Zeal Network SE, a German lottery brokerage, has announced its acquisition of a 96.5% stake in SevenCanyon Limited, a UK prize draw operator. This acquisition allows Zeal to enter the UK market, which it recognizes as the largest in Europe for digital prize draw products.
SevenCanyon operates a suite of well-established digital prize draw websites in the UK, including 7days Performance, Redline Competitions, and UK Carp Competitions. Prior to this announcement, Zeal held a 3.5% stake in SevenCanyon, and the acquisition of the remaining shares is valued at approximately £33.8 million, pending post-completion adjustments. Additionally, an earn-out payment of up to £4.8 million will be made within six months following the completion.
To finance this transaction, Zeal secured a €40 million, seven-year term loan organized by Deutsche Bank. Since its FY25 earnings call in March, Zeal has been signaling intentions to expand into new markets through prize draw initiatives. Company CEO Dr. Stefan Tweraser highlighted that Zeal possesses a "strong war chest" for investing in such opportunities.
Interest in prize draws has long been a part of Zeal's identity. The former CEO, Helmut Becker, mentioned last year the sector's appeal to younger audiences, noting significant opportunities for innovation tailored to this demographic.
Tweraser described the acquisition as a strategic move aimed at both geographic and product diversification, stating, "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 underscored the profitability of SevenCanyon, indicating that the acquisition will primarily be funded through the new loan, thus maintaining Zeal’s capacity for future capital allocation.
Zeal projects that the acquisition will be EBITDA-accretive, with SevenCanyon significantly contributing to the group’s revenue and EBITDA after consolidation. The company confirmed its EBITDA guidance for 2026 to be between €70 million and €75 million, contingent upon a typical jackpot scenario in Germany.
For FY’25, Zeal reported a 2% increase, reaching the upper limit of its revenue forecast, tallying between €205 million and €215 million. EBITDA stood at €68.8 million, aligning with expectations of €63 million to €68 million.
Zeal expressed optimism regarding the evolving regulatory landscape for the UK prize draw market, which benefits from established compliance knowledge. Currently, this sector operates under a voluntary code set by the Department of Culture, Media and Sport (DCMS) established in May. Jamie Pinner, a senior leader at DrawHouse, noted that one advantage in the UK is that prize draws aren't subject to Remote Gaming Duty, making them a more efficient revenue outlet compared to sportsbooks or casino products.
Recently, the Prize Competition Council (PCC) was founded in the UK to represent the prize draw industry, aiming to promote responsible standards and enhance player protections. According to a report by Rokker, the UK's prize draw competition market generates an estimated £1.3 billion in annual revenue and has approximately 7.4 million active participants.
