Playtech Expands Partnership, Invests in NorthStar Gaming

The UK-based gaming technology supplier invests $12.3 million CAD ($9.2 million USD) in NorthStar. It will also advise the Toronto-based startup on market expansion that could include online poker.
Playtech Expands Partnership, Invests in NorthStar Gaming
February 14, 2023

Playtech’s unparalleled expertise in the gaming industry will help NorthStar accelerate our growth and rapidly expand our user base. Playtech announced Monday that it had invested $12.3 million CAD (USD 9.2 million) into NorthStar Gaming, the Toronto-based startup that launched its NorthStar Bets brand for sports betting and online casino in Ontario last May.

The move is significant because it involves two companies often mentioned as possible subsequent entrants to the Ontario online poker market. The two also announced that they would extend and expand a strategic partnership they formed in January 2022 for an additional ten years.

Last June, Playtech said it planned to launch an online poker network running its iPoker software in the province by the end of 2022 and that NorthStar had agreed to join the network. At the time, the UK-based gaming tech supplier was also looking for other operators to join the network.

While an iPoker network has yet to materialize, it’s possible one still could. The investment deal calls for Playtech to have a seat on NorthStar’s board of directors and to advise the Canadian company on gaming matters, including market expansion in Ontario and across Canada.

NorthStar Nears Listing on TSXV

On Monday, Playtech said it had completed its investment in NorthStar through a convertible debenture designed to convert equity and warrants from NorthStar’s reverse takeover of Baden Resources — a mineral exploration company based in Vancouver and focused on mining in British Columbia.

NorthStar had initially planned to complete its reverse takeover of Baden in December 2022, but the company announced earlier this month that the deadline to close the acquisition had been extended to February 28, 2023. Following the deal’s closure, NorthStar will be listed on Canada’s TSX Venture Exchange (TSXV).

Playtech could come away with a substantial chunk of NorthStar. A recent analysis by MarketWatch estimated the stake would be 16%.

Investment to Fuel Expansion

The original strategic partnership from January 2022 called for Playtech to launch its IMS platform, which supports casino, live casino, poker, and bingo software. Monday’s investment announcement included the news that the partnership would be expanded and extended for another decade.

“Playtech will provide strategic advice to [NorthStar], notably online operations, managed services, and market expansion,” the company said. “Capital raised from Playtech’s investment and the expanded partnership with Playtech will support the growth of NorthStar’s footprint across Ontario and future Canadian markets.

“The capital will allow NorthStar to invest in new technological innovations for the NorthStar Bets gaming platform while also reaching new audiences through marketing campaigns.”

It was unclear what Playtech meant by “market expansion,” but considering its previously announced plans to launch online poker in Ontario, that could be part of it.

The tech giant teased that it had “significantly” expanded its partnership with NorthStar by including “the right to expand the agreement across the entire Canadian marketplace and changes to certain commercial terms.”

More details about the expanded and extended partnership will become publicly available through the System for Electronic Document Analysis and Retrieval (SENAR), a database used by Canadian securities authorities. The details are also included with NorthStar’s application to be listed on TSXV.

NorthStar’s “Unique Business Model” Impresses

Playtech likely needs more operators besides NorthStar to make a viable iPoker network in Ontario.

Three brands currently live in the province — bet365, Betsafe, and Coolbet — are often mentioned as potential partner operators because they are active on iPoker platforms in Europe. None of the three have announced plans to join an iPoker network in Ontario.

Still, executives with Playtech and NorthStar expressed optimism about their amended partnership.

“Playtech’s unparalleled expertise in the gaming industry will help NorthStar accelerate our growth and rapidly expand our user base,” said NorthStar Gaming CEO Michael Moskowitz. “With the additional investment, we look forward to expanding our market share across Ontario and further enhancing our premium, content-driven experience for consumers.”

Said Playtech CEO Mor Weizer: “As a key partner of NorthStar in their early stages, we understand and were impressed by NorthStar’s unique business model and product offering and are excited to further expand our partnership.”

The agreement put Playtech CFO Chris McGinnis on NorthStar’s board of directors as a non-executive director.

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