- Malta based sportsbook/iGaming company Novibet is planning to head to North America via a SPAC deal with Artemis Strategic Investment Corporation.
- Novibet currently operates in several European markets and is looking to enter key jurisdictions in the US and Canada.
- If all works out, Novibet will end up listed on the NASDAQ exchange.
We haven’t seen a sports betting related SPAC deal in awhile but we’ve got one for you today. European facing sportsbook/iGaming platform Novibet has announced plans to merge with Artemis Strategic Investment Corporation (NASDAQ: ARTE)–a publicly traded special purpose acquisition company AKA SPAC. Once the transaction is complete, Novibet’s ordinary shares will be listed on the NASDAQ and ‘Artemis founders and existing Novibet stakeholders’ will hold approximately 75% of the new company at the time of closing.
If we accept the rationale for the move at face value, the plan is to ‘establish a differentiated brand in North America’ with their sports betting, iGaming and ancillary services. Founded in 2010, Novibet currently operates iGaming and online sports betting actively across four regulated European markets: Greece, Ireland, Italy, and Malta. One thing that is attractive about Novibet is that they own their own technology platform. If you’ve been paying attention since the start of the US sports betting era, you’ll know that investors consider this a big deal.
The plan is to expand their operations in Europe, along with entering the market in North America and Latin America. In Europe, the company is targeting ‘Sweden, the Netherlands, Romania, Belgium, Hungary, Germany, France and Spain via a joint venture partnership or strategic, accretive M&A.’ In North America, Novibet is in the process of working out sports betting and/or gaming market access agreements in Pennsylvania (iGaming only), New Jersey, Indiana, Louisiana (iGaming only), Iowa, Missouri and Mississippi. The company plans to begin US operations in 2023 or 2024. They’re also looking to enter the Canadian market starting with Ontario with a tentative launch date of Q4 2022. Mexico could be the first new market to come on line–Novibet has a ‘partnership with a land-based operator beginning in Q3 2022.’
It should be a concern to US facing regulators and companies that–judging from the timeframe Novibet is talking about–it is significantly more difficult for a new-to-market competitor to get established in the US than Mexico or Canada. I doubt if it will be. The translation for this is that future investment resources, jobs, etc. will have significant incentive to head North or South of the border to set up North American operations. At this point, I expect to see Toronto as the epicenter (or ‘epicentre’ in Canada thanks to their French citizenry) of the North American sports betting industry within a couple of years. Unfortunately, most US states have taken the short sighted strategy of soaking the sports betting industry just to get into the market (New York), juicing in politically connected legacy betting interests (New York and pretty much every other US state) or bequeathing what could be a huge economic upside to the state lottery for use as a ‘gimmick game’.
Founded in 2010, Novibet currently operates iGaming and online sports betting actively across four regulated European markets: Greece, Ireland, Italy, and Malta. Over the last four years, Novibet has grown gross gaming revenue at a compound annual rate of approximately 107% for the full year ended December 31, 2021, with EBITDA during this period increasing at a compound annual rate of approximately 182%.
Novibet’s current operations and offerings include:
- An iCasino platform that offers one of the largest online slots portfolios in the global gaming industry, including more than 5,000 casino games and 180 progressive jackpot games;
- An online sports book platform that has strong brand awareness across its markets, with an opportunity to establish a differentiated brand in North America based in part on an internal team that covers more than 400,000 events across more than 20 sports;
- A scalable and flexible technology offering that positions Novibet to efficiently address future growth with emerging iCasino verticals such as live games; and,
- A proprietary platform for customer relationship management and technology.
There’s plenty more to unpack here, particularly if you’re a fan of financial industry jargon and legal disclaimers. Novibet also posted a well done investor presentation about the plan that I’ll include below.
Anyway, best of luck to Novibet and Artemis. Their biggest challenge will be the same as every other sports betting/iGaming startup trying to gain traction in the US market and particularly those from other countries–trying to make their way through the labyrinth of bumbling regulators and corrupt, cronyist politicians who are determined to minimize competition and protect incumbents.