The shares of the leading provider of technology and services, powering betting and gaming operators, Bragg Gaming Group, increased Wednesday, after one of its largest shareholders sent a letter, supporting different business combinations, including partial or full sale of the company’s assets. The letter was sent by Jeremy Raper, the founder of Raper Capital, a company that is in charge of some 375,000 shares in Bragg and the second-largest disclosed investor in the company.

In his letter, sent to CEO Matevz Mazij, the expert spoke about Bragg’s acquisition of Oryx a few years ago, explaining that its current stock price is 25% lower when compared to that period. Raper acknowledged the company has seen “chronic underperformance,” regardless of its listing on NASDAQ dating back to 2021. Raper Capital’s founder explained in his letter to Bragg: “Suffice to say, the public markets have had plenty of opportunity to appraise our Company’s growth story, over time, and yet the record demonstrates that it will not, or cannot, accord even the lower bounds of what most shareholders would consider fair value.”

According to Raper, Bragg can ensure proper returns for the shareholders via a partial or full sale of company assets. He encouraged the company to pursue all possible strategic alternatives, including the aforementioned sale that can help maximize the value for all of its shareholders. Moreover, Raper said he believes that minority shareholders would agree that this would be the best course for Bragg.

“As such, it is evidently clear that a third-party sale of the business is the only way to crystallize a proper return for the underlying business value that you, and legacy management, have created.“

Jeremy Raper, founder of Raper Capital

Proposed Sale To “Unlock Latent Value” for Shareholders

Raper Capital’s founder compared the proposal to similar recent transactions within the iGaming vertical that have taken place over the last 24 months. He uncovered that on average, transactions similar to the proposed one were 19x EV/EBITDA, while a median multiple was approximately 15x EV/EBITDA.

Speaking about Bragg’s shares at the time of writing, Raper said that they trade barely at 5.5x EV/EBITDA. He said that even with a conservative 12x EV/EBITDA Bragg’s share would be worth $13.5 per share based on current year numbers or $18 per share on FY24E numbers.

Toward the end of his letter, Raper said that he plans to continue to be a long-term shareholder of Bragg. “By calling for a sale of the company now, I only seek to preserve, and finally unlock, that latent value for the benefit of all stakeholders,” he explained.

Earlier this month, Bragg confirmed that its current chief operating officer and president, Lara Falzon, gave resignation notice. At the time of the announcement, the company confirmed that she would step down from the two roles, effective from the end of the year.

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Last month, an operation by the Singapore National Police against a group of foreign nationals, allegedly involved in money laundering and other criminal activities, including online gambling and scams, resulted in the arrest and charges against 10 individuals. At the time of the announcement, an estimated S$1 billion ($732.2 million) in assets were seized.

In a recent update on Wednesday, the Singapore National Police confirmed that the estimated value of the seized assets amid the ongoing investigation soared to a staggering S$2.4 billion ($1.7 billion). Moreover, a prohibition of disposal order was filed as well, meaning that the assets, which included gold bars, properties, luxury watches, cars and bags, could not be sold.

The initial operation included simultaneous raids in areas, including River Valley, Sentosa, Bukit Timah, Orchard Road and Tanglin. Ten individuals, arrested during the operations, are facing charges related to money laundering. The alleged participants in the illegal operation included foreign nationals with passports from China, Cambodia, Cyprus as well as Turkey. The investigations into the massive money laundering operation continue.

“In response to media queries, the Police provided an update on further operations conducted in relation to the group of foreign nationals suspected to be involved in laundering the proceeds of their overseas organized crime activities, including scams and online gambling. During these operations, additional assets were seized and issued with prohibition of disposal orders. To date, the total value of assets seized or issued with prohibition of disposal orders by the Police stands at more than S$2.4 billion,“

reads a statement released by the Singapore Police Force

Bank Accounts Frozen, Cash and Expensive Items Seized

According to the recent statement released by the Singapore Police Force, some S$1,127 million ($820.1 million) was seized from bank accounts. Additionally, the operation sized approximately S$76 million ($55.6 million) in cash that included foreign banknotes.

