Entain is adding to its push for sports betting in Canada.
On Monday, Entain announced the acquisition of Avid Gaming, which owns Sports Interaction, a key operator in the Canada sports betting landscape. The acquisition price is CAD $300 million, according to a release.
“[Sports Interaction] is highly complementary to our existing operations in Canada, and the combination of its local expertise and Entain’s powerful platform will provide customers with an unrivaled range of exciting and engaging products in this fast-growing market,” Entain CEO Jette Nygaard-Andersen said in a statement.
Gray-market questions around Canadian acquisition
Avid Gaming licenses Sports Interaction services to the Mohawk Council of Kahnawàke and Mohawk Online. Mohawk Online operates Sports Interaction in Canada in the gray market under the Kahnawake Gaming Commission.
For now, it can operate online sports betting and gaming without provincial regulatory approval.
According to a release from the Kahnawàke, Entain intends on applying for licensure in Ontario under its other brands, leaving Sports Interaction operating under KGC.
“We’ve had to work for everything we have,” Grand Chief Kahsennenhawe Sky-Deer said in the release. “Entain has chosen to work closely with Kahnawàke, as we have one of the most established and well-respected jurisdictions in the world. However, recognition in Canada continues to be a challenge.
“For example, we are still fighting for a carve-out for First Nations in Canada’s C-218 gaming legislation as well as in Ontario’s ‘conduct and manage’ modelled iGaming project.
“Recognition on the international stage – such as today’s announcement, exemplifies the excellence of Kahnawàke’s igaming industry and is yet another instance of why we need to have access to, and be full participants in the Canadian gaming industry. We cannot and will not accept being shut out by the old boys club.”
Sports Interaction gross revenue grew 40% in 2021, to CAD $76 million.
Combining Canada sports betting forces
Entain touted the addition of the local expertise it will gain through the acquisition. Avid Gaming CEO Will Golby and other employees will join Entain.
Entain expects the acquisition “to deliver approximately CAD $15 million of synergies in 2023.” Sports Interaction has official partnerships with the National Lacrosse League and four Canadian Football League teams.
“[Entain] has a unique approach to local markets, and no other company of its scale consistently delivers so many well-executed, localized approaches to the same level of customization and detail,” Golby said in the statement.
Adding to Entain’s Canada efforts
Entain is pursuing an online gaming license for sports betting in Ontario. Sports Interaction will join Entain’s Party and bwin brands in Canada.
“Canada is a highly attractive and fast-growing sports betting and gaming market,” the release said. “This acquisition provides an excellent opportunity to drive further growth, in line with the Group’s growth and sustainability strategy.”
Shifting BetMGM future?
BetMGM, which Entain owns jointly with MGM Resorts, also plans to enter Ontario, according to last month’s business update. Analysts at Regulus Partners suggest this Entain acquisition could change BetMGM’s course.
“The deal tacitly advertises BetMGM’s US-only focus for Entain strategically, which might unhelpfully box it in from an MGM perspective especially if US markets do not deliver the kind of profitable growth most stakeholders still seem to be hoping for,” the analysts wrote.
Elisa Richardson, BetMGM head of communications and public relations, told LSR there are no changes to the BetMGM Canada strategy.
“Very much business as usual,” Richardson said. “We’re gearing up to launch with our BetMGM product offerings in Ontario once the regulated market opens.”
Canada sports betting heats up
Most major sportsbook operators have expressed interest in the Canadian market. Single-game wagering opened through most provincial lotteries in August 2021, after the Canadian government amended the nation’s criminal code giving provinces the power to regulate the issue.
Alberta regulators released an RFP for two retail sportsbook operators, with the potential to expand online in the future. The Saskatchewan Indian Gaming Authority hopes to have online sports betting up and running this summer.