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Gaming Report: Nazara Technologies Files Papers With SEBI For IPO & More

Gaming Report
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  • Namita Ghosh January 24, 2021
  • 5 Minutes Read

The long-awaited IPO of game developer Nazara Technologies now looks within sight, with the company reportedly filing the requisite papers with SEBI earlier this month.

In a significant development, the U.S. First Circuit Court of Appeals has upheld the June 2020 U.S. District Court ruling that struck down the 2018 reinterpretation of the 1961 Wire Act by the U.S. Department of Justice.

In other reports, MGM Resorts International has dropped its takeover plans for Entain Plc after the latter rejected its latest $11.1 Billion (£8.1 Billion) offer. We had last reported that MGM was exploring options to make the offer more attractive for Entain. Still, the company has formally announced that it will no longer continue efforts to acquire Entain.

Online sports betting and casino games finally went live in Michigan on January 22, with three key U.S. operators, DraftKings, FanDuel, and BetMGM, officially launching their apps.

Georgia is another U.S. state moving towards legalized online sports gambling. The momentum for legal gambling is also gaining ground in Arizona and Kentucky, as the respective state governors have indicated that they’re exploring ways to legalize fantasy sports betting.

Sports betting legend Billy Walters, convicted in a multi-million Insider Trading scam, caught a lucky break after being pardoned by outgoing U.S.President Donald Trump on his last day in office.

Thailand is considering legalizing casinos to check the growing menace of illegal gambling in the country.

 

Nazara Technologies Files IPO Papers With SEBI

Mumbai-headquartered game developer Nazara Technologies has filed papers with the capital markets regulator, Securities, and Exchange Board of India (SEBI), to float an Initial Public Offering (IPO). The IPO will make Nazara the first Indian gaming firm to enlist on the market.

As per the Draft Red Herring Prospectus (DHRP) filed by Nazara Technologies on January 14, once the company goes public, it will sell 49,65,476 equity shares, each with a face value ₹4, held by the promoters and existing shareholders of the company.

The other investors, including Good Game Investment Trust NSE, IIFL Special Opportunities Fund, IndexArb Securities and Azimuth Investments, and Mitter Infotech LLP, will also sell their shares.

 

IPO – Long Awaited

The Rakesh Jhunjhunwala-backed Nazara Technologies was founded by Nitish Mittersain in 2002. The company hit the jackpot with popular game titles like Chhota Bheem and the Motu Patlu series based on the World Cricket Championship. While it enjoys a strong operational base in India, Nazara has consolidated its presence in other Asian markets, the Middle East, Africa, and North America.

Nazara has been eyeing an IPO for at least two years now. It had even filed preliminary papers with SEBI for the same in February 2018. Even though the regulator gave them the go-ahead, the company did not file the DRHP until recently.

In preparation for this IPO, Nazara has made a slew of investments and acquired over 13 sports media and gaming start-ups to further consolidate its position in the fast-evolving gaming ecosystem. Some of its notable acquisitions include Nodwin Gaming, Next Wave Multimedia, Sportskeeda, Paper Boat Apps, Mastermind Sports, Moonglabs Technologies, Bakbuck, CrimzonCode, InstaSportz and NZWorld.

The company is also a significant stakeholder in fantasy sports platform Hala Play. Last June, the company increased its stake in HalaPlay by buying out Kae Capital’s share worth ₹14.6 Crores.

Later in September, there were speculations that Nazara was in the race for the reported acquisition of Adda52 from Delta Corp-own Gaussian Networks. However, nothing materialized. According to undisclosed sources, the company has also held talks with other poker operators to buy a significant stake.

 

U.S. Appeals Court Rules Against DOJ in Wire Act Case, Allows Interstate Online Poker

The online poker industry in the U.S got a much-needed shot in the arm after the U.S. First Circuit Court of Appeals upheld a U.S. District Court ruling that struck down the U.S. Department of Justice (DOJ) ’s 2018 reinterpretation of the 1961 Wire Act.

Appellate court rejects DOJ

Hearing the case, Judges Sandra Lynch and William J. Kayatta stated – “New Hampshire and its vendors should not have to operate under a dangling sword of indictment while DOJ purports to deliberate without end the purely legal question it had apparently already answered and concerning which it offers no reason to expect an answer favorable to the plaintiffs. According to Neo Pollard’s affidavit, it would be impossible for it to comply with the plain language of the 2018 Opinion without entirely shutting down the NHLC’s iLottery platform.

