XST Capital Group and Webis Holdings Join Forces in Strategic Gaming Partnership

Two significant players in the digital gaming world have come together in what could reshape opportunities across the online wagering landscape. The partnership between Webis Holdings and XST Capital Group represents a major development that brings together decades of industry experience with fresh strategic vision.

The Players Behind This Strategic Move

XST Capital Group, founded in 2024 by industry veteran Joel H. Simkins, has quickly established itself as a specialized investment bank focused exclusively on the digital gaming sector. Simkins brings an impressive track record to the table, with over 25 years of experience spanning investment banking and equity research across both land-based and digital gaming industries. Before founding XST Capital Group, he held senior positions at major financial institutions including Houlihan Lokey, Truist Securities, Credit Suisse Securities, Macquarie Capital, and Deutsche Bank Securities.

What makes Simkins particularly valuable in this space is his unique background. He was named Best Up and Coming Analyst in the 2009 Institutional Investor Poll and later ranked No. 6 overall in 2012. His deep industry expertise has made him a regular featured speaker at gaming conferences and a frequent guest on financial networks including CNBC, Bloomberg, Fox Business, and Yahoo Finance. XST Capital specializes in mergers and acquisitions, capital raising solutions, and strategic consulting for rapidly growing companies across the digital gaming industry.

On the other side of this partnership sits Webis Holdings, a company with a long history in licensed international pool wagering. The company operates through its primary subsidiary, WatchandWager.com LLC, which has become a significant player in the advance deposit wagering (ADW) market across the United States.

WatchandWager’s Market Position and Operations

WatchandWager operates from dual headquarters, with its operational base in Lexington, Kentucky, and its head office in the San Francisco Bay Area, California. This strategic positioning allows the company to serve clients across the United States through multiple distribution channels. The company holds crucial US pari-mutuel licenses for its ADW operations, including a multi-jurisdictional license issued by both the North Dakota and California Horse Racing Boards. Additionally, it maintains licenses in Kentucky, New York, and several other key states.

The company’s wagering services primarily focus on horse and greyhound racing, but its real strength lies in its partnerships with prestigious racetrack partners across the country. These partnerships include contracts with Churchill Downs, the New York Racing Association (NYRA), and Monarch Content Management. These agreements provide WatchandWager with access to premier racing events, including the prestigious Triple Crown series and the Kentucky Derby.

WatchandWager also operates Cal Expo Harness Racetrack in Sacramento, California, under a license issued by the California Horse Racing Board. This brick-and-mortar presence in California, the largest state economy in the US, provides significant leverage for the company’s related global pari-mutuel operations.

Financial Performance and Market Context

Webis Holdings has experienced mixed financial performance in recent years, reflecting broader challenges within the pari-mutuel wagering industry. According to company financial statements, Webis reported revenues of approximately $50 million in recent fiscal years, though the company has faced profitability challenges with operating losses in several periods. The company’s business-to-consumer operations through WatchandWager have shown stronger performance, with significant increases in handle and active player wagering, particularly in non-rebate player segments.

The broader ADW market in which WatchandWager competes is dominated by several major players. TwinSpires, owned by Churchill Downs Inc., and TVG, part of Flutter Entertainment Group, control approximately 71% of the US ADW market as of 2021. This market concentration presents both challenges and opportunities for smaller players like WatchandWager.

Churchill Downs’ TwinSpires has reported impressive financial results, with record second-quarter revenue of $159.9 million in 2024, representing a 15% increase from the previous year. However, the company also noted some decline in TwinSpires handle, attributed to market access issues and shifts in race days at other tracks.

The Evolving Digital Gaming Landscape

The partnership comes at a particularly dynamic time for the digital gaming and sports betting industry. The global sports betting market was valued at approximately $103 billion in 2024 and is projected to reach $224 billion by 2033, growing at a compound annual growth rate of 8.56%. The North American sports betting market specifically is expected to reach over $54 billion by 2030, growing at a CAGR of 8.9%.

Within this broader market, pari-mutuel wagering represents a specialized but significant segment. The advance deposit wagering model has become increasingly important, particularly after the COVID-19 pandemic accelerated the shift from on-track betting to online platforms. During 2020, almost 100% of US wagering on horse racing was conducted via ADWs, highlighting the critical importance of these platforms.

Major sportsbook operators like FanDuel, DraftKings, and BetMGM have begun launching their own standalone ADW sites, recognizing the growth potential in this market segment. This trend represents both increased competition and validation of the ADW model’s viability.

Strategic Opportunities and M&A Activity

The gaming industry has seen significant merger and acquisition activity in 2024, with 198 deals announced valued at approximately $10.5 billion in aggregate. This represents increased year-on-year activity, demonstrating that strategic buyers continue to see long-term growth potential in the sector. Private equity houses have played an active role, accounting for $3.9 billion of the total deal value.

