Compliance
Due Diligence
Definition
The pre-contract review of a counterparty covering licence status, beneficial ownership, AML controls, and financial standing. Heavy in M&A, supplier onboarding, and partnership deals.
Key takeaways
- Due diligence is the pre-contract review of a counterparty's licences, beneficial ownership, AML controls and finances.
- In gambling M&A, regulator approval of change of control means diligence must surface anything that could complicate licensing.
- Grey-market revenue, licence breach history and banking relationships are areas of particular weight in iGaming diligence.
Why it matters
Due diligence in iGaming has unusually heavy regulatory and reputational components. In M&A, regulator approval is often required for change of control, which means due diligence has to surface anything that could complicate licensing transitions. In supplier onboarding, the operator is accountable for whose technology and content they use, so KYB processes on suppliers can run for weeks. In partnership and affiliate diligence, the operator is exposed to whatever the partner is doing in their name.
Specific iGaming diligence areas include grey-market revenue treatment (whether the target generates revenue from jurisdictions that could compromise listing or banking relationships), AML control adequacy, licence breach history, key-person assessments, technology stack and dependencies, and content rights. Banking relationships and acquirer status add another diligence layer because losing acquirers or banking can be existential. Listed-company diligence work has set the standard that increasingly applies to private market transactions as well.
Frequently asked questions
How long does typical M&A diligence take in iGaming?
Three to six months for a major transaction is common, longer for cross-border deals where regulator approvals are needed. The licensing transition planning often runs in parallel and can extend the path to closing.
What's distinctive about iGaming diligence versus other industries?
Licence continuity, grey-market revenue treatment, AML control review, and key-person assessment are the most distinctive. The regulator relationship is a transferable but not automatic asset, and getting it wrong can mean operating disruption post-close.