Month: October 2021

Aristocrat will pay 680 pence for each Playtech share in an all-cash deal, representing a premium, of 58.4% to the 429.2 pence per share closing price of Playtech shares on 15 October, the last trading day before the acquisition announcement.

This, Aristocrat said, is also a premium of 66.0% to the volume weighted average closing price per Playtech share of 409.7 pence over the three-month period to 15 October, as well as a 55.0% premium to the weighted average price of 438.8 pence over the past 12 months.

Aristocrat said the combination would provide the business with “material scale” in both the igaming and online sports betting segments, delivering medium-term revenue and earnings growth, particularly in the North America online real-money gambling market.

The combined business will employ staff across 24 countries and territories, including seven content studios globally, and operate in 30 regulated jurisdictions with 170 global licensees.

The deal, Aristocrat continued, would also allow its and Playtech’s distribution, technology and content to meet a broader range of customer and player needs, while Playtech’s Snaitech business gives it a B2C presence in multiple European markets.

The acquisition is expected to deliver attractive financial returns, boosting the combined business’ share price in the low- to mid-single digit range before synergies, then mid- to high-single digits once synergies have been achieved.

The acquisition remains subject to a number of regulatory approvals and closing conditions, including approval from a minimum of 75% of Playtech shareholders. It is intended that the Playtech board will recommend the deal be approved. 

The two companies have received irrevocable undertakings or letters of intent in respect of a total of 63,412,083 Playtech shares, representing, in aggregate, approximately 20.70% of Playtech’s issued ordinary share capital in issue.

The deal is expected to close during the second quarter of 2022.

Aristocrat chief executive Trevor Croker said the deal would combine his company’s “world-class” gaming content, customer and regulatory relationships, with Playtech’s “industry-leading” online gaming platform and European B2C footprint.

The combined group, Croker said, would therefore offer a broad portfolio of end-to-end solutions for gaming customers around the world.

“Additionally, the business will be ideally positioned to unlock sustainable shareholder value by seizing opportunities in the fast-growing global online RMG segment as they continue to open up, particularly in North America,” he added

“Adding Playtech’s talented team with Aristocrat’s established strengths and momentum will create a true industry leader in the global online RMG space, particularly in terms of our B2B capabilities.”

Playtech CEO Mor Weizer described the combination as “an exciting opportunity in the next stage of growth for Playtech”, that would deliver significant benefits to stakeholders.

“This deal has the potential to enhance our distribution, our capacity to build new and deeper relationships with partners and bolsters our technological capabilities,” he explained. “The combination of our two companies builds one of the largest B2B gaming platforms in the world, with the people, infrastructure and expertise to provide our customers with a truly best-in-class offer across all areas of gaming and sports betting.”

Aristocrat intends to fund the acquisition through a combination of existing cash resources available to the group, new debt facilities and an equity offering of Aristocrat ordinary shares.

The deal comes after Playtech last month also agreed to sell Finalto – the supplier’s financial trading division – to Gopher Investments for $250m, after shareholders rejected a board-approved bid led by the Barinboim Group last month.

Playtech had initially put Finalto up for sale in March, in order to focus on its core gambling business, though it had been considering plans to divest it since 2019, amid poor performance

In August, Aristocrat announced plans to expand its digital games business after it agreed to acquire mobile gaming studios Futureplay and Playsoft, while the group also announced plans to set up a new development facility in Finland.

The three studios will form part of the Aristocrat Digital division, which Aristocrat said would support its development efforts in the casual gaming and social casino markets.

The deal places Okada Manila at an enterprise value of $2.6bn (£1.9bn/€2.3bn) and will also provide Okada Manila with up to $275m in cash, generated via 26 Capital’s initial public offering in January this year.

The transaction, which is expected to close in the first half of 2022, is subject to approval by 26 Capital stockholders and other customary closing conditions, will also see the newly publicly traded business have its common stock listed on the Nasdaq via an American Depository Receipt program.

Japanese-owned and operated casino Okada Manila opened in 2019 in Entertainment City, Manila in the Philippines, though the facility is yet to fully open with construction work still ongoing. 

Presently, the casino has over 35,000sq m of gaming space and capacity to operate 599 gaming tables and 4,263 electronic gaming machines. When the casino is fully open in 2022, its gambling capabilities will be expanded to 974 gaming tables and 6,890 electronic gaming machines, in addition to 993 luxury hotel rooms, retail facilities and over 25 dining options.

