Israeli Investment Firm Leads $600 Million Deal for Online Casino Developer

Leading Israeli investment house Meitav Dash Pension and Provident Funds is in advanced negotiations to acquire a 15% to 20% stake in online casino game developer Sunflower. The potential deal values the private company at $3 billion to $3.5 billion, with the acquisition itself expected to be between $500 million and $600 million. Meitav Dash is slated to invest over $300 million, approximately one billion shekels, from its own funds.

Sunflower, founded in late 2022 by entrepreneurs Ram Mizrahi and Ben Goffer, has achieved significant success, primarily through its game Crown Coins Casino. The company generates annual revenues exceeding $2 billion and a net profit estimated at over $300 million. While other institutional bodies and international funds have approached Sunflower, the primary discussions are with the group led by Meitav Dash, which includes family offices and financial investors.

The deal faces considerable regulatory challenges. Sunflower operates using a Sweepstakes Casino model, which exploits a legal loophole in U.S. gambling laws. However, several U.S. states, including New York, California, and Illinois, have begun restricting this model. Consequently, the negotiations incorporate protective mechanisms and incentives to ensure investor returns in the event of legislative changes.

Currently, investor returns are primarily derived from ongoing dividend distributions. Looking ahead, an initial public offering (IPO) on foreign stock exchanges is being considered, contingent on a favorable regulatory environment. This investment follows Meitav Dash's recent notable investments in private companies such as EdgeConneX, Energetiq, and the Nunu and Mimi restaurant group.