Casinos for you
Hong Kong Social Casino Company Scores $2.19 Billion PaydayWe investigate how the largest casino acquisition deal in 2021 has been for a social casino developer, outshining the money spent on real money casinos and leading sports betting companies. Where does the money come from when players cannot cash out?
Whether they’re being played for real money or for bragging rights casino games hold an inherent appeal to people from all walks of life, regardless of race, colour, or creed.
While the online gambling community has been enthralled with the multi-billion dollar mergers and acquisitions happening across the USA and Europe it seems that the value of free spins slots has not been lost on the video game market.
Astounding Fun Play Valuation
South Korean mobile game developer Netmarble, better known for mobile action games like Marvel Future Fight and Marvel Future Revolution, has just acquired social casino developer SpinX Games for an incredible $2.19 billion.
Netmarble chief executive Seungwon Lee explained their reasoning:
“The social casino genre shows continued global growth, and we are very excited to execute a share purchase agreement with SpinX Games, one of the leading companies in the genre.”
The acquisition sees Netmarble take full control of the Hong Kong-based fun play casino developer adding popular casino-themed mobile games Cash Frenzy, Lotsa Slots and Jackpot World to their suite of titles.
Seems Like a Lot for Free Spins
What makes this acquisition, so mind-boggling is the $2.19 billion price tag. To put the deal in context, DraftKings recently acquired the US-facing real money online casino Golden Nugget for $1.56 billion, while Penn National Gaming acquired Canada’s leading real money sports betting platform theScore (and its parent software and media company Score Media & Gaming) for $2 billion.
In both cases, these deals were lauded as landmark events in the iGaming space, yet a mobile game company just purchased a social casino developer for more than either of these market-leading real money gambling sites.
The recent financial success of SpinX Games was clearly a key driver of the final sale price as the company reports more than $423 million in sales for 2020 and a further $286 million in sales for the first half of 2021.
Their annual projections indicated that they were on track to end 2021 more than 40% up over their 2020 sales figures, based on existing products alone.
With the integration of these two companies and the potential to cross-sell their client bases, the newly merged entity stands to increase that figure many times over.
How Is 'Social Casino' Not Gambling?
In most countries the definition of gambling is loosely but importantly defined as the ability to win real money by placing a stake with money or goods which have a monetary value. This is why licensing and regulation does not focus on ‘casino games’ but addresses the regulation of ‘gambling’.
Playing a casino game like slots, blackjack or even roulette where there is not chance to win real money is not considered gambling under this definition.
Social casinos offer players the chance to enjoy casino games in a free to play environment where the credits that are won have no financial value and cannot be withdrawn. Rather they are used to compare your account to those of your friends and other social casino players by designating your position on a leaderboard.
When players spend money at a social casino it is to boost their point earning ability and thereby help them ascend to the upper echelons of their respective leader boards, not for financial gain.
You might also like