Gambling operator William Hill PLC announced earlier today that it had bought a 29.4% stake in online lottery options provider NeoGames S.a.r.l. for the total amount of £16 million ($25 million).
William Hill also pointed out that it could purchase the remaining 70.6% stake in the lottery company within three or five years after the acquisition of the minority stake. The price the gambling operator is to pay for the rest of the NeoGames shares is to be determined by means of a certain methodology, which had been agreed upon as part of the original stake purchase.
Owning 29.4% of the online lottery company, William Hill will have particular shareholder rights and will be able to nominate two members for the NeoGames Board. Furthermore, the buyer is to finance a working capital totaling $15 million, if necessary.
It could be said that NeoGames is one of the pioneers in the provision of online scratch cards. The company was founded back in 2005 and has gradually expanded its product offering since then. It provides its customers with a wide selection of online games, a technology platform as well as various related services to a total of ten lottery operators across the globe.
The company is particularly focused on its operations in the US market as the per capita spending on lottery there is higher than any other part of the world. At present, four states are selling lottery products online and sales amounted to $60 billion back in 2014. NeoGames also provides its services in several European countries, such as Italy, Portugal, and the Czech Republic.
Commenting on the latest agreement, James Henderson, Chief Executive Officer of William Hill, said that it gives his company the opportunity to expand its presence in a market, which is expected to become more and more attractive to gambling customers.
Ilan Rosen, Chief Executive of NeoGames, noted that they are extremely excited with the new partnership with William Hill and with the gambling operator expressing confidence in his company and its plans for further expansion. In addition, the partnership offers both businesses opportunities for synergies in the online lottery market, with William Hill bringing its experience in sports betting and other gambling segments as well as its omni-channel solution.
