Sports Betting Consolidation Could Benefit Big Players

Must read

[ad_1]

Posted on: May 3, 2023, 11:50h. 

Last updated on: May 3, 2023, 11:56h.

Speculation regarding sports wagering industry mergers and acquisitions activity, particularly on the operator side, remains intense and some analysts believe deal-making could perk up as 2023 progresses.

Sports Betting Consolidation
The famous charging bull on Wall Street. Sports betting consolidation is expected to increase this year. (Image: Reuters)

In a Monday note to clients, Morgan Stanley analysts observed that over the past seven years, revenue for the world’s five largest sportsbook operators more than quadrupled with a big assist from acquisitions. They added that Flutter Entertainment (OTC: PDYPY) will post more revenue this year than the five biggest operators did on a combined basis in 2015.

This change has been driven partly by market growth, but has come from M&A, as operators seek to diversify their revenues and achieve scale benefits in the face of rising tax and regulatory headwinds,” observed the analysts. “We expect regulatory drivers for consolidation to endure.”

It’s possible, even likely, that the biggest sportsbook operators, such as Flutter and Entain Plc (OTC: GMVHY), will grow via acquisitions. Flutter, the parent company of FanDuel, arrived at its current composition via at least a dozen acquisitions over the past decade while Entain has been one of the most acquisitive firms in the industry over the past several years.

“The M&A opportunity set for the largest operators appears to be broadening as diversification, scale, technological capability, cash flow generation, and balance sheet capacity is increasingly in contrast to smaller scale competitors, “ added Morgan Stanley.

US Could Be Epicenter of Sports Betting Consolidation

Not surprisingly, the US could be a hub of sports betting industry consolidation activity. At the very least, this country will be a hotbed of related rumors.

For example, PointsBet (OTC: PBTHF) recently confirmed it’s in advanced discussions to sell its US operations. Its Australia arm has also been the subject of takeover speculation. Rush Street Interactive (NYSE: RSI), another smaller domestic sportsbook company, has long been viewed as a potential target, too.

“The potential of the US market has driven a significant initial phase of consolidation, focused on ownership/control of US entities, insourcing technology, and gain an edge in customer acquisition through media and database deals,” noted Morgan Stanley. “As the market transitions into its next (profitability) stage, we expect some of these to endure with additional impetus from new/late entrants.”

With just three operators, FanDuel, DraftKings, and BetMGM, controlling more than three-quarters of the US online sports wagering market, smaller rivals may have no choice but to merge with each other in a bid to cobble together market share.

Sports Betting Consolidation Negative for Data Providers

If there are potential losers by way of more sports wagering industry mergers and acquisitions activity, it could be data providers such as Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD),  according to Morgan Stanley.

The analysts say that if the number of gaming operators declines, the existing firms will gain leverage in negotiations with data providers.

That doesn’t imply the relevance of Genius ad Sportradar is vulnerable, but those firms could experience diminished pricing power if the number of potential clients declines.

[ad_2]

Source link

More articles

Latest article

Bu Wati Menang Rp150 Juta Saat Main Mahyong Ways 2 Di Subuh Buta Pak Surya Karyawan Toko Jatibarang Dapat Kejutan Multiplier Mahyong Ways 2 Ibu Lilis Desa Lohbener Bawa Pulang Rp222 Juta Berkat Simbol Emas Anak Muda Karangampel Tembus Jp Mahyong Ways 2 Saat Malam Minggu Bu Darmi Pedagang Pasar Di Bangodua Tiba Tiba Dapat Rp118 Juta Driver Ojek Sukagumiwang Beruntung Main Mahyong Ways 2 Jam Ganjil Guru Ngaji Di Kroya Dapat Rezeki Nomplok Lewat Mahyong Ways 2 Perajin Batik Dari Kertasemaya Mendadak Dapat Rp199 Juta Dari Mahyong Pak Ujang Pensiunan Sliyeg Dapat Keberuntungan Dari Mahyong Ways 2 Bu Rini Pkl Di Tukdana Senang Bukan Main Karena Mahyong Ways 2 Berkat Mahjong Ways 2 Bu Titin Dari Lohbener Dapat Rp198 Juta Main Jam Ganjil Pak Narto Karangampel Menang Besar Di Mahjong Ways 2 Bu Rukayah Kaget Lihat Saldo Naik Rp165 Juta Dari Mahjong Ways 2 Anak Warnet Juntinyuat Kena Hoki Subuh Main Mahjong Ways 2 Pns Desa Tukdana Curi Waktu Dini Hari Dan Menang Mahjong Ways 2 Simbol Emas Bikin Petani Pasekan Tersenyum Dapat Rp214 Juta Perempuan Pedagang Keliling Di Kroya Dapat Keberuntungan Dari Mahjong Ways 2 Kakek Asal Sliyeg Bisa Renovasi Rumah Berkat Mahjong Ways 2 Ibu Hamil Di Sukagumiwang Main Mahjong Ways 2 Dan Dapat Rezeki Pengantar Galon Balongan Bisa Beli Motor Baru Lewat Mahjong Ways 2 Maen Mahjong Ways Sambil Santai Di Rumah Dapat Hadiah Menanti Mengupas Keunikan Mahjong Wins Versi Modern Dari Cina Klasik Paduan Grafik Epik Dan Keberuntungan Di Game Mahjong Ways Perjalanan Menang Beruntun Dari Mahjong Wins Pemain Indonesia Alasan Mahjong Ways Lebih Disukai Daripada Game Lain Eksplorasi Fitur Rahasia Dalam Mahjong Wins Hanya Di Bom Jitu Keseruan Main Mahjong Ways Bersama Teman Satu Komunitas Tantangan Unik Game Mahjong Wins Dengan Reward Harian Coba Mahjong Ways Edisi Spesial Hanya Di Platform Bomjitu Game Mahjong Wins Bikin Healing Dan Bisa Bawa Hoki Besar Mahjong Ways Game Kuno Asia Paling Banyak Membawa Keberuntungan Tips Cerdas Menang Besar Di Mahjong Wins Versi Terbaru 2025 Strategi Terbaik Mahjong Ways Untuk Hasil Maksimal Setiap Hari Sensasi Mahjong Wins Dengan Fitur Ganda Yang Bikin Ketagihan Cara Main Mahjong Ways Bomjitu Dengan Metode Anti Gagal Mahir Mahjong Wins Dalam 7 Hari Panduan Dari Para Pro Player Temukan Kejutan Setiap Putaran Di Game Mahjong Ways Bom Jitu Review Lengkap Mahjong Wins Dengan Visual Dan Suara Memukau Maen Mahjong Ways Di Bomjitu Sambil Ngopi Dijamin Seru Kenapa Mahjong Wins Jadi Game Paling Dicari Di Tahun Ini