The massive anti-money laundering operation seized 294 luxury bags, as well as 164 luxury watches and a staggering 68 gold bars. During the raids, some 546 jewelry pieces were seized, along with 204 electronic devices including mobile phones and computers. Cryptocurrency, valued at more than S$38 million ($27.8 million) was seized as well.

Some 62 cars along with 110 properties, estimated to be worth more than S$1,242 million ($878.7 million) were impacted by the prohibition of disposal orders. The law enforcement even sized ornaments, as well as bottles of wine and liquor.

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High-profile NA gambling company Century Casinos has completed the sale of its Edmonton and Calgary real estate assets to Vici Properties subsidiaries in a CAD 221.7 million ($162.31 million) agreement. The deal has allowed Century Casinos to secure significant proceeds and adjust its lease agreement with VICI.

Streamlining Efforts Should Pay Long-Term Dividends

Century Casinos first inked the sale-leaseback deal in May, hoping the transaction would “unlock the real estate value” of the operator’s Canadian portfolio. The agreement with VICI saw the operator sell four of its assets in Edmonton and Calgary, adding them to the existing triple-net master lease agreement between the two companies.

As a result of the sale, annual rent increased by CAD 17.3 million ($12.67 million). The agreement also extended the master lease term to 5 years with the option for four 5-year renewals and capped the annual rent increase to 2.5%. Century Casinos co-CEO Peter Hoetzinger was optimistic that the extra capital would aid the company’s long-term plans and growth ambitions.

“This transaction provides us with the ability to pay down our debt and with greater financial flexibility as we continue to grow.”

Peter Hoetzinger, co-CEO at Century Casinos

Accounting for various expenses and taxes associated with the sale leaves Century Casinos with approximately CAD 154.5 million ($113.08 million). Some of these funds will be allocated as payments to Century Downs minority owners but should still be sufficient to significantly improve the operator’s financial standing and open new opportunities. 

The Operator Remains Highly Competitive

Century Casinos’ restructuring efforts perfectly align with its rising revenues to bolster its competitiveness. Directing resources toward expanding and optimizing its core gaming operations should result in significant returns and maximize shareholder value. The strategic realignment also strengthens Century Casinos’ bond with Vici Properties, leveraging their mutually beneficial lease agreement to foster sustained growth.

Overall, the Edmonton and Calgary real estate asset sale marks a significant milestone for Century Casinos, helping it retain its regional leadership position. This strategic move underscores the operator’s determination to remain at the forefront of the gaming sector while exploring new avenues for innovation and development.

As Century Casinos continues to evolve and adapt to the changing dynamics of the gaming industry, the company remains committed to providing unparalleled gaming experiences and driving positive outcomes for its shareholders and stakeholders. The operator will continue delivering outstanding gaming and entertainment offerings to its patrons, positioning itself for a bright future of growth and expansion.

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Enjoy Group, a South American casino and hospitality company, has contacted the Chilean Commission of Financial Markets (Commission for the Mercado Financiero/CMF) about a potential sale of casino properties in Chile and Uruguay. The decision comes in the wake of a failed merger with DREAMS SA.

Enjoy was supposed to merge with the aforementioned company but the deal was abandoned in April. Since then, Enjoy Group has been seeking other long-term strategic plans to boost its profitability.

The announcement follows a publication by the Diario Financiero on July 30, which claimed that Enjoy’s operations in Chile and Uruguay are up for sale.

A sale of its operations in Chile and Uruguay could lead to a favorable transaction that may benefit the company. The move has been coordinated with ASSET Chile, a financial advisor that Enjoy Group hired to explore potential business deals.

ASSET Chile is tasked with seeking interest from potential investors and finding a deal that would benefit the company.

Enjoy promised to keep the CMF informed about any relevant developments in relation to the potential sale.

Chile Seeks to Launch iGaming, Joining the LATAM Revolution

In the meantime, Chile continues to consider the legalization of online gambling, as attested by the recent advancement of an online gambling bill. The measure was first introduced in March and gained traction in June after being stuck in limbo for a while.

For reference, the only legal gaming companies in the country currently are Lotería de Concepción, Polla Chilena de Beneficencia and Teletrak.

