Playtech has amended its strategic agreement with Tecnologia en Entretenimiento Caliplay SAPI de CV, a Corporación Caliente SA de CV subsidiary, resulting in the company receiving over €150m in unpaid software and service fees.
The gambling technology company has also provided a trading update ahead of its interim H1 results being published later this month, stating that FY 2024 adjusted EBITDA is “slightly ahead of current consensus expectations”, as well as the latest on its potential Snaitech sale to Flutter Entertainment.
Caliplay is a joint venture operation between Playtech and Caliente in Mexico.
However, Playtech and Caliplay have been in a dispute for almost a year related to the commercial structure and entitlement contracts of the Mexican joint venture, with the long-standing legal challenge being referred to the courts of London and Mexico City.
Despite the disagreements, Playtech had previously stated that Caliplay was an important customer and that the two parties remained in an open dialogue. As such, an amended strategic deal has been agreed upon.
Mor Weizer, CEO of Playtech, commented: “During the past nine years, we have worked closely with Caliplay to create a successful and rapidly growing digital business in Mexico.
“The revised arrangements mark the beginning of an exciting new chapter that will build on the impressive progress to date, with a view to driving significant further growth for Cali Interactive in the future.”
Under the amended terms, Playtech will hold a 30.8% equity interest in Caliente Interactive, which will be the new holding company of Caliplay in the United States. Playtech will also be entitled to receive dividends alongside other shareholders in Cali Interactive, as well as have the right to appoint a Director to the Board.
In addition, the platform provider will enter into a revised eight-year B2B software licence and services agreement and will receive an additional US$140m from Cali Interactive, paid in cash over four years.
Caliplay has also resumed paying its software and services fees to Playtech, with more than €150m (over 80%) of the unpaid fees due from the Mexican brand having now been received. Paid into escrow, the balance will be released either on the closing of the revised arrangements – expected in Q1 2025 – or by the end of 2025 at the latest.
Playtech noted that the revised arrangements are conditional upon Mexican antitrust approval with closing expected in Q1 2025. An agreed standstill of all current legal proceedings between Caliente, Caliplay and Playtech is in place and once the revised arrangements come into effect, the proceedings will be dismissed in full.
“The agreement with Caliente and Caliplay underlines the attractiveness of Playtech’s leading proprietary technology,” stated Weizer.
“With a strong position in Mexico and exposure to other fast-growing markets in the Americas and Europe, we remain well-placed to deliver strong growth in our B2B business in the coming years.”
With the amended agreement in place, Playtech has received updated details on Caliplay’s financials, reporting that the operations are performing strongly in the first half of 2024.
Emilio Hank, Chair of Caliplay, added: “We are delighted to finalise this renewed agreement which shows the inherent strength of the strategic relationship between Caliplay and Playtech.
“We are focused on growing Caliplay, leveraging our core strengths and Playtech’s leading technology to broaden our geographical footprint, as we continue in our mission to give the best gaming experiences to our customers in Mexico and beyond.”
Playtech has also delivered a trading update ahead of the release of its interim H1 2024 results on 30 September.
The company noted that a “good trading performance” has been delivered during the period “with a broad continuation of the trends” from its AGM trading statement back in May.
In addition, 2024 adjusted EBITDA is expected to be “slightly ahead of current consensus expectations” thanks to a strong B2B performance which was “driven by a combination of revenue growth in the Americas and a focus on tighter cost control”.
Alongside the previously mentioned Caliplay performance, Playtech stated that “good strategic progress” continues to occur in the US and Canada with strong growth occurring from a small base, while Colombia is providing a “growing contribution”.
For B2C operations, the company reported that Snaitech is seeing “underlying growth” in wagers, despite being negatively impacted by customer-friendly sporting results in Italy.
Playtech also reflected on the potential sale of Snaitech to Flutter, noting that while discussions continue, there can be “no certainty that any transaction will ultimately be agreed, or as to its terms”, and that further announcements will be made as and when appropriate.
Gaming Innovation Group Inc, now Gentoo Media Inc, has finalised its restructuring process, officially splitting up its media and platform division into two independently listed companies – Gentoo Media and GiG Software PLC.
Following final approval from its board of directors, Gentoo Media stated that “all necessary legal steps have been completed, and the assets and subsidiaries of the platform business have been extracted from Gentoo Media Inc. and distributed to the shareholders”.
Completing the split initiated in February last year, GiG Software will continue as an independent B2B company, providing the igaming industry with its proprietary platform and sportsbook technology. The business will be listed on the Nasdaq First North Premier Growth Market.
Meanwhile, supplying marketing affiliate services to the igaming industry, Gentoo Media will be listed on the Oslo Stock Exchange in Norway with the ticker symbol G2MNO, in addition to being listed on Nasdaq Stockholm in Sweden with the ticker symbol G2M.
Jonas Warrer, CEO of Gentoo Media, noted: “We are thrilled by the opportunities this split presents, allowing us to strengthen our market leadership while enhancing shareholder value.”
Gentoo Media has also entered into a €25m Revolving Facility Agreement with Citibank Europe plc, “securing financial flexibility and operational excellence in its daily operations”.
“This marks a new chapter in the ongoing evolution of our media affiliate business,” stated Mikael Harstad, Chair of the Board at Gentoo Media.
“Gentoo Media is now well-positioned to continue its remarkable growth journey as an independent and vertical-focused company within igaming.”
The distribution of the GiG Software business to the shareholders has taken place “in the form of depository receipts in GiG Software PLC, i.e. Norwegian Depository Receipts (NDRs) to investors holding shares in Euronext Securities Oslo (VPS), and Swedish Depository Receipts (SDRs) to investors holding shares in Euroclear Sweden”.
GiG Software’s SDRs will be listed on the Nasdaq First North Premier Growth Market, but neither the SDRs nor the NDRs will be listed on any stock exchange in Norway.
However, holders of NDRs can convert the NDRs to SDRs by contacting their banks or brokers. GiG Software aims to list the NDRs on the Euronext NOTC market.
Richard Carter, CEO of GiG, commented: “Today marks a pivotal moment for GiG as we embark on a new chapter of growth and opportunity. The strategic spinout allows us to unlock the full potential of our proprietary technology and provides GiG with the focus, agility, and innovation needed to excel in the B2B space.
“By standing alone, we can fully commit to delivering value to our partners and investors, all while leveraging the foundations that we have already laid for sustainable long-term growth. This is the start of an exciting new era, with GiG positioned to deliver as a leader in the global B2B igaming industry.”
The platform business has received a starting cash balance sufficient to secure its operations. Meanwhile, the media business has used part of the proceeds from the share issue in June 2024 to repay €5.9m of bank loans held by Sportnco before the split.
“GiG represents a very exciting growth story: having full control over our technology stack, combined with management’s vision and the execution of our strategic initiatives, the company is well positioned for success,” said Phil Richards, CFO at GiG.
“In addition, the quality of our platform will give us a significant competitive advantage. We’re confident that as we continue to deliver on our strategy, the full value of the potential of this business will be realised.”
Petter Nylander, Chair of the Board at GiG, added: “Today is the realisation of our long-held confidence in the company’s ability to thrive independently. By focusing exclusively on our technology and full end-to-end services, we are unlocking new avenues for growth and innovation.
“The board fully believes in the vision and the leadership team driving this business forward. We are confident that GiG is uniquely positioned to capitalise on the immense opportunities ahead, and today’s listing marks the beginning of an exciting journey that will create significant value for our investors.”
