Maltese gaming M&A
Of Big Fish and Little Ones Andrew J. Zammit gives a Maltese perspective on M&A activity within the gambling industry and provides five key considerations for buyers.
I t is a truth universally acknowledged that the big fish eat the little ones - in business at it is in the natural world. The last six years have witnessed an explosive trend of mergers and acquisitions in the online gambling and video game industries, often worth billions of dollars, creating a significant buzz within the wider industry. The main drivers of this M&A activity include the overall growth of the gambling industry, the slow but steady opening up of the US sports betting industry and other geographical markets across all continents, and undoubtedly the Special Purpose Acquisition Company (SPAC) trend that has boosted acquisitions across all sectors. Market-trend-based strategies for the online gambling market include investing in Artificial Intelligence (AI) technology to enhance the user experience, integrating cryptocurrency as a method of payment, building mobile apps, investing in Augmented Reality (AR) and Virtual Reality (VR) technology, sponsoring sports events with large
audiences, collaborating with celebrities and influencers, providing free access to games with certain main features and offering cross platform support for games. Incumbent operators and investors seek to get quicker access to tried-and-tested technology, robust customer databases, and a wider spectrum of markets and licences, achieving speed-to-market through acquisitions rather than organic growth, given the sheer pace of market development and also the significant opportunity cost of time and resources. According to the EuropeanGaming 1 portal, the online gambling market reached a value of nearly €73,597.4 million in 2020, having increased at a compound annual growth rate (CAGR) of 13.7 percent since 2015. The market is expected to grow at a rate of 10.7 percent to €122,148.15 million in 2025 then expected to push on at a CAGR of 8.6 percent from 2025, reaching €184,264.3 million in 2030. Opportunities in the online gambling market are expected
1 https://europeangaming.eu/portal/latest-news/2022/03/24/111563/global-192-billion-online-gambling-markets-opportunities-and-strategies-2015-2020- 2025f-2030f/
10 • IMGL Magazine • July 2022
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