Football Pools sale could have domino effect for Sportech

The rumoured sale of Sportech's last remaining UK-facing operation, The Football Pools, could put in motion a series of events that will fundamentally change the nature of the London-listed gaming operator.

If the rumour proves to be true, it could signal the final step in the transformation of Sportech into a fully-fledged US-facing operator. The Football Pools business has suffered from declining revenue and player numbers since - and prior to - its acquisition by Sportech, as the National Lottery and online gaming proved more attractive to players than the 90-year old Football Pools. But with Pools EBITDA having stabilised at around £15m, a sale could provide Sportech with the cash it needs to complete its transformation into a US-facing operator. Without the Pools, almost all of its business will be based in the US, and this will most likely prompt the company to switch its listing to the New York Stock Exchange from London, as it continues to accumulate licences and venue partnerships across the United States.The business has suffered some setbacks in the US, most notably losing the contract to process horse racing bets in California in October 2014, and a fall in 2014 racing revenue due to adverse weather conditions. But the company has also moved to diversify its revenue stream, launching its iGaming offering with the Resorts Casino Hotel in New Jersey through its joint venture partner NYX Gaming Group. This could potentially lead to the most transformational event in the company’s history. Speaking to Gaming Intelligence last week, NYX chief executive Matt Davey said his company would look to secure licences across the US, launching in-venue and land-based content, establishing a presence in these states and ultimately entering the iGaming space, but without being held back by the painfully slow rate of progress on legislation. This fits perfectly with Sportech’s drive to secure licences, enter land-based markets, move online where possible and establish a presence as a well-regulated, proven partner for land-based operators. The two companies already work together. They clearly have complementary product offerings, and in a period of industry convergence, it is easy to speculate that the pair may ultimately look to merge operations. This would create a lean, nimble company that could conceivably establish a leading presence in the US despite a number of larger competitors. If this is a potentially exciting time in Sportech's history, it is important to acknowledge chief executive Ian Penrose’s role in bringing the company to this point. He has turned a struggling operator into a growing business that has been able to seize opportunities in the US to give it a presence other European competitors could only dream of. And now the sale of a seemingly dying division could push Sportech to even greater heights.