Entain Acquires Avid Gaming in Canada Sports Betting Push
Posted on: February 7, 2022, 09:29h.
Last updated on: February 7, 2022, 12:11h.
Entain Plc (OTC:GMVHY) is paying nearly $235 million to acquire Deis Ltd., the parent company of Avid Gaming, in an effort to bolster its footprint in Canada’s newly liberalized sports wagering market.
The Ladbrokes owner is purchasing Avid Gaming from Middle Brook Investments Ltd., which specializes in private alternative investments. Avid owns Sports Interaction — one of Canada’s largest online betting brands.
Sports Interaction licenses its trademark and provides internet wagering products and services to the Mohawk Council of Kahnawà:ke and the Mohawk Online socio-economic initiative. Mohawk Online, which is controlled by the council, operates Sports Interaction in Canada.
Canada is a highly attractive and fast-growing sports betting and gaming market. Together with Entain’s application for an Ontario licence, this acquisition provides an excellent opportunity to drive further growth, in line with the Group’s growth and sustainability strategy,” said Entain in a statement.
The Coral owner already operates in Canada’s gray market and analysts expect the company will be a major force in the country. That’s as more provinces and territories embrace regulated single-game sports wagering, encountering little friction in converting gray market customers to its regulated platform.
Sports Interaction Is Growing
With the Avid acquisition, Entain is acquiring a growth engine that could spur its efforts to boost Canadian market share.
Last year, Sports Interaction’s revenue surged 40 percent to $59.52 million (based on current exchange rates) as the operator generated earnings before interest, taxes, depreciation and amortization (EBITDA) of nearly $14.1 million. As of Sept. 30, 2021, the company has $32.11 million in assets, according to the statement issued by Entain.
Due to content, procurement and technology benefits, the Avid deal will deliver $11.74 million in efficiencies in 2023, adds Entain. Sports Interaction’s sports-led platform is viewed as complementary to Entain’s existing Canadian business, consisting of the Bwin and Party brands.
“This results in a post synergies acquisition multiple for Entain of approximately 7x 2023 EBITDA. The consideration for the acquisition has been paid from existing facilities,” according to the UK-based gaming company.
Canada Compelling Market for Entain
Entain’s acquisition of Avid Gaming comes as Ontario, Canada’s largest province by population, is slated to open its iGaming and sports wagering markets to private competitors in April. Last August, the country passed the Safe and Regulated Sports Betting Act, paving the way for single-game sports betting for regulation at the provincial level.
US-based operators, including Caesars Entertainment, DraftKings, and Penn National Gaming are already establishing footholds in what analysts believe will be a sports wagering market that eventually generates a handle of more than $25 billion and revenue north of $2 billion.
Entain, which is one of the largest bookmakers in Australia and Europe, also owns 50 percent of the BetMGM business in the US.
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