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PlayAGS Takeover Creates Questions For US Online Casino Providers

Written By Derek Helling | Updated:
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In the online casino industry, the only consistent thing is change. Just when PlayAGS seemed to be gaining some momentum in the US, wholesale changes could be ahead.

PlayAGS’ board of directors has accepted a takeover bid from Brightstar Capital, potentially taking the company private with shareholder approval. Questions now abound about how the new ownership could steer PlayAGS going forward.

Few details on the PlayAGS takeover so far

On May 9, PlayAGS made its acceptance of Brightstar’s offer public. A news release from that date shared that Brightstar has agreed to pay $12.50 per share. PlayAGS characterized that as “a 41% premium to the company’s volume-weighted average share price over the last 90 days.”

However, the takeover is still pending an actual vote of shareholders. Primarily due to that fact, details are scant about what, if any, changes Brightstar plans for PlayAGS. This takeover is potentially occurring when PlayAGS’ business in the US has never been more robust.

In January, DraftKings Casino announced adding PlayAGS online slots to its menu. Then, Caesars added PlayAGS to its online casino products the same month.

Caesars then built on that partnership in February by offering its first cross-platform game for New Jerseyans via PlayAGS.

Whether and to what extent that will continue or expand leads to the questions for PlayAGS’ partners in this transaction.

Where might PlayAGS go from here?

There are some obvious and not-so-apparent strategic choices if Brightstar intends to invest in the PlayAGS brand in the US online casino market. The most obvious angle is expanding into more jurisdictions.

PlayAGS is licensed as a supplier or vendor in Michigan, New Jersey, and Pennsylvania. Those are the three primary states for legal online casino play, so that leaves others like Connecticut, Delaware and West Virginia as potential expansion targets.

Even within the three states where it currently has a license, there are numerous operators with which PlayAGS could still form new content partnerships. Content partnerships could be another expansion possibility from a different angle.

PlayAGS offers a third-party aggregation service for its partners, who are online casino operators. With that service, PlayAGS is a kind of “middle man,” giving operators access to games produced by studios besides PlayAGS.

The proliferation of that service could be a primary concern for Brightstar. It allows PlayAGS to expand its content library without bearing the overhead cost of game production. However, how that cost compares to maintaining the aggregation service is uncertain.

What’s certain is that assuming shareholder adoption, PlayAGS will soon be a private company. So far, Brightstar is holding its cards when it comes to its ambitions for the company.

Photo by Shutterstock/Dilok Klaisataporn
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Derek Helling

Derek Helling is the assistant managing editor of PlayUSA. Helling focuses on breaking news, including finance, regulation, and technology in the gaming industry. Helling completed his journalism degree at the University of Iowa and resides in Chicago

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