Takeover fever gripping online gambling sector

[The Buzz]

The big news last week in the online gambling industry was the mega-merger between PartyGaming and bwin. Another gambling giant, 888, told Reuters this morning that it has fielded offers from other companies about possible takeover bids.

Here's what 888 CEO Gigi Levy had to say:

"This puts us in a position in which we are one of the best assets in the field -- we got a few phone calls immediately from various people. Everybody in the industry is looking and saying 'who is the best one to merge with if we need to?' Party and bwin took almost a year to close the deal so we don't see anything happening imminently but there's definitely expressions of interest."

[best.hands]

Perhaps these big daddies are trying to form an industry divided by soviet and allied. Well, I don't really care as long as my affiliate commissions are intact.

[Anthony]

No doubt we will see more mergers and buyouts. I don't think we will be waiting a year before another announcement.

[grem]

please buy out my site for 1 billion

[LuckyLizzy]

If they don't all start merging, the big guys will probably take them out one by one. So it is definitely a smart move to join forces.

It might even be a positive thing for us since the larger companies seam to get more publicity and have promotions on a regular basis to promote.

[mattk]

IMO It's not always a good thing, not for the affiliate, lifetime revshare deals get scrapped and they often don't know enough about the company they are buying which delays commission pay outs.

They always want to recoop their investment and the affiliate suffers. Not just with party gaming but with other programs I have had this.

[Simmo!]

In light of the fact that an amendment to the Frank Bill precludes some operators from taking part in that market if the Bill gets through, it's 100% inevitable that we will see new or existing operators buying other operators out (or merging) to get a good foothold. Affiliates will have to have eyes in the back of their heads I suspect LOL.

If we don't prepare for this we'll have no excuse really as we're getting plenty of notice. We'll probably all take a hit at some point (i dont mean necessarily underhandedly) , it's how astute we are at absorbing the impact. If you have a large portion of your income from US-facing operations you might want to at least consider how risky that could prove. I'd like to think most operators will honour afiliate contracts, but remember Tradal? My gut feel is a lot of us will lose a chunk of revenue overnight somewhere along the line, but as long as we insulate ourselves properly, that it will be a short-term loss for a long-term gain.

[TanyaEverest]

IMO It's not always a good thing, not for the affiliate, lifetime revshare deals get scrapped and they often don't know enough about the company they are buying which delays commission pay outs.

They always want to recoop their investment and the affiliate suffers. Not just with party gaming but with other programs I have had this.

I think this is more an issue with companies going out of business rather than those merging or joing forces. Generally mergers are thought of as a means to expand futher and to take considerable market share, not to shrink away.

As most of you know, Everest Gaming was bought by Mangas at the end of 2009. The merger has given Everest the opportunity to grow in ways we were unable to previously- for example being one of the first operators to launch in the French market.

Any company buying another company should be smart enough to know every aspect of their new business prior to the sale, so if there is a sudden drive to recoop investment and drop affiliate business then there's a lot to worry about with the company's future...

[mattk]

I have had 3 mergers that I can think of at the top of my head now where revshare has been dropped for all affiliates and previous deals wiped.

I do agree it's a very short-sighted strategy.