industry,” he says.“[ Although ] It’ s hard to imagine Entain buying Evoke.”
Jones points to private equity takeovers also driving consolidation. Although the UK has experienced less of this trend, in Europe, Blackstone, CVC and Apollo Global Management have dominated gaming deals and backed leading players like Superbet, Tipico and Lottomatica in Italy, over the last few years.
“ Private equity has been the default buyer of lots of businesses. When you look at a business like Evoke, for example, it has about € 1.8 billion in debt. That’ s not an impossible transaction for a large private equity firm to buy the whole business, refinance the debt, and reinvest more aggressively to make the revenue grow faster and deliver the promised profitability more quickly,” says Jones.
The PE trend in gaming has also been more prevalent in the US than the UK, with a handful of deals agreed in 2024, including Apollo acquiring suppliers IGT and Everi Holdings in a $ 6.3bn deal. Frank Fantini, founder of Fantini
Research, puts the wave of US PE deals down to waning valuations across gaming stocks, as the sector struggles to reach the all-time highs experienced during the Covid-19 pandemic.
Speaking to iGB’ s sister publication GGB, he said,“ Private equity firms can continue to move into [ gaming ] as they have the luxury of paying higher prices for acquisitions knowing they are free of impatient investors and can wait for their paydays.”
EASING OF REGULATORY PRESSURES RETURNING UK TO GROWTH
The UK government’ s decision to reform the 2005 Gambling Act rocked the industry, driving down revenue in 2021 and 2022 as operators grappled with the threat of much tighter regulations and prepared for the worst. The white paper’ s release in 2023 caused another wave of panic as operators were faced with incoming affordability checks, deposit limits, online slot stakes and a statutory levy, to name a few.
In H1 2024, 888 Holdings experienced a 25 % year-on-year decline in UK revenue, which it put down to proactive player protection measures initiated during the period. The group subsequently said it soon expected to return to growth, but in April of this year it reported a 1 % UK revenue decline as it continued to face pressures from incoming regulations. But player protection measures have been much softer than the white paper suggested, and operators are starting to see a slow return to growth, as the impact of these new regulations have already been absorbed. Entain hailed UK net gaming revenue growth of 22 % in Q1. This followed 13 % growth across the UK & I business in Q4 2024 as the operator hailed an“ earlier than expected” return to growth in the market.
Entain CFO Rob Wood said the turnaround effort was powered by the group addressing frictions and complexity within its UK customers’ journeys.“ Those drivers enabled the UK to return to market levels of growth in H2, which in turn helped all of Entain return to market growth,” he told analysts in March.“ We’ re therefore
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