Top 10 Biggest Acquisitions in the Gambling Industry over the Years
Without a doubt, one of the biggest growth sectors over the past two decades is the gambling industry; certainly, this has only been expedited by online growth, which essentially gave birth to an entire standalone niche that has augmented significantly.
It has seen multiple brands come from nowhere to establish themselves as global powerhouses, with a presence in multiple markets around the world, having created a substantial amount of player demand. The results, more often than not, lead to numerous mergers and/or acquisitions by competitors and even IPOs (Initial Public Offerings), where a company gets listed on a stock market, with shares made available.
For most new brands in the iGaming industry, regardless of which market(s) that they operate in, growing to a point where they can be acquired is often the main goal, and there isn’t necessarily a fixed timeframe for this to happen.
Multiple variables need to be accounted for, however, so that this can happen – usually, the leading companies that buy such brands see the value in many different forms, not least adding a new revenue source to their balance sheet.
For some, there is also the possibility of utilising a particular brand’s software with their own assets in order to make them more efficient, in addition to the various cross-marketing opportunities that are presented following their interest.
Below, we explore the 10 biggest gaming acquisition deals that have happened in the industry over the years (including in the software niche of the sector) and the effects that these have had, with the merger and acquisition scene has really skyrocketed over the last decade.
Virtue Fusion Acquired by Playtech
Arguably the first notable deal in the industry involved one of the leading software providers, with Playtech completing the takeover of Virtue Fusion in 2010. The latter was (and still is), known for its online bingo software, having cleverly identified this as a niche that would grow when the company was launched in 1999 (two years after Playtech).
At the time, Virtue Fusion had an annual turnover of $19.3 million, with Playtech agreeing a fee of $37 million for the company, which helped to propel its status in the years that followed and add a valuable servicing offering to its main asset. As a result, through Virtue Fusion, Playtech has become a leader in the development of online bingo software.
GVC Holdings & William Hill Acquires Sportingbet
The first in a long line of deals involving GVC Holdings (now Entain), which saw the conglomerate purchase online brand Sportingbet alongside William Hill. Completed in 2013, this was not as straightforward industry acquisitions. The £530 million fee was split between both GVC and William Hill, with the latter buying Sportingbet's Australian and Spanish businesses and GVC, the rest of the world.
Since then, the South African brand has grown significantly under the GVC umbrella and continues to be held in high regard by sports betting enthusiasts the world over.
BetStar Acquired by Ladbrokes
In 2014, British bookmaker Ladbrokes announced the acquisition of Australian bookmaker BetStar, which was founded in 2007, with operations in both Melbourne and Darwin. This move allowed Ladbrokes to enter the Australian market in a bid to try and outmanoeuvre its rivals in what was becoming an ever-increasingly competitive UK market.
The deal was reported to be worth between AUD$ 20-25 million, with BetStar having become even more established over the last decade, being considered by many to be the premier betting site in Australia.
This was the second deal for Ladbrokes in quick succession; merely a year earlier, it had completed the acquisition of secondary betting exchange Betdaq for €30 million, however, this was sold back to its original owner Dermot Desmond in 2021, for an undisclosed sum.
Stan James Acquired by Unibet
Arguably online gambling's biggest deal up to this point, in 2015, it was announced that Unibet PLC, belonging to Swedish conglomerate Kindred Group had agreed to buy Stan James PLC in their bid to enter the lucrative UK market.
A £19 million fee saw the Gibraltar-based company transfer its 150 employees under the employment of Unibet, with operations effectively continuing as normal.
We have long been looking at strengthening our position in the UK online market. Stan James as an operator, is one of the most well-respected in the UK market, with particular strengths in horse racing and other British sports.
Stan James has had a long presence in the British market, where there are few companies of this size available for acquisition. Since Unibet has only recently targeted the UK market, there is little overlap between our respective businesses. Over time we see a significant potential to increase the breadth of the Stan James product range, such as live streaming, casino and improving the mobile offering.
