Supplier News

Luxembourg – William Hill buys share in lottery specialist NeoGames

By Phil - 10 August 2015

William Hill has bought a 29.4 per cent stake in Luxembourg-based NeoGames for US$25m as it moves to enter the online lottery market.

Founded in 2005 as a pioneer of online scratch cards, NeoGames 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 ten 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. Four states have started selling online and others are expected to follow. NeoGames’ NeoPollard joint venture won the contract for Michigan’s iLottery and has achieved the highest online penetration rate of the four states so far. It has also been successful in a number of European countries, including supplying Sisal in Italy and Santa Casa in Portugal, and in 2015 was selected by Sazka, the leading lottery licensee in the Czech Republic, to provide a complete internet solution.

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.

James Henderson, Chief Executive Officer of William Hill, said: “The emergent online Lottery market is an exciting new opportunity in the gambling sector and NeoGames is a disruptive technology operator offering customers a great experience and lottery rights holders a compelling alternative to established retail lottery operators. This agreement gives William Hill good optionality in a new market that is increasingly attractive to gambling customers.”

Ilan Rosen, Chief Executive of NeoGames, commented: “We are excited by this strategic investment and partnership with William Hill which, apart from being a strong vote of confidence in our company and future expansion plans by one of the leading players in the gambling world, also opens up promising areas for synergies between our companies in the online lottery market, bringing William Hill’s expertise and excellence in areas such as sports betting and omni-channel growth.”