On November 26th, the global gaming and interactive entertainment provider The Stars Group Inc. officially announced their partnership with Eldorado Resorts, Inc., a giant in US land-based gambling establishments. This type of collaboration is set to benefit both parties, as well as the U.S. online gaming market demands.
The Specifics of the Agreement
Under this partnership, The Stars Group is set to expand its online presence to an additional 11 states in the US. According to the terms, this would be possible across all locations where the Eldorado Resorts owns or operates land-based gambling establishments.
The Stars Group will thus be able to open, provide, and brand online casino, poker, and sports betting to states which already have regulations in place – Nevada, Mississippi, and West Virginia. Additionally, it will be able to cater to players from states expected to legalize such online gaming practices – Florida, Indiana, Colorado, Louisiana, Iowa, Missouri, and Ohio.
Sports Betting Services
When it comes to online sports betting services, The Stars Group will be able to provide first skin access in states where Eldorado owns or operates more than one establishment. Alternately, it is set to provide second skin access in the remaining states, where Eldorado owns or operates a single land-based gambling location.
What Does It All Mean for Eldorado?
Eldorado Resorts Inc. is set to benefit greatly from revenue incurred by their online gaming partners, said to be “one of the world’s largest, most licensed and most geographically and product diverse publicly listed online gaming companies”, in the words of their CEO, Gary Carano. He then proceeded by stating that:
“We are excited to work with The Stars Group to capitalize on their proven ability to leverage their products to gain share in the growing market for online gaming.”
The company is set to receive a share of the revenue incurred from these services, and additionally gain access to about 1 million shares issued by The Stars Group. These will come at a price of $23.22 per share, or an estimated value of about $25 million, along with $5 million worth of common shares issued by TGS once the company exercises their first option to provide iGaming services.
Another round of common shares at the value of $23.22 per share will be issued to Eldorado after the first five years, based on profits from these online gaming platforms.
The Stars Group’s Latest Expansions
Chief Executive Officer of The Stars Group, Rafi Ashkenazi, is equally enthusiastic about this agreement, as expressed in his official statement:
“We are excited to announce this agreement with Eldorado, one of the fastest growing regional gaming companies in the United States. This agreement establishes the foundation for our U.S. strategy as we tactically pursue access to other key states and opportunities with potential media partners.”
This is The Stars Group’s most massive expansion, following that to the New Jersey and Pennsylvania iGaming markets through partnerships with Resorts Casino Hotel and Mount Airy Casino Resort, respectively.