Gaming legend Lyle Berman, co-founder of Grand Casinos Inc. and a member of the American Gaming Association’s Gaming Hall of Fame, has formed a new company to take advantage of the burgeoning business in esports.
Berman formed a special-purpose acquisition company based in Minnesota, Black Ridge Acquisition Corp., to acquire World Poker Tour (WPT) Enterprises and the assets of Allied Sports International. The merged company, to be called Allied Esports Entertainment, will trade on the Nasdaq exchange under the symbol AESE.
Black Ridge will acquire Allied Esports International from China-based Ourgame International Holdings. The new company will issue about 11.6 million shares, valued at $118 million, to Ourgame, plus additional warrants and $50 million in milestone payments. The debt and equity deal is valued at $213.8 million by Thomson Reuters.
Berman, a director of Black Ridge, is expected to be chairman of Allied Esports Entertainment. Frank Ng, CEO of Ourgame, is expected to be named CEO of AESE.
The new company will have a presence in Minneapolis but will move its headquarters to Irvine, California, and will initially have 100 employees, according to the Star Tribune.
The combined revenue for WPT and Allied Esports International will be about $35.1 million in 2018 and is expected to grow to $108 million by 2020 and $208 million by 2021.
With Grand Casino, which later became Lakes Entertainment, Berman was a pioneer in the Indian gaming industry, developing Grand Casinos in Minnesota, as well as casinos in Mississippi and elsewhere. In 2016, Berman’s Lakes Entertainment merged with Golden Gaming to form Las Vegas-based Golden Entertainment Inc. Berman remains a director of the company and a minority shareholder.
Allied Esports is well-known in the esports sector, having developed the HyperX Esports Arena in Las Vegas. WPT, which stages the World Poker Tour, an event co-founded by Berman and formerly part of Lakes Entertainment. According to the report in the Star Tribune, Allied Esports Entertainment will use efforts pioneered by WPT, including in-person experiences, multi-platform content creation and interactive services to gain ground in the esports industry.