A consortium of Chinese investors headed by Shanghai Giant Network Technology Co and including Alibaba founder, Jack Ma’s private equity company has just closed a deal to pick up Playtika Ltd, the online casino-style games company which has been part of the Caesars Entertainment Corp through its online gaming division Caesar’s Interactive Entertainment since 2011. The deal is worth $4.4 billion is entirely in cash and took place after an auction. It will give money-strapped Caesars the much needed breathing space in its negotiations with creditors.
The members of the consortium included China Oceanwide Holdings Group Co., Hony Capital Fund, and China Minsheng Trust Co., apart from Jack Ma’s Yunfeng Capital. In a statement released to the media last Sunday, the buyers said that Playtika’s operations would not be moved from its existing location in Herzliya, Israel. In fact, the company’s existing management would also remain in place since the buyers have said that they don’t wish to disrupt the creative process and corporate culture of the Israeli company.
The Playtika purchase will most likely be completed in latter part of 2016 once all the regulatory approvals have been obtained. It is worth pointing out here that no other Israeli founded company has managed to attract such a sale price so far!
The Chinese buyers have very clearly invested in Playtika, which indicates the growing importance of mobile gaming. Increasing numbers of gamblers are opting to gamble on mobile applications instead of PCs or consoles. In fact, the number of people accessing games through their mobile phones has surpassed the number of people accessing them through their desktops long back. So it only makes sense to follow in the same direction.
However, this deal does not involve any of Playtika’s real-money online gambling businesses and its World Series of Poker. But this could be more of a strategic decision, only time will tell!
Playtika has been a pioneer of the free-to-play casino-style games available on social networks. It was founded in 2010 by Uri Shahak and Robert Antokal. Since then, it has created a number of popular games such as Bingo Blitz and House of Fun that have gone viral within a short period of being launched! But Slotomania is probably the one with the maximum players. In fact, many of the company’s games have ranked very high on App Store and Google Play and they entertain millions of players all over the world every day.
Did you know that the games developed by Playtika are played by more than 6 million people every single day? Now that’s some real popularity. These people are located in about 190 countries and the games are available in 12 languages on over 10 platforms.
Playtika CEO Robert Antokol is understandably excited about the deal even though the maximum benefit from the deal will go to Caesars. His company will now have access to emerging markets that are not only large, but are also seeing a fast growth. The company has offices in the Americas, Europe, Asia, and Australia. It employs a team of about 1,300 people at the time of writing this article.
It is very interesting to come across such a large Chinese investment in an industry that is banned by that country’s government. Gambling is immensely popular in China and many of its citizens flock to online gaming sites or land based casinos in Macau and other parts of Asia. It is clear to see that the consortium has made a long term investment in the gambling industry. If the gamble does pay off, and it will indeed take many years for China to legalize gambling, then the rewards for the investors will be truly massive.