I’m thrilled to sit down with Priya Jaiswal, a distinguished expert in banking, business, and finance, whose deep knowledge of market analysis and international business trends offers invaluable insights into the gaming and lottery industries. Today, we’re diving into the recent merger between Allwyn International and OPAP, a deal that’s creating waves with a valuation of $18.56 billion. Our conversation explores the strategic motivations behind this merger, the potential for global expansion, the valuation process, and the future of listings in major financial hubs. Priya also sheds light on what makes a company like Allwyn a standout in competitive markets and the broader implications for the lottery sector.
What inspired the merger between Allwyn International and OPAP, and what do you see as the driving forces behind this partnership?
The merger between Allwyn International and OPAP is a strategic move to combine strengths in the lottery and gaming sectors, creating a powerhouse valued at $18.56 billion. The primary inspiration comes from the opportunity to scale operations and leverage complementary markets—Allwyn’s rapid growth in Europe and the U.S. pairs well with OPAP’s strong foothold in Greece and Cyprus. This partnership is driven by a shared vision to dominate the global lottery industry, pool resources for innovation, and gain better access to capital markets for future growth.
How does this merger position the combined entity to lead in the global lottery market?
By joining forces, the combined entity becomes one of the world’s largest lottery operators, with a footprint spanning multiple continents. This scale allows them to standardize best practices, invest heavily in technology, and offer a broader range of products. Their diversified portfolio reduces regional risks and positions them to bid aggressively for new opportunities, especially in markets transitioning to private operators. It’s a bold step toward setting industry standards and outpacing competitors.
Can you break down how the valuation of 16 billion euros, or about $18.56 billion, was determined for this new company?
The valuation reflects a combination of current revenues, growth projections, and market comparables. Allwyn’s recent financials, with adjusted earnings of 1.5 billion euros on 8.8 billion euros in revenue, alongside OPAP’s steady performance, provided a strong baseline. Analysts likely factored in synergies from the merger, such as cost savings and expanded market reach, as well as the potential for future acquisitions. It’s a forward-looking figure that banks on the combined entity’s ability to capitalize on global trends in gaming and lotteries.
With Karel Komarek’s investment group holding 85% of the voting rights, what was the rationale behind this ownership structure?
This structure ensures that Karel Komarek, through his investment group, maintains control over strategic decisions, which is critical during the integration phase of such a massive merger. It reflects confidence in his vision for the company, given his track record of driving Allwyn’s expansion. Concentrated voting rights can streamline decision-making, avoiding potential gridlock, while still allowing minority shareholders to benefit from the company’s growth through their equity stakes.
The companies are considering a secondary listing in either London or New York. What key considerations do you think will shape this decision?
Choosing between London and New York will likely hinge on investor appetite, regulatory environments, and market liquidity. New York offers access to a vast pool of institutional investors and a strong tech and gaming sector focus, while London provides proximity to European markets and a history of supporting international listings. Past challenges, like volatile market conditions or geopolitical shifts, will also play a role, as will the cost of compliance and the ability to attract long-term shareholders in each hub.
Given Allwyn’s recent expansions in Britain and the U.S., what do you see as the next big market or region for growth?
I believe the U.S. remains a goldmine for growth, particularly in states where lotteries are still state-run but could shift to private operators. Beyond that, emerging markets in Asia or Latin America, where disposable income is rising and gaming regulations are evolving, could be on the radar. The key will be identifying regions with a cultural acceptance of lotteries and a regulatory framework that’s open to privatization or partnerships.
What unique strengths does Allwyn bring to the table when competing for new lottery opportunities in markets shifting to private operators?
Allwyn stands out due to its proven expertise in managing large-scale lottery operations across diverse regions, from Illinois to Britain. Their ability to tailor products to local preferences, combined with a strong technological backbone, gives them an edge. They’ve also mastered the art of navigating regulatory landscapes, which is crucial when bidding for contracts. Their track record of driving revenue growth—12% year-on-year recently—demonstrates reliability to governments looking for partners.
Looking ahead, what is your forecast for the lottery industry’s evolution over the next decade, especially with mergers like this one?
I foresee the lottery industry becoming increasingly consolidated, with major players like the Allwyn-OPAP entity leading the charge through mergers and acquisitions. Digital transformation will be a game-changer, with online platforms and mobile apps expanding reach, especially in younger demographics. At the same time, regulatory shifts will open new markets to private operators, but competition will intensify. The focus will likely shift toward responsible gaming and innovation in entertainment offerings to sustain public and governmental support.
