In its full-year 2025 earnings call on Monday (FY25), Bally’s Intralot CEO Robeson Reeves outlined some of the more attractive assets it was considering in its acquisition talks with Evoke.
Evoke yesterday reported that Bally’s was considering an all-share combination with Evoke priced at £0.50 per share. Discussions follow a strategic review for Evoke to sell off part or all of its business, launched in December.
This was triggered by the government almost doubling Remote Gaming Duty in the UK, as of this month.
Speaking to analysts yesterday, Reeves said the operator was interested in the scale Evoke had achieved across Europe.
“We see a compelling opportunity to bring our operating model to a significantly larger business and the potential to transform its financial performance through synergies we are uniquely positioned to deliver,” Reeves said.
“This is an opportunity we’re pursuing with conviction.”
Evoke international opportunity a “free” bonus
Answering questions on which facets of the Evoke business particularly interested Bally’s, the CEO highlighted Italy as “an appealing market, hard to get entry, and [Evoke is] scaled there”.
He further talked up Romania as “an attractive market and [also] on the list”, and Spain, which could help build in Bally’s small presence in the market.
Deutsche Bank analyst Richard Stuber said in a January note he believed Evoke’s Italian-facing businesses generated around £60 million of EBITDA annually and are growing at mid-teens rates. Comparable assets have traded at around 8x EBITDA.
Evoke’s international gaming revenue climbed 14% in Q4, and CEO Per Widerström said during a Q4 trading update in January that Italy and Denmark had both delivered record quarterly revenues in Q4.
Reeves was positive about the opportunity Evoke’s international division could provide for Bally’s Interactive.
“We don’t necessarily understand some of these other markets as well as I would like. So we’re being fortunate in the fact that you can look at M&A with a single lens on actually essentially applying your business model just to the UK market, and you can pick up other territories free,” he noted.
UK retail still has value
When asked about Evoke’s UK retail assets, a number of which are being shut down as part of its strategic review, Reeves said: “I think it’s important to have presence in retail. I think it’s a good business. It needs to work very much hand-in-hand with online.”
But he also highlighted the long-standing struggles facing the vertical in the UK, stemming from fixed-odds betting terminals (FOBTs) stake limits to the impact of Covid-19 closures. The uptick in RGD and betting duty next year have also heavily impacted retail betting businesses in the UK as operators have sought to cut lesser performing assets.
Entain and Flutter have also closed parts of their retail betting portfolios in recent months, with others having threatened to do so, as a result of higher taxes on the sector.
“Everything we’re looking at we’re being honest with ourselves and saying, we know UK online very well. So that will be our leaning. There are other factors which come into play where you get some other assets to diversify, that is an added benefit,” Reeves added.
UK confidence as growth continues despite RGD hike
Talking about the UK, Reeves emphasised the operator’s confidence in it outpacing market growth in a post-tax hike environment. UK B2C net gaming revenue for Bally’s ticked up 10.5% year-on-year in Q1.
Nineteen days into April, following the UK’s RGD hike, Reeves said Bally’s B2C NGR had seen double-digit year-on-year growth. He also said player volumes and total wager amount “had held”.
Today, the UK accounts for 30% of Bally’s Intralot’s revenue, while America accounts for 43% and Europe 11%.
“Our product is competitive and our player base is growing. So active players are up 7% year-on-year. While some competitors have been reducing marketing, we have been gaining players. The market share thesis I articulated on previous calls is not theoretical; it’s happening.”
The current high-tax environment had created a huge opportunity for consolidation via M&A, the CEO added.
“The remote gaming duty change has created a more differentiated competitive landscape. Operators with thin margins and limited scale are under real pressure. I have said on previous calls that we’re actively evaluating opportunities and that we will not miss a genuinely compelling one. This morning’s [Evoke] announcement is consistent with that posture,” he told analysts.
He hinted that further M&A was possible: “Beyond Evoke, we continue to monitor the broader M&A landscape. Our criteria have not changed, regulated markets, strong brand positions, accretive economics and logical operational fit. Our €160 million undrawn revolving credit facility provides genuine financial flexibility for the right opportunity.”
Evoke acquisition to shift Bally’s Intralot capital structure
Where Reeves remained somewhat tight-lipped was around how its potential Evoke acquisition could impact the operator’s capital structure, which it had outlined clearly after the Bally’s Interactive/Intralot merger closed in September last year.
As of December, the group had a free cash flow of €93.4 million.
“If we move ahead with Evoke we’re looking into a different capital structure moving forward,” Reeves confirmed during the call. “And as we said, we will refrain at this moment of making and giving any further insights [into] how we think about it.
CFO Andreas Chryso revealed during the call that the group’s adjusted net debt hit €1.493 billion, as of December, up from €334.2 million the previous year.
Nicole Macedo
Nicole cut her teeth in local news rooms at home in Gibraltar, and helped to establish the peninsula’s first online-only broadcaster.
Original article: https://igamingbusiness.com/strategy/ballys-interactive-italy-romania-ceo-reeves-evoke-opportunity/
