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Playtika Holding Corp, a major developer of social casino games, has begun filing paperwork for an initial public offering (IPO) in the US. Assuming it receives approval from the Securities and Exchange Commission, shares of the company could become available later this year or early in 2021.
The details of the IPO are private at this time. However, Reuters claims that it has sources which have said Playtika could sell $1 billion in shares at a price valuing the company at close to $10 billion.
It’s an interesting time for a social gaming company to make such a move. The US real money online gambling market is expanding rapidly, and social casino products like Playtika’s, or the popular High 5 Casino, are an adjacent industry. At the same time, US stock markets, particularly NASDAQ, are hot right now as recovery from the COVID-19 crash continues apace.
Though headquartered in Israel, Playtika is currently owned by a Chinese investor group which comprises Giant Network Group (GNG) and Yunfeng Capital.
For most of its prior life, however, the company belonged to Caesars Entertainment. It acquired a controlling interest in Playtika in 2011, when it barely a year old. Caesars later bought up the remainder of the company, then sold it to GNG in 2016 for $4.4 billion.
Despite the change in ownership, Playtika has continued to be a western-facing company, with most of its offices in Europe. The relationship with Caesars remains tight, with Caesars Slots and a play money WSOP poker app being among Playtika’s top products.
Much of the motivation for the IPO may simply be that Playtika’s current owners see the market as being favorable. However, with the expansion of iGaming going as it has been, the company may also see new social gaming opportunities arising in the US.
Playtika has also been in the news recently for less favorable reasons. It was one of several companies that settled lawsuits in Washington state over the summer, stemming from accusations that its play money products constitute illegal gambling.
The judge in the case, Ronald Leighton, agreed with the plaintiffs that play money chips constitute a “thing of value” when the game cannot be played without them. Social casino apps like Caesars Slots dole out free chips on a regular basis. However, they then attempt to coax players to buy more with real money in order to keep playing when their initial supply runs out.
To settle the suit, Playtika ultimately coughed up $38 million and agreed to make some changes to its products.
Such lawsuits have become commonplace in industries which flirt with with the boundaries of what does and doesn’t constitute gambling. Play money casinos like Gambino Slots are all over social media, so Playtika is just one company in a saturated and often problematic market. If Playtika does see new opportunities relating to burgeoning gambling markets in the US, this may not be the last time it finds itself in court defending the legality of its products.