Playtech and Caliente agree new deal and eight-year B2B contract

Playtech and Mexican gaming operator Caliente have agreed a path forward for their Caliente Interactive partnership.

Under the terms of the agreement announced Monday (16 September), Playtech will own a 30.8 per cent equity stake in Caliente Interactive, a new holding company of Caliplay incorporated in the United States.

The equity stake entitles Playtech to receive dividends from the business and to appoint a director to the Caliente Interactive Board.

Playtech will also receive US$140 million in cash on a quarterly basis over a four-year period, alongside more than $150 million in unpaid software and services fees, which will be released from escrow in 2025.

The revised arrangements are subject to Mexican antitrust approval and closing is expected to take place in the first quarter of 2025, after which all current legal proceedings between Caliente, Caliplay and Playtech will be dismissed.

The agreement includes an eight-year B2B software licence and services agreement and replaces the previous joint venture agreement between the parties, which was due to run until 2034.

"During the past nine years, we have worked closely with Caliplay to create a successful and rapidly growing digital business in Mexico. The revised arrangements mark the beginning of an exciting new chapter that will build on the impressive progress to date, with a view to driving significant further growth for Cali Interactive in the future,” said Playtech chief executive Mor Weizer.

“The agreement with Caliente and Caliplay underlines the attractiveness of Playtech's leading proprietary technology. With a strong position in Mexico and exposure to other fast-growing markets in the Americas and Europe, we remain well-placed to deliver strong growth in our B2B business in the coming years.”

Emilio Hank, chairman of Caliplay, commented: “We are delighted to finalise this renewed agreement which shows the inherent strength of the strategic relationship between Caliplay and Playtech. 

“We are focused on growing Caliplay, leveraging our core strengths and Playtech's leading technology to broaden our geographical footprint, as we continue in our mission to give the best gaming experiences to our customers in Mexico and beyond.”

Playtech also provided a trading update this morning, confirming that it now has access to Caliplay’s financial information, which shows a continued strong performance in the first half of 2024.

Together with strong growth in the United States, Canada, and Colombia, Playtech now expects 2024 Adjusted EBITDA to be slightly ahead of current consensus expectations, mainly driven by a strong performance within the B2B division.  

In B2C, Playtech said that its Snaitech business in Italy continues to see underlying growth in wagers against a tough comparative period last year, while being negatively impacted by customer-friendly sporting results, particularly at the start of the year.

Talks with Flutter Entertainment regarding the company’s potential acquisition of Snaitech are ongoing.

Shares in Playtech plc. (LSE:PTEC) jumped 7.96 per cent on the news to 706.40 pence per share in London early Monday morning.