Shutterstock/Jonathan Weiss Last week, Boyd Gaming announced that they’d reached a deal to buy Pala Interactive, a California online gambling software and services company.
The deal is worth $170 million. Pala is largely owned by the Pala Band of Mission Indians. The group currently has business-to-business services in eight U.S. states and in Canada, and operates business-to-consumer products in New Jersey and Canada.
It has even tried its hand (without much success) in the online poker space, launching Pala Poker in New Jersey in 2017.
According to industry analysts, Pala Interactive brought in a modest $5 million in adjusted earnings last year. That figure should improve this year. And the deal itself probably won’t close until the first quarter of 2023. Marginal call
These names might be unfamiliar to many online gamblers. Boyd’s more of a retail brand and its online products don’t use the company’s own name. Pala, for its part, has been almost invisible.
New Jersey online poker players will be familiar with WSOP , PartyPoker , and PokerStars , and perhaps some international brands. Pala Poker is essentially deserted, while even Pala Casino is just one minor brand among dozens.
Even so, that didn’t deter Boyd, based in Las Vegas, from snapping up the little company. As David Katz, an equities analyst with Jefferies Equities Research, told CDC Gaming Reports : “Given the size of the transaction and marginal (adjusted earnings) contributions or capital requirement near-term, we expect a generally neutral reaction to the share.” This could be interpreted as either a backhanded compliment, or an insider trying to downplay what may be a shrewd play for the long game. That is, this is a company which is up and coming, but still lesser known in the online space, making a tortoise-like play for much smaller, much more unremarkable gaming companies. After all, consolidation has been the name of the game in US online gambling from the start.
It’s reminiscent of the the way, say, local radio stations have been swallowed by the likes of iHeartMedia (FKA Clear Channel) or the way Sinclair Broadcast Group has become the largest owner […]
Click here to view original web page at www.onlinepokerreport.com
