The two parties have been at each other’s throats for some time now regarding a dispute over unpaid fees. This related to uncertainties over Caliplay holding an option to redeem additional services fees from its strategic agreement with Playtech.
Playtech was of the position that this option had expired, whereas Caliplay was adamant it was still valid. Neither was willing to budge on their position but dialogue has been open between the two parties.
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 has continued to increase while the dispute remained ongoing.
What is in the new Playtech-Caliplay agreement?
But a revised agreement looks set to bring the saga to an end as all parties have agreed to a standstill of legal proceedings.
Notably, Caliplay has resumed paying its disputed software and services fees to Playtech. So far, more than €150m – approximately 80% – of the unpaid fees have been received. This balance has been paid into escrow and be released on closing of the new arrangement or by the end of 2025.
As part of the new deal, Playtech will hold a 30.8% equity interest in Caliplay’s new US-incorporated holding company Caliente Interactive.
Playtech will be entitled to receive dividends alongside other shareholders and also maintains the right to appoint a director to Caliente Interactive’s board. It will also receive $140m in cash over a four-year period.
The two parties will initiate a revised eight-year B2B software licence and services agreement
Subject to Mexican antitrust approval, the revised agreement is expected to complete by Q1 of next year.
The ongoing legal case will be dismissed in full if, as expected, the revised arrangements come into effect next year.
Welcome end to an unfortunate saga
The dispute dates back to early 2023. In February last year, Playtech sought a declaration from English courts to clarify its disagreement with Caliplay over additional services fees.
In response, Caliplay launched legal proceedings to annul its partnership with Playtech later that year.
Playtech then hit back at the annulment request, announcing steps to resolve the dispute. It also said actions by Caliplay in a Mexican court contravened contractual agreements dating back to 2014.
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 Caliplay remains a highly important customer. It also said at the time it sought an open dialogue to discuss a path forward.
Playtech CEO welcomes “exciting” new chapter
Commenting on the new agreement, Playtech CEO Mor Weizer paid tribute to the success of Caliplay over the nine years of the venture. He said that the revised deal will maintain this trajectory over the coming years.
“The revised arrangements mark the beginning of an exciting new chapter that will build on the impressive progress to date, with a view to driving significant further growth for Cali Interactive in the future,” Weizer said.
“The agreement with Caliente and Caliplay underlines the attractiveness of Playtech leading proprietary technology. With a strong position in Mexico and exposure to other fast-growing markets in the Americas and Europe, we remain well-placed to deliver strong growth in our B2B business in the coming years.”
Caliplay chairman Emilio Hank also welcomed the new deal. He said it reflects the “inherent” strength of the strategic relationship between Caliplay and Playtech
“We are focused on growing Caliplay, leveraging our core strengths and Playtech’s leading technology to broaden our geographical footprint, as we continue in our mission to give the best gaming experiences to our customers in Mexico and beyond,” Hank said.
Original article: https://igamingbusiness.com/legal-compliance/playtech-caliplay-strategic-agreement/
