Chinese investors buy Caesars’ games unit for $4.4 bn

Investors led by Chinese online games developer Shanghai Giant Network Technology agreed to buy Caesars Entertainment’s online casino-style games unit Playtika for $4.4 billion in cash, even as gambling remains illegal in the Asian country.

The consortium includes Yunfeng Capital, the private equity company founded by Alibaba Group Holding. Chairman Jack Ma, China Oceanwide Holdings Group, China Minsheng Trust, and Hony Capital Fund, the purchasers said on Sunday in a statement. Playtika will remain independently run from its headquarters in Herliya, Israel, they said.

The deal gives the Chinese buyers a foothold in a fast-growing segment of the gaming industry, as users turn to mobile applications over the PC- and consolebased systems. Organised gambling is illegal in China with the exception of licensed casinos in Macau, and while rules aren’t clear for online games, authorities have regularly raided operators.

“Despite the legal issues in China, these Chinese investors are more comfortable playing the long game,” Union Gaming Group analyst Grant Govertsen said. “Online gaming, eventually, should be massive after the various regulatory hurdles are worked out even if it takes a significant number of years.”