Meanwhile, Denis Kelly, CEO of Stan James Online, added: “We are delighted to join the wider Unibet group. There is a substantial market opportunity in the UK following the re-regulation. Through the combination of Unibet’s expertise in marketing and financial strength, together with Stan James’ high quality sports and racing betting offering aimed at the UK market, I am confident that we can substantially increase the combined Group’s market share in the UK. I would also like to take this opportunity to thank the shareholders of Stan James for their strong support of the business.”
GVC Holdings' Acquisition of Bwin
The second notable deal for GVC was somewhat of a giant, after agreeing to buy bwin for £1.1 billion in 2016 after five months of negotiation while also fiercely fighting for the acquisition with big companies like 888 Holdings.
888, meanwhile, said it was unable to make any higher bid, as noted by CEO Brian Mattingley, who revealed: “It may have been a transformational deal, but it was too risky. It may have gone wrong for us. We have looked and run several models several times, and we were nervous.”
Mattingley, also at the time, famously laughed off any suggestion of competition from GVC following the deal, stating: “I don’t see them as a competitor. They will take what failed with bwin and do more of it. They have the same [software] platform, the same managers, and the same marketing. They even still have Norbert [Teufelberger]. The guy who destroyed the value of the company is still in there!”
Ladbrokes Merges with Coral
Although at the time, this was much-publicised as a friendly merger between two of the ‘Big 3’ British high street bookmakers, there are suggestions that this was somewhat of an aggressive takeover of Coral by Ladbrokes. Overnight, it became the largest bookmaker in the UK, bringing together 2100 shops from Ladbrokes and 1845 from Coral and 30,000 employees to create a £2.3 billion company listed on the London Stock Exchange.
While the brands stayed separate (and still are), the collective name of the company became known as Ladbrokes Coral, with the group recruiting Andy Hornby, former CEO of HBOS (Halifax Bank of Scotland) at the time when it almost imploded in 2008, as a senior executive to help steer the transition.
CEO of Ladbrokes, Jim Mullen, threw his full support behind Hornby, despite him being condemned in 2013 by the parliamentary commission on banking standards in 2013, with Mullen stating: “Andy Hornby is a first-class executive that this combined group is lucky to have.”
Betfair and PaddyPower Merger
In the same year, two of the industry's leading digital betting companies decided to merge, in what was a particularly complementary deal. Betfair being the largest and most popular betting exchange, with PaddyPower being highly regarded in the sector, especially for their marketing campaigns.
In coming together, the newly formed PaddyPower Betfair group, created a £5 billion powerhouse, with headquarters in Dublin, over 7,000 employees and well in excess of £1.2 billion in sales.
Chairman of PaddyPower, Gary McGann, talked up the possibilities that lay ahead for the group following the merger, stating: “The merger of Paddy Power and Betfair will create a company of world-class capability and people who will deliver substantial up-front synergies and a platform for very exciting business expansion.”
Meanwhile, Gerald Corbett, chairman for Betfair, revealed the strategic sense that it made for the two entities to join forces, “bringing together two industry-leading and successful businesses and providing enlarged scale, capability and distinctive, complementary brands”.
Kindred Group Acquires 32Red
The ever-growing Swedish company completed a takeover of Gibraltar-based online sportsbook and casino 32Red in 2017 after gaining approval from the UK Gambling Commission, with the offer valued at £175.6 million, with Kindred Group acquiring 97 percent of 32Red’s shares.
Over the last few years, 32Red has become a pivotal sportsbook in the UK market and has gained substantial traction, with the adoption of a particularly clever strategy, partnering with well-known second-tier English football clubs to become their official sponsor. As a result, the brand has grown substantially, and while it certainly isn’t the biggest in the UK gambling industry, it does have its fair share of fans.
