Gambling M&As drive all-time high revenues in 2016

A new infographic from igaming affiliate CasinoUK reveals that gambling M&As topped £5 billion in 2016, helping firms make record revenues.

As most gambling companies start announcing their Q4 and full-year 2016 earnings, it’s clear companies that completed M&As were the biggest winners.

While the Euros were a big factor in firms making record revenues, mergers and acquisitions across the industry played an equal part in their growth.

Paddy Power Betfair logo.

Paddy Power Betfair and Ladbrokes Coral Group lead the M&A way

Paddy Power Betfair (PPB) has announced they expect full-year revenues to be up 18% reaching almost £1.55 billion after successfully merging 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 and AskGamblers as well as regulated US affiliates such as PlayNJ and USPoker. They have consequently seen their share price increase 250% after their IPO in February 2016.

William Hill casino logo on a blue background


William Hill bucked M&A trend

Conversely, William Hill, who rejected a takeover bid from 888 and Rank, has seen their profits fall £20m below expectations – a drop of more than £30m from the £291.4m operating profit they posted in 2015.

This year we could see one of the biggest mergers in gambling history with Tabcorp and Tatts, who control 95% of Australia’s betting market, expected to come together. The impending FanDuel-DraftKings merger 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 the M&A trend to continue.”

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Nigel Frith