Kings Entertainment looks to Ontario market with Bet99 merger

Kings Entertainment Group has agreed a deal to merge with Sports Venture Holdings (SVH), the parent company and operator of the Bet99 brand, one of the largest sports betting and casino websites in Canada.

The deal revolves around the completion of a so-called ‘three-cornered amalgamation’, whereby SVH will merge with a soon to be incorporated subsidiary of Kings Group, which will then function as a wholly owned subsidiary of the Kings business.

In the period prior to the amalgamation of the two businesses, outstanding shares in Kings Entertainment Group will be consolidated on the basis of 20 post-consolidation shares for every outstanding share in Kings Entertainment Group.

Kings will issue 31.0724 pre-consolidation shares per share in SVH, an arrangement which will result in the issue of 518 million shares. The deal values Kings at a price of $0.21 per share, representing a premium of 13.5% on its closing price as at May 25.

Upon completion of the deal, current SVH shareholders will hold 87% of the common shares in the combined group. In connection with the transaction, Kings have agreed to provide SVH with a senior secured non-interest bearing credit facility of up to $5m.

The combined group post combination will operate under the name Interactive Entertainment Group.

Conditions relating to the combination include SVH obtaining an Ontario igaming license, the approval of SVH shareholders and Kings Entertainment, as well as all regulatory and transaction-based requirements.

However, the deal has already been greenlit by the board of directors of both companies.

Current Bet99 CEO Jared Beber will take on the CEO role of the merged company, with Kings Entertainment CEO Steve Budin continuing to lead LottoKings operations and acting in an advisory role.

Former CEO and founder of Bragg Gaming, Adam Arviv, will step into the executive chair role of the combined entity.

Kings Entertainment Group operates lottery, casino, and sportsbook gambling and functions as the parent company of global online gaming innovators LottoKings and WinTrillions.

SVH operates as a holding company, operating a number of subsidiaries including a Swiss-facing business name of business and BQC Consulting, which operates the Bet99 brand, and a third Ontario based business, CanCo, which has recently applied for an igaming operating licence in the Canadian province.

Upon approval, CanCo will operate and market BET99.ca to residents of Ontario. Historically the brand has used a “hyper-localized” approach to target Canadian players, an approach which has led the business to handle over $1.2bn in bets across sportsbook and casino.

During the first quarter of 2022, the business generated net gaming revenue of $12.2m.

Bet99 operates a number of Canada-facing partnerships with personalities including UFC hall of famer Georges-St-Pierre, NHL all-star Auston Matthews, and two-time Olympian Alysha Newman.

The brand is also partnered with the Ottawa Senators, CF Montreal, and the Montreal Alouettes.

Kings Entertainment Group CEO Budin hailed the deal as a “transformative” transaction for the Canadian sports betting sector.

“Our vision for Kings has always been to build leadership positions within each of the regulated jurisdictions that we enter, and this agreement will certainly accelerate that goal within the Canadian landscape and beyond,” Budin added.

These sentiments were echoed by his opposite number, with Beber saying: “Merging with an internationally recognized online betting veteran such as Kings is a natural next step for SVH.

“Bringing the Bet99 brand to the public capital markets, through Kings’ CSE and OTC listings, will not only support expansion by engaging a much broader investor base, but will also build the Bet99 brand with an even wider audience of betting enthusiasts,” the SVH CEO added.