The bill still needs additional approvals but its advancement was hailed by the gambling industry. More recently, the country approved changes to the bill, further highlighting the interest in exploring the online vertical.

In other LATAM-related news, Galera.bet, a Brazilian sports betting brand, just joined the International Betting Integrity Association as its latest member. This highlighted the company’s desire to protect the integrity of professional sporting events in the region and oppose sports and betting-related corruption.

The move comes as Brazil prepares to regulate sports betting, paving the way to a revolution in the local gambling market. However, the Brazilian Institute of Responsible Gaming, a newly-founded industry body, expressed its disapproval of changes to the envisioned taxation rules, believing them to be harsh and unsustainable.

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PointsBet announced that an overwhelming majority of its shareholders supported the sale of its US-facing business to the well-known sports merchandise company, Fanatics. Fanatics Betting and Gaming, the company’s sports retail division, filed a proposal for the takeover of PointsBet’s US assets in a deal for some $225.0 million, a significant increase from its initial proposal.

In light of the fresh proposal, some 98% of PointsBet’s shareholders showed approval for the sale of the company’s US business arm. The announcement comes at a time when PointsBet faced difficulties while trying to expand in the competitive US sports betting market.

It was back in 2021 when PointsBet started its US expansion. Brett Paton, PointsBet’s chairman, who was recently cited by The Sydney Morning Herald, spoke about the frustration of the shareholders over the share price of the company since the start of its US-facing expansion and the costs associated with that venture. “Let me say on behalf of your board that we understand your disappointment about the share price performance of our company,” he said, explaining that he and PointsBet’s chief, Sam Swanell, understand their frustration and concern.

“Continuing to operate the US business would require significant capital and further capital raises.“

Brett Paton, chairman at PointsBet

On the other hand, Paton spoke about the ongoing high costs required to continue the US business operation. Speaking about the sale of US assets to Fanatics he pointed out that the “transaction addresses that uncertainty.”

While the aforementioned transaction will offload PointsBet’s US business, the company will remain in control of its Australian and Canadian businesses. Additionally, it will continue to leverage its leading iGaming and sports betting technology that is used within regulated gambling markets in Australia, as well as North America, providing further growth opportunities.

Fanatics Wins a Tough Fight for PointsBet’s US Business

It was last month when Fanatics and PointsBet agreed on a $150 million deal for the latter’s US business. At the time, Fanatics agreed to pay $100 million upon closing of the agreement as well as $50 million in February next year.

But what was thought to be a done deal had an unexpected turn, after the US gaming and betting giant, DraftKings, tabled a new proposal of $195 million for PointsBet’s US-facing business, surpassing the initial $150 million offer by Fanatics.

However, Fanatics wasn’t going to let this happen and responded with an increased bid of $225 million, which was ultimately the successful one. In light of the new bid, DraftKings confirmed earlier this week that it will no longer pursue options for obtaining the US-facing business of PointsBet.

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Casino equipment maker and digital gaming content provider International Game Technology Plc (IGT) has announced that its board of directors is “evaluating potential strategic alternatives” for the group’s global gaming and PlayDigital segments, “in order to unlock the full value of IGT’s portfolio.”

“IGT’s board of directors is considering a broad range of potential alternatives, including but not limited to a sale, merger or spin-off, as well as retaining and further investing in the global gaming and PlayDigital businesses,” the firm said in a Thursday press release.

Lottery Giant Behind IGT Name

Formerly known as Gtech S.p.A. and Lottomatica S.p.A. until a takeover of Si Red’s Las Vegas, Nevada-based IGT in 2015, the group is a multinational gambling company that produces various gambling technology including slot machines. While the company is headquartered in the UK, it maintains major offices in Rome, Providence, Rhode Island, and Las Vegas, and is controlled, with a 51 percent stake, by De Agostini, an Italian company founded in 1901.

The overall company, which includes the world’s largest lottery supplier by gross receipts, generated over $400 billion in revenues.

