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RB CAPITAL THEshapeOF2019


Julian Buhagiar, co-founder of RB Capital, gives us his


predictions for the year ahead.


THERE WILL BE AT LEAST TWO MEGA MERGERS next year on the scale of the Ladbrokes/Coral and Betfair/Paddy Power transactions. The marketplace is simply too crowded for all the big players to co-exist.


SWEDISH MARKET REGULATION RULES WILL INITIALLY CAUSE CONFUSION. There will also be gradual, but cautious, adjustment to the most successful acquisition strategies without incurring the wrath of the newly empowered regulators. Winners in Sweden will be second movers – those that learn from the mistakes of the first to market, just as we saw in France and Germany.


THERE WILL BE A FIRST WAVE OF ESPORTS TAKEOVERS in the US by EU players. To date, post-PASPA, most EU operators have been cautiously watching early mover States, making small land grabs for free-to-play and data-based esports entities. That will change in 2019 with bolder plays for newly regulated States and/or rest-of-world ventures with initial offerings in the US. There will be more focus on streamers, the twitch-esque families that will in time spurn the new wave of affiliate marketing, and this charge will be led from the US.


UK GAMBLING COMMISSION FINES WILL RISE IN SEVERITY. This is only the beginning. The only reason we haven’t yet seen higher fines is that they are still under investigation by the Commission. Regulators will continue to crack down on “social irresponsible promotions” and cut down bonuses to a single welcome bonus. FOBT limits will equally harshly impact Q2 and Q3 earnings reports leading to Year-on-Year stagnation.


DE AND CEE ACQUISITIONS WILL INCREASE SIGNIFICANTLY IN 2019. Customer lifetime values (CLTV) Vs acquisition cost (CAC) still enjoy very healthy numbers in Eastern Europe. Coupled with relatively immature markets this makes acquisition one of the safest bets within the EU. Germany will renew Schleswig Holstein licences in 2019 which will spur a fresh wave of acquisitions with newly- confident buyers.


NEW SPAWN OF CENTRAL AFRICAN AND SOUTH AMERICAN BRANDS. Colombia, Chile, and to a lesser extent, Brazil, have begun to regulate, taking a leaf from their


98 JANUARY 2019


Julian Buhagiar is an nvestor, CEO & board di director to multiple ventures in gaming,


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fintech & media markets. He has lead investments, M&As and exits to date in excess of $370m.


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simply too crowded for all the big players to co-exist





European counterparts. Latin gambling branding is markedly different from Europe with many local brands enjoying good traction. If they are (locally) celebrity endorsed, they will start a growth spurt that will only be mitigated once they are acquired by larger (bolder) international brands. Central Africa is a different strategy. Significantly low LTVs can only be spurred on by persistent local marketing, coupled with strong external affiliate networks. Eyes on Nigeria, Kenya and Tanzania. However, any emerging African gaming teams will need to be tightly managed. Only those with operational control on the ground will have any chance of success; they can’t be managed remotely as with some other territories.





COUNTERINTUITIVELY, THE FALL IN CRYPTOCURRENCY PRICES WILL ENCOURAGE ADOPTION AS A GAMING CURRENCY. Reducing speculative value on holding crypto and


thereby encouraging users to spend rather than store will help drive the digital currency chip. Especially in China and SE Asia where legislation and capital controls encourage use of digital currency. Conversely, any business with ‘blockchain’ in the pitch deck will lose momentum. Investors are slowly waking up to the fact that *chains are essentially nothing more than distributed databases, which inherently don’t add any IP.


The marketplace is


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