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Pinnacle is set to re-enter the U.K. sports betting market later this year after announcing that it will apply for a gaming license there in Q4 of 2016.
Pinnacle exited the market on November 1, 2014, in response to new gaming legislation that imposed a 15 percent point of consumption tax on all revenues from U.K. customers.
Now, according to a report in eGaming Review, Pinnacle is coming back and expects its rivals to be worried.
Pinnacle recently re-branded itself from Pinnacle Sports following the acquisition of the pinnacle.com domain name. As Pinnacle Sports, the company was enough of a household name to get a mention in an episode of the Sopranos, HBO’s famous TV series.
The company took its first online bet in 1998, and established a market position based on offering the best odds rather than big introductory bonuses.
In August 2014 entrepreneur Magnus Hedman took a controlling interest in the company.
At the time, Pinnacle CEO Paris Smith said:
“I am extremely excited about working with our new major shareholder to realise a shared vision for Pinnacle Sports, which includes significant product enhancement and expansion into regulated territories.”
The re-branding exercise completed last week reflects these ambitions. The move into market segments like esports and virtual sports betting occurred well before the sale, but under new ownership the addition of new betting products is likely to continue to expand.
Pinnacle is licensed in Curacao, but took the decision to operate in more respected regulatory jurisdictions by applying for a license in Malta.
The license was awarded in March 2015. The press statement issued by Pinnacle at the time said:
“The issue of the Class 2 Provisional Gaming Licence by the Maltese regulator helps fulfil a key component of a growth strategy outlined since a change of ownership, in August 2014.”
A U.K. license application will continue that strategy.
Magnus Hedman also owns the Malta based Touchbet business, and in March 2015 he acquired Sporting Index.
Sporting Index is a spread betting company licensed by the U.K.’s Financial Conduct Authority and by the UK Gambling Commission.
The depth of regulatory compliance expertise across the companies he controls should provide confidence that Pinnacle’s application will succeed.
After UIGEA was passed in 2006, Pinnacle decided to leave the U.S. market. The decision cost it around 60 to 65 percent of its customers. But the decision could also clear the way for Pinnacle to re-enter the U.S. market.
In a message to its customers, Pinnacle said:
“After careful consideration, Pinnacle Sports has chosen to voluntarily exit the U.S. market. Accordingly, wagers will no longer be accepted from clients within the U.S. as of Thursday, January 11, 2007.”
The company probably has plenty of scope for expanding into European regulated markets before it is likely to consider doing business in the U.S. again. But, if it does decide to go back, having left the market in 2007 will ensure that it doesn’t run afoul of any bad-actor language included in any future legislation.