Playtech has announced a revised strategic agreement with Mexican operator Caliente over its Caliplay joint venture, ending a dispute between the two parties.
Both parties have been at loggerheads for some time over a dispute over unpaid fees. This was related to uncertainty over whether Caliplay had the option to redeem additional service fees from its strategic agreement with Playtech.
Playtech maintained that this option had expired, while Caliplay insisted that it was still valid. Neither company was willing to budge on its position, but dialogue was opened between the two parties.
What’s in the new agreement between Playtech and Caliplay?
Initially, Playtech said it was owed €34.4m (£29.0m/$38.3m) in unpaid services and licensing fees for the six months to 30 June 2022.
This amount continued to increase while the dispute remained ongoing. But a revised settlement appears set to bring the matter to an end, as all parties have agreed to a stay of legal proceedings.
Notably, Caliplay has resumed payment of its disputed software and services fees to Playtech. To date, more than $150 million – approximately 80% – of unpaid fees has been received. This balance has been deposited and will be released upon closing of the new agreement or by the end of 2025.
As part of the new arrangement, Playtech will have a 30.8% equity stake in the new US-incorporated Caliplay holding company, Caliente Interactive.
Playtech will be entitled to receive dividends along with other shareholders and also retains the right to nominate a director to the board of Caliente Interactive. It will also receive $140 million in cash over a four-year period.
The two parties will enter into a revised eight-year B2B software license and services agreement. Subject to Mexican antitrust approval, the revised deal is expected to close in the first quarter of next year.
Therefore, the ongoing court case will be fully settled if, as expected, the revised agreements come into force next year.
End to an unhappy saga
The dispute dates back to early 2023. In February last year, Playtech requested a declaration from the courts in England to clarify its disagreement with Caliplay over additional service fees.
So, in response, Caliplay began legal proceedings to nullify its partnership with Playtech later that year.
Playtech then countered the annulment request, announcing measures to resolve the dispute. She also said that Caliplay’s actions in a Mexican court violated contractual agreements dating back to 2014.
When announcing its full-year results in March this year, Playtech made further claims against Caliplay in terms of unpaid fees.
The most recent update on the case came in May, with Playtech reiterating that Caliplay remains a very important customer. Therefore, at the time, the company also stated that it was seeking an open dialogue to discuss a way forward.
Playtech CEO welcomes new chapter
Playtech CEO, Mor Weizer, highlighted Caliplay’s success over the venture’s nine years. He said the revised agreement will maintain this trajectory for years to come.
“The revised agreements mark the start of an exciting new chapter that will build on the impressive progress to date. In other words, our goal is to drive significant growth for Cali Interactive in the future.” – Weizer said.
“The agreement with Caliente and Caliplay highlights the strength of Playtech’s leading proprietary technology. So, with a strong position in Mexico and exposure to other fast-growing markets in the Americas and Europe, we remain well positioned to deliver continued growth in our B2B business in the coming years.”
Thus, Caliplay president Emilio Hank also welcomed the new agreement. “We are focused on growing Caliplay, leveraging our core strengths and Playtech’s leading technology to expand our geographic presence as we continue on our mission to deliver the best gaming experiences to our customers in Mexico and beyond.”