Given the unequivocal position in the 2018 Opinion and the pre-2011 response given by DOJ to inquiring states, we cannot see why the plaintiffs should be forced to sit like Damocles while the government draws out its reconsideration.”

Jeff Ifrah, a lawyer presenting the case on behalf of the U.S. state of New Hampshire, tweeted the news on Wednesday.

 

 

The DOJ-Created Roadblock

In November 2018, the U.S. Department of Justice (DOJ) released a memo announcing that it had re-assessed the Interstate Wire Act of 1961. Subsequently, in January 2019, the DOJ publicized a new legal opinion on the Wire Act, stating that Act’s prohibitions extended not only to sports betting but also to most forms of interstate online gambling, including poker.

The new opinion discounted the 2011 OLC opinion that allowed several U.S. states to permit legal online lottery, poker, and casino products. The revised DOJ opinion also put the online poker liquidity sharing pact between Delaware, New Jersey, and Nevada operators in jeopardy.

Legal OppositionThe revised DOJ opinion was challenged in court by the New Hampshire Lottery Commission (NHLC). Hearing the lawsuit on June 3, Federal District Court Judge Paul Barbadoro ruled that the Wire Act 1961 “applies only to transmissions related to bets or wagers on a sporting event or contest.”

The ruling effectively countered the DOJ’s reinterpretation of the Wire Act, and the DOJ appealed against it to the US First Circuit Court of Appeals. The DOJ presented its oral arguments to the court via teleconferencing in June-end, clarifying that the Wire Act was not a threat to lotteries. However, the NHLC representatives maintained that the DOJ reassurances did not legally protect the online lottery business from prosecution.

On January 20, the First Circuit Court upheld Judge Barbadoro’s ruling, underlining that the Wire Act applies only to sports events and contests.

 

What Next?

With DOJ’s appeal now struck down, it has the alternative to take the case to the U.S. Supreme Court. However, the recently elected U.S. president Joe Biden had publicly indicated in 2019 that he would back the 2011 interpretation of the Wire Act.

With Las Vegas Sands Corp founder Sheldon Adelson’s demise, online gambling has lost its biggest opponent. And after this legal win, the online poker boom might finally materialize.

 

MGM Resorts Drops Entain Takeover Bid

Las Vegas-headquartered MGM Resorts International has given up on its takeover plans for Entain Plc – formerly GVC Holdings. On January 19, MGM announced that it would not be pursuing an acquisition of Entain anymore.

The company announced on Tuesday – “After careful consideration and having reflected on the limited recent engagements between the respective companies, [MGM] does not intend to submit a revised proposal, and it will not make a firm offer for Entain.”

MGM had made its first takeover bid for Entain in November 2020 – an all-cash offer. The casino giant followed this up with a better all-stock proposal early this month. The offer entailed 0.6 MGM share for each of Entain`s, equivalent to 1,383 pence a share, valuing the deal at $11.1 Billion (£8.1 Billion).

Entain rejected the offer stating it significantly undervalued its business. Still, the company’s board kept possibilities of a deal open by asking MGM to provide additional information and strategic rationale for the merger. While it seemed like MGM was looking at ways to sweeten the deal, it has evidently taken a different stance and doesn’t want to pursue the takeover any further. MGM and Entain are business partners since 2018 through their joint sports betting platform, BetMGM.

MGM Resorts International CEO Bill Hornbuckle clarified that BetMGM will continue to be a key priority, “We believe that BetMGM has established itself as a top-three leader in its markets. We remain committed to working with Entain to ensure its strong momentum continues as it expects to be operational in 20 states by the end of 2021.”

 

Online Sports Betting Goes Live in Michigan

Michigan hit the gaming headlines last week after Richard Kalm from the Michigan Gaming Control Board announced that online betting would soon go live in the state. The U.S. state officially launched online sports betting and casino games on Friday, i.e., January 22.

Michigan Sports betting

For starters, state regulators have authorized licenses to all three Detroit casinos and seven of the 12 tribes that run ‘Class III’ casinos. In the weeks to come, additional operator and platform provider licenses will also be issued to the operators.

Calling this launch a “new era,” Kalm said that this would give casinos an additional way to engage with customers and provide local and state governments extra tax revenue.

So far, DraftKings, FanDuel, and BetMGM have launched their apps for the Michigan market.

