Playtech invests $85m in Hard Rock Digital alongside rev-share supply deal
Playtech has invested $85m in Hard Rock Digital (HRD), in exchange for a low single-digit percentage minority ownership stake in the business.
The two companies have also signed a new supply agreement, which will see HRD able to offer Playtech products to its customers.HRD is the online gambling arm of Hard Rock International, which offers a variety of land-based and online sports betting and casino gaming in US states including Arizona, Indiana, Iowa, New Jersey, Ohio, Tennessee, and Virginia, as well as in Canada.
Details of the agreement
Proceeds from Playtech’s investment will primarily be used to fuel HRD’s continued expansion both in the US and internationally.
The operator expects to launch in additional US markets in the future, as well as leveraging its globally-recognised brand to expand into other markets abroad.
Playtech’s investment will help with this by providing cash, but also additional international market knowledge as well as the software and services required for international expansion.
The firms’ new supply agreement, meanwhile, will see HRD customers in the US and Canada gain access to a variety of Playtech content.
That is expected to include slots, RNG and live dealer table games, all to be integrated into HRD’s existing proprietary platform and technology.
Playtech will supply its products and services to HRD predominantly on a rev-share basis, under long-term commercial agreements.
Playtech said it expects minimal impact from the agreement on its B2B segment results for full-year 2023.
The agreement’s contribution to B2B revenue is expected to increase in full-year 2024 and thereafter, it added, as HRD continues to increase its penetration in established markets and as additional markets continue to launch.
“The Playtech team is thrilled to announce our strategic partnership with HRD,” said Playtech CEO Mor Weizer. “Hard Rock International has cemented itself as a marquee name worldwide, not just in gambling, but more widely in entertainment.“HRD will combine the strength of this global brand with a proven management team, some of whom we at Playtech have known for many years and believe to be among the strongest in the online gambling industry.”
HRD has been overseen by executive managing director and president Matt Primeaux since November 2020.
Primeaux holds a wealth of experience in the gambling industry, having previously served as president of Fox Bet, SVP strategy and operations for the US at The Stars Group, and chief revenue officer and board member at PokerStrategy.com, which was acquired by Playtech in 2013.
“For Playtech, this partnership significantly advances our position in the North American market and is very much in line with our B2B strategy,” Weizer concluded.
Playtech CEO Mor Weizer: “HRD will combine the strength of [its] global brand with a proven management team, some of whom we at Playtech have known for many years and believe to be among the strongest in the online gambling industry.”
From Hard Rock International, chairman Jim Allen (also chair of HRD) said: “This partnership will act as an accelerator to Hard Rock Digital’s planned strategic initiative to expand its online gaming offerings to international markets, becoming the first operator with a global omni-channel offering under a singular, irreplaceable brand.
“This announcement only reinforces our commitment to lead innovation in the gaming industry and expand the ‘Hard Rock’ experience worldwide. We look forward to providing an authentic, digital experience for Hard Rock’s global fan base within a comprehensive, omni-channel offering.”
The agreement marks Playtech’s latest strategic investment in one of its operator partners. In February, the business invested C$12.25m into Ontario-based online sports betting and iGaming operator NorthStar Gaming.
Hard Rock Digital’s supplier history
In 2020, Hard Rock agreed to terminate a previously agreed supply deal with Gaming Innovation Group (GiG), originally signed for a five-year term beginning in 2018.
However, both parties failed to find a commercial agreement to satisfy their individual strategic needs, with HRD representing just 2% of GiG revenue and proving a negative drag on EBITDA.
Scientific Games was subsequently selected as HRD’s new US betting and gaming technology supplier, providing both land-based and online solutions to power the operator’s offerings.
In October 2021, HRD also signed an agreement with Genius Sports to gain access to its sportsbook solutions suite, before announcing a further partnership with Sportradar in September 2022.