Gaming Innovation Group announced today that it has agreed to sell its B2C division to gambling operator Betsson Group in a bid to focus on its B2B operations, “reduce complexity and improve efficiency.”
Under the terms of the deal, Betsson will pay the amount of €31 million on the day the transaction closes. The aforementioned amount will include €22.3 million in cash payment for the acquisition, plus a prepaid platform fee of €8.7 million.
GiG will use proceeds from the transaction to repay its SEK300 million 2017-2020 bond.
GiG’s portfolio of B2C brands includes the Rizk, Guts, Kaboo, and Thrills casino and sports betting websites. Under the terms of the deal, Betsson will keep all four brands operational on GiG’s proprietary iGaming platform for at least 30 months.
During the first 24 months, Betsson will pay a premium platform fee based on net gaming revenue generated. Based on the estimated platform fees, the total value of the sale is expected to reach approximately €50 million.
The deal is subject to regulatory approvals and is expected to close by mid-April.
GiG said that its decision to offload its B2C business was the result of a strategic review the gambling group initiated last November. The review further resulted in an “evolved strategic direction” prompting the company to “reduce complexity and improve efficiency.”
Focus on B2B Business
The sale of its B2C division will free up resources and will enable GiG to fully dedicate its attention on driving and growing its B2B operations. The company explained that it sees “a large and sustainable addressable market for its platform business” as iGaming continues to become a regulated industry in a number of jurisdictions.
GiG also believes that through its omni-channel platform, it is well positioned to capitalize on the continued digital transformation of the global gambling market.
As part of the recently launched strategic review of its operations, GiG has also decided to make its technical platform “sportsbook agnostic” and to team up with other betting technology providers to offer the best possible solutions to its clients.
Under its deal with Betsson, the gambling operator will integrate its sportsbook solution on GiG’s platform. The two companies will thus be able to sell their B2B solutions without conflict of their B2C brands.
To further spearhead the growth of its sportsbook, GiG said that it would seek joint ventures and other collaborations with gambling companies to “release the true asset value” of the solution.
The gambling group plans to seek partners for the growing US market. Here it is important to note that GiG is one of just several B2B providers that offer omni-channel online gambling services in multiple states around the US.
Of the acquisition of GiG’s B2C business, Betsson CEO Pontus Lindwall said that they believe the deal offers a good opportunity for his company to “consolidate, create synergies, and apply our core B2C skills and marketing insights to scale these assets to their true potential.”
Mr. Lindwall went on that their agreement with GiG will also further strengthen and expand their outreach and growth potential for their proprietary sportsbook solution and payments platforms in the international B2B market.
GiG Chief Executive Officer Richard Brown commented that the transaction enables them to focus their efforts towards the B2B segment and that while “offering both B2C and B2B services had synergies” in the past, the “current conflicting priorities of the two business areas, and increased complexity in the market, have lessened the potential offering on both fronts and our ability to sign new customers.”
Of the integration of Betsson’s proprietary sportsbook into their platform, Mr. Brown said that this would not only provide “cost saving synergies”, but would also allow them to offer one of “the most well-renowned European sportsbooks to our current and future B2B partners.”