As most gambling companies start announcing their Q4 and full-year 2016 earnings it is clear companies that did M&As were the biggest winners.
While the Euros were a big factor in firms making record revenues, the mergers and acquisitions across the industry played an equal part in their growth.
Paddy Power Betfair (PPB) have announced they expect full-year revenues to be up 18% reaching almost £1.55bn after successfully merging together back in February last year.
Ladbrokes Coral Group also issued a trading statement this week with proforma group operating profit for the full year expected to be within the range of £275m-£285m which represents a 20% increase on 2015.
M&As weren’t just restricted to the gaming operators in 2016 as Catena Media acquired several iGaming affiliates with notable acquisitions including CasinoUK, AskGamblers as well as regulated US affiliates like PlayNJ and USPoker. They have consequently seen their share price increase 250% after their IPO in February 2016.
Conversely William Hill who rejected a joint-bid from 888 and Rank of a takeover have seen their profits fall £20mn below expectations -a drop of more than £30m from the £291.4m operating profit posted in 2015.
This year we could see one of the biggest mergers in the gambling industry with Tabcorp and Tatts who control 95% of Australia’s betting market expected to come together. The impending merger between FanDuel and DraftKings is also set to be completed.
Commenting on the gambling M&A scene, Catena UK’s Head of Marketing Varun Mathure said “seeing the results from 2016 it is the clear that operators and affiliates involved in M&As stole a march on the competition. With governments across Europe pursuing regulation of the gambling markets, we can expect to M&A trend to continue.”