Gambling technology giant Scientific Games has entered into an agreement to sell its sports betting business OpenBet to UFC owner Endeavor Group Holdings, Inc. in a cash and stock deal valued at $1.2 billion.
News about the sale emerge after Scientific Games said earlier this year that it plans to divest its B2B wagering and lottery units to fully focus on the provision of online casino content.
Under the terms of the transaction, the provider will receive $1 billion in cash and $200 million in Endeavor Class A common stock. The deal is expected to close in the second quarter of 2022, subject to regulatory approvals and customary closing conditions.
Endeavor said that it will combine OpenBet, which specializes in the development and provision of sports betting and gaming software, with its existing wagering business IMG ARENA.
OpenBet is one of the leaders in the B2B sports gambling space. The business was formed in 1996 as Orbis Technology Ltd. It was renamed to OpenBet in 2010. In 2016, the company was acquired by online casino software maker NYX Gaming Group for £270 million. Scientific Games purchased NYX in early 2018 for more than $630 million.
OpenBet currently has more than 75 global clients, including 24 sportsbooks across 12 US states.
Culmination of a Thorough Process
Of the sale of the sports betting technology provider, Scientific Games President and CEO Barry Cottle said that it marks the culmination of a “thorough process to divest OpenBet in order to maximize value for our shareholders and rapidly advance our vision to become the leading cross-platform global game company.”
Mr. Cottle went on to note that the transaction will position them to invest both organically and inorganically in key growth areas, particularly in content and digital markets.
Endeavor CEO Ariel Emanuel said that OpenBet and its capabilities are the ideal complement to their IMG ARENA betting business, which works directly with sports rights holders, and that they are looking forward to growing the two units together and “capitalize on the strong secular tailwinds in the sports betting ecosystem.”
The sale of OpenBet is the latest major M&A development in North America’s sports betting space. Canada recently legalized athletic gambling and more and more states in the US are regulating the industry as demand has been growing at a tremendous pace.
Last week, US fantasy sports and betting giant DraftKings tabled a $22.4 billion offer for British rival Entain. The latter company provides wagering services in the US via the BetMGM brand in partnership with Las Vegas casino powerhouse MGM Resorts International.
In addition, Caesars Entertainment, Inc. earlier this year acquired William Hill for £2.9 billion and sold this month the legacy bookmaker’s non-US assets to online gambling firm 888 Holdings in a deal worth £2.2 billion.
Source: Scientific Games Announces Sale of Sports Betting Business, OpenBet, to Endeavor for $1.2 Billion, PR Newswire, September 27, 2021