It seems that some of the largest gambling operators on a global scale are on their way to consolidation through a new wave of multi-billion mergers and acquisitions. Reportedly, the dealmaking process is set to start as early as October 2017, as a result of the operators’ efforts to consolidate their positions in both their domestic markets and in international markets as well.
Lately, it becomes more challenging for gambling companies to operate in the conditions of quickly changing environment. In addition, the market conditions in the UK gambling industry have been not so stable, as more gambling authorities and regulatory bodies calling for stricter measures against operators to be imposed. The country’s competent authorities insist on stricter regulation on the companies that currently offer their services without owning an operating license.
Increased costs have also been imposed by local lawmakers and regulatory authorities, with new taxes being implemented. The tighter regulation and rising duties have been blamed for being some of the most serious difficulties that gambling companies have been forced to deal with.
Gambling Companies Trying to Bolster Market Presence
As reported by Casino Guardian at the end of August 2017, the two companies that are considered most likely to join forces in order to form a gambling industry conglomerate are the UK bookmaker Ladbrokes Coral and the Isle of Man-headquartered GVC Holdings. Earlier today, The Financial Times revealed that according to a number of people with knowledge of the matter, the two companies are on their way to merge in a larger entity and have even already agreed on the shape of the new company’s executives and board.
Earlier in August, the Isle of Man-based group was reported to have held talks about a possible takeover of one of the largest British bookmakers, Ladbrokes Coral. The acquisition bid, estimated to approximately £3.6 billion, was not successful at that stage. The negotiations, however, seem to have gone further, with a possible deal on the way.
At the same time, other British and international operators have been trying to get used to the new market conditions and are reportedly considering possible merger and acquisition deals to bolster their positions. Some of the operators that have been considering such moves are Paddy Power Betfair, William Hill, 888 Holdings, Rank Group, former Amaya which is already known as The Stars Group, as well as Jackpotjoy.
As revealed by The Financial Times, over 15 senior industry executives, including some involved in merger and acquisition negotiations, have shared in interview that a massive wave of deals is expected in the market after the UK Government publishes the results of its gambling industry review, with the outcome being expected until the end of October. No official commentary of the matter has been provided by any of the above-mentioned operators.
Apart form the tighter market conditions faced by gambling operators, due to increased regulatory scrutiny, companies are also forced to deal with the fierce competition of online operators. An enlarged scale of these companies could bring them the chance to operate several different brands and at the same time would make it possible to split the expenses for online gambling offering on a single platform.
Of course, the above-mentioned gambling operators are not the only one that could end up joining forces to create larger players on both the British gambling market and the global gaming industry arena. Other combinations are also possible, so the upcoming months will probably be quite dynamic and quite interesting in terms of emerging merger and acquisition deals.
- Author
Olivia Cole
