Playtech accelerates B2B transition with sale of German B2C brand HappyBet to Pferdewetten AG

Playtech has announced the sale of its German B2C business HappyBet to Pferdewetten AG. Confirmed on Wednesday, the agreement marks the divestment of the company's latest B2C asset, as Playtech transitions to a purely B2B role. No financial details were released.

The deal comes about two months after Playtech launched the process of selling the German-facing business. The company had previously reported an adjusted EBITDA loss of €11.8 million ($13.4 million) for the betting brand, amid increases in costs.

HappyBet, which in October 2020 secured one of the first federal sports betting licenses in Germany, had long been deemed a non-core asset for Playtech. Last year, the gaming giant closed HappyBet's operations in Austria and announced that it would be closing the German operation as well if a buyer could not be found.

However, Pferdewetten sees a valuable opportunity to expand its sports betting business in this purchase. Headquartered in Düsseldorf and formerly known as Sportwetten.de AG, Pferdewetten has established itself as a major player in the German horse racing betting market.

Since 2018, the company has also entered the sports betting market via sportwetten.de and expanded into retail sports betting in 2022. The HappyBet purchase can play a key role for the group in this space.

“The agreement significantly strengthens the market position of Pferdewetten in the stationary sports betting business and marks another milestone on the company’s growth path,” the company said in a statement.

By acquiring the brand, Pferdewetten is allowed to contract with franchise partners for the HappyBet shops, which would then operate under Pferdewetten’s Sportwetten.de unit. The purchase also includes approximately 600 hardware units, including betting terminals and POS systems.

The agreement calls for a transition period, which allows Pferdewetten to negotiate with franchise partners and secure the necessary regulatory approvals from German authorities. Any remaining HappyBet assets not transferred to Pferdewetten will cease operations and ultimately be wound up.

“We expect a mid-double-digit number of shops to be integrated into our network in the next three months. This corresponds to an expected additional annual turnover of around €7 million ($7.9 million) and a positive EBITDA contribution of over €1 million ($1.1 million),” said Pierre Hofer, chief executive of Pferdewetten.

“With this strategic step, we are significantly closer to our goal of operating more than 300 brick-and-mortar betting shops under the sportwetten.de brand by the end of 2025,” Hofer continued.

For Playtech, the sale marks the latest step in its strategy to become a purely B2B operator, following the sale of its Snaitech business in Italy to Flutter Entertainment for a value of €2.3 billion ($2.6 billion). The company expects the resulting B2B business to allow it to improve its technology, grow its customer base, and expand its share of wallet with existing customers under a simplified model.

The Snaitech sale, described as a "large value creation event" by Playtech officials, will see the payment of a special dividend of between £1.7 billion ($2.3 billion) and £1.8 billion ($2.4 billion) to shareholders. This roughly translates to £4.56-£4.83 per share.