After a decade defined by rapid expansion, regulatory experimentation and a global land grab, the iGaming sector enters 2026 in a more sober, strategically focused phase. The events of 2025 — marked by blockbuster mergers, a resurgence of lottery-led consolidation and renewed private equity interest — have reshaped the competitive landscape and clarified where future growth is likely to come from.

Industry advisers and investors broadly agree on one point: consolidation is no longer a tactical option but a structural feature of modern gaming. What remains uncertain is the shape it will take, which subsectors will dominate, and how macroeconomic and regulatory pressures will influence dealmaking over the next 12–18 months.

• Consolidation is reshaping the iGaming landscape, with large incumbents absorbing smaller operators and lottery groups emerging as strategic powerhouses.

• Private equity investment is set to increase in 2026, taking advantage of depressed valuations to fund long-term growth and technology-driven expansion.

• Regulatory pressures and tax changes remain the industry’s biggest risks, driving localisation strategies and influencing where operators choose to expand.

Consolidation Accelerates — and Changes Character

M&A activity in 2025 reached levels not seen since the early days of online gambling regulation, but the motivation behind deals has shifted. According to Brendan Bussmann, managing partner at B Global, consolidation has been “supercharged” by regulatory pressure, particularly rising tax rates and compliance costs that have made survival increasingly difficult for smaller, locally focused operators.

As a result, scale is once again decisive — not for rapid market entry, but for margin protection. Larger incumbents are absorbing smaller competitors that can no longer operate profitably under tighter regulatory regimes. This dynamic is expected to continue into 2026, particularly in high-tax European markets and newly regulated jurisdictions where early optimism has given way to cost realities.

At the same time, localisation strategies are evolving. Rather than building bespoke operations market by market, many operators are using M&A to pivot toward less volatile jurisdictions or acquire established local brands that can withstand regulatory scrutiny. The “podium strategy”, as described by Tom Waterhouse of Waterhouse VC, remains central for global B2C operators: acquiring or partnering with a top-three local player is often more effective than organic entry.

While consolidation remains a dominant theme, its nature is becoming more selective. Matt Davey, founder and chairman of Tekkorp Capital, argues the industry is moving away from pure scale-driven mergers toward portfolio optimisation and specialisation. Operators are increasingly acquiring adjacent businesses — from media and affiliate platforms to data and pricing technology — to diversify revenue and deepen control over the value chain.

This trend is particularly pronounced on the B2B side. Content studios, affiliate networks and technology providers are consolidating to offer “one-stop solutions” to operators seeking simplicity, cost efficiency and tighter integration. Waterhouse highlights significant consolidation in data, pricing and sports rights, with operators bringing formerly external capabilities in-house through acquisition.

For operators, this reduces fragmented integrations and enhances control over trading and risk management. For leagues and rights-holders, it means negotiating with fewer, better-capitalised partners — a shift that could reshape commercial dynamics across sports betting. Perhaps the most consequential development of 2025 was the emergence of lottery groups as dominant strategic buyers. The consolidation of Allwyn, OPAP, Prize Picks and Novibet into a single vehicle — expected to be listed in Athens and potentially the US — represents a fundamental shift in industry power dynamics.

Robin Chhabra, president of Tekkorp Capital, describes lottery operators as “cash-rich, ripe for modernisation, and undervalued relative to their potential”. Historically conservative and domestically focused, lotteries are now positioning themselves as global digital gaming platforms capable of cross-selling sports betting, casino and DFS products.

The rationale is straightforward: lotteries offer stable cash flows, strong regulatory relationships and massive player databases. As the line between lottery and gaming continues to blur through digital channels, these assets become increasingly valuable. Both Chhabra and Davey believe lottery-led M&A is only beginning, with numerous national lotteries still available for acquisition or management.

Paul Richardson of Partis points to Allwyn’s acquisition of Prize Picks as particularly transformative, arguing it could significantly reshape DFS and North American expansion strategies over the next five years.

Private Equity Eyes a Return

After a period of caution driven by rising interest rates and regulatory complexity, private equity appears poised to re-engage with the gambling sector in 2026. Depressed valuations in certain markets have created opportunities that PE firms find attractive, particularly in cash-generative segments such as gaming machines and infrastructure. Recent acquisitions — including Brightstar Capital’s purchase of AGS and Apollo’s moves for Everi and IGT — illustrate this renewed appetite. Chhabra notes that public markets often penalise gaming companies for short-term earnings volatility or heavy upfront investment, making private ownership an appealing alternative during transformation phases.

Under PE ownership, companies can pursue longer-term strategies — such as technology overhauls or geographic expansion — without quarterly earnings pressure. Richardson and Waterhouse both highlight continued interest from major players such as Apollo, Blackstone and CVC, as well as smaller sector specialists preparing for regulatory licensing despite not yet deploying capital.

That said, PE activity remains uneven. Mid-cap transactions are rarer, partly due to licensing complexity in major jurisdictions and the capital commitments required at fund-raising stage. Even so, several funds are reportedly “sitting on their hands”, ready to move once conditions align. External economic forces continue to cast a long shadow over the industry. Bussmann identifies taxation as the single greatest global risk to gaming. Higher tax burdens reduce operator investment, squeeze supplier margins and often result in diminished customer experiences.

Macroeconomic uncertainty — from inflationary pressures to geopolitical instability — further complicates forecasting. While consumer demand for gaming has proven resilient, discretionary spending remains sensitive to broader economic conditions. In the US, stagnating domestic travel figures and airline capacity reductions are already impacting destination-driven gaming markets such as Las Vegas. The industry’s ability to navigate these pressures will depend largely on capital discipline, operational efficiency and regulatory engagement — areas where scale and experience increasingly matter.

Public Markets: Fewer Listings, Different Venues

Despite a shrinking London Stock Exchange, enthusiasm for gaming equities has not disappeared — it has migrated. While 2024 marked the LSE’s quietest IPO year on record, successful listings in Stockholm and Madrid signal continued investor appetite in Europe.

Hacksaw AB’s oversubscribed debut on Nasdaq Stockholm and Blackstone-backed Cirsa’s Madrid float reflect a more favourable European environment, characterised by lower rates, clearer regulation and private equity exits. For gaming companies considering public markets in 2026, venue selection may be as strategic as timing.

Consolidation is no longer a tactical option — it’s a structural feature of modern gaming.

Looking Ahead

As 2026 unfolds, iGaming appears to be entering a period of consolidation-driven maturity rather than contraction. The winners are likely to be those with regulatory resilience, diversified portfolios and access to capital — whether through public markets, private equity or cash-rich legacy businesses such as lotteries.

Innovation remains essential, but increasingly constrained by regulatory boundaries, particularly in the US where grey- and black-market activity limits acquisition opportunities. Against this backdrop, disciplined M&A, rather than disruptive experimentation, is set to define the industry’s next chapter.

The age of relentless expansion may be over. What replaces it is an industry recalibrating for durability — and, in doing so, quietly reshaping itself for the long term.