The Gaming Intelligence HOT 50 of 2020 – Acquisition specialists12th February 2020 10:26 am GMT
Consolidation continues to be one of the driving factors for the betting and gaming industry. And the deal of the year in the online space was Flutter Entertainment’s acquisition of The Stars Group.
The deal creates a £10bn market cap company. It will have more than 13 million customers, revenue of £3.8bn and EBITDA of £1.14bn. It will bring together market leaders such as Paddy Power, Betfair, PokerStars, Adjarabet and FanDuel, with insurgents such as Sky Bet, FOX Bet and SportsBet.
The audacious deal wins Flutter chief executive officer Peter Jackson a place in the Hot 50. Considering the fact that much of his tenure has been spent trying to fix the teething problems associated with Paddy Power’s combination with Betfair, the acquisition of Stars Group is something of a gamble. However, Jackson has proved himself a serial buyer of companies, with The Stars Group the cherry on the cake, following smaller acquisitions of FanDuel in the US and Adjarabet in Georgia.
The Stars Group is itself still trying to digest Sky Betting & Gaming, which it acquired last year for $4.7bn. But GVC Holdings has shown it can be done. Its acquisition of LadbrokesCoral – shortly after acquiring bwin and shortly after Ladbrokes merged with Coral – has set a precedent. Jackson will need an equally slick team in place to make it work.
The second most notable online gaming deal of the year belonged to Gamesys, which was acquired by JPJ Group for £490m, just four years after JPJ (in its previous guise as Intertain) bought the Jackpotjoy, Starspins and Botemania brands for £750m from… Gamesys!
Not only did Gamesys chief executive officer Lee Fenton help engineer these fantastic double deals but he also ended up scooping the top job at the combined company, which was renamed… Gamesys!
It takes a special kind of genius to sell your company to the same buyer twice and to also win the contract to supply the acquirer in the time in between. But joking aside, Fenton and his team have proved themselves one of the most adept operational outfits of recent years. It celebrated the union in its first post-completion results announcement with a 23 per cent increase in revenue to £92.4m for the third quarter of 2019. Fenton is a canny operator and one can expect much more from him in the M&A market in the coming years.
While the Goliaths of UK online gaming have been busy, their land-based counterparts in the US have also been turning to M&A. Eldorado Resorts transformed itself from regional casino player to gaming royalty with its $8.58 billion acquisition of Caesars Entertainment.
Chief financial officer Bret Yunker joined Eldorado from JP Morgan in February and was immediately thrown into one of the most complex deals the industry has seen. Twenty years in the banking industry with clients working across the gaming, lottery and online sector allowed him to hit the ground running.
The Caesars acquisition did not come out of the blue. It followed the acquisitions of Isle of Capri and Tropicana. With William Hill recently in talks with old Caesars, and chief executive officer Tom Reeg talking about spinning off the online gaming operation, you can expect Yunker to be as important a figure in 2019 as he was in 2020.
On the back of its daily fantasy sports operation, DraftKings has raced to the front of the fledgling sports betting market. Its speedy rollout and partnerships have been shaped in part by chief legal officer Stanton Dodge, who will also have had a major influence on the company’s acquisition of sports betting supplier SBTech.
Described as a “super strong general counsel” by one of our judges, Dodge will have been pivotal in unpicking the company’s contract with Kambi to make way for SBTech.
DraftKings chief financial officer Jason Park also wins a place in the Hot 50. The former Bain Capital partner joined the company in June and set about structuring the deal to acquire SBTech and list on Nasdaq. The deal involved a merger with a special acquisition vehicle led by former MGM chief executive Harry Sloan, which then acquired SBTech. DraftKings’ ambition is almost limitless. Park and Dodge will be major assets in fulfilling that ambition.
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