|Online betting exchange The Gaming Bourse is all set to get listed on June 11 in an initial public offering (IPO) of about 18.4 percent of its equity to raise about £5 million after expenses and fees. |
The company will debut on the London stock markets late next week. With an offering price of 68 pence per share, analysts put the market capitalization or company’s overall value at £30 million.
‘The proceeds are destined to fund growth. He expects The Gaming Bourse to grow by more than 10 times over the next four years in sports betting alone,’ says Chief executive Hamish Raw.
Internet exchanges such as The Gaming Bourse and Betfair, which posted an eight-fold rise in profits earlier this week, have squeezed traditional bookmakers such as William Hill and Ladbrokes margins with cheaper offers, by letting punters bet against each other rather than against a central bookmaker.
‘Betting exchanges are putting pressure on their own profit margins because of tax loopholes rather than a superior business model. The reason why their price is better is because their customers are acting as bookmakers, but they don’t pay tax and levy,’ argues David Harding, CEO of William Hill – UK’s second biggest betting shop chain.
But raw of Gaming Bourse says contrary to high street bookie’s accusations, bookmakers were making clandestine plans for their own version of online betting exchanges. ‘I suspect that as soon as one of the majors breaks rank, they'll all get into betting exchanges, and I can’t wait for the competition; I think it will be great,’ he says.