Caliplay initiates legal action to sever partnership with Playtech

Mexican online casino and sports betting business Caliplay, known in the market as Caliente Interactive, has initiated legal proceedings against gambling technology provider Playtech in a bid to terminate their existing partnership.

Caliplay said, in a statement, that it has filed legal proceedings before the 46th Civil Court of Mexico City against Playtech plc and its subsidiaries Playtech Malta and Playtech Software Limited.

Caliplay seeks termination of its legal relationship with Playtech due to concerns about the partnership’s adverse impact on its regulated business operations in Mexico. This move follows the Mexican Court’s acceptance of jurisdiction over the claim on August 28th. The Court has also issued several interim orders pending the final resolution of the claim, including the suspension of certain rights held by Playtech under their agreements.

As a result of these interim orders, Playtech has been directed to continue providing software and services to Caliplay during the ongoing legal process. Notably, this requirement remains in place despite the suspension of other rights, including Playtech’s entitlement to receive payments from Caliplay for the aforementioned services.

“The claim seeks the annulment of the legal relationship between Caliplay, Playtech, and related parties contained in various contractual agreements. As such, it is directly relevant to the running of Caliplay’s regulated business in Mexico. This announcement has therefore been issued by Caliplay to ensure that its customers and business partners are made aware of the position and as an update to the market announcements previously issued by Playtech plc and Caliplay earlier this year (on February 6 and 10, respectively),” the statement said.

Caliplay said it is committed to maintaining a channel of communication with Playtech to resolve the dispute quickly. Caliplay is a joint venture between Playtech and Mexican operator Caliente.

Responding to the legal action, Playtech has stated that this announcement marks the first time it has been made aware of proceedings in Mexico, while also referring to Caliplay as a “highly valued customer.”

The matter traces its origins to February when Playtech turned to the English courts to seek clarification on a point of contention with Caliplay. The dispute centers around whether Caliplay retains the option to exercise the additional services fee component of their strategic agreement.

The companies had agreed that the amount payable by Caliplay to Playtech upon exercise would be determined either by mutual agreement between the two parties or, if not possible, by an independent investment bank valuing Playtech’s current entitlement to receive the additional services fee until December 31, 2034.

Playtech stated that the option to purchase Caliplay was exercisable for 45 days following the approval of Caliplay’s audited accounts for the year ending December 31, 2021. This option has since expired, as stated in Playtech’s interim report for the six months ending June 30, 2022.

Caliplay argues Playtech failed to include a reference to board approval in its announcement or its interim report for the six-month period ended 30 June 2022, published on 22 September 2022.