London Capital (LCG.L) - announces white label deal with Betfair LCG.L
Comment by Objective Capital , Oct 29, 2007 Questions?
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London Capital announced today that it had reached an agreement with Betfair, an e-gaming operator and the world’s largest online betting exchange to provide it with LCG’s white label spread betting product.
Objective's view:
LCG continues to make steady progress in its drive for growth. The announcement that it has agreed to provide Betfair with its white label spread betting product comes less than two months after it announced an agreement to provide Paddy Power with a white label product. LCG concluded five smaller white label agreements in the first half of the year but the agreement with Paddy Power and now Betfair are higher profile and with much larger partners.
LCG views white label arrangements as a way of increasing business either in markets where there is little awareness of its own Capital Spreads brand, or as a supplement to its own marketing efforts. In either case, LCG pays away a portion of the revenues generated to its white label partner but keeps client acquisition costs correspondingly low thus defraying some of the risk of expansion into new markets.
LCG had a very strong first half and we believe that the combination of continued market volatility and existing white label arrangements will have helped maintain momentum in the second half of the year. Although details of the agreement with Betfair have not been made public, we believe that it is likely only to enhance this growth and provides greater confidence in our forecasts and valuation.
