After some 13 years from stepping out of the US online gambling payments sector it looks like industry giant PayPal is moving back into online gaming. When eBay purchased PayPal in 2002 it immediately pulled its presence from the online gambling payments sector in the US but now thirteen years on it has now been introduced again on the Caesars Interactive websites in Nevada.
Now that PayPal has been given its freedom from eBay as a separate entity, PayPal wants to prove itself and has recently hired some well-known online gambling industry payments professionals to ensure the success in the online gambling business US side.
Before it pulled out of the US online gambling business PayPal was generating more than 6% of its total revenues from online gambling and it sees the US market as a huge potential for growth again says industry watchers.
Showing posts with label PayPal. Show all posts
Showing posts with label PayPal. Show all posts
September 09, 2015
March 23, 2015
Optimal Payments strikes €1.1bn digital wallet deal for Skrill
Optimal Payments has expanded its digital wallet with the €1.1bn reverse takeover of rival Skrill in a move that will propel the combined online payments business into the FTSE 250.
The company said the “transformational” deal would broaden its exposure to the “rapidly expanding online gaming sector” as well as the wider e-commerce world
The group has developed a payments technology system allowing gamblers to transfer winnings and place stakes across a range of gaming websites at the touch of a button, as well as enabling rapid-fire payments for live sports betting.
Skrill’s paysafecard brand is one of the largest pre-paid online voucher providers in Europe, enabling consumers without a bank account or credit card to purchase goods and services online.
“We thought they were out fishing for sprats and they have landed a whale,” said Ivor Jones, leisure analyst at Numis. “At a stroke, it brings a major competitor on board, sharply reduces [Optimal’s] exposure to Asia and brings credible venture capital investors on to the share register.”
Shares in Aim-traded Optimal were suspended on Monday morning after it announced the proposed acquisition, to be financed by a fully underwritten £451m rights issue plus existing cash and debt facilities, after which it will relist on the main market.
Skrill, which shelved plans for a £160m listing in 2011 and was once chaired by the former investment banker Bob Wigley, is majority owned by CVC Capital Partners. The private equity firm acquired a majority stake in the business for €600m from Investcorp 18 months ago.
“PayPal is the 800 pound gorilla in this industry, and while I’m not sure we’re in their rear view mirror yet, there’s room for a number two,” said Joel Leonoff, Optimal’s chief executive, adding that the deal was “a very significant acceleration of our business plan”.
As well as online gaming, the group has ambitions to target a greater share of the mobile payments market, although it faces stiff competition from tech giants Apple, Samsung and Google.
The space is rapidly consolidating as payment providers try to scale up as quickly as possible in the heavily regulated space. Last November, Skrill itself announced that it was acquiring another competitor, Ukash, in a deal that is yet to be completed.
Beneath it all is the growing dominance of smartphones in ecommerce and online gaming. “It actually sits on something more fundamental, which is the move towards mobile commerce. It’s the mobile ecosystem that’s emerging here,” said Robin Speakman, analyst at Shore Capital.
Digital wallets are an increasing necessity for online gamblers, who tend to play across multiple sites. Customers in “grey” markets, where online gambling is not formally regulated, also use wallets as a way of moving their money to gambling websites.
“In certain jurisdictions Visa and MasterCard are not available for online gambling,” said Gavin Kelleher, analyst at Goodbodys.
Mr Leonoff said that customers used their wallets as a “hub” to move money between websites like PartyGaming, PokerStars and 888.
Higher transaction speeds offered by digital wallets were crucial for live sports betting, he added: “If you’re watching a tennis game, you can bet whether a serve is going to be in or out, so it has to be really fast.”
The combined business would be well placed to target demand from emerging markets and the rapidly evolving mobile payments market, he said.
“We also cater to a very significant proportion of the world that is unbankable and doesn’t have the facilities to provide credit cards. We have helped the online gaming companies gain access to customers in South America where US-verified credit card payments were hard to obtain, which has greatly facilitated approval ratings.”
Optimal said it would acquire the entire listed share capital of Skrill for €720m cash and 37.5m new ordinary shares, after which parent company Sentinel Group Holdings would own nearly 8 per cent of the group.
Optimal said the deal had an enterprise value of €1.1bn, valuing Skrill at a multiple of 9.3 times earnings before interest, tax, depreciation and amortisation for the 12 months to September 2014, adjusted to reflect ongoing annual cost saving synergies of $40m, plus net debt of €256m.
The combined group would have annual revenues approaching $700m, and ebitda of $175m, Optimal said, diversifying its geographic exposure and customer base, offering over 100 payment types in 41 currencies and 22 languages. This would enable Optimal to “capitalise on expected growth in the North American regulated online gambling market,” the company added.
Optimal’s full-year results, released in tandem with its announcement on Monday, showed an 83 per cent increase in profit after tax to $57.7m on revenues that increased 44 per cent to $365m in the year to December 31.
