The layers are not fixed
Every company in the chain wants to be in a better layer than the one it is in: the operator wants the supplier's margin, the supplier wants the operator's distribution, the affiliate wants a slice of the revenue rather than a commission, the data company wants to be the trading desk. The industry's structure at any moment is the result of those ambitions, and its deal flow is the record of them. This lesson covers the standard moves, why they are made, and why they so often disappoint.
Operators moving down: vertical integration
An operator that owns its platform keeps the platform fee; one that owns studios keeps the revenue share; one with its own sportsbook keeps the managed-service margin and controls the product. Large operators have made all three moves: DraftKings bought the B2B sportsbook and iGaming supplier SBTech in 2020 to form a vertically integrated business and in 2024 bought Simplebet, a provider of in-play micromarket content and pricing; Kindred took control of the games studio and aggregator Relax Gaming in 2021.
Why it works for them: at scale, the fee saved exceeds the cost of running the asset, and control of the product roadmap is worth more than the savings. Why it fails for others: an operator-owned studio risks losing its third-party customers (competitors are wary of buying content from a rival), which is why Kindred said it would keep Relax Gaming as an independent entity with its own management team and board to secure its B2B customers; an operator-owned platform often stops being sold to anyone else; and the acquired business's talent, used to serving many customers, leaves when it serves one. Vertical integration makes sense when the operator's own volume justifies the asset; when it does not, the operator has bought a cost centre.
Suppliers moving up: buying distribution
A supplier that buys an operator gets a guaranteed customer for its content and a share of the operator layer's revenue. Several have tried it: Playtech bought a majority of the Italian operator Snaitech in 2018, and Flutter bought Snai from it in April 2025. The problem is the mirror of the one above: the supplier's other customers see it as a competitor, and the operator business needs skills (marketing, customer management, compliance to players) the supplier does not have. Such moves have the best chance where the supplier has few B2B customers in that market to lose, or where it keeps the businesses at arm's length.
Suppliers consolidating: buying breadth
The most reliable move in the chain. A studio group buys studios to fill gaps in its portfolio and to bring hit-makers under its distribution; a platform buys an aggregator or a sportsbook to offer the full stack; a data company buys trading or integrity businesses to deepen its position with leagues and operators. The economics favour it (fixed costs spread, cross-selling to the same operators) and the risks are integration and the loss of the acquired studio's creative culture. Evolution, the live casino leader, is the pattern: it completed its purchase of Nolimit City in August 2022 and now runs NetEnt, Red Tiger, Big Time Gaming and Nolimit City among its slot brands. The slot machine manufacturers' online acquisitions, covered below, follow the same logic.
Affiliates moving toward revenue
Affiliates negotiate for revenue share rather than CPA to capture a slice of the player's lifetime value, as Better Collective has done by moving its North American business towards revenue share agreements since 2022; others have moved into media, and Better Collective now describes its ambition as building the leading digital sports media group. The constraint is that an affiliate's asset is its search ranking and its independence, and both would be damaged if it became an operator.
Data companies moving into trading
Sports data companies have moved from selling data to selling odds to running managed trading, which is a sportsbook supplier's business: Sportradar's Managed Trading Services earn a percentage of winnings and fees on the bet slips it accepts from clients. The rights they hold make the move natural; the operators they serve as data customers watch it warily, because a supplier that prices the market for all of them holds the market.
Land-based moving online
Casino resort groups with small online businesses have three options: build (slow, and the talent is elsewhere), buy (an online operator with the platform and the customers), or partner (a joint venture with an online group). All three have been tried, and MGM Resorts has done two of them: in 2018 it formed BetMGM with Entain, and in 2022 it bought the online operator LeoVegas. The joint venture route gave MGM a North American online business without building one from scratch, at the price of control: all major operating, investing and financial decisions at BetMGM need the consent of both partners. Slot machine manufacturers moved online by buying studios and platforms: Scientific Games, now Light & Wonder, completed its acquisition of NYX Gaming in January 2018, and Aristocrat completed its purchase of the online platform and content business NeoGames in April 2024 and now reports it in its Aristocrat Interactive segment.
Operators moving across markets
Not a layer move but a chain move: entering a new regulated market means assembling a local chain (licence, certified platform, local payments, local content, local marketing) or buying one. In Brazil, the US states and Ontario the logic was the same: buying or partnering with a local chain is usually quicker than building one from scratch. Flutter, already present through Betfair, added scale in regulated Brazil by buying NSX, the group behind BetNacional, in May 2025, and it credits BetNacional's local market expertise with the growth since.
New layers appearing
The chain grows new layers when regulation or technology creates them. Market access providers appeared in the US because of licence design: in New Jersey, for example, internet gaming can be conducted only by an Atlantic City casino licensee or its licensed internet gaming affiliate, so an online operator needs a casino partner. Payment orchestration appeared because of local rails. Compliance vendors (affordability data, self-exclusion registers, marketing monitoring) appeared because of regulatory obligations. Prediction market exchanges appeared through a different regulator: event contracts trade on exchanges regulated by the Commodity Futures Trading Commission rather than under state gambling licences, and operators are now buying into the layer, as DraftKings did when it acquired Railbird, a CFTC-registered designated contract market, in October 2025. Each new layer is a new place for margin to sit and a new set of companies for the rest of the chain to negotiate with.
Why the moves disappoint
Acquisitions across layers often earn less than expected, for reasons the chain makes predictable: the acquired business's customers were the acquirer's competitors; the skills of one layer do not transfer to another; the margin the acquirer wanted came from a position (rights, distribution, scale) that does not survive the change of ownership; and the integration costs the customers the deal was meant to secure. The moves that work respect the chain: consolidation within a layer, integration where the acquirer's own volume justifies it, and partnership where a layer's skills are not for sale. The iGaming M&A and Corporate Finance course covers the mechanics of the deals; this course's contribution is the map that says which deals make structural sense.
The chain in one paragraph
Players fund everything. Operators hold the licence and the customer and carry the tax, the marketing and the obligations. Platforms, studios, live casino, sportsbook suppliers, data companies, payments and compliance vendors sell to operators and take a share of their revenue, with the margin sitting where rights, distribution and scale sit. Affiliates deliver the players and are paid for them. The state licenses the operators and, in many markets, their suppliers too (in Britain a gambling software licence is needed to manufacture, supply, install or adapt gambling software), and takes its share through tax. The shape differs by region and product, companies move across layers with mixed results, and the map is the tool for reading every deal, every result and every negotiation in the industry.