Zeal Network SE, a German lottery brokerage, has taken a significant step into the UK market by acquiring a 96.5% stake in SevenCanyon Limited, a UK prize draw operator. This acquisition reflects Zeal's intent to enter what it regards as Europe’s largest market for digital prize draw products. SevenCanyon manages a portfolio of established websites, including 7days Performance, Redline Competitions, and UK Carp Competitions.
Prior to this move, Zeal owned a 3.5% equity stake in SevenCanyon. The company announced that the purchase price for the remaining shares is around £33.8 million, with potential adjustments following the deal's completion. An additional earn-out payment of up to £4.8 million is also set to be made within six months after the acquisition is finalized.
To fund the transaction, Zeal secured a €40 million loan with a seven-year term, arranged by Deutsche Bank. This acquisition aligns with the company’s hints about its plans for market expansion within the prize draw sector, which Zeal CEO Dr. Stefan Tweraser discussed during the FY25 earnings call in March. At that time, he remarked that Zeal was well-positioned for new investments, citing a “strong war chest” for opportunities.
Zeal's interest in prize draws isn't new; former CEO Helmut Becker highlighted this sector’s appeal to younger audiences in an interview last year, noting the potential for innovation to meet their needs.
Tweraser has characterized the acquisition of SevenCanyon as a strategic move for geographic and product diversification. He stated: “SevenCanyon is one of the most successful prize draw operators in the UK – we have known them for years. With the acquisition, we hit the ground running in a highly attractive and growing market.”
CFO Andrea Behrendt emphasized the profitability of SevenCanyon, indicating that the acquisition would largely be funded through a new loan, allowing Zeal to maintain flexibility for future capital allocations.
Zeal anticipates that this acquisition will be EBITDA-accretive, projecting that SevenCanyon will significantly contribute to revenue and EBITDA once consolidated. The company reaffirmed its EBITDA guidance for 2026, estimating it will range between €70 million and €75 million, assuming typical jackpot conditions in Germany.
In terms of revenue for FY’25, Zeal reported figures 2% above its earlier forecast of €205 million to €215 million. EBITDA reached €68.8 million, aligning with the upper limit of the previously forecasted range of €63 million to €68 million.
Zeal expressed optimism regarding the UK prize draw sector's regulatory landscape, believing that the ongoing development of more formal frameworks will benefit seasoned operators. Presently, this market is overseen by a voluntary code established by the Department of Culture, Media and Sport (DCMS) in May.
Jamie Pinner, a senior leader at DrawHouse, has indicated that one of the key advantages in the UK is the current exemption of prize draws from Remote Gaming Duty, stating it creates a more efficient revenue stream compared to sportsbook or casino products, at least for now.
Recently, the Prize Competition Council (PCC), a trade body representing the prize draw industry, was formed in the UK to unify operators in promoting responsible practices, enhancing player protections, and fostering long-term growth. An April report by consultancy Rokker estimates that Britain’s prize draw competition (PDC) market has generated around £1.3 billion in annual revenue, engaging approximately 7.4 million active players.
