Betsson acquires Rizk, Kaboo and Thrills
Betsson is already one of the major players in both the New Zealand and international betting markets. Since the company bought up parts of the competitor Gaming Innovation Group in mid-april, the company's market share is growing further. Specifically, it is the online casinos Rizk, Kaboo and Thrills that Betsson bought for a sum between SEK 300 and 400 million. The acquisition is a way for Betsson to grow in strategic key markets. The company expects, among other things, to be able to gain a foothold in the Spanish market where they had previously been weak.
The parts of the Gaming Innovation Group (GIG) that are sold are thus those that are aimed directly at consumers in the form of the subsidiary Zecure Gaming Limited. GIG will continue to maintain and develop the part of the company that develops B2B solutions for other casino companies. Part of the agreement is that Betsson will have access to GIG's technology for, among other things, payment solutions and betting, which Betsson expects will sharpen their offers against their own customers. The upside for Betsson's shareholders is that this deal will create greater growth opportunities.
The cash consideration for the acquisition of Zecure Gaming Limited amounts to EUR 22.3 million. In addition, Betsson will also pay higher license fees to use the software developed by Gaming Innovation group. The higher license premiums are partly revenue-based but they are estimated to land at around 15 million euros, of which a little more than half will be prepaid in connection with the acquisition. The turnover of Zecure Gaming Limited in 2019 was 77 million euros with an operating profit of around 10% so properly managed, this can be a good deal for both parties.
Impact on existing customers
How this will affect those who are currently customers of either Zecure Gaming Limited or Betsson is still too early to say. Of course, Betsson expects to be able to save some money on efficiency improvements and economies of scale, but this does not necessarily have to be noticeable to the consumer. They have purchased Zecure gaming Limited with a stated ambition to grow both in their existing key markets and to enter new ones. According to our analysis, this points to the fact that all brands will be retained in their current form.
What will hopefully be better for Betsson's customers is the availability of new technology which should be able to affect the gaming experience in a positive direction. Gaming Innovation Group is a skilled developer. As they divest those parts of their business that sell directly to consumers, new opportunities open up for them to license their business and cloud solutions to other companies. All in all, we believe that this will be a win-win both for the companies involved and for everyone who plays at the casino of any of their brands.
The casinos acquired by Betsson are Guts, Kaboo, Rizk and Thrills, which will most likely be operated under Betsson's license in the future. This means that new players on any of these platforms who have already received a bonus from any other Betsson casino will not be able to receive a new bonus here. Our overall analysis is that this is primarily something that will benefit Betsson's shareholders if the deal turns out well. Existing customers of Betsson or Zecure Gaming Limited are unlikely to notice any major differences.