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New York, NY – December 15, 2020 -It’s been a wild and crazy year for the online gambling industry, especially with the rise in demand coming from a shift in traffic away from attending brick-and-mortar casinos towards players participating on their mobile devices from the comfort of their own homes. In particular, many online poker and online casinos are up triple digits since October 2019, while mobile wagering on sports is up as new markets become legalized over the next year—representing more than half of US states. The result of all this activity has been a flurry of new partnerships, mergers, and acquisitions in the industry, including from Bragg Gaming Group (TSX-V:BRAG) (OTCQX:BRGGF), Penn National Gaming (NASDAQ:PENN), Landcadia Holdings II (NASDAQ:LCA), Caesars Entertainment (NASDAQ:CZR), and GAN Limited (NASDAQ:GAN).
But not all of the activity is taking place in the United States, as European markets such as Switzerland continue through the stages of opening up to online casino gaming. Bragg Gaming Group (TSX.V:BRAG) (OTC:BRGGF) just recently announced a strategic content deal between its subsidiary ORYX Gaming and leading licensed Swiss operator Grand Casino Luzern’s asset mycasino.ch.
“The Swiss online market is one that we have had an eye on since the new legislation entered into force in 2019 and we are thrilled to finally make our debut,” said Matevz Mazij, Managing Director of ORYX Gaming. “Grand Casino Luzern makes a perfect partner for us as one of the most established operators in the market with a strong online brand and we look forward to working together to build our presence in the country.”
Throughout 2019, online gaming was still illegal in Switzerland, with all access to unlicensed sites and apps blocked. However, some July 2019 gambling reforms would go on to enable land-based casinos like Grand Casino Luzern to launch their own online operations.
So far, the launch has been a significant success, with Switzerland’s latest official figures touting revenue from online gaming licensees generating CHF23.5 million (more than USD$26 million) in just the first partial year of being live.
In the case of Grand Casino Luzern, the mycasino.ch brand alone generated nearly 38% of the total Swiss online gaming market with CHF8.9 million in revenue (nearly US$10 million) in 2019.
“We have had a strong start to our online operations and are constantly looking for fresh and exciting content to enhance the experience for our growing customer base. We’re thrilled to have the opportunity to collaborate with ORYX moving forward,” said Wolfgang Bliem, CEO of Grand Casino Luzern. “Our main objective is to provide our Swiss players with pure entertainment at the highest level, and we believe ORYX’s portfolio of games can help us achieve just that. We are pleased to be the first operator in the country to offer the games through ORYX and are confident that the games will be huge hits with our players.”
Bragg Gaming Group had recently announced an exceptional revenue growth of 72% in Q3 2020. Bragg continued to focus on expanding its global footprint, onboarding 14 new customers in the quarter alone. Beyond Switzerland, they’re also in advanced discussions with new customers across multiple other licensed jurisdictions in Europe and Latin America.
“We’re very supportive of the move to legalizing single-event betting,” said Rob Godfrey, Board Member at Bragg Gaming. “Jurisdictions around the world are modernizing their gaming regulations to reflect today’s global gaming market, and Canadians – and the country’s operators – should have the same ability to place bets as their international peers. The reality is that many Canadians are already placing single-event bets today, but through illegal black-market channels that make them vulnerable. This proposed legislation will move a significant portion of these activities to a safer, more regulated environment that better protects Canadians’ interests while also ensuring a level playing field for Canadian operators.”
According to the American Gaming Association, experts now believe that huge holes in state budgets will likely spur further expansion of sports betting and online casino gambling across America.
Working to strengthen their presence in the US sportsbook market, online B2B gaming technology provider GAN Limited (NASDAQ:GAN) made a splash by buying one of the fastest-growing iGaming and sportsbook operators in Europe, Coolbet, for $175 million.
“We believe this acquisition is being undertaken at a highly attractive valuation, relative to the opportunity to rollout B2B sports betting services in the US,” said GAN CFO Karen Flores. “We have undertaken to acquire Coolbet for approximately $175 million, which represents 3.5 times 2021 forecasted revenue.”
There is much speculation into who the first major client that GAN and Coolbet have alluded to (but declined to identify), with some suspecting it might be Penn National Gaming (NASDAQ:PENN).
Much of this is tied back to the statements of Penn’s CEO Jay Snowden, who has pointed towards his company’s focus on growing within the younger demographics that are increasing their interests in sports betting.
Penn has already garnered plenty of accolades for the performance of its January 2020 acquisition of Barstool Sports. The acquisition has paid off very well for Penn National Gaming, as the company highlighted to investors the overwhelming success of the Barstool Sportsbook app.
Caesars Entertainment, Inc. (NASDAQ:CZR) also made one of the biggest splashes in the sector, acquiring British sportsbook experts William Hill in a deal worth $3.9 billion in September. Given that the sportsbook market in parts of Europe is more mature than many of the US jurisdictions, bringing on UK expertise is a good way to get an edge.
“We’re looking at different activities and bolt-on acquisitions. This (William Hill’s European business) can definitely fall under that category,” Caesar’s CEO Itai Pazner told Reuters.
Already in the state of Indiana, Caesar’s Entertainment was working in partnership with William Hill’s rival 888Sport, which itself is moving forward to enter three more US markets.
As new markets open up to legal gaming, a new joint entity formed through a reverse merger between Landcadia Holdings II (NASDAQ:LCA) and Golden Nugget Online Gaming is wasting no time in expanding its footprint. Since state regulators in New Jersey finally approved the deal, the newly combined entity has gone on to enter the state of West Virginia, and the Illinois market. Together, their exposure now consists of 5 states: Illinois, Michigan, New Jersey, Pennsylvania, and West Virginia.
Companies like Bragg Gaming Group look to be in a good position as the online gambling market continues to expand. As more mergers and acquisitions appear on the horizon, interest in this industry looks set to continue growing.
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