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Aristocrat has announced its intentions to purchase the digital portfolio of the igaming firm Playtech. The Australian slot manufacturer is seeking to expand its own digital footprint. Aristocrat values the deal at $3.7 billion or $5 billion Australian dollars. Playtech has apparently agreed in principle.
This constitutes a significant consolidation of the iGaming sector. It is a time of boom for the industry in general. Retail and land-based operators continue to gather momentum in the sector. The deal was announced on October 18 and the markets are still adjusting to the possible merger.
The implications for both firms are significant. Aristocrat CEO Trevor Croker states, “the combined group would offer a broad portfolio of end-to-end solutions for gaming customers around the world.” Gaining a global footprint is the main reason Aristocrat is seeking this sale.
Having access to global iGaming markets is a close second priority though. Primarily, both companies are keen to secure a footprint in the rapidly expanding US market. Playtech has already established itself in the US market. Their slot, live, and lottery games are already in use in several licensed jurisdictions in the US. This established market offers a fresh opportunity for Aristocrat.
The United States on the Horizon, Aristocrat on the Move
The Australian company is keen on expanding its horizons and exploring new markets. Every company wants to be part of the world’s largest market. Since 2013, the US has been expanding regulatory frameworks for the iGaming sector. New Jersey was, for a long time, the only US state that allowed iGaming.
Since 2018 things have been changing rapidly. Today more states are legalizing their gaming sectors. Pennsylvania, Michigan, and Colorado have been leading the push for iGaming legalization. Playtech has been a part of this conversation since it began. They have many key markets on their own.
The company established a footprint in New Jersey with BetMGM and bet365 in 2020. It has been actively seeking access elsewhere as well. A partnership with Greenwood Racing enabled Playtech to enter additional markets. Michigan, Pennsylvania, and Indiana introduced their frameworks for regulation in February 2021.
Playtech has shown it is able to gain traction in the US. This experience will also serve as a vehicle of progress for Aristocrat. It is not as though Aristocrat has no experience in the US. Aristocrat is very active as an established industry leader in physical slots. Their machines can be found on the Las Vegas Strip and Atlantic City Casinos. The acquisition of Playtech will bring expertise to their digital sector as well.
How Would the Deal Impact iGaming?
Consolidations in the iGaming sector seem to be quite common recently. Evolution acquired NetEnt, marking one of the biggest such moves. Even without merging, companies have been establishing partnerships throughout the industry. The goal is always to ensure that they bring the best of the land-based and iGaming sector.
BetMGM is the result of merging MGM Resorts and Entain. Together they created one of the most successful operators in the world. BetMGM has been quickly gathering momentum in the US market.
While the company has not focused just on iGaming, BetMGM has good digital assets in the sector. The main vertical the company is expanding into is sports gambling. This is similar to the goal of Aristocrat and Playtech’s pending merger.
The trend is moving towards broad focus. No longer are operators choosing between land based casinos and iGaming. These firms are looking to compete across the whole industry. Aristocrat is primarily a manufacturer of some of the best casino software suites available. Purchasing an iGaming brand will only enhance that.
To fully appreciate its products, players around the world need access. Aristocrat is hoping that through Playtech, it will be able to achieve that. There are also other factors to consider.
Playtech has a very strong footprint across the European market. This puts Aristocrat in an enviable position. Playtech doesn’t simply provide growth in the United States. Their established market in Italy is also a feather in Aristocrat’s hat. Playtech has one of the best omnichannel software products. The addition to the Aristocrat portfolio will only strengthen the brand.
The caveats at the moment are the possible regulators. There might be issues depending on the jurisdiction. Overall, Aristocrat and Playtech are looking to strike a genuine partnership. One that would allow them to quickly establish their footprint and move forward.
With the global gaming market constantly growing, there are more positive developments coming up next.
