Playtech and NorthStar Extend Investment Deal in Ontario

Established iGaming industry stakeholders Playtech and the NorthStar Gaming Holdings extend the strategic partnership from June 2023 to reinforce their operations in the growing Ontario market. Their respective verticals, Playtech Software Limited and the NorthStar Ontario, will be able to exclusively focus on the operating goals set after Playtech has agreed to funnel CA$3.0m (US$2.2m) in short-term financing to NorthStar to facilitate player pool expansion in Ontario.

$4.0 Million Financing Facility

The original strategic agreement signed in June 2023 included a complete availability of Playtech Software’s services for the operator. The facility valued at $4.0 million was a key driver for NorthStar to increase its presence in the Canadian province in 2023 and grow revenues accordingly.

Six-Month Extension

The strategy seems to have proven successful as the deal is now extended. Under the extension, Playtech Software will continue with the provision of similar marketing services once again valued at $4.0 million. The renewed contract has been set for a six-month performance and will run through 31 October 2024.

Reimbursement Plan

Under the agreement, NorthStar will use the short-term financial facility to boost its marketing activities and repay the funds to Playtech Software from the income generated over the contract period. The operator will benefit from the balance between the revenue generated and the six-month financing cost, while the provider may benefit from the financing conditions.

Financing Ontarian Expansion

As for these conditions, NorthStar has already issued a $3.0m unsecured, interest-bearing promissory note to Playtech, with interest rate of 8.0% per annum, payable in arrears at maturity. According to NorthStar, the investment will help the company’s balance sheet adjustments and continued expansion in Ontario.

NorthStar chair and CEO Michael Moskowitz commented: “We are very pleased to continue to strengthen our relationship with Playtech, one of the world’s leading gambling technology companies. Their ongoing support has been instrumental in helping us to acquire new customers, provide a premium online gaming experience and fund the expansion of our brand in Ontario and across Canada.”

$12.25 Million Investment Boosts Collaboration

The extension of the 2023 strategic agreement comes after Playtech agreed to make a $12.25 million strategic investment in the NorthStar Ontario-based online casino and sports betting facility a few months earlier. In fact, the strategic partnership between the two companies dates back to December 2021. Since then, Playtech has supported NorthStar and the the existing contract for software and services has now been extended by 10 years.

Repayment Guarantee

Playtech’s investments are converted into equity and warrants related to Baden Resources Inc, a company acquired by NorthStar in March 2023.In this way, Playtech holds around 16% of shares belonging to NorthStar, as well as warrants to potentially acquire above 20% stake in this company. The transaction is additionally secured by the inclusion of Playtech’s chief financial officer Chris McGinnis in the board of directors of the subject entity.

Source: “Playtech renews Ontario deal with NorthStar and advances financing’’. iGaming Business. April 29, 2024.