Bally's Intralot CEO Robeson Reeves Talks Evoke Takeover

**SPEAKER_1** (0:02)
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**Caroline Hepker** (0:07)
The Greek lottery operator, the gaming operator Bally Intralot has reached an agreement to buy Evoke. Evoke is the parent company for a range of internationally known gambling brands, including William Hill and 888 Casino. Joining us now for more is Robeson Reeves, CEO of Bally's Intralot, who joins us now after the fresh announcement just today of this M&A deal. Welcome to Bloomberg Radio, very pleased to have you on. Just tell us about the motivation behind this acquisition, why this purchase, why now?

**Robeson Reeves** (0:44)
Well, we've chosen to acquire Evoke. We want to become a very dominant European player.
We've been highly concentrated in the UK market actually, of Bally's Intralot as a B2C provider. And this allows us to become a podium position operator across six core markets in Europe. We've become the number two operator in the UK. And this gives us the diversification we always wanted with Italy, Spain, Romania and Denmark, and we'll continue to expand internationally. These are great regulated markets and I love regulation.
We believe that the partnership that we have with our regulators is critical to future growth forevermore.

**Charles Capel** (1:26)
Right. And this acquisition, valuing the company at 52p to share, it's about a 20% increase to the company's closing price yesterday.
Total equity value of 243.1 million pounds. But of course, Evoke used to be worth a lot more and it has had a tricky couple of years. You go back to 2021 and it was worth more than a billion pounds. What do you think that you would be able to do with Evoke that is going to help turn this around to help make it more profitable?

**Robeson Reeves** (1:58)
Well, if you look at our business and compare us to Evoke, operating EBITDA margins, it's above 40 percent, and there sits at approximately 20 percent, and there's large similarities there. We'd obviously have to look at the cost structure, we'd look at how they spend marketing money.
This tax increase that recently was introduced in the UK has obviously caused challenges for various operators with lower margins, so I expect consolidation. Our technology is very powerful, we have a lot of data, and we build, I would say, very good models which retain customers well by allowing them to spend affordably for the long term. It's meant that our growth in margin and profitability has been consistent every year since I can remember.

**Caroline Hepker** (2:49)
Yeah, you're talking about the gross gaming yields tax that the UK has. Basically, it's not a tax on winners or the individuals, it's a tax on the businesses, isn't it? I mean, why are you prepared to take on this increased burden in terms of the gambling tax burden, and also the risks that may become with a government that is in flux, that might see a more left-leaning government?

**Robeson Reeves** (3:21)
This tax increase, it was a surprise to us all how much it's increased by. With our margins being at least 10 percentage points above any of our peers, it puts us in a very strong position.
If there were further tax increases, I think there'd only be one operator left.
Lots of companies will go under, there'll be lots of job losses from the long tail. This, iViewers, really is acquiring Evoke in order to become the business that we always wanted to become, which was far more diverse. So we're not rescuing them, it actually transforms us into the business we wanted to become. But I do expect many smaller operators to leave the market because it's simply unsustainable. You should understand that this tax at 40 percent in iGaming isn't a tax on profits, it's a revenue based tax, which is significant.

**Charles Capel** (4:20)
Of course, much of your business is now taking place online. It's a very fast growing profitable area, but there are also hundreds of many physical shops from William Hill on high streets around the country. How important are they to your business model? How cool do you see them moving forward?

**Robeson Reeves** (4:43)
I view them very much as a great bit of signage that we have presence throughout the country. They are places where many people engage, again, nationally.
There's different audiences who go there. William Hill have already come up with a plan and Evoke have already come up with a plan to reduce the number of stores because they need to rationalize that footprint. Because not only taxes increase, there's been other costs associated with the employment, which has meant that many of these shops are not profitable. I hope that we can keep the High Street alive. We've seen a mass reduction in the High Street in all industries over the years. So I don't have any intention to change that.