Elys Game Technology to acquire US Bookmaking


USB has expanded to several new states since repeal of PASPA.

Elys Game Technology, Corp., an interactive gaming and sports betting technology company, on Wednesday said it has entered into a definitive purchase agreement to acquire 100% of Bookmakers Company US LLC, a Nevada limited liability company doing business as U.S. Bookmaking (USB).

Founded in 2016, USB is a provider of sports wagering services such as design and consulting, turn-key sports wagering solutions, and risk management.

USB’s management team includes Victor Salerno, its president, who has more than 40 years’ experience in the Nevada sports book business managing risk for more than 100 properties and who was inducted into the American Gaming Association's Gaming Hall of Fame in 2015; Bob Kocienski, CEO, also with 40 years’ experience in the gaming industry, including oversight on the sportsbooks at several high-profile casinos; Robert Walker, director of bookmaking, with three decades’ experience in managing sportsbooks at several casinos, including the Stardust, Mirage and MGM; and John Salerno, director of operations and compliance, who has 20 years’ experience in the sports wagering industry under the tutelage of his father, Victor.

After the repeal of the Professional and Amateur Sports Protection Act in 2018, USB began providing its services to the Santa Ana Star Casino in Albuquerque, New Mexico, and later expanded its New Mexico presence with service provider agreements at Isleta Resort and Casino and Santa Claran Hotel and Casino. USB then expanded to Colorado at the Sky Ute property, followed by agreements with the Odawa Tribe in Michigan and the 4 Bears Tribe in North Dakota.

Earlier this year, USB entered into a service agreement in Washington, DC, with an expected opening for sports wagering in the latter part of 2021. USB also entered its first B2C agreement by leasing a skin for interactive business in Iowa.

The Elys/USB deal structure provides that, subject to final closing deliveries, which is expected by July 15, or as soon as practicable thereafter, Elys will acquire 100% of USB and USB will become a wholly owned subsidiary of Elys.

Pursuant to the terms of the membership interest purchase agreement, Elys will pay $12m on the closing date, of which 50% will be payable in cash and 50% in shares of common stock of Elys at a price equal to the volume weighted average price of Elys stock for the 90 trading days preceding the closing date, subject to shareholders’ approval if the number of shares exceed 4.4m.

In addition, members of USB will have an opportunity to receive up to an additional $38m, plus a potential premium of 10% (or $3.8m), referred to as the “earnout,” based upon achievement of certain EBITDA milestones during the next 4 years, payable 50% in cash and 50% in stock at a price equal to the volume weighted average price of Elys common stock for the 90 trading days prior to January 1 of each year during the earnout period, subject to obtaining shareholder approval and a cap on the number of shares to be issued not exceeding 5,065,000. Any excess not approved by shareholders or exceeding the cap shall be paid in cash.

The two parties said the annual earnout payments are based on the achievement of certain adjusted cumulative EBITDA milestones that range from $(213,850) for 2021 to $19.4m for 2025.

“We started US Bookmaking with a vision to build a top-ranked team of experienced bookmakers in light of the looming repeal of sports betting prohibition in the US,” Vic Salerno, president and founder of USB, said in a statement. “Since 2018, our team and customer network have been building quickly and we are very optimistic about the expansion and growth opportunities developing in the US sports betting market.”

According to Salerno, the management team at USB realized that to effectively compete and grow, the company needed a viable technology partner that knows the sports betting business.

“Having visited the Elys trading floor in Italy, we are very impressed with the work that the Elys team did to Americanize their sports betting technology,” Salerno continued. “We believe the timing of this acquisition is ideal for USB since we have been vetting the technology field for the best sports betting technology while getting ready for the reopening of our clients as the COVID pandemic subsides. The addition of a proprietary sports betting platform will allow USB to customize features that our clients desire while having full control of our cost structure. We look forward to working with the Elys team to complete the transaction as quickly as possible.”

Michele Ciavarella (Pictured), executive chairman of Elys Game Technology, added, “Our team at Elys has worked diligently to prepare our platform for the booming opportunity in the US market. We are extremely pleased with the relationship we developed with the founders and highly-experienced team at USB during our negotiations and the extensive synergies that we believe the combined entities have. We found great commonality between the family culture that Elys fosters in its Italian operations, as with USB and its business operations spanning a number of states in the US. We believe that our Elys Gameboard technology will give USB the tools they need to rapidly expand their current US footprint and potentially develop operations in the evolving Canadian sports betting market. The agreement with USB provides our shareholders with a compelling growth opportunity through the combination of our betting technology and USB’s seasoned bookmaking expertise.”

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