In an surprise move, industry-leader PokerStars has reached an agreement with the US DOJ to purchase long-time rival Full Tilt Poker and settle its outstanding legal matters.
PokerStars has reached a settlement with the US Department of Justice, pokerfuse can reveal. Part of the deal involves the purchase of Full Tilt Poker and full repayment of all players.
The specifics of the deal are not yet known, and no statement has yet come from any parties involved.
Rumors that PokerStars has reached a deal with the DOJ to purchase Full Tilt Poker began swirling early Tuesday morning on poker forum 2+2. Sources have corroborated the story with Pokerfuse that a deal has indeed been reached but could not confirm any specific details.
Alex Dreyfus, CEO of Chili Gaming, stated on twitter that PokerStars has paid $750m to acquire Full Tilt and settle its outstanding legal issues with the DOJ. A reported $330m of that price will go to repay Full Tilt account holders with the remainder believed to be in settlement of outstanding charges against PokerStars.
Until now, French investment group Group Bernard Tapie were known to be in late-stage talks. According to sources at e-Gaming Magazine, “efforts to obtain final DoJ approval to acquire the assets of Full Tilt Poker have ended without success,” and that the deal was “sabbotaged,” according to iGamingFrance.
As a point of comparison, PartyGaming (now known as bwin.party) co-founder Anurag Dikshit agreed to a plea deal with the DOJ in 2008 for a total of $300m. In 2009, payment processor Neteller settled for $136m.
However, the charges facing Scheinberg are more serious. The elusive billionaire, along with an otherwise unknown Isle of Man resident Paul Tate, are charged under violation of the UIGEA, operation of an illegal gambling business, and conspiracy to commit bank fraud, wire fraud and money laundering.
According to the unconfirmed reports on 2+2, PokerStars plans to bring Full Tilt Poker back online, and maintain separate sites.
April 25, 2012
April 24, 2012
Bet365 copyists need more than a good ad
Bet365 and Ray Winstone revolutionised TV advertising for sports betting. In 2011 the rest of the industry tried to copy its success. But advertising is not the sole success factor.
A disembodied Ray Winstone and a pioneering use of live odds has proven a potent combination for Bet365, allowing it to steal a march on its rivals in the increasingly lucrative in-play market.
The TV campaign, originally launched in 2009 for the Cheltenham races, has evolved from Winstone walking out on a pitch to generate excitement about the 50 in-play markets on offer, to the tough-guy actor receiving a hologram makeover and appearing to fans in a variety of settings, at home, down the pub and at the game. Appearing at half time, he offers the latest live odds in a friendly, almost off-hand tone.
Key to the ad’s success is use of Winstone’s history of playing gentlemen gangsters. He exudes the essence of the gambling man, while tapping into the multimedia, mobile world we live in. Who watches TV without a laptop or mobile in hand these days? Most of Bet365’s target market of young male football fans, that’s for sure.
“The ads have very cleverly tapped into the multi-screen revolution which is shaping how people consume and interact with media content,” points out Oisin Lunny, senior marketing development manager for mobile services and transaction provider OpenMarket, which works with clients across the gaming industry. “Viewers, particularly the digital-native generation, have a high expectation of interactivity, which increases in line with technologies ability to support it.”
While privately-owned Stoke-based Bet365 does not release its financial data, it has revealed that sports betting rose by 47.5% to £195.1m over the first half of its financial year, which started in March 2011. At the same time, co-chief executive Denise Coates notes the launch of the new sports site with its in-play features as one of the highlights of of the year.
It is no surprise Bet365’s rivals have been quick to follow suit. Kristof Fahy, chief marketing officer at William Hill, said its new strategy would include an increasing number of live components. While Ladbrokes’ Game On! campaign seeks to tap into the excitement of betting in-game with its use of famously over-the-top Italian commentator Tiziano Crudeli. Launched for the start of the football season, he is shown getting excited about the games’ most incongruous moments.
In marketing and advertising, where is it often said there are no new ideas, rival brands seeking to ape certain elements of a rival’s campaign is neither frowned upon or unexpected. Customers will rarely, if ever, care who created the advertising first but what they will remember is whether the service they receive lives up to their expectations.
William Hill and Ladbrokes are merely two of the companies that have sought, dare we say it, to copy Bet365’s attempts to generate in-the moment excitement around betting. While it is hoped this kind of incremental betting will bring in new customers, the role of the advertising is simply to drive them to the website or app.
