Many experts expect the gambling industry to grow to €465.76 billion in 2020. This growth will reach €516.03 billion in 2021, with an annual expansion rate of 10.8%. The reasons for this increase are mainly due to takeover deals. Recovery from the effects of the Corona pandemic which imposed many difficult measures on people. Such as social distancing, work remotely, and suspending all sports activities. All these impacts have led to major challenges in all commercial and industrial activities; The online gambling industry is projected to reach €674.7 billion by 2025 at a compound annual rate of 7%.
The gambling industry consists of the sales made by commercial entities that operate gambling facilities.
Major markets in the online gambling industry
During the past years, the Asian market and the Pacific Islands were the largest market for the global gambling industry. Accounting for more than 38% of the total industry in 2020.
North America ranked second with 29% of the total industry. While the Middle East ranked third as the smallest market for the global gambling industry; However, the Middle East’s presence on this list is a huge jump; due to the harsh legislation imposed on gambling in Middle Eastern countries.
At the same time, slot machines are becoming increasingly popular due to their easy-going nature and straightforward gameplay. As well as the various themes that depend on it. such as movies, dramas, music, TV shows, sports, and other topics.
Even if the player is not aware of the nature of gambling games. He will have a strong motivation to try these games to learn about the fun and profits they offer. Slot machine games attract all kinds of players, even beginners, who have limited gambling experience. At the current time, slots based on dramas and films are the most popular, such as: (Game of Thrones, Rick and Morty Megaways, Narcos, Survivor, Jurassic Park).
Impact of the Pandemic on the Gambling Industry
While the spread of the Pandemic has restricted the traditional gambling industry. The online gambling industry has recovered notably; Because social distancing and lockdown restrictions prompted players to discover online gambling.
Changing gambling habits
There are many analysts and experts who believe that free casino games and social gambling apps will create a larger base of punters. Thus, driving the industry’s future growth. That is, the main driver of the real money gambling industry is free gambling. Although these games are completely free and do not require players to place real money bets, they get good incomes from ads. The size of this industry reaches 4.64 billion dollars this year and is likely to grow at a rate of 5% over the following years.
In addition, the development of smartphones, tablets and the spread of the Internet has led to the growth of the online gambling industry.
US legislation changes towards internet gambling
Due to the changes that the online gambling industry has undergone in recent times. Some US states have legalized online gambling activities, such as New Jersey and Nevada. Consequently, many American giants aim to acquire British gambling companies to obtain a greater share in the global market. Expanding throughout the United States. Especially with the development of legal controls and standards on American gambling services operators and imposing taxes on them. Hence, this is expected to create tremendous chances for companies operating in this industry.
During previous years the UK was considered the most open country to gambling activities, as it was possible for sports betting companies to place their ads in subway stations, sponsors various sports teams, and make promotion through social media. Thus, these companies have been able to build huge fortunes during the past years. However, the increase in the number of gambling addicts in the UK has prompted the UKGC to crack down on gambling operators. So these companies may want to enter other markets that offer them a better potential for growth, less risk, and provides them with a more flexible legislative environment.
The most important expected acquiring deals
Mergers are likely to be the hallmark of the online gambling industry over the following years. But what are the most important deals that are likely to take place in future?
1. Caesar will buy William Hill
One of the most important deals expected to take place in the following years is William Hill acquisition of Caesars Entertainment.
Caesars Entertainment is one of the largest gambling companies in the United States. Also, William Hill is one of the largest company in the UK in the online gambling industry.
Although there are many reports indicated that this deal will be conducted during the year 2020, it has not been done. Due to the pandemic and lockdown procedures. Also, The reports indicate that the acquisition of William Hill’s company was valued at more than € 3 billion.
The statement reads that William Hill is considered “one of the most important leading gambling companies in the world”. Also, it stated that this deal is expected to take place in 2021. But it has not taken place at the time of writing this article.
Tom Rigg, CEO of Caesars Entertainment, said, “We are trying to work with William Hill to have a larger player base, and provide our customers with a better online entertainment”.
Despite this, William Hill’s sales decreased by 16% during 2020. Meaning that they lost an amount of 30 million pounds. However, these losses will not affect the acquisition deal.
2. Ladbrokes Turns Down MGM Offer
Ladbrokes is William Hill’s biggest competitor in the UK online gambling industry. MGM made an initial acquisition offer, but Ladbrokes turned it down. This company is pursuing a raft of acquisitions of popular gambling companies to enter the US market aggressively. However, Ladbrokes turned the offer down because it was “not up to par with the company’s value”.
3. Flutter is trying to acquire Paddy Power
There is a lot of news in circulation since 2019 of Flutter’s intention to acquire Paddy Power. In a deal that has reached the value of € 10 billion. The reports indicate that the goal of this agreement is to merge the two companies into a single entity to be a giant company for online sports betting. Indeed, Flutter is currently seeking to control more companies. Most recently, it purchased FanDuel in a deal worth € 4.2 billion.