Capital investment group Black Ridge Acquisition Corp., closely associated with original World Poker Tour co-founder Lyle Berman, acquires the WPT and esports company Allied Esports International, Inc. from China’s Ourgame International in a cash-and-shares deal.
World Poker Tour (WPT) co-founder Lyle Berman has reacquired an interest in the nomadic WPT after his acquisitions entity, Black Ridge Acquisition Corp. (BRAC), picked up two gaming entities from China’s Ourgame International, with future plans to merge the two into a poker-and-esports content-producing force.
Under the terms of the deal, BRAC picks up World Poker Tour corporate parent WPT Enterprises, Inc., and Allied Esports International, Inc., and plan to merge them into a single new entity, Allied Esports Entertainment, Inc.
The total value of the deal was pegged at a bit over $150m (£118m), consisting of nearly $38m (£30m) in cash and $118m (£93m) in stock from the combined business entity. The new Allied Esports Entertainment, Inc., is expected to be listed on the NASDAQ stock exchange and traded under the symbol “AESE,” with an estimated original market valuation of nearly $214m (£168.6m).
Berman re-expands WPT role
Casino-entertainment mogul Berman was the money man behind Steve Lipscomb’s concept for a floating, worldwide poker tour that became reality with the launching of the WPT in 2002. Now in its 17th season, the venerable series has traveled through multiple owners and several broadcast networks, yet remains one of poker’s most recognizable brand names.
Berman, an expert poker player himself who is a member of the Poker Hall of Fame, has remained associated with the WPT in various roles through its multiple changes of ownership. Berman is expected to be named as the director of the newly created AESE, while the WPT itself will continue without any interruption.
According to Berman: “In more than 40 years in the gaming and entertainment business, this is the most exciting opportunity I have seen. The capital from the Black Ridge SPAC will be used to expand AESE’s global property network, accelerating their first-mover advantage as the company continues to build a brand that is synonymous with Esports.”
Ourgame steps back from poker
Though not mentioned in the extensive press materials accompanying the deal, Ourgame may have been seeking to pull back from its public ties to poker. Ourgame acquired the WPT in 2015 from its previous owner, the struggling and soon-to-be-sold bwin.party, with Ourgame envisioning the WPT as its primary vehicle for growing the game of poker in China.
Ourgame was already well established as a multi-faceted gaming and mind-sports brand in China and surrounding countries, and in 2016 and 2017 it began promoting WPT-branded events across the Asian Pacific Rim. All that changed in the spring of 2018, when Chinese authorities launched a broad crackdown targeting extensive underground gambling using “poker” games produced by Ourgame and other companies as proxies for secret, high-stakes wagering.
At least six middle- and high-level Ourgame employees and executives were arrested in China as part of that crackdown, with the companies generally accused of offering tacit approval and support for the illicit use of their games. Ourgame has offered no public statements since its acknowledgment of the six arrests, when it was required to announce the matter due to market-disclosure requirements.
Ourgame has dropped all promotional efforts for the WPT, while poker events have been canceled across the region. Even though Ourgame will retain a solid piece of the new AESE — and Ourgame CEO Frank Ng is giving up his role there to take a similar post with the new company — the deal allows Ourgame to decouple its name from “poker” within China’s sphere of control.
WPT approach applied to esports
According to statements from BRAC, the concept for AESE is to apply the WPT’s experienced “floating tour” concept to the Allied esports offerings. “Upon completion of the transaction,” the company said, “AESE will be an esports entertainment company dedicated to providing world-class in-person experiences, multiplatform content, and interactive services to the global video gaming community through a unique fusion of two leaders in the esports and entertainment industries, Allied Esports and WPT. By strategically combining Allied Esports’ global network of properties and content creation facilities with WPT’s nearly two decades of international expertise in live events, content distribution and customer engagement, AESE will provide esports audiences with offerings unparalleled in the industry today.”
Former Ourgame CEO Ng, who brings his esports management expertise to the deal, said: “This transaction will be transformational for our rapidly expanding company and provide the esports community with a fully capitalized, globally connected esports enterprise capable of producing the volume and breadth of esports entertainment products the industry is increasingly demanding.
“By applying WPT’s proven business model to the much bigger, higher-growth global Esports business, we are creating an esports entertainment platform that is long-lasting and positioned to capture the esports monetization opportunity.”
AESE already has some of the tools in place to move the WPT’s floating concept into esports in a big way. In 2018, mirroring its European esports truck, nicknamed “Big Betty,” Allied Esports launched North America’s HyperX Esports Truck, a state-of-the-art, 80-foot, 18-wheel, 35-ton semitrailer. The rig transforms into a self-contained mobile stage and production studio set to operate at each touring location.
Meanwhile, the WPT already has begun exploring opportunities created by esports’ growth. The WPT held four of its Season 16 final tables at HyperX Esports Arena Las Vegas in 2018. The WPT then announced that all of its Season 17 final tables will take place at the broadcast-friendly venue, located within the Luxor Hotel & Casino on the Las Vegas Strip.