It has happened to the best of us. We remember playing a game by a certain software developer we love, search by name in the casino’s catalog, and come up with nada. How can that be? We Google the company’s name and lo and behold, we have our answer. That company, as we know it no longer exists. Not because it has gone out of business, but because it has been acquired and now goes by another name.
If this sounds like a familiar scenario it is because it is not an uncommon occurrence. Over the past number of years, quite a few familiar game development companies have been acquired or merged with others. Some companies have made more than one significant acquisition, while others have changed hands more than once, which can truthfully get a bit confusing for even the most astute of us.
So while you may have followed the news at the time, it’s always interesting to look back and remember some of the biggest acquisitions of game development companies over the years.
The acquisitions and evolution of Amaya Group
The first remarkable acquisition on our list is ancient history by online gaming standards, but so it was, in 2012 Amaya Group purchased CrytpoLogic, an application service provider, in a $35.8 million cash-for-shares takeover. In addition to the technology, Amaya also took over the consumer-facing brands of CryptoLogic, including InterCasino.
Later that same year Amaya Group went on to make another significant acquisition with the purchase of Ongame Network – which does poker software – from Bwin for some for €25 million. Ongame Network, however, did not stay in Amaya’s hands for all that long, as in due course (i.e. two years) it was sold to NYX Gaming.
Then, if all that wasn’t complicated enough in 2014, Amaya proceeded to sell WaterLogic, CryptoLogic’s subsidiary which handled gaming software licensing, payment processing, and support services, for $70 million. This was a pretty impressive turnaround, considering the price Amaya paid for the full CrytpoLogic offering just two years earlier.
But that, by far wasn’t Amaya’s biggest acquisition, not even of the year. Because again in 2014, Amaya went on to acquire Rational Group (more familiar to most of us as the company behind the PokerStars and Full Tilt Poker brands) for a whopping $4.9 billion in that very same year.
Then, Amaya Group proceeded to make another deal with NYX Gaming when it sold its Cryptologic and Chartwell software divisions to NYX Gaming for $119 million. Beyond the money that exchanged hands, the deal gave tremendous performance value to both companies. NYX for its part enjoyed a boost of some 300 extra titles to its repertoire, that is almost doubling the NYX portfolio in an instant. On the flip side, NYX also provided gaming content to Amaya for its newly acquired PokerStars and Full Tilt Poker portals.
These were not the only acquisitions by Amaya over time. This was a fast-growing, some might say aggressive company after all, so there were certainly others like Diamond Game Enterprises along the way. But these were the ones that have certainly had a more direct impact, swallowing up gaming companies that we know.
And finally, to help keep the whole picture straight, in 2017 Amaya and all of its holdings changed names so that the entire enterprise now operates under the name The Stars Group, a NASDAQ and Toronto Stock Exchange-traded company. Hence Amaya itself is now essentially history.
GVC Holdings goes on a (long) acquisition roll
GVC Holdings, founded in 2004 in Luxembourg, built its name and place in the gaming world the old-fashioned way – from the ground up. Once it solidified its standing and financial power it then went on a steady stream of mergers and acquisitions. Again, stay with us, and pay close attention because this gets really convoluted.
The first significant acquisition GVC made was in 2013 for around £560 million, when along with William Hill it bought Sportingbet. Or more precisely, the Spanish and Australian Sportingbet markets went to William Hill, while GVC maintained the rights to the rest.
Next, in 2016, following a bidding war with its rival 888 Holdings, GVC acquired Bwin.Party Digital Entertainment for £1.1 billion! Bwin has gone on to become GVC’s primary sports betting brand focusing on European markets such as Germany, France, Belgium, Italy, and Spain. In addition, bwin’s casino software now serves GVC clients with table and online pokies, as well as standard online poker games.
After that came the acquisition of Ladbrokes Coral for a deal totalling somewhere in the £4 billion range. Due to the nature of its size, while initiated in 2017, it was only closed in March 2018. And that, by the way, also has an acquisition backstory of its own – with Ladbrokes and Gala Coral having only recently merged themselves in 2016, forming the Ladbrokes Coral Group plc.
Other significant GVC acquisitions over the years have included: Betboo (2009), Gamebookers (which had previously been acquired by bwin and came to GVC with the purchase), CasinoClub, Neds, Partypoker and party casino, and Foxy Bingo to name but a few in a rather long list.
Paddy Power and Betfair become one in a £6 billion deal
One of the biggest if not the hugest casino game developer acquisitions was actually to a degree more of a merger. And it was between two of the biggest players operating in the UK betting field. Okay enough with the drama you say. We already gave it away in the title – it was between Paddy Power (an Irish bookmaker) and Betfair (operator of the world’s largest online betting exchange as well as bingo, poker, casino, and sportsbook operator). And the resulting new entity, as the joint company is now known, was Paddy Power Betfair.
