The two companies look to the future and mutual interests
Tuesday 10th August 2004
World Gaming Plc and Sportingbet have released details of a new agreement they have formed, making revisions to their existing partnership. World Gaming is a provider of software used by online casinos and sports and horse betting sites, Sportingbet is one of their licensees. In fact Sportingbet is their largest licensee being responsible for 80% of the royalty revenue that World Gaming earned last year. Sportingbet also currently own a 29.5% share of World Gaming’s outstanding equity, as well as holding a convertible loan of the value of US$900,000, which when converted would translate into them owning a 39.2% stake in the equity of World Gaming.
The new agreement now dictates that Sportingbet will make staggered payments worth US$10 million to gain a 50% interest in their software, and an additional US$3.3 million which will cancel the $900,000 loan as well as the economic and voting rights currently earned by the existing 29.5% stake they have in the company. Other aspects of the agreement deal with future development plans, with both parties agreeing to devise a joint development plan; Sportingbet agreeing to funding US$4.5 million worth of the development (over the period of four years); Sportingbet in return to gain a now royalty free license for its own use and World Gaming to undertake an exclusive hosting agreement for the US branch of Sportingbet.
The Chief Executive of World Gaming, Daniel Moran said of the new agreement: 'We are pleased that we have now successfully resolved this issue with Sportingbet allowing for continued growth in the World Gaming software and infrastructure. The restructured relationship not only stabilizes World Gaming's future but will allow us to move forward and expand into new markets as well as open new investment opportunities that previously were not possible.'
Chief Exec of Sportingbet, Nigel Payne, released his own statement concerning the changes in their agreement: 'We are pleased to have agreed new arrangements with World Gaming which will give Sportingbet greater control over the software platform for its U.S. facing business and, importantly, over the future development of that software. Furthermore, these arrangements will also reduce our costs significantly going forward. We are also pleased that these arrangements will allow World Gaming to emerge a stronger, more profitable business independent of Sportingbet's
