdings launched a new online slot game featuring the band behind the pop hit “Barbie Girl” for Denmark’s former monopoly operator Danske Spil. Aqua will launch on Danskespil.dk and is the latest in a series of games built by GVC exclusively for

24 “International Game Technology (IGT) acquires Hudson Alley Software,” MarketLine, 22 July 2016, via Factiva; “Corporate,” Public Gaming website, http://www.publicgaming.com/index.php?option=com_content&view=article&id=20625:igt-acquires-hudson-alley-software-a-leading-provider-of-sales-force-automation-sfa-and-lottery-retailer-engagement-applications&catid=36:corporate-news&Itemid=54, accessed on 25 September 2016. 25 “888 and Rank mull merger’,” Globes, 24 August 2016, via Factiva; “Industry News,” Legal Sports Report website, http://www.legalsportsreport.com/11103/rank-group-888-holdings-abandon-bid-william-hill/, accessed on 25 September 2016. 26 “Intertain to List in London as Jackpotjoy,” Gaming Awards, 7 September 2016, via Factiva.

Betting and gaming update: July – September 2016 EY 9

its B2B partner based on popular Danish themes. GVC’s chief product officer Liron Snir, commented, “Our aim is to supply our partners with the best online gaming platform in the market. Whilst the quality of our gaming systems are well known, we are genuinely excited to demonstrate our ability to deliver high quality, original gaming content.”27

► 21Bet, the UK-based online sportsbook and casino operator, launched an affiliate program in partnership with Income Access, a digital marketing and technology company. The new program, which has integrated with the Income Access software platform, will be managed by Income Access’ affiliate management team.28

► Playtech launched its first virtual sports retail product with Coral. The Virtual Sports Football Accumulator will be rolled out in 100 Coral shops across the UK, with the potential to expand this to 1,000 sites in the next 12 months.29

► FanDuel, daily fantasy sports (DFS) operator, launched its contests for the first time in its native UK market, ahead of the start of the 2016–17 Premier League season. The UK launch marks FanDuel's first offering outside of North America, with a one-day fantasy football platform initially focused on the Barclays Premier League, which is now live. FanDuel’s Chief Executive and co-founder Nigel Eccles, commented, “This is a proud moment and marks our first step into fantasy football and the UK market — our first international offering.” 30

Management moves

► GVC Holdings announced that Richard Cooper, Chief Financial Officer, will resign from the Board, effective February 2017. Richard will pursue private business interests. To ensure an efficient transfer, Paul Miles, currently Chief Financial Officer

27 “GVC continues B2B development with new slot for Danske Spil,” Gaming Intelligence, 26 August 2016, via Factiva. 28 “21Bet launches affiliate program with Income Access,” ENP Newswire, 9 August 2016, via Factiva, (c) 2016, Electronic News Publishing. All Rights Reserved. 29 “Playtech launches first virtual title with Coral,” Emirates News Agency, 2 August 2016, via Factiva, © 2016. © 2016, Emirates News Agency (WAM). 30 “FanDuel launches daily fantasy sports in the UK,” Gaming Intelligence, 3 August 2016, via Factiva, © 2016. Gaming Intelligence.

of consumer credit group Wonga, has agreed to join the Group in February 2017 and will succeed Richard. Paul, a Chartered Accountant, has held several senior finance roles in regulated industries, encompassing international and online operations. His previous roles include Group Financial Controller at insurance group RSA Group and Acting Group Finance Director of Phoenix Group, the FTSE250 life assurance operator.31

► Rank Group appointed new managing directors for its main brands, Mecca Bingo and Grosvenor Casinos. Martin Pugh, previously Mecca Bingo’s managing director, has been moved over to take charge of Grosvenor Casinos, with Alan Morgan joining from the hospitality sector to replace him at Mecca. Pugh has been with Rank since January 2015, after working as Managing Director for high-profile retail brands such as fitness chain Virgin Active and Camelot UK Lotteries. He also worked as Chief Executive of digital advertising business Adpoints. Morgan joined from the Spirit Pub Company, where he served as the Chief Operating Officer and Chief Commercial Officer since 2013. He has also previously worked with David Lloyd Leisure and Whitbread.32

► Sportech appointed Richard McGuire to its Board as a Non-executive Director. Prior to this, Richard was a Non-executive Director at Mitchells and Butlers, one of the largest operators of restaurants, pubs and bars in the UK and non-executive chairman of Timeweave, the joint owner of Turf TV, a dedicated TV channel providing horse racing TV pictures and data to Licensed Betting Offices (LBOs) in the UK and Ireland.33

► Intertain Group will have five of its current directors and will appoint four new directors following its new listing as Jackpotjoy. The five current directors are expected to be Neil Goulden, Andrew McIver (president & CEO), David Danziger, Paul Pathak and Jim Ryan. The four new directors will be Nigel Brewster, Keith Laslop (who has been confirmed as Chief Financial Officer), Jörgen

31 “GVC Holdings PLC Directorate Change,” Regulatory News Service, 20 September 2016, via Factiva. 32 “Rank appoints new MDs for Mecca and Grosvenor businesses,” Gaming Intelligence, 19 September 2016, via Factiva, © 2016. Gaming Intelligence. 33 “Sportech appoints non-executive director,” MarketLine, 9 September 2016, via Factiva, © 2016 MarketLine.

