Takeover speculation is swirling around Kambi Group Plc (OTC:KMBIF). That’s after the sports betting platform provider ditched a poison pill provision hindering its ability to be acquired.

Kambi said last week it satisfied the terms of a $8.5 million convertible bond agreement reached when Kindred spun the technology company off in 2014. It announced that while certifying its partnership with Swedish sportsbook operator Kindred — its former parent company — is extended through 2026,

Convertible bonds are debt that can be converted into equity of the issuing company, meaning Kindred wielded control over Kambi to the extent that it could have stood in the way of a suitor looking to make a deal. That hurdle is a thing of the past.

Kambi now has the option to prepay the full loan amount and exit the bond agreement at any time of its own discretion,” according to a statement issued by Stockholm-listed Kambi. “Upon the prepayment of the convertible bond, Kambi will no longer be required to seek prior consent for certain events and will eliminate the prospect of Kindred converting the bond into shares, which would have given the operator a controlling influence over Kambi.”

The Malta-based company and its investors now have full control of its future direction, which could include positioning itself for a takeover.

Plenty of Suitors Could Line Up for Kambi

Less than two months into 2022, the gaming industry is already a hotbed of takeover offers and related rumors.

Even with lost business, Kambi’s technology is valuable to would-be buyers and the list of potential suitors includes well-known names.

“Kambi has long made sense as an acquisition target for B2C operators looking to bring technology in-house,” wrote RoundHill Investments co-founder Will Hershey in the firm’s weekend newsletter. “Now that Kindred’s poison pill has been addressed, this becomes a very real possibility. In terms of potential acquirers, I believe that Penn, Fanatics, and Rush Street all could be in the running for various strategic reasons.”

Kambi sports an enterprise value of $831 million as of Feb. 11 — an easily digestible figure for any number of suitors.

Bidder May Have Already Emerged

Due to Kambi calling the aforementioned convertible bond and landing a new three-year accord with Kindred two years in advance of the current agreement expiring, there’s speculation that Kambi may already be holding talks with an unidentified bidder.

While that’s unconfirmed, the logic makes sense, because there was no reason for Kindred to sign off on new pact with two years remaining on the current one.

Kambi clients include ATG, Churchill Downs Incorporated, Kindred Group, LeoVegas, Penn National Gaming, and Rush Street Interactive, according to the company.

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Australia’s second-biggest casino company will need to come up with about A$13 million in its 1H FY2022 accounts to pad the checks and retirement funds of more than 2000 employees. Star Entertainment Group had been underpaying workers for the last six years.

On Monday, the operator said that it had been in contact with the United Workers Union and the Fair Work Ombudsman to let them know it planned to begin making payments of back pay with interest and contributions to the workers’ preservation super accounts.

The news came from a stock exchange filing wherein Star stated the underpayments had been found during a scheduled six-year review of salaried staff wages (see .PDF here). The statement noted that since the discrepancies were found it had “improved its processes, systems and training and has a plan in place to ensure salaried team members’ pay is correct moving forward.”

Star CEO Matt Bekier added:

“We apologize to any team member impacted by the payment shortfall and we are committed to doing the right thing by acting transparently. Our priority is to address this issue and to ensure that it does not happen again.”

1H FY2022 Financial Results to be Announced February 17

The statement comes ahead of The Star’s 1H FY2022 financial results which will be released on February 17. It has already been known for some time that the numbers will show material impact from a lack of cross-border customer traffic, overall operating restrictions, and outright closures in the face of the worldwide health emergency of COVID-19.

The operator is already reeling from a withering review of its statutory regulatory responsibilities in maintaining a safe and sane gambling environment and has denied claims that it has unwittingly allowed money to be laundered through its gambling floors.

While the impacted employees were found through internal review and the company is already in the process of compensating the affected workers for the shortfall, union representatives look at the issue from another angle as it isn’t a one-off occurrence with a single employer, but something that occurs far too often in many industries.

