NEW YORK INVESTMENT FIRM LAUDS POTENTIAL FOR ONLINE GAMBLING
23rd April, 2013 at 03:03:03
MGT Capital's takeover of fantasy sport betting business is just the start
The New York investment company MGT Capital Investments put its corporate toe in the online gambling water this week, announcing that it is about to take a controlling interest in an established fantasy sports betting operation branded FanTD LLC.
Commenting on the announcement, Robert Ladd, MGT's president and CEO, said that a subsidiary, MGT Sports, Inc., has signed an agreement with the owners of the Fan Throw Down.com website, adding:
"It is hard to overstate the potential we see in legal online gambling, both now and in the near future, as states continue to relax prohibitions in pursuit of tax revenue. Betting on fantasy sports is legal in nearly all states and has a preferential carve-out on the Federal level under the Unlawful Internet Gambling Enforcement Act of 2006.
"Today's announcement is part of MGT's comprehensive strategy to add other games of skill over the next several months, with an emphasis on mobile applications and secure technologies. We look forward to providing investors an update via conference call within the next two weeks."
A statement from the company described the new venture as an initial move into "...the online and mobile gaming and wagering space."
On its website, FanTD hosts a socially interactive destination where users can participate in free or real money daily fantasy sports contests.
Users select a roster of athletes across all popular sports, and winnings are determined by the same-day performance of these rosters. Daily fantasy sports compress the betting timeframe of traditional fantasy sports from multi-month seasons into 24-hour periods. FanTD generates revenue through a rake of the total amount bet.
MGT's latest mandatory financial reportage shows that the company has a debt-free balance sheet with approximately $5.5 million of cash.
The company expects to issue 627,500 shares of restricted common stock plus $200,000 in cash to acquire a 65% ownership interest in FanTD LLC, with the deal closing within the next two weeks.
One of the company's subsidiaries, MGT Gaming owns USA Patent No. 7,892,088 relating to casino gaming systems. In November 2012, MGT Gaming filed a patent infringement suit against Caesars Entertainment Corporation, MGM Resorts International, Inc., WMS Gaming - a subsidiary of WMS Industries, Inc., Penn National Gaming, Inc., and Aruze Gaming America, Inc. The litigation continues.
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