TopBetta Holdings sells retail wagering arms to PlayUp

TopBetta Holdings ASX TBH MadBookie PlayUp

Retail and wholesale wagering facilitator TopBetta Holdings (ASX: TBH) has received positive news from the ASX and has landed on its feet after its shares came out of a trading halt this morning.

TopBetta shares were up by as much as 32% this morning after the planned sale of its retail businesses TopBetta and Mad Bookie to PlayUp Ltd was verified by the ASX with the deal not having to comply with ASX listing rule 11.2.

The potential stumbling block saw TopBetta shares placed in a trading halt and suspended from trading at TopBetta’s request earlier this month.

The deal seeing TopBetta’s retail businesses being sold for A$6 million is now expected to go ahead as initially proposed via a binding agreement signed earlier this month.

The deal also includes a provision for TopBetta to retain 20% of future revenue via monthly service and licence fees generated by PlayUp as a result of the services it offers its retail customers.

Currently, TopBetta operates a retail wagering business, offering consumers wagering, fantasy tournament and content products and services.

The company also runs Global Tote Australia which conducts its wholesale business, including operating and licensing its wholesale tote product which enables licensed wagering operators, including corporate bookmakers and tote operators from all over the world, to participate in global pools.

The company’s wholesale business is conducted under a B2B licence granted by the UK Gambling Commission to Global Tote Limited, a company incorporated in Alderney, UK.

Deal details

The key highlights of the deal include the immediate sale of TopBetta and Mad Bookie to PlayUp for A$6 million.

TopBetta is effectively ceding its retail arm to PlayUp but will continue to offer wholesale services to which PlayUp will become a customer and continue to operate under a commercial agreement including a 10% of ‘gross wagering revenue’ service fee and a further 10% licence fee for the provision of supplementary services conducted by TopBetta Holdings.

In simplified terms, TopBetta will sell its retail businesses for A$6 million but will continue to rake in 20% of all future revenue generated by the businesses.

The deal is expected to “greatly reduce” the cost base of the TopBetta Holdings business overall and provides “substantial funding for the wholesale business” which will now become the paramount focus for TopBetta.

Since the signing of the binding heads of agreement on 13 April 2018, TopBetta now expects to dispatch a Notice of General Meeting to its shareholders at the start of May 2018.

The date of its General Meeting has been provisionally scheduled for 1st June 2018. PlayUp’s A$3 million deposit is due to be paid “on or before 6th June 2018” according to TopBetta with the deal expected to complete sometime in August 2018.

Routing blockchain wagering

PlayUp intends to deliver a fully-integrated, blockchain enabled global fantasy sports, online sports betting & gaming ecosystem.

Underpinning its ecosystem is the PlayChip Utility Token, dubbed the ‘PlayChip’, a crypto-currency built on the Ethereum blockchain, specifically designed for use as a universal payment and rewards system for the online gaming industry.

Meanwhile, TopBetta is currently considering developing a tote platform which will accept third-party cryptocurrencies, in addition to traditional currencies.

The Crypto Tote is “still in concept phase” according to TopBetta with the company also confirming that it is still “considering the viability” of its plans including associated regulatory issues and proposed business plan for the Crypto Tote.

“We want to stress to the market that we have not put any value on this part of the deal when assessing the value to shareholders on the Sale, other than to say that TopBetta Holdings believes the Crypto Tote is an interesting concept, given the current interest in cryptocurrencies, and the commitment of the PlayChips will support the launch of a Crypto Tote if TBH decide to pursue it,” said Mr Todd Buckingham, CEO of TopBetta Holdings.

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