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GAMING ACQUISITION PHENOMENON

While the Online Casino industry was growing before Covid it is now booming, the likes of which we have never seen. The Covid has provided a boost to online gambling of all sorts and introduced players who would have never even imagined going online to gamble. This is evidenced by the consolidation of many companies and the premium in the price to purchase these companies.

The most recent acquisition happened in October of this year (2021) with Playtech agreeing to be purchased by Aristocrat. Aristocrat Leisure Ltd. is an Australian slot company which in many ways dominates the “Down Under” market. The purchase of Playtech Plc for $3.7 billion was a 60% premium over the market price. These acquisitions are not based on the market value but on a strategic value of expanding the sphere of influence as well as looking to future growth.

 

What has led to the Online Casino Phenomenon?

This most recent purchase is just one of many that has occurred in the past. Much of this has to do with the past 2 years where the online climate has changed dramatically. With much of the quarantining happening in mid 2020 people were forced to purchase goods online, and not just toilet paper. Everything from food to electronics were being purchased online while those who never bought anything online were finally catching up to the 21st century.

Much of the consolidation of online gambling/gaming has to do with new markets as well as technology. In an industry where the newest technology can make or break companies, many of the larger firms are looking to stay in the game by purchasing the lean and agile companies.

Of course, this is not new and has been occurring in industries worldwide since the Industrial Revolution.

Recent Acquisitions

Flutter Entertainment Plc (Ireland) acquired Stars Group (Canada) 2020

Caesars Entertainment Inc (US) acquired William Hill Ltd. (Britain) 2020

DraftKings Inc (US) acquired Entain Plc (UK) 2021

Bally Corp (US) in the process of acquiring Gamesys Group Plc (UK) 2021

We will continue to see more acquisitions even as the Covid restrictions lift, and players get back to their “normal” lives. This Virus has changed the mindset of many people and has made gamblers think twice before spending time in a crowded casino.