The field for the City of London Gaming Industry Mega-Merger Stakes is becoming an increasingly crowded one. Betfair and Paddy Power are the latest to line up under starters orders alongside Ladbrokes and Coral, with Bwin.Party another confirmed runner. The owners just need to decide whether Sportingbet owner GVC or 888 Online will get the ride.
Regardless, it won’t be a fancied runner, in stark contrast to the partnership of Paddy Power and Betfair, which was immediately installed as the red hot favourite by the market yesterday.
The two might have opted for a corporate name with all the excitement of a wet Wednesday in November – Paddy Power Betfair (yawn) – but it isn’t hard to see why their investors are excited.
It is a potentially formidable combination, hinted at in a tweet by Paddy Power a couple of weeks ago in response to the announcement of the Ladbrokes and Coral tie up. The Irish bookie cheekily suggested it could respond by teaming with Betfair under the entertaining title of “Betty Power”.
Call it what you like, but the end result will be a £6.5bn business listed in London and Dublin and run by Betfair boss Breon Corcoran, who made himself a man to watch after a successful spell running Paddy Power’s internet operation.
If he can pull this off – and it looks like a good bet – he will have a business that is dominated by digital, with the world’s biggest betting exchange tacked on to Paddy Power’s multi-national sports book.
If this were a horse it would be Kauto Star, jump racing’s late legend which carried off just about all the top prizes in a storybook career.
By contrast, Ladbrokes and Coral represent his rival Denman, an old-fashioned giant of a horse. These two will be an old-fashioned giant of a company that will dominate on the high street rather than online. By the time they sort out several thousand betting shops at the behest of the competition authorities, Paddy Power Betfair (yawn) might just be passing the finish line.
Which leaves William Hill, well, where? The gambling industry’s hunger for deals is being driven by tax and regulation, notably the Government’s point-of-sale tax.
Hill has proved a classy performer, even with those challenges, but its shares were under pressure just as Ladbrokes’ were after Paddy Power and Betfair nailed their colours to the mast. It has been sniffing around for a deal of its own, but it might have to try to win this race as a non-runner.
If Corbyn can make the trains run on time . . .
Jeremy Corbyn’s opponents have repeatedly used his pledge to re-nationalise the railways as evidence of his general looniness. It appears not to have registered within London’s political and media bubble that it’s one of his more popular policy proposals with the rest of the country. Including with people who would rather cut off their right arms than vote Labour.
A look at Stagecoach’s latest trading update might help to illustrate why. It has been unable to reach a deal to extend the South West Trains franchise until April 2019 and says it won’t make money off an expected (forced) extension from February 2017 to June 2017, to give the Department for Transport time to find someone else.
Trouble is, the DfT may have its work cut out. Stagecoach has proved rather good at turning a profit from its railway businesses (the trading update says things are going swimmingly) and it has high hopes for the East Coast franchise it was recently awarded.
The latter had been serving as an embarrassment to the Government – by proving you can run a financially successful service and keep passengers happy in state hands.
Ultimately, it is hard to see a Corbyn government (calm down now) making a better fist of things with a nationalised service because successful state systems (like Germany’s) tend to be handed operational independence, with the owners kept at arms length.
But the reason his idea has gained traction is because no one in power appears to recognise the frustration that exists with the existing system.
China’s knee-jerk response highlights its own failing
China’s watchdogs have opted to drop the hammer, arresting journalist Wang Xiaolu as part of what is being portrayed as a crackdown on alleged illegal activity by a number of market participants.
Her apparent crime was the penning of an article claiming the Government was considering withdrawing its support for the stock market, which was seen as having contributed to a huge plunge in Chinese share prices late last month.
Ms Wang’s employer, a respected business magazine, is so far supporting her, arguing that objective reporting promotes the healthy development of the securities market.
It is right about that. The crisis has barely merited a mention in the state media, and in the absence of concrete information, rumours and speculation that may be far more damaging than anything written by Ms Wang will inevitably fill the void. Not that it helps her much. Her arrest might prove to be as effective as attempting to hold back a tsunami with a sheet of rice paper. But the authorities in Beijing appear desperate enough to try that.