Playtech, which has been Caliplay’s joint venture partner during the latter’s Mexico launch nine years ago, has sought a court declaration that would help solve a contractual disagreement between the two parties. The provider of gambling and financial trading services and software has asked for a clarification that would help put an end to its dispute with Caliplay.
The point of disagreement refers to whether Caliplay still has the option to redeem the extra service fee as part of the strategic deal that the two companies had signed in 2014. The option regarding the additional fee was put together so that the amount that Caliplay would have to pay to Playtech upon exercise would be either mutually agreed between the two companies, or, provided a mutual understanding would not work, it would be established by an independent investment bank.
The latter would value Playtech’s current entitlement to get the extra services fee until December 31, 2034.
For the first half of 2022, the amount of the respective service fee reached £30.8 million ($37.1 million). For H12021, the same service fee was €19.8 million ($23.9 million).
According to Playtech, the option is exercisable for 45 days following the approval of Caliplay’s audited accounts for the year ending December 31, 2021. The provider added that the option has already expired, which was also included in its interim report for the six months ending on June 30, 2022, and published last September.
Nonetheless, in spite of Caliplay not looking to exercise the option to date, the leader in the regulated online casino and sports betting market in Mexico believes the option has still not expired and continues to be valid. Hence, Playtech’s decision to get in touch with the UK courts and ask for clarification.
Postponed Spin-Off Plans for Caliplay
Playtech called Caliplay “a highly valued customer and partner” while also acknowledging their highly successful and fast-expanding business. In 2022, Playtech debated whether it should turn Caliplay into a new and separate company by having the joint venture merge with a special-purpose acquisition company and enable it to go public.
The plan also spoke about the special-purpose acquisition company partnering with a top media business with a strong focus on LatAm customers located in the US market. In July 2022, because of the significantly deteriorated conditions in the capital market, Playtech gave up the original spin-off plans.
For the time being, Playtech is still contemplating a business that would target Latin American customers in the US via the leading Caliente brand in Mexico.
At the start of the month, Playtech announced an expansion of its lucrative partnership with Paddy Power.