With the previous two years being more of transition ones, seeking to see the closure of a number of questionable deals, the environment in the gambling market has been quickly changing.
In spite of the fact that 2016 was quite eventful as far as mergers and acquisitions are concerned, further consolidation of the market has been projected by a number of market experts and analysts. Considering certain merger and acquisition talks between some of the major gaming operators both in the UK and on a global scale, some of them were expected to take the path towards further consolidation after clearly stating out that they were looking for opportunities.
Lately, market conditions in the gambling industry have been quickly changing, with more gambling authorities and regulators trying to impose stricter measures against companies that offer their services without an operating license or are not in line with the legislative rules. On the other hand, lawmakers and gambling regulators have been imposing larger costs to the companies, with some of the latter facing difficulties to deal with the stricter market conditions.
Major M&A Attempts and Deals so Far in 2017
Still, 2017 has not seen any large merger and acquisition deals so far, but a number of companies have made takeover attempts or have decided to become more oriented in affiliate acquisition deals in order to consolidate their market presence. Here are some of the most important ones so far in 2017.
GVC Holdings and Ladbrokes-Coral Unsuccessful Takeover Deal
As Casino Guardian reported last week, the leading gambling company GVC Holdings had recently held talks over a possible acquisition of the UK bookmaker Ladbrokes Coral. The company had made a takeover offer estimated to around £3.6 billion in return to full assets of Ladbrokes Coral, which currently owns 3,500 high street betting shops.
Unfortunately, it became clear that the acquisition talks had failed and no longer exist for the time being. In case that the two companies had reached an agreement over a takeover of Ladbrokes Coral, the deal would have created one of the behemoths not only in the UK gambling industry, but worldwide as well.
The acquisition approach has been considered as a sign of the latest sign that the gambling companies on the territory of the UK have been taken the path of further consolidation over a wave of merger and acquisition deals. According to market experts, this is only the beginning, since the local industry operators would try to become stronger in order to deal with the upcoming regulatory clampdown after the UK Government impose stricter legislation and regulatory measures to companies operating in the sector.
Playtech
As Casino Guardian reported earlier in August, one of the largest gambling software developers – Playtech – has surprisingly taken a different path than the one it has previously expected to do. After following an aggressive acquisitions strategy in 2016, which costed it the massive amount of €240,000, the Isle of Man-based developer has been primarily focused on signing more partnership deals and releasing fresh content in the market in 2017 so far.
Playtech founder’s decision to sell a large part of his shares in the company has probably made the gaming software developer to change its initial plans and take another path for the current year, with the aim of consolidating its presence and boost its portfolio to attract more and more customers.
Gaming Innovation Group 2017 Affiliate Deals
Over the year 2017, the gaming services provider Gaming Innovation Group (GIG) has been primarily oriented towards further consolidation of its existing assets as well as expanding its presence in the industry. So far, the company has carried out a total of four affiliate deals.
First, Gaming Innovation Group took over the reputable affiliate website Casinotopsonline.com through its subsidiary Innovation Labs. The deal was estimated to €11.5 million and was aimed at significantly bolstering the positions of the Group as one of the leading gaming affiliate Groups across Europe. Then, the company decided to continue its European affiliate expansion through the takeover of an affiliate network that was especially oriented towards sportsbook players in Germany, Austria and Switzerland (the DACH region). The total consideration of the deal amounted to €5.7 million.
This year, Gaming Innovation Group also managed to carry out the largest affiliate acquisition in its history so far, spending approximately €26 million on the takeover of one of the biggest affiliate networks in the Scandinavian region – Stk Marketing Ltd. Thanks to this acquisition, the company has succeeded in establishing itself as the indisputable leader in the affiliate segment of the Nordic market.
Last but not least, the Gaming Innovation Group has carried one more affiliate acquisition in 2017 so far. At the time the deal was announced, the company did not disclose the affiliate company it had acquired, but it became clear that the acquired company has experience of about a decade in the industry. The takeover deal was expected to significantly bolster the positions of the Gaming Innovation Group in the digital marketing service industry.
Catena Media Affiliate Deals in 2017
The performance marketing company Catena Media was one of the major players in the gambling industry so far in 2017. The operator has been focused on further consolidating its status as a market leader, which is exactly why it has been aiming to bolster its positions through a series of partnership agreements.
So far in 2017, Catena Media has been involved in a number of affiliate networks acquisition deals. The company signed its first affiliate acquisition deal for this year in February, when it acquired Slotsia.com and its related assets. At the time of the deal, the Chief Executive Officer of Catena revealed that the company worked continuously to identify attractive acquisitions that would complement and strengthen its portfolio.
On March 23rd 2017, the company announced another affiliate acquisition deal. At that time, Catena Media purchased Newcasinos.com and its related affiliate assets, expanding its business further, with the transfer being planned to take place no later than July 15th. Several months later, in mid June 2017, Catena revealed another casino affiliates acquisition deal to expand its presence in the market and complement its existing portfolio. This time it acquired two casino affiliate websites – MrGamez.net and Spielekiste.de, which are oriented towards German-language customers. The operator paid a purchase price amount to €4.2 million.
The last affiliate acquisition deal for the company so far was the acquisition of the award-winning sports affiliate Bettingpro.com at the prize of £13.9 million at the beginning of July. The acquired business assets are primarily focused on the regulated UK and Australian online gaming markets, with a large number of premium affiliate domains also included in the deal.
Conclusion
So, it seems that consolidation of the gambling market has been on the way, whether companies and regulators like it, or not. For some gambling operators, mergers and acquisitions seem like the only way for them to deal with increasing costs and new taxes imposed by lawmakers and local regulatory authorities, not to mention some new restrictions and new rules that are expected to be imposed.
With a few months left until the end of 2017, and almost no major merger and acquisition deals, we can still see some surprises in the gambling industry, especially if some of the largest market players feel endangered with the stricter regulation that is expected to be imposed over the upcoming months.
- Author
Olivia Cole
