Poll results: Supplier consolidation will be bad for sector

Consolidation taking place in the egaming supplier sector will lead to less choice and higher costs for B2C businesses, according to the respondents to this week’s eGaming Review poll.

Following a spate of recent acquisitions and mergers, including Scientific Game’s purchase of Bally Technologies for $5.1bn and GTECH’s £6.4bn combination with IGT, we asked whether such movement was good for sector.

A resounding 69% of respondents said supplier consolidation would only lead to less competition resulting in few competitors and potentially higher prices for customers.

In the UK and the rest of Europe, there is likely more M&A activity to come. The British government’s Point of Consumption tax will squeeze suppliers and the larger firms among them will no doubt look to diversify both geographically and in product.

But the converse argument is suppliers can invest more in research and development and provide a higher level of service with greater flexibility and integration through a broad product suite.

And just 16% of readers were in favour of supplier consolidation, having agreed that larger more powerful suppliers will be able to deliver a higher level of service and greater flexibility.

Meanwhile, 14% of respondents felt the end result would be neutral with no significant change expected.