Notable transactions in the gaming space include Apollo Global Management’s $6.3 billion acquisition of International Game Technology’s gaming and digital business combined with Everi Holdings. These large-scale transactions highlight the consolidation trend occurring across the gaming industry and the premium valuations being achieved for well-positioned companies.

XST Capital’s track record suggests they are well-positioned to identify and execute similar strategic opportunities for Webis Holdings. The firm’s focus on the gaming industry and Simkins’ extensive network of strategic and institutional investor relationships provide valuable resources for exploring various strategic alternatives.

Regulatory Environment and Licensing Advantages

One of WatchandWager’s key competitive advantages lies in its comprehensive licensing structure across multiple states. The regulatory environment for advance deposit wagering has evolved significantly, with 21 states having approved ADW operations by 2015, up from just seven states in 1999. States including Connecticut, Illinois, Maryland, New York, Ohio, Oklahoma, Pennsylvania, Louisiana, Washington, Kentucky, and Nevada have all legalized advance deposit wagering.

This regulatory expansion has created substantial revenue opportunities. A 2012 report by the State of New York Racing and Wagering Board found that New York residents placed more than $165.5 million in bets with out-of-state ADW providers in 2010 and more than $416.8 million with in-state wagering providers. The report also noted that racetracks charged fees to ADW entities, which tended to be higher for out-of-state providers, sometimes reaching 8.5%.

Recent developments have further expanded opportunities. North Carolina legalized online sports betting and advance deposit wagering on horse racing in 2023. These regulatory changes continue to create new market opportunities for licensed operators like WatchandWager.

Technology and Innovation Drivers

The digital gaming industry is increasingly driven by technological innovation, particularly artificial intelligence and blockchain technologies, which led to the emergence of platforms such as crypto poker. AI enhances sports betting through predictive analytics, offering up to 85% accuracy in odds calculations and personalized betting recommendations. Machine learning algorithms analyze real-time sports data to optimize in-play betting options, with platforms processing over 140 million bets during major tournaments.

For pari-mutuel wagering specifically, technology improvements have focused on enhancing user experience through better mobile applications, live streaming capabilities, and sophisticated handicapping tools. The best ADW sites now offer features such as past performance data, real-time odds, live video streaming, and comprehensive player rewards programs.

Market Competition and Positioning

The competitive landscape in advance deposit wagering includes several well-established players beyond the market leaders. Major companies offering ADW betting exchanges include TVG Network, TwinSpires.com, Xpressbet.com, and KeenelandSelect.com. Each of these platforms competes for both customers and racing content, creating a dynamic market environment.

NYRA has been particularly active in recent years, launching NYRA Bets as its national ADW platform, now available in 30 states. The organization generated $2.1 billion in annual all-sources wagering handle in 2018 with paid attendance exceeding 1.7 million. NYRA’s leadership reported achieving an increase of more than $20 million in annual revenue through strategic content-related negotiations.

The competition has intensified with major sportsbooks entering the ADW space. FanDuel’s TVG platform and other integrated offerings create additional competitive pressure. This environment requires ADW operators to continuously innovate and improve their value propositions to maintain and grow market share.

Partnership Benefits and Future Outlook

The strategic partnership between Webis Holdings and XST Capital Group was announced on September 8, 2025, and took effect immediately. XST has been appointed to assess mergers, acquisitions, and other strategic opportunities aimed at enhancing shareholder value. Notably, any transactions under this agreement will not include Webis’s existing horse racing license at Cal Expo in Sacramento, California.

Ed Comins, managing director of Webis, emphasized the company’s enthusiasm for collaborating with XST Capital Group on this significant strategic initiative as they enter the final quarter of 2025. He committed to keeping customers, shareholders, and partners informed of any notable developments.

Joel H. Simkins highlighted the strength of Webis’s regulatory licenses, respected brand, and loyal customer base as key assets in capturing emerging opportunities within the evolving digital wagering landscape. XST’s commitment involves supporting the Webis Board as it explores strategic options to unlock the company’s full potential.

This partnership positions WatchandWager to potentially benefit from XST Capital’s extensive industry connections and strategic expertise. Given the ongoing consolidation in the gaming industry and the growth potential in digital wagering, this collaboration could open doors to various strategic alternatives, from strategic partnerships to potential acquisition opportunities.

The timing of this partnership aligns well with broader industry trends toward consolidation and the continued evolution of the digital gaming landscape. With XST Capital’s proven track record in identifying and executing strategic opportunities, and Webis Holdings’ established position in the ADW market, this partnership has the potential to create significant value for all stakeholders involved.