In April, Golden Matrix Group completed its acquisition of MeridianBet Group. Estimated at $300m, the combination of the two companies’ business-to-business (B2B) and business-to-consumer (B2C) casino, sports betting and tournament platforms created a global enterprise operating on four continents. CEOs Brian Goodman and Zoran Milosevic sit down with G3 to explain why the move is right for all concerned.
Brian, why MeridianBet Group? Zoran, why Golden Matrix Group?
Brian: We started this process a few years ago and there are many reasons why MeridianBet Group was the business we landed on. There are cultural similarities between both companies, both are highly profitable, both have always operated without debt, and each has their own technology stack. We wouldn’t buy something that was burning money or didn’t fit with the core values of what we do and how we operate.
Prior to the acquisition, we were primarily in the B2B online casino space alongside a raffle ticket type business, RKings, in the UK market, which actually just posted its strongest quarterly revenues thus far in Q2. We wanted to scale the Group and were on the lookout for a company with strong sports betting technology. Together, I think we make a good team.
We’ve just posted some impressive interim results, achieving record revenues of more than $39m in Q2, and will continue to scale these consolidated businesses whilst looking for further acquisition opportunities. We were also granted two new major licenses, in South Africa and Peru, earlier this summer.
Zoran: The most important parameter for joining with Golden Matrix Group was the cultural fit. Golden Matrix Group is a conservatively run company, like MeridianBet Group, and both are run by veterans of the gaming business. Brian and his team are also wholly focused on gaming and that was a big appeal for us.
On top of this, their product suite and markets of operation are complementary to ours. In the jurisdictions they operate, we don’t operate, and vice versa. The products we have in the portfolio, they don’t have, and vice versa. There is no conflict of interest whatsoever. We continue to learn daily from each other, exchange opinions and cross-sell business.
So, Golden Matrix Group were on the lookout for acquisition and remain so. Zoran, was MeridianBet Group looking to be acquired?
Zoran: That’s an interesting question. MeridianBet Group has long held ambitions to ultimately become a public company and we were in the process of becoming listed, with the London Stock Exchange our primary target. We submitted our application a few weeks after Brexit but the situation on the financial markets at that time meant we didn’t receive the valuation we were after. We were enjoying a record-breaking year, but it was amidst the backdrop of a political crisis. We never abandoned the ambition of becoming listed, just the London Stock Exchange. Then the pandemic hit.
In June 2020 we were inundated with calls from the US, a market that, frankly, we weren’t paying overmuch attention to because our estimates were that it would take around 10 years for the market to regulate state by state without federal licences. However, regulation expanded much faster than anticipated and that’s how we ended up talking with several companies including one of the biggest in the world, but we didn’t come to terms.
We never desired to sell the company and wanted to continue running it ourselves. Our view is that the best days of sports betting and gaming in general are yet to come because much of the world is on the cusp of being regulated. Several companies wanted to acquire MeridianBet Group simply for its software and that simply wasn’t an option for us. The final company we entered talks with was Golden Matrix Group and we immediately liked their story.
The acquisition was a win-win opportunity for both of us. With Golden Matrix Group, we can be listed on the NASDAQ and grow the business with a company that’s a cultural fit. The combination took around three years to execute, and it hasn’t been an easy process, but it’s finally completed, and we are delighted with the outcome.
Could you tell us more about MeridianBet Group’s business model?
Zoran: The important thing for MeridianBet Group has always been to maintain a high profitability margin because that will keep us safe in the long term. When I joined the business, not a single company operating then still exists today. The B2B segment of the business was once significant at around 50-60 per cent, but now it comprises circa 10 per cent. We offer a turnkey solution that does absolutely everything like a proper franchise should.
We deliver part of our system to the end-client and user whereas competitors in the B2B industry just license software. We give away part of the system that with a view to building the business, not just to sell the software. This is how we have expanded worldwide through B2B and, after several years of the product being accepted by clients, we have tended to acquire these partners and turn the business into B2C.
All the B2C markets where we are now live, we were once involved in B2B. In new markets where we are now going live such as South Africa and Kenya, we have been involved in the B2B side for over a decade, whilst Brazil is currently operating on a B2B model which we want to turn into B2C.
Brian, how will Golden Matrix Group seek to leverage Meridianbet Group’s market presence, technology, and expertise with its existing offerings?
Brian: The basics of a gaming business are how much you pay for players and how much you can get from players. It sounds very easy and a simple formula to follow, but the amount you acquire a player for is a big challenge because it’s very competitive in some markets. In the US operators are paying ridiculous amounts of money and they will never get that money back because those players aren’t loyal and likely have multiple accounts.
To keep players loyal and get as much value as possible, you need extensive loyalty programmes and sophisticated software. This is where MeridianBet Group comes to the party. They have their own tried and tested technology whose results speak for themselves. We can now buy players for a low cost and believe we can retain those players. We have proven over time that we can show value in those players, driving profitability.
When you’re missing some of those pieces, the formula doesn’t work because it’s upside down – the more players you buy, the worse your business becomes because it’s a losing business. MeridianBet Group, as a sportsbook operator with sophisticated technology and artificial intelligence tools that are better than anything else available in the markets, provides Golden Matrix Group with multiple new advantages.
