Caesars Interactive Sells Off Playtika, Retains WSOP

Updated: July 30th, 2016 by Dev Ops

Caesars Interactive Entertainment, parent company of the World Series of Poker’s online entities and WSOP.com, has announced the sale of social-gaming platform Playtika to a Chinese social-gaming consortium in a $4.4 billion, all-cash deal.

Ongoing negotiations over the reported sale of the Playtika brand had surfaced over a week ago, at an an initial suggested price of about $4.2 million, but a subsequent bidding war for the fast-growing Platika assets pushed the final price a little bit higher.  The sale of the Playtika entities from within CIE actually accounts for the vast majority of CIE’s present business, as the social-gaming platform experienced vaast growth after being acquired by Caesars a few years ago.

Playtika_logoThe purchase of Playtika was engineered by a group of several prominent investors, mostly from China. The group is organized around Shanghai Giant chairman Giant chairman and billionaire Shi Yuzhu, and also includes Jack Ma, head of the famed Chinese-manufacturing wholesale site, Alibaba, via Ma’s Yunfeng Capital market-equity firm.  Other entities involved in what is called the “Giant” consortium include China Oceanwide Holdings Group Co., Ltd.; China Minsheng Trust Co., Ltd.; CDH China HF Holdings Company Limited; and the Hony Capital Fund.

Exactly what happens to the remaining small slice of CIE — that being the World Series of Poker’s online assets — remains unclear.  The likeliest short-term solution involved folding the WSOP’s online components into another division within Caesars or perhaps restructuring all WSOP-related components into their own separate company within Caesars.

Any such move, however, is complicated by the ongoing, fierce battle over the Chapter 11 bankruptcy and reorganization of another Caesars operational entity, that of Caesars Entertainment Operating Company [CEOC].  Neither Playtika nor the WSOP are under the CEOC umbrella, yet the heated and protracted bankruptcy battle could result in a partial or total unwinding of the complex reorganization parent company Caesars undertook back in 2013.  That process also paved the way for the CEOC bankruptcy filing, and should it be undone, the WSOP’s collective assets could again be in play.

The Playtika deal, however, is expected to sail through despite the ongoing creditor dispute.  The $4.4 billion cash infusion represents a healthy patch against Caesars’ $19 billion or so in corporate debt, and despite Playtika’s growth, it’s unlikely a better deal would emerge.  The Playtika sail also brings into question the long-term future of CIE’s chief executive officer, Mitch Garber, an experienced and well-regarded executive who might be too pricey a keep for what will soon remain of CIE.  Garber could move elsewhere within Caesars, or perhaps consider moving to another major online-gambling company within the rapidly-reorganizing segment.

Said Robert Antokol, the co-founder and CEO of Playtika, “This transaction is a testament to Playtika’s unique culture and the innovative spirit of our employees who for the past six years have consistently designed, produced and operated some of the most compelling, immersive and creative social games in the world. We are incredibly excited by the commercial opportunities the Consortium will make available to us, particularly in its ability to provide us access to large and rapidly growing emerging markets.”

Added Garber, on behalf of CIE, “It has been a particularly rewarding experience growing Playtika from a 10-person start-up, when CIE acquired them in 2011, into a global leader. Playtika today is a highly profitable growth company with more than 1,300 employees, multiple top grossing titles and millions of daily users. Robert is a true visionary and Israeli business leader who has created not only a great business, but also the most unique corporate culture I have seen in my career.”

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