Gambling consolidation gathers pace

"Everyone's been talking to everyone within the industry and that's been an open secret," said Geetanjali Sharma, leisure analyst at broker Noble. Ms Sharma said the possibility of a tie up with Bwin made good strategic sense, creating a giant with the muscle to compete against aggressive American rivals, both in its home market and in the US, which is believed to be considering a repeal of its online gaming ban.

Noting Playtech's recent strategic alliance with US lottery infrastructure provider Scientific Games, Ms Sharma predicted further deals in the months to come. "We're seeing the culmination of all these talks and I'd imagine we'll see a lot more deals while we have the stronger winter trading period holding up valuations," she said. Playtech this week said its share of profits from its William Hill Online joint venture nearly doubled in its fourth quarter to €8.1m (£7m).

Certainly, after weakness in 2009, trading across the European industry has begun to stabilise since October. "This winter has been extremely harsh, which forces punters indoors. Online gambling has been a beneficiary," noted Ms Sharma, adding that the jump in gaming has offset any weakness from disruptions to the sporting calendar, and that less unexpected football results had helped to restore margins across the sector to more normal levels.

But Ms Sharma agreed that Ladbrokes is still in danger of being left standing in the current game of industry musical chairs, despite news that its long standing chief executive Chris Bell is to step down. "The problems at Ladbrokes are a lot more structural and there are things that have happened in the company that the chief executive's departure will not fix," she said. "They don't have the cash to do outright deals, and, as pure-play bricks and mortar specialists, would have the weaker hand at the online negotiating table."