ZEAL Network Enters UK Market with €39.5m SevenCanyon Acquisition

The German online lottery operator ZEAL Network is expanding into the UK market with the acquisition of SevenCanyon. ZEAL acquired the remaining 96.5 percent stake in SevenCanyon for approximately 39.5 million euros. ZEAL previously owned 3.5 percent of the company. This move grants ZEAL direct entry into what it describes as Europe's largest market for digital lottery offerings.

SevenCanyon operates UK competition platforms such as 7days Performance, Redline Competitions, and UK Carp Competitions. These sites offer digital prize competitions with non-cash rewards like houses, cars, and lifestyle products, rather than monetary prizes. For ZEAL, this represents an expansion of its geographical reach and product portfolio.

Numbers and facts

ZEAL Network has acquired the remaining 96.5 percent of SevenCanyon for approximately 39.5 million euros. In addition to this cash consideration, the agreement includes post-closing adjustments, such as one tied to vehicle inventory in the single-digit million euro range. An earn-out payment of up to 5.6 million euros has also been agreed upon, to be paid over six months from closing.

In the fiscal year 2026, SevenCanyon generated an EBITDA of over 11.7 million euros. EBITDA is an operational metric that tracks earnings before interest, tax, depreciation of tangible assets, and amortization of intangible assets. Deutsche Bank arranged a 40 million euro loan with a seven-year maturity to finance the acquisition.

ZEAL expects SevenCanyon to make a significant contribution to revenue and EBITDA after consolidation. ZEAL's EBITDA guidance remains at 70 million to 75 million euros, assuming a normal jackpot environment in Germany and taking into account one-time transaction costs in the mid-single-digit million euro range. For the first full financial year after completion, ZEAL anticipates a positive EBITDA contribution in the high single-digit million euro range.

Background

This acquisition is part of ZEAL Network's strategy to diversify its business model through new products and markets. The company sees digital competitions as a growing segment focused on high-value non-cash prizes rather than cash. Dr. Stefan Tweraser, CEO of ZEAL Network SE, commented on the deal:

“SevenCanyon is one of the most successful competition operators in the UK – we have known the company for many years. With this acquisition, we have succeeded in entering a highly attractive and growing market directly. At the same time, we are accelerating the targeted diversification of our business model through new products and new markets.” - Dr. Stefan Tweraser, CEO of ZEAL Network SE

ZEAL believes the company can leverage its expertise in customer acquisition marketing, monetization, retention, data analytics, regulatory processes, and platform operations to scale the UK business. The company also anticipates increasing professionalization in the British competition market, which could benefit operators with compliance experience in regulated markets. Andrea Behrendt, CFO of ZEAL Network SE, emphasized the financial soundness of the venture:

“SevenCanyon is a highly profitable company with a proven business model. The purchase price will be financed mainly through a new loan agreement. This will allow us to maintain our financial flexibility in order to continue a growth-oriented and shareholder-friendly capital allocation in the future.” - Andrea Behrendt, CFO of ZEAL Network SE

Why it matters for German players

For German players, this acquisition has no direct impact on the offerings of GGL-licensed gambling providers. ZEAL Network's expansion into the UK market for digital prize competitions with non-cash prizes is a business specifically tailored to the UK market. Germany's State Treaty on Gambling 2021 (GlüStV 2021) is subject to strict rules that differ significantly from British competition models.

German players exclusively use providers on the whitelist of the Gemeinsame Glücksspielbehörde der Länder (GGL). These casinos are subject to requirements such as a monthly deposit limit of 1,000 euros, a maximum stake of 1 euro per spin on slot machines, and the use of the cross-player blocking system LUGAS. Such prize competitions, as offered by SevenCanyon, are not provided for in the GGL-regulated online gambling market in Germany. ZEAL Network itself is primarily active in the online lottery sector in Germany. The acquisition in the UK does not directly affect its core business in the German market.

What it means for GGL-licensed casinos

For operators of online casinos with a GGL license, ZEAL Network's expansion has little meaning. The GGL focuses strongly on player protection and compliance with German laws. International deals like this underline the differences in regulations across various countries. While digital competitions with high-value non-cash prizes can flourish in the UK, the German market is restricted to strictly regulated gambling like online slot machines or lotteries found on the GGL whitelist.

Operators in Germany must continue to focus on adhering to the stringent requirements of the GlüStV 2021, such as the 5-second rule for slot machine games or strict advertising restrictions. SevenCanyon's prize competition models are incompatible with German gambling law. Therefore, it is not expected that such concepts will be introduced in Germany anytime soon, as long as the regulatory framework remains unchanged.