The results were boosted by the acquisition of the Meritus and GMA businesses in the US last summer, plus a “significant” contribution from the World Cup.
Optimal intends to raise £451m through a five-for-three rights issue priced at 166p per share, a 60 per cent discount to Friday’s closing price of 419p, which has been fully underwritten by Canaccord Genuity, Deutsche Bank and BMO Capital Markets. Lazard additionally advised Optimal on the transaction.
Optimal said it had received “significant” shareholder support for the rights issue, including its largest shareholder Old Mutual which holds an 11.3 per cent stake.
If shareholder approval is granted at a general meeting on April 16, the new shares are expected to start trading on Aim a day later, with the acquisition expected to complete “in the third quarter of 2015”, the company said.
The company said the “transformational” deal would broaden its exposure to the “rapidly expanding online gaming sector” as well as the wider e-commerce world
The group has developed a payments technology system allowing gamblers to transfer winnings and place stakes across a range of gaming websites at the touch of a button, as well as enabling rapid-fire payments for live sports betting.
Skrill’s paysafecard brand is one of the largest pre-paid online voucher providers in Europe, enabling consumers without a bank account or credit card to purchase goods and services online.
“We thought they were out fishing for sprats and they have landed a whale,” said Ivor Jones, leisure analyst at Numis. “At a stroke, it brings a major competitor on board, sharply reduces [Optimal’s] exposure to Asia and brings credible venture capital investors on to the share register.”
Shares in Aim-traded Optimal were suspended on Monday morning after it announced the proposed acquisition, to be financed by a fully underwritten £451m rights issue plus existing cash and debt facilities, after which it will relist on the main market.
Skrill, which shelved plans for a £160m listing in 2011 and was once chaired by the former investment banker Bob Wigley, is majority owned by CVC Capital Partners. The private equity firm acquired a majority stake in the business for €600m from Investcorp 18 months ago.
“PayPal is the 800 pound gorilla in this industry, and while I’m not sure we’re in their rear view mirror yet, there’s room for a number two,” said Joel Leonoff, Optimal’s chief executive, adding that the deal was “a very significant acceleration of our business plan”.
As well as online gaming, the group has ambitions to target a greater share of the mobile payments market, although it faces stiff competition from tech giants Apple, Samsung and Google.
The space is rapidly consolidating as payment providers try to scale up as quickly as possible in the heavily regulated space. Last November, Skrill itself announced that it was acquiring another competitor, Ukash, in a deal that is yet to be completed.
Beneath it all is the growing dominance of smartphones in ecommerce and online gaming. “It actually sits on something more fundamental, which is the move towards mobile commerce. It’s the mobile ecosystem that’s emerging here,” said Robin Speakman, analyst at Shore Capital.
Digital wallets are an increasing necessity for online gamblers, who tend to play across multiple sites. Customers in “grey” markets, where online gambling is not formally regulated, also use wallets as a way of moving their money to gambling websites.
“In certain jurisdictions Visa and MasterCard are not available for online gambling,” said Gavin Kelleher, analyst at Goodbodys.
Mr Leonoff said that customers used their wallets as a “hub” to move money between websites like PartyGaming, PokerStars and 888.
Higher transaction speeds offered by digital wallets were crucial for live sports betting, he added: “If you’re watching a tennis game, you can bet whether a serve is going to be in or out, so it has to be really fast.”
The combined business would be well placed to target demand from emerging markets and the rapidly evolving mobile payments market, he said.
“We also cater to a very significant proportion of the world that is unbankable and doesn’t have the facilities to provide credit cards. We have helped the online gaming companies gain access to customers in South America where US-verified credit card payments were hard to obtain, which has greatly facilitated approval ratings.”
Optimal said it would acquire the entire listed share capital of Skrill for €720m cash and 37.5m new ordinary shares, after which parent company Sentinel Group Holdings would own nearly 8 per cent of the group.
Optimal said the deal had an enterprise value of €1.1bn, valuing Skrill at a multiple of 9.3 times earnings before interest, tax, depreciation and amortisation for the 12 months to September 2014, adjusted to reflect ongoing annual cost saving synergies of $40m, plus net debt of €256m.
The combined group would have annual revenues approaching $700m, and ebitda of $175m, Optimal said, diversifying its geographic exposure and customer base, offering over 100 payment types in 41 currencies and 22 languages. This would enable Optimal to “capitalise on expected growth in the North American regulated online gambling market,” the company added.
Optimal’s full-year results, released in tandem with its announcement on Monday, showed an 83 per cent increase in profit after tax to $57.7m on revenues that increased 44 per cent to $365m in the year to December 31.
The results were boosted by the acquisition of the Meritus and GMA businesses in the US last summer, plus a “significant” contribution from the World Cup.
Optimal intends to raise £451m through a five-for-three rights issue priced at 166p per share, a 60 per cent discount to Friday’s closing price of 419p, which has been fully underwritten by Canaccord Genuity, Deutsche Bank and BMO Capital Markets. Lazard additionally advised Optimal on the transaction.