Indeed, as with any online or mobile service, the battle will be won and lost on the customer experience. Driving customers to the site is just the first step. As Lunny says: “While I completely agree with the Bet365 strategy, which sees smartphones and their HTML5 betting site as a key driver of interactivity, this will only be as compelling as the sign-up process for first-time users, which is currently quite laborious.”
Dealing with that as well as addressing the lack of consumer trust about mobile security (many people are still reluctant to punch their credit card details into an m-site), are crucial to ensure consumers stay on the site once the ad campaign has driven them to check it out.
The win-win situation, says Lunny, is to ensure in-game services are properly optimised for use on PCs, smartphones and also with SMS-triggered in-game bets. Meanwhile, new technology, such as MMS age verification, will allow operators to identify customers and build complex profiles that help to make their messages more targeted, engaging customers at the right time with the right message.
“The marriage of technology innovations, consumer appetite for interactivity and clever marketing, such as the TV ads from Bet365, has sparked this massive growth of in-game betting,” explains Lunny. “And it’s only going to get bigger.”
A disembodied Ray Winstone and a pioneering use of live odds has proven a potent combination for Bet365, allowing it to steal a march on its rivals in the increasingly lucrative in-play market.
The TV campaign, originally launched in 2009 for the Cheltenham races, has evolved from Winstone walking out on a pitch to generate excitement about the 50 in-play markets on offer, to the tough-guy actor receiving a hologram makeover and appearing to fans in a variety of settings, at home, down the pub and at the game. Appearing at half time, he offers the latest live odds in a friendly, almost off-hand tone.
Key to the ad’s success is use of Winstone’s history of playing gentlemen gangsters. He exudes the essence of the gambling man, while tapping into the multimedia, mobile world we live in. Who watches TV without a laptop or mobile in hand these days? Most of Bet365’s target market of young male football fans, that’s for sure.
“The ads have very cleverly tapped into the multi-screen revolution which is shaping how people consume and interact with media content,” points out Oisin Lunny, senior marketing development manager for mobile services and transaction provider OpenMarket, which works with clients across the gaming industry. “Viewers, particularly the digital-native generation, have a high expectation of interactivity, which increases in line with technologies ability to support it.”
While privately-owned Stoke-based Bet365 does not release its financial data, it has revealed that sports betting rose by 47.5% to £195.1m over the first half of its financial year, which started in March 2011. At the same time, co-chief executive Denise Coates notes the launch of the new sports site with its in-play features as one of the highlights of of the year.
It is no surprise Bet365’s rivals have been quick to follow suit. Kristof Fahy, chief marketing officer at William Hill, said its new strategy would include an increasing number of live components. While Ladbrokes’ Game On! campaign seeks to tap into the excitement of betting in-game with its use of famously over-the-top Italian commentator Tiziano Crudeli. Launched for the start of the football season, he is shown getting excited about the games’ most incongruous moments.
In marketing and advertising, where is it often said there are no new ideas, rival brands seeking to ape certain elements of a rival’s campaign is neither frowned upon or unexpected. Customers will rarely, if ever, care who created the advertising first but what they will remember is whether the service they receive lives up to their expectations.
William Hill and Ladbrokes are merely two of the companies that have sought, dare we say it, to copy Bet365’s attempts to generate in-the moment excitement around betting. While it is hoped this kind of incremental betting will bring in new customers, the role of the advertising is simply to drive them to the website or app.
Indeed, as with any online or mobile service, the battle will be won and lost on the customer experience. Driving customers to the site is just the first step. As Lunny says: “While I completely agree with the Bet365 strategy, which sees smartphones and their HTML5 betting site as a key driver of interactivity, this will only be as compelling as the sign-up process for first-time users, which is currently quite laborious.”
Dealing with that as well as addressing the lack of consumer trust about mobile security (many people are still reluctant to punch their credit card details into an m-site), are crucial to ensure consumers stay on the site once the ad campaign has driven them to check it out.
The win-win situation, says Lunny, is to ensure in-game services are properly optimised for use on PCs, smartphones and also with SMS-triggered in-game bets. Meanwhile, new technology, such as MMS age verification, will allow operators to identify customers and build complex profiles that help to make their messages more targeted, engaging customers at the right time with the right message.
“The marriage of technology innovations, consumer appetite for interactivity and clever marketing, such as the TV ads from Bet365, has sparked this massive growth of in-game betting,” explains Lunny. “And it’s only going to get bigger.”
