Online betting giant Bet365 mulls initial public offering or sale of a substantial stake, potentially worth a whopping $12 billion dollars.
A Possible Change for Bet365: Exploring Options, Including a U.S. IPO
It seems Bet365 is gearing up for a significant move. The company is discussing various possibilities, such as a full sale, a partial private equity deal, or even a U.S. stock exchange listing. According to reports from The Guardian, Wall Street banks and American advisers are involved in the ongoing chats.
Bet365 is eyeing a deal worth around 12 billion US dollars if it decides to go public in the U.S. A U.S. listing would bring a host of changes and regulatory challenges, given the strict consumer protection laws in the country.
Financial performance in the past year has added momentum to these talks. For the year ending March 2024, Bet365 reported a revenue increase of 9 percent, reaching £3.72 billion, approximately 4.96 billion US dollars. The company also returned to profitability, recording a pre-tax profit of 626.6 million pounds, roughly 835 million US dollars. This followed a 12.4 million pound loss the previous year.
The Coates family is deliberating on the best approach for this transition. One option could involve a private equity deal, providing capital while allowing the family to maintain a leading role. Another possibility under consideration is a U.S. IPO, which would bring in institutional funding, expand the company's investor base, and potentially boost its valuation, given the premium U.S. investors place on high-growth gambling firms.
The family has already made a few changes to prepare. In March, Bet365 stepped away from the mainland China market. Around the same time, the leadership of Stoke City Football Club moved to John Coates, Denise Coates' brother. These adjustments may simplify the group's structure and make it more attractive to outside investors.
If Bet365 lists publicly, it would face new regulatory challenges. U.S. legislation would likely raise operational costs, and the Securities and Exchange Commission and shareholders would demand increased scrutiny. In the UK, new proposals from the Gambling Commission could reshape the company's business at home, putting pressure on growth in other markets.
James Norton from Shore Capital commented on the potential impact of a Bet365 listing: "If Bet365 goes public, it would be the largest gambling float ever and could redefine valuation benchmarks for peers like Flutter and Entain," he said. "More importantly, it would cement online betting's status as a mainstream, investable sector."
Bet365 has grown rapidly since 2000, starting as a small bookmaker in Stoke-on-Trent. Over time, the business expanded into over 20 jurisdictions, offering poker, casino games, bingo, and sports betting. Much of its success came from its in-play betting technology, capturing large shares of the European and Australian markets.
Looking ahead, the sports betting market in the United States could reach over 23 billion dollars by 2029, presenting a significant opportunity for Bet365 if it chooses to enter the U.S. market via an IPO.
Even with speculation swirling, the Coates family has shown a preference for maintaining control. Denise Coates, who holds an estimated fortune of 7.5 billion pounds, or 10 billion US dollars, typically avoids ceding influence over company decisions.
Bet365 is exploring the possibility of a U.S. Initial Public Offering (IPO), which could potentially increase its valuation and attract institutional funding.
If Bet365 goes public in the U.S., it could list at a value of around 12 billion US dollars, as reported by sources.
The family behind Bet365, the Coates, are considering this route, as a U.S. IPO may expand their investor base and cement the status of online betting as a mainstream, investable sector.
*By 2029, the U.S. sports betting market could reach over 23 billion dollars, presenting a significant opportunity for Bet365 if they choose to enter the market via an IPO.