Optimal said it had received “significant” shareholder support for the rights issue, including its largest shareholder Old Mutual which holds an 11.3 per cent stake.
If shareholder approval is granted at a general meeting on April 16, the new shares are expected to start trading on Aim a day later, with the acquisition expected to complete “in the third quarter of 2015”, the company said.
August 22, 2014
PayPal to process US igaming transactions
EBay owned payment processing operator PayPal is considering allowing customer transactions in US state licensed igaming territories.
The news that PayPal the world largest payment processor could allow payment transactions for US igaming customers was brought to light by Poker news website – Onlinepokerreport.com.
“Sources tell OPR that PayPal will start processing regulated US online #gambling payments in coming months,” OPR tweeted. “Handful of operators to start.”
The news of PayPal allowing US transactions will come as good news to state licensed igaming operators, who have been frustrated at the lack of third party payment providers willing to take transactions
At present, Skrill (formaly known as “Moneybookers”) is the top payment processor in the state of New Jersey. Neteller is the web wallet of choise for Nevada and Delaware.
The news that PayPal the world largest payment processor could allow payment transactions for US igaming customers was brought to light by Poker news website – Onlinepokerreport.com.
“Sources tell OPR that PayPal will start processing regulated US online #gambling payments in coming months,” OPR tweeted. “Handful of operators to start.”
The news of PayPal allowing US transactions will come as good news to state licensed igaming operators, who have been frustrated at the lack of third party payment providers willing to take transactions
At present, Skrill (formaly known as “Moneybookers”) is the top payment processor in the state of New Jersey. Neteller is the web wallet of choise for Nevada and Delaware.
December 16, 2013
PayPal Admits To Sharing Customer Info With Company Tied To UB Poker Scandal
According to PayPal's Privacy Policy, the popular payment company contracts Iovation to "retrieve risk information regarding the IP and device from which you are accessing PayPal [and] research and testing as to appropriateness of new products and services."
Iovation, for those of you unaware, has a CEO who founded Ultimate Poker, the now shuttered online poker site scarred by an internal cheating scandal that ultimately wound up being profiled on a segment of the CBS news magazine "60 Minutes".
Whether the folks behind PayPal were aware of Iovation’s skeletons, few seem to really know. PayPal bigwigs might not follow industry poker news but they certainly keep tabs on their own community forum, which now features a posted message regarding the controversy.
USPoker.com was among the first websites to note the cozy relationship between PayPal and Iovation.
And it is not the first time Iovation has developed business partnership arrangements with otherwise reputable companies.
Last March, the Station Casinos backed online poker site Ultimate Poker (not to be confused with UltimateBet) severed ties with Iovation once these past revelations came to light.
“We understand that there were concerns among some of our customers, we hope this makes our players feel more comfortable,” a short statement from Ultimate Poker read at the time.
Iovation is subcontracted through CAMS, itself a subsidiary of Verifi.
From US Poker:
Travis Makar, a former business associate of Russ Hamilton, released tapes that implicate Hamilton and Greg Pierson, among others, in a cover-up of the UltimateBet insider cheating scandal. Pierson is the CEO and co-founder of Iovation.
A documentary on the UltimateBet insider cheating titled UltimateBeat connects Iovation co-founders directly to the scandal. Scott Bell, director and creator of UltimateBeat, published a detailed outline of the tapes leaked by Makar here. These tapes were used in the UltimateBeat film.
Iovation, for those of you unaware, has a CEO who founded Ultimate Poker, the now shuttered online poker site scarred by an internal cheating scandal that ultimately wound up being profiled on a segment of the CBS news magazine "60 Minutes".
Whether the folks behind PayPal were aware of Iovation’s skeletons, few seem to really know. PayPal bigwigs might not follow industry poker news but they certainly keep tabs on their own community forum, which now features a posted message regarding the controversy.
USPoker.com was among the first websites to note the cozy relationship between PayPal and Iovation.
And it is not the first time Iovation has developed business partnership arrangements with otherwise reputable companies.
Last March, the Station Casinos backed online poker site Ultimate Poker (not to be confused with UltimateBet) severed ties with Iovation once these past revelations came to light.
“We understand that there were concerns among some of our customers, we hope this makes our players feel more comfortable,” a short statement from Ultimate Poker read at the time.
Iovation is subcontracted through CAMS, itself a subsidiary of Verifi.
From US Poker:
Travis Makar, a former business associate of Russ Hamilton, released tapes that implicate Hamilton and Greg Pierson, among others, in a cover-up of the UltimateBet insider cheating scandal. Pierson is the CEO and co-founder of Iovation.
A documentary on the UltimateBet insider cheating titled UltimateBeat connects Iovation co-founders directly to the scandal. Scott Bell, director and creator of UltimateBeat, published a detailed outline of the tapes leaked by Makar here. These tapes were used in the UltimateBeat film.
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