Isle of Man eGaming Summit 2019: Panellist Susan Breen
3rd October 2019
Paul Moulton
Interviewer
We are at the COMIS Hotel for the KPMG eGaming Summit. As always a very major event for the players and with me is Susan who is a lawyer, flown in from the exotic London to us.
Susan Breen
Partner, Mishcon de Reya
Yep.
Paul Moulton
Interviewer
People flying in all over the world but they do.
Susan Breen
Partner, Mishcon de Reya
They are.
Paul Moulton
Interviewer
Um, really the hot subject of course is this business with the Star Sweep.
Susan Breen
Partner, Mishcon de Reya
Mm-hmm.
Paul Moulton
Interviewer
You must be keeping your eye on that one very closely.
Susan Breen
Partner, Mishcon de Reya
Big news.
Paul Moulton
Interviewer
Big news. I mean in fact, literally, was it yesterday? It was only yesterday I think they really announced it.
Susan Breen
Partner, Mishcon de Reya
Yes yesterday, they announced it yesterday. Yeah, we were surprised.
Paul Moulton
Interviewer
What can you tell us about that?
Susan Breen
Partner, Mishcon de Reya
Well I mean Vaughan was supposed to be on the panel with us this morning. We were speaking on I think the first panel today which is on MA and consolidation.
Paul Moulton
Interviewer
And he’s been called elsewhere.
Susan Breen
Partner, Mishcon de Reya
So we’ve all flown in and he’s flown out. [Laughter from Susan and Paul]
Paul Moulton
Interviewer
What can you tell us about it? What do you think it means?
Susan Breen
Partner, Mishcon de Reya
Well I think it’s a very unusual deal. Personally I don’t think many of us were expecting that deal. It is an interesting combination. You’ve got a very strong brand with Stars, you have a very serious sports betting business in terms of Flutter, Paddy Power, Betfair, er you’ve got high technology, local US knowledge. It has the potential to be a very er interesting combination. You’re looking um at FanDuel in the States, you’re looking at er Fox Sports Media. These are businesses that are still in the integration phase I think so it’s, it’s, it’s a, it’s an unexpected large combination when they are still bedding down I think and integrating.
Paul Moulton
Interviewer
Sure and Star Group have had quite a lot of turmoil, should we put it in that polite way, over the last few years in terms of integrations and mergers haven’t they?
Susan Breen
Partner, Mishcon de Reya
Well some would say maybe um the Star has been waning a little bit.
Paul Moulton
Interviewer
Yeah.
Susan Breen
Partner, Mishcon de Reya
Um but I still think that they have a terrific poker legacy, poker history business. Um it, it probably is looking like the right sort of deal when you talk about combination of technology, poker liquidity um and entrée into sports betting into one of the biggest markets that is opening up in the US.
Paul Moulton
Interviewer
The Isle of Man of course very sensitive to the Stars really because…
Susan Breen
Partner, Mishcon de Reya
Yeah.
Paul Moulton
Interviewer
…their global headquarters or whatever they want to call it here, employs a lot of people.
Susan Breen
Partner, Mishcon de Reya
Yep.
Paul Moulton
Interviewer
Do you think this will affect it or is it just too early to say?
Susan Breen
Partner, Mishcon de Reya
I think it’s too early to say. I mean they are doing a little bit of what I’d call rationalisation.
Paul Moulton
Interviewer
Yeah, they downsize I think you call it.
Susan Breen
Partner, Mishcon de Reya
And downsize and in, and in Malta um it’s very difficult to predict with large combinations, integration and synergies and how they pan out are, um are testing for businesses. They’ve set themselves a target of I think about 140 million er of synergies over the next few years in the combination, they’re still trying to work through the synergies they’ve projected on the Fox deal. Um the whole industry is going to be subject to rationalisation of some sort. It will be either downsizing.
Paul Moulton
Interviewer
Yeah that word rationalisation can mean similar things.
Susan Breen
Partner, Mishcon de Reya
It, it can mean a lot of things.I think if the cost pressures are enormous on these businesses, even the bigger businesses and because of regulation, um because of technology, because of demands of consumers and the options that consumers have, I think all businesses medium and large have a very tough time er trying to cope and keep profits at a respectable level and I say respectable level for those that are on the public markets which is a level that will maintain the share price and confidence in the business.
Paul Moulton
Interviewer
And should we have confidence in the business, in the sector?
Susan Breen
Partner, Mishcon de Reya
Yes. I mean this is, this is a sector that is going to get bigger but it’s going to change I think enormously over the next five years. Um there is still a place for mid-sized businesses but in the short-term I think there are businesses that are being invested in with a view to being acquired um and there is a, a race and a search for the mega global Coca-Cola brand within this, within this business and I think the business is not as mature as we think it is. Um there are a lot of big players, um I think this is a, an attempt by Stars and Flutter to become a clear international global leader
Producer: Paul Moulton
PMC-TV Production