Evolving Situation: UK Watchdog to Investigate Multi-Billion NetEnt/Evolution Merger
The UK’s Competition and Markets Authority has this week confirmed it is looking into the recent merger deal between online live casino gaming giant Evolution Gaming and popular Swedish slot developer NetEntertainment, or NetEnt.
The regulatory body must be concerned that the $2.1 billion agreement between two of Europe’s biggest casino game developers could potentially stifle smaller competition out of the UK casino market.
The CMA’s official case documents for the investigation are available on the UK government website.
They state that they are considering whether this merger “may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services.”
Deadlines for Decisions
Both companies have reportedly been informed of the investigation proceedings. They have until October 5th to state their case for the fairness of the deal before submitting it to regulators to chew over.
The first phase decision will be made on November 16th, in just under two months. This is not a hard and fast date, however. “The CMA cannot guarantee that the decision will be announced on or before this current deadline,” said their statement.
The process will be subject to newly relevant information providing reasonable requests for delay, especially with the current COVID-19 pandemic forcing office workers all over Europe to work from home.
NetEnt and Evolution’s deal was quickly approaching its own deadline, too. NetEnt management had recommended shareholders vote for Evolution’s buyout, and most senior figures and insiders in the industry consider it a done deal.
However, it was not actually set to take place until November 2nd. That deadline might be itself delayed by the investigation, and the offer could even be off the table entirely if the CMA deems it illegal.
The CMA has a mixed record with high-profile deals in the UK, especially when it comes to gambling.
It approved the world’s biggest online gambling merger between Flutter Entertainment and The Stars Group after a short investigation.
However, back in 2016, physical betting shop chains Ladbrokes and Gala-Coral were only allowed to merge if they sold or closed down nearly a third of their retail stores in the UK.
Buying Up the Competition
NetEnt and Evolution have been busy since announcing Evolution’s bid in late June.
Both companies have been aggressively targeting the growing US market. NetEnt has this week signed deals to enter the West Virginia and Pennsylvania markets with BetMGM and Wind Creek Casino, respectively.
BetMGM is itself a joint effort between European giants GVC Holdings and Las Vegas-based MGM Resorts. This is truly a global online casino venture that shows how much massive betting companies collaborate with each other across borders.
Evolution Gaming has been at the heels of the fast-moving US legal market since the first states opened. In the past few months, it has signed deals with fast-growing sportsbook and casino operator PointsBet, as well as its own deal with BetMGM.
Live casino is a quickly growing vertical among online gamblers, and Evolution hopes to bring its quality games – as well NetEnt’s massively popular jackpot slots – to as many Americans as it can over the next few years.
For the latest updates on this important story, plus other news from the gambling world, keep your eyes on online.casino/news.