Email Address Topics: Casino & games Finance Sports betting Bingo Poker Unfortunate timing in Italy and the reset of earnouts payable on its US assets is indicative of many more twists and turns ahead for affiliate consolidator Catena Media, writes Scott LongleyFlexibility is a good trait to have in business and Catena Media can fairly say it has that attribute in spades going by the announcements it has made since it bought the NJPlay assets back in December 2016.At the time, the deal was structured so that the vendors received $15m upfront, 25% of which would be paid with over 440,000 shares. There was also an additional earnout of up to $45m which would be based on the revenue performance over the subsequent three years.These terms applied to the online casino and poker affiliate sites then operating in New Jersey and Nevada.But the deal came with a kicker related to the potential for further states to regulate online involving a “range of assets” including some esports and DFS titles whereby the vendors would receive 50% of net profit going forward with a series of put and call options in place for Catena to gain full control after three years.The purchase price for these additional assets was set at between 2.5/3 times the net profit generated by these assets in the 12 months previous to the exercising of the options. This, remember, was against a backdrop of DFS being somewhat on the wane. That buyout price was reasonable and both sides were likely happy.The arrangements stood for just over a year, until February this year in fact when, as we all know, there were already rumours that PASPA was in trouble in front of the Supreme Court. With the prospect of the US opening up to US sports, and with the vendors controlling various websites aimed at just such a potential market, the two sides came to a new understanding.This involved a rejigging of the earnout plus a new structure for the put/call options on the additional assets. It restricted the original earnout potential significantly, from $34.5m to $17m with 50% being paid in shares. Meanwhile, and importantly, the buyout terms of the additional assets rose from 2.5 to 3 times to 2.5/3.5 times.This last change would suggest the vendors had some inkling of what might be coming down the track and what that might mean for the revenue and profit potential for those additional assets.This new deal lasted about six months. In the intervening period, PASPA was indeed consigned to the dustbin of history and as we all know the door was blown wide open – potentially at least – for regulated sports betting across the US.Catena Media found it was sitting on a goldmine but one which it neither wholly controlled nor was due the full profits.Back they went to the negotiating table and in the middle of October the company duly announced a new set of terms.As the announcement made clear, the unforeseen “rapid spread of regulated online sports betting” in the US meant that under the new terms from February, the increased revenues projected in the US meant the final cost of the additional assets would “likely exceed the original profit-sharing amounts.”The new terms now will see all earnings between 1 November this year and 31 October next included in the earnout with a third earnout payment due afterwards of up to $45m, of which the majority will be paid in shares.Affiliate um & ah Another decent attribute in business as much as in life is timing. The gods of fortune have favoured Catena in the US, albeit at the price of a hefty earnout, in a way that they have failed to do in Italy.As far as iGaming Business can ascertain, the ASAP Italia deal, announced a matter of days ahead of the new populist Italian government proclaimed a ban on all forms of gambling advertising, marks for now at least a high watermark for affiliate acquisitions.The question of where this leaves the gambling affiliate sector is hard to gauge. In some intriguingly comments on a panel at G2E in Las Vegas, Chris Grove, under the title of acting director US for Catena Media, said that in the US the definition of what an affiliate is, “is going to expand.”“There is a massive amount of sports media that can now act as a sports-betting affiliate,” he added. “The definition will change dramatically. [The percentage of marketing that goes through] traditional affiliates’ channels – like Catena – will be lower than it is with casino. But taking in all new affiliates like sport media and sports bars, it will be a bigger percentage.”The gambling sector has been handed an opportunity that it truly cannot have expected at the start of the year and the speed of developments is indeed dizzying for all involved.Catena will be hoping it now has the structure to drive its US business forward and it will be interesting to hear what the company has to say in the coming months, both about the US and the apparently stalled M&A drive.But if its earnout resets are any guide, we can expect some twists and turns along the way.Scott Longley has been a journalist since the early noughties covering personal finance, sport and gambling. He has worked for a number of publications including Investment Week, Bloomberg Money, Football First, eGaming Review and Gambling Compliance 29th October 2018 | By Stephen Carter Catena’s US hokey cokey Tags: Card Rooms and Poker Online Gambling Regions: Europe US Southern Europe Italy Subscribe to the iGaming newsletter AddThis Sharing ButtonsShare to LinkedInLinkedInShare to FacebookFacebookShare to TwitterTwitter Bingo Unfortunate timing in Italy and the reset of earnouts on its US assets suggests more twists and turns ahead for affiliate consolidator Catena Media, writes Scott Longley
Novomatic hands top systems role to Czapkiewicz Topics: People Strategy AddThis Sharing ButtonsShare to LinkedInLinkedInShare to FacebookFacebookShare to TwitterTwitter Subscribe to the iGaming newsletter Tags: Mobile Online Gambling OTB and Betting Shops Novomatic has appointed Bartholomäus Czapkiewicz as its new chief systems officer as part of a wider effort to expand its research and development activities. Czapkiewicz (pictured), who also joins the operator and supplier’s executive board, has worked at Novomatic for the past 10 years, serving in a number of senior roles across various departments. He was previously responsible for coordinating international development projects, and also led the company’s research and development department in his role as managing director of its Novomatic Gaming Industries subsidiary. “As part of the successful executive team, my goal, in particular, is to continue development in system and platform solutions, and ensure that our processes become even more efficient as we look towards the future,” Czapkiewicz said. Bernd Oswald, head of the supervisory board at Novomatic, added: “Over the past few years, Bartholomäus has played a decisive role in successfully expanding our innovative abilities.” “He is an internationally-experienced research and development mathematician and computer scientist, with a focus on system and platform solutions.” The appointment of Bartholomäus comes after Novomatic in October brought in Felipe Ludeña to head up its plans for sports betting expansion in European and North American markets. Ludeña joined from Codere Group, where he had led the sports betting provider’s Spanish online business unit since 2011. The company enjoyed a successful first half of the year, during which sales reached a record €1.37bn (£1.24bn/$1.56 bn). This led to an 11.6% increase in earnings before interest and deductions to €318m.Image: Krischanz & Zeiler OG 11th December 2018 | By contenteditor Email Address People Bartholomäus Czapkiewicz has been with the gaming technology giant for a decade
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