We speak to Dee Maher, Chief Executive Officer at La Royale Gaming Investments, to learn more about how the ever-changing global economic outlook is driving investment decisions in iGaming
As we come to the end of 2024, where is the global gambling industry in terms of appetite among investors? Are they still hungry for opportunities?
Investors are always hungry for the (right) opportunities, and within the global online gambling industry, there are plenty of opportunities to explore.
This is a unique industry in that there is always something new happening, whether that be a market embracing regulation and opening its doors for the first time, companies bringing innovative technologies or never-seen-before products and experiences to the market, or the chance for businesses to consolidate and dominate their respective verticals and markets.
Investors will always approach an opportunity with caution, and I can’t speak for everyone, but at La Royale Gaming Investments, our appetite to back great business in the sector is stronger than ever.
We certainly saw a slowdown in investment activity in the early part of the year. What were the driving forces behind this?
We did, and this was mostly driven by the cost of borrowing money increasing significantly due to the sharp rise in interest rates. This led to general uncertainty in the market and thus a bit of a slowdown in investment and M&A activity.
I think we also saw the first signs the US market might not be the gold rush many expected it to be, with operators writing off platform acquisitions, brands exiting the market and B2B suppliers shutting up shop. Interest rates have since stabilised and confidence has returned.
Of course, for well-capitalised companies like La Royale Gaming Investments, raising capital is not a concern and the situation earlier in the year actually presented opportunities to engage with companies looking to secure capital.
Activity now seems to be ramping up with several major deals getting across the line in the second half of the year. What led to this turnaround?
I think it’s just the confidence in the industry has returned, new markets have embraced regulation (Brazil being a big one with the likes of Finland in Europe moving away from a monopoly also opening up opportunities), and there’s just a bit more optimism in the air.
It’s amazing how the general mood of a market or industry can impact deals getting over the line. That’s why we have strict investment criteria we consider to ensure the opportunity is the right one for us – adhering to these criteria means we can invest whenever we deem it to be the right time, even if the rest of the market has gone a little cold.
Will this momentum continue to build in 2025? Where do you see the biggest investment opportunities to explore?
Absolutely. Investors are getting really excited about the Latin American market, especially Brazil.
But Brazil is just one LatAm market with Mexico, Colombia, Argentina, Peru and Chile offering plenty of potential for investors to look into. In all markets, there’s always room for new brands to get in on the action, so long as they offer something different to the current contenders.
And I always get excited about innovative technologies that bring either evolution or revolution. As I mentioned earlier, this is an exciting industry with plenty of action and movement, and this is what makes it so interesting for investors.
For me, the biggest opportunity is always in proprietary technologies, products and experiences that allow a company to secure and defend market-leading positions.
What does La Royale Gaming Investments consider when investing in a company? Does the global economic outlook come into it?
We really like companies with their own tech, product, solution or experience. If they are doing something that their competitors are not, or that they can quickly catch up with, this makes the company incredibly attractive from an investment perspective.
The business ideally has a strong founding team with plenty of experience in the sector and is willing to work closely with us once the initial investment has been made. We like to see a solid business plan with realistic growth projections, including the costs of reaching those goals, and we like to see these plans early. The sooner we can invest in the business, the better. Does the global economic outlook come into it? For us, not really. We are well capitalised with proven criteria for investment so that when an opportunity presents itself, we can act, regardless of what is happening in the wider economy.
What can companies do, especially start-ups, to make themselves more attractive to investors?
Pretty much what I said above. Those that meet this criteria are ripe for investment and, given where the global online gambling market is right now, I expect we will see plenty of investment and M&A activity over the coming 12 months. Here at La Royale, we plan to be at the heart of this action.
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