Playtech sells German B2C business HappyBet

Playtech Divests Final B2C Asset as NetX Betting Acquires HappyBet

In a strategic move signaling a definitive shift away from its business-to-consumer (B2C) operations, Playtech has officially announced the sale of its German brand, HappyBet, to NetX Betting, a subsidiary of Pferdewetten AG. This deal, disclosed on Wednesday, underscores Playtech’s ongoing transformation within the dynamic gambling landscape.

This development follows closely on the heels of Playtech’s initiation of the sale process for HappyBet two months ago, an effort aimed at streamlining its operations.

According to Pferdewetten, the acquisition significantly bolsters its footprint in the land-based sports betting sector, marking a pivotal milestone in its growth trajectory. “This agreement strengthens our market position in stationary sports betting,” the company stated, emphasizing its commitment to expanding its operational capabilities.

For the financial year 2024, Playtech reported an adjusted EBITDA loss of €11.8 million associated with the HappyBet operations. This loss occurred despite a 4% increase in revenue, which totaled €18.9 million, reflecting escalating operational costs.

In the same year, Playtech made the strategic decision to terminate HappyBet’s operations in Austria and signaled intentions to close its German operations should a buyer not materialize.

Franchise Partnership Opportunities Under HappyBet

As part of the acquisition arrangement, NetX Betting will have the opportunity to negotiate contracts with existing franchise partners associated with HappyBet. These partners will transition to operate under Pferdewetten’s Sportwetten.de brand, enhancing the integration of services.

The deal encompasses approximately 600 operational units, including betting terminals and point-of-sale (POS) systems, facilitating a smooth transition for franchise partners. While specific financial details of the transaction were not publicized, an integration period is in place, allowing Pferdewetten to secure necessary regulatory approvals from German state entities. Any remaining HappyBet assets not acquired will be phased out and ultimately cease operations.

“We anticipate integrating a mid-double-digit number of shops into our network within the next three months, translating to an expected annual turnover boost of approximately €7 million and a positive EBITDA contribution exceeding €1 million,” stated Pierre Hofer, CEO of Pferdewetten.

Playtech’s Transition to a Pure-Play B2B Operator

The divestiture of HappyBet represents Playtech’s latest effort in its strategic pivot toward a pure-play business-to-business (B2B) model. This shift is designed to enhance operational focus, improve technological offerings, and expand its customer base.

In a related move last year, Playtech successfully sold its Italian operations, Snaitech, to Flutter Entertainment for a total enterprise valuation of €2.30 billion (£1.94 billion/$2.56 billion). This transaction was heralded by Playtech as a crucial step toward simplifying its business model, which will allow the company to foster stronger relationships with existing clients and amplify its share of customers’ expenditures.

The sale of Snaitech was positioned as a significant value creation opportunity for shareholders, with Playtech announcing a forthcoming special dividend in the range of £1.7 billion to £1.8 billion, equating to £4.56 to £4.83 per share.

HappyBet was integrated into the Snaitech portfolio in 2021 and notably secured one of Germany’s first federal sports betting licenses in October 2020, solidifying its market positioning during a critical regulatory evolution.

As of Wednesday morning, shares of Playtech experienced a slight decline of 0.93%, trading at 319.50 pence per share in London. Conversely, shares of Pferdewetten AG showed a notable increase of 6.83%, reaching €2.97 per share in Frankfurt, reflecting investor confidence in the strategic acquisition.