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Through its acquisition of PSG, Penn National will gain 1,100 terminals across Illinois.
Penn National Gaming, Inc. will acquire Prairie State Gaming (PSG), an Illinois operator of movie gaming terminals (VGTs), for an undisclosed charge. The company adds the purchase to its collection of some 31,000 video gaming devices in 26 facilities across America.
While Illinois lawmakers squabble about their budget plans, with the resulting standoff meaning that large tax revenues from their state’s VGTs will be held in limbo until they could concur terms, Penn National is seeking to get its own slice with this lucrative industry.
The deal, for an undisclosed all-cash transaction, will discover the Pennsylvania-based casino, racetrack, and racino operator acquire 1,100 terminals across a network of 270 different bars and retail gaming establishments statewide.
Big Business
In Illinois, anywhere with a alcohol permit is allowed to operate a VGT, and it’s big business. But that reality has established something of a challenge to the state’s casino industry.
The VGT industry raked in $72.8 million in revenue in July, in comparison to the combined $118.1 million in revenue of Illinois’ ten casinos, according to Fantini Gaming Research. For Penn National, which has three of those casinos, it’s a thought process of ‘if you can’t beat ’em, join ’em.’
PSG, which is probably the biggest VGT operators in Illinois, produced almost $10 million in cashflow for the fiscal 12 months ending June 30th.
According to Jay Snowden, chief operating officer of Penn National, the acquisition represents the phase that is latest in a long-term strategy for ‘growth through accretive acquisitions.’
In the company agreed to purchase the Tropicana in Las Vegas for $360 million, making it the operator’s second Sin City property april. The company first bought off the debt for and in of 2011 finalized its purchase of the M Resort and Casino on the South Las Vegas Strip june.
Penn National currently operates 26 casino, racinos, and racetracks in 16 US and one jurisdiction that is canadian with the majority found in the Midwest and the South of the United States.
Placed for Growth
The deal will cement the company further’s position in Illinois, said Snowden. ‘We believe this acquisition provides us a platform that is solid future growth in the Illinois VGT market and potentially other states where this form of video gaming is authorized.
‘PSG is certainly one of Illinois’ most VGT that is respected, with a strong track record of regulatory compliance and a reputation for dependable around the clock service backed by one of many industry’s many experienced teams,’ he added.
Penn National’s present financial performance has made the investment community sit up and simply take notice. Its Q2 results for 2015 have exceeded expectations, bringing in revenues of $701 million, and the company says it remains favorably positioned for continued growth into the second half of this year.
June as well as the purchase of the Tropicana, Penn State opened Massachusetts’ first casino at the end of. Called Plainridge Park Casino, the establishment that is slots-only onto the racecourse, and reported $6.1 million in gambling revenue in its first week of operation.
Optimal Payments’ Skrill Takeover to Complete by August 10
Optimal Payments acquisition of Skrill has gotten the go-ahead from British financial regulators, as the payments industry looks to consolidate into the face of increased competition that is mobile . (Image: totallygaming.com)
NETELLER moms and dad Optimal Payments has announced that its €1.1 billion ($1.2 billion) reverse takeover of Skrill, formerly Moneybookers, will be finalized next Monday, August 10, after obtaining the light that is green UK financial regulators.
Optimal received approval to acquire Skrill’s US business from American regulators in June. Both companies provide their payment services to your new US online video gaming markets.
The deal highlights a time period of consolidation into the digital payments industry, as competition increases and innovation that is mobile disruption make the pooling of resources attractive. In April, Skrill completed the acquisition of UK competitor Ukash, a month after the Optimal deal was announced.
The launch of Apple’s ‘wave and pay’ system on iPhone has spooked the digital wallets industry, which views the incursion of large non-traditional payment service provides into the re payment area as a highly troublesome threat. The ‘wave and pay’ system allows users to load credit card details onto their handset, acting as a de facto e-wallet.
‘ Not Just a Defensive Move’
Optimal Payments has denied that the acquisition is a defensive move, citing growth that is steady. Instead, analysts have said the enlarged business, which marries two of the UK’s biggest electronic re payment services, will benefit from greater scale. It’s estimated the group that is combined have a cash flow of around £117 million ($182 million); Optimal’s standalone figure is around £58 million ($90 million).
The offer will relieve both businesses’ reliance on the gambling that is online, consolidating their more conventional e-commerce interests.
‘we are becoming more relevant in the e-commerce room and we come across organic growth both here and in gaming following the deal,’ Joel Leonoff, leader of Optimal, insisted recently.