Betting and gaming update: July – September 2016 EY 10

Nordlund and Colin Sturgeon. Brewster and Sturgeon will join as Independent non-executive directors, Nordlund will be a Non-executive Director and Laslop an Executive Director.34

► Paddy Power Betfair’s Stewart Kenny will resign as Non-Executive Director on the Board. Stewart co-founded Paddy Power in 1988 and was Group Chief Executive until 2002 when he retired from his executive role. He was Chairman from 2002 to 2003 and has remained on the Board as a Non-Executive Director for the past 13 years.35

► William Hill’s Chief Executive James Henderson, was asked to leave in an attempt to turn around its misfiring online business. Henderson was with William Hill for two years. He will leave with a year’s salary and has been replaced temporarily by Philip Bowcock, Chief Financial Officer, until a successor is appointed. William Hill’s Chairman Gareth Davis said that the new chief executive would “in all probability” be an external candidate, adding recently online has not performed according to the management’s expectations.36

► IG Group Holdings, appointed Paul Mainwaring as an Executive Director and Chief Financial Officer with immediate effect. He joins the Board of IG. Paul was previously a Director of Tullett Prebon from 2006 to 2016. 37

► International Game Technology (IGT) appointed Mario Di Loreto as Executive Vice President of Human Resources, Organization & Transformation. Mario is responsible for providing the overall HR leadership and strategy to improve organizational development. He will also ensure that IGT

attracts, develops, and retains a talented, diverse, and engaged workforce. Prior to joining IGT, Mario was Executive Vice President for Human Resources and Organization at the Telecom Italia Group prior to which, he spent four years as the

34 “Intertain names new board ahead of London listing in October,” Gaming Intelligence, 2 September 2016, via Factiva, © 2016 CenturyComm Limited. 35 “Paddy Power Betfair plc Directorate Change,” Regulatory News Service, 24 August 2016, via Factiva. 36 “Whoa! William Hill boss takes a tumble,” thetimes.co.uk, 22 July 2016, via Factiva, © Times Newspapers Limited 2016. 37 “IG Group Holdings plc Board Changes - Appointment of CFO,” Regulatory News Service, 20 July 2016, via Factiva.

Human Resources Group Director for Barilla.38

► Rank Group appointed Liam Smith to the newly created role of Director of Customer Contact. Smith came from outsourcing specialist Contact Center Managed Service, and will be responsible for leading and managing a new centre of customer excellence in Sheffield, which will employ more than 60 people.39

Regulatory news

► The United Kingdom Gambling Commission (UKGC) has made changes to gambling regulations that will now make it possible for online casinos to regard cryptocurrency as a cash equivalent. This will allow casinos to accept Bitcoin payments. The new amendment will come into force starting 31 October this year. UKGC’s new rule applies only to online casinos operating in the UK market. 40

► CMA closed the undertakings offered by Ladbrokes and Coral after they agreed to sell the required number of licensed betting offices to a suitable buyer to be approved by the CMA so that their merger can go ahead.41

► The UK Gambling Commission (UKGC) has suspended the operating licenses of Smart TV Broadcasting pending a review of the company’s suitability to continue offering online gambling services. The UKGC commenced a review of Smart TV under section 116 of the Gambling Act 2005 based on the regulator’s belief that the operator is “unsuitable to carry on the licensed activities (section 120(1)(d) of the Act).”42

38 “IGT PLC Appoints Mario Di Loreto - Executive Vice President Of Human Resources, Organization & Transformation,” PR Newswire, 5 July 2016, via Factiva. 39 “Rank announce new Director Appointment,” Gaming Awards, 28 June 2016, via Factiva. 40 “UKGC Allows Online Casinos to Accept Bitcoin Payments,” Gaming Awards, 12 September 2016, via Factiva. 41 “CMA consultation closes on Ladbrokes / Coral merger inquiry undertakings; Advance Media Information; Future News Item; Competition and Markets Authority,” Precise Media Planner, 13 September 2016, via Factiva. 42 “UK Gambling Commission suspend Smart Live Gaming license pending suitability review,” CalvinAyre.com, 6 August 2016, via Factiva.

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