The developer of online gambling software has entered into a conditional agreement to buy Real Entertainment Ltd, a long time licensee of World Gaming operating the flagship brand Sportsbetting.com and other primary sites like Racebook.com and Win4real.com.
The final price, which will be paid 75 per cent in cash and 25 per cent by the issue and allotment of Consideration Shares, will depend on whether Real Entertainment\’s profit before tax is not less than $15 million this year.
In the event that the profit before tax is below $15 million, the consideration will be six times the 2005 PBT, subject to a minimum consideration of $72 million.
The transaction constitutes a reverse takeover for the purpose of the Alternative Investment Market rules and hence in accordance with these rules World Gaming has requested that its shares be suspended from trading on AIM until the Annual General Meeting, when the company will look to obtain the consent of its shareholder for the acquisition.
“The acquisition represents the World Gaming Group\’s first step into Internet gaming operations in its core markets of sports betting, horse racing, casino and poker. Our existing business and assets combined with those of the Sportsbetting.com Group represent a robust platform from which we can continue with our strategy to grow and become a leading consolidator in the industry. We believe that this transaction better positions the Group to target global markets which will increase revenues and diversify risk,” said Daniel Moran, Chief Executive of World Gaming.
By taking ownership of the underlying customer database, World Gaming will move up the industry value chain and earn all of the revenue, or net win, on each gambling transaction as opposed to a percentage of revenue under existing licensing models.
Furthermore, the company\’s Directors believe there is an opportunity to target other geographic regions, which will increase revenues, diversify risk and reduce the seasonality, which exists due to the sports seasons in the United States. The addition of non-event reliant products such as poker will further mitigate seasonal demand.
In separate news, Carmen Media has acquired its most successful affiliate program, ReferBack.
Today on the stock market, shares of BetonSports and Empire Online were in demand on rumours that the sportsbook operator could be a takeover target for PartyGaming, while the online poker operator is supposedly set to announce a tie-up with a leading player in the betting world.
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