Structure is where risk is allocated
Price is what the headline says; structure is what the buyer actually pays and when, and who carries which risk between signing and long after closing. In gambling deals structure does more work than in most sectors, because the regulatory gap between signing and closing is long, the liabilities that surface late are large, and much of the value is in revenue whose quality the parties disagree about.
Shares or assets
A share purchase buys the company: its licences, contracts, staff, liabilities and history. An asset purchase buys selected assets (customer database, brand, domains, platform) and leaves the rest. In gambling the licence usually decides it: licences generally sit with the company and cannot be sold as assets, so a buyer who needs the licence buys shares and inherits the history. In Britain, for example, the Gambling Act 2005 does not allow an operating licence to be varied so as to authorise anyone other than the person to whom it was issued, and a share purchase that brings in a new controller triggers section 102: the licensee must inform the Commission and either surrender the licence or apply for it to continue, and if it has not done so within five weeks, a period the Commission may extend, the Commission must revoke it. A buyer who has its own licence and wants only the customers may buy assets, but then faces the question of whether customer data can be transferred at all under data protection law and the target's own terms, and whether the customers will consent to be migrated. The UK Information Commissioner's Office treats such a transfer as data sharing that belongs in due diligence: the parties must identify the purposes for which the data was originally obtained, establish a lawful basis for sharing it and consider how to inform the customers.
Asset deals are common for affiliate businesses (the assets are websites) and for distressed operators where the buyer wants the brand and the base but not the company's liabilities, though affiliate groups use both routes: Raketech's 2022 annual report describes buying all the shares in P&P Vegas Group under a share purchase agreement in July 2021, and buying assets from A.T.S. Consultants and two other sellers under an asset purchase agreement in November 2021. Share deals are the norm for regulated operators and suppliers.
Cash, shares and the mix
A listed buyer can pay in its own shares, and whether it should depends on how the market values them. Shares trading at a premium to the buyer's view of their worth are cheap currency; shares trading at a discount are expensive. Sellers accepting shares are taking a view on the buyer's prospects and the combined company's execution, and they will ask for lock-ups, board seats or price protection.
The mix also signals. A deal paid largely in shares to a founder who stays is a partnership; a deal paid in cash from new debt is a bet by the buyer's board. Lenders will size debt against combined EBITDA with covenants that leave little room for the regulatory shocks the valuation lesson described, which is why a leveraged gambling deal is badly exposed if a tax rise or advertising ban arrives mid-hold.
Locked box or completion accounts
The price is set against a balance sheet, and there are two ways to do it. Completion accounts draw up the balance sheet as at closing and adjust the price afterwards for net debt and working capital; they are accurate and they generate disputes. A locked box fixes the price against a historical balance sheet and forbids value leaking to the seller between that date and closing, with the buyer taking the economics from the box date: economic risk passes to the buyer at the locked box date, and the buyer is protected by a pound-for-pound no-leakage indemnity and the seller's covenants on running the business. It is simpler and puts the risk of deterioration on the buyer.
In gambling the locked-box protections need to be written for the sector. Leakage in the strict sense is value passing to the seller, so the sector-specific restrictions belong in the leakage definition and in the covenants on running the business: no changes to bonus policy, no drawdown of player funds, no acceleration of affiliate payments, no unusual marketing spend to flatter the numbers. Player funds need their own treatment in either method, since they are cash held for customers rather than money the business can spend. In Britain a remote operator must hold customer funds, including crystallised but unpaid bonuses, in a separate client bank account, and tell customers whether those funds are protected if it becomes insolvent.
Earnouts
An earnout defers part of the price and makes it conditional on future performance. It is the natural tool for the disagreements gambling deals produce: the seller believes the grey-market revenue will keep coming, the buyer will not pay for it; the seller believes the new market will launch on time, the buyer has seen launches slip. An earnout lets the deal sign with the disagreement priced later by events. Earnouts can also be bought out: in March 2018 Better Collective and the sellers of Pull Media, a French affiliate it had bought the previous year, agreed an addendum to the share purchase agreement settling the earnout at a fixed €1.2 million.
