How the Sale Process Works (Broker-Led)
Engagement & Confidentiality
You instruct the broker to explore a sale.
The broker issues a mutual NDA so you can safely disclose sensitive data (financials, traffic, player KPIs, provider terms, AML/RG policies). NDAs are standard at this stage.
Initial Fact-Find & Teaser/Prospectus
After NDA, you complete a structured prospectus questionnaire (tailored to your model; skip non-applicable questions).
Broker runs a discovery call (Zoom/Meet) to understand value drivers and sale rationale (e.g., capital reallocation, regulatory pivot, partner exit). A clear rationale builds buyer confidence.
Data Room Prep (Last 12–36 Months)
Provide traffic & revenue by product/geo/provider, merchant statements, game server reports, CRM cohorts, chargebacks, bonuses, KYC/AML metrics, RG interventions, and platform/provider contracts.
Include license status and change-of-control obligations (these frequently require regulator sign-off). For example, MGA mandates filings for qualifying shareholding changes; similar rules apply in other top jurisdictions.
Broker Valuation & Go-to-Market
Broker reviews SEO/brand, payments stack, platform portability, compliance posture, and financials to form a valuation view and pricing strategy.
You approve asking price and deal structure guidance (cash at close vs. seller financing/earn-out). Benchmarks for online businesses often reference profitability and risk; structure selection is driven by churn, regulatory exposure, and concentration risks.
Buyer Targeting & Qualification
Broker markets the opportunity confidentially to vetted strategic buyers and funds.
Interested parties sign NDA(s) and provide proof of funds before receiving the full data room. (Filtering is essential; only a small subset are true decision-makers.)
Management Calls & Q&A
Host structured calls with buyers, covering tech stack, licensing path, geographies, PSP risk, RG/AML, and migration options.
Expect deep dives into Curacao/MGA/Kahnawake posture and ongoing reforms (e.g., Curaçao LOK shifting to B2C/B2B licenses and stricter compliance).
Indicative Offers → LOI
Buyers submit IOIs; you shortlist to negotiate key levers (price, structure, escrow, transition support, exclusivity).
Preferred bidder issues an LOI with exclusivity and diligence timetable.
Confirmatory Due Diligence
Legal: corporate, IP, contracts, affiliate agreements, change-of-control consents, data protection (GDPR), and regulator notifications/approvals.
Regulatory/AML: fit-and-proper, policies, procedures, and reporting (e.g., Malta’s sector-specific AML guidance); some jurisdictions require pre-approval before closing.
Financial/Tax: revenue recognition (bonus costs, PSP fees), liabilities, and clawbacks.
Tech/Operations: platform portability, source-code/licensing limits, content/provider assignments.
Definitive Documents
Asset or Share Purchase Agreement (APA/SPA) drafted by buyer/seller counsel, reflecting regulator conditions, price adjustments, earn-out mechanics, non-compete, and transition services.
Close is often conditional on regulator approvals (e.g., MGA change in qualifying shareholding).
Funds Flow, Escrow & Handover
Buyer wires funds to escrow per the SPA/APA schedule.
On release conditions: domain/DNS, platform credentials, CRM/exported data (where lawful), provider notices, PSP handover, affiliate sub-IDs, analytics, and code/IP (if included).
Migration and post-close support proceed under the agreed transition plan.
Key Compliance Reality Check (by Jurisdiction)
Malta (MGA): Change in qualifying shareholding/control requires notification and approval; expect documentation and timelines embedded in the SPA.
Curaçao: Ongoing LOK reforms modernize the regime (B2C/B2B licensing, centralized CGA, stricter compliance). Legacy sublicenses and transitions affect deal structuring and timing.
Kahnawà:ke: Regulatory amendments and emphasis on electronic gaming rules; changes in control/ownership must align with Commission requirements.
Capitalization & Fit-and-Proper: Expect minimum capital and fitness tests in top EU regimes (e.g., MGA capital requirements by license type).
