Online gaming billionaire Teddy Sagi (photo above), is currently embroiled in a court case (CL-2023-000883, Skywind Holdings Limited and In Touch Games Limited v. Simon Wilson, Caroline Yu-Lin Wilson and Ruskin Properties Limited) that involves heavily contested claims of fraud and physical threats over his acquisition of In Touch Games (ITG), for £53 million. ITG, once a thriving digital gaming company with almost 5 million customers and a sponsorship deal with West Bromwich Albion, is now allegedly worth nothing.

Sagi, who is Israeli, has an estimated net worth of $6.4 billion, amassed his fortune primarily through Playtech, a gaming software development company he founded in Estonia in 1999. The company was valued at £550 million on its 2006 London stock market listing and had almost doubled in value by the time Sagi sold his last shares in 2018. He has since invested much of his wealth in a property portfolio, which includes Camden Market in North London.

Simon Wilson, the man behind ITG, also capitalized on the online gambling boom of the early 21st century. He transformed ITG from a supplier of high street slot machines and jukeboxes into a successful digital gaming company. However, he found himself contemplating the deal of his life when he entered negotiations with Sagi.

The deal-making took place in Sagi’s £30 million Knightsbridge residence overlooking Hyde Park, a world away from the no-frills, functional office block in Halesowen, West Midlands, where Wilson had built his business. Given the high-stakes nature of the deail and the claim filed at the high court by Sagi’s Gibraltar-based online gambling company, Skywind, it is perhaps surprising that Sagi was not more nervous about this acquisition.

In the summer of 2021, ITG was under scrutiny from the Gambling Commission. The regulator had been investigating the company since 2017, resulting in a forced £2.2 million settlement. Despite this, ITG failed to improve its practices, leading to a second, harsher punishment in March 2021 – a £3.4 million fine and an official warning.

ITG’s transgressions included poor monitoring of whether online casino players might be suffering from a gambling problem and lax money-laundering checks that did not assess the risk of customers using cryptocurrencies. As a result, the commission imposed a third-party audit of the company’s paperwork by risk management and consultancy group RSM UK.

ITG passed the audit, and RSM applauded its “positive direction of travel”. However, according to Skywind’s high court claim, this story of redemption was an elaborate sham that led to Sagi’s company buying ITG for £53 million.

In this unfolding M&A drama, each party is backed by a formidable legal team. Teddy Sagi has enlisted the expertise of Quinn Emanuel Urquhart & Sullivan, a global litigation firm known for handling high-profile and high-stakes cases.

On the other side of the table, Simon Wilson, the man who built In Touch Games from the ground up, is represented by Irwin Mitchell, a UK-based law firm with a strong reputation in commercial litigation.

Adding another layer to this complex case is Yu Lin Wilson, also known as Caroline, Simon Wilson’s estranged wife, who has engaged the services of Chamberlain Hamnet, while Ruskin Properties, another defendant in this saga, is represented by FBC Manby Bowdler.

These legal world class firms bring a wealth of experience and strategic acumen to the table, setting the stage for a legal battle that will capture the interest of the global gaming industry, an outcome that will most likely have significant implications for all parties involved, a case that could potentially reshape aspects of the global online gambling sector.

Less than a year after the audit, Sagi arrived on the scene with his chequebook. He wanted ITG’s profitable brands such as Jammy Monkey, mFortune, and PocketWin, online casinos that typically offer a reliable stream of income from fixed-odds games. The takeover via Skywind was completed by June 2022.

However, the deal began to turn sour within months. In January 2023, the commission hit ITG with its biggest fine yet, a £6.1 million penalty for failures that took place in March 2022, prior to the acquisition. In August 2023, the Gambling Commission wrote to ITG, now under Skywind’s ownership, suggesting ITG had “knowingly altered” documents in advance of the crucial favourable audit conducted by RSM in 2021.

The case continues and it remains to be seen whether Sagi’s £53 million gamble will pay off or if he has been dealt a losing hand.

Sagi’s high-risk high-reward business dealings have been marked by a number of legal disputes and controversies over the years.

