TORONTO, Sept. 19, 2019 (GLOBE NEWSWIRE) -- Wayland Group (CSE:WAYL) (“Wayland”) and Cryptologic Corp. (CSE: CRY) (“Cryptologic”) are pleased to announce that Maricann Inc. (“Maricann”), a subsidiary of Wayland, and Cryptologic have entered into an amended and restated loan agreement, effective as of September 17, 2019 (the “Agreement”), that provides for additional bridge loans from Cryptologic to Maricann (collectively, the “Loans” and each a “Loan”). Each additional Loan is expected to be in an amount equal to $1 million, subject to an overall aggregate cap of $25 million for all Loans, including Loans already advanced. Following Cryptologic’s advance of an additional Loan of $1 million on September 18, 2019, the aggregate principal amount of outstanding Loans is $6 million. The Agreement has been entered into in connection with the previously announced letter of intent dated August 2, 2019 (as amended, the “LOI”) pursuant to which Wayland intends to sell its Canadian business to Cryptologic (the “Asset Sale”).
The Agreement provides for, amongst other things, the payment by Maricann to Cryptologic of a non-completion fee (the “Fee”) up to an amount equal to 5% of the deemed aggregate equity value of the Asset Sale. Wayland would be required to pay the Fee in the event that the Asset Sale is not completed as a result of Wayland completing an alternative transaction in connection with its Canadian business, and the Fee would be payable on the earlier of the closing date of an alternative transaction, or the last day of the term of the Loans. The amount of the Fee would be calculated based on the aggregate principal amount of outstanding Loans (subject to the 5% maximum). In the event that the Fee becomes payable, based on the current aggregate principal amount of outstanding Loans, the Fee will be $6 million if the principal amount of the loan is repaid on or prior to completion of the alternate transaction or $11.5 million if it is not, which is the maximum amount permitted under the Agreement based on 5% of the deemed aggregate equity value of the Asset Sale of $230 million. The Agreement further amends the LOI to provide that any time after December 16, 2019, Wayland may provide notice that it intends to commence discussions with respect to an alternative transaction and the issuance of such notice shall consequently trigger the obligation to pay the Fee.
Like Leap, Inspired has enjoyed overseas success, particularly in Greece and Italy. Now, the company said, several potential partners in the US are beginning to understand the ease of virtual sports integration, not to mention the product’s low deployment cost.
To boot, Inspired noted, virtual sports appeals to all types of players, from those who prefer lottery or slots to those who lean toward sports betting and online gambling.
However, Lissauer said, virtual sports as an offering is not exactly a turnkey product.
“There are types of content that fit various types of territories,” he said, citing the popularity of soccer in Europe and a lack thereof in the US. “You have to customize and adapt in order to be successful. The US is not going to be any different.”
Leap Gaming is making its foray into the American market. It launched in 2014 and is a provider for real-money virtual sports games in Europe. Leap is now looking to open up shop in Nevada.
“The mere effect of sports betting can be very popular in the US,” Lissauer said. “The whole stir and excitement around real sports betting in the US, by nature, implies there’s a lot of room for growth and adoption for virtual sports in the US.”
Using Europe as a gauge, he added, by accounting for factors such as market size, population, the popularity of sports, “the conclusion is inevitable” that virtual sports can be a hit.
Lissauer understands that patience is vital for such a new product. Virtual sports cannot always become a success like it did in Europe. There, “tier-one” companies offered such games, where they proved to be complementary to real sports betting just as Lissauer suggested.
Even in New Jersey, where virtual sports has lived since 2017, the niche market has been drastically overlooked compared with online casino gambling and sports betting.
This explains why he, and certainly his compatriots within the virtual gaming space, are not disconcerted with Pennsylvania’s early returns on Xpress Sports.
“In general,” he said, “the industry is still fairly young. In part, when it comes to virtual sports, there needs to be some adaptation done.”
A complementary product that pays dividends
Inspired noted that virtual sports “has proven to drive incremental revenues for customers globally” while also attracting new players. The digital format, the company pointed out, “mimics the type of entertainment that millenials already consume.”