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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 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 Taiwanese 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.

Trained as an accountant, Caroline Yu-Lin, is also CEO of Ruskin Properties Ltd.. Despite the company's focus on building high-quality, design-led developments, there appears to be a connection with the gambling sector through Caroline Yu Lin Wilson. In an interview following her recognition as one of the Top 10 CEOs of 2022, Wilson said that balancing empathy with honesty is crucial to her. She revealed that Ruskin had partnered with Gordy Moody, an organization that advocates for support for those with gambling addictions. She said that this collaboration aimed to fund the world’s first residential treatment centre for women struggling with gambling addiction.

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.

In Colombia, a total of 8,676 unauthorised sports betting and online casino sites have been blocked by the regulator, Coljuegos.

Coljuegos began using ISP blocking in 2016, the year of regulation and the establishment of the first licensing system for iGaming in Latin America. Since then, 15,521 websites have been blocked by the Colombian regulator, including over 6,000 unlicensed casinos and bingo sites.

Marco Emilio Hincapié, the president of Coljuegos, explains, "We have already hired a firm specialising in cybersecurity and digital monitoring to intensify efforts to identify and block portals where illegal betting is carried out or promoted."

Since 2020, Coljuegos has also partnered with the Ministry of IT and Communications to fight the black market while protecting the legal market.

Coljuegos' efforts will not stop at blocking illegal websites but will also target influencers promoting illegal games. “We hope that during the second half of this year, we will be able to block hundreds of websites and even social media profiles where illegal games of chance are promoted or carried out,” explained Hincapié.

Coljuegos head added: "We want to remind citizens that promoting or advertising illegal gambling portals is an activity not allowed by law. For this reason, we will continue to carry out exhaustive surveillance of the network to prevent illegality from scamming players and affecting health resources."

In Colombia, Coljuegos has issued only 15 licenses for iGaming operators. The regulator reminded Colombians who want to partake in iGaming that "before playing, they should verify that the websites are authorised. Otherwise, they would not only be betting illegally, but they would be putting their money at risk."

In March 2024, Hincapié had warned players that choosing unlicensed operators also meant "supporting betting houses that do not contribute resources for the health of less privileged Colombians."

Around 100 employees at Penn Entertainment have been made redundant as the company ventures on major strategic changes to focus on digital sports betting. This shift in strategy aims to prioritise the growth and development of ESPN Bet, its digital sports betting platform.

The decision to streamline operations and improve efficiency comes from Penn's 2021 acquisition of theScore, a major Canadian media and gaming company. This acquisition integrated theScore's sportsbook platform with Penn's operations, which has led to the necessar within the company.

According to an internal email from CEO Jay Snowden, the layoffs primarily target areas directly related to ESPN Bet, indicating a renewed focus on optimising the platform. The company aims to enhance the digital sports betting experience and deepen the integration with Disney's ESPN, with which Penn has a branding partnership worth $2 billion (approximately €1.8 billion).

The decision to lay off employees and focus on ESPN Bet emphasises the high stakes involved in this decision. While the potential for success is important, the company faces a challenging road ahead. The launch of new ESPN Bet features and the start of the football season will be critical moments for Penn, offering insights into the platform's effectiveness and ultimately shaping the company's future trajectory.

The decision to prioritise ESPN Bet comes as a response to pressure from investors and concerns about the platform's performance. Penn has missed earnings expectations for the past two quarters and adjusted its financial guidance, leading to frustration among investors. Activist investor group Donerail has even suggested that the company's board should consider selling the entire company, leading to speculation within the industry.

Barry Jonas, an analyst at Truist Securities who has a buy rating on Penn and a price target of $25 (€22.96), remains optimistic about the future of Penn and ESPN Bet. He believes that the upcoming features of ESPN Bet, set to be launched during the football season, will significantly enhance the platform's competitiveness. Additionally, the recent layoffs are seen as a sign of Penn's commitment to controlling costs and ensuring the success of ESPN Bet.

However, Penn's stock price has declined by 25 percent year-to-date, reflecting investor concerns about the company's direction and financial health. Ongoing concerns regarding Penn's ability to achieve profitability in the highly competitive sports betting market and uncertainties surrounding the long-term sustainability of ESPN Bet have also been raised.

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