The iGaming industry is booming, and there are tons of different companies and game providers vying for player’s attention (and wallets) as its popularity increases. Inevitably, many of these companies end up either acquiring the smaller fish or merging with similar ones to maximize profit or just survive in an extremely competitive field.
As online gambling booms, many traditional betting firms are merging with online providers who have the experience, infrastructure, and platform to support this new audience. There can sometimes be business-related tech problems involved, but usually, it’s beneficial for both sides. The traditional betting companies get access to the online market, and the iGaming firms get the trust that comes with long-established companies.
It’s a mutually beneficial arrangement in that regard, but it’s obviously all driven by profit at the end of the day. One of the absolutely smartest examples of this was FanDuel and Paddy Power Betfair, which was just a perfectly timed merger (fresh off the back of another one, no less).
We’ll go into a little detail about some of these big mergers below. It’ll give you just a taste of how complex the global gambling industry can be!
FanDuel and Paddy Power Betfair
The most prolific example of an iGaming merger comes in the form of the American outfit FanDuel, which merged with Paddy Power’s U.S operation in 2018. This was timed quite nicely with the widespread legalization of online betting in the United States. Rules can still vary quite intensely from state to state, but the overwhelming wave of legalization is set to hit basically everywhere besides Texas.
Now, the FanDuel Group is one of America’s biggest iGaming companies. They’re one of the exclusive providers of online gaming in the state of Connecticut – providing the platform for the state’s Native American casinos to operate online.
Back in the nineties, all types of sports betting were basically outlawed in America by the Professional and Amateur Sports Protection Act. This was deemed unconstitutional and overturned by the Supreme Court, and both Paddy Power and FanDuel were in just the right place to target this new industry before it exploded. It was an extremely savvy move.
Here’s the interesting bit, though. Paddy Power Betfair itself was the result of a merger all the way back in 2016 – Paddy Power and Betfair were two rival companies that merged in order to maximize profit and market share.
The corporation has continued to absorb and expand all over the world. It now operates under multiple names in several countries, all under the “Flutter Entertainment” banner. FanDuel is essentially the American operating name of the firm, as the very Irish term “Paddy Power” doesn’t have a lot of relevance to that audience.
FanDuel has recently launched its online sportsbook in Arkansas, following the state’s legalization of online sports betting. The company has had a presence in the state for a while now thanks to the fantasy sports app it offers, but now bettors will be able to make use of the company’s range of offerings.
Arkansas has only very recently legalized online sports betting. The legislation was passed in February this year. The state’s three major casinos are expected to provide online themed sportsbooks in due course.
William Hill was acquired by Caesars Entertainment… and then sold to 888 Holdings
William Hill is a long-established UK bookmaker, going all the way back to the 1930s. In September 2020, William Hill agreed to a monstrous bid of 3.7 billion by Caesars Entertainment. Caesars is a name many bettors in the online sphere will be familiar with – the Nevada-based company operates tons of physical locations and iGames at various sites. They basically have a casino, online or otherwise, and in every American state it is legal to do so.
The acquisition went through, unopposed, by April 2021. Within that same month it was delisted from the stock exchange, but just a few short months later in September Caesars sold William Hill’s European company to 888 Holdings for 3 billion. William Hill’s American offerings were all rebranded to Caesars Sportsbooks, so the brand has essentially disappeared.
888 is another massive iGaming company, which, like Flutter Entertainment, has been expanding aggressively along with America’s continuing legalization of online betting. 888 operates under a ton of different brands, offering bingo, betting, and casino games. William Hill itself is still doing well, although the company did have to return 24.5 million in furlough funds it received from the UK government during the coronavirus pandemic.
It has also moved predominantly online, partnering with Relax Gaming to deliver the latter company’s huge portfolio of online casino games.
Eldorado Resorts acquires Caesars Entertainment
If by this point you’re wondering if the entire gambling industry is just lots of different companies buying and selling each other, you’re not far off from the truth. This one is a little bit unique in a way because El dorado Resorts acquired Caesars Entertainment and then assumed its identity back in 2020.
Eldorado already had a bunch of casinos in its portfolio but presumably was looking to maximize profits by merging with a business that already had a significant presence in the iGaming industry. Caesars, as mentioned above, is one of the most recognizable names in the American gambling industry full stop – so the name alone was probably worth quite a bit to Eldorado.
Caesars announced a multi-year deal back in February which made them the exclusive sportsbook partner of the NBA team, the Cleveland Cavaliers.
With the American sports betting and iGaming industries still so relatively young, companies are practically climbing over themselves to get through the door first. In this writer’s humble opinion, the Paddy Power Betfair/FanDuel merger was a stroke of absolute genius and one that really sets the tone for the future of the industry.
With such a huge, profitable market, companies can either struggle against each other as rivals or absorb each other to keep on upping the profits and expanding. As more and more American states legalize the pastime, we’re likely to see mergers on an even grander scale.
