Increased M&A speculation, major sporting events and the opening of the US market create a significant upside for the sector over the next 12 months.
Changes in customers’ habits restrain growth in the traditional, land-based market while pushing demand for online products.
Tightening regulatory frameworks around the world squeeze bookmarkers’ margins forcing them to put more emphasis on technology as proprietary IT stacks allow for lower costs and faster adaptation to ever-changing customers’ needs.
Tougher regulation also pushes for increased M&A among operators looking to merge their IT and marketing spend.
Some markets like the US still have to open to gambling operators, creating huge opportunities for those with proprietary IT and enough marketing firepower to scale up quickly.
Past years’ M&A led to the creation of gambling giants with lower risk profiles, better diversification and improved liquidity.
Our Lead Analyst on Gambling, Edouard Enault, has published his latest note entitled “A consolidation game”.
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Coverage: Paddy Power Betfair, GVC Holdings, William Hill, OPAP