Tycoon Tzvetkoff spotted hiding
Fallen IT tycoon has reportedly been spotted by The Courier-Mail yesterday taking a leisurely family stroll with his wife, son and newborn daughter through New York’s Chinatown, whilst being ‘in hiding.’ He once faced 75 years’ jail for processing $1billion in illegal US gambling money.
His recent “under FBI protection” has come a long way since his last whereabouts, inside a New York jail, for allegedly processing illegal transactions for the world’s three largest gambling companies: PokerStars, Full Tilt Poker and Absolute Poker, using his inside knowledge.
He disappeared in 2010; it was speculated that he was helping the FBI and the US Government’s prosecute the three kingpin owners of the websites.
When approached by The Courier-Mail, Tzvetkoff at first denied who he was.
“No that’s not me,” he said.
“No, no,” he said, refusing to answer questions.
“Look, you’re going to get in a lot of trouble. There are people with us who you’re going to be in trouble with,” Tzvetkoff said while pointing behind him.
When he couldn’t specify who his secret protectors were he said: “Look mate, you’re going to get in a lot of trouble with me right now”.
He hastily packed his family into a nearby taxi and drove off.
Despite being public enemy No.1 in the online gambling community and ratting out his former mates, Tzvetkoff strolled carefree down Chinatown’s popular Mott St.
His recent “under FBI protection” has come a long way since his last whereabouts, inside a New York jail, for allegedly processing illegal transactions for the world’s three largest gambling companies: PokerStars, Full Tilt Poker and Absolute Poker, using his inside knowledge.
He disappeared in 2010; it was speculated that he was helping the FBI and the US Government’s prosecute the three kingpin owners of the websites.
When approached by The Courier-Mail, Tzvetkoff at first denied who he was.
“No that’s not me,” he said.
“No, no,” he said, refusing to answer questions.
“Look, you’re going to get in a lot of trouble. There are people with us who you’re going to be in trouble with,” Tzvetkoff said while pointing behind him.
When he couldn’t specify who his secret protectors were he said: “Look mate, you’re going to get in a lot of trouble with me right now”.
He hastily packed his family into a nearby taxi and drove off.
Despite being public enemy No.1 in the online gambling community and ratting out his former mates, Tzvetkoff strolled carefree down Chinatown’s popular Mott St.
April 23, 2012
Centrebet embarks on post-acquisition IT consolidation
Online wagering operator, Centrebet, is consolidating its IT infrastructure to reduce costs and remove system duplication following its $183 million takeover by UK-based rival, Sportingbet, in September last year.
A migration of Centrebet’s Web infrastructure over to Sportingbet’s internal platform is underway as well as consolidation of the two companies’ wide area networks (WAN) and call centres.
According to Centrebet network operations manager, Shane Paterson, the company - which has an annual turnover of $1 billion a year and offers 6000 international sports and horseracing wagering events on its website - migrated Sportingbet’s Darwin call centre operations into its own call centre in Alice Springs late last year.
Sportingbet’s Darwin hosting services were also migrated to Sydney, where Centrebet keeps its hosting services. The migration and consolidation will be complete in June 2012.
“The outcomes [of the project] will be significant cost reduction, simplified management and not having to worry about multiple WAN links,” Paterson said of the consolidation program.
Prior to its acquisition, Centrebet implemented a Microsoft Windows Azure platform for the Spring Racing carnival which takes place in October every year.
He said the company had considered buying hardware which would have cost $50,000 and hosting the platform internally.
“The return on investment for us was that we didn’t have to invest in any capital expenditure outlays,” he said of the decision to opt for Azure.
“The network also performed well because data was distributed over a large number of machines rather than a single database. We have access to sufficient bandwidth and processing power when punter numbers and transactions spike.”
Paterson said the company selected Azure also because of a long standing partnership with Microsoft. There are now plans to build microsites for other sporting events such as Australian Football League (AFL) and National Rugby League (NRL) grand finals.
Because of the amount of transactions going through the Centrebet website, security issues such as denial of service (DDoS) attacks are never far from Paterson’s mind.
“We got hit with a nasty DDoS attack back in 2004 which lasted a week and since then we get a serious attempt once a year,” he said.