BetMGM’s launch in Michigan entails its Sportsbook and Lounge – an athletic wagering facility opened by BetMGM in MGM’s Grand Detroit resort last October. BetMGM CEO Adam Greenblatt said, “Reaction to the opening of MGM Grand Detroit’s BetMGM Sportsbook and Lounge has been incredible. We’re thrilled to complement our retail offering with the launch of the BetMGM mobile app in Michigan.”

The FanDuel Group has also launched the FanDuel Sportsbook and Casino app and the standalone FanDuel Casino app in collaboration with MotorCity Casino. Likewise, the DraftKings Sportsbook is now officially live in Michigan.

 

Online Sports Betting to be Legalized in Georgia

On January 14, Georgia state lawmakers filed the Georgia Lottery Mobile Sports Wagering Integrity Act, aka bill HB 86, to legalize online sports gambling.

The proposed bill was sponsored by three Republicans and three Democrats, including primary sponsor Rep. Ron Stephens (R-Savannah). Stephens said, “Georgia just aims to capture those revenues for what people are already doing.”

Rep. Ron Stephens
Rep. Ron Stephens

 

The bill proposes sports betting revenue to be taxed at 16% after a $50,000 application fee. Sportsbook operators would be required to pay $900,000 each year to retain the license. The taxes collected will be used to help fund the HOPE scholarship.

 

Governors of Arizona & Kentucky Push For Legalizing Sports Betting

Arizona Governor Doug Ducey and Kentucky Governor Andy Beshear are looking at ways to legalize regular and fantasy sports betting in their respective states.

Doug Ducey and Andy Beshear

 

Ducey recently announced his desire to revamp the state’s gaming landscape, including the possibility of A-Z sports betting both on and off the state’s tribal reservations.

“There’s also an opportunity for a modernized gaming compact that will bring in more revenue for our tribal nations and our state budget,” said Ducey.

Ducey’s push could help a legislative charge that went nowhere last year despite backing from Sen. Sonny Borrelli and Rep. Steve Pierce. The legislators again introduced a bill this year to allow sports betting kiosks at bars and other locations throughout Arizona.

Beshear has also been arguing in favor of the pro-gambling rhetoric for most of his political career and is pushing lawmakers in Kentucky to legalize sports betting this year. Beshear appeared on a local television network advocating for gambling expansion.

 

Outgoing U.S. President Donald Trumps Pardons Sports Betting Legend Billy Walters

Sports betting legend Billy Walters convicted in the 80’s Insider Trading scam, was granted clemency by the former U.S. President Donald Trump on the latter’s last day in office.

Billy Walters and Donald Trump
Billy Walters and Donald Trump

 

A close friend of Walters, poker veteran Doyle Brunson, welcomed the news.

In his 39-year long career, Walters had won millions from Las Vegas sportsbooks. Between 2008 and 2014, Walters reportedly made $25 Million from information passed on to him by the former Dean Foods Co. Chairman Tom Davis about a relationship with a restaurant company that was not yet public.

The 74-year-old was convicted in 2017 in relation to the scam and sentenced to five years imprisonment while being fined $10 Million for six years of insider trading with Davis. Calling Walter “a cheater and a criminal, and not a very clever one,” U.S. District Judge Kevin Castel called Walter’s crime “amateurishly simple.”

Last April, after the COVID-19 pandemic broke through, Walters was released from a federal prison in Florida and allowed house arrest in his San Diego home, as per the CARES Act provisions. He would have completed his prison sentence in February 2022 but was among 90 people granted ‘executive clemency’ on the last day of Trump’s presidency.

 

Thailand Plans to Legalize Casino Gambling

The Thailand government is planning to legalize casinos in the country. Prime Minister of Thailand, Prayut Chan-o-cha, confirmed that he was considering it to curb the growing number of illegal gambling dens.

Thai PM Prayut Chan-o-cha
Thai PM Prayut Chan-o-cha

 

Chan-o-cha said the critical question was whether legalized gambling would be considered morally correct by most Thais since not everyone considered gambling acceptable.

Last week, Chan-o-cha authorized the development of two committees to find formulas to effectively limit the spread of COVID-19. One of them was to examine how local authorities investigate cases related to illegal gambling.

Currently, the laws in Thailand prohibit gambling and only allow a state lottery operation, which is not very attractive to local residents. PM Chan-o-cha wants a public discussion on the convenience of legalizing gambling, but anti-gambling groups have already started waving their flags in protest.

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