In this deal, Paddy Power took 52% control over the business, while the remaining stakes went to Betfair investors. Together with Paddy and Betfair now form an awesomely powerful duo that is one to the world’s single biggest betting companies, covering the scope of gambling operations in a significant manner.
Since the merger, by the way, the company has gone on to be listed on the London Stock Exchange (LSE) and is now officially a Financial Times Stock Exchange (FTSE) 100 company.
The formation of IGT
Here’s another mega game developer acquisition for you. In fact, the second biggest as far as we can tell and that is the acquisition of Interactive Gaming Software (the biggest pokies manufacturer in the world) by Gtech (which previously operated under the name of Lottomatica out of Italy). The deal here was for $6.4 billion or more accurately $4.7 billion cash and the rest in assumed debt) in April 2015. Whatever! Cash or debit payment, is it just us, or are these numbers absolutely insane? It just goes to show what a lucrative industry the gaming space can be for the lucky (and smart) few developers who know how to run their business right.
In some ways, however, this move was considered more of a merger than an acquisition per se, as the new company combined forces and was collectively rebranded as IGT – though the Gtech CEO maintained control. Together they are now a serious, multinational force bringing us pokies machines both online and offline, as well as a rich array of casino games, lottery games, operating systems, services, and cabinets. Which in other words, makes them pretty much a household name for any of us with an interest in the gambling world.
William Hill acquisitions
In recent times, like the last year or so, there has been much speculation as to William Hill’s fate. Following so many mergers and acquisitions of big player development companies, many have contemplated whether or not William Hill will follow suit and make another major industry move. The rumor has had it that Stars Group (you know, that same company that was spun out of Amaya) would merge forces with William Hill. But as of the time of writing this article, this has yet to come to fruition.
And going back a bit, this lack of recent acquisition doesn’t mean William Hill has been owned by one entity all along the way. In fact, the company changed ownership numerous times starting with an acquisition by Sears Holdings (1971), Grand Metropolitan (1988), and then Brent Walker (1989), followed by a leveraged buy-out by Nomura, a Japanese investment bank in 1997, and finally offloaded to two private equity firms for £825 million in 1999. In 2002, William Hill was listed on the London Stock Exchange.
And all that certainly does not mean William Hill hasn’t been a part of the acquisition game. For example, as recently as January 2019, William Hill got the green light to complete its acquisition of MRG which is best known perhaps as the operator of the Mr. Green casino brand in a deal valued at $307.4 million – which is some pretty serious cash, even amongst the big boys.
And of course, there is the Sportingbet deal we mentioned above, as well as another significant William Hill acquisition we passed over here. And that is the 2008 partnership that it formed with Orbis (formerly known as OpenBet) and the casino software giant Playtech whose owner Teddy Sagi was paid £144.5 million for various affiliate companies and assets, as well as online casino websites like the William Hill branded casino it continues to run to this day. To complicate this all a bit more, Playtech maintains a 29% interest in William Hill Online, hence it is no surprise as to why you will see all Playtech games there.
Reasons why one casino software company would acquire another
There are a number of reasons why one game development company would purchase or merge with another. And these reasons are pretty much the same motivators of any industry. Some use this strategy to reduce competition. That is, by bringing a rival directly into the fold there is one less competitor on the market. Another reason is cost-cutting. For example, for a company that does not want to invest in developing certain types of operations, it is cheaper and simpler to acquire the sought after technology or expertise. And finally, other companies may want to add a significant vertical to their current offering quickly, with a proven product, like a casino developer acquiring poker technology.
Whatever the driving factor, one thing is for certain, these mergers are helping make the online gaming space even more competitive, cutthroat, and dynamic. Whether or not this is a good thing is a matter of opinion. In ours, it is clear that gaming software has improved exponentially over the years. This can in part is credited to the competitive nature of the business, but equally so, to the merging of excellent minds into one collective hive. Also, by merging forces, many companies are able to cut down on their costs, as alluded to above. This also gives the companies more money to invest in their workers, attracting the very best around, and in some cases may even trickle down to consumers, with the cash flow to deliver even better offers.
In other words, the verdict if you were to ask us, is that gaming mergers and acquisitions have proven to be predominantly a positive thing – for players, for casinos, and for software developers alike.
A final assessment of the biggest casino development company acquisitions
Over the past decade, there have been a large number of mergers and acquisitions across the gaming industry, spanning sports, casino, poker, and bingo software companies, as well as the customer-facing portals themselves. The list of the biggest acquisitions of game development companies, as you may have noticed is extremely long and complicated with companies buying, and selling, and merging and buying and selling and merging again!
And this is only the tip of the iceberg, truth be told. There are a lot of small companies out there doing game development you may not have heard of, that quickly get grabbed up by a larger competitor when they recognize the value of particular software or service on the rise. So if this topic interests you, rest assured there’s enough info out there to write a thesis on the matter, detailing the intricacies of each deal and company evolution. Otherwise, this article should suffice, certainly giving us a great sense of how the casino giants operate, and the amazing fluidity and complexities in which the industry operates as a whole.