Company mergers seem to be happening everywhere lately. The Gala Coral Group’s merge with betting company, Ladbrokes, is probably the most prolific at the moment — their deal which has been up in the air for the last few months is finally coming to a close this week. Regardless of the company and how it benefits or hinders them, what does a company merger do to the player? How do they feel the effects of something that fuses to become on entity? On the surface, that may not immediately seem apparent. After a few weeks, however (or even a few days), the consequences may come to light. And those consequences can be good — often very good. But those consequences may also have a negative impact.
What do we think? Well, we’ve weighed up all the major pros and cons of most mergers that happen between two or more companies in the gambling industry.
How do mergers happen?
Mergers happen all the time in the world of business. It’s the process of two or more companies coming together to form one single company. The process involves all the company shareholders getting together and agreeing on a deal which would benefit both organizations. This is why they usually happen over a period of a few months as it involves a lot of contracts, lawyers, agreements, and conditions that take forever to decide a upon. Eventually, however, the two companies shake hands and the process is done.
A merger is one of the ways in which a company can hope to make better profits and (sometimes) save them from going under completely. And this can go for any kind of business everywhere! Coca-Cola makes mergers all the time and as a result controls almost everything we drink. Sometimes, however, things can go wrong. There are such things as hostile takeovers and a business may have to fight to stop itself from being seized by another company that has malicious intents.
As the igambling is a growing, global industry, mergers are naturally a complete bi-product of the market. With demands for higher quality, better games and more valuable promotions, companies may think that merging with a competitor is the best way forward. And, very often, that turns out to be correct. But that isn’t always the case. It really depends on the circumstances.
So what good things come from a merger? What do players get out of two betting operators coming together? More than you may think it will.
1) Bigger Growth: If a bigger company swallows a smaller company, this can equate to larger instantaneous growth for both organizations and lead to better profits. It also gives them a better chance of standing against other competitors, especially when that company’s at a loss for a way forward.
2) More Innovation: Want to see more interesting, original slots out there? Well, a company merger could achieve just that. With bigger growth comes more profit and with more profit companies can invest in developing better software for better games which ultimately means players get to have more fun.
3) Bigger Payouts: And with more profit, companies can dish out more money to winning players, especially those who play progressive jackpot slots. This goes for any prizes players can win that involves large amounts of cash and those who often play risky bets are bound to be the first to notice.
Like everything else in existence, nothing’s perfect. Aside from the hostile takeover a company can experience, when a competitor wants to buy them out for their own gains even the most genuine of mergers don’t always work favourably. The consequences of this can echo down to the players as well.
1) Less Competition: While less competing businesses may sound like a good thing, in reality it isn’t. Without competition, businesses would not be trying to outdo one another by lowering their prices or offering cool promotions to draw you in. Hence, you’ll have less variety to choose from and won’t be able to enjoy as many welcome bonuses as you previously liked. Also, jackpots will stay relatively the same unless the casinos get money elsewhere.
2) Less Real-Life Betting Shops: While this may not affect online gambling in any direct way, some conditions of a merger dictate that one or both of the companies must shut down their betting shops or rebrand it. This has happened a result of several mergers in the past where a long-established betting store closed down on high streets up and down the country simply because they joined with a competitor. This can hurt online gambling but also aid it. For instance, those disadvantaged players my turn to internet gambling as an alternative but they may also turn away from it altogether, losing any potential customers mobile casinos could have gained.
So while it’s not as easy to say if mergers are definitely all-good or all-bad, we can say for the most part they are good but not without their disadvantages. It really depends on the circumstances and since the market for igambling is currently at all time high, we believe only more are going to come out of the woodwork. However, if the nature of the companies involved dictates that things will go pear-shaped in due course… well, guess what will happen?