Aristocrat Leisure Suspends Mobile Gaming in Russia

Australian gambling giant Aristocrat Leisure is the latest in a long line of companies to suspend operations in Russia. Dozens of major companies are distancing themselves from the invasion of Ukraine by neighbouring Russia.

Goliath-like companies, including Shell, Exon Mobil, and Australian refiner Viva Energy have suspended, stopped, or limited business activities with Russia following the controversial invasion. Aristocrat announced the suspension of mobile gaming in Russia on March 9. Aristocrat does not envisage the move impacting its bottom line despite Russia having a population of 144.1 million residents. Indeed, only 3% of its Pixel United gaming division’s revenue stems from Russia.

Aristocrat’s Statement About Russia

“Aristocrat Leisure Limited today provided an update on its people and business operations in view of Russia’s invasion and the war in Ukraine, together with the imposition of significant sanction on Russia. The thoughts of all Aristocrat people are with our Ukraine colleagues and the team members who are supporting them at this difficult time.”

“The wellbeing and safety of our people remain our highest priority and Aristocrat’s Pixel United team continues to lead a comprehensive response. Approximately 1,000 people normally work for business units within Aristocrat’s Pixel United organisation in Ukraine. To date, Aristocrat has assisted over two-thirds of our Ukraine-based employees and their families to voluntarily relocate, either internationally or to safer locations within the country. We have set up a special task force in Poland to assist staff and families on the ground. Aristocrat is providing transport, visas and legal help, housing and settling-in assistance for relocated staff.”

“Unfortunately, operating in Russia is currently not viable and Aristocrat confirms it will suspend operating our mobile games in Russia. Russia has historically contributed approximately 3% of total annualised Pixel United bookings.”

PokerStars Suspends Activity in the Russian Market

World leader are imposing sanctions on Russia designed to cripple its economy and force President Vladimir Putin to at least rethink his invasion of Ukraine. By affecting Russian citizens and limiting their ability to lead their normal lives, the hope is they turn against President Putin.

Aristocrat’s announcement came on the same day online poker giant PokerStars suspended activity in Russian markets. A simple one-sentence Tweet broke the news.

“Important update: we are suspending all our services in Russia.”

PokerStars recently cancelled a planned live poker festival in Sochi, Russia, on safety grounds. Its players threatened a boycott of the site and its live poker tours if it did not act and ban Russian customers.

Although not known if this is the reason for this week’s suspension, PokerStars’ actions will not go unnoticed. Entain Plc is a major rival of PokerStars’ parent company, Flutter Entertainment. Entain pulled out of Russia on February 14. This was a strategic move and not linked to the invasion of Ukraine.

Aristocrat Is Not Acquiring Playtech Plc

The $3.9 billion acquisition of Playtech Plc by Aristocrat looks dead in the water. Aristocrat’s offer valued Playtech shares at 680 pence each. This was a 58% premium over the closing price when the Aussie giant lodged its offer.

Everything was moving along swimmingly but mergers and acquisitions rarely run without a hitch. Gopher Investments, a substantial shareholder in Playtech, was not keen on Aristocrat’s offer. However, it did not state why this is the case. Experts predicted a no vote from Gopher’s representatives when the offer when to a shareholder vote. Those predictions came true and resulted in Aristocrat failing to get 75% shareholder approval; it receive 56.13%.

“The total votes in favour of the resolutions were 56.13% at the Court Meeting and 54.68% at the General Meeting, which were below the minimum threshold (75% of hose shares voted) needed to approve the resolutions. Accordingly, the acquisition of Playtech by Bidco has been terminated and the scheme has lapsed.”