In the realm of online casinos, there have been a number of high-profile mergers and acquisitions recently. Notably, William Hill, a UK-based bookmaker, has extended its content arrangement with Realistic Games and resumed billion-dollar merger talks with The Stars Group, which had been put on hold last year.
While Playtech keeps up its aggressive acquisition campaign and Scientific Games buys Tech Art Inc. and NYX Gaming, LeoVegas makes headlines by purchasing all of the shares of Web Investments Limited, a Maltese company whose holdings include the Royal Panda trademark. Weirdly, a lot of mergers and acquisitions have happened recently. What does this mean for the future of Canada’s online gambling market and for us, as devoted Canadians who play exclusively online? To discover out, we decided to conduct a thorough investigation.
Alterations in the Market, Legislation, and Law
Gambling hotspots are obviously looking for ways to counteract the rising costs associated with tax, compliance, and ever-evolving technology. British politicians have recently cracked down on Fixed-Odds Betting Terminals in an effort to crack down on problem and underage gaming. William Hill, among other operators, relies heavily on them. This alters the long-term strategies of the operators, which in turn influences the global market. Similarly, as the United States’ sportsbetting regulations are expected to change in the near future, operators will want to adapt their services in anticipation of this new market. This will have an indirect impact on Canada.
William Hill entered into relaunch discussions with The Stars Group because of the possibility that it would need to place a greater emphasis on its iGaming division. Concerns that The Stars Group (formerly Amaya Gaming Inc.) was not sufficiently established in the iGaming sector caused talks to stall last year, resulting in the creation of billions in new debt. However, the advantages of the deal were once again emphasized in light of the increased legal pressure on gambling operators and the continuing demonstrable success by The Stars Group.
William Hill’s profits dropped by 1 percent in the first half of 2017, and the companies’ strengths are seen as being complementary, so a merger between the two seems like a no-brainer at this point.
Greater Productivity in More Challenging Markets
Online casinos continue to be a lucrative business opportunity thanks to the widespread acceptance and growth of online gambling in Canada and elsewhere. As more people become interested in the industry and more money is made, the market becomes more competitive and businesses within it must find new ways to expand. Mergers and acquisitions are a great tool for doing just that, since they allow companies to expand their product offerings, reach a wider audience, and reduce risk through diversification.
As an illustration, consider the hypothetical combination of William Hill and The Stars Group. The vast majority of operators and software developers have openly expressed their intent to provide cross-platform product delivery. The agreement between William Hill and Realistic Games, which increases the number of available casino games, is a prime example of this. Playtech has gone one step further by establishing a finance business known as TradeTech and supplying services for the financial markets. The gambling conglomerate also bought ECM Systems, a bingo industry software and hardware supplier for numerous major UK operators like Mecca Bingo and Gala Leisure. This again exemplifies extensive forays into new fields of computer code and hardware design.
Some businesses, like the LeoVegas Group, see merging as a simple way to enhance profits and expand their range of casino games and other offerings. Both Royal Panda and LeoVegas Casino are well-known and respected in their own right, but by joining forces, they are anticipated to become even more formidable. Royal Panda’s sportsbook was just released, expanding the range of options available from the LeoVegas Group, which owns and operates the casino.
M&A Activity Spikes in 2021
In 2021, Caesars Entertainment acquired William Hill in what was arguably the largest stock deal in the online gambling and casino industries. Many in the sector were taken aback by the decision, which cost more than US$3 billion.
Another topic that generated a lot of discussion was the US$2 billion merger of Bally and Gamesys, which followed a more conventional agreement structure. With this deal, an established American brand joined forces with cutting-edge European software that had already passed the necessary regulatory muster. It was a win-win for everyone involved, including the companies and the players.
Contemplating Merger and Acquisition Effects
Mergers and acquisitions, like any other form of business, have both pros and cons. One reason is that bigger studios have the means to rapidly expand their operations. This means that games will receive upgrades and new releases much more frequently than they would from a smaller firm.
However, this trend also indicates that smaller, independent developers are finding it difficult to survive. This is bad news for the state of originality and innovation in games played for real money, as fewer creative risks will be taken.
The Consequences for Canadian Gambling Fans
Even if Canadian gambling laws have not changed significantly in recent years, international developments have an effect on the business. This is becoming increasingly clear as businesses move their operations closer to the largest players in the field. In the end, it appears that what we are witnessing is an effort by online casinos, online sportsbooks, and casino software providers to diversify their offerings in order to thrive in an ever-evolving industry.
Companies with ambition will do what it takes to win over customers and remain competitive. The results of this for Canadian gamblers might go either way. If you could get all your gaming needs met by one company, you could save time and effort by keeping all your money and rewards in one place. It’s possible that these bonuses can be amassed more rapidly, which would be a huge boon to players. In addition, the sites of the mega-operators should have a larger quantity of each type of gambling product, including but not limited to additional casino games and betting markets.
Even while there may be fewer operators in the market, there should still be enough groups left so that the lack of competition between them and the lack of tempting offers to entice gamblers from the opposition is not a serious problem. Worse still, players would have fewer options and diversity if there were less competition, and the online casino business environment might eventually become too hostile for the launch of any independent outfits. Mergers and acquisitions now appear to be the greatest option for gambling companies to maintain substantial profits, though this may change as the sector becomes less diverse over time. Operators and players alike would benefit from the increased profits that the remaining heavyweights would generate.
If the casino is doing well, it can afford to cut the minimum wagers and increase the paybacks when players win. It’s possible that we’ll see less variety but greater financial benefits as a result.