Gaming Innovation Group’s (GiG) sale of its B2C gaming and sports betting brands to Betsson was this week approved by antitrust regulators, enabling the deal to close by mid-April.
GiG announced in mid-February plans to offload its B2C division to Betsson in a bid to focus on its B2B operations. The move would help the company “reduce complexity and improve efficiency.”
Under the terms of the deal, Betsson, which already operates a multi-brand online casino and sports betting portfolio, has agreed to pay €33 million to acquire GiG’s B2C operations. The purchase amount includes €22.3 million in cash payment, €8.7 million in prepaid platform fee, and €2 million in cash deposit securing GiG’s Spanish casino license.
GiG said this week that it would use part of the proceeds from the sale of its B2C operations to repay its SEK300 million 2017-2020 bond, which would help it strengthen its balance sheet and reduce significantly the financial leverage ratio.
GiG’s B2C operations include the Rizk, Guts, Kaboo, and Thrills online casino and sports betting brands. Under the terms of the sale, Betsson will keep all four websites operational on GiG’s proprietary iGaming platform for the first 30 months after the transaction closes.
During the first 24 months, Betsson will pay a premium platform fee based on net gaming revenue generated. Based on estimated platform fees, GiG could trouser up to €50 million from the sale of the four brands.
Freeing Up Resources to Spearhead B2B Growth
GiG has previously explained that its decision to divest its B2C business was a result of a strategic review as the company seeks to “reduce complexity and improve efficiency.”
The online gambling group has also pointed out that the sale of the four iGaming and wagering brands would free up resources and enable it to fully dedicate its attention to driving and growing its B2B business, and thus secure stable and sustainable earnings and profit margins.
According to GiG, there is a “large and sustainable addressable market” for its platform business as iGaming continues to become a regulated industry in more and more countries around the world.
As part of its strategic review, GiG has also decided to make its platform “sportsbook agnostic” and to partner up with betting technology providers in a bid to offer its clients the best possible wagering solutions.
Under the deal for the sale of GiG’s B2C brands, Betsson will integrate its sportsbook solution onto GiG’s platform. As a result, the two companies will be able to sell their B2B solutions without creating conflict in the B2C vertical.
Commenting on their decision to offload their B2C brands, GiG CEO Richard Brown said previously that the deal would enable them to focus on their growth in the B2B sector and that while offering both B2B and B2C products had synergies in the past, the “current conflicting priorities of the two business areas, and increased complexity in the market, have lessened the potential offering on both fronts and our ability to sign new customers.”