The Global Tote business offers pari-mutuel technology and services to horse race betting operators worldwide. It includes the Americas Tote business, which provides betting solutions, hardware, and operational services to over 200 racetracks, casinos, and betting venues across the US, Canada, and Latin America.
Additionally, the acquired assets consist of Sportech’s North America-facing white label digital betting solutions business, serving more than 25 customers on the continent. The UK and European Tote operations, along with the Quantum Tote betting engine, are also part of the acquisition. In 2019, this business processed $12.2 billion in stakes for clients from 37 countries.
For the mentioned period, the Global Tote business generated revenue of £30.8 million and adjusted earnings of £5.6 million, with a pre-tax loss of £0.8 million. In the first half of 2020, it generated revenue of £12.0 million, adjusted EBITDA of £1.6 million, and a loss before tax of £1.2 million.
The purchase price of £30.9 million is subject to adjustment based on working capital and pension liability valuation. Shareholders’ vote on the transaction is scheduled for the week starting December 21. The majority of the purchase sum, once finalized, will be returned to shareholders based on investment opportunities and capital requirements.
The acquisition of Sportech’s Global Tote business by BetMakers will greatly enhance the supplier’s presence in the US market. BetMakers aims to support the horse racing industry globally and views Sportech as an internationally renowned name associated with racing. The company plans to retain all current staff and make significant investments to keep up with the evolving sports betting industry.
BetMakers intends to fund the deal using existing cash and an AU$50 million placement, with additional fundraising through a share purchase plan. Canaccord Genuity will serve as lead manager and underwriter, while Taylor Collison will act as co-manager.
Sportech’s transformation objectives include delivering tangible investor returns. The board believes the transaction with BetMakers achieves this objective and presents opportunities for the group. Sportech’s remaining business will consist of its Connecticut-based retail and online betting venues division, draw-based lottery solutions business, and the Bump 50:50 in-stadium raffles operation.
The completion of the deal is subject to BetMakers receiving necessary approvals for license transfer and other customary closing conditions. It is expected to finalize in the first half of 2021.
Alongside this acquisition, efforts to legalize fixed odds betting on horse racing in New Jersey through Senate Bill 3090 have been underway. BetMakers is already preparing for potential roll-out by partnering with PointsBet, New Jersey Thoroughbred Horsemen Association, and Darby Development to provide and manage fixed-odds horseracing in the state.
In November, Sportech received a takeover bid from New York-based investment fund Standard General, but the offer was rejected by the Sportech board as undervaluing their businesses and prospects.