Deal Readiness Table (What Buyers Ask vs. What to Prepare)
| Workstream | Buyer focus | What to prepare | Owner | When |
|---|---|---|---|---|
| Licensing & Regulator | Change-of-control path, timing, conditions precedent | License certificates, regulator correspondence, MGA change-of-structure filings draft, compliance org chart | Legal/Compliance | Pre-market |
| AML/RG | Procedures & evidence they work | AML policy, EDD samples, SAR logs (redacted), RG intervention logs, training records | Compliance | Pre-market |
| Financials | True profitability, cash flow, liabilities | P&L (36m), MRR/NRR cohorts, PSP fees, bonus/comp tables, tax filings, debt schedule | Finance | Pre-market |
| Tech & Platform | Portability, IP, limits from platform/providers | Platform contract (assignment/termination), code ownership list, API docs, incident history | CTO/Operations | Pre-market |
| Content/Providers | Game/content rights & rev share | Provider agreements, rev-share schedules, notice periods, exclusivities | Legal | Pre-market |
| Traffic & SEO | Durability of demand | GSC/GA exports, backlink audit, top keywords, disavow log, penalties history | Marketing/SEO | Pre-market |
| PSP & Fraud | Stability of payments | Acquirer list, rolling reserves, fraud/chargeback KPIs | Finance/Risk | Pre-market |
| Data & Privacy | GDPR and data portability | RoPA, DPA with vendors, consent logs, deletion policies | DPO | Pre-market |
| HR/Key Persons | Continuity risk | Key-person map, retention/TSAs, contractor IP assignments | HR/Legal | LOI stage |
Sources informing compliance & regulator steps include MGA guidance on ownership changes and AML procedures, Curaçao LOK reform updates, and Kahnawà:ke regulatory updates.
Practical Notes on Structure
Asset vs. Share deal: Asset deals can avoid legacy liabilities but may require new licensing or fresh approvals; share deals keep licenses/PSPs in place but trigger change-of-control reviews. (Jurisdiction determines feasibility.)
Earn-outs & Seller Financing: Common where compliance or cohort durability is a question—tie tranches to net gaming revenue (NGR) or EBITDA and clear definitions of bonus cost, fraud losses, and PSP fees.
Escrow & CPs: Release tied to regulator nods, provider consents, and completion of technical migrations.
FAQ
1) Can I transfer my license to the buyer?
Not exactly. In most top jurisdictions, you don’t “transfer” a license; you execute a share sale (change in ownership) or the buyer must obtain its own license. Regulators like MGA require filings/approval for qualifying share changes; similar oversight exists in Kahnawà:ke and under Curaçao’s LOK regime. Plan your SPA conditions accordingly.
2) How long does the process take?
Typical ranges are 8–20 weeks from mandate to close, driven mostly by buyer diligence and regulator/provider approvals. Complex migrations or multi-geo footprints extend this. (Timeline guidance aligns with standard iGaming M&A workflows.)
3) Do I need to disclose AML/RG materials?
Yes—serious buyers and their counsel will review AML policies, monitoring evidence, and training logs (Malta’s sector-specific AML guidance is a good benchmark for the depth expected).
4) What kills deals most often?
Hidden compliance issues, provider/PSP contracts that block assignment, unclear IP ownership, and unreliable financials (bonus liability treatment, PSP reserves). Early data-room prep prevents value erosion.
5) We’re licensed in Curaçao—what should we expect?
The LOK reforms reshape licensing into B2C/B2B with tighter compliance. Expect buyers to scrutinize your transition plan, CGA touchpoints, and timing risk. Build that into LOI/SPA conditions.
6) Do I need a lawyer from day one?
Yes—engage counsel with iGaming regulatory expertise to map change-of-control steps and draft SPA/APA with regulatory conditions precedent, data protection, and earn-out mechanics. (Your broker coordinates workstreams.)