IGT’s chief executive, Vince Sadusky, said in a statement that the company remained “focused on the execution <of its> growth objectives and multi-year goals” as outlined in November 2021, and is reviewing and evaluating strategic alternatives for the gaming and digital segments. At that time the company noted its digital and betting businesses were to be included in a potential public listing of assets.

“Regardless of the outcome of this process, IGT is well-positioned to deliver on its long-term growth and profit targets,” noted Sadusky in the Thursday announcement.

Mediobanca, Deutsche Bank, and Macquarie Capital have been brought in as financial advisors in concert with Sidley Austin and White & Case acting as legal counsel for the potential public listing.

Global gaming revenue for the group for the first quarter of 2023 was up more than 21% compared to a year ago at US$389 million. Digital and betting segment revenues stood at $47m one year ago and have risen to $55m. The first three months of the year generated $23m in net profits for shareholders with revenues up nearly 1% and just brushing past $1.06b.

The company would appear to be flush with cash and an increasingly powerful credit profile. From January 1, 2023, to the end of the first quarter, net debt dropped from $5.15b to $5.12b as the company started the year with “significant cash flow generation and further improvement” in its credit profile.

No Decisions Have Been Made

On Thursday, the company noted that “No decision has been made regarding any alternative, there is no timeline for the review and there can be no assurance that the exploration of strategic alternatives will result in any transaction.”

Marco Sala, the executive chair was quoted in the information release: “Over the last three years, IGT has sharpened its strategic focus by reorganizing around core product verticals, monetizing non-core assets, reducing structural costs, and significantly improving its credit profile.”

Sala added: “We believe the intrinsic value of IGT’s market-leading businesses and diversified cash flow profile is not currently reflected in our stock price and the timing is right to assess opportunities that may enhance value for IGT’s shareholders.”

Stock prices were up at the close of trading on Thursday nearly 4% after the announcement at $31.50.

For decades, Gtech/Lottomatica competed and sometimes cooperated with Scientific Games, the other world lottery leader. However, Scientific Games restructured and rebranded itself to Light & Wonder. Major changes included the sale of its lottery business which still retains the Scientific Games name for about $5b and offloaded its sportsbetting business for about $800m. Light and Wonder’s stock price closed more than double that of IGT at $66.97 Thursday.

Source:

IGT mulls possible sale, spin-off of gaming, digital units, GGRAsia, June 9, 2023

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Karen Brailsford, a former employee of Derbyshire firm Urban Design and Development, has been ordered to sell her house, Mercedes car, personalized number plate, and designer goods to pay back a portion of the £1.6 million ($2 million) that she stole from her employer. 

Former Employee Forced to Sell Assets to Pay for Fraudulent Actions

Financial investigators at Derbyshire police discovered that the 53-year-old only has £130,314.59 ($164,242) left to her name, which will come from the sale of the items she still owns, The Derbyshire Telegraph reported. The Proceeds of Crime Act (POCA) allows the police to seize cash from criminals who have made their money from illegal gains. In this case, the judge ordered the sum to be paid as compensation to her former employer. If Brailsford comes into money later in life that she does not currently have, police can still apply to have it seized.

At her sentencing hearing last year, it was revealed that Brailsford falsified invoices to fund her gambling impulses. At its peak, she took £300,000 ($378,106) from the company in one year, and she had already taken £29,000 ($36,542) in 2021 before being caught. 

Brailsford claimed her actions were an error, but the directors were unsatisfied with her response. When confronted, Brailsford confessed to what she had been doing and that she had been stealing from them for some time. Brailsford pleaded guilty to a single count of fraud by abuse of position, telling the police that she was desperate for the money, which was why she did it in such an obvious way.

Woman Steals from Company to Fund Gambling Addiction and Buy Holiday Caravans

Police found that Brailsford had spent £298,867.36 ($376,658) on gambling, sent some of the money to her children, and bought two-holiday caravans. 

The company’s managing director, Mr. Dawson, stated that the business had lost out financially and that he had struggled to keep his work and home life separate because of the incident. 

According to Nicola Hornby, who was representing Brailsford, there were no significant assets that could be traced and Brailsford had nothing to present as evidence. She also noted that Brailsford had made admissions when charged, had been suffering from depression, for which she takes medication, and that her imprisonment would have an impact on her children and elderly father.