26 Capital Acquisition is led by activist investor Jason Ader, who said he intends to use his expertise in the gambling sector to help the combined business unlock value and drive new growth opportunities.

“Okada Manila is the future of the gaming market in Asia and poised for tremendous growth,” 26 Capital chairman and chief executive Ader said. “With its beautiful new facility, a desirable location in one of the fastest-growing gaming markets in the world, and potential for industry-leading margins and cash flow conversion, I believe the Okada Manila is an extremely compelling investment.”

Should the deal go through as expected, Okada Manila will continue to be led by president Byron Yip, chief financial officer Hans Van Der Sande and its leadership team. Universal Entertainment Corporation, Okada Manila’s parent company and current owner of 100% of its equity, will retain its current holdings in Okada Manila in the newly publicly traded company.

“Okada Manila is at the heart of the gaming and hospitality business in Asia,” Yip said. “We are fortunate to operate the most luxurious integrated resort in the Philippines, and excited to realise the full potential of this state-of-the-art facility for gaming, entertainment, and hospitality as a public company and in partnership with Jason Ader of 26 Capital.”

Universal Entertainment’s chairman, president and chief executive, Jun Fujimoto, added: “Today marks an exciting milestone for Okada Manila and for Universal Entertainment. Universal Entertainment has always taken great pride as the owner and developer of Okada Manila, and we are extremely pleased to partner with Jason Ader and 26 Capital to introduce Okada Manila to the public markets. 

“We look forward to continuing our strong support for the business and to a path of immense growth ahead.”

Earlier this year, Okada was granted approval to enter the online gaming market from the Philippine Amusement and Gaming Corporation (PAGCOR), making it the first of the four “Entertainment City” integrated resort operators permitted to launch an online product.

This quarter saw corporate activity centred on the affiliate sector ratchet up another level with Bruin Capital splashing £155m to acquire Oddschecker Global Media. This of course followed Q2’s headline acquisition of the Action Network by Better Collective for an equally eyewatering $240m.

While Oddschecker’s business is almost wholly focused in European odds comparison markets, the US was a much a driver of the deal as it was for Better Collective’s of Action Network and Catena’s of lineups.com and I5Media. Oddschecker’s head of commercial strategy Guy Harding speaks exclusively about the deal to Scott Longley in Part 1.

The US was however not the only driver of acquisition in the period, with Raketech’s acquisition of Infinileads giving it a bigger footprint in Latam and XLMedia acquiring igaming-focused digital agency Blueclaw.

The flurry of activity in Q3 was also not restricted to M&A, with Gambling.com Group listing on the New York and Playmaker on the Toronto exchanges, providing further earnings visibility on the sector. Jefferies’ initiation note on GAMB pegged the value of the US gaming market at between $2.4-$3bn a year. We provide analysis of this in Part 2.

Stephen Carter
Editorial director, iGB

This was a rise of 91.0% compared to the revenue of €323.0m generated in Q2 2020, a quarter affected by the novel coronavirus (Covid-19) pandemic.

A total of €420.0m of the revenue was made up from online sports betting, which was also a record number. This was a significant increase of 346.8% from €94.0m in Q2 2020.

“The French bet more online and quite logically, the Euros boosted the segment of sports betting, with revenue reaching another record this quarter,” said Isabelle Falque-Pierrotin, president of the ANJ.

Horse betting made up €95.0m of the total, a rise of 7.9% year-on-year.

The remaining €103m was made up by online poker, down 27.4% from €142m compared to the previous second quarter.

The total number of active player accounts also grew in the second quarter, from 2.0m in Q2 2020 to 3.3m in Q2 2021, a rise of 65.2%.

Sports betting had the most active players at 2.7m, while horse betting had 921,000. Poker made up the remaining 363,000.

The amounts deposited by players in Q2 reached €1.11bn, the third quarter in which deposits exceed €1bn. This was up by 89.0% from Q2 2020.

The deposits were mostly made by credit cards, at 79.0%.

Withdrawals hit €523.0m, an increase of 84.0% year-on-year.