Alleged assassination plot: In 2021, Israeli authorities accused Iran of plotting to assassinate Israelis in Cyprus, including potentially Teddy Sagi. The plot was reportedly uncovered by Mossad, Israel’s national intelligence agency. However, both the Israeli prime minister’s office and Sagi’s company, the Sagi Group, denied that Sagi was a known target. This incident underscored the geopolitical risks that high-profile business figures like Sagi can face.

Dispute with William Hill: Another significant legal dispute involved the British bookmaker William Hill and Playtech, a company founded by Sagi. The claimants alleged that Sagi planned to sell a company called ValueNet for “hundreds of millions of dollars.” This case highlighted the high-stakes nature of the online gambling industry and the potential for disagreements over valuations and business strategies.

1996 Scandal: Perhaps the most serious legal challenge in Sagi’s career was his involvement in a scandal in 1996. He was imprisoned for nine months on charges of grave deceit, bribery, and insider trading. This case tarnished Sagi’s reputation and raised questions about his business ethics.

These cases illustrate the complex and often contentious nature of Sagi’s business dealings. They also highlight the broader legal challenges faced by key players in the online gambling industry.

Founder of In Touch Games Simon Wilson lives in Stourbridge and has been a key figure in the online gambling industry, capitalizing on its boom in the early 2000s. He transformed ITG from a supplier of high street slot machines and jukeboxes into a thriving digital gaming company with almost 5 million customers.

The company operates several online casino brands, including bonusboss.co.uk, cashmo.co.uk, casino.mfortune.co.uk, casino2020.co.uk, drslot.co.uk, mfortune.co.uk, mrspin.co.uk, pocketwin.co.uk, and slotfactory.com.

Under Wilson’s leadership, ITG also secured a sponsorship deal with West Bromwich Albion, a football club based in the UK. This move was aimed at building ITG’s profile among football fans and attracting them to its online casino brands.

However, things started to take a turn when The Gambling Commission fined the company multiple times for failures related to social responsibility and money laundering. Despite these setbacks, Wilson remained at the helm of ITG.

In addition to his work with ITG, Wilson, along with his now estranged wife Caroline Yu-Li Wilson, founded the Intouch Global Foundation (IGF) in 2017. On its website, the foundation claims to provide tailored guidance and financial support to charities both locally and across the globe.

SiGMA East Europe Summit powered by Soft2Bet, will take place in Budapest from 2-4 September 2024.

Global law firm White & Case LLP has been advising Kindred Concepts Limited, trading as F1® Arcade, on a US$130 million growth debt financing deal. This financing, provided by several private credit funds, is set to fuel F1® Arcade’s rapid global expansion, particularly its ambitious venture into Las Vegas.

F1® Arcade is the world’s first F1® experiential hospitality brand, backed by Formula 1 and Liberty Media. It has already seen success in the UK and US, with venues in London, Birmingham, and Boston Seaport. However, the company’s sights are set on further expansion, with a site opening in Washington, DC in the autumn of 2024 and a flagship site in Las Vegas in 2025.

The Las Vegas venture represents a significant gamble. The city, known for its vibrant entertainment scene, presents a unique opportunity for F1® Arcade. The state-of-the-art F1 racing simulator experience, coupled with an exceptional hospitality offering, is expected to appeal to groups, families, and corporate entertainment seekers in the city.

However, this expansion is not without its challenges. The high stakes of the Las Vegas market, coupled with the complexities of mergers and acquisitions in the experiential hospitality sector, present a complex landscape for F1® Arcade to navigate.

The investment aspect is particularly crucial. The growth debt financing deal, led by White & Case partner Jeremy Duffy, provide the necessary capital for F1® Arcade to venture into new markets and scale their operations rapidly.

However, these deals also come with risks. High valuations and the potential for significant losses are inherent in such aggressive expansion strategies. The challenge for companies like F1® Arcade is to balance the potential for rapid growth with the need for financial stability and risk management.