Optimal also desires to minimize its current reliance upon an unnamed customer that is asian which reportedly now represents over 33 % associated with company’s product sales.
Online Gaming Payments Giant
‘Over the last four years, we have effectively delivered significant growth in profits and earnings for our investors,’ said Leonoff. ‘This growth lead from performing our strategy to generate high degrees of natural growth and also to supplement this with accretive acquisitions.
‘The purchase of Skrill will develop a tech that is global within the fast growing digital payments space and we think represents a transformational step forward that greatly accelerates our strategic real-money-casino.club plan. The Optimal Payments management group is extremely stoked up about the prospects that are future the Company.’
NETELLER ended up being formed back in 1999, at the same time as PayPal. But while PayPal shied away from the grey area that is legal of gambling in America, NETELLER embraced it.
By 2005, the business was processing 80 percent of online gambling transactions globally, which accounted for 95 percent of its revenue stream, but was forced to grab of the market that is US after UIGEA made the processing of online gambling transactions illegal.
Gaming Business Wants to See Regulation of Everyday Fantasy Sports
Yahoo has joined a growing number of major companies wanting to break into the fantasy that is daily industry. (Image: Eric Risberg/AP)
FanDuel and DraftKings have actually turned fantasy that is daily from a little niche product to your quickest growing part regarding the fantasy sports industry.
Now, using the valuations of each of the companies reaching $1 billion or more, the gaming industry is beginning to take serious notice, with some believing that the daily fantasy games deserve the same kinds of strict regulation casino companies deal with on a regular basis.
According to officials at many gaming that is major, there’s absolutely nothing actually wrong with day-to-day fantasy sports (DFS), and they don’t want to see the offerings banned or restricted from the marketplace.
However, they believe that regulation is an important part of any sort of gambling product, something they feel applies to DFS sites just as much as it does a casino or racetrack.
‘I think daily fantasy sports betting should just be legal like I believe old-fashioned sports betting should be legal,’ William Hill US CEO Joe Asher told Reuters. ‘But let us not pretend one is OK plus the other is not. Drawing some line that is artificial the two makes no sense as a matter of law or policy.’
DFS Embraced by Leagues, Media Titans
All major DFS sites suggest that their tasks are totally legal, and both DraftKings and FanDuel stay out of five states where they feel laws do not allow fantasy sports games to supply real money prizes.
That argument seemingly have a lot of sway, as sports leagues and media organizations are both getting on board en masse: most leagues now have partnerships with one or more sites, ESPN has an advertising that is major content deal with DraftKings, and both Yahoo and CBS have launched their very own DFS items in recent days.
But there are those who are taking a better look at the industry that is growing.
In Nevada, the state gaming control board is analyzing the legality of DFS games, although the industry thinks it’s quite clear that the contests are legal under a fantasy sports exemption within the 2006 Internet Gambling Enforcement that is unlawful Act.
‘When you begin providing day-to-day fantasy contests, then you start to blur the line between skill and chance,’ said Nevada Gaming Control Board Chairman AG Burnett. ‘ When possibility starts to govern the outcome more than skill, there is a type of gaming, and that is as soon as the need for regulation kicks in.’
Lobbyists for the fantasy activities industry dispute that characterization, nevertheless, saying that their games are clearly more about skill than luck.
‘ They’re not like games of chance, where no matter how skillful the players is, losing or winning typically comes down to fortune,’ said Jeremy Kudon, somebody at Orrick who lobbies for the Fantasy Sports Trade Association.
For their part, FanDuel and DraftKings issued a statement that is joint the Reuters report.
For the reason that declaration, they stated which they work working with officials within the video gaming industry ‘to educate them on the fantasy sports industry as our products are fundamentally separate from, and never competitive with, casinos and video gaming businesses.’
Lawsuits Target Free Money Marketing Campaigns
But you will find other threats to the industry also.
DraftKings is facing class action lawsuits in at least three states, including Massachusetts, Florida, and Illinois, from players who feel they were deceived by the business’s aggressive advertising campaign, particularly due to misunderstandings over the nature of exactly how deposit bonuses work.
And while the Fantasy Sports Trade Association thinks daily fantasy games should really be legal and don’t represent gambling, even they will have expressed issues over the advertising promotions utilized by the 2 major web sites.
‘The money motivation was never an element that is key of sports,’ stated FSTA President Paul Charchian. ‘ Now a lot of the advertising in daily fantasy sports is actually excessively focused on monetary gain.’