Online gambling group GVC has sold its Turkish business in a deal worth up to €150m — a move that could help pave the way for a multibillion pound takeover of a large retail bookmaker such as Ladbrokes Coral or William Hill.

On Thursday, the Isle of Man-based group said it had disposed of Headlong Limited and a number of associated businesses, which make up its Turkish operations, to Ropso Malta Limited, a Maltese group that provides IT services for GVC's Turkish business.

Kenny Alexander, GVC’s chief executive said: “As the group evolves, our focus is increasingly on regulated markets and markets where we believe there is a realistic path to regulation.”

The deal marks a move away from its successful strategy in recent times of targeting “grey markets” — untaxed or unregulated areas around the world.

Analysts at Citi, the bank, estimate that 30 per cent of the group’s revenue is derived from grey markets, although rivals such as Paddy Power Betfair have abandoned these territories, believing operations are at risk of facing sudden regulatory action.

The FTSE 250 company’s decision to sell its Turkish business could have wider implications for the gambling industry. Over the past 12 months, GVC has twice held takeover talks with UK bookmaker Ladbrokes Coral over a deal worth up to £3.6bn.

It had also previously opened talks with rival William Hill, although several people close to the talks said its attention was now focused on completing a deal with Ladbrokes Coral.

In the past takeover negotiations, both Ladbrokes Coral and William Hill expressed strong reservations about GVC’s business in Turkey, due to concerns about the country’s regulatory position.

“Whilst clearly earnings dilutive, [GVC’s sale of its Turkish business] is a compelling strategic move resulting in a more regulated and attractive business, even better positioned to participate in sector mergers and acquisitions,” said Simon French, analyst at the brokerage Cenkos Securities.

In September, the company released results for the six months to June 30, revealing revenues were up 11 per cent to €432m, while earnings before interest, tax, depreciation and amortisation increased 47 per cent to €133.9m.

GVS’s most recent talks with Ladbrokes also stalled because of a disagreement over the value of the companies, as it was unclear how their businesses would be hit by the UK government’s review into the gambling sector.

On Tuesday, the government released the long-awaited review, announcing a crackdown on Fixed Odds Betting Terminals (FOBTs), which are a significant source of revenue for retail bookmakers such as Ladbrokes Coral. 

Officials at the Department for Media, Culture and Sport have suggested the machines, which allow gamblers to place bets of up to £100 every 20 seconds on games such as roulette, should have maximum stakes of either £50, £30, £20 or £2. 

The government has said it will hear views on what the maximum stake should be over a 12-week consultation period, but settling on how far the curbs should go. 

Gambling industry executives have said that the completion of the review will trigger a wave of consolidation, as the companies believe greater scale helps to stave off fierce competition from online upstarts and the increased regulatory scrutiny.

This article has been amended to reflect the fact that a takeover of Ladbrokes Coral would be worth £3.6bn rather than £3.6m.

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