Boyd Gaming pays $170 million for Pala Interactive
Posted: March 28, 2022, 7:11 a.m.
Last update: March 29, 2022, 12:45 p.m.
Boyd Gaming Inc (NYSE:BYD) today announced that its Boyd Gaming Interactive unit is paying $170 million in cash to acquire Pala Interactive from Pala Band of Mission Indians in California.
Pala Interactive includes business-to-business (B2B) and business-to-consumer (B2C) platforms. News of the purchase comes shortly after Pala Interactive secured its license as an Ontario Gaming Related Supplier (GRS). The company provides B2B services in eight states and Canada, while its consumer offerings are available in Canada and New Jersey.
For Las Vegas-based Boyd, the deal brings additional technology – a coveted trait in the iGaming space these days.
The acquisition of Pala Interactive marks the next phase in the continued execution of our iGaming strategy, giving us full control over technology, development and customer experience,” Boyd CEO Keith Smith said in a statement.
Boyd is financing the purchase, which is expected to be completed in the first quarter of 2023, with cash and capital from an existing credit facility.
Benefits for Boyd
Boyd currently operates its iconic Stardust brand for its social casino, through which members of its B Connected loyalty program can earn rewards points.
With the purchase of Pala Interactive, the buyer benefits from online casino technology, an experienced management team and managed services for customer support, fraud issues and payments. Additionally, Boyd acquires technology relevant to the operation of real and social money casino operations and the management of player accounts, as well as an in-house game studio.
“By integrating online casinos with our existing land-based operations, we will be able to further leverage and monetize our extensive customer database and the amenities of our national portfolio of properties, driving the growth of our land-based and iGaming operations” , adds Smith.
More and more casino operators are looking to take advantage of online platforms as data confirms that dedicated users of internet offerings end up traveling and spending at land-based gaming venues.
The regional casino company operates 28 gaming sites in 10 states, including 11 in its hometown. It currently offers real money online casinos in New Jersey and Pennsylvania.
EBITDA increase, no FanDuel interference
In an investor presentation, Boyd notes that Pala Interactive generated $5 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) last year — a figure that is expected to rise in 2022.
The buyer also points out that the acquired entity’s customer list includes Gamesys, Kindred, Unibet and the World Poker Tour, among others.
Boyd adds that the acquisition of Pala Interactive does not impact its 5% stake in FanDuel, which serves as the casino operator’s main exposure to sports betting outside of its home country.