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IGaming Mergers and Acquisitions: Trends and Analysis
IGaming Mergers and Acquisitions: Trends and Analysis
Mergers and acquisitions have always been key in changing the direction of the iGaming business in the dynamic landscape in which it operates. Getting into 2024, this trend accelerates as companies strategically position themselves for emerging opportunities and the moving target of a regulatory environment. Besides M&As, big players like https://verdecasino.com/ca use other great promotion tools. This article brings you closer to the current state of M&As in the iGaming sector and the implications it raises for all parties involved.
What Are Mergers & Acquisitions?
Simply put, a merger of two iGaming companies means their fusion into a single entity, while acquisition is one larger company buying a smaller one. Both come with different legal and practical consequences, manifesting in a change of the following:
- Status;
- Rights;
- Obligations towards the partners and the customers;
- Ownership percentages, etc.
The complexity of the process demands a large number of lawyers specialized in this field. Some M&As are so big, they require more than one law firm for the entire procedure to go smoothly. This is done to precisely define the terms and conditions of the deal and avoid future disputes.
Why Do M&As Happen?
The reasons for M&As can vary. Two casino operators might want to increase their profits, so they decide to unite their forces on the market. Sometimes, they do it to cut operating costs, transform their brand, or collide against a competitor.
The legal provisions can also play a huge role in deciding whether a company wants to go through this process. Let’s say a platform wants to expand from the US market into the European gambling environment, but the legislation is too restrictive regarding foreign companies.
By merging with an entity from the European market, they get to avoid plenty of limitations for a fair share of profits, which is a win-win for all parties involved.
On the other hand, acquisitions in iGaming happen when one of the bigger online casinos wants to expand its impact and take over a smaller casino that’s willing to sell its platform. The most common reason for this is a lack of profits, so in a way, the larger casinos save the latter from further financial ruin.
However, acquisitions occur even when a casino is doing great, which can be the sole reason for it in the first place — driven by good results, the owners may be the ones to initiate the sale and hand over the business to a more prominent organization.
This way, they are free from risking future failure while earning lucrative compensation for building a successful business endeavour.
Notable iGaming M&As
In 2023, the world of iGaming has seen a great deal of M&A activity — a real change of course for the entire industry. The spotlight was mostly on the United States, where growing interest in freshly regulated markets has fuelled deals with some eye-watering prices.
Everi Holdings, Inc., one of the Video King's big competitors, acquired the assets of Video King, Inc., for a purchase price of $59.00 million, constituting one of the major transactions in this industry to support Video King's expansion plans in the digital gaming content and customer space.
Gaming Innovation Group (GiG) has been making moves in that direction, having invested $47.87 million in acquiring websites like Askgamblers.com and Johnslots.com from Catena Media Plc. The company recently announced the acquisition of KaFe Rocks for €35 million, which will help it consolidate its position in the iGaming affiliate sector.
This is not the only major industry deal Exacta Solutions has helped arrange this year: it also helped in arranging an undisclosed acquisition for Endeavour-owned OpenBet of Neccton, as it pursued to toughen up its responsible gambling activities across OpenBet’s customer network.
Looking ahead, 2024 looks ripe for more activity in online sportsbooks within the North American market. Operators are looking to gain more traction in the market. The industry is set to observe large developments in the next year, as ESPN Bet plans to place big investments to win its substantial market shares.
This development will probably add interesting twists to the partnership stories that the iGaming scene unfolds going forward.
How M&As Impact the iGaming Industry?
For now, mergers and acquisitions have been the propelling force of the iGaming industry, helping out smaller websites increase their strength and resources while also expanding the market reach of bigger ones.
In theory, the only potential danger would be creating a monopoly for some of the largest online casinos out there, but that’s almost impossible in practice. The field is too versatile, and the market is too big and customer-oriented.
The players’ preferences are a significant factor that doesn’t let any of the companies just buy everyone else and go lazy due to being the only option.
Speaking of the industry’s future, it’s safe to say M&As will force online casinos on a path of constant improvement, increasing the value of their offers and providing an overall better experience for every player out there.