It looks like we will be seeing a rapid increase in M&A Activities in digital gaming soon. Let’s learn more about it.
The world is changing quickly and many industries are trying new things and with the recent outbreak of the COVID-19 pandemic, the pace has increased to look for new alternatives for the things that have been put on hold due to the pandemic. One such industry is gambling and it looks like there will be an increase in M&A activity in digital gaming in the future.
The land-based casino profitability has been increasing over the years and it has increased quite a lot this year due to pent up demand and compared to the same time last year the margins have gone up from 30% to up to 60%.
Since people just want to get out of their houses and want to start playing the casinos don’t have to provide free food and beverages to attract them and this helps get a higher margin for casino owners.
David Isaacson is Vice President at Spectrum Gaming Capital, recently talked about this in a video interview and also said that regional gaming is in a much better position as compared to destination gaming like Las Vegas as he said: “So in a place like Las Vegas it’s going to be a much longer impact, I think overall business volumes won’t recover for a couple of years just because of the reliance on air travel.”
M&A activity in digital gaming
He also talked about how there will be an increase in M&A activity in digital gaming and the pandemic has increased the momentum. Whether the igaming company is looking to dip their hands in sports betting and poker or it is the betting company that wants to get in igaming. He also told about many such mergers that have already taken place like DraftKings acquisition of SBTec, Evolution Gaming acquisition of NetEnt, and many similar mergers have taken place.
He said one of the challenges the industry will have to face is the profitability since it’s hard to find companies who are making money in Esports, the future will depend upon how good the current companies are doing and which business model suit the industry the best.
It remains to be seen how well the companies will perform but there will some of them that try so we will know how well it works in the future. Stay Tuned with us to learn more about gaming and other related news!