Entain CEE’s £750m acquisition of STS Holdings gives Entain access to Central and Eastern Europe’s (CEE) largest economy, Poland. For Mikolaj Cymerman, head of corporate development at Entain CEE, this is just the first step.
The deal for the Polish sportsbook market leader marks the second acquisition made by Entain CEE, a joint venture between Entain and investment management company Emma Capital.
It’s also a major milestone for the two parties. Getting a foot in the door will allow Entain to make serious inroads in the CEE market, one already somewhat carved out by its first acquisition – of Croatia’s SuperSport – last year.
Running up that hill
The CEE region has not exactly existed at the forefront of the industry’s collective conscience in the last few years – certainly not compared to regions such as Latin America, which is now picking up speed as regulation sweeps through.
And unlike Latin America, Cymerman says CEE initially had strong potential but quickly began to de-escalate as regulation progressed.
“CEE used to be an important market for tier-one operators, and throughout the years while it started regulating, it became less important for many companies,” he explains. “The dot.com model didn’t work any more; you had to localise the product. Operators were struggling to make a more meaningful market share.”
But there was a silver lining. Cymerman says that assessing the pitfalls of CEE was what inspired Entain to establish Entain CEE in the first place.
“We identified the trend that’s happening with so-called local heroes, where you have these companies that used to be large, successful retail operators that transitioned into online,” he explains. “Then once the market regulated, they were the biggest beneficiary of accelerated growth in the market.
