M&A

Regulatory due diligence in gambling deals: the issues that kill transactions

Change-of-control approvals, licence structures and compliance history decide whether gambling deals complete. A solicitor and former PLC CEO on what to check before you sign.

Most gambling deals that run into trouble do not fail on price. They fail on licensing. As a solicitor who has led gambling M&A, bid for a listed company and sold my own business, I have seen how regulatory issues found late can delay, reprice or end a deal.

Here is what I check first.

1. Change of corporate control

In Great Britain, a new controller arises when someone holds 10% or more of the shares or voting power in a licensed operator or its parent, or can otherwise exercise significant influence. Holdings of people acting together count together.

The licensee must report the change as a key event within five working days of becoming aware of it. Within five weeks of the change, it must either apply for the licence to continue or surrender it. Otherwise the licence may be revoked (Gambling Commission).

Other regulators have their own rules, and some require approval before completion. In a multi-market business, mapping every regulator's change-of-control process is one of the first jobs.

2. Where the licences actually sit

Licences are often held in an entity that does not match the deal structure. If the buyer is acquiring a holding company, but the licences sit somewhere unexpected in the group, the approvals and the price may both need to change.

3. People who hold personal licences

Key people often hold personal or management licences. If they are leaving with the sale, the business needs approved replacements in place, and new individuals joining may need their own approvals. The Gambling Commission expects incoming individuals to apply as part of a change of control.

4. Compliance history

Look closely at past AML and safer gambling findings, regulatory settlements, customer complaints and open investigations. Undisclosed issues found late are the fastest way to lose a buyer's trust.

5. Source of funds

Regulators will ask where the purchase money comes from. Buyers should have clear evidence of source of funds and the purchase price ready for the application.

6. Contracts that change on a sale

Platform, game supplier, payment and B2B contracts often allow termination or renegotiation on a change of control. A critical supplier walking away can change the value of the business.

7. Tax exposure

Gambling taxes change often and vary by market. Check that duty has been calculated and paid correctly, and model the effect of rate changes already announced, such as the UK's 40% Remote Gaming Duty (HM Government).

The lesson

Every one of these issues is easy to fix six months before a sale and expensive to fix six weeks before completion. Sellers should run their own regulatory review before going to market. Buyers should build approval timetables into the deal from day one.

For the wider deal market, see gambling M&A in 2026. If you are preparing for a sale or acquisition, get in touch.

This article is general information, not legal advice.

Sources

Andrew Lindley
Andrew Lindley

Gambling industry business adviser. Holds a solicitor's practising certificate but does not give legal advice through this business. Co-founder of Lottoland and Lot.to, former CEO of Sportech plc and former General Counsel of the Tote. More about Andrew