The phase of consolidation continues in the internet gambling sector with the announcement by Paddy Power and Betfair that they are considering a merger.
Paddy Power gave a few reasons for the thinking behind the Betfair merger: the scale and capabilities to compete in existing and new markets; exploiting the distinctive and complementary brands, online business and geographic mix and, of course, the obligatory cost savings.
If the deal comes to fruition then the combined entity would jump into second place in the rankings of leading i-gaming companies by gross gaming yield (GGY). In the new climate of higher taxation and greater compliance costs i-gaming operators are clearly taking the view that “size matters”.
Based on historic revenues, there would be a marked gap between Unibet (which has acquired Stan James since the last FY accounts) and the new Ladbrokes-Coral entity. The companies currently sitting between the two are Bwin.Party, Paddy Power and Betfair. which are all involved in potential merger deals.
In this context, it becomes apparent why GVC Holdings and 888 Holdings are so keen to acquire Bwin.Party. No-one wants to be left behind.