The company was also a victim of cyber squatting in 2009. Attempts to expand to Greece ahead of the 2010 FIFA World Cup were hampered by cyber squatting on both the centrebet.gr and centerbet.gr domains. The company, through Melbourne IT, ultimately resorted to using dispute resolution laws in Greece to get back the domain names in time for the World Cup, through the ELTA, the Hellenic Post Office.
“We’ve used Melbourne IT brand protection services and that has helped stop further cyber squatting attempts,” he said.
While the company does not operate pokie machines, which are subject to a $1 maximum bet in Australia, Paterson said it is required by legislation to impose weekly and monthly wagering limits for its online customers to crack down on problem betting.
In November last year, the Internet Industry Association made a submission to the federal Interactive Gambling Act 2001 in which it said prohibition of online gambling sites and applications was ineffective given the availability of offshore services.
Instead, the IIA called for problem gambling to be regulated at the PC and smartphone-level.
A migration of Centrebet’s Web infrastructure over to Sportingbet’s internal platform is underway as well as consolidation of the two companies’ wide area networks (WAN) and call centres.
According to Centrebet network operations manager, Shane Paterson, the company - which has an annual turnover of $1 billion a year and offers 6000 international sports and horseracing wagering events on its website - migrated Sportingbet’s Darwin call centre operations into its own call centre in Alice Springs late last year.
Sportingbet’s Darwin hosting services were also migrated to Sydney, where Centrebet keeps its hosting services. The migration and consolidation will be complete in June 2012.
“The outcomes [of the project] will be significant cost reduction, simplified management and not having to worry about multiple WAN links,” Paterson said of the consolidation program.
Prior to its acquisition, Centrebet implemented a Microsoft Windows Azure platform for the Spring Racing carnival which takes place in October every year.
He said the company had considered buying hardware which would have cost $50,000 and hosting the platform internally.
“The return on investment for us was that we didn’t have to invest in any capital expenditure outlays,” he said of the decision to opt for Azure.
“The network also performed well because data was distributed over a large number of machines rather than a single database. We have access to sufficient bandwidth and processing power when punter numbers and transactions spike.”
Paterson said the company selected Azure also because of a long standing partnership with Microsoft. There are now plans to build microsites for other sporting events such as Australian Football League (AFL) and National Rugby League (NRL) grand finals.
Because of the amount of transactions going through the Centrebet website, security issues such as denial of service (DDoS) attacks are never far from Paterson’s mind.
“We got hit with a nasty DDoS attack back in 2004 which lasted a week and since then we get a serious attempt once a year,” he said.
The company was also a victim of cyber squatting in 2009. Attempts to expand to Greece ahead of the 2010 FIFA World Cup were hampered by cyber squatting on both the centrebet.gr and centerbet.gr domains. The company, through Melbourne IT, ultimately resorted to using dispute resolution laws in Greece to get back the domain names in time for the World Cup, through the ELTA, the Hellenic Post Office.
“We’ve used Melbourne IT brand protection services and that has helped stop further cyber squatting attempts,” he said.
While the company does not operate pokie machines, which are subject to a $1 maximum bet in Australia, Paterson said it is required by legislation to impose weekly and monthly wagering limits for its online customers to crack down on problem betting.
In November last year, the Internet Industry Association made a submission to the federal Interactive Gambling Act 2001 in which it said prohibition of online gambling sites and applications was ineffective given the availability of offshore services.
Instead, the IIA called for problem gambling to be regulated at the PC and smartphone-level.
Gibraltar warns UK of tax plan
A bold warning has been issued to the UK Government about the UK consumption tax plan. The issue was raised at the recent KPMG eGaming Summit in Gibraltar. Britain is set to move forward with plans to impose a 15 per cent gaming tax which will affect UK on-line punters and gaming companies, no matter where they place their bets, the Treasury hopes to have arrangements in place by December 2014.
Gibraltar Chronicle reported: “the move will be counter-productive and, in the long run, more harmful to the UK than to the jurisdictions – such as Gibraltar, the Isle of Man and Malta – at which the measures are aimed.”
A series of gaming experts warned that the moves would damage Britain by opening the doors to an on-line unregulated black market in gambling similar to that which still operates in France. The Gaming Minister, Gilbert Licudi, who opened the Summit, claims the UK changes are unnecessary. He claims the UK market is already protected by Gibraltar’s strict licensing and supervision regime, which he claimed earlier this year is as high, or higher, than in the UK.
In his speech he referred to how the UK could be affected in the future:
“This is a political proposal and politicians, much as we minds. That seems to be happening already on another announcement made by the UK Chancellor at last month’s budget – the proposal to cap tax relief on donations to charity.
