William Hill has acquired 29.4 per cent of NeoGames, a leading online lottery software and services provider, for US$25m.
NeoGames is a leader in the emergent online lottery market. Founded in 2005 as a pioneer of online scratch cards, it subsequently developed its offering to provide a range of online lottery products and services to lottery rights holders. It provides a combination of a wide portfolio of games, a state-of-the-art technology platform and operational services to 10 lotteries worldwide. Its primary focus is currently on the US, where per capita spend on lotteries is the highest in the world. Following a clarification of US Federal Law in 2011, state lotteries are now permitted to sell lottery products over the internet. Total lottery sales in the US were $60bn in 2014. William Hill has an option to acquire the remaining 70.6 per cent of NeoGames, exercisable after either three or five years. The option is exercisable at William Hill's full discretion and the price payable will be determined at the time of exercise using a valuation methodology agreed as part of the initial stake purchase. William Hill's 29.4 per cent shareholding in NeoGames will afford it certain shareholder rights as well as allowing the group to nominate two representatives to the board of NeoGames. William Hill has also agreed to fund a $15m working capital facility if required.
