Israeli-based social gaming developer Playtika has agreed to acquire mobile gaming developer Innplay Labs for up to $300 million. Playtika will pay $80 million upfront, but the final price will be contingent on contractual factors. Innplay Labs is also based in Israel, and some of its most popular titles include:
- Animal Kingdom
- Brix Master
- Tiles of Fortune
- Water Ride
On its website, Innplay says that its areas of focus are the quality of the art and animation for its games and leveraging data to optimize player experience. Although it’s not a social casino company, that skillset appears relevant to Playtika’s business model.
According to its website, Playtika has over 34 million active users across its games. Most of these are free-to-play social casino products that use play money. Despite the lack of cash deposits and prizes, that business model has faced multiple lawsuits in the US, questioning whether even play money casinos constitute illegal gambling. The latest of these against Playtika came earlier this year in Alabama.
Playtika’s History With Caesars
Playtika was founded in 2010 and was acquired the following year by Caesars, which integrated it into its Interactive Entertainment division (CIE). Although CEI now includes the real-money Caesars Palace Casino and Caesars Sportsbook, it was primarily focused on free-to-play social games at the time. In 2016, a Chinese consortium of investors bought Playtika from Caesars for $4.4 billion, though the two companies have continued to work together.
Some of Playtika’s most popular games date back to that era and use Caesars brands, like Caesars Slots and WSOP Poker. Other titles include:
- Slotmania
- Bingo Blitz
- Board Kings
The announcement regarding Innplay Labs marks Playtika’s second acquisition in the past month. In August, Playtika acquired Youda Games from Azerion Group. Meanwhile, in January, the company attempted but failed to purchase Rovio, the developer of the popular Angry Birds franchise.
Mixed Results for Playtika Acquisitions in 2023
A little over a month before the Innplay Labs acquisition, Playtika announced a deal to acquire social game developer Youda Games. Under the agreement, Playtika would pay Youda’s parent company, Azerion Group, for an initial €81.3 million ($86.8 million). Like the Innplay Labs deal, the Youda acquisition involves a performance-based component that could increase the purchase price to as much as €150 million ($160.2 million.)
Youda Games’ most popular titles include the Governor of Poker series. The studio also develops free-to-play blackjack, Poker World, and Higher Lower.
In the failed acquisition attempt in January, Playtika offered €683 million ($729 million) for Rovio. That offer represented a 60% premium over Rovio’s stock price at the time. Even so, in March, Rovio announced it had ended talks with Playtech and was considering other offers. The following month, Japanese gaming giant Sega announced it had struck a deal to purchase Rovio for €703 million ($750 million.)
Playtika Faces Class-Action Lawsuit in Alabama
Social casinos have been popular targets for class action lawsuits. By definition, gambling consists of a wager, an element of chance, and a thing of value as the prize. Most social casino lawsuits hinge on whether play money chips and the gameplay they allow can be considered a “thing of value.”
However, because these suits have consistently ended in settlements, that remains an open question.
In one of the latest cases, Playtika is facing a lawsuit in Alabama, one of the most prohibitionist states regarding gambling.
In the suit filed Mar. 8, plaintiff Gayla Hamilton Mills argues that Playtika’s games are games of chance, which violate state laws. Mills seeks an injunction to stop the developer from offering games in the state. The plaintiff also seeks for Playtika to recover all the money that Alabama residents paid to play its games from one year before the filing until the case is resolved.
Playtika is among the companies to have previously settled a similar lawsuit. That case was filed in 2018 in Washington and resulted in Playtika and CIE settling for $38 million in 2021.
There have been two other settlements from other social casino companies this year: $415 million from DoubleDown Interactive and IGT in Washington and $11.75 million from VGW in Kentucky. Other companies, like Yellow Social Interactive, have tried to insulate themselves from such suits by including class action waivers in their terms and conditions.
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