Chapter 1 – Introduction
profitability being hit by increasing taxes, compliance costs and marketing expenses. They can ill
afford the burden of another form of ‘tax’ on a growth area like in-play betting.
Some countries in Europe have moved away from a dot.com model to a dot.country one and have
in some instances received criticism due to their prohibitive tax rates, limited product ranges and
burdensome registration processes. These requirements increase costs and slow down market access.
For operators, understanding the strengths of the software and platform providers in the industry is
critical for their future or existing business success.
Another important industry trend is a wave of merger and acquisition (M&A) deals which has taken
place in the past two years (see Chapter 7); for example, Canada-based Amaya Gaming Group
acquiring the parent company of PokerStars and Full Tilt Poker and GVC's takeover of bwin party.
UK-focused M&A deals have exceeded £11bn throughout 2015 (including new owners for Sporting
Index and Sky Bet), with mega-mergers planned between Paddy Power and Betfair, and Ladbrokes
and Gala Coral.
The performance of the leading global companies in the online gambling and betting segment varied in
2014, with William Hill and Paddy Power showing growth rates in online net revenues of close to +20%,
while Betfair showed only moderate growth and bwin party registered a decline in total revenues.
Total global digital gaming gross win (€bn)
76.9
9.3
2003
23.1 23.9
18.6 20.8
15.5
15.9
12.3
2004
2005
2006
2007
2008
2009
2010
2011
36.9
31.5 34.1
28.4
26.1
2012
2013
2014
2015E
2016E
41.4
2017E
45.3 48.0
2018E
2019E
Source: H2 Gambling Capital
Global digital gaming gross win by product genre (%)
Poker
10%
Bingo
6%
Skill/Other/Community Lotteries
6%
State Lotteries
9%
Casino
22%
Source: H2 Gambling Capital
12 Digital Sports Betting
Betting
47%
51.8
2020E