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Aristocrat Buys Playtech

With Playtech PLC (British) agreeing to a $3.7 billion takeover by Aristocrat Leisure Ltd. (Australia) the online gambling market is proving to be one of the fastest growing industries in the world the Pokie-Player reported. Deregulation in many of the markets, especially the United States, as well as the Pandemic has proven to be a boon for well established companies as well as start-ups. 

The online gambling world has been growing by leaps and bounds for the past decade or so, but it wasn’t until the Pandemic introduced the industry to the rest of the world. There were the hard-core online gamblers and those who played intermittently which provided a great source of revenue for these companies. Those who played at the traditional casinos refused to play online and felt in some ways that it was beneath them. 

Unfortunately for these players most of the brick-and-mortar casinos closed their doors and places such as Las Vegas literally shut down. This no doubt sped up the online demand, but the question remains, as places such as Las Vegas open up will those players no longer play online. 

Will the Takeover of Online gambling site continue? 

The takeover of Playtech was approximately 60% over the closing price at the day’s end. In other words, Aristocrat felt that this investment was a strategic investment justifying the 60% premium. Obviously, Aristocrat feels that the industry will continue to grow, and they can integrate a lot of their business into Playtech and get rid of any redundancy. As deals go this seems like a win for both companies. 

Much of this can be traced back to 2018 when the Supreme Court in the US made available online gambling across all 50 states. This creates an opportunity for not only startup companies but for well-established Sport Betting firms to enter into a new market. Caesars bought William Hill form the UK while DraftKings offered to buy Ladbrokes and Coral. 

The acquisitions help those companies looking to get a foothold in to a specific region as well as acquiring expertise and a new customer base. Creating an online casino as opposed to a land-based casino is as different as night and day. Any brick-and-mortar retailer who goes into the online business can tell you emphatically that the two are at the opposite ends of the spectrum. From the cost of creating a site, to attracting customers to your site via SEO or affiliates, there is nothing that is similar except for many of the games. 

Who Benefits from Online Casino Mergers?

Online Casino mergers can reduce the number of casinos available to online players as well as create a monopoly which only benefits the companies. As with any industry where there is less competition, there is always the chance of limited options and the chance of serving only one master. Think of Google, which as the owner of YouTube controls the largest video channel and the largest search engine by far. You can’t spend 5 minutes online without encountering one of these platforms. The same is true with Amazon which is tied to 90% of your online purchases. 

Now that I’ve scared you let me put things into perspective and calm your fears of an online casino monopoly. Yes, the industry is consolidating somewhat, but there is no need to fear one or two companies controlling the industry. Here are a few reasons for this: 

  • Not too expensive to enter the market
  • Plenty of opportunity thought-out the world
  • It’s a very lucrative industry
  • Expanding your business requires little capital 
  • Its gambling!!

My opinion is that with the popularity of the industry continuing to grow there will be more companies trying to get a start in the industry, which in the long run will benefit everyone. With online gambling available on every platform your choices for where to play will only increase.