In terms of marketing, the budget was €78.0m in Q2 2021, up 387.5% year-on-year.. The highest amount of this budget- 30.0%- went on retention bonuses. A total of 15% was directed towards acquisition bonuses, while 14% was aimed at television and cinema marketing. The remaining budget was aimed at several different marketing strategies, such as sponsoring and radio advertising.

These results come weeks after ANJ announced a public consultation into gambling advertising in France, after ANJ branded the advertising tactics during the Euros as “questionable”.

A total of 1% of bettors contributed greater than €10,000 in stakes, the same percentage as listed for Q2 2020, though these totals were rounded to the nearest percent. 4% contributed between €3,000 and €10,000 while 8% provided between €1,000 and €3,000. These were increases of 2.0% and 3.0% year-on-year respectively.

A plurality of bettors – 26%- provided between €0 an €30 towards stakes, a significant drop of 15% compared to Q2 2020.

The top 10% of bettors contributed 76.0% in stakes, a decrease of 2.0% year-on-year. The top 1% contributed 35.0%, down 3.0%,

61,296 matches were surveyed in 2020, a reduction from the previous year due to the novel coranavirus (Covid-19) pandemic leading to the cancellation of many matches. A total of 217 matches – 0.35% – were deemed to be suspicious, down from 0.56% in the previous year’s report.

2020 was the third consecutive year where suspicious matches decreased – 0.73% of matches were flagged in 2018.

42% of suspicious matches were from the top division of domestic football in the country in which they took place. During the past year, Stats Perform signed data partnerships with such leagues, including Holland’s Eredivisie and the Women’s Super League in England. The second-highest level of domestic football was responsible for 36% of suspicious matches.

Friendly matches continued to be comparatively much more likely to attract suspicious activity. 1.19% of friendlies analysed were suspicious, up from 0.67% in last year’s report.

In women’s football, only one match was deemed to be suspicious out of the 3,700 which were analysed.

Stats Perform’s global head of integrity Jake Marsh said: “2020 was an exceptional year for football in how it was affected by the COVID-19 pandemic, and we will no doubt be understanding the long-term effects and risks to the sport for several years.

“Despite the reduction in fixtures in 2020 there was still a very high number of matches that we identified as suspicious and potentially linked to manipulation. There are cautious signs for optimism in some areas, but the report shows the risk of match-fixing is ever present in football, and it is paramount that those protecting the sport are properly equipped to protect the beautiful game.”

The figures presented in the report are resultant of in-depth analysis of key betting markets on football matches – including domestic and international competitions – across 112 countries and six continents.

Affy Sheikh, head of integrity at Starlizard, added: “Worryingly, we have still identified over 200 games that are suspicious in terms of potential match manipulation, and that, we feel, warrant further investigation. Despite the more limited availability of matches due to the pandemic, this suggests that criminals have found new ways and new targets in their attempts to manipulate matches and the betting markets.

“It is imperative that all football stakeholders remain vigilant to the threat of match-fixing at all times and make adequate resources available to keep the sport clean, free from corrupt influence, and to ensure that football fans can enjoy watching an honest and fair game.”

Stewart has held a series of executive positions in Canada and the US during her career and is currently chief resource officer of Pex, a digital rights technology business that is backed by Tencent and other global investors.

Prior to this, she was head of the future of media at the World Economic Forum, working with the CEOs and chairs of companies such as Bytedance, Facebook, NBCU and Google.

Stewart also spent time as vice president of North American Media at Twitter in New York and had a spell as the head of CBC, Canada’s national broadcaster.

Read the full story on iGB North America.

The arrangement will see the roll out of the STN Sports online sports platform and mobile applications, as well as retail over-the-counter and kiosk-based sports wagering.

The deal covers Red Rock Resorts’ full portfolio of properties across Nevada, as well as any projects currently in development, but remains subject to regulatory technical certification and any related regulatory licensing.

“The choice of GAN reflects their proven technology platform, specialist experience with integrating reward programs, reputation for integrity and their exciting sports betting user experience across online and retail devices, and their overall commitment,” Station Casinos’ senior vice president of innovation and slots, Thomas Mikulich, said.

Read the full story on iGB North America.

Financial terms of the deal were not disclosed, but it was confirmed that all staff at Casino Davos would be retained as part of the agreement. 

