The Effects of Casino Mergers and Acquisitions
There have been several high profile mergers and acquisitions in the online casino world recently. Most notably, William Hill and The Stars Group have resumed the merger talks that were shelved last year, which could result in a billion-dollar deal, and the bookmaker based in the United Kingdom has also extended its content deal with Realistic Games. LeoVegas made big news by acquiring all the shares of a Maltese company – Web Investments Limited – whose holdings include the Royal Panda trademark, and Playtech has continued its dynamic acquisition campaign, while Scientific Games has purchased Tech Art Inc. and NYX Gaming.
So why the massive increase in mergers and acquisitions, and what does it mean for the online gambling industry on a global scale? Do these mergers have an impact on the experience of players?
Changes in the Market and Legal Regulations
Gambling destinations are understandably keen to offset the increase in the cost of tax, compliance, and evolving technology. A big issue is the recent throttling of fixed-odds betting terminals in the UK as lawmakers seek to aggressively curb underage gambling, but many online operators such as William Hill rely heavily on fixed-odds wagers. Legal and regulatory changes such as these impact heavily on the operator’s business plan, which in turn affects the industry on a global scale.
This has inadvertently meant that William Hill has had to focus more of their attention on their online casino interests, which has been a major contributing factor to their interest in acquiring The Stars Group. There have also been changes in the gambling regulations of Australia in recent months, which have also had an impact on how Australian betting sites are able to operate.
Increased Market Strength in Increasingly Competitive Environment
The ever-increasing popularity of online casinos around the world has made it evident that the online casino business remains highly lucrative, and the industry continuously attracts greater interest and generates more money. However, this also means that the market becomes increasingly competitive and operators need to find new and innovative ways to remain relevant and keep growing in stature. Mergers and acquisitions have become a good way of achieving this goal, as more products are added to already diverse portfolios, and the products and services on offer begin to appeal to a wider customer base.
Most operators and software developers have clearly expressed a desire to deliver products across a wide variety of platforms, and this is highlighted perfectly when considering that Playtech – a software company – has crreated a financial division called TradeTech which offers financial market services. However, for some companies such as the LeoVegas Group, it is all about the bringing together of casino brands for increased profits and a wider variety of products to choose from.
The Impact on the Player
It’s important to remember that changes to one country’s gambling regulations has a ripple effect on the gambling industry around the world, especially considering how many operators have their companies based in countries outside of their main user base. As a result, operators have become more centralised and localised and it has become apparent that online casinos, sportsbooks, and casino software developers have had to adapt in order to survive in a changing environment. The most ambitious companies will continue to do what is necessary to stay afloat, and ultimately keep their players happy – guaranteeing repeat business.