New poll: How would you invest US$500m?
After IGT put its faith in social gaming with the acquisition of Double Down Interactive, what alternatives are there for major egaming investments?
Last week’s news that IGT had agreed to acquire Double Down Interactive for $500m (£326.5m) got the attention of the egaming world, not least for the great faith it shows in the future of social gaming.
However, if given that amount of money to invest anywhere in the industry, should we consider the social side to be the obvious choice for ambitious service providers and operators?
The egaming industry has not seen that size of single investment all too often, with bwin’s £474m purchase of the Ongame network in 2005 seemingly a thing of the past given the worsening plight of poker networks as UIGEA and dot.country regulation have put paid to much of the potential once seen in that particular vertical.
Mobile continues to be championed within the industry, but investments have been considerably lower to date as Playtech’s £23.8m outlay on Mobenga demonstrates.
With the United States seemingly becoming more amenable to intrastate markets opening that could be the answer, although it perhaps requires a leap of faith to commit resources before any one state proves that the model can work.
A safer bet in many senses would be the acquisition of an operator with an existing strong presence in a regulated market, a route chosen by Sportingbet and PokerStars with their acquisitions of Centrebet and Cara de Poker respectively, but there are arguably few operators within the industry capable of justifying such a monumental outlay.
There are a handful of major operators whose market cap comes in at close to $500m, with Unibet among the closest. A market cap of £429.4m means IGT’s outlay on Double Down would equate to a majority share in the Swedish operator.
Of course there is another option. While Groupe Bernard Tapie’s initial outlay on Full Tilt Poker is just $80m, the repayment of players and the revival of the stricken poker operator could well end up costing the French consortium a similar amount to that which IGT has invested in Double Down.
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