Scientific Games has detailed a definitive agreement alongside sports and entertainment group Endeavor, which will acquire the firm’s OpenBet sports betting business.

Under the terms of the agreement, the former will receive $1bn in cash and $200m in Endeavor class A common stock based on the volume-weighted average trading price for the twenty trading days ending on September 24, 2021, subject to customary purchase price adjustments. 

The transaction is expected to close in the second quarter of 2022, subject to applicable regulatory approvals and customary closing conditions. 

“OpenBet has built an incredible sports betting suite anchored in its best-in-class betting engine and now includes expanded content, services and products for sportsbooks and fans,” said Ariel Emanuel, CEO of Endeavor

“This capability set is the ideal complement to our IMG Arena sports betting business, which works directly with sports rights holders. We look forward to growing these businesses together to capitalise on the strong secular tailwinds in the sports betting ecosystem.”

The divestment is lauded as a “significant milestone” for Scientific Games, after the company previously spoke of an intention to “target investments towards the largest growth opportunities”. 

“This transaction represents the culmination of a thorough process to divest OpenBet in order to maximise value for our shareholders and rapidly advance our vision to become the leading cross platform global game company,” explained Barry Cottle, president and CEO of Scientific Games

“The transaction is a significant milestone towards optimising our portfolio and de-levering the balance sheet to enhance our financial flexibility. 

“It will position us to invest both organically and inorganically in key growth areas, particularly in content and digital markets. 

“We are delivering on our promises and executing on our strategy to transform our company and unlock significant value for employees, customers and shareholders.”

To date, OpenBet has more than 75 global customers, including 24 sportsbooks across 12 states, including the likes of SkyBet, William Hill, Ladbrokes, DraftKings, BetMGM and FanDuel.

Scientific Games had acquired Openbet in 2018 as part of its £700m takeover of NYX Gaming, as the technology group moved to expand into the online gambling sector.

“We believe Endeavor will enable us to build on our exceptional track record of innovation and reliability and unlock even greater value for our customers and employees,” added Jordan Levin, chief executive of Scientific Games’ digital business

“Endeavor’s deep industry relationships and global reach make them the ideal partner. Together, these companies will be well positioned to capitalise on emerging trends to deliver even more innovative and tailored solutions to customers as we define the future of sports betting entertainment.”