David Cameron’s comments this week on this suggests that the UK Government is prepared to listen. We will make sure that our position on the proposed gaming transaction tax is heard and taken into account. We will make sure that they understand that what they call a fairer system of taxation would operate with disproportionate unfairness with regard to Gibraltar.
It has also been suggested to us that one of the reasons for the licensing and regulatory regime is the need to protect UK customers. Online gambling is a leisure activity that carries some risks. Some customers may exercise poor judgment and control, Some customers may seek to commit crimes against the operators.”
Gibraltar Chronicle reported: “the move will be counter-productive and, in the long run, more harmful to the UK than to the jurisdictions – such as Gibraltar, the Isle of Man and Malta – at which the measures are aimed.”
A series of gaming experts warned that the moves would damage Britain by opening the doors to an on-line unregulated black market in gambling similar to that which still operates in France. The Gaming Minister, Gilbert Licudi, who opened the Summit, claims the UK changes are unnecessary. He claims the UK market is already protected by Gibraltar’s strict licensing and supervision regime, which he claimed earlier this year is as high, or higher, than in the UK.
In his speech he referred to how the UK could be affected in the future:
“This is a political proposal and politicians, much as we minds. That seems to be happening already on another announcement made by the UK Chancellor at last month’s budget – the proposal to cap tax relief on donations to charity.
David Cameron’s comments this week on this suggests that the UK Government is prepared to listen. We will make sure that our position on the proposed gaming transaction tax is heard and taken into account. We will make sure that they understand that what they call a fairer system of taxation would operate with disproportionate unfairness with regard to Gibraltar.
It has also been suggested to us that one of the reasons for the licensing and regulatory regime is the need to protect UK customers. Online gambling is a leisure activity that carries some risks. Some customers may exercise poor judgment and control, Some customers may seek to commit crimes against the operators.”
Russia to bring back gambling?
Reports from Russia among gaming insiders is that the Government is considering taking measures to bring back gambling to the major Cities.
It has been some 3 years nearly since the close down on the 1st July 2009, making some estimated 300,000 jobless within the country. Russia’s then prime minister Vladimir Putin proposed the legislation in 2006, when president, in an apparent attempt to wipe out an immoral industry. Despite expectations of a compromise with the casinos, Putin stood firm and closed all the casino operations down within the country.
The plan by the Government to have 4 designated regions, Primore region in Russia’s remote far east; the Baltic enclave of Kaliningrad; the Altai region of Siberia; and the Azov Sea in the south. Those regions have hardly seen any development and most gamblers now use illegal operations set up around Moscow.
However from our sources within the country, whom have links to the state parliament, the Duma. Politicians quietly and actively are discussing a revision of the decree that may permit strictly regulated land gambling in the bigger cities, such as St. Petersburg, Sochi, Krasnodar & Moscow.
The corruption from within the law enforcement bureau has been rife towards gambling over recent years and has not stopped the continued rise of illegal dens.
It has been some 3 years nearly since the close down on the 1st July 2009, making some estimated 300,000 jobless within the country. Russia’s then prime minister Vladimir Putin proposed the legislation in 2006, when president, in an apparent attempt to wipe out an immoral industry. Despite expectations of a compromise with the casinos, Putin stood firm and closed all the casino operations down within the country.
The plan by the Government to have 4 designated regions, Primore region in Russia’s remote far east; the Baltic enclave of Kaliningrad; the Altai region of Siberia; and the Azov Sea in the south. Those regions have hardly seen any development and most gamblers now use illegal operations set up around Moscow.
However from our sources within the country, whom have links to the state parliament, the Duma. Politicians quietly and actively are discussing a revision of the decree that may permit strictly regulated land gambling in the bigger cities, such as St. Petersburg, Sochi, Krasnodar & Moscow.
The corruption from within the law enforcement bureau has been rife towards gambling over recent years and has not stopped the continued rise of illegal dens.
April 19, 2012
Ladbrokes calls for urgent reform
Ladbrokes has called for urgent reform of the betting sector, saying its further expansion here will be dependent on the Government modernising the industry.
The British bookmaker operates more than 200 shops here and ranks second only to Paddy Power in the Irish market.
