Internet Casino Giants Who Will Merge Next?

With the PartyGaming-Bwin merger, on paper at least stands a very good chance of creating an internet casino frontrunner with 12% share of the world’s egaming segment, the question everybody is asking who will be next.  Maybe 888, Sportingbet and Ladbrokes will merge within the foreseeable future.  Betfair invested millions in markets situated outside the UK, most probably in a bid to combat the 12% “mammoth”.

In the mean time, France has unlocked a feeding frenzy as companies pile in to be “top dog” in a market that has a long standing tradition of assisting its own, in addition to a stifling tax regime on internet casinos, this might even take a turn for the worst once VAT has been introduced by the French government.

It is well known fact that the French are fiercely loyal to French brands only.  In the event they want to purchase a vehicle it would be a Peugeot, a Renault or a Citroen and as for where they purchase their wine & cheese, maybe, they have a point there.

Logic, history clearly indicates that the likes of PMU and FDJ will come out top after other companies did their math and realise it’s not worth while,  in my opinion Ladbrokes has made a very smart move when they decided to exit the French market.

A good example is Sweden – Svenska Spel is still top of the food chain here irrespective of massive amount of cash being thrown into poker over the course of the last decade by virtually every one of the major poker rooms.  To be honest Saab and Volvo are still your average Swede’s choice of car.

So back to mergers – is it really a prolonged amalgamation process? The administration will take a very long time; same applies for the integration of cultures, I won’t even mention the problematic issue of co-CEOs, each one signifying a preceding contender.

Is “PWin” to be feared? They certainly don’t become an indisputable leader at 12%. However, they maintain that, given a level playing field, they will become invincible. Possibly true.  Please note; every country’s legal systems differ, a worldwide equal playing field is almost certainly never going to happen.

A good example on this is the case of the IPO problem; this clearly signifies the greedy nature of the shareholder; forever wanting, not only instant gratification but forever more upward curve.  In all probability this hampers mid to long-term investment in general, unless alternative solutions are implemented to combat these types of issues.  Concerning Betfair, it does not always offer the best price, in all probability it’s likely to mean playing with commission rates, this in turn will further impact the customer’s value and thus their major USP.

That’s just my opinion, I’m looking at both sides of the coin here and it seems that everybody has accepted the moves by Party, Bwin and Betfair without taking into account the facts.

As the saying goes, “Those that tend to ignore their history will relive it again” and history clearly points out that one in five mergers are not successful, with 70% falling significantly short of their expected value.  Obviously no can predict the outcome of this merger of the parties concerned and for the industry as a whole, however one has to take the lessons learned in history, one can only watch their progress going forward.