In the gaming space, massive gaming company mergers are nothing new. The huge sums behind these mergers are the thing you either, with many of them going for millions. What are some of the biggest mergers that happened in recent history, and what does that mean for the casino industry at large?
Looking At Some Of The Biggest Mergers And Buyouts
There are so many different buyouts and mergers happening in the industry right now, it can be difficult to keep up. Your favourite casino site may be owned by another brand, and they may well then get bought out by another brand in turn. Examples of this can be seen at Betfree where Ladbrokes and Coral are owned by Entain.
It’s amazing to see how much these mergers go for as well. With such huge amounts changing hands, you can see just how profitable the industry is right now.
For example, one of the biggest acquisitions was the purchase of Sportingbet by William Hill and GVC Holdings. This was the first of many different deals, which eventually saw GVC Holdings becoming Entain. Sportingbet went for $530 million, and this fee was split between both companies.
Mergers will often happen between game developers as well, and these often go for massive amounts too. One such example is the acquisition of Virtue Fusion by Playtech in 2010. They were acquired for their online bingo software, something that Playtech correctly predicted would be in demand. The company were bought for $37 million, and Playtech are now one of the leaders in online bingo.
Are These Acquisitions Worth The Cost?
These are some huge sums of money that these businesses go for, so you have to wonder whether it is really worth the cost. It is clear that the companies doing the buying believe so, as they are willing to shell out that many in order to acquire these companies.
In many cases, they may be buying these companies in order to gain their knowledge, experience, or technology. For example, in the Virtue Fusion buyout, Playtech were looking to gain their online bingo tech. It was clearly a purchase that paid off in the end for them.
There are many other reasons why a company may choose a merger or a buyout of another company. They may simply want to obtain the competition, eliminating a threat to their business. Buying a company in order to gain a foot hold in a different country’s market is also quite common.
Whatever the reason, there are lots of benefits to companies to buy up competition, and gaining that experience for themselves.
The Benefits Of Gaming Company Mergers
Are there benefits to these huge company mergers? There are several different benefits that both shareholders, and players of online casino games can enjoy thanks to these buyouts.
Different brands can focus on different sectors: Is several different brands are under one umbrella, they can all focus on different products or customer types. For example, there can be different brands working on table games, slots, or bingo. This enables them to bring the best possible experience to customers, and give them exactly what they are looking for in the online gaming experience.
Retaining customers: On a business level, having multiple brands together under one buyer means that it’s much easier to retain customers. If someone switches to a different brand, and that brand is still under the same parents company, then the parent company does not lose out overall.
The Downsides Of Casino Company Mergers
Of course, there are also going to be downsides to these mergers as well. The biggest issue is that with any merger, layoffs are always likely. No matter how much the buying company assures that they will be keeping on staff, it will not make financial since to keep everybody on. In doing so, there is always the risks that you lose vital talent.
With multiple brands under one roof as well, marketing spends greater as it’s harder to create brand awareness for so many different brands.
As you can see, there are huge summed involved in the mergers and buyouts of many different casinos businesses. In many cases though, it is clear that the sums are worth it as they bring benefits to both the companies, as well as their customers.