Despite aggressive acquisition-led growth in recent years, managing director of the Irish division Joe Lewins said that whether Ladbrokes continues to expand in Ireland or merely consolidates its operations rely on the Government reforming the retail betting market — to allow for such things as touch-screen "in-play" betting terminals and extended opening hours.
Currently, Irish-based betting shops can stay open until 9.30pm in the summer and only as late as the last race of an Irish meeting in the winter. Mr Lewins said that such rules are an impediment to retail operations competing with online traders.
His comments follow the publication of a report showing that Ladbrokes — which has been trading here for 26 years — contributed almost €73m to the Irish economy in 2011, including over €1m on local sponsorship activities, and employed nearly 1,000 staff.
"The 1931 legislation governing the sector isn’t fit to meet the challenges of emerging 21st century technologies, and this is leaving the sector unable to compete on a level playing field," Mr Lewins said.
"The sector in Ireland is at a crossroads and any move by Government to remedy the current difficulties must take a holistic approach to reform. If these concerns are not urgently addressed, the sector will continue to struggle and this will have a negative impact on much-needed exchequer revenue and employment."
On the proposed 1% turnover tax on bookmakers, Ladbrokes agrees with Paddy Power that it is worthwhile, but only if the Government can ensure all players will pay.
The British bookmaker operates more than 200 shops here and ranks second only to Paddy Power in the Irish market.
Despite aggressive acquisition-led growth in recent years, managing director of the Irish division Joe Lewins said that whether Ladbrokes continues to expand in Ireland or merely consolidates its operations rely on the Government reforming the retail betting market — to allow for such things as touch-screen "in-play" betting terminals and extended opening hours.
Currently, Irish-based betting shops can stay open until 9.30pm in the summer and only as late as the last race of an Irish meeting in the winter. Mr Lewins said that such rules are an impediment to retail operations competing with online traders.
His comments follow the publication of a report showing that Ladbrokes — which has been trading here for 26 years — contributed almost €73m to the Irish economy in 2011, including over €1m on local sponsorship activities, and employed nearly 1,000 staff.
"The 1931 legislation governing the sector isn’t fit to meet the challenges of emerging 21st century technologies, and this is leaving the sector unable to compete on a level playing field," Mr Lewins said.
"The sector in Ireland is at a crossroads and any move by Government to remedy the current difficulties must take a holistic approach to reform. If these concerns are not urgently addressed, the sector will continue to struggle and this will have a negative impact on much-needed exchequer revenue and employment."
On the proposed 1% turnover tax on bookmakers, Ladbrokes agrees with Paddy Power that it is worthwhile, but only if the Government can ensure all players will pay.
April 18, 2012
Playtech faces questions over acquisitions linked to founder Teddy Sagi
Playtech is facing questions over a series of proposed acquisitions in which its founder and major shareholder, Teddy Sagi, has a "beneficial interest".
The online gambling software group, which is no stranger to controversy, has signalled its intention to buy a cluster of assets in areas such as social gaming from Mr Sagi, who owns a 48pc stake in Playtech.
Names and details of the companies have not been disclosed but the group said it is likely to spend €95m (£78m).
Playtech said it is also looking at buying, for £10.5m, an office building in London that is owned by a company in which Mr Sagi is "beneficially interested".
The group is seeking to graduate to the main market from Aim by the summer and has also taken on Mr Sagi as an advisor for €1 a year.
Playtech stressed the moves would be put to an independent shareholder vote but analysts expressed surprise.
Simon Davies of Cannacord Genuity said: "There will be inevitable shareholder sensitivity at a series of transactions with its largest shareholder."
That view was echoed by Simon French of Panmure Gordon. "The market will be disappointed by the related party nature of the transactions," he said.
The online gambling software group, which is no stranger to controversy, has signalled its intention to buy a cluster of assets in areas such as social gaming from Mr Sagi, who owns a 48pc stake in Playtech.
Names and details of the companies have not been disclosed but the group said it is likely to spend €95m (£78m).
Playtech said it is also looking at buying, for £10.5m, an office building in London that is owned by a company in which Mr Sagi is "beneficially interested".
The group is seeking to graduate to the main market from Aim by the summer and has also taken on Mr Sagi as an advisor for €1 a year.
Playtech stressed the moves would be put to an independent shareholder vote but analysts expressed surprise.
Simon Davies of Cannacord Genuity said: "There will be inevitable shareholder sensitivity at a series of transactions with its largest shareholder."
That view was echoed by Simon French of Panmure Gordon. "The market will be disappointed by the related party nature of the transactions," he said.
