Dissecting the Largest iGaming M&A Deals

The iGaming industry is incredibly dynamic, with companies constantly looking for aggressive expansion and consolidation. With the rapid growth in demand across the world in the last two decades, mergers and acquisitions have come thick and fast.

The big brands like Scientific Games, William Hill, GVC, and Netent have a penchant for taking over promising new companies to bolster their own portfolios. Many of these smaller brands continue to exist as subsidiaries of their new owners.

But then, these big brands themselves get involved in the biggest deals with each other, often worth hundreds of billions of dollars. Consolidation and economies of scale are the two main motivating factors for some of these deals.

Paddy Power – Betfair (£5bn)

Worth a combined £5 billion, this merger of two of the biggest brands in the UK left a lasting impact on the global iGaming industry. The newly formed company was initially called Paddy Power Betfair, before rebranding to Flutter Entertainment in 2019. That deal created one of the world’s largest betting brands, with sales worth over £1.2 billion.

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Match made in heaven

Tanya Watkins from NoDepositWorld.com, had these thoughts about the deal, “2016 was a year of reckoning for the UK iGaming industry. The prospect of new taxes and stricter regulation, combined with the need for increased investment in evolving technologies forced the hand of these two giants.”

Ladbrokes – Coral – GVC (£2.3bn & £4bn)

This is actually two separate deals that deserve to be grouped together under one heading because of the speed at which it developed. It all started with a merger between Ladbrokes and Coral, yet another 2016 deal between two prominent UK brands.

At an estimated value of £2.3 billion, the deal included both iGaming, as well as offline betting assets of the two companies. As part of the merger, the brands agreed to sell off at least 300 shops between them to avoid competition concerns.

The newly formed Ladbrokes Coral brand did not have a very long life in the iGaming industry. Barely a year after the deal was struck, GVC Holdings came calling. The company, which only began in 2004, has been making waves in the industry with some eye-watering deals in the last decade.

GVC offered around £4 billion for the acquisition of Ladbrokes Coral, and the deal was eventually finalized in 2018. As a result, GVC Holdings became one of the biggest online betting brands in the UK, with both Ladbrokes and Coral customers migrated to their online platform.

Flutter Entertainment – Stars Group (£4.6bn)

Barely three years after the merger of Paddy Power Betfair, the newly formed company was ready to make a bigger splash in the iGaming and sports betting markets. Newly christened as Flutter Entertainment, this UK giant made a foray in the exciting North American market.

Its target was the famous Canadian brand – The Stars Group. In a deal worth a mind-boggling $6 billion, Flutter would acquire and merge with TSG, creating one of the biggest brands in the global gambling industry.

With this merger, Flutter will have a firm foothold in two of the biggest regulated iGaming markets in the world, stretching across the Atlantic. The newly formed entity is expected to have annual revenues close to $5 billion.

This was one of the many moves triggered by the landmark US Supreme Court judgment in 2018 which opened the way for the legalization of online sports betting in the US. All the leading UK iGaming brands have joined hands with local brands in the US to get in on the action.

GTECH – International Game Technology (£4.5bn)

One of the biggest mergers exclusively in the realm of iGaming (not involving much of sports betting), this deal dates back to 2015. GTECH was an Italian giant in online lotteries and casino gaming, with assets across the EU, US and other major markets.  

GTECH rebrands as IGT

Big Group Big Profits

Formerly called Lottomatica, they adopted the GTECH moniker after buying a US brand of that name. They followed the same tradition in 2015 after the merger with International Game Technology, a Las Vegas-based manufacturer of slot machines and online games.

GTECH went on to adopt the IGT branding after the merger, with a home base in the UK for the newly formed entity. It would have a major stake in the online and offline slot manufacturing business, along with a massive presence in online lotteries.

Amaya – Rational Group (£3.7bn)

This acquisition raised eyebrows when it happened in 2014 due to the mismatch between the size of the company making the deal, and the amount of cash involved. Since Amaya was a smaller brand, the deal was backed by big players like GSO Capital, Deutsche Bank, and Barclay.

Based in the Isle of Man, Rational Group was famous for its PokerStars brand, one of the most recognizable names in iGaming. Amaya paid in cash to acquire 100% stake in their target company. After this deal, they became the biggest brand in iGaming, at least for a short while.

The deal made sense because Amaya was a Canadian company looking at global expansion. And for Rational Group and PokerStars, originally from Canada, the deal meant a potential return to the North American market, which they had to leave in the past due to US Department of Justice crackdown on online poker.

With regulated online poker and betting experiencing a revival in the US, PokerStars was looking for a way in. And the sale to the Canadian firm must have made sense to the owners of Rational Group, given their history of trouble in the US.

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