Gambling Industry Bets on Mergers and Acquisitions

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Recent years have seen many of the major betting and gambling brands merging with or acquiring other brands in the industry. And you can observe that the trend is on the rise. The gambling industry covers many segments including the land-based casinos and online casinos. Some brands have been present for long as land-based betting houses. With the recent entry of the online gaming and betting industry, they started setting up online sites, too, including sports betting like online football betting. Relatively newer gambling companies include those who have only an online presence. Why do we observe the increasing mergers and acquisitions now? There have been many attempts to explain the phenomenon. Some view it as something special and come up with plausible reasons, while others like to believe that it is all to be expected as a natural outcome of the gambling industry’s progress.

List of latest mergers and acquisitions

The latest news we hear is that Flutter Entertainment, owner of Paddy Power and PokerStars, the Irish gambling company, is about to acquire The Stars Group of Canada worth $12b. Many big M&As in the gambling industry have taken place in recent years. Some of the latest developments are listed below:

  • William Hill, the famous sports betting company, is acquiring the sportsbook assets of CG Technology company.
  • Rank Group that owns Grosvenor casinos has completed all formalities of acquiring Stride Gaming, an online Bingo and Casino company, for a bid of £115.3m.
  • 888 Holdings, an online casino organization, completed its acquisition of several divisions under Jet Media and Jet Management in March 2019, including three Bingo brands, namely, Costa Bingo, Sing Bingo, and City Bingo for £18m.
  • Betbright, the betting company from Dublin, is being acquired by 888 for £15m.
  • Paddy Power Betfair has announced the acquisition of the Georgian brand Adjarabet for €116m.

Reasons for mergers and acquisitions

These developments have been under keen observation by industry enthusiasts. Various sources come up with different explanations, and here we listed the most popular ones. 

  • Increasing regulatory pressure

Gambling is a highly dynamic industry, and many governments are still coming up with newer and newer regulations to keep the industry under control. These legal changes not only make the operations difficult for many companies but also create additional costs. Hence, some companies prefer selling their businesses to other parties. 

  • Saturation in the market

There are numerous large and small enterprises in the field of betting and gambling. Creating new companies will only make it hard to survive. Even long-standing companies have to compete with rivals to stay in the field. Hence, acquisitions sometimes become a better option.

  • Efforts for economies of scale

As the gambling business is exponentially growing, the business size has to be increased when it has reached its maximum resource capacity. However, the strenuous efforts required for the expansion and a necessity to set it all up in a short time make business managers think that merging or acquisition is a better option for expansion.

  • Revoking the PASPA regulation in the USA

In the USA, the regulation of PASPA that opposed sports betting has been removed, and bettors can now freely take part in sports betting. This increase in betting interest is also seen as a reason for the new stir in the betting world. 

Conclusion

Gambling, betting, and casino industries have always been extremely dynamic fields. They have always witnessed drastic changes happening around them, sometimes for their good and sometimes for bad. Today, such fluctuations are at their highest. The mergers and acquisitions between top brands in the industry are only a couple of indications, with deeper changes taking place inside the business and deemed to reveal themselves shortly.

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