Betsson to acquire Nordic Gaming Group
Betsson AB will acquire Nordic Gaming Group (NGG), a private gaming company based in Malta, owning the brands, NordicBet, Tobet and Triobet. NGG offers gaming in the form of sportsbook, casino and poker to, primarily, Nordic and Baltic customers. Through this acquisition, Betsson secures its position as the largest private alternative to the Nordic monopolies. This acquisition will not affect the previously communicated dividend proposal.
"Through this transaction, Betsson continues to strengthen its Nordic operations and its leading position amongst the private gaming company alternatives in the Nordic region. In addition, Betsson's brand portfolio is strengthened significantly within the betting segment, as NGG receives approximately fifty percent of its revenues from sportsbook", states Magnus Silfverberg, CEO and President of Betsson. In 2011, NGG increased its revenues by 37 percent. During the period 1 April 2011- 31 March 2012, revenues amounted to MEUR 50 and operating income (EBIT) to MEUR 111. At the beginning of 2012, the number of active depositing customers totaled 90,000 and the company has 185 employees. In addition to the income contributed by NGG, it is deemed that synergy effects will be achieved, for example, through the integration of technology platforms and of supplier agreements. As Betsson has a major recruitment need, management believes that the synergies will primarily result in a welcomed injection of qualified staff, which can be utilised within other parts of Betsson which are currently undergoing a strong expansion. Betsson is acquiring NGG from a number of individuals, including both the founders of the company, members of management and employees, as well as from external investors. At closing of the transaction, Betsson will pay a purchase price for the operations (enterprise value) totalling MEUR 65, of which MEUR 5 will be paid either in the form of Betsson shares at a historical 10 day average price or in cash, and the remaining MEUR 60 will be paid in cash. The purchase price is equivalent to 5.9 times EBIT during the last 12 months (1 April 2011 - 31 March 2012). In addition to the up-front purchase price, an additional purchase price, based on the development of NGG during 2012, may become payable by Betsson. Such additional purchase price, if any, will amount to a maximum of MEUR 20, which implies that the total maximum purchase price is MEUR 85. If the outcome of the acquisition results in the full additional purchase price becoming payable, the total purchase price is expected to correspond to approximately 6-7 times NGG's EBIT for 2012. Betsson is entitled to choose to pay any additional purchase price in cash or in Betsson B shares, based on the share price prevailing at the time of such payment. Completion of the transaction is conditional upon customary regulatory approvals.
Betsson has secured a two-year external financing of the transaction, amounting to MSEK 500, which at the current base rate results in an interest rate of approximately 4 percent. The facility will be fully utilized at closing and will be amortised at an appropriate rate which considers the company's dividend policy.
"For NGG, this is an attractive solution as the company can incorporate Betsson's global strength into its operations and it strengthens our possibilities to continue to grow rapidly and with good profitability in the Nordic region, the Baltics and Poland. The two companies have similar cultures, and we foresee a smooth integration, and we believe that we can quickly benefit from each other's strengths ", says Per Hellberg, CEO of NGG.
"Through this transaction, Betsson continues to strengthen its Nordic operations and its leading position amongst the private gaming company alternatives in the Nordic region. In addition, Betsson's brand portfolio is strengthened significantly within the betting segment, as NGG receives approximately fifty percent of its revenues from sportsbook", states Magnus Silfverberg, CEO and President of Betsson. In 2011, NGG increased its revenues by 37 percent. During the period 1 April 2011- 31 March 2012, revenues amounted to MEUR 50 and operating income (EBIT) to MEUR 111. At the beginning of 2012, the number of active depositing customers totaled 90,000 and the company has 185 employees. In addition to the income contributed by NGG, it is deemed that synergy effects will be achieved, for example, through the integration of technology platforms and of supplier agreements. As Betsson has a major recruitment need, management believes that the synergies will primarily result in a welcomed injection of qualified staff, which can be utilised within other parts of Betsson which are currently undergoing a strong expansion. Betsson is acquiring NGG from a number of individuals, including both the founders of the company, members of management and employees, as well as from external investors. At closing of the transaction, Betsson will pay a purchase price for the operations (enterprise value) totalling MEUR 65, of which MEUR 5 will be paid either in the form of Betsson shares at a historical 10 day average price or in cash, and the remaining MEUR 60 will be paid in cash. The purchase price is equivalent to 5.9 times EBIT during the last 12 months (1 April 2011 - 31 March 2012). In addition to the up-front purchase price, an additional purchase price, based on the development of NGG during 2012, may become payable by Betsson. Such additional purchase price, if any, will amount to a maximum of MEUR 20, which implies that the total maximum purchase price is MEUR 85. If the outcome of the acquisition results in the full additional purchase price becoming payable, the total purchase price is expected to correspond to approximately 6-7 times NGG's EBIT for 2012. Betsson is entitled to choose to pay any additional purchase price in cash or in Betsson B shares, based on the share price prevailing at the time of such payment. Completion of the transaction is conditional upon customary regulatory approvals.
