iGB North America magazine IGBNA Aug/Sep | Page 44

Management & Marketing

THE INTEGRATION GAME
The received wisdom is that as full an integration as possible should follow any
M&A activity, but as Intertain CMO Peter Marcus points out, there are compelling
reasons why this has not been adhered to by many of the most successful mergers
and acquirers in the sector, and certainly not by his company.
When discussing M&A opportunities in
the gaming industry, the received wisdom
is that unless the companies offer very
different products it is best to integrate
the businesses. After all, integration offers
pooled technology, one marketing team,
a back office to provide a single view and
communication with the player, and super
deals with the software suppliers to be able
to run everything from one place. The theory
of course is that by merging everything, the
revenue-to-cost ratio will be far higher, and
the best of both companies’ talents will be
combined, leading to more innovation, faster

growth. In the end, the cost synergies did not
make up for the loss of focus and growth
during the merger process, good staff left
and competitors pounced. Bwin.party is
not the only example. Whilst in the end
very successful, the William Hill marketing
merger with the Israeli assets was in no way
plain sailing and probably took six months’
growth away before it was resolved.
Some of the most successful mergers
in our business have actually done very
little integration either in technology,
management or marketing. Playtech keep
very distinct divisions, such as Virtual Fusion,

“Even Amaya is running PokerStars and Full Tilt
separately, despite the fact they are in exactly the
same space. Merging the businesses was deemed
too risky to the growth projections they had.”
turnaround and a better product. Marketing
will be streamlined, given better discounts
and learnings from all brands, which under
one leadership will lead to higher ROIs for
each dollar spent. One plus one equals three.
However this is rarely true. There have
been a few examples of this concept working
in the land-based betting industry (think
William Hill and Stanley Bet) and in the
software space, but there have also been
failures. Where would BWIN and Party be
if they had not merged, or more importantly
had not spent two years integrating their
whole business? Probably more profitable.
The idea made complete sense. However,
in reality it was too big a challenge and
detracted from the daily work of revenue

Ash Gaming or Geneity. The smartness
of Playtech is to treat them as separate
companies yet allow e X