Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. Today we take a look at legal matters in both Nevada and Washington; the ongoing pursuit of Crown Resorts; US commercial gaming revenue and acquisitions concerning Zynga, Flutter, and Everi.
A Nevada court denied an emergency motion for a preliminary injunction to be issued against Dr Laila Mintas by technology supplier PlayUp, after finding that the group’s ex-CEO had not caused the collapse of a proposed sale and “was turned into the scapegoat”.
The ongoing legal dispute stems from the online betting and gaming provider citing breach of contract claims, alleging that Mintas had tried to damage the business and ultimately “engaged in conduct directly in violation” of contractual terms in causing the collapse of a proposed sale.
However, Judge Gloria Navarro denied the motion for a preliminary injunction, stating that Dr Mintas’ defence had successfully demonstrated “that it was just as likely or more likely that the actions of Daniel Simic are the ones that caused the negotiations to cease irreparably”.
The alleged derailment of a proposed acquisition by cryptocurrency exchange FTX has previously seen Mintas’ defence claim that Daniel Simic, PlayUp Global CEO, “became greedy” and caused the deal to fall through.
Citing an email from November 9, 2021, a prior filing claimed that Simic disclosed to Dr Mintas that he wanted to require FTX to acquire a company purportedly unrelated to PlayUp, PlayChip, for an additional $105m, and the group to pay a $65m incentive to Australian “key staff”, including $25m for himself, which increased the total acquisition price to an additional $170m.
Maverick Gaming has filed litigation to challenge what it dubs “an erroneous application of the Indian Gaming Regulatory Act”.
This, the company says, is being used inappropriately to give tribes exclusive rights to certain types of gaming, such as sports betting, that are not allowed in non-tribal gaming properties in Washington state.
The company’s legal representative adds that the state is misusing IGRA to “create tribal monopolies on certain types of gaming,” in addition producing “tribal monopolies on certain types of gaming”.
In response, the Washington Indian Gaming Association has called the lawsuit, filed in the US District Court for the District of Columbia, a “desperate attempt to overturn federal law” which it says represents the sentiments of the general public in the region.
“It would severely undermine the well regulated and safe system of limited gaming that has been established in Washington state over three decades of carefully negotiated compacts between the state of Washington and native American tribes,” responded Rebecca George, executive director of WIGA.
Crown Resorts confirmed the receipt of a fresh takeover offer from a company on behalf of funds managed and advised by Blackstone and its affiliates.
The revised proposal, which has been made after considering non-public information provided by Crown during initial due diligence, represents a price of A$13.10 cash per share.
This comes in at an increase of $0.60 cash per share compared to the previous offer of $12.50, which was announced to the Australian Stock Exchange on November 19, 2021.
Blackstone had made a number of acquisitive overtures to the embattled casino operator, with its latest proposal subject to the same conditions as its prior motion.
This includes, but is not limited to, completing further due diligence; unanimous support and recommendation by the Crown board; execution of a binding implementation agreement; and Blackstone receiving final approval from the casino regulators in each of Victoria, New South Wales and Western Australia.
The Crown board said that, following consideration, it considers that “it is in the interests” of the group to engage further with Blackstone on a non-exclusive basis.
Take-Two Interactive unveiled a definitive agreement that will see the New York headquartered firm purchase Zynga in a cash and stock transaction valued at $9.861 per Zynga share, based on the market close as of January 7, 2022, with a total enterprise value of approximately $12.7bn.
Under the terms and subject to the conditions of the agreement, Zynga stockholders will receive $3.50 in cash and $6.361 in shares of Take-Two common stock for each share of common stock outstanding at closing. This represents a premium of 64 per cent to the group’s closing share price on January 7, 2022.
The purchase, lauded as a unity of “two global leaders” of interactive entertainment, is expected to deliver in the region of $100m of annual cost synergies within the first two years after closing.
The transaction is expected to be finalised during the first quarter of Take-Two’s 2023 fiscal year, ending June 30, 2022, subject to the consent of stockholders of both firm’s, as well as the satisfaction of customary closing conditions, including applicable regulatory approvals.
Flutter Entertainment continued to execute on its M&A intentions into 2022, with the gambling group announcing the completion of its previously announced Tombola transaction.
The acquisition, which became finalised following the receipt of all necessary regulatory confirmations, has seen Flutter pay £402m which has been fully funded through the group’s current cash and debt facilities.
The firm asserted that its latest portfolio addition is set to deliver several “key strategic advantages,” with diversification of its products one such benefit previously pinpointed.
Furthermore, the operator group also highlighted that Tombola would also create a more engaged and sustainable player base, while enhancing Flutter’s safer gambling strategy.
US commercial gaming continued its record breaking momentum into November, with the American Gaming Association’s Commercial Gaming Revenue Tracker showing that the 30-day period marked the second-highest grossing month.
The group reported that revenue from traditional casino gaming, sports betting and igaming reached $4.85bn, which demonstrated growth of 35.3 per cent year-on-year and up 1.3 percent from October 2021.
Prior to 2021, monthly commercial gaming revenue had never surpassed $4bn, however, this now represents the ninth-consecutive month where that figure has been exceeded.
With December revenue yet to be reported, 2021 annual gaming revenue reached $48.34bn through the end of November, shattering the industry’s full-year record of $43.65bn in 2019 and tracking 21.3 per cent ahead of the same eleven-month period from two years earlier.
On a state-by-state basis, 23 of 26 commercial gaming jurisdictions that were operational in November 2019 saw revenue growth over that month, with decreases only witnessed in Kansas (-10.6 per cent), Louisiana (-6.3 per cent) and New Mexico (-9.1 per cent).
Everi is looking to drive its development capabilities, as well as carve out opportunities for further global penetration, after detailing an agreement to acquire certain strategic assets of Atlas Gaming and Atlas Gaming Technologies.
The purchase will include game development technology and intellectual property of the Australia-based developer and provider of proprietary gaming content and products, with Everi expecting to close the transaction within the next 60 days.
The company said that the newly acquired assets will complement its existing game development studios and portfolio of games, while providing a pathway for future expansion into new international markets.
In conjunction with the acquisition of these assets, Atlas development and engineering team members will join Everi, who will fund the acquisition from existing cash on hand.