The battle for dominance in the online casino software market continues with another major takeover deal that will see a more shift in power and influence among the industry’s biggest software providers.
Evolution Gaming, one of the world’s biggest casino game producers and the current global leader in live casino gaming, has completed a takeover of game development company Big Time Gaming (BTG), concluding a deal that was first announced back on April 12 this year. Our casino experts at Playright.co.uk bring you all the ins and outs of the deal and how it can potentially affect casino players.
A Mammoth, Big-Time Deal
The deal to buy Big Time Gaming was confirmed after all of the relevant regulatory approvals were received, and is likely to be worth a huge €450 million, made up of cash and shares in Evolution Gaming. Australian slot developer and games innovator BTG enjoyed an impressive year in 2020, and this strong performance has formed the basis for the agreement. The initial payment from Evolution amounts to €220 million, with €80 million of that figure paid and cash and the rest paid through newly issued Evolution shares.
The remainder of the money in this mammoth deal will be paid according to the EBITDA figure that BTG records in the next two financial years (2022/23 and 2023/24). This extra payment could be worth as much as €230 million, with 70% of that figure likely to be cash and the rest delivered in shares.
While the figures involved are enormous, the deal could represent good business for Evolution, particularly given that around half of the money it is committing to pay out will be based on the BTG performance over the next two years. This effectively gives it a degree of insurance in the unlikely event that BTG hits significant problems or records big losses in the short term.
Live Casino Dominance
Evolution Gaming has benefitted from the rising popularity of live casino gaming in recent years. Set up in 2006, it quickly established itself as a leader in what was then a new genre of online casino gaming, in which online players can interact with real-life dealers at real physical tables.
The Evolution game portfolio, provided through multiple studios in Europe and North America, has come to dominate the global live casino industry. Holding licenses with nine national and state gambling regulatory authorities, Evolution offers live games in six categories: blackjack, roulette, baccarat, craps, poker and game shows, all of which have proven popular with online operators.
Evolution has also continued to bring innovation to the live casino market, with some new and original games, including the popular Crazy Time. This is an action-packed wheel-based game show, with four bonuses and multipliers of up to x25,000, which has already hit the headlines, generating a record $12.5 million prize for one lucky player in 2020. Not surprisingly, Crazy Time now features at many of the top online casinos. In fact, Evolution has a presence all across the global market.
So strong is Evolution’s position in the marketplace, which includes versions of live roulette, blackjack, baccarat and other games that it has landed the title of Live Casino Supplier of the Year at the EGR B2B Awards for eleven consecutive years.
Evolution Gaming’s Expansion
However, it seems clear that Evolution is not content with dominating the live casino market and is also pushing for a share of the even more lucrative slots market.
A year ago, it struck a deal to acquire long established slots game developer NetEnt. This effectively removed one of Evolution’s main rivals in the online casino market and enabled it to increase its market share significantly. Absorbing NetEnt’s impressive array of slots titles made Evolution a significant force in multiple niches. The fact that the deal also included the acquisition of high profile games developer Red Tiger further enhanced Evolution’s position.
Evolution Is Becoming a Major Force
Acquiring Big Time Gaming will only add to Evolution’s growing reputation as a big player in the online casino world. The Australian-based company is one of the most respected slots developers in the world. It is best known for the phenomenally successful Megaways mechanics. This unique feature enables the reels on a slot game to change the size and shape with each spin, making it possible for large numbers of symbols to land on the wheels, creating thousands of winning lines.
Megaways started out as a BTG innovation and first appeared in 2015 in a slot called Dragon Born. The impact was immediate. At a time when most slot games offered up to 40 pay lines, Megaways-powered games were able to give players as many as 117,649 ways to win.
Not surprisingly, this fantastic feature has swiftly been taken up by a host of other developers. Over 200 games now feature Megaways play, and each of these has required a licensing deal with Big Time Gaming, an income stream that will now benefit Evolution.
The acquisition of Big Time Gaming also adds a solid balance to the Evolution Gaming portfolio of slots. Having already absorbed an industry star with a catalogue of hundreds of top games in NetEnt and one of the newer breed of developers in Red Tiger, Evolution has now enlisted a games producer responsible for some of the most significant slot innovations in the last few years.
It puts Evolution in the frontline with the world’s most established slot developers like Microgaming, Playtech and IGT.
Evolution’s Future Plans
The move to acquire Big Time Gaming has been welcomed by the Australian company itself. Back in the spring, Big Time Gaming’s CEO Nik Robinson said that the takeover would offer a ‘bright and entertaining’ future for players of BTG games. Evolution Gaming’s chairman, Jens von Bahr, added that the acquisition would strengthen the company’s position as the world’s leading provider of online casino games.
Evolution’s profits of €561.1 million in 2020, which represented a 53% increase, indeed suggests that the company is in good health. But it seems that Evolution’s expansion is unlikely to be over.
While the company is now securely placed in the upper tiers of the global gambling market, there are still bigger rivals out there, including the Flutter Entertainment Group, which boasts revenue of £5.2 billion, Entain ($3.57 billion) and Scientific Games ($3.37 billion).
The online gambling sector has been characterized by consolidation for the last few years. That trend is likely to continue when the lingering effects of the COVID-19 pandemic have destabilizing influences on the global economy. Evolution appears to be well-positioned with its broad reach and expansionary ambition to thrive in a more unstable and competitive global market.