Imogen Beynon of the United Workers Union called on The Star to fix the situation for workers sooner rather than later.

Beynon said in a statement: “We know from this example and many others that incidences of wage theft and underpayments are reduced when people are covered by a union agreement.

“This situation has also brought to light the issues surrounding many companies’ over-reliance on salaries which fall short of the relevant award.”

Some Workers Not “better off overall”

During the six-year period comprising the review, workers were paid about $3.3 billion. While the overall shortfall in pay relative to the expected award is small, individually it had the potential to affect individual team members’ quality of life with basic salary insufficient to properly compensate them for overtime and expected enhanced rates.

Star Entertainment Group Ltd (ASX: SGR) stock has been on a steady rise since January 27 after experiencing a precipitous drop between October 6th and 12th with gains since that time of a rosy 29 percent. A strong first-half operating report later this month is not expected to see any surprises with EBITDA in the positive $30m range and expected normalized net loss over $70m. Stock prices are more likely to be driven by any new COVID variants or surges than the known fundamentals.

Source: Star casino to pay $13 million after ‘wage theft’, The New Daily, February 7, 2022

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Last week, the Nevada Gaming Control Board (NGCB) unanimously signed off on Apollo Global Management’s (NYSE:APO) purchase of the Venetian, Palazzo and Venetian Expo, indicating one of the largest Las Vegas Strip asset sales announced in 2021 is closer to wrapping up.

The next step in the process is the Nevada Gaming Commission (NGC) evaluating the NGCB’s decision, which is scheduled to occur on Feb. 17. Once the NGC greenlights the acquisition, it will close.

The deal represents the departure of Las Vegas Sands (NYSE:LVS), the largest gaming company by market capitalization, from the biggest US casino center.

Apollo Assuages Nevada Regulators

David Sambur, co-head of private equity for Apollo, and Venetian President and Chief Operating Officer George Markantonis who’s taking over as chief executive officer of the new operating entity, presented for the private equity company at last week’s NGCB meeting.

Black’s attorneys also claim Harris hired a public relations company to tie Black to the late, notorious Jeffrey Epstein. Black is no longer chairman of the private equity company.

Gaming experience isn’t a hurdle Apollo has to clear to appease Nevada regulators. The investment firm previously controlled Caesars Entertainment and today it runs Great Canadian Gaming Corp., Italy’s Gamenet Group S.p.A and is frequently tied to a slew of gaming industry mergers and acquisitions rumors.

What’s Next for Sands

With the proceeds from the sale of its Las Vegas assets, Sands is targeting enhancements to its venues in Macau and Singapore — currently its two remaining markets.

In Macau, where Sands runs five integrated resorts and is the market share leader, the operator could direct some proceeds from the sale of the Nevada venues to bolstering non-gaming amenities to gain favor among local regulators. The company recently said it’s planning $1 billion in upgrades to Marina Bay Sands in Singapore.

Some analysts argue Sands should use part of the proceeds to buyback its stock, which hasn’t come close to returning to pre-coronavirus pandemic highs. The company is also interested in developing new casino-resorts in Florida and Texas and is rumored to be a contender for a New York City-area gaming permit.

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A 41-year-old Fresno, Calif. woman passenger was killed and a 63-year-old driver remains hospitalized following a Wednesday night accident on Highway 41 in California’s Madera County. They were returning from a visit to Chukchansi Gold Resort and Casino when the car went out of control and crashed.

The female died at the accident scene, according to the California Highway Patrol (CHP). On Thursday, Fresno County Coroner’s Office released her name. It is Khayriyyah Jones, the Fresno Bee reported.

The driver was not identified by the CHP. He suffered serious injuries, police revealed. He was transported to a local hospital. Police did not have details on his condition as of mid-day Thursday.

The accident took place at about 8:30 pm. Officers continued to investigate the circumstances surrounding the crash on Thursday, CHP said.

The casino is located in Coarsegold, Calif. It is about 36 miles north of Fresno. The gaming venue is near Yosemite National Park.

