Business model diversification

Inspired inks first acquisition in lottery sector as it buys Sportech's LatAm unit

LEIDSA is a private lottery operator in the Dominican Republic, powered by Sportech Lotteries.
2022-01-04
Dominican Republic
Reading time 2:10 min

US-based Inspired Entertainment, which provides B2B gaming content, systems and solutions, announced Tuesday that it has acquired Sportech Lotteries, Inc., a subsidiary of Sportech whose main asset is the lottery systems contract to provide online and retail lottery services, as well as the upcoming launch of Sportech's iLottery solution, to Loteria Electronica Internacional Dominica S.A. (LEIDSA) of the Dominican Republic. The acquisition is for $12.5 million.

The current lottery systems contract with LEIDSA had been scheduled to run until March 9, 2025. Concurrent with closing of the acquisition of Sportech Lotteries, Inspired and LEIDSA extended the lottery systems contract through March 9, 2035.

This marks Inspired's first acquisition in the lottery sector, further diversifying its business model on a product, customer and geographic level. It is expected to provide additional growth opportunities in North America, a key strategic geography for the company, bolster its positioning in the growing iLottery market and enhance its ability to offer a platform with a full turnkey lottery/iGaming solution to new customers in the future, in line with its cross-platform approach.

"This acquisition accelerates our entry into the lottery business, where, as a management team, we have extensive collective experience and long-standing relationships," said Lorne Weil, Executive Chairman of Inspired. "We expect to build on Sportech's established lottery supply contract to increase our scale and scope within the lottery and gaming ecosystem. We are excited to enhance the value proposition we provide to operators and consumers as we seek to realize on significant opportunities in the sector."

Weil continued, "LEIDSA is one of the largest and most successful lotteries in Latin America. Beyond the immediate potential in the Dominican Republic, we anticipate that the lottery systems platform can be further enhanced in order to accelerate the path of our strategic objectives in the worldwide online and retail lottery market."

Inspired acquired Sportech Lotteries for $12.5 million on a cash free/debt free basis, subject to certain customary adjustments and up to $2.0 million of potential additional earnout consideration. This acquisition was funded with cash from Inspired's balance sheet.

LEIDSA is a private lottery operator in the Dominican Republic that has offered electronic lottery products (draw games, Keno, etc.) as well as a host of other services since the lottery's inception in 1997. In conjunction with the acquisition, Inspired will control Sportech's Quantum System for LEIDSA, which supports more than 2,100 land-based outlets as well as software and field service support. Inspired will also license Sportech's Lot.to system, an omni-channel iLottery solution that manages the entire lottery business from the cloud, which is currently undergoing testing with LEIDSA to launch digital lottery sales during 2022.

Sportech is a technology supplier and operator in the gambling market with two core businesses: a digital omni channel platform for gaming verticals including its own in-house lottery module as its B2B offering. In B2C, the company operates Sports Bars and other venues in Connecticut, where it deploys its exclusive licence to offer pari-mutuel wagering in the state and a distribution agreement with the Connecticut Lottery to offer sports betting. It also has the exclusive licence to operate pari-mutuel betting online in Connecticut, which it does under the MyWinners.com brand, and a general licence for pari-mutuel betting online across the wider US under the 123Bet.com brand.

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