Chinese Consortium to Buy Caesars’ Playtika Games Unit
Posted on by Sean Williamson
A group of Chinese investors, led by Shanghai Giant Network Technology Co. has bet on the rapidly growing popularity of mobile casino games and has agreed to buy Caesars Entertainment Corp’s Playtika ltd. for an impressive $4.4 billion. In January 2015 Caesar’s Entertainment puts its largest division into bankruptcy, and by selling to the consortium they may have more cash available to offer their bondholders settlement.
Playtika ltd. is an online casino game platform that can be accessed online or via smartphone or tablet, and by acquiring it, the Chinese buyers now have a foothold in the incredibly fast growing mobile gaming industry. According to the Playtika website they were the first to introduce free-to-play casino games on social networks and their Facebook app includes a selection of slots, video poker, roulette and blackjack.
Interestingly enough, the Playtika platform isn’t a traditional online gaming platform as it only makes use of virtual currency that cannot be exchanged for cash, and the new owners don’t intend to change this. The free play format is due in part to organised gambling being an illegal activity in China, with only the casinos in Macau being an exception.
The investors who have shelled out $4.4 billion include China Oceanwide Holdings Group Co, China Minsheng Trust Co, Hony Capital Fund, and a private equity group founded by Jack Ma, the Chairman of the Alibaba Group Holding Ltd.
For the time being, Playtika will continue to be independently run from its current headquarters in Israel, but the consortium has made the purchase with a view to the laws changing in the future. Even if it takes a number of years for online gaming to be allowed and for entities to be awarded licenses, it’s almost certain that it will happen in the future, and when it does Playtika will be prepped and ready to be a household name.
By selling Playtika to the Chinese investors, Caesar’s will make an exit from the business it bought in 2011 under the Caesar’s Interactive Brand. The deal will not however include the brands real money online gaming business, or the World Series of Poker.
Robert Antokol, the co-founder and CEO of Playtika has said that Caesar’s is incredibly excited by the commercial opportunities that will be available to them now, and that they look forward to seeing how the consortium will grow the business even further.