Exclusive: Broadway Gaming CEO on landmark 888 bingo assets purchase

Something is happening in bingo, the often forgotten, sometimes maligned, fourth vertical of industry. A £402m acquisition of Tombola by Flutter Entertainment was swiftly followed by a $50m deal which saw David Butler’s Broadway Gaming acquire 888’s bingo properties. M&A has always been a hallmark of the gambling industry but now it is bingo’s time to shine.

The London-listed operator, deeming its Dragonfish B2B and B2C operations, including Wink Bingo, surplus to requirements, saw Butler swoop in a move which now makes Broadway the largest independent online bingo operator in the UK.

Speaking exclusively to EGR, Butler details how the proposition caught his eye and how he wasted no time in moving swiftly for the products. Butler goes on to reveal his plans for the newly embedded 888 teams, tech and brands while giving his thoughts on how bingo can truly challenge casino, sports betting and poker as a required column of operations, rather than a bolt-on banality.

EGR Intel: How did the opportunity to secure Dragonfish and 888’s bingo operations come about?

David Butler (DB): The origin of the deal was through 888’s adviser Oakvale Capital who approached me. They knew we were bingo specialists and that we were very focused on the UK market and asked if we’d be interested. Naturally I was interested; so, when the prospectus came our way and I saw all of the brands and the awesome team they had I was interested very quickly.

As the market has developed, there has been this accepted wisdom that you needed to be in all verticals. We’ve seen it with operators where they have sports, casino, poker and bingo – which was thought of as the fourth vertical.

I think over the last three or four years you’ve seen specialists come to the fore in different sectors with the likes of PokerStars and Tombola. What appealed to me most was that it allowed us, as bingo specialists, to make a transformative transaction in the regulated bingo market space.

EGR Intel: On paper, bingo looks to be in a very healthy state in the UK. What do you think the potential of the market could be moving forwards?

DB: The online gaming space in the UK is not seeing any major growth at the minute bar coming back from the pandemic. We all know there is a lot of pressure from the regulator and that the gambling act review will give us more certainty.

I think the bingo space will only strengthen from that whole process. Our average bet size is a fraction of what sportsbook or casino would see. For the entertainment and leisure player, bingo is the ideal product. It is a resilient income stream with resilient revenue in that space. Not just in the UK but also in other regulated markets as they settle down, such as Sweden and the Netherlands. I think it will prove to be a sustainable space. It may not seem as glitzy as casino or sportsbook but it is a very sold business and that’s what attracts us to it.

EGR Intel: In terms of the acquired 888 properties, what is the plan? Will they remain as a standalone entity or be absorbed into Broadway Gaming?

DB: The rationale for the deal was that it was transformative for us but also the fact it gives us significant scale. I think it makes us the largest independent bingo operator in the market now. What Broadway brings to this deal is very good operational efficiencies. We have a lot of expertise across compliance, safer gambling and customer experience.

What Dragonfish and the 888 B2C brings is a fantastic platform and a huge skillset in terms of the PAM and product. For the B2C brands, I think Wink Bingo will become the standout brand with the group supported by Butler’s Bingo from the Broadway side of thing.

We already have a strong core here of payments, regulations, HR, customer service, and finance so the deal is very complementary. We have phenomenal business insight capabilities, they have fantastic branding. We don’t have a bingo product, they do. From an operations and systems perspective, they have a whole team ready which come as part of the deal, so it is highly synergistic from a skillset level.

In terms of B2B, we see this as a huge opportunity. When you look at which products there are, there is Pragmatic Play and Playtech. That is not a healthy state of affairs for competition and innovation. From a B2B perspective, we think there’s huge opportunity in the bingo product area.

EGR Intel: What is the plan in terms of employees and C-level executives to run the new operations?

DB: We will be retaining the 888 staff and we are also looking to hire more people. On an operational level, there are several senior executives who are coming as part of the deal. Most of them will be taking a step up in terms of roles and responsibilities.

One of the opportunities I saw in this deal was that they are a team with huge ambition and innovation which wasn’t being leveraged in recent times. I want to engage directly with them because we are nimble and quick to make decisions here. I want to harness that energy and allow them to innovate.

EGR Intel: Was 888’s decision to sanction the deal related to the fact they saw its bingo operations as non-core?

DB: A lot of the major brands have looked at bingo as the fourth vertical and to have the full deck you needed bingo. The demographics of the bingo market are very different to that of sports, casino and poker. I think 888 made the decision that at this point it was non-core and they wanted to focus on other projects. They have their own excellent sportsbook technology in Spectate and their plans with the William Hill acquisition. This meant they didn’t see bingo as a core asset.

They thought it was something that would be in better hands elsewhere and I think they are right. It allows them to focus on their core.

EGR Intel: This was a major piece of M&A work on behalf of Broadway so are there any further plans in the pipeline to continue down this route?

DB: I will look at any and all opportunities if it is in the bingo space, or soft casino and arcade space. I think the regulated space is tricky. It is tough at the moment with the raising of standards, which is something we have embraced wholeheartedly, I think not everybody is doing that.

If people are wanting to exit the space, we’d obviously engage with them on the basis that they also have a similar philosophy in terms of regulation and responsible gambling.

EGR Intel: Are there any plans to expand Broadway’s service outside of the UK market following the deal?

DB: We only ever operate in regulated markets. We see 98%+ of our revenue coming from the UK, with a small piece of ancillary business from Ireland. We do intend to go into other markets. There’s a lot of uncertainty around some of those markets and until we have certainty we will stay out because I don’t think it is a prudent use of resources to invest in a market where you don’t have stability or certainty.

EGR Intel: What are your hopes and expectations for Broadway’s growth over the next 12-24 months?

DB: The initial period will be focused on the extraction project as we are buying a business from a much larger entity, and then consolidation of that business. Once we have done that and we are fully operational, we would look to continue our organic growth. It could take up to 12 months to complete the whole extraction process.

We will also look for geographic expansion. We would do the foundations for expansion during the initial 12-month period such as applying for licences but for now we are focused on bedding in and consolidating operations and teams and making sure the new hires integrate successfully within the group.