He has built up a £2bn online giant — is William Hill the next in line to be swallowed?
REGULARS at the “Vic” — the Grosvenor Casino on the Edgware Road and the spiritu al home of L ondon poker — might recognise Kenny Alexander. The tall, dry Scot who runs internet gaming firm GVC Holdings has a family in Perth but lives in London during the week and can occasionally be found at the tables, playing in the no-limit cash games when work permits.
He’s rubbed shoulders with the likes of Neil Channing, professional gambler and veteran of the capital’s poker scene, and played a few times against seven-time world snooker champion Stephen Hendry in Dundee.
Alexander has had a few big wins — taking £7500 one night off some wealthy Arabs “who were playing it like snap” at the Palm Beach casino — but knows his limits and is wise enough to stick to games where he has an edge. When he once stepped up a level at the Vic’s much tougher tables, “I got taken to school”.
His wife was “horrified” when he briefly considered turning pro during his Sportingbet days, so it’s lucky that the 49-year-old has made his millions instead over a decade running GVC. Since he took over, he has steered it from a tiny AIM-listed player to a FTSE 250 constituent worth more than £2 billion.
Alexander’s own personal stake is worth some £23 million. It has 2800 staff, operates in 14 countries from the UK to Brazil and the Philippines, and includes brands such as Sportingbet — where he began his career in the industry — Foxy Bingo and PartyPoker, the world’s second-biggest poker brand behind PokerStars.
His own poker skills might come in handy over the months ahead. Alexander is a dealmaker and in the online gaming and betting world, there are deals to be had.
Tax crackdowns on online companies have forged an M&A frenzy as industry players look for scale, savings and marketing firepower. Alexander has already made a big move of his own — buying Bwin.Par t y for £1 billion in 2015.
He fended off online rival 888, which now looks vulnerable to a bid itself, to clinch that deal. City speculation is rife that he’ll make a bid for William Hill, which is listing badly after profit warnings and problems with its previously industry-leading online operation.
Alexander plays his cards close to his chest on that one, although with his track record of generating returns for shareholders — such as GVC’s 2013
‘Alexander is a dealmaker and in the online gaming and betting world, there are deals to be had’
purchase of the struggling UK arm of Sportingbet where he started his own career in the industry — he has a pretty good hand.
In that deal, where GVC issued new shares equivalent to its entire market capitalisation, he says “we were all in”, slipping back into poker talk. “It was the best of all the deals, it was a steal. It looked like we were buying damaged goods although we knew we could turn it around pretty quickly.”
When the £485 million deal was being thrashed out, Alexander would occasionally take himself off to the Vic for a couple of hours “and leave the advisers to sort it out”.
Sitting in a colonial wine bar near GVC’s One New Change offices, Alexander has an untouched beer in front of him while a stuffed fox peers over his shoulder and Take Five wafts away in the background. I play the M&A parlour game with him.
For all its worldwide reach, GVC doesn’t have a significant presence in the UK betting market. The theory goes that he buys William Hill, gets a major online presence at a stroke and then sells off the hugely cash-generative shops to a private-equity buyer.
“If only it was as easy as that,” he mutters, although he won’t comment directly on whether a bid for Hills or anybody else is in the offing. But the bosses in the sector say he has put the feelers out all over the place, and there was also chatter of a tie-up with Ladbro- kes Coral before Christmas. Whatever happens, nothing will get done until after the Government completes its triennial review of hugely controversial gaming machines, expected later this month.
The “c rack coc aine” machines account for more than half the profits of Hills and Ladbrokes, and any serious reductions of the current maximum
‘Retail doesn’t scare us and it is not a poison pill to any deal. Not just for the UK but other markets as well’
£100 stakes will have a huge impact on the valuation of both companies.
He thinks the campaign to cut machine stakes to £2 is “ridiculous” and that the industry is a “political football”. But, interestingly for the boss of an online-only company, Alexander doesn’t rule out owning betting shops, which certainly puts the more famous names in the industry up for grabs. “I
ALL of that might have seemed a bit unlikely in a meat plant in Ayrshire 20 years ago when he took his first step into industry after six years at Grant Thornton as an accountant (“it was freezing in the factory... that was real hard work”).
Growing up in Irvine, west Scotland, there wasn’t much to do — “play golf, play football, go to the bookies, eat fish suppers” — but his civil servant father used to take him to the races and by the age of 13 he was hooked, trying to pick winners and doing side bets when he wasn’t following Kilmarnock.
After catching the racing bug, his ambitions of getting out stopped him in his tracks in 2000 when he saw an ad in the Racing Post from a small startup called Sportingbet, which was looking for a financial controller.
Being a career accountant didn’t turn him on and he “d i d n’t wa n t to hang around in meat plants for the rest of my life” so he went down south for an interview and ended up talking betting with online gaming pioneer Mark Blandford. He got the job and moved to Alderney (“one pub for every 40 people”) in a start-up working 16hour days, heading back to Scotland to see the family every 10 days. His old boss at the meat plant held his job open in case the newfangled venture went wrong, although ironically the Prestwick plant is now closed and Sportingbet is thriving under GVC’s banner.
Alexander’s recent financial success means he’s been indulging his love of racing as an owner for the past seven years. He’s got horses with trainers including Lucinda Russell, Nick Williams and David Pipe. Magie Du Ma, from Pipe’s stable, had its first run of the year at Cheltenham but the filly was always a long shot, finishing ninth in its race.
When I run into him at the racing festival entertaining GVC’s big hitters, he has swapped the blue suit for dark brown corduroy, and they’re all flush because they’ve piled into 40-1 shock winner Labaik in the very first race, on a tip from a cabbie.
His own tip for me — Some Plan — finished sixth and another one, Starchitect, was also some distance from visiting the winner’s enclosure. But he’s likely to be at the front of the pack when the betting industry’s wheelerdealing breaks out again.
@russ_lynch