Bet365 Explores $12 Billion Sale or Potential IPO, Sources Say

Bet365 might be up for grabs or in the initial stages of a public debut in the U.S. The global betting industry titan has reportedly been in talks with Wall Street banks regarding its potential sale. 

Its owners, the billionaire Coates family, are considering selling part of the company to a private equity firm, or an initial public offering (IPO) that could value the firm at a staggering $12 billion. 

Although unconfirmed, this move could reshape the betting landscape, especially in the U.S., where Bet365 is looking to expand. Here’s a deeper assessment of the informal news and what it could mean for the gambling industry.

The Coates Family’s Strategic Talks with Wall Street

Word on the street is that the Coates family, headed by Denise Coates, has been holding talks with Wall Street banks in the last few weeks regarding the possibility of floating Bet365 on the US stock exchange.

According to credible sources, the billionaire family has also been seeking guidance from US advisers on the partial or full sale of the online gambling empire. Another insider says the Coates are also in talks with private equity firms to assess the viability of taking a partial stake in the company before the potential IPO happens.

One unidentified source close to the discussions recently revealed that Bet365 has already entered the bank selection phase. It has been engaging with banks to identify those best positioned to maximize the value of any potential transaction.

The talks come at a crucial moment for Bet365, considering its financial performance and future outlook. The company reported a pre-tax profit of £627 million for the year ending March 2024, which was a remarkable turnaround from a £72.6 million loss the previous year. 

This financial rebound, coupled with the family’s recent exit from China’s tightly regulated betting market, suggests the proprietors are streamlining operations for a big move. As these talks unfold, the question isn’t just about selling but also about positioning Bet365 for its next chapter.

A $10–$12 Billion Price Tag Looms Large

The numbers being floated are eye-popping, and industry analysts agree. Gaming consultancy Eilers & Krejcik Gaming (EKG) pegs Bet365’s valuation at between $10 billion and $12 billion, considering its robust financials and industry benchmarks. This valuation makes Bet365 one of the most valuable gambling firms on the market, rivalling other industry giants, including Flutter Entertainment and DraftKings. For Denise Coates, a sale at this valuation could net her over £5 billion personally, given her majority stake. 

When rumors of a potential auction surfaced a few weeks ago, a California-based research firm concluded that Bet365 could easily fetch this massive sum, owing to its global reach. The company started as a modest bookmaker in Stoke-on-Trent, but has gradually grown into a global powerhouse operating in over 20 jurisdictions.

However, Bet365 has a relatively small market share in the US, where it covers only 3% of the total gambling industry. It is easily dwarfed by giants like FanDuel and DraftKings, which suggests that untapped potential is a major factor behind driving this valuation.

In reality, the prospect of a $12 billion deal goes beyond the company’s current success. It is a bet on its future growth, especially in the U.S., where legal sports betting is booming. This hefty price tag begs the big question of how Bet365 will navigate the sale or IPO.

How a U.S. IPO or Sale Could Unfold

Bet365 has several viable options. However, the Coates family will have to make a wise choice to avoid ending up with a less-than-desirable deal. If the family settles for a full sale to a private equity firm or competitor, it would allow them to cash out and avoid the headaches of active management. However, it would mean handing over the reins of a company they have built painstakingly.

On the other hand, if it decides to sell a partial stake to a private equity firm, the family would retain control until an IPO happens later on, but it would have to keep working on the company’s goals. 

In the third scenario, if it goes for a public listing on a U.S. stock exchange, the family could raise fresh capital and broaden their company’s investor base. However, this option would also bring stricter regulatory scrutiny, especially around responsible gambling.

Also, if they pursue a U.S. IPO, it could prove a game-changer. Analysts say an IPO would make Bet365 the largest gambling float ever, potentially redefining valuations for peers like Flutter and Entain.

A New Bet for Bet365

As Bet365 stands at this $12 billion crossroads, the Coates family’s next move is expected to impact many stakeholders across the gambling world.  Whichever road they take, the next step hinges on balancing growth ambitions with regulatory complexities. It means Bet365 requires a strong suitor to step up to the table. Fortunately, the company is in the hands of excellent businesspeople who have proved their abilities in the past and might do the same this time. However, only time will tell. 

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