Swedish gaming firm Betsson AB announced Monday that it has acquired the Georgian gambling company Europe-Bet in a deal worth a minimum of $50 million.
Europe-Bet is in an interesting spot in the gambling industry, as it helped draw attention to the Republic of Georgia, a nation that is not normally on the forefront of people’s minds when it comes to gambling. Because of an intra-nation rivalry with Adjarabet, though, the market has been doing surprisingly well. Both sites offer all sorts of gambling, but in the poker world, Adajarabet leads with a seven-day average of 650 cash game players versus 375 for Europe-Bet (figures courtesy PokerScout.com). Adjarabet has been particularly aggressive, stringing together promotion after promotion catering to recreational players, the site has gone from a relative unknown to either sitting in squarely in the top ten of PokerScout’s rankings or just outside of them (it is currently tied for 12th).
Europe-Bet has not been as aggressive in the poker space as Adjarabet, but has still joined the promotion fray on occasion.
According to a press release issued by Betsson, the initial purchase of Europe-Bet is for $50 million, but that could increase by as much as $35 million if the state of gaming regulation in Georgia stays the same for the next year.
“Europe-Bet has established a strong brand with a competitive multi-product offering in the locally regulated market of Georgia,” said Betsson CEO & President Magnus Silfverberg. “Together with Betsson’s technology, a foundation for profitable and sustainable growth within and outside Georgia is created.”
Betsson notes that Europe-Bet’s 2014 revenues were $52.4 million with about 80 percent of that coming from online sources. Of the online revenues, almost half – 44 percent – were from Europe-Bet’s sportsbook. Earnings before interest and taxes (EBIT) was $20 million in 2014, $17.9 million of which is from the online business.
Betsson said that some of Europe-Bet’s founders will stay with the new company after the acquisition, which is slated to close in the month of July. Other “key employees” will also be kept onboard.
Of course, Betsson will now become the second-largest online gambling concern in the Republic of Georgia. Betsson’s poker room is interesting in that it is actually split into two rooms on two networks: the Ongame Network and MPN, the Microgaming Poker Network. Players deposit money into their Betsson account and can then actually decide where they want to play; upon making a decision, players then transfer money from their Betsson account to the wallet at the appropriate network. MPN is tied for 10th in PokerScout’s cash game rankings, while the Ongame Network is 31st.
Share of Betsson (BETS-B.ST) rose approximately 3 percent on the news, closing at 118.5 SEK after closing at 115 on Friday. The stock price had sunk in after-hours trading after Friday’s close, though, opening at only 110 SEK on Monday, so the intraday increase was an even healthier 7.7 percent.