Emerging Trends in Sports Betting: Mergers, Acquisitions, and the Role of Technology

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Experts predict this trend to persist into 2025 as sports betting firms seek to enhance customer engagement and retention platforms, and break into emerging markets like online lotteries – an example being DraftKings’ acquisition of lottery service provider Jackpocket for $750 million as evidence of such efforts.

Chris Grove, Partner Emeritus at Eilers & Krejcik Gaming stated at Global Gaming Expo, he anticipated operators pursuing M&A deals focused on five areas within 12 months. These were: enhancements in customer relationship management technology; back office operations improvements; free-to-play games that promote user acquisition.

Grove also noted that, despite recent activities, sports betting and media partnerships may not become significant contributors in 2025, as prior mergers failed to meet expectations.

The Potential of Parlays in Spurring M&A Actions

“The market remains rich with opportunities for acquisitions designed to strengthen parlay pricing capabilities, with multiple companies available for partnership or acquisition offering plenty of room for strategic deals,” Grove stated.

DraftKings’ acquisition of Simplbet to expand its parlay options suggests an emerging trend of related acquisitions by companies seeking to enhance their betting menus.

Grove mentioned iGaming as one area for acquisition opportunities, emphasizing incorporation of technology providers rather than purchasing direct competitors for market share growth.

Regulatory Compliance and Payment Systems as Catalysts for M&A Activity

Compliance, regulatory and cybersecurity costs represent significant expenses for online sportsbook operatorss. Some may turn to acquisitions as a strategy to lower these expenses but economic feasibility presents its own unique set of difficulties.

Payment processing continues to present significant costs and operational challenges; Grove suggests that significant consolidation in this area might only occur post-2025 due to its complex logistics and liabilities involved with U.S. market operations.

Payment processing is an integral yet challenging part of user experiences, particularly at FanDuel where it consumes an enormous proportion of their net gaming revenue. Although some payment services will likely move in-house over time, any significant shift here should occur gradually.” Grove concluded.

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