SCCG Research: Strategies for industry M&A valuation  | Gambling Insider

SCCG Research provides Gambling Insider with its latest exclusive excerpt into multiplying valuations, and examples of operators that have done it well. 

Valuation in the gaming, sports betting and sports engagement technology sectors has evolved significantly in the past five years, shaped by the industry’s explosive growth, increasing regulatory scrutiny and rapid technological innovation. Investors and acquirers today apply a variety of traditional and modified valuation techniques, but revenue and EBITDA multiples remain the core metrics. 

Revenue and EBITDA multiples for operators and suppliers 

Revenue and EBITDA multiples for operators and suppliers

For mature operators – especially those with diversified offerings across casino gaming, iGaming and sports betting – valuations tend to centre on EBITDA multiples ranging from 6x to 12x. In 2022, Flutter Entertainment, parent company of FanDuel, traded at around 11x EBITDA, significantly higher than regional-only competitors. The premium reflects Flutter’s massive US market share, diversified product lines and technology ownership, demonstrating how strategic factors heavily influence multiples beyond simple earnings figures. 

On the B2B supplier side, particularly companies providing critical technology infrastructure, multiples trend even higher. Strategic data providers like Genius Sports and Sportradar have achieved multiples in the 10x–18x EBITDA range, reflecting the irreplaceable nature of official league data, real-time feed capabilities and predictive modeling engines. The higher the strategic criticality (i.e., how irreplaceable the supplier is to operators), the higher the valuation premium. 

Revenue multiples for high-growth or early-stage targets 

Revenue multiples for high-growth or early-stage targets

For earlier-stage targets – like fantasy apps, engagement platforms and emerging tech startups – investors and acquirers often focus more on revenue multiples rather than EBITDA, particularly if profitability has not yet been achieved. 

Typical observed revenue multiples (2021–2024): 

In these cases, growth rate, retention metrics and unit economics (CAC vs. LTV) weigh more heavily than bottom-line profitability. 

Example: Underdog Fantasy’s valuation of ~$485M in 2023 reflected around 7x projected forward revenue, justified by its explosive user growth, high daily engagement and potential to cross-sell into sports betting as regulations evolve. 

Example:

Discounting for regulatory risk and market saturation 

Discounting for regulatory risk and market saturation

One critical factor adjusting multiples downward is regulatory exposure. Companies operating in highly volatile markets (e.g., DFS “pick’em” markets under scrutiny in the US) or markets with pending legislation (like Brazil’s evolving betting rules) often face discounted valuations compared to those operating in stable, licensed environments. 

Similarly, saturation risk (too many operators chasing limited market share) can depress valuations. The flood of US sportsbooks post-PASPA initially created massive enthusiasm, but by 2024, profitability pressures forced consolidation and disciplined pricing of assets. 

Acquirers today are far more cautious about overpaying for market access or user bases that may be expensive to retain. 

Valuing engagement and fan data assets 

Valuing engagement and fan data assets

In the sports engagement technology space, user bases and first-party data assets have become critical valuation drivers. Unlike traditional gaming operations, where cash flow is king, fan engagement companies are often valued on engagement metrics and monetisation potential. 

Key valuation metrics for engagement assets: 

– Monthly active users (MAUs) and daily active users (DAUs) 

– Session frequency (sessions per user per week) 

– Churn rates and stickiness 

– Cross-sell potential into betting, merchandise and premium content 

– Quality and ownership rights of user data (first-party vs. third-party acquisition) 

The ability to monetise attention through betting, fantasy contests, merchandise sales and advertising defines the true long-term value of these companies. 

Case study: Fanatics’ integrated engagement model 

Case study: Fanatics’ integrated engagement model

Fanatics’ expansion into sports betting was not driven solely by the opportunity to take sportsbook market share – it was about controlling the full customer lifecycle across merchandise, collectibles, fantasy gaming and betting. 

By owning PointsBet’s US operations and launching Fanatics Betting and Gaming, the company leverages first-party merchandise customer data to drive betting conversion at far lower CAC than standalone operators. This type of cross-platform synergy is increasingly critical in valuations today. 

Companies that merely “rent” users through paid media channels are viewed far less favorably than those who own engagement touchpoints. 

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