Private equity investing has become a popular gambling business in the virtual world. One of their remarkable achievements is worth a mention. CVC, a popular private equity firm, purchased Sky Bet at a controlling stake worth $1.25 billion. This is considered to be the biggest bet by any private equity firm for an online gaming business. Online gambling has lead to the foundation of many other private equity investors, trading more in order to gain huge profit.
Sky, a well known British based satellite TV Company which founded Sky Bet in 2001, runs an online sports betting site and also offers online casinos and poker play. Sky is definitely in a good position, as they still continue to own 20% of the company.
With more gambling sites going online, it has caught the attention of most of the major private equity firms which want to rake in the profits. The buyout business is also trying to form new industries in order to enhance the financial background. It is an interesting fact that in the last few years participating in online gambling was considered to be similar to that of the Wild West. Most of the big institutional investors avoided online gambling in the past but this is definitely changing.
The credit division of Blackstone Group, the biggest private equity firm, has proved this by purchasing PokerStars worth $4.9 billion, but it was possible with Amaya’s investment. Pokerstars is considered to be the largest company owning online poker games. In order to lock this deal, GSO unit invested $1 billion, a part of Blackstone group. This was one of their greatest commitments, and this is because banks like Barclays and Deutsche provided their first colossal bank loan for an online gaming asset. The company was lucky and did a great job, as shares from Amaya showed steady escalation, and this was announced earlier this year.
Even big companies such as TPG and Apollo Global Management are considered to be huge private equity firms among many that are risked by betting with $484 million. This huge sum was invested for Caesars Acquisition Co., and it takes care of assets that are related to online gambling, looked after by Caesars Entertainment. In this recent year, many equity firms have shown a great deal of interest in online gambling. Permira needs a mention because they have made a deal with 888 holdings and it was a part of the gambling operator. Bwin.Party, another popular online gambling site, was a part of the fund campaign for an activist hedge fund, initiated by Springowl Asset Management group. Taking part in activists the hedge fund is indeed a major step taken by any company or a firm. With the big risk and investment, there is an assurance to gain huge profit through online gambling. This has indeed lead to a downfall of many and others have been escalated as their luck and shares favored. Online gambling will definitely attract more firms in the coming years.