Key Points
- The Pennsylvania Gaming Control Board has yet to make a final decision, despite the state’s enforcement office having lodged an objection to a proposed deal shortcut.
- All this is because of a pretty old poker contract that Bally’s Intralot now wants to pass on to its new owners, a deal that was originally signed all the way back in 2012.
- Evoke is still “confident” that the takeover will wrap up in late 2026 or early 2027, although it’s worth noting that major debt repayments are still outstanding for 2028.
One of those old poker contracts is causing problems for Bally’s Intralot as it tries to push through its £243m takeover bid for Evoke. Pennsylvania’s Office of Enforcement Counsel has come out swinging against the proposed deal that’s supposed to help the takeover go through. Their official line in the filing is blunt: the board’s staff just don’t want the deal to happen. Of course the final say will go to the Pennsylvania Gaming Control Board, but so far, they’ve stayed quiet on the matter.
The Poker Contract That’s Causing A Headache
Back in 2012, Evoke’s subsidiary 888 Atlantic signed an agreement with Caesars, which basically handed over responsibility for some of the tech and customer support services for the World Series of Poker online product in Pennsylvania. This was all under an interactive gaming manufacturer licence. But fast forward to today, and that old contract is now causing problems for Bally’s Intralot as it tries to wrap up the takeover.
The Debt That’s Looming Large
The contract with Caesars is a bit of a tangled web. Evoke’s purchase of Caesars’ non US business back in 2022 is now leaving Bally’s Corporation with a large debt to service. All of this is making the gaming board’s decision even more complicated, especially since Caesars are now one of the only US customers left for Evoke.
The Deal That’s Lost Momentum
Bally’s Intralot first made its bid for Evoke back on 5th June, which valued the company at a pretty impressive £243.1m. Of course the deal was always likely to be complicated, but the wrangling over that old Caesars contract has added a whole new layer of complexity. Evoke’s directors are starting to get worried too, with some of them questioning whether Bally’s Intralot is even up to the job of running the group.
Petitioning for Relief
Evoke, 888 Atlantic, Bally’s Intralot and Bally’s Corporation collectively petitioned sometime around 18 August, according to Gambling.com.
The petition is for acceptance of the conditional surrender of the licence by 888 Atlantic, and the conditional change of control. This would allow the deal to close subject to the board’s final approval of the surrender of the licence.
The companies state that compliance with the normal licensing procedures might take around nine months, and more. A period of this duration would mean the completion of the deal after the expiration of the target set by Evoke. The long-stop date of the scheme stands at 5 September 2027.
The Objection by the Enforcement Office, Subject to Conditions
The objection of the Enforcement Office of Pennsylvania is to the relief requested by the companies. However, the objection suggests that it has no particular concern about the broader implications of the decision. It states that it is “not overly concerned that any precedent set in this instance would have a material negative impact.”
The response of the office provides the board with some possible conditions for granting the relief even against its objections. They include the provision for weekly updates post-completion of the deal. This would be followed by the license surrender after final board approval and staff confirmation. NEXT.io provides the list of safeguards proposed to avoid any control by an unlicensed person. It also sets monthly administrative fees of $20,000.
Objection by the enforcement office is not a rejection of the petition. Only the Pennsylvania Gaming Control Board can give a verdict in this case, and either grant or deny the relief sought.
The Deal Timeline Remains the Same
Evoke has not deviated from the timetable of the deal despite the ongoing petition in Pennsylvania. In the 23 October update, the company has stated that the acquisition is proceeding as per the timeline and most of the approvals have been granted.
It expects the deal to close in late Q4 2026 or early Q1 2027, provided all other conditions are fulfilled. The trading update does not mention anything about the license issue in Pennsylvania, since a normal trading update would not necessarily address such a petition.
Revenue in the third quarter of Evoke came in at £406 million, down 7% in reporting terms and 2% like-for-like at constant currency.
The £1.86 Billion Debt Behind the Deadline to 2028
Any delay in proceedings is likely to put a lot of financial pressure on Evoke. After all, its current debt situation is already pretty dire, at the end of 2025 its net debt stood at a staggering £1.86 billion. Then in its half-year report they had to flag not one but two major concerns about the business being able to stay afloat as a going concern. And guess what, both of them related to the proposed takeover.
NEXT.io are reporting that £769 million of debt is due in July 2028, while a £200 million revolving credit facility is maturing in January 2028.
A group of investors led by TPG, Oaktree and OHA have put up a second lien facility worth as much as £889 million, and it’s all a bit complicated as the facility is actually a euro equivalent for certain senior debt that comes due in 2028. That comes from a Bally’s Corporation filing with the US Securities and Exchange Commission, and, interestingly, it doesn’t say that the facility covers the whole of Evoke’s debt.
Ben Robinson from Corfai has been speaking to iGaming Business about this, he reckons that the combined net debt of over £3 billion is basically “underpriced”, which is just one view but gives you a sense of why lenders and shareholders are keeping a very close eye on this timeline.
Expert View
In our view, we’d be okay with a deal being approved with some conditions, and that’s mainly because of the enforcement office’s own assessment that they don’t think there will be any major knock-on effects. And in any case the Caesars contract extension has done its time and no longer applies. If 888 Atlantic is already starting to wind down its operations in Pennsylvania, and we’re talking about needing a nine-month review for a single customer, that all feels a bit excessive.
However there’s a pretty good argument against that position, if the buyer already has two state certificates then you’d expect them to have to follow the normal licensing rules. Giving an exception to them isn’t a small ask.
The reports we’ve seen don’t actually say how much the Caesars contract is worth to Evoke, which just leaves this big unanswered question about how much risk the sale should carry because we don’t know the financial value of this contract.
Pennsylvania’s objection has certainly complicated things for the takeover deal, but it’s not the final word on the subject. The board could still approve the petition with some conditions, reject the deal or make them go through the longer licensing process and all the hassle that comes with that.
Evoke is still aiming for completion in late Q4 2026 or early Q1 2027, but its 2028 debt maturities are a reminder that any delay is going to come with a hefty price tag. And in the meantime a contract that dates all the way back to 2012 is still hanging in the balance for a deal valued at £243.1 million.
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