Egaming industry predictions for 2017 – part 10
Paul Leyland of Regulus Partners and Burlywood Capital's Mark Blandford predict the big egaming themes for 2017
Paul Leyland, partner, Regulus Partners
Online gambling growth will accelerate to the upper end of the 15-20% range, driven by continued mass market mobile adoption and channel shift. This will be hard to see until after summer in revenue terms, due to tough trading comps (betting margins, World Cup), but we believe that underlying online gambling growth is accelerating, not reducing.
2017 is likely to be a mixed year for regulated markets, with strong growth seen from established markets but disruption planned or expected in a number of others (UK, Netherlands, Poland, Australia, possibly clarity on Germany and Sweden for the following year). Given the pace of change, more operators are likely to suffer problems than deliver opportunities. However, while this can be seen as further disruption for the dot.com model, increasingly global opportunities in regulated markets means the sector is now properly growing up, which is very positive for long-term market growth if not for all online participants.
There will be at least one ‘mega deal’ that effectively positions a largely land-based business (operator or supplier) into the online space. It is significant that this has not happened yet, with the big deals largely being driven by parallel businesses seeking easy synergies rather than different businesses seeking genuine strategic depth. Given the pace of market change, this separation is now causing inefficiencies and risk imbalances that only M&A can effectively solve.
Mark Blandford, partner, Burlywood Capital
Consolidation will be an ongoing theme into 2017 in my opinion, and thus 888 to buy 32Red. Again this is about big synergies and it would also increase the amount of 888 revenues that come from regulated markets.
New FOBT regulations will be introduced that restrict the total stake per spin to £10 and to slow down the speed of the spin. Restrictions on FOBTs have of course been talked about before.
China will announce that it is looking to run a feasibility study on regulating sports betting. The authorities are aware that sports betting is rife and thus adopt a ‘if you can’t beat them join them’ approach to regulate and thus be able to offer safety nets for the vulnerable and to raise tax revenues.