The wave of mergers and acquisitions in the gaming industry is not over yet, according to experts.
As governments hike up the tax burden at a time when companies are competing harder than ever for new customers, those companies are finding that the best way to increase profitability is to join forces.
At $12.9bn, the volume of deals announced in 2015 was about double that of 2014 and the highest since 2005, according to data compiled by Bloomberg. “Consolidation will continue, because a trend is in place where globally governments are increasing taxes on gambling,” said Warwick Bartlett (pictured), chief executive officer of researcher Global Betting and Gaming Consultancy. “There’s a lack of profitability and a need to gain scale.”
The August announcement of Paddy Power’s US$4.4bn takeover of Betfair showed how companies are merging to cope with a clampdown by governments, while seeking to boost their standing in the booming $40bn online gaming market. There have been 72 deals across the industry this year, the most since 2006.