Las Vegas Strip Fatal Crash

In an unrelated fatal accident, a 43-year-old woman died from her injuries in November 2020. That’s after the SUV she was in crashed into a wall at the Paris Hotel & Casino parking garage located on the Las Vegas Strip.

Local TV station KLAS reported that Veronica Acosta was a passenger in the 2019 Chevrolet Trailblazer when the accident took place. Acosta resided in Riverside, Calif.

Las Vegas Metropolitan Police later arrested the driver of the SUV for driving under the influence, KLAS said. He was identified as Scott Thomas, age 39, of Montclair, Calif., KTNV, another Las Vegas TV station, reported.

Motorcycle Fatal Crash

In still another deadly accident, the victim in an Aug. 5 2021 Las Vegas motorcycle crash died. The accident was at the Strat Hotel, Casino, and Skypod on Las Vegas Boulevard.

The motorcycle was heading south on Las Vegas Boulevard. When it got to north of Bob Stupak Avenue, it collided with a Nissan Altima near the entrance to the casino’s valet area.

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A newly launched political action committee from the Nevada Resort Association (NRA) will support state candidates whose positions are in line with the hotel and casino sector. It already has more than $2 million in its coffers and the PAC could play a key role in upcoming legislative races.

The fund is called the Nevada Resort PAC. It comes as the hospitality industry continues in its rebound since the onset of the coronavirus pandemic. The sector is generally opposed to new requirements that could hamper its financial recovery.

The Nevada Gaming Control Board reported last month that 2021 gross gaming revenue (GGR) totaled more than $13.42 billion. That set a new record.

But the Las Vegas gaming sector might see a “modest contraction” during 2022, Deutsche Bank gaming analyst Carlo Santarelli warned to The Nevada Independent in December.

It’s critical that Nevada has elected representatives who value the unique role our industry plays in the economic security of every community in this state to keep our recovery moving forward,” NRA President Virginia Valentine said in a statement released on Monday announcing the PAC.

She explained the state’s future prosperity “is inextricably intertwined with the success of our industry as evidenced by the devastating impact of the global pandemic.”

Voting Records Will Be Scrutinized

The PAC will support “business-minded candidates,” the NRA statement said. Before making contributions or endorsements, the PAC will evaluate candidates’ prior voting records, current positions, and whether they are aligned with the industry’s priorities, the statement adds.  Candidates will be required to complete “an extensive candidate questionnaire.”

Endorsed candidates should be able to be popular enough to win in primary and general elections, the statement adds.

We’re looking for sensible individuals on both sides of the aisle who will champion issues that grow our economy, encourage economic investment and job creation, contribute to our employees’ well-being, ensure taxes are fair and transparent, and protect our state’s distinctive character as a global leader in travel and tourism,” Valentine said.

The Nevada Resort PAC will also undertake targeted educational campaigns and community outreach efforts to promote the industry’s priorities.

Casinos May Face 3 Percent Tax Hike

One issue that impacts the Nevada casino sector is a possible increase in the gaming tax to add to funds for the state’s public schools. The tax rate is now at 6.75 percent. A proposal would hike it to 9.75 percent.

The issue could find its way onto a November ballot. It is now being addressed in a court case.

In 2020, the NRA said it was not against raising taxes across the board to support education, but draws the line at targeting a single industry.

Also, in October the Nevada Employment Security Council proposed increasing the state’s unemployment insurance tax. It would have cost employers as much as $130 per employee in 2022, according to the Vegas Chamber, a pro-business group.

We are still facing challenges ahead of us as a state because of the pandemic. Passing a tax increase at this time sends the wrong message to Nevada’s employers, who have struggled to keep their doors open and maintain employees,” Gina Bongiovi, chair of the Vegas Chamber and local attorney, said in October.

The NRA represents nearly 80 gaming resorts in Nevada. The organization declined to comment further on the PAC and its priorities when questioned by Casino.org about specific legislation. The Culinary Union, which represents many casino workers, also declined to comment.

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