Every December, executives and experts from the gaming industry may look up at the clouds, wondering what the coming year holds for them. In most circumstances, no one in this fast-paced industry will be in the same position as they were in December of the previous year. In gaming, situations change quickly and patterns emerge quickly. Consider what happened in 2019: could anyone have expected that a global epidemic would completely change the sector in 2020?
At the same time, there are certain mainstays in our industry — happenings that are more certain to occur with increasing certainty as each year passes. Industry consolidation, new US states legalising sports betting, and Bet365 reporting record revenue statistics are just a few examples… To that purpose, let us take a look ahead to 2022. We won’t be scared to make a few daring predictions, because we know there are a number of safe bets we can fall back on, in classic Gambling Insider manner.
WHO MOVES WHERE WHEN IT COMES TO MERGERS AND ACQUISITIONS?
In the area of gaming, the most straightforward prediction is that industry M&A will occur in 2022. It’s more difficult to predict where it will occur, while there are some patterns that are easier to spot. Operators purchasing suppliers and operators establishing their own game studios are the most recent M&A trends to emerge in the gambling industry (like LeoVegas and Penn National). This is almost certain to continue. In addition, you’ll get very short (hypothetical) odds on Evolution purchasing another company in 2022. Evolution purchased NetEnt for $2.1 billion in 2020, followed by Big Time Gaming for €450 million ($533 million) in 2021. In light of the supplier’s market dominance and growth trajectory,It appears that it will buy another gaming studio in the following 12 months.
Following this year’s rush of gambling companies putting their stock to market, more and more of our sector’s biggest enterprises are likely to go public in 2022, given the general expansion gambling is seeing – mostly on the digital side. The expanding number of SPAC (Special Purpose Acquisition Company) transactions is unlikely to slow anytime soon, as we outlined in our September/October SPACs vs. IPO cover piece. In the gaming industry, there are more of them than ever before, and a diverse spectrum of companies with more value built into their future growth than their past performance. They’ll make the most of this quicker, and arguably more efficient, way of going public.
KEYING IN ON SIMPLE THINGS
In my most specific forecast, I’m happy to publicly proclaim my conviction that Simplebet will grow into a major industry player in the next years – and will almost certainly expand in 2022. No, I’m not employed by the company. Simplebet is a sports betting company based in the United States that specialises in micro-betting technology. In the most basic terms – if you’ll excuse the pun – this means that it maximises in-play betting opportunities on the next pitch, throw, or three-pointer. For sports bettors, this is both good and bad news; it gives them plenty of opportunities to wager, but also plenty of opportunities to lose, lose, and lose some more.
Big-name operators will love this technology, and many have already done so, with DraftKings and FanDuel partnering with the company early on. Not only that, but former MGM Resorts International CEO Jim Murren has joined its board of directors, and YouTuber-cum-boxer Jake Paul’s investment firm has contributed to its $30 million Series B funding round. Operators will be on the lookout for swift, sharp technology that maximises efficiency in every manner as the North American sports wagering business matures. So keep an eye on this space — and keep an eye on Simplebet.
A YEAR WITH MANY EVENTS
We don’t need to expound on how much this sector has missed actual trade exhibitions and events during the last 18 months. The impact of the epidemic on the events industry has been enormous. And, while the Global Gaming Expo (G2E) returned to Las Vegas in October, land-based events did not return until the end of the calendar year in 2021. Expect a lot more in 2022, not just because the world’s inhabitants have been vaccinated, but also because event organisers just have to make things happen, especially when virtual event overload is factored in. In 2022, ICE London will be the first major gambling event, and we at 0 Spiel want to see you there.
THE IGAMING UNITED STATES
While the timing of Asia’s full recovery – particularly in Macau – is unknown, the image has long been drawn in the United States. Some analysts predict that Macau will recover to 2019 levels in 2022, but there is no assurance that this will happen before 2023, especially given the continued travel restrictions in Asia. In the United States, not only Las Vegas, but casinos across the country are prospering, with sports betting and iGaming following behind.
The importance of online casinos has already been demonstrated (to the business, not necessarily to gamblers!) by the fact that they generate significant revenue and provide a steady source of income in the face of hardship. It can withstand land-based closures as well as sporting swings like heavy favourites winning and fixtures being cancelled. In 2022, iGaming will continue to thrive in the United States and become the industry’s biggest winner. Sports betting’s margins are negligible in comparison, despite the fanfare. As more states legalise the activity, the bigger question is how much regulatory intervention will be required to prevent massive player losses.
ISN’T THERE ANY REAL CHANGES FOR THE UK?
Finally, leading into 2022, the UK market is enveloped in mystery – or, perhaps more appropriately, a lack of transparency. For some time, the Gambling Commission and the UK Government have both been studying various areas of the UK sector, and by 2022, we’ll have a better idea of what will happen to the market’s makeup. Despite the inevitable uproar and speculation that the region will engender, my prediction for 2022 is that virtually little will really change.
Gambling advertising was outlawed in Italy on January 1, 2019. That market is still prospering nearly three years later. As we reported in our July/August issue, the advertising restriction had little to no effect on actual gambling levels. In the United Kingdom, the same thing could happen in 2022. Will players quit betting with Ladbrokes, Bet365, William Hill, Paddy Power, and other bookmakers if the Department for Digital, Culture, Media and Sport proposes any vote-winning policy, such as a gambling sponsorship ban in football or perhaps a whole advertising ban? Obviously not.
Even the drop in the maximum stake on fixed-odds betting terminals from £100 ($138.25) to £2 in 2019 has probably done nothing to modify gambling habits – especially when compared to the Covid-19 pandemic. While revenue from B2 machines (essentially fixed-odds terminals) decreased, retailers simply began to increase revenue from B3 machines. The gross gaming yield may decline slightly, but given the market’s maturity, this is likely to happen anyhow. In essence, business as usual will resume in the United Kingdom in 2022, and the gaming industry will be much closer to business as usual as the world tries to put the coronavirus pandemic behind it.