While the deal between Betsson AB and Holland Gaming Technology looked set to close in February 2024, the Swedish group surprised the iGaming industry by announcing in early June that it was cancelling the planned acquisition outright. The deal, worth a total of €27.5 million, included Holland Gaming Technology Ltd and its in-house studio Holland Power Gaming BV. But without warning, Betsson decided to pull out of the deal. Why this about-face after months of preparation and enthusiastic communication?
A look back at an agreement that would have changed the game
The deal, announced last year, was intended to enable Betsson to re-enter the Dutch market, from which it withdrew in 2021 following the regulation of online gambling in the Netherlands.
Holland Gaming Technology, via its Goldruncasino.nl site, held a valid licence issued in September 2022 by the Kansspelautoriteit (Ksa), making it an ideal target to bypass the long delays in obtaining a licence. This acquisition would have enabled Betsson to quickly generate revenues in a regulated market. In addition, Holland Power Gaming, which specialises in the creation of slot machines, was an asset to enrich Betsson’s proprietary content.
Change of strategic direction or tactical caution?
In an official press release published at the beginning of June, Betsson confirmed that it had terminated the agreement to acquire Holland Gaming Technology and Holland Power Gaming. The Swedish operator justified this decision by the prolonged regulatory delays, pointing out that the Ksa had still not issued its decision by the deadline agreed between the parties.
“The completion of the acquisition was subject to the approval of the Kansspelautoriteit. As the Kansspelautoriteit did not take a decision by the agreed date, Betsson has decided to dissolve the transaction.”
As a result, the transaction will be cancelled in its entirety. The purchase price originally paid will be refunded, less a contractual penalty (‘break fee’). In total, Betsson will recover €26.7 million.
The group has stated that this cancellation will have no impact on its financial forecasts and does not call into question its overall prospects. Betsson has also assured that it is already exploring other commercial opportunities, confirming its desire to grow in regulated markets despite this one-off setback.
Implications for Betsson and the Dutch market
This withdrawal does not mean that Betsson is abandoning the Dutch market. The company is still keeping an eye on this fast-growing jurisdiction. However, it now seems to be opting for a more cautious approach, even waiting for a new attempt to apply for a licence from the Ksa.
Interestingly, just a few months ago, Betsson was ordered by the Rotterdam court to pay back more than €500,000 to a Dutch player. The player had lost this sum by playing on gambling sites operated by Betsson subsidiaries, platforms that were not licensed in the Netherlands at the time. The ruling concerns a case dating back to 2014, when online gambling was still illegal in the country. The court found that Betsson, via its foreign brands, was operating without a legal basis on the Dutch market.
As for Holland Gaming, this decision could reshuffle the cards. The company, now still independent, will have to pursue its growth on its own in a market where the major operators are seeking to position themselves rapidly. Its in-house studio will continue to supply the Goldrun platform, but without the financial and technological clout of Betsson.
A coveted Dutch market
The Dutch online gambling market, which has been regulated since October 2021, is attracting a lot of interest. According to the Ksa, it generated more than €1.3 billion in gross sales in 2023, with stable growth despite the advertising restrictions introduced in 2023.
For Betsson, which had a record year in 2023 with €948 million in sales (+22%) and EBITDA of €262.7 million (+52%), the resources are there to continue investing. The Group remains active in a number of regulated markets in Europe and Latin America, and may be targeting other targets that are more compatible or more advanced in regulatory terms.