Aristocrat braces for US online gambling gold rush
Playtech is paving the way for Aristocrat to enter the US $ 70 billion ($ 94.4 billion) “real money games” (RMG) online industry, which includes real money sports betting and games. gambling in digital casinos.
âI think that’s the nature of this industry where it’s just starting to be regulated, it’s starting to mature right now. And that’s why we think entering North America with Playtech is so compelling, âsaid Mr. Croker.
âWe believe it has a very strong growth trajectory, driven by underlying structural trends with product innovation, customer demand and the opening of regulated jurisdictions.
âWe believe the current $ 70 billion addressable market has the potential to grow in line with broader consumer and tech trends, which have only accelerated thanks to COVID. The North American market is expected to experience the strongest growth over the medium term, âhe said.
Playtech operates the largest purpose-built live casino in the industry and is one of the world’s largest providers of online gambling software, developing platforms and content for the gaming industry. money and operates in 24 countries. It supplies software to 170 online gaming operators in the RMG industry, including sports betting giants like Entain (owner of Ladbrokes), Flutter and Bet365.
The acquisition would complement Aristocrat’s gaming infrastructure, but the move also represents a shift for Aristocrat from a pure infrastructure provider to a gaming and betting operator through Playtech’s business-to-consumer (B2C) division.
Italian Playtech company – Snaitech – operates betting shops, gaming parlors and online operators, giving punters the ability to play slots, sports, horse racing and a range of games. in line.
The business-to-consumer and business-to-business branches of the London group recorded EBITDA of $ 396 million during the fiscal year ended June 30.
But Mr Croker said on Monday that Aristocrat would review Playtech’s operations in a number of high-risk jurisdictions and potentially exit them, with a potential of $ 78 million to $ 125 million in EBITDA to be reduced significantly or eliminated altogether. High risk jurisdictions have not been identified.
Aristocrat halted trading Monday morning before announcing the proposed acquisition to the Australian Securities Exchange. The acquisition ends more than 12 months of research for a company of the size and caliber of Playtech.
Mr Croker said management scoured the market, evaluating a range of smaller, cheaper companies before choosing Playtech because it has the software and global footprint to develop business-to-business and customer-facing products. .
âThis has been going on for over 12 monthsâ¦ it has been going on for quite some timeâ¦ we have looked at many alternatives to [Playtech]”said Mr. Croker.
âWe looked at smaller-scale solutions that could have been cheaper and could have been scaled up.
“[But] to be honest with you, we were ideally aiming for a platform and an integrated system, which Playtech offers. And [we were also looking for] the ability, with very powerful technology, to be able to scale and integrate, âCoker said.
Shareholders of London-listed Playtech are offered 680 pence per share, a premium of 58.4% over the company’s closing price on Friday.
Aristocrat has solicited the market for a $ 1.3 billion capital increase to fund the transaction, which will also be funded by a combination of $ 1.1 billion of existing cash and a new B loan of 2, $ 8 billion.
The Australian Financial Review Street Talk reported that UBS and Goldman Sachs are in the market for a capital raise. The brokerage offices contacted the funds Monday morning to offer new Aristocrat shares at $ 41.85 each in a pro-rated one-for-20.56 entitlement offer.
The agreement was signed and valued at a discount of 8.6% compared to the last closing. It was structured as a pro-rata accelerated waiver of rights offering with retail rights negotiation.