Penn National Scoops Up Illinois Video Gaming Operator, Posts Strong Q2 Financials

Through its acquisition of PSG, Penn National will gain 1,100 terminals across Illinois.
Penn National Gaming, Inc. will acquire Prairie State Gaming (PSG), an Illinois operator of movie gaming terminals (VGTs), for an undisclosed charge. The company adds the acquisition to its collection of some 31,000 gaming machines in 26 facilities across America.
While Illinois lawmakers squabble about their budget plans, with the resulting standoff meaning that large tax revenues from hawaii’s VGTs will be held in limbo until they could concur terms, Penn National is looking to get its very own slice of this profitable industry.
The deal, for an undisclosed transaction that is all-cash will dsicover the Pennsylvania-based casino, racetrack, and racino operator acquire 1,100 terminals across a network of 270 different pubs and retail gaming establishments statewide.
Big Company
In Illinois, anywhere having a alcohol permit is permitted to work a VGT, and it is big business. But that reality has established one thing of the challenge to the state’s casino industry.
The VGT industry raked in $72.8 million in revenue in July, compared to the combined $118.1 million in revenue of Illinois’ ten gambling enterprises, based on Fantini Gaming Research. For Penn National, which owns three of those casinos, it’s a thought process of ‘if you can’t beat ’em, join ’em.’
PSG, which is probably the VGT operators that are largest in Illinois, created very nearly $10 million in income for the fiscal 12 months ending June 30th.
According to Jay Snowden, chief operating officer of Penn National, the acquisition represents the latest phase in a long-term strategy for ‘growth through accretive acquisitions.’
In April, the company agreed to purchase the Tropicana in Las Vegas for $360 million, making it the operator’s second Sin City property. The organization first bought off the financial obligation for and in June of 2011 finalized its purchase associated with M Resort and Casino in the South Las Las vegas Strip.
Penn nationwide currently runs 26 casino, racinos, and racetracks in 16 American and one Canadian jurisdiction, with the majority found in the Midwest while the South of the United States.
Placed for development
The offer will cement the company further’s position in Illinois, said Snowden. ‘We believe this acquisition provides us a platform that is solid future development in the Illinois VGT market and potentially other states where this form of gaming is authorized.
‘PSG is one of Illinois’ many respected VGT operators, having a strong track record of regulatory compliance and a reputation for dependable night and day service supported by one of many industry’s most experienced teams,’ he added.
Penn National’s recent performance that is financial made the investment community sit up and take notice. Its Q2 results for 2015 have exceeded expectations, bringing in revenues of $701 million, and the company says it remains real-money-casino.club favorably positioned for continued growth in the half that is second of year.
Along with the purchase associated with the Tropicana, Penn State opened Massachusetts’ first casino at the end of June. Called Plainridge Park Casino, the slots-only establishment tacked onto the racecourse, and reported $6.1 million in gambling revenue in its first week of operation.
Optimal Payments’ Skrill Takeover to Complete by 10 august
Optimal Payments acquisition of Skrill has gotten the go-ahead from British financial regulators, as the payments industry looks to consolidate within the face of increased mobile competition . (Image: totallygaming.com)
NETELLER moms and dad Optimal Payments has announced that its €1.1 billion ($1.2 billion) reverse takeover of Skrill, previously Moneybookers, will be finalized next Monday, August 10, after obtaining the light that is green UK economic regulators.
Optimal received approval to acquire Skrill’s US company from American regulators in June. Both companies offer their payment solutions towards the new US online video gaming areas.
The deal highlights a period of consolidation within the electronic re payments industry, as competition increases and innovation that is mobile disruption result in the pooling of resources attractive. In April, Skrill finished the purchase of UK competitor Ukash, per month after the Optimal deal was announced.
The launch of Apple’s ‘wave and pay’ system on iPhone has spooked the digital wallets industry, which views the incursion of large non-traditional payment service provides into the re payment room as a threat that is highly disruptive. The ‘wave and pay’ system allows users to load credit card details onto their handset, acting as a de facto e-wallet.
‘ Not Just a Defensive Move’
Optimal Payments has denied that the acquisition is a defensive move, citing growth that is steady. Instead, analysts have said the company that is enlarged which marries two of the UK’s biggest digital re payment services, will benefit from greater scale. It’s estimated the group that is combined have a cash flow of around £117 million ($182 million); Optimal’s standalone figure is around £58 million ($90 million).
The deal will relieve both organizations’ reliance on the gambling that is online, consolidating their more conventional e-commerce interests.
