Betcorp has entered into an agreement, conditional only on the approval of shareholders, to sell the group’s gaming operations and operating infrastructure in Antigua and Toronto to Bodog Entertainment Group.
The consideration payable to Betcorp includes $3 million upfront and $6 million in four equal quarterly instalments over the next 12 months. In addition, Bodog has agreed to assume the group\’s net current liabilities and to honour the existing employees\’ contracts as well as the group’s obligations to its customers.
Betcorp estimated that if it had to close down the group’s gaming operations, the cost of severance and closure would have been approximately $6 million.
The company also determined that its non-US business could not be profitable without a major increase in trading volume. In the current environment, such expansion requires substantial investment in marketing and brand development, or the acquisition of existing non-US facing operators. Betcorp does not have access to the funds required to adopt either of these strategies and accordingly, the Board has concluded that it is in the best interests of shareholders to dispose of the group’s entire gaming operations and infrastructure.
Bodog has stated that it intends to invest in developing its own brand into the European and Asian markets utilizing the multi-currency shared purse operating platform developed by Betcorp. Bodog has also undertaken not to use any URL, trade mark, brand name or other intellectual property acquired from the group to provide services to United States residents, following its purchase of the gaming operations.
Commenting on the acquisition, Colin Walker, CEO of Betcorp, said: “I am pleased that we have secured the sale of our operating subsidiaries to the Bodog Entertainment Group, one of the leading companies in the digital entertainment sector. In very difficult circumstances we have achieved a satisfactory outcome for shareholders and have been able to safeguard the interests of our customers and employees.”
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