INSIGHT
Table 1: Recent affiliate deals
Date Buyer Target Market focus Buyout price
Sep-17 Better Collective WettPortal Germany Unknown
Sep-17 Better Collective CasinoLounge.co.uk UK Unknown
Sep-17 Better Collective Pull Media France Unknown
Nov-17 Better Collective PariuriX Romania Unknown
Nov-17 AXL Affiliates Astute Media Global €24.8m
Dec-17 Catena Media BayBets Germany €26.5m
Dec-17 Catena Media Squawka UK €1.1m
Dec-17 Better Collective Goal.pl Poland Unknown
Jan-18 Gambling.com Mobile perf. company Global €0.4m
Jan-18 XLMedia Good Game Finland €15m
Jan-18 Cherry/Game Lounge Slot Tracker Scandinavia €1m
Jan-18 Catena Media Dreamworx Germany €9.5m
Feb-18 Meta Gambling Afiliados Latam Latin America Unknown
from €30m following the deal to buy the
similarly German-facing Dreamworx, which
the Baybets management team will now run
and will count toward the likely 40% growth
target for each of the next two years.
The price provides an interesting data
point for the value of that market ahead of
any potential regulation, although as Paul
Leyland, partner at gambling consultancy
Regulus Partners noted, it is likely the
grey-market nature of the business partly
accounts for the low multiple.
Grey matters
Even in the throes of the drive to
consolidate, affiliates are wrestling with
issues of regulation as much as their
partner operators.
Catena said it estimates that 60% of its
fourth-quarter revenues of €20.1m now
come from regulated markets. During the
presentation, Ekdahl pointed to the mostly
regulated market focus for future M&A,
including an increasing focus on regulating
states in the US.
Such comments mirror those of the
operators for a reason. As Better Collective
chief executive Jesper Søgaard says,
“There is no question that regulated
markets offer more stability in terms of
long-term strategy.
“Therefore, we are in favour of more
markets becoming regulated.”
However, there are nuances of approach.
“Revenues from grey markets are
traditionally a little less reliable, but at the
same time, it strongly differs depending on
the market,” says Raketech chief executive
Michael Holmberg. “Some grey markets
have been very stable and will continue to
be so for the coming years. Others have a
roadmap for regulation or are discussing
the possibility.”
However, the appeal of earnings from
unregulated territories – whether darker
grey or black – remains in particular for
smaller and newer operators.
“There will be start-ups setting out now
to target only black or dark grey markets,”
says Gillespie. “There are opportunities
to make money in these markets, it’s just
not legal. If you are a listed company
or looking to be listed in the future,
then you have to answer to investors
and stakeholders.
“In those circumstances, the shift to
regulated markets may be ‘inevitable’,
as investors will pay more for regulated
revenue than they will for unregulated
revenue. It’s two different strategies for two
different types of company,” says Gillespie.
SCOTT LONGLEY has
been a journalist since the
early noughties covering
personal finance, sport and
gambling. He has worked for a
number of publications including
Investment Week, Bloomberg Money,
Football First, eGaming Review and
Gambling Compliance. He now runs his
own editorial consultancy, Clear Concise
Media, and writes for a number
of online and print titles.
iGB Affiliate Issue 68 APR/MAY 2018
49