‘We’re becoming more relevant in the e-commerce space and we come across organic growth both here and in gaming following the deal,’ Joel Leonoff, leader of Optimal, insisted recently.
Optimal also wants to minimize its current reliance on an unnamed customer that is asian which reportedly now represents over 33 % associated with the organization’s product sales.
Online Gaming Payments Giant
‘Over days gone by four years, we have effectively delivered growth that is significant profits and earnings for our shareholders,’ said Leonoff. ‘This growth lead from executing our strategy to generate high quantities of natural growth also to supplement this with accretive acquisitions.
‘The purchase of Skrill will produce a tech that is global in the fast growing digital payments space and now we believe represents a transformational leap forward that greatly accelerates our strategic plan. The Optimal Payments management group is extremely excited about the future prospects for the business.’
NETELLER had been formed back in 1999, at the same time as PayPal. But while PayPal shied far from the grey area that is legal of gambling in America, NETELLER embraced it.
By 2005, the company was processing 80 % of on line gambling transactions globally, which accounted for 95 percent of its revenue flow, but was forced to pull out of this market that is US after UIGEA made the processing of online gambling transactions unlawful.
Gaming Business Desires to See Regulation of Constant Fantasy Sports
Yahoo has joined an increasing number of major companies attempting to break to the fantasy that is daily industry. (Image: Eric Risberg/AP)
FanDuel and DraftKings have turned fantasy that is daily from the little niche product to the quickest growing portion associated with fantasy activities industry.
Now, using the valuations of each of the companies reaching $1 billion or more, the video gaming industry is needs to get sucked in, with some believing that the daily fantasy games deserve the same types of strict regulation casino businesses deal with on a regular basis.
In accordance with officials at many gaming that is major, there’s nothing actually wrong with day-to-day fantasy sports (DFS), and they don’t really want to see the offerings banned or restricted through the marketplace.
However, they think that legislation is a part that is important of sort of gambling product, one thing they feel applies to DFS sites just as much as it does a casino or racetrack.
‘we think daily fantasy sports betting should just be legal like I think old-fashioned sports betting should really be legal,’ William Hill US CEO Joe Asher told Reuters. ‘But let’s not pretend one is OK therefore the other is not. Drawing some line that is artificial the two makes no feeling as a matter of law or policy.’
DFS Embraced by Leagues, Media Titans
All major DFS sites suggest that their tasks are completely legal, and both DraftKings and FanDuel stay out of five states where they feel laws do not allow fantasy sports games to provide real money prizes.
That argument seems to have plenty of sway, as sports leagues and media businesses are both getting on board en masse: most leagues now have partnerships with more than one internet sites, ESPN has a major advertising and content deal with DraftKings, and both Yahoo and CBS have actually launched their own DFS products in recent weeks.
But you will find people who are going for a better look at the industry that is growing.
In Nevada, the state gaming control board is analyzing the legality of DFS games, although the industry believes its quite clear that the contests are legal under a fantasy sports exemption into the 2006 Unlawful Internet Gambling Enforcement Act.
‘When you start offering daily fantasy contests, then you start to blur the line between skill and chance,’ said Nevada Gaming Control Board Chairman AG Burnett. ‘ When chance starts to govern the outcome more than skill, there is a form of video gaming, and that’s whenever need for regulation kicks in.’
Lobbyists for the fantasy sports industry dispute that characterization, however, saying that their games are clearly more about skill than luck.
‘ They’re not like games of chance, where no matter how skillful the players is, losing or winning always precipitates to fortune,’ said Jeremy Kudon, a partner at Orrick who lobbies for the Fantasy Sports Trade Association.
For their part, FanDuel and DraftKings issued a joint statement for the Reuters report.
For the reason that statement, they said on the dream sports industry as our products are fundamentally separate from, and not competitive with, casinos and gaming companies. that they work using officials into the gaming industry ‘to educate them’
Legal Actions Target Free Money Marketing Campaigns
But you can find other threats to the industry also.
DraftKings is facing class action lawsuits in at least three states, including Massachusetts, Florida, and Illinois, from players who feel they were deceived by the business’s aggressive advertising campaign, particularly due to misunderstandings over the nature of just how deposit bonuses work.
And while the Fantasy Sports Trade Association believes fantasy that is daily should really be legal plus don’t constitute gambling, even they’ve expressed concerns on the advertising promotions employed by the two major web sites.
‘The money motivation had been never an element that is key of sports,’ said FSTA President Paul Charchian. ‘ Now a lot of the advertising in daily fantasy sports is truly extremely concentrated on financial gain.’