When sentencing Brailsford, recorder Tim Spruce acknowledged that her methods were not unsophisticated and that she had access to critical financial control. He noted that Brailsford had planned the fraud to go unnoticed and ordered her to sell her assets to repay her former employer.

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A UK resident, that was convicted of rape went on a shopping spree after winning a £2.5 million ($3.2 million) jackpot more than a decade ago. The man, identified as Edward Putman, bought a few properties, luxury cars and obtained other assets. It has taken quite some time for Putman’s elaborate scam to be uncovered, as he actually won the jackpot by defrauding a lottery operator. Now, he is threatened to lose his home along with other assets while remaining incarcerated for nine years over the lottery fraud.

Back in 1993, Putman was sentenced to seven years in prison after he was found guilty of raping a 17-year-old pregnant girl. That prison sentence did not help rehabilitate the man as after going out of prison, he co-conspired to defraud a lottery operator by securing a jackpot with a forged ticket.

In 2019, Putman was sentenced to nine years in prison over the lottery scam and according to the Mirror, the Court may now repossess some if not all of his assets for his debt to be settled. Initially, he was ordered to pay back £940,000 ($1.2 million). However, Putman disagreed and wanted to challenge that decision, resulting in him paying only £100,000 ($125,100) out of the money he obtained via fraud. But now the tables have turned as the Court was greenlighted to take possession of Putman’s assets to resell them and put an end to the criminal case.

Defrauding the Lottery

The elaborate lottery scam dates back to 2009. At the time, Putman co-conspired with Giles Knibbs, who worked for Camelot, the operator that runs the National Lottery in the UK. Knibbs used to work as a part of the fraud detection team of the company. Using a fake winning ticket and collaborating with Knibbs, Putman was able to collect the multi-million-dollar jackpot.

It’s not unusual for such criminal co-conspirators to see their relationship deteriorate. This was precisely what happened between Knibbs and Putman. At some point, Knibbs thought that he didn’t receive the “fair share” of the lottery prize, considering the risk he had taken. Several years after the duo pulled off the scam, Knibbs eventually admitted to the crime before his family. However, it is likely that the crime had a significant psychological impact on the young man, considering that in 2015, he took his own life.

Knibbs’ suicide marked the downfall of Putman as well, considering that he left a note revealing details regarding the crime itself. Initially, the case didn’t lift off as there was not enough evidence. However, in 2017, the fraudulent ticket was uncovered which ultimately resulted in Putman’s sentence in 2019.

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The legal battle between Mansion Group, a leading online gambling operator that is globally recognized, and its former CEO, Karel Christian Mañasco, dates back to last year. Back then, the operator filed a claim against Mañasco with the courts in Gibraltar. In its claim, Mansion Group alleged that the former CEO abused his powers and misused company funds.

Mañasco’s tenure with Mansion Group dates back to 2010. In 2012 he was appointed to the role of CFO, while in 2017, Mañasco became CEO. A few years after that, in September 2021, Mansion Group suspended him, launching an investigation into alleged breaches of duty. After that, in December 2021, Mañasco resigned from the company.

“The application of the foregoing principles must be applied in the context that freezing orders  are one of the court’s “draconian  powers,“

reads a judgement released by the Court in Gibraltar

Now, the chief Justice and judge of the Supreme Court in Gibraltar, Anthony Edward Dudley, imposed a global freezing order of £5 million ($6 million) against Mañasco. The court acknowledged that such an order is known as one of its “draconian powers.” Yet, given the allegations against Mañasco and the possible risk of the assets, the Court considered this to be a proportionate measure.

“Mere reliance on the alleged dishonesty of the defendant is not, of itself, sufficient to found a risk of dissipation. The court must scrutinize with care whether what is alleged to have been the dishonesty justifies the inference of a real risk of dissipation,“

explains the recent Court decision

What Do the Allegations against Mañasco Include?