Earnouts are also where post-closing disputes concentrate. The metric must be defined to the penny (which revenue, which markets, which accounting policy), the buyer's freedom to run the business during the earnout period must be bounded (a buyer can starve an earnout by cutting marketing), and the effect of a regulatory change on the target must be addressed. Outside gambling, the Auris Health dispute shows what is at stake: in January 2026 the Delaware Supreme Court largely upheld a finding that Johnson & Johnson breached its obligation to use commercially reasonable efforts towards earnout milestones, while holding that a change in the regulatory pathway excused the first milestone, with the contract's own words deciding both points. Sellers should assume the buyer will run the business for the buyer's benefit and negotiate accordingly; buyers should assume the seller will litigate any ambiguity.
Escrows, indemnities and insurance
Diligence findings that are uncertain in amount become specific indemnities: the seller agrees to pay if a named liability crystallises, typically a tax enquiry or a regulatory investigation in progress at signing. Part of the price is often held in escrow for a period to fund claims. The seller gives warranties about the business, and a breach gives the buyer a claim, subject to caps, thresholds and time limits that are negotiated hard.
Warranty and indemnity insurance is increasingly used in M&A transactions, and gambling deals can use it like any other: an insurer takes the warranty risk for a premium, the seller's exposure can drop to a nominal amount or nothing, and the buyer has a creditworthy counterparty. Policies commonly exclude known or disclosed matters, and some exclude specific liabilities such as money laundering, and insurers scrutinise regulatory and AML diligence closely; a target with a thin compliance history may find the policy excludes exactly the risks the buyer wanted covered.
Conditions precedent and the regulatory gap
Signing and closing are separated by the conditions that must be met, and in gambling the regulatory approvals are often the ones that take longest. The contract must address:
Who does the work. The buyer supplies most of what the regulators assess, since it is the buyer's owners, managers and money under review; the seller procures the target's cooperation. In Britain the licensee itself makes the change-of-control application, it can be made in advance for a person expected to become a controller, and the Commission usually wants source of funds evidence for the acquisition money. Timetables and cost allocation are set out.
What happens if approval is refused or conditioned. A refusal usually lets either party walk. A conditional approval (divest this market, remove this shareholder) is harder: the contract should say which conditions the buyer must accept and which let it walk.
Interim covenants. Between signing and closing the seller runs the business, and the buyer needs it run as usual: no new markets, no change to bonus policy, no key hires or fires, no settlement of regulatory matters without consent. In a long regulatory gap these covenants are the buyer's only protection against deterioration.
Material adverse change. A clause letting the buyer walk if the business is materially damaged between signing and closing. Buyers want it to cover regulatory and tax changes in the target's markets; sellers resist, since those are the very risks the buyer is paid to take. Where the clause lands depends on leverage, and the definition of "material" has been litigated to the point where a specific threshold is more useful than the word. Courts set a high bar: as the English High Court noted in Travelport v WEX in 2020, the Delaware Court of Chancery's 2018 ruling in Akorn v Fresenius, where the target's regulatory compliance failings were in issue, was the first time that court had found a material adverse effect to exist.
Long-stop date. The date after which either party can walk if closing has not happened. Set it against the slowest regulator's realistic timetable, not the fastest.
Break fees and exclusivity
Break fees compensate a party if the other walks; reverse break fees compensate the seller if the buyer cannot obtain financing or regulatory approval. Given the regulatory risk, sellers in gambling deals may ask for a reverse break fee sized to the damage a failed deal does to the target's staff, customers and competitive position. On a takeover of a UK listed company the Takeover Code shapes this: without the Panel's consent the target may not agree an offer-related arrangement such as an inducement fee, but commitments that impose obligations only on the bidder are excluded, so, outside a reverse takeover, a reverse break fee payable only by the bidder remains available. Exclusivity periods give the buyer time to diligence without the seller shopping the asset, and the seller will trade them for evidence of progress.
The next lesson follows the deal through the regulatory process to closing.