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NetEnt/Evolution merger a done deal? Not so fast, say UK competition authorities

Evolution Gaming’s purchase of Net Entertainment hit the first hurdle this week. The UK competition authority (CMA) has flagged the £173bn deal for an inquiry into whether this would “substantially lessen competition” in the UK gambling market.

The CMA is now inviting third parties to provide feedback into the tie-up. The likes of Playtech and Microgaming will surely lodge some kind of objection, since they compete in both the live casino and slots verticals.

Based on the feedback received, the CMA will announce whether or not the merger inquiry will move onto a 2nd phase by November 6th. That date is 4 days after the two companies intended to tie up the deal and could delay the merger until the New Year.

It will be interesting to see what the CMA has to say on the matter. The authority did give the go-ahead to the recent Flutter/TSG deal, which was estimated to have created a gambling giant covering a massive 35-40% of market share in the UK market.

Most likely the Evolution/NetEnt deal will similarly receive the go-ahead, and the stock market seems to see things the same way. The stock prices of both companies initially took a slight dip on the CMA news but quickly recovered to the levels seen before the announcement.

It’s hard to see how exactly the CMA could realistically block the deal, since neither NetEnt nor Evolution are listed on the UK stock exchange. In the worst-case scenario, the CMA could ask the UKGC to block either Evolution’s live casino or NetEnt’s slots from UK licenced casinos – but even this move would appear a low-risk scenario.

We hope this deal does get the go-ahead, as we look forward to seeing some of the NetEnt slot classics be given a live casino makeover.

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