Playtech Plc has notified investors that it has agreed to purchase ‘a low, single-digit percentage stake in Hard Rock Digital (HRD)’ – the online gambling subsidiary of US entertainment and leisure group Hard Rock International (HRI).
The investment will amount to $85m (€80m), and will be used to fund HRD’s global expansion plans to the benefit of Playtech’s commercial pipeline and technology products.
Hard Rock Digital has an established online and retail sports betting operator that currently operates in the US states of Arizona, Indiana, Iowa, New Jersey, Ohio, Tennessee and Virginia.
Dealmakers aim to extend its online sportsbook and iGaming offerings in further US states and ‘select international markets’ in the coming years as HRD will be allowed to licence a range of Playtech’s technology solutions and iGaming content.
The partnership will see Playtech’s products and services supplied predominantly on a revenue-share basis under long-term commercial agreements.
The FTSE250 technology group expects the deal to have minimal impact on its business-to-business (B2B) results in the financial year 2023, with a contribution to B2B revenue set to rise in the following year
The partnership between Playtech and HRD is seen as a transformative transaction for the former, which has long sought to expand its technology presence in the North American market.
Updating investors, Playtech CEO Mor Weizer noted that the deal “significantly advances our position in the North American market and is very much in line with our B2B strategy”.
Hard Rock Digital was established in December 2020, led by Stars Group and Fox Bet veterans. Its CEO is Marlon Goldstein, former Chief Legal Officer of PokerStars, with former Stars Group CEO Rafi Ashkenazi named executive Managing Director and Executive Chair.
The deal comes at a time when the online gambling industry is experiencing rapid growth, after the COVID-19 pandemic led to an increased demand for online gaming options.
The partnership between Playtech and HRD is expected to help both companies to capitalize on this trend and expand market share in the highly competitive online gambling sector.
Hard Rock International and HRD Chairman Jim Allen, added that the partnership will help HRD to become the first operator with a global omni-channel offering under a singular, irreplaceable brand. The move is part of HRD’s planned strategic initiative to expand its online gaming offerings to international markets.