What's with all the Online Gaming Mergers?

Over the past year the online gambling and gaming industry has seen a fair amount of consolidation. We've seen online casinos, sportsbooks, poker rooms and associated businesses merge to form a bigger industry presence. Sometimes the 'big fish' swallow up smaller sites; other times they eye up and aim to consume their major competition.

Branding

Mergers and acquisitions within the online gaming industry are often responsible for the development of big brands. These industry giants are then able to offer existing customers an increased choice of products and services. Their trusted status and familiar branding also attracts new customers to help the company grow its market share.

Expansion

Another reason for mergers and acquisitions within the online gaming industry is to broaden the expertise and product/service range of the company. This may involve merging with providers of services not currently offered or that are under-developed. It could also include mergers with suppliers.

Mergers and acquisitions have proven a surefire way for providers of online sportsbooks to expand into online casinos; for providers of online casinos to venture into the world of online poker and so on.

Who's Talking to Who?

Examples of online gaming mergers currently on the table include Ladbrokes approach to Playtech (who are simultaneously discussing a buy-out of 888). Tongues are also wagging between PartyGaming and bwin, whose shareholders have now approved a merger which will result in the joint entity becoming theworld's biggest listed online gaming company.

Quick and Easy

iGamingBusiness recently asked gaming law expert I Rose Nelson about the recent spurt of proposed mergers. He feels the trend is set to continue. He cited the development of land-based casinos, where mergers lead to a few multi-nationals controlling 60% of Las Vegas. The same, he feels, is set to happen in the world of online gaming.

The online nature of these entities expedites the paperwork. According to iGamingBusiness, "Even the largest pure-Internet gaming operations can, and do, clear all regulatory barriers in far less than a year."

So the reason for all these mergers? Quite simply it is often quicker and easier to merge with or buy-out key companies within the industry than to grow organically.