The Betsson Group is an established sports betting and online casino provider in the online gambling market. Betsson has now expanded the company and takes over GiG’s online casinos. These include RIZK, Guts, Thrills and Kaboo.
Betsson takes over the Business-to-Consumer business (B2C) of the Gaming Innovation Group (GiG). The brands Rizk, Thrills, Guts and Kaboo operated directly by GiG are taken over by Betsson. White label casinos like Dunder are not affected by the acquisition.
The GiG brands acquired have gaming licenses from Malta, Great Britain, Sweden and Germany (Schleswig-Holstein). In the future, RIZK will also receive gaming licenses from Spain and Croatia.
Betsson also takes over the GiG subsidiary Zecure Gaming Limited. It will transfer the assets, business activities, front-end and middleware technology and gaming licenses required for B2C operations to provide online gambling through the brands acquired.
What goals does Betsson pursue with the takeover?
With the takeover, Betsson tries to consolidate its own position in various key markets. You can also see new markets with potential in Spain and Croatia. Furthermore, one would like to integrate own sports betting and payment platforms into the GiG platform. These could then be made available to B2B customers who use GiG software.
Pontus Lindwall is managing director of the Betsson Group and explained the step as follows:
Betsson’s goal is to grow organically and through acquisitions in the long term. This acquisition confirms that Betsson is a driving force for market consolidation. We believe this deal is a good opportunity for Betsson to consolidate the business at a good price. We will create synergies and use our B2C core competencies and marketing insights to scale the assets to their true potential. The agreement with GiG strengthens and extends Betsson’s reach and growth potential for its own sports betting and payment platforms in the B2B market. As one of the largest European operators, Betsson is well positioned to further expand its strategic position.
What does GiG get from the deal?
In November 2019, GiG initiated a strategic review. It would have led to further strategic orientation. The decision was made to reduce complexity and improve efficiency. This also includes the sale of the B2C business. In return, the B2B business should be strengthened. Accordingly, one would only like to offer gambling platforms for online casinos and sports betting providers and no longer operate them.
In the area of sports betting, one would like to develop further and plans to integrate Betsson’s sports betting solution into GiG’s platform offering. You want to gradually grow with existing and new long-term partners. The US market is also expected to be attacked.
Richard Brown is GiG’s CEO and commented on the move as follows:
The offer of B2C and B2B services has had synergies in the past. However, the currently conflicting priorities of the two businesses and the increasing complexity of the market have reduced the potential offer on both fronts and our ability to attract new customers.
I am very happy to keep our brands on the platform and in the process and add Betsson as a partner as we share the same ambition of responsibility for everyone involved, safe gaming for end users and an entertaining user experience. I am sure that Betsson’s specialties, the focus and strong track record in promoting B2C growth will be a fruitful partnership. In addition, the planned integration of Betsson’s sports betting into our platform offer not only offers cost-saving synergies, but also enables us to offer our current and future B2B partners one of the best-known European sports betting systems.
What is the deal to buy the online casinos?
Until the acquisition is completed, Betsson will have to pay 31 million euros to maintain the Rizk, Thrills, Guts and Kaboo online casinos. This is a one-off payment of EUR 22.3 million for the acquisition and EUR 8.7 million as an advance payment for GiG’s platform usage fee.
Betsson has to keep the online casino on the GiG platform operational for 30 months. In the first 24 months, an additional premium platform fee will be charged based on the gross gaming revenue for the specified period. Estimates assume that the entire business will be around EUR 50 million thanks to the premium platform fee.
The takeover is currently subject to the usual regulatory approvals. The transaction is expected to close in mid-April 2020. What will then change with the former GiG brands will be shown.