IAGA SUMMIT FOCUS: KEYNOTE UK/US LEGAL AND REGULATORY DEVELOPMENTS IN GAMING M&A
INSIGHT IAGA SUMMIT BELFAST - JUNE 20-22, 2023 controls
IAGA Summit Belfast With M&A activity expected to
continue in the sector, keeping up to date on current transaction
trends and challenges is critical. During the IAGA Summit in Belfast the panelists considered what potential M&A activity might lie ahead in the next three to five years, including potential opportunities that might arise in markets that are pre-regulated or at the early stages of regulation.
Jones Day’s Leon Ferera and Evan Kanter summarise the discussion in Belfast with an overview of the latest deals shaping the marketplace.
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Te recent announcements of Aristocrat’s acquisition of NeoGames and Fanatics acquisition of PointsBet’s U.S. business shows that, despite macro economic and geo-political headwinds, there is still meaningful M&A activity in the online gaming sector, which continues to be a key driver of growth for the overall gaming industry. With this in mind, this article highlights some recent legal developments in the UK and US that are of relevance to M&A involved online gaming companies.
First, digital and online markets are in the crosshairs of antitrust and other regulatory agencies. Although the regulators have their sights on the alleged "market power" of the big tech companies, we can expect more stringent and cautious assessments by antitrust agencies for deals involving significant sector
P80 WIRE / PULSE / INSIGHT / REPORTS
consolidation in online gaming. As demonstrated recently with the Microsoft/Activision merger, tech deals involving complementary businesses operating at different levels of the market can be subject to extended antitrust review. Faced with the difficulty of predicting the evolution of what are often fast-moving markets in terms of both technological developments and consumer preferences, authorities might be more prepared to intervene to avoid so-called “Type 2 errors,” where regulators clear transactions that, only with the benefit of hindsight, appear to result in less competitive markets.
Different decisions by the UK and EU antitrust agencies relating to the Microsoft/Activision merger (the UK blocked the deal, whereas the EU gave a conditional clearance) also illustrate that, since Brexit, deal parties now have to
contend with both UK and EU antitrust agencies with differing approaches, rather than being able to rely on the one stop shop regime that applied when the UK was part of the EU.
In another regulatory development, in July 2021 the UK Takeover Panel introduced new rules on the invocation of conditions to offers for UK public companies, including rules under which it is now harder for bidders to terminate takeover offers by invoking conditions relating to UK and EU merger control clearances.
Previously, if there was a referral for a Phase 2, or in-depth, merger control review, a bidder would automatically be entitled to withdraw its offer. Tat is no longer the case and a bidder could now conceivably be obliged by the Takeover Panel to accept and close over any antitrust remedies required to secure EU and UK
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