As F1® Arcade gears up for its Las Vegas launch, the company stands at the intersection of opportunity and risk. The success of this venture could redefine the experiential hospitality sector and set a new standard for entertainment offerings. However, the stakes are high, and the outcome is far from certain.

White & Case LLP, has been instrumental in a variety of financing deals, providing advice to a diverse clientele. Its services range from the creation and negotiation of financing agreements to offering strategic risk management advice. The company’s global presence and comprehensive approach to financing deals enable them to support a wide array of businesses across different sectors, guiding them through intricate financial transactions.

Leading distributed gaming operator Accel Entertainment, Inc. (NYSE: NYSE:ACEL), has recently announced that it will acquire Fairmount Holdings, Inc. This acquisition includes Fairmount Park, Inc., the sole active horse racing venue in the greater St. Louis area. This acquisition is indeed a significant move that could reshape the U.S. gaming sector.

The transaction, estimated at around $35 million, will be settled through 3.45 million shares of Accel’s Class A-1 common stock. This strategic move allows Accel to broaden its local gaming presence by integrating the Fairmount property into its portfolio. The property currently hosts approximately 435 horse races over 65 race days annually.

Included in the deal is an Organization Gaming Licence, which permits casino gaming positions, and a partnership with FanDuel for sports wagering in Illinois. Accel is set to invest an additional $85 to $95 million beyond the purchase price for the development of casino facilities and enhancements to the horse racing experience. The company has enlisted RRC Gaming Management LLC for the development and operations of the casino, leveraging the expertise of industry veterans like Tony Rodio and Holly Gagnon.

The transaction is lined up to close in the fourth quarter of 2024, pending customary approvals from the Illinois Racing Board and the Illinois Gaming Board. Accel projects that the investment will generate an Adjusted EBITDA potential of $20 to $25 million with over 75 percent free cash flow conversion, indicating a strong return on capital.

Accel’s co-founder and CEO, Andy Rubenstein, (pictured above on the left with co-founder Gordon Rubenstein after going public under the ticker ACEL in 2019) expressed his excitement for the venture, underscoring the company’s dedication to preserving the rich history of Fairmount Park and supporting the Illinois horse racing industry. The acquisition, which marks nearly a century of Fairmount Park’s operations, aims to boost job creation and economic development in southern Illinois and the greater St. Louis community.

The sellers, William Stiritz and Robert Vitale, commended the agreement, expressing confidence in Accel’s capabilities to maximize the full potential of the sportsbook and racetrack. Mayor Jeff Stehman of Collinsville, IL, also welcomed the acquisition, anticipating positive economic impacts for the local community.

In other recent news, Accel Entertainment reported steady growth in the first quarter of 2024. The company’s Q1 2024 revenue rose to $302 million, marking a 2.9 percent increase year-over-year (YoY), and adjusted EBITDA saw a marginal increase of 0.3 percent YoY, reaching $46 million. Despite facing challenges such as unfavourable weather conditions that negatively impacted same-store sales growth, Accel’s expansion into Illinois and Nebraska and a robust growth pipeline have contributed to these positive results.

Accel Entertainment also announced a $200 million share repurchase program, which is backed by a strong balance sheet with $286 million in net debt and $553 million in liquidity. The company is actively exploring multiple opportunities for expansion across the country, with expectations to enter multiple markets by the end of the year.

In light of Accel Entertainment’s (NYSE: ACEL) recent move to acquire Fairmount Holdings, Inc., investors may find it beneficial to consider some key financial metrics and insights from InvestingPro. With a market capitalization of $875.15 million, Accel’s strategic investment in expanding its gaming footprint shows a commitment to growth in the gaming and entertainment sector. The company’s P/E ratio, which stands at 20.35, reflects investor sentiment about its earnings potential, particularly as it embarks on this new venture.

Accel’s robust financial position is reflected by a Price / Book multiple of 4.34, indicating that the market values the company’s assets favourably compared to its book value. This is particularly relevant as the company takes on a significant investment in developing casino facilities and improving the horse racing experience. Additionally, with a gross profit margin of 30.23 percent over the last twelve months as of Q1 2024, Accel appears to be effectively managing its costs, which could bode well for the profitability of the newly acquired operations.