Stadtcasino Baden previously held 46% of the shares in Casino Davos, with Ardent holding 44% and the Davos Destination Organisation (DDO) the remaining 10%.

Ardent acquired its stake in May 2018, in anticipation of the operator rolling out an online gambling offering in the regulated Swiss market. 

Casino Davos then became the fourth land-based casino operator to launch online gambling in Switzerland when it went live with its Casino777.ch brand in September 2019. Ardent’s Gaming1 online casino solutions provider subsidiary powered the launch. 

“With regard to further development of online activities in particular at casino777.ch, the partners recently had different ideas,” Stadtcasino Baden said. “This finally led to the agreement that it would be advantageous for the further development of Casino Davos if a partner took over the lead and Stadtcasino Baden sold its stake to Ardent Group.

“The sale of the shares in Casino Davos enables the Stadtcasino Baden Group to concentrate on the further development of its own software solution within Gamanza and to focus on further projects of its own.”

The sale is yet to be approved by Swiss regulator Eidgenössische Spielbankenkommission (ESBK).

Finnplay’s Fair Play Casino has now launched online through Janshen-Hahnraths, which operates more than 30 other Fair Play-branded land-based venues across the Netherlands.

Janshen-Hahnraths was one of 10 operators that received Dutch licences from Dutch gaming regulator de Kansspelautoriteit (KSA) after the country’s igaming market opened on 1 October.

The 28 operators that applied for a licence paid the stipulated €48,000 licence fee.

“We were very pleased to be one of only 10 companies awarded the Dutch B2C licence,” said Björn Fuchs, chief digital officer of Janshen-Hahnraths.

“We selected Finnplay because of their excellent track record supporting top tier operators in Europe’s regulated markets. We look forward to expanding the reach of our strong and well-recognized brand online to a bigger and broader audience of players.”

“This is a very exciting opportunity for Finnplay, and a strong new partnership for the Dutch market,” said Jaako Soininen, newly appointed managing director of Finnplay. Soinenen replaces Sari Aitokallio, who left Finnplay despite having only been named as its new managing director in January after CEO Martin Prantner stepped down.

“Between JH-Group’s experience as a successful operator in the Netherlands and Finnplay’s technical and compliance expertise in online gaming, this is sure to be a very successful venture.”

Last week, Evolution announced that it had also gone live in the Netherlands through Janshen-Hahnraths.

Chaired by British business executive Karren Brady, the board will support Sisal with strategic counsel during the licensing process.

Crossbench peer, chair of Social Enterprise UK and chair and founder of Collaborate, Lord Victor Adebowale, will also serve on the new board, alongside former Asda chief executive and non-executive chairman Andy Clarke.

Other members include experienced international operator, Plc and private equity executive Gary Hughes, UK Creative Industries leader MT Rainey, and Conservative Peer and former Minister for Culture Lord Ed Vaizey.

“We are delighted to announce the appointment of our Advisory Board,” Sisal chief executive Francesco Durante said. “Each member brings unrivalled experience across key areas of industry and society that are central to our strategy and will help us to deliver the best possible solution for The National Lottery.

“We’ve invested the time to secure the right team and ensured each of their values align with our vision for the future of the National Lottery. Together with our partners, the advisory board will add valuable insight and strategic counsel as we approach the final stage of the application.”  

Advisory board chair Brady added: “As an active supporter of several high-profile charities and businesses that make a positive contribution to society, I am delighted to be working with Sisal on its application for the fourth National Lottery Licence. 

“Our Lottery is a treasured institution that generates substantial funds for good causes across the UK.  Sisal’s proven track record of managing and growing lotteries in Italy, Turkey and Morocco makes them a strong contender and I look forward to working with them and the rest of the Advisory Board as the application progresses.”

Sisal announced in April it would bid for the licence, partnering with telecommunications giant BT and British children’s charity Barnardo’s to support its application. 

Pan-European lottery and gaming giant Sazka Group was the first operator to announce its intention to compete for the licence in October 2020, while Sugal & Damani, India’s largest lottery operator, joined the race later that month.

Incumbent licensee Camelot completed the Selection Questionnaire in October, but has not yet publicly confirmed whether it was bidding for the tender.

In August, Britain’s Gambling Commission pushed the selection of the winner of the tender back until February 2022 and extended Camelot’s licence for six more months to February 2024.