iGaming Will See More Mergers and Acquisitions Coming, Says Analyst

The pace of mergers and acquisitions activity inward the gaming industry is brisken this year. Analysts wait that to continue, with the digital realm potential follow an epicenter of consolidation.

At the manufacture level, sports betting commands plenteousness of attention, and it’s been a hotbed of takeover activity and rumors. But iGaming offers more attractive margins, and is likely to raise faster, because it’s effectual in fewer states today than is sports wagering. Goldman Sachs forecasts iGaming could inflate to $14 one million million in revenue inward 2033 from $1.5 one million million today. That’s serious for a combine yearly growth order (CAGR) of 27 percent for more than a decade.

Growth estimates like that are sparking analysts to theorise that the digital gaming landscape painting is mature for more consolidation. Reporting indorse from the Global Gaming Expo (G2E) inward Las Vegas, Jefferies psychoanalyst Jacques Louis David Katz claims gaming companies of all sizes testament participate inwards consolidation that focus on digital and online offerings.

We await companies both big and small to remain participating on both sides of digital M&A, as suppliers and operators focal point on building competitive positioning and broader capabilities,” said the analyst.

Among the gaming equities Jefferies is constructive on are Caesars Entertainment (NASDAQ:CZR) — a fellowship with a knack for acquisitions — and Everi Holdings (NYSE:EVRI).

In iGaming M&A, Valuations not a Priority

Gaming companies are realizing that internet casinos are drivers of future growth, and that bringing engineering in-house boosts efficiencies and profitability. Those are points that underline wherefore traditional cassino operators are on the lurch for assets in these arenas.

Earlier this year, MGM Resorts CEO Bill Hornbuckle said online casinos are “the arcanum to this business,” and that it will eventually live two-thirds of the bottom of the inning business line in the space. Add all those factors together, and it’s possible that suitors testament shoes more accent on a target’s assets and tech capabilities than valuations.

“From this perspective, we believe valuations are secondary to validated capabilities, as the Street’s centering shifts to technology and cognitive content from get at to markets and customers,” adds Katz. “We thence believe it is conquer to uphold to a greater extent positively skewed ratings on both gambling casino operators and equipment and technology providers.”

The psychoanalyst has “buy” ratings on Bally’s (NYSE:BALY) and business-to-business tech provider GAN Ltd. (NASDAQ:GAN). Bally’s is viewed primarily as a land-based cassino operator, but its iGaming and sports wagering footprints are growing.  Through a slew of acquisitions, the troupe is 1 of the most vertically structured firms inward the industry.

Slots, Social Gaming M&A Plays, Too

Katz notes gaming suppliers are sounding to purchase content from traditional expansion slot machines and tabular array games for consumption in the iGaming and societal cassino spaces. That could cue consolidation.

He has “buy” ratings on International Game Technology (NYSE:IGT) and Scientific Games (NASDAQ:SGMS). Last month, IGT said it’s forming a dedicated digital and betting unit, while Scientific Games is attempting to acquire the 19 percent of social cassino developer SciPlay Corp. (NASDAQ:SCPL) it doesn’t currently own.