Is Bet365 Up For Sale?

Has iGaming legend Denise Coates decided to throw in the towel? The Guardian Newspaper in the UK seems to believe she is close, reporting that she has been actively speaking to New York money men about at least a partial sale or partnership in the near term, with longer-term goals of listing on an American stock exchange. 

Valuation numbers put the company's fair price currently in the $12 billion range, so any deal will be a big one. This is certainly an impressive feat for Ms Coates, a former accountant in her family-run chain of small betting shops.

But she took an enormous gamble of her own more than two decades ago, launching a small online gambling site out of an austere portable building somewhere in Stoke-on-Trent in the British Midlands.  

With more than 9,000 employees and over 100 million customers worldwide in many dozens of countries, it's safe to say that was a wager that paid off. However, Ms. Coates, who is the majority shareholder at 58%, has made no qualms about her desire to be a part of the American gambling boom.

While the company got in early in 2019, soon after the momentous PASPA decision, which allowed states to start licensing online sportsbooks and casinos, Bet365 missed much of the growth enjoyed by its one-time UK competitor, Flutter Entertainment. This saw its investment in FanDuel turn into a 95% stake in the USA's largest online sports and casino operator. 

Flutter, which moved its own primary stock listing from the London Exchange to the NYSE early last year, has reiterated its belief that the American Online Gambling Market will grow to more than $70 billion by 2030, and MS. Coates appears to have been listening. 

They have slowly grown their sportsbook presence to 13 states and now have iGaming operations in both New Jersey and Pennsylvania. More impressively, and showing their intention to be in the States for the long haul, they opened their new headquarters last September in downtown Denver, Colorado.

This new 120,000-square-foot, $40 million building will function as both office space and a tech hub for Bet365's future plans in the US and will eventually employ more than 1,000 people. The company also removed itself from the Chinese market earlier this year in a sign that many people said pointed to future growth ambitions here in the States. 

Some investors would see China as perhaps a bridge too far, in what will already be a complicated and time-consuming regulatory approval process, so shedding that small portion of its Asian business probably makes perfect sense if one wants to get a deal across the finish line in any sort of expedited manner.

However, Ms. Coates has the advantage of running a highly profitable and privately held company, which means she gets to set the timing. There is no need to hurry, and if the deal is, as is likely, not an outright sale but a partnership or partial sale, then there is no need to settle for less than the perfect pairing.

Also, there is certainly no need for fire sale pricing, especially with the growth story the company has set up in both LATAM and North America. Brazil’s newly regulated market opened up last year, and with a population of over 220 million people, Bet365 is certain to see double-digit growth as the market matures over the next 5 or 6 years. 

Their operation in Ontario has seen phenomenal growth since the Province legalized iGaming in 2022, and new regulations in Alberta will likely see another new market open.

While iGaming in the US has been slow to take hold, the company added to its long-running online casinos in New Jersey last year, including new casino apps in Pennsylvania. With only seven states having legalized internet casinos, the upside market if and when iGaming spreads is likely to be huge. However, the time frame involved in that anticipated growth is still highly speculative. 

Sports betting in the US, on the other hand, has grown to more than 35 States in just a few short years. Bet365 is active in 13 of them, but they are all relatively new markets with huge upside potential. Of course, there are still a couple of dozen already legal states the company could target for future growth prospects, as well as new states still considering adding legal sports betting.

It remains to be seen what direction Ms. Coates will take; whether a full sale, a strategic partnership, or perhaps a U.S. IPO or spin-off of key assets. But it's clear she’s positioning Bet365 for its next chapter, making deliberate choices that reflect both her powerful ambition and flawless timing in what has already been a remarkable success story.

One thing is certain: Wall Street, her 100 million global users, and regulators across multiple continents are all watching closely to see what she does next.