Betsson has secured a two-year external financing of the transaction, amounting to MSEK 500, which at the current base rate results in an interest rate of approximately 4 percent. The facility will be fully utilized at closing and will be amortised at an appropriate rate which considers the company's dividend policy.
"For NGG, this is an attractive solution as the company can incorporate Betsson's global strength into its operations and it strengthens our possibilities to continue to grow rapidly and with good profitability in the Nordic region, the Baltics and Poland. The two companies have similar cultures, and we foresee a smooth integration, and we believe that we can quickly benefit from each other's strengths ", says Per Hellberg, CEO of NGG.
April 17, 2012
Playtech aims to go social with €95m acquisition
Online gaming software and services provider Playtech is poised to enter the social gaming market with a planned €95m acquisition of real money gaming and social media assets from a company linked to Teddy Sagi, Playtech’s largest shareholder.
Playtech has signed a non-binding Memorandum of Understanding (MOU) with the undisclosed party regarding the potential acquisition of certain B2B real money gaming and B2B social media assets and businesses, together with a 20 per cent stake in a B2C social gaming operation.
The remaining 80 per cent stake will be retained by entities linked to Teddy Sagi, who will be granted perpetual royalty free licences to use the software and other assets under acquisition, as well as a licence to use certain games from the Playtech portfolio in relation to play for fun activities.
The company says it has been monitoring the social media scene and analysing ways to penetrate the market and believes that the intended acquisition will provide it with the broad range of social gaming platforms and products needed to enable it to supply cross platform capabilities for a full suite of products including social casino, poker, bingo and rummy.
In addition to the social gaming platform and products, the acquisition also includes real-money end-to-end online casino software with integration platform and casino games content, mobile poker and casino software, and online poker software.
Under the AIM Rules for Companies, the acquisition would constitute a related party transaction and Playtech says that it intends to seek independent shareholder approval for the deal, as required for a company with a Premium Listing, regardless of whether it has succeeded in moving to a Premium Listing on the Main Market of the London Stock Exchange at the time of completion.
Playtech added that the €95m consideration would be payable in one or more tranches at a time of its choosing following completion, with any outstanding balance accruing interest at a competitive market rate.
In a second non-binding MOU announced today, Playtech has also secured the services of Teddy Sagi as an advisor to the company for a nominal annual fee of €1.
Playtech has signed a non-binding Memorandum of Understanding (MOU) with the undisclosed party regarding the potential acquisition of certain B2B real money gaming and B2B social media assets and businesses, together with a 20 per cent stake in a B2C social gaming operation.
The remaining 80 per cent stake will be retained by entities linked to Teddy Sagi, who will be granted perpetual royalty free licences to use the software and other assets under acquisition, as well as a licence to use certain games from the Playtech portfolio in relation to play for fun activities.
The company says it has been monitoring the social media scene and analysing ways to penetrate the market and believes that the intended acquisition will provide it with the broad range of social gaming platforms and products needed to enable it to supply cross platform capabilities for a full suite of products including social casino, poker, bingo and rummy.
In addition to the social gaming platform and products, the acquisition also includes real-money end-to-end online casino software with integration platform and casino games content, mobile poker and casino software, and online poker software.
Under the AIM Rules for Companies, the acquisition would constitute a related party transaction and Playtech says that it intends to seek independent shareholder approval for the deal, as required for a company with a Premium Listing, regardless of whether it has succeeded in moving to a Premium Listing on the Main Market of the London Stock Exchange at the time of completion.
Playtech added that the €95m consideration would be payable in one or more tranches at a time of its choosing following completion, with any outstanding balance accruing interest at a competitive market rate.
In a second non-binding MOU announced today, Playtech has also secured the services of Teddy Sagi as an advisor to the company for a nominal annual fee of €1.
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