iGaming Next Day 1 conference notes
White heat: On a panel dedicated to discussing trends in M&A, Mohit Kansal, partner at Clairvest, made the obvious point about the “euphoric” M&A backdrop being driven by events in the US. “You have all this capital chasing deals to capture that growth.” Asked by panel host Julian Buhagiar from RB Capital which deals had surprised him, he mentioned the DraftKings deal for VSiN (see below for more on DraftKings and media).
“This was a move to go upstream,” he said. “This is a big step forward for them and it opens the floodgates. They are all looking for an edge. They are moving upstream and buying media assets. So could they buy a media network? Who knows? Maybe they might buy rights? That I feel is on the horizon.”
SPAC in black: The panel also discussed the future of SPACs. Kansal suggested that the PIPE market – that is those putting extra money into a de-SPAC deal – has “largely dried up.” “It’s been more challenging to do deals as a result,” he added. “But a slowing doesn’t eliminate the fact that there are a huge amount of SPACs on the sidelines trying to do deals.” But Buhagiar was more worried. “SPACs can adversely affect the (M&A) market,” he said, suggesting that the equal and opposite reaction to the current frenzy might be a period of nothing being bought. “I think SPACs will be the weapon of mass destruction in the gaming industry. It will deplete good capital in the acquisition space.” Buhagiar also predicted a wave of consolidation among slots developers (maybe he has some on his advisory books?): “I think there will be a ridiculous amount of slots companies acquired,” he suggested. “In terms of content, and creativity, you can see there will be consolidation.”
A media message: The investment theme was picked up on a later panel by Thomas Allen, analyst at Morgan Stanley and Andreas Aean, partner at Copenhagen-based investment firm Symmetry Invest. Thomas said that from an his standpoint he had “never seen such an influx of other investors looking at this space.” “I spend more time on my phone with internet and media investors than gaming investors,” he added. Meanwhile, Aean spoke specifically about the affiliate side and suggested he can see the operators only wanting to work with the big affiliates. “They can really roll up this industry.” Note: Symmetry has a close relationship with the founders at Better Collective and is invested in Gaming Innovation Group (GiG) which has a large affiliate business.
Agenda setting: Thomas also spoke about the issue of gambling and ESG, saying the US industry “needs to be aware of it and be focused.” It was also the subject of a panel hosted by E+M’s Scott Longley which featured Kelly Perry, director of ESG at Edison Group, and Liesbeth Oost, sustainability manager at Aspire Global. Both pointed to the way that ESG – and particularly governance and societal elements of the equation – have risen up the agenda for the investment community in recent years, a trend that the gambling sector “absolutely needs to be aware of.”