While analysts have revised their earnings expectations downwards for the upcoming period, they predict the company will be profitable this year. Furthermore, Accel’s liquid assets exceed its short-term obligations, which may provide financial flexibility for the investments and developments planned. It’s noteworthy that Accel does not pay a dividend to shareholders, which could mean that the company is reinvesting its earnings back into growth initiatives like the Fairmount acquisition.

SiGMA East Europe Summit powered by Soft2Bet will take place in Budapest from 2-4 September.

British investor Amanda Staveley will sell her stake in Newcastle United to the Public Investment Fund (PIF) of Saudi Arabia and the Reuben Brothers. This move will further consolidate the control of the top shareholders over the Premier League club.

Amanda Staveley has been a key figure in Newcastle United’s recent history. She played a pivotal role in the club’s acquisition from Mike Ashley in 2021. Her firm, PCP Capital Partners, held a minority shareholding in the club. However, it was announced on Friday that PIF and RB Sports & Media, owned by the British businessmen Reuben Brothers, would acquire these shares.

The acquisition is part of PIF’s long-term strategy to develop Newcastle United into a formidable competitor in both domestic and European competitions. Post-acquisition, PIF will hold approximately 85 of the club, with the Reuben Brothers owning the remaining 15 percent.

Staveley’s exit marks a significant moment for the club. Despite PIF leading the £305 million takeover of Newcastle in October 2021, Staveley was instrumental in facilitating the deal. She emerged as the face of the ownership group, and her departure shifts the day-to-day running of the club to Darren Eales, who took over as chief executive in July 2022.

Staveley and her husband, Mehrdad Ghodoussi, (photo above), were featured in an Amazon series about Newcastle, where they appeared alongside PIF governor Yasir Al-Rumayyan. Staveley’s PCP vehicle owned roughly 6 percent of the club. Despite her departure, sources close to Staveley suggest that she is likely to remain involved in football.

Staveley’s exit comes amidst a costly legal dispute with Greek shipping magnate Victor Restis. In March, she faced a bill of £3.5 million after losing a UK court case.

Al-Rumayyan, the chair of Newcastle, expressed his best wishes to the departing shareholders as they shift their focus to other business interests. He reaffirmed the ownership group’s commitment to building on the existing foundations for the long-term, sustainable success of the team.

PIF, with $925 billion in assets under management, has invested billions of dollars in sports businesses worldwide, from golf to motor racing. However, Newcastle United remains the fund’s only asset in European football. The regulatory environment for clubs has become stricter since the acquisitions of Chelsea by Russian billionaire Roman Abramovich in 2003 and Manchester City by Sheikh Mansour, a member of Abu Dhabi’s ruling family, in 2008. Clubs are now limited to £105 million of losses over three seasons, with exceptions for investment in infrastructure and other areas.

Following PIF’s acquisition of Newcastle, Premier League owners voted to tighten rules on sponsorship deals with related parties. This move was designed to prevent PIF-backed companies from funnelling money into the club. However, Newcastle has signed sponsorships with its Sela events organiser and Noon online retailer, and has flown to Saudi Arabia for training camps, thereby boosting the club’s finances.

On the pitch, Newcastle United has enjoyed quick success after the takeover, qualifying for the UEFA Champions League at the end of the 2022-23 season. The club’s revenue increased nearly 40 percent to £250 million that season.

In her parting statement, Staveley expressed gratitude for having played a part in setting up the club for future success. She affirmed that she and her husband would remain lifelong fans of the club. This development marks a new chapter in the history of Newcastle United, with the promise of exciting times ahead.

While the sale marks the end of an era with Staveley’s departure, it also heralds the beginning of a new chapter in Newcastle United’s history. The club is poised for growth and success, backed by the financial strength of its new owners and the strategic vision of its management. However, it will also need to navigate the challenges of a stricter regulatory environment and the expectations of its passionate fanbase. Only time will tell how these changes will shape the club’s future.

SiGMA East Europe Summit powered by Soft2Bet will take place in Budapest from 2-4 September.