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Evolution Gaming Is Free To Acquire NetEnt
By Shane Addinall Nov 16, 2020 IndustryAfter months of waiting on legislative approval for their multi-billion Euro acquisition of NetEnt, Evolution received the go-ahead today. But how did this massive merger avoid being branded a monopoly?It must have been a time of rejoicing at both the Evolution Gaming and NetEnt headquarters when the UK Competition and Markets Authority (CMA) announced their approval of the planned merger of the two industry giants earlier today.
The approval announcement was simple and almost blasé despite the potential impact of the decision on the online gambling industry, simply stating:
“CMA clearance decision - 16 November 2020: The CMA has cleared the anticipated acquisition by Evolution Gaming Group AB of NetEnt AB. The full text of the decision will be published shortly.”
It will be of interest to industry enthusiasts to discover how this merger of two of the industry’s largest casino game providers managed to skirt regulatory concerns over the creation of a monopoly.
Unexpected Hurdles
When Evolution Gaming announced its intentions to acquire Netent with a landmark bid of nearly €2 billion, they were bullish about the timeline. Their official press release stated that their intention was to have the deal done and dusted by no later than November 20th of this year, just over four months from the date of the announcement.
However, their forward momentum was brought to a sudden halt by inquiries into the danger of a monopoly being created and the negative impact this would have on both the players and other gaming providers.
The CMA’s approval was the last piece of the buyout puzzle for Evolution Gaming, with it in hand they can now move forward with their plans to form one of the iGaming industry’s most prolific, profitable and entertaining online game providers to date.
MCCAA Plays Open Cards
The CMA was not the only oversight body to thoughtfully consider the impact that a merger between Evolution and NetEnt could have on the regulated online casino industry. As early as August 25th, 2020, only 8 days after receiving the required legal documentation for the proposed acquisition Malta’s Competition and Consumer Affairs Authority (MCCAA) launched its own investigation.
By September 28th the MCCAA had provided an in-depth report into their findings and definitions relating to the deal. While there are many supporting statements surrounding their decision to approve the merger this is the most telling:
“(Under Assessment) 31. According to the MGA’s 2019 Annual Report, the number of B2B licences in gaming at 92, an increase of 24 providers (35%) from the previous year, 81 of which possess a Type 1 licence. This suggests that the entry barriers are low and that B2C gaming companies have a large number of suppliers to choose from.”
The CMA fully supports the coming together of two equally strong B2B focused organisation as they feel the combined company will be a boon to the online casino operators who choose to work with them.
It is great news for both companies that the online gambling industry is as stable and vibrant as it is. With more than ninety game providers available to support online casino operators the marketplace is strong enough to allow for their merger without hindering any other businesses.
What Lies Ahead?
When the original proposal was drafted a focal point of the future super-group was the ability to leverage the strengths of both Evolution and NetEnt to secure a firm foothold in the burgeoning North American online gambling space.
Evolution spokesperson Jens von Bahr said at the time:
“… the combination of NetEnt's established position in North America and Evolution's existing studios in the US and our so-called first to regulated market strategy will put us in an advantageous position to capitalize on the ongoing regulation in North America.”
A sentiment echoed by NetEnt Chairperson Mathias Hedlund when he noted that the agreement would mean “unique opportunities are created to form a leading B2B supplier” in North America.
For those who prefer to place their stakes at the stock exchange rather than a gaming table, there must a strong pull to go all-in on Evolution Gaming given their ongoing run of success and clear desire to dominate the European and American gaming space.
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