GVC Holdings Acquire Ladbrokes Coral
This one was a blockbuster. Two years after two of the UK’s leading bookmakers completed a merger, ambitious conglomerate GVC swept up the company in a megabucks £4 billion deal, in their quest to become the largest gambling group in the industry, taking the number of brands that it owned to in excess of 20 - all of varying size.
Ladbrokes Coral board believes that the proposed combination with GVC accelerates our strategy to improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses.
The acquisition has compelling strategic rationale allied to an opportunity to use the best of both from proven management teams and will create material shareholder value. It secures earlier delivery of our long-term value potential, which is why the board of Ladbrokes Coral has unanimously recommended GVC’s offer.
This remains one of the largest deals in the online gambling industry, at the time, revealing that the sector is up there in one of the most lucrative in the world.
FanDuel Acquired by PaddyPower Betfair
We continue with a very interesting deal, though one that allowed PaddyPower Betfair (which later became Flutter Entertainment), to acquire what has become the leading brand in the increasingly-growing US market in 2018, for $158 million, allowing it to merge its existing US assets, to form the FanDuel Group.
In the years that followed, the US online gambling scene has exploded, with this now legal in multiple states around the country, growing into arguably, the largest and most lucrative market in the world, by some distance.
It literally could not have been any better timing for Flutter, with the group, via its FanDuel brand, taking on DraftKings and BetMGM in the US market, coming out on top more than once. Two years later, meanwhile, Flutter bought early shareholders and private equity investors out of the remaining 37 per cent of FanDuel, for an eye-watering $4.2 million.
888 Holdings Completes William Hill Acquisition
After losing out to Entain many years previously in the battle to acquire bwin, 888 finally had some luck, completing a £2 billion acquisition of the non-US assets of William Hill in the summer of 2022, which was somewhat of a landmark for the Gibraltar-based company.
There were early suggestions that 888 would sell William Hill’s brick-and-mortar retail business, but these were quickly quashed by former 888Holdings CEO Itai Pazner following the takeover.
We did see interest in the retail [estate] from the outside but we feel that the retail is an integral part of the William Hill asset. Today they’re managing a very well-run retail estate that’s present in good and prime locations. We’re planning to keep the retail stores and the great people they have in them.
In addition, Pazner also spoke about how the gambling landscape has completely revolutionised over the decades.
In the 1970s and 1980s, the British betting scene was dominated by the so-called ‘big four’ bookmakers: Ladbrokes, William Hill, Corals and Mecca. Not one of those names is now independent. Instead, the new leaders are Flutter Entertainment, Entain, bet365 and now 888.
bet365 has no high street presence at all and the other three are all here more because of their online prowess than their physical store estate.Moreover, all four have ambitions to further their global presence for good measure.
Meanwhile, a year earlier though, it was US company Caesars Entertainment that bought William Hill in its entirety for £2.9 billion, in their bid to enter the US online gambling market.
In the months that followed, it was decided that the company wanted to only focus on the US and accepted an offer from an ambitious 888 in what has seemingly been a considerably shrewd deal.
Near Misses in the Industry
While it might seem as though GVC (now Entain) were the biggest bully in the playground, the company has been on the receiving end over the last few years.
Initially, it was MGM Resorts International that launched a staggering bid, in the region of $11 billion for the conglomerate, in January 2021, however, this was swiftly rejected by Entain. One of the reasons for the bid was because of a joint-venture between the two industry mega-forces; BetMGM, which gave Entain the opportunity to enter the US market in 2018, and handed MGM significant expertise in the online gambling sector. However, Entain stood firm.
Less than a year later, it was DraftKings that came forward with a jaw-dropping $22.4 billion offer, with Entain seemingly offering considerable resistance to any deal. However, there were suggestions that DraftKings withdrew its offer to focus on the US market. Furthermore, it is understood that MGM may have possibly influenced the resistance from Entain, due to the joint venture both companies had together, which would have led to many possible complications.