Element Partners, LLC is poised to become the new owner of the World Poker Tour (WPT), but internal conflicts within Ourgame International, which currently owns 30 percent of WPT’s parent firm Allied Esports, is delaying the entire acquisition process.
Element emerged victorious in a bidding war against Bally’s Corporation to acquire the WPT by upping the ante to $105 million back in March. But the private venture-capital firm will have to wait a little longer for the sale to get final approval, as Ourgame’s board of directors appear to be at odds with each other in terms of the manner by which proceeds of the sale would be distributed.
Things became too complicated and as a result three board members ended up being dismissed from their posts.
A shareholder vote to approve the sale of the WPT to Element Partners was supposed to take place on June 28, but according to an Allied Esports representative, they will now have to wait for a scheduled meeting within Ourgame on June 30 before the vote can proceed. This means that the vote will now be moved to a later date, after June 30. The new schedule has yet to be confirmed.
Conflict Among Ourgame Board Members Exposed
The internal turmoil within Ourgame was exposed in a series of early 2021 filings with the Hong Kong Stock Exchange. It appears that Allied Esports allowed Ourgame’s top brass to directly influence its handling of the initial acquisition offer from Element Partners back in November 2020. The bidding war with Bally’s was also supported by Ourgame, as stated in a May filing.
However, during the final stages of the sale, disagreements erupted within Ourgame’s leadership, resulting in the expulsion of three board members, namely, Fu Qiang, Hu Wen, and Gao Hong. It was found out that the three were facing massive debt, multiple lawsuits and fines for failing to comply with laws on filing corporate disclosures.
Hong also demanded that a significant portion of the proceeds of the WPT sale be funneled directly to another company wherein he also serves as one of the directors. The three allegedly threatened to “cause obstructions” to Ourgame’s operations if their demands weren’t fulfilled.
In an attempt to carry out some sort of a corporate coup, the three called an emergency meeting in May seeking to oust the remaining board members. While the plan did not succeed, it further delayed the approval of WPT’s sale to Element Partners.
Ourgame Maintains Significant Influence in WPT Sale
Ourgame and the WPT first partnered back in 2012 when both companies signed a five-year branding agreement, which paved the way for WPT’s expansion to China and across the Pacific Rim. On the same year, the tour was able to host its first-ever event in China, followed by other major events in the subsequent years.
In 2015, Ourgame fully acquired the WPT as part of a $35 million deal with the tour’s previous owner Bwin.party.
Under Ourgame, the WPT achieved more growth, expanding to more countries in Asia. However in 2018, China launched a crackdown on social poker apps targeting private poker clubs and poker app developers. Hundreds of individuals were arrested as a result, including six employees at Ourgame’s subsidiary Beijing Lianzhong Co. This hampered the growth of live poker in the region, affecting WPT’s Asian operations.
Ourgame was forced to stay out of poker, with Black Ridge Acquisition Corp, a company owned by WPT Chairman Lyle Berman, officially becoming the new owner of Allied Esports and the WPT via a deal initiated in 2018. Black Ridge would later rebrand to Allied Esports, trading on NASDAQ as “AESE”.
AESE’s leadership roles were assumed by executives from both Ourgame and the WPT. It was believed that Ourgame had let go of its poker assets altogether, but latest developments show that the company still owns a 30.6 percent stake in Allied Esports. This means that Ourgame can still very much influence the entire WPT sale process. Final approval is expected to be granted in July, or after Ourgame’s June 30 meeting.