Global Betting and Gaming Consultants’ GBGC 50 index of the leading gambling companies has seen some big changes over the last 12 months after a year of mergers and acquisitions, as well as continued difficulties in some key gambling markets.
The biggest winner has been the newly created Paddy Power Betfair, which has leapt into fourth (4th) place in the index. As separate companies Paddy Power and Betfair occupied eighteenth (18th) and twenty-sixth (26th) places respectively in January 2015’s GBGC 50. But the gambling market cap of the combined businesses and the rising share price has meant that Paddy Power Betfair has stormed into the top five and disrupted the dominance of the Asian-focused casino companies. Paddy Power Betfair is the only non-casino company in the top 10.
Another merger which has not had such a dramatic impact on the GBGC 50 index over the last year was that of IGT and Lottomatica GTECH. The newly created IGT occupies nineteenth (19th) place at the start of 2016 but the individual businesses were in fifteenth (15th) and seventeenth (17th) places at the start of 2016. A falling share price for the new IGT has actually seen it perform slightly worse than the two separate companies.
In 2014 the biggest climber in the GBGC 50 index was Amaya (52nd to 22nd), following its purchase of PokerStars. But Amaya has fallen back in 2015 and now occupies thirtieth (30th) place because of its declining share price over the last year.
For several years now it has been Asian-facing companies that have dominated the top of the GBGC 50 because of the strength of the casino gaming market in Macau. But the falling gross win from Macau’s gaming tables has also been reflected in the falling share prices of some of those companies focused on that market. SJM Holdings, for example, has seen its share price fall precipitously since its historic highs of late 2013. The shares are now trading at around HK$ 5 and the company has fallen out of the GBGC 50 top 10 (falling from 8th to 17th place).
Nevertheless, Asian-facing companies still make up much of the GBGC 50 top 10. Las Vegas Sands keeps the top spot, ahead of sister company Sands China and Galaxy Entertainment. It is incredible to think that, in terms of gambling market cap valuations, Paddy Power Betfair – predominantly an internet-based business – is valued more highly than the likes of Wynn Resorts or Genting Singapore, with their vast casino properties.
Lower down the index, the decision by the Chinese Ministry of Finance to halt online lottery sales early in 2015 has seen two companies – REXLot Holdings Ltd and China Lotsynergy – drop out of the GBGC 50 as a result.
GBGC 50 Top 10 (by gambling market cap as at January 2016)
Source: GBGC Global Gambling Report