Home In-Depth Playtech extends Ontario agreement with NorthStar, and advances funding

Playtech extends Ontario agreement with NorthStar, and advances funding

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Playtech has extended a strategic partnership between its Playtech Software Limited and the NorthStar Ontario subsidiary of NorthStar Gaming Holdings and agreed to advance CA$3.0m (PS1.8m/EUR2.1m/US$2.2m) in short-term financing to the latter.

The strategic marketing agreement, signed in June of last year with the goal to speed up the NorthStar player recruitment strategy in Ontario.

Playtech Software contributed services totaling $4.0m to the initial agreement. NorthStar stated that this was the major factor in its growth within Canada’s province of British Columbia during 2023.

Playtech Software is now providing similar marketing services to Ontario under the new contract. The services are valued at up to $4m, and run until 31 October of this year.

Playtech Software, in response, will receive a reimbursement and compensation through a portion of the income from marketing initiatives that it has contributed to.

NorthStar gets a financial boost

NorthStar also issued to Playtech a promissory loan of $3,0m, which is unsecured and bears interest. The note will have an interest rate of 8.0% annually and be payable at maturity in arrears.

NorthStar claims that proceeds from this note will be used to fund the company’s ongoing growth strategy as well as for other corporate purposes.

NorthStar’s chair and CEO Michael Moskowitz stated that they were “very pleased” to be able to further strengthen their relationship with Playtech. Playtech is one of the leading companies in gambling technology.

Their ongoing support was instrumental in helping to gain new customers, offer a premium gaming experience online and finance the expansion of our brands in Ontario and Canada.

Playtech supports NorthStar

Playtech has supported NorthStar for a long time, even before the June marketing deal. Playtech had made a strategic investment of $12.25m in Ontario’s online sportsbook and casino a few months before.

Playtech also extended a software and service agreement with NorthStar for 10 more years. Playtech and NorthStar entered into the first partnership in December of 2021.

This investment was made via a convertible debenture. The investment was converted to warrants and equity in connection with NorthStar’s acquisition of Baden Resources Inc. This deal was completed in March of 2023.

Playtech now holds approximately 16% of NorthStar’s total outstanding and issued common shares. The company also has warrants which give it the option to increase its holding to more than 20%.

Chris McGinnis, Playtech’s Chief Financial Officer, joined the Board of Directors of the listed company as a result of this investment.

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