Blackstone plans 2025 IPO for Spanish gambling giant Cirsa

Private equity firm Blackstone is reportedly preparing to take Cirsa, a leading Spanish gambling operator, public in the first half of 2025.

According to sources cited by Spanish financial publication Expansión, the move could generate between €700m and €1bn by offering 20% to 25% of the company’s shares on Madrid’s stock exchange.

Blackstone has reportedly enlisted Barclays, Deutsche Bank, and Morgan Stanley as global coordinators for the IPO, according to the media outlet.

Neither Blackstone nor the financial institutions involved, however, have openly discussed the plans, leaving market analysts to speculate on the timing and potential impact of the move.

Blackstone acquired Cirsa in 2018 for an undisclosed amount, gaining control of a company that operates casinos and betting establishments across Spain and Latin America. While this is not the first time the IPO discussion has emerged, the current market environment may be more favourable for such a step.

Recent changes in Spain’s regulatory framework for gambling advertising could play a significant role in shaping Cirsa’s market prospects. In a ruling several months ago, Spain’s Supreme Court annulled several provisions of Royal Decree 958/2020, which had imposed stringent restrictions on gambling ads.

These restrictions, which included bans on certain advertising channels and limited promotional efforts to attract new customers, were criticised by industry stakeholders as overly restrictive and damaging to business operations.

The Supreme Court ruled that the absolute prohibitions violated constitutional rights related to free enterprise and advertising. It emphasised that any such limitations must be explicitly approved by parliament rather than implemented autonomously by regulatory bodies.

The decision could open new opportunities for operators like Cirsa to expand their promotional activities, enhancing their market appeal ahead of the IPO.

Market potential and risks

The planned IPO aligns with a broader trend of increased investment activity in the gambling sector, particularly in regions with favourable regulatory developments. For Cirsa, the IPO offers an opportunity to strengthen its capital base, fund expansion, and position itself as a global leader in the gaming industry.

However, challenges remain. The regulatory landscape for gambling in Spain and other key markets continues to evolve, and Cirsa’s reliance on these jurisdictions means the company is sensitive to policy shifts.

Furthermore, while the Supreme Court ruling has relaxed advertising restrictions, public sentiment around gambling remains cautious, and future legal challenges could arise.

Additionally, the gambling industry is facing heightened scrutiny worldwide, with many jurisdictions imposing stricter controls on operations and marketing. Cirsa will need to navigate these dynamics carefully to sustain growth and meet investor expectations post-IPO.

On the right track

In October, Cirsa provided a forecast for its consolidated financial performance for the full-year 2024. The company projected net operating revenues to range between €2bn and €2.1bn, reflecting a growth of approximately 6% to 8% compared to 2023.

This increase, according to the company, is driven by anticipated mid-single-digit growth in its land-based operations and high double-digit growth in its online gaming and betting segment compared to the previous year.

Cirsa also estimated its EBITDA for 2024 to fall between €680m and €710m. This marks an increase of approximately 8% to 13% from 2023.

The company expects its EBITDA margin, calculated as a percentage of net operating revenues, to reach approximately 32% to 33%. These improvements are projected to be evenly distributed across both its land-based and online gaming and betting businesses.

Cirsa mentioned the possibility of an IPO with its forecast. It explained that if it proceeded, it anticipates that its investment capacity for non-transformational M&A activities over the next three years would range between €400m and €500m.

For Blackstone, taking Cirsa public represents an opportunity to capitalise on its investment while retaining a significant stake in the company. The firm has been an active player in the gambling industry around the world, and could use the proceeds from the IPO to pursue additional acquisitions or investments in the sector.

The IPO also signals a potential shift in Blackstone’s strategy for its gaming portfolio. By partially divesting Cirsa, the firm can unlock liquidity while maintaining exposure to a business with strong growth prospects in Spain and Latin America.

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