Glynn has already said that he’s keen to improve Ladbrokes’ position in the online market and put it on a par with the likes of William Hill (which bolstered its online offering earlier this year by launching a JV with casino software developer Playtech). But it’s not the first time the chain has attempted to buy 888; last time, it was thwarted by a crackdown on online gaming companies from the US Department of Justice. So this still represents a bit of a gamble.
If they pull it off, any deal between the two companies should be mutually advantageous. After the William Hill-Playtech tie-up, Ladbrokes's online offering looks a bit lacklustre in comparison. And 888 hasn’t been doing particularly well, either: in May, it issued a profits warning and in September, it scrapped its dividend after profits dropped by half during its first six months of trading, to $4.3m (£2.8m). Things were looking marginally more upbeat at the time of its most recent update last month, but it’s by no means out of the woods yet.
There are still obstacles to be overcome, though. The previous acquisition, when 888 was valued at a significantly higher £470m, was eventually scuppered by Ladbrokes’ own board, which decided a tie-up would be too risky given that the DoJ had effectively rendered online gambling illegal in the US. Four years on, 888 - unlike many of its rivals - has yet to strike an ‘immunity deal’, which means that any takeover could eventually land Ladbrokes with a nasty fine. So it will have to factor that into the cost of any deal.
Still, as any gambler will know, if Ladbrokes can defy the odds there's a hefty prize on offer. Last year, the US gambling market was estimated to be worth $5.4bn, which could rise in value to between $12bn and $16bn if the DoJ repeals the laws. So you can see why it thinks this deal is worth another punt.