World Poker Tour Bought By Black Ridge Acquisition Corp

WPT Enterprises, parent company of the World Poker Tour and Allied Esports International, has signed a merger deal with US firm Black Ridge Acquisition Corp. The $150 million acquisition is expected to be finalized in early 2019, with the company to be called Allied Esports Entertainment Inc., and publicly traded on Nasdaq as AESE.

Company Backgrounds

Interestingly, Black Ridge Acquisition Corp is controlled by Lyle Berman (photo), a 3-times WSOP bracelet holder, who together with Steve Lipscomb originally founded the World Poker Tour in 2002. The brand has since grown into the world’s premier name in televised gaming and entertainment.

In 2015, the WPT was subsequently acquired by Ourgame International Holdings Ltd for $35 million. The Hong Kong-listed company is one of Asia’s top social gaming firms, with its product range including a variety of card and board games available via online and mobile platforms.

Exciting Opportunity

Once the deal is completed, Black Ridge Director Lyle Berman will assume AESE’s chairman role, while current Ourgame chief executive Frank Ng will become its CEO. Commenting upon the merger, Berman said that it was the “most exciting opportunity” he had encountered in more than four decades in the gaming and entertainment industry. He also added that capital raised would be used to expand AESE’s global property portfolio, and accelerate its first-mover advantage within Esports.

Meanwhile, Frank Ng said that the transaction would provide the Esports community with a globally connected Esports company with the volume and depth of products that the industry has increasingly been demanding. Elaborating further, Ng stated:

“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.”

Deal Unanimously Approved

Both the boards of Black Ridge and Ourgame have unanimously approved the deal, but must now await regulatory and stockholder approval before going ahead. All being well, the transaction is expected to be finalized sometime during the the first three months of 2019. Ourgame will subsequently receive $118 million in Black Ridge shares, and be given the option to buy a further 3.8 million in Black Ridge shares for $11.50 per share.

Opportunities For WPT

As part of the deal, Adam Pliska will continue to be the World Poker Tour’s President and CEO, as well as AESE President. Joining him will be Eric Yang as Vice Chairman, Ken DeCubellis as Chief Financial Officer, and David Moon as Chief Operating Officer.

Meanwhile, Pliska has assured the poker community that WPT opportunities would only increase as a result of the deal, and that the WPT will continue to remain the poker world’s gold standard for years to come. It would seem, however, that the WPT’s association with Esports will be instrumental in helping it achieve the next level of growth. This tallies with a statement made by the WPT in May 2018 that poker and Esports enjoy cross synergies and complement one another.

At present, details are sketchy as to how this will be achieved. Nevertheless, the HyperX Esports Arena at the Luxor Hotel & Casino in Las Vegas is expected to form part of the major changes already hinted at by the WPT. Black Ridge Chairman Ken DeCubellis spoke to Bloomberg recently, and as the news source subsequently stated:

“The new company plans to operate venues, sell the content generated by those events, and then move viewers onto a new online tournament platform to be launched in 2020.”

In the interview, Ken DeCubellis pointed towards the current gap which exists in Esports monetization right now, and a golden opportunity to monetize viewership.