Pennsylvania Poker Deal Stalls Bally’s Evoke Acquisition

Bally’s £243.1m acquisition of Evoke faces a regulatory hurdle in Pennsylvania due to an existing B2B poker deal between Evoke’s 888 Atlantic subsidiary and Caesars. Pennsylvania regulations restrict companies holding interactive gaming certificates from acquiring interactive gaming manufacturers, a conflict impacting Bally’s digital operations in the state.

What Happened

Evoke’s B2B poker agreement with Caesars in Pennsylvania has emerged as a significant obstacle to Bally’s acquisition of Evoke. The £243.1m acquisition by Bally’s Intralot requires regulatory approvals globally, including in Pennsylvania, where Bally’s Corporation’s US parent has digital operations (NEXT.io).

Evoke, despite a limited US presence following its 2024 exit from US consumer-facing operations and termination of its Sports Illustrated partnership, maintains active B2B deals. One such deal involves its 888 Atlantic subsidiary providing technology, player account management, and customer support for Caesars’ Pennsylvania World Series of Poker (WSOP) online offering under an interactive gaming manufacturer license (NEXT.io).

The conflict arises because Pennsylvania regulations prohibit the acquisition of interactive gaming manufacturers by groups that also hold interactive gaming certificates. Bally’s Corporation, which controls Bally’s Intralot, owns Bally’s Pennsylvania, an online casino operator holding two such certificates. Evoke and Bally’s proposed a solution where 888 Atlantic would surrender its Pennsylvania manufacturer license while the regulator approved a conditional change of control, allowing temporary measures for 888 Atlantic until activities wound down (NEXT.io).

However, Pennsylvania’s Office of Enforcement Counsel (OEC) formally objected to this proposed arrangement, stating, “Based on its review, Board staff and the Office of Enforcement Counsel OBJECT to the granting of the relief requested in the Petition.” The OEC has left the final decision to the Pennsylvania Gaming Control Board (PGCB) and recommended additional conditions if the PGCB approves the deal, including weekly updates, final approval before license surrender, and restrictions to prevent unlicensed individuals from controlling 888 Atlantic (NEXT.io).

Key Details

• Bally’s Intralot’s £243.1m acquisition of Evoke requires regulatory approval in Pennsylvania (NEXT.io).
• Evoke’s 888 Atlantic subsidiary holds an interactive gaming manufacturer license in Pennsylvania for its B2B deal with Caesars’ WSOP online offering (NEXT.io).
• Pennsylvania regulations restrict groups holding interactive gaming certificates, such as Bally’s Corporation, from acquiring interactive gaming manufacturers (NEXT.io).
• The Pennsylvania Office of Enforcement Counsel (OEC) formally objected to the proposed solution for the licensing conflict (NEXT.io).
• The OEC recommended a monthly payment of $20,000 to cover supervision costs if the PGCB approves the transaction (NEXT.io).

Why It Matters

This regulatory impasse in Pennsylvania highlights the complexities of M&A activity in highly regulated iGaming markets, particularly when existing B2B contracts create licensing conflicts. The situation underscores the granular level of regulatory scrutiny applied to such transactions by state authorities. The OEC’s objection, despite acknowledging that an exemption might not have a “material negative impact,” demonstrates a cautious approach to setting precedents within the Commonwealth’s regulatory framework (NEXT.io). Delays in regulatory approvals, which can take nine months or more, could significantly impact the closing date for Bally’s acquisition of Evoke, affecting both companies’ strategic timelines (NEXT.io).

What’s Next

The ultimate decision regarding the proposed arrangement rests with the Pennsylvania Gaming Control Board (PGCB). If the PGCB decides to approve the deal despite the OEC’s objection, the OEC has recommended applying additional conditions and safeguards, including weekly updates to the enforcement office, final approval before license surrender, and restrictions on control of 888 Atlantic (NEXT.io).