Year in Review Part Four – UKGC reaches conclusions and M&A sagas come to a close
The final quarter of the year saw huge news across a range of areas of the international betting and gaming industry, as two major acquisition sagas concluded – with differing results – and the UKGC made a number of important announcements.
In the second half of 2021, the betting sector closely followed a prominent transatlantic development, as major US player DraftKings made its intentions to acquire FTSE100 gambling group Entain clear.
A contentious issue in the process, however, was the status of BetMGM, Entain’s US subsidiary operated in partnership with MGM Resorts – another key actor in the US betting and gaming sector.
A month of negotiations between the two parties saw Entain extend its ‘put-up-or-shut-up’ deadline to DraftKings, requiring ‘a number of matters to be satisfactorily resolved ‘by no later than 5.00pm on 19 October 2021’.
Although DraftKings remained hopeful that it would be successful in acquiring Entain, significantly bolstering its international holdings in the process, the operator ultimately withdrew its offer in November.
Meanwhile, a separate merger reached a different conclusion, as 888 Holdings moved closer to completing its takeover of William Hill’s non-US assets, put up for sale by the latter’s new owner Caesars Entertainment.
888 was able to secure regulatory approval in November, anticipating a full completion of the acquisition sometime in the first quarter of the new year. In an update to its investors, the firm stated that it had been ‘progressing well’ on integration planning in order to complete the takeover in the first quarter of the new year.
Meanwhile, Aspire Global’s BtoBet sportsbook platform also reached a significant commercial milestone, successfully migrating all of its partner brands, a development which it predicted would have a positive impact on revenues, reduced costs and profitability.
Tsachi Maimon, CEO at Aspire Global, said: “I’m very happy to see that we have already managed to complete this significant step in our growth strategy. This is yet another milestone in our aim to become the world’s leading iGaming supplier.”
BtoBet also offered some unique insights into the industry during this period, offering a breakdown of three prominent European betting and gaming markets – the UK, Germany and the Netherlands.
Citing data from H2 Gambling Capital and Regulus Partners, BtoBet predicted that Dutch gross gaming revenues of €827 million and €1.084 billion respectively, with sports betting highlighted as the key product to win over consumers in the country.
With regards to Germany, the report referenced by BtoBet forecasted that the German market will grow to €18.2 billion by 2024 when factoring in the ‘positive impact and new momentum’ of the new regulatory framework of the GlüNeuRStv fourth interstate gambling treaty.
However, there were some concerns remaining for the UK sector, as the British retail betting industry faces increasing difficulties, with the gross gaming yield from non-remote operations declining by 26.4% and 639 high-street betting shops closing between 2019 and 2020.
A separate report saw BtoBet identify a ‘resurgence’ in the French horse racing scene, noting that data from l’Autorité Nationale des Jeux (ANJ) suggested a ‘new benchmark’ in terms of bets placed and revenue.
“Gone are the days of horse racing as a niche offering for a small segment of players, with operators treating the sector as a separate channel,” the platform explained.
“The industry’s rapid evolution in terms of available content offering, aided by the rapid growth and migration towards the online channels has resulted in operators and bookmakers alike eyeing horse racing as a new revenue stream.”
Lastly, from a regulatory perspective, the UK Gambling Commission (UKGC) made a number of announcements, including bringing the long-running speculation regarding the collapse of Football Index to a close.
In an update in October, Andrew Rhodes, UKGC Interim CEO, stated that Football Index had ‘non-compliance issues and practices’ which needed to be addressed, but added that these circumstances were ‘not severe enough’ that the UKGC felt the need to put an end to the company’s operations.
Towards the close of the year, Rhodes spoke at GambleAware’s ninth annual conference, warning operators of the need to adhere to compliance requirements, saying: “In an ideal world, the Commission would have little to do beyond licensing operators. But that is far from the case… We are no way near that at this point in time. There is simply too much harm from gambling as a result of too little compliance amongst too many operators.”
The conference also included a speech from Chris Philp, the Gambling Minister, who offered some insights into the outcomes of the 2005 Gambling Act review.
Notably, the Minister confirmed that £100 affordability checks would most likely not be introduced, agreeing with the UKGC’s assessment that consumers would find the measures “unwelcome, disruptive and disproportionate to the risks”.
He did, however, detail an ambition for the UKGC to ‘excel in holding the industry to account’, whilst also calling for greater cooperation between different betting operators as well as increased engagement with the financial services industry.