Besides breach of duty, allegations against the former CEO of Mansion Group claim that he used company money for personal expenditures, including six-figure bonuses. Mañasco allegedly paid himself a £427,500 ($514,000) bonus for the 2022 financial year, while in 2019, he received €327,033 ($346,400). Moreover, he allegedly collected a sum of £66,236 ($79,600) which was used for personal expenditures.

Further allegations claim Mañasco authorized or approved the payment of €2,508,035 ($2,656,420) and £127,073 ($152,700) to White Wizard Media Limited, a suspicious company from the Marshall Islands. Mansion claimed that it wasn’t involved in any business with the aforementioned company.

Additionally, Mañasco allegedly obtained multiple luxury vehicles, as well as expensive jewelry at the expense of Mansion. Last but not least, the claims against the former CEO include an accumulation of credit card payments at the expense of the company of some £249,951 ($300,400).

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On Monday Pace-O-Matic in Pennsylvania announced it had won a court motion forcing Monroe County to return its gaming machines and other seized assets including cash since the cabinets that look like slots were seized illegally in raids conducted by the county district attorney’s office in 2021.

The ruling was issued by Monroe County Common Pleas Judge Jennifer Harlacher Sibum on February 8, 2023.

The ruling states that the machines are games of skill rather than games of chance. Additionally, the court admonished the DA’s office as the judge found “the Commonwealth improperly withheld and misrepresented material evidence in order to get the search warrant” used to seize the machines.

Skill Games Seized with Fudged Warrant

In addition to the games being skill games, the de facto illegal search and seizure was cited by the court as another reason the seized property could not be used as evidence.

“This ruling reaffirms our status as legal games of skill,” said Pace-O-Matic spokesman Mike Barley. “This is another tremendous victory for Pennsylvania Skill games, powered by Pace-O-Matic, and our Pennsylvania small business and fraternal partners.”

In the Commonwealth of Pennsylvania, the machines are branded as “Pennsylvania Skill”. Pace-O-Matic skill gaming machines are operated in six states, including Georgia, Illinois, Kentucky, Pennsylvania, Texas, and Wyoming. The firm’s headquarters is in Duluth, Georgia.

In Kentucky, where thousands of the cabinets are said to be deployed, they are branded as Burning Barrel and can be found in bars, restaurants, truck stops, convenience stores, and veterans halls.

One element that makes them games of skill is that, unlike slots, the “payline” must be recognized and claimed by the player. The games come in a variety of presentations such as a tic-tac-toe grid with various shapes and characters appearing on the screen. When three matching icons are aligned in a row, the player must tap that line to “catch” the win.

Homegrown Machines

In a press release announcing the ruling, Pace-O-Matic informed readers that the games are manufactured in PA and over 90% of the profits stay in-state. The PA-branded products are made by Miele Manufacturing in Williamsport. POM contends that Miele Manufacturing has created about 200 direct jobs. Much of the material used to create the games comes from Pennsylvania companies.

The statement added inter alia:

“Pennsylvania Skill has pumped new life into the commonwealth’s small businesses, fraternal and social clubs, and veterans organizations by providing them with an entertainment product that the public enjoys. Meanwhile, research data proves skill games do not impact the revenue of casinos and the lottery, both of which are achieving record profits year after year.

This isn’t the first time the company has dealt with law enforcement officers confiscating its machines along with the money in them. Last year, wrongfully seized skill games were returned after a settlement was negotiated by the Pennsylvania Office of the Attorney General and the Clearfield County District Attorney’s office to return gaming cabinets, cash, and associated equipment.

A County Court of Common Pleas ruled in 2014 that Pace-O-Matic’s Pennsylvania Skill games are legal as “winning” predominantly occurs as a result of skill, not just blind luck. After the Clearfield County settlement, another PA county also returned wrongfully seized property.

The company stated that it employs a team of former state police officers to ensure compliance with all laws and contract terms with outlets. The contracts dictate where the machines are to be placed on the premises as well as the number of machines that can be deployed. Protections are also in place to prevent underage play on the machines.

Source: Pennsylvania Skill, powered by Pace-O-Matic, ruled legal game of skill once again by a Pennsylvania Court, Global NewsWire, February 13, 2023

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