Part 2: The changing affiliate landscape
Part 2: The changing
affiliate landscape
The affiliate sector
has witnessed a huge
amount of M&A deals in
recent years, as the trend
towards consolidation
has played a significant
role in the formation of
a new class of super-
affiliate that now
dominates the landscape.
Attention is now turning
to how these businesses
will develop and what
pressures their formation
will exert on the rest of
the sector
Consolidation interruptus
The wave of M&A that has affected
the gambling affiliates sector
predates the present period of
multiple regulatory squeezes in
Europe, although it is certainly
directly related to the trend towards
greater oversight of affiliate
marketing activities.
Going by the data compiled by
iGaming Business going back to the
summer of 2014, the likes of Catena
Media (with 34 deals by its own
count), XL Media, Gaming Innovation
Group, Better Collective, Raketech,
Cherry Gaming, Gambling.com
and others have engaged on many
dozens of deals, which collectively
have led to the emergence of the
super-affiliate.
It is not coincidental that all of
the above named are also in some
way listed entities, either directly,
indirectly or, as is the case with
the newest entrant into this area,
Gambling.com, via the issuance of
listed bonds.
However, definitions are important
and it should be said that while not
all super-affiliates have achieved
their status via acquisition, neither
are they all publicly listed entities.
Oddschecker, for instance, sits within
the new Stars Group/Sky Betting &
Gaming entity, the UK’s Racing Post
has also made its presence felt and
groups such as KaFe Rocks, Lotto
Logic, Skores, OLBG and Natural
Intelligence have less exposure due
to being private but are by no means
the sector’s also-rans.
Still, despite the continued
momentum for consolidation
witnessed in the first six months
of 2018, in the second half of the
year it can be seen that the pace of
M&A has slowed, if not completely
stalled, with the last major deal
being Catena Media’s ill-fated ASAP
Italia acquisition. Significantly, that
was overtaken by regulatory events
when Italy’s populist coalition
government moved to institute
a ban on all forms of gambling
marketing and advertising, including
affiliates, a matter of weeks after
the deal was announced.
In fact, going by publicly available
information tracked by iGaming
Business/Clear Concise Media since
the start of 2018, there were 17 deals
in the first half worth at least £65m.
However, after June we have not
logged any deals involving the major
consolidators (see Table 1).
Hitting the brakes
“There has definitely been a
slowdown in the M&A and that is to
be expected,” says Ian Sims, founder
and chief executive at affiliate
landing-page tracker Rightlander
and formerly the owner of the
SlotJunkies website. “It is cyclical.
You build up, get to a point of
saturation, move content around,
trim things, work out what staff
you have and in the meantime the
Under pressure: Regulation and the evolution of affiliate marketing
9