Just hours after Evoke confirmed receipt of Bally's Intralot's full stock acquisition offer, Bally's CEO Robson Reeves personally dismantled the most exciting assets in this potential deal during the FY2025 full-year earnings call. The offer is anchored at 0.5 pounds per share, behind which is the direction of Evoke's strategic review since last December - the UK remote gambling tax doubled from 21% to 40% this month, directly triggering this self-sale. Reeves was straightforward to analysts: applying Bally's operating model to a much larger business and completely rewriting financial performance through synergies, this opportunity is worth betting on. He specifically pointed out the difficult but stable Italian market for Evoke, as well as Romania, which is also on the wish list, and assets that could strengthen Bally's layout in Spain. Deutsche Bank analysts estimated in January that Evoke's business facing Italy has an annual EBITDA of about 60 million pounds, with a growth rate in the mid-double digits, and a transaction multiple of about 8 times EBITDA for similar assets. Reeves even frankly stated that from the perspective of the UK market, other overseas markets are equivalent to being given away.
International License Matrix: Italy is difficult to enter, Romania is listed, Spain is supplemented
Evoke's international gambling revenue grew 14% year-over-year in the fourth quarter of last year, with Italy and Denmark both setting quarterly revenue records. For Bally's, Evoke's European license portfolio provides a shortcut to bypass the lengthy cycle of applying for licenses in each market. Italy has high market entry barriers and strict localization requirements, and Evoke has already built large-scale operations there, which is a ready-made bridgehead for any operator wanting to enter the market. Romania, as one of the fastest-growing gambling markets in Eastern Europe, was also named by Reeves. In Spain, Bally's currently has only a small presence, and Evoke's assets just complement this puzzle. Reeves was quite pragmatic on the call: We still don't understand these markets well enough, fortunately, we can first apply the operating model to the UK business, and other territories are considered a bonus.
UK retail still holds value, online and offline need to be deeply integrated
When asked about the UK William Hill retail stores that Evoke is gradually closing, Reeves's answer was not one-size-fits-all. He believes that retail itself still makes sense, but it must be deeply integrated with online. The long-term plight of UK retail betting shops is no secret—from fixed odds betting terminal limits to pandemic closures, to this month's doubling of remote gambling tax and next year's betting tax increase, operators are accelerating the cutting of inefficient outlets. Entain and Flutter have recently shrunk their retail portfolios. Reeves emphasized that Bally's is familiar enough with the UK online, which will be the focus of evaluation, and the diversified value of other assets is icing on the cake.
The importance of the UK market to Bally's is evident from the data. In the first quarter, UK B2C net gambling revenue grew 10.5% year-over-year, and despite the remote gambling tax increase in April, it still maintained double-digit growth within nineteen days, with both the number of players and total betting amount stabilizing. Reeves attributed the market share expansion to Bally's attracting customers against the trend when competitors cut back on marketing—active player numbers grew 7% year-over-year, and the increase in market share is not just on paper, but a fact that is happening. Currently, the UK contributes about 30% of Bally's revenue, with the Americas accounting for 43%, and Europe 11%.
High tax environment fosters M&A window, the question of capital structure under 1.4 billion debt
Reeves sees the current high tax environment in the UK as a historic window for M&A integration. Operators with thin profit margins and limited scale are under real pressure, while Bally's still has an undrawn revolving credit facility of 160 million euros, reserving financial flexibility for suitable targets. However, he kept silent on how the Evoke transaction would change the group's capital structure. Chief Financial Officer Andreas Kriso revealed on the call that as of last December, the group's adjusted net debt had soared from 334.2 million euros in the same period last year to 1.493 billion euros, mainly due to the debt consolidation after the merger of Bally's Interactive with Intralot. If Evoke is swallowed, this balance sheet will face a new round of reshaping.
PASA official website continues to track global gambling M&A and license asset pricing dynamics, noting that Bally's valuation logic for Evoke is becoming a typical example of industry integration after the UK tax reform. When remote gambling tax jumps from 21% to 40%, the scale effect of a single market and the combination premium of cross-licenses are replacing the simple revenue multiple as the core variable in M&A pricing. Evoke's Italian license, Romanian access, and Spanish supplementation are perhaps more valuable in Bally's eyes than UK retail stores.
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