US Gambling Industry 2021: What M&A Deals Have Stood Out So Far?

Share On Facebook
share on Linkedin
Print

The global gambling industry is incredibly competitive, something that can be seen by the sheer number of operators in the world. In the US, this idea is only exacerbated as many forms of gambling are not yet legal in certain states, meaning that in those state where it is, competition for customers is fierce. The biggest companies will, of course, be looking to establish their place at the top of the chain, which is something they can do by acquiring or merging with other companies. As the US continues the regulation of online gambling, M&A activity will undoubtedly see a rise.

©

One recent acquisition that garnered much attention was DraftKings’ purchase of Golden Nugget Online Gaming for around $1.56 billion earlier this month. Most followers of the industry will be aware that GNOG owns one of the best-known brands in today’s US casino market, mostly thanks to the parent company’s land-based offering. This acquisition will allow DraftKings to utilise the GNOG brand and give the company access to a database of more than 5 million customers. DraftKings has already developed a plan following the acquisition of GNOG, aiming to use a multi-brand strategy that will seek to increase cross-selling opportunities and subsequently drive market share and revenue growth across other states.

Following this deal, there is little doubt that many more of these tie-ups will happen as the industry continues to grow in the US; according to former William Hill CEO Joe Asher, it is “inevitable” that the market will continue to consolidate as more M&A activity arises.  Lloyd Danzig, the founder of Sharp Alpha Advisor, posits “The primary drivers of M&A activity in the U.S. sports betting industry continues to be access to technology, access to customers, and access to markets/licenses”, all of which appear to be increasing – and the online casino vertical opens an even greater pool of potential customers. In this way, followers of the industry can expect to see more M&A deals between the established brands and newer entrants before the year is out.

Another deal that gained much media attraction also happened earlier this month when Penn National bought Score Media and Gaming for approximately $2 billion. The brand that is most associated with Score Media and Gaming is theScore which many fans of sport will know well, since it provides updates on the latest happenings in the sports world. As Score Media and Gaming is Toronto based, the acquisition gives Penn National even further reach alongside its wide coverage of much of North America. The motives behind the deal were made clear by Penn National CEO Jay Snowden, who said “we’ll be gaining access to theScore’s deep pool of product and engineering talent and data-driven user analytics, which will help drive our customer acquisition, engagement, retention strategies, and cash flows”.

The frequency of acquisitions that have been seen in this month alone is indicative of the year to come, and how quickly the industry is growing overall. As more gambling companies become public, competition will begin to increase even more, and so more M&A activity can be expected to take place. Through the examples of DraftKings and Penn National, other companies’ interest in sports betting will be inspired to do the same to compete in a highly competitive US market.

The most obvious play from an investor point of view seems to be to invest in the smaller listed iGaming companies in the expectation that they will be swallowed up by the larger players in 2021 or 2022. Names like the ASX-listed PointsBet Holdings (PBH) hold particular promise for this kind of action.

 

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Comments

  1. mcmather says:

    It might also be worth keeping an eye on Webis Holdings Plc (LSE: WEB) who operate the Cal Expo racetrack in Sacramento, California, and whose other operation is WatchandWager.com LLC – a US entity, incorporated in Nevada and holding a multi-jurisdictional license issued by the North Dakota Racing Commission (NDRC).

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20211017 11:41:45