Business Valuation Process
iGaming Business Valuation Process
Valuing an iGaming company demands far more than plugging numbers into a model. After a decade advising acquirers and founders from Malta to Manila, I have learned that qualitative subtleties—regulatory head-room, product mix, player lifetime value—can shift the headline price by well over 50 %. Quantitative discipline remains critical, but context is king.
How we arrive at a defensible valuation
We benchmark each target against more than 300 publicly disclosed and proprietary deals closed since 2015. Recent transactions show a broad 8–12 × forward EBITDA range for regulated B2C sportsbook and casino operators, while asset-light affiliate portals occasionally eclipse 12 × thanks to their cash conversion and minimal capital needs. Alongside market data, we run a five-stage analytical track that balances speed with rigour.
Data capture: We collect three full years of audited P&Ls, balance sheets and monthly GGR by vertical, complemented by KPI packs covering first-time depositors, retention curves and jurisdictional splits. Tax returns arrive later as a reliability back-stop.
Diagnostic questionnaire: A structured 60-item survey explores licence footprint, marketing constraints, technology ownership, AML exposure and any profit-enhancing add-backs.
Normalisation & spreading: Figures are re-mapped into our valuation workbook. We rebuild cash EBITDA, adjust for one-offs, and produce a comparative view of margins and hold percentages.
Collaborative challenge session: Management joins a virtual workshop to validate normalisations and explain anomalies. The session often uncovers hidden value—e.g., dormant brands or surplus licences—that the raw accounts miss.
Model refinement & value corridor: We apply situational multiples—peer-set, precedent, and DCF cross-check—to land on a conservative, base and stretch scenario. A follow-up call walks you through each driver so that the logic is fully transparent.
Documentation Roadmap
| Document | Period Covered | Why it Matters |
|---|---|---|
| Audited P&L & Balance Sheet | Last 36 months | Establish headline profitability and balance-sheet health |
| Monthly Gross Gaming Revenue | Last 36 months | Reveals seasonality, product-mix shifts and jurisdictional dependency |
| KPI Pack (FTDs, ARPU, Churn) | Current YTD + 2 yrs back | Links marketing spend to economic value of user cohorts |
| Licence Register & Compliance Logs | Current | Flags regulatory concentration risk and renewal cliffs |
| Adjustment Schedule | Deal year | Supports EBITDA add-backs and one-off cost removals |
Outcome of the exercise
At the end of the process you receive an interactive valuation file plus an executive commentary that maps each value lever—growth runway, regulatory stability, tech depth, concentration risk—to its impact on the multiple and quantifies upside from readily executable initiatives (e.g., migrating from a rev-share platform to an owned PAM or diversifying into higher-margin markets such as Ontario).
Pros and Cons of our methodology
Pros
Holistic view blending hard metrics with softer licence and brand assets.
Real-time scenario toggling lets founders see the valuation delta from strategic moves instantly.
Mirrors the diligence sequence Tier-1 buyers use, reducing surprises during exclusivity.
Cons
Requires granular data that some early-stage operators must first consolidate.
Management time commitment (≈ 6 hours across two weeks) can feel onerous when resource-constrained.
Model transparency may expose value gaps sellers would prefer to defer.
Frequently Asked Questions
How do regulatory changes affect my multiple?
Multiples expand when an operator holds renewable, exclusive-style licences in stable regimes. Grey-market exposure can compress valuations by roughly two turns of EBITDA.
Do pure-play affiliates still command a premium?
Yes. Cash-flow margins north of 60 % and negligible cap-ex mean digital media assets continue to fetch double-digit EBITDA multiples even in a risk-off environment.
Is discounted cash flow still relevant when buyers rely on earnings multiples?
Absolutely. DCF acts as a sense-check against aggressive growth assumptions baked into an earnings multiple, especially for high-bonus markets such as the U.S.
What preparation shortens diligence time?
Proactively reconciling KPI dashboards to financial statements and maintaining a clean licence register shave weeks off buyer QA and limit re-trades.
Armed with a clear value corridor and a list of actionable optimisation levers, you can decide whether to initiate a process now or defer until strategic improvements mature. Either way, this methodology delivers a price narrative that withstands scrutiny from the most exacting iGaming investors.
