F-1

As filed with the Securities and Exchange Commission on September 7, 2021.

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM F-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

NEOGAMES S.A.
(Exact Name of Registrant as Specified in its Charter)

NOT APPLICABLE
(Translation of Registrant’s Name into English)

Grand Duchy of Luxembourg
(State or other Jurisdiction of
Incorporation or Organization) 7999
(Primary Standard Industrial
Classification Code Number) Not Applicable
(I.R.S. Employer Identification Number)

NEOGAMES S.A.
5, RUE DE BONNEVOIE
L-1260 LUXEMBOURG, GRAND
DUCHY OF LUXEMBOURG
+352-2040119020

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)​

Puglisi & Associates
850 Library Avenue, Suite 204
Newark, DE 19711
302-738-6680

(Name, address, including zip code, and telephone number, including area code, of agent for service)​

Copies of all communications, including communications sent to agent for service, should be sent to:​

Joshua G. Kiernan
Nathan Ajiashvili
Latham & Watkins LLP
1271 Avenue of the Americas
New York, New York 10020
Tel: (212) 906-1200
Fax: (212) 751-4864 Gil White
Ron Ben-Menachem
Joshua Ravitz
Herzog Fox & Neeman
4 Weizmann Street
Tel Aviv 6423904, Israel
Tel: +972(3) 692-2020
Fax: +972(3) 696-6464 David J. Goldschmidt
Yossi Vebman
Skadden, Arps, Slate, Meagher & Flom LLP
One Manhattan West
New York, New York 10001-8602
Tel: (212) 735-3000
Fax: (212) 735-2000 ​ Sharon Rosen Alex Berman FISCHER (FBC & Co) 146 Menachem Begin Street Tel Aviv 6492103, Israel Tel: +972(3) 694-4111 Fax: +972(3) 609-1116  

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.​

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐​

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐​

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐​

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.​

Emerging growth company. ☒​

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐​

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

CALCULATION OF REGISTRATION FEE

Title of Each Class of  Securities to be Registered	Amount to be Registered(1)		Proposed Maximum Offering Price Per Share(2)		Proposed Maximum Aggregate Offering Price(1)(2)		Amount of Registration Fee
Ordinary shares, no par value		3,975,947	$	40.41	$	160,668,018	$	17,528.88

(1) Includes the aggregate offering price of additional ordinary shares that may be acquired by the underwriters if their option to buy additional shares is exercised in full. See “Underwriting.”

(2) Estimated solely for the purpose of computing the amount of the registration fee. In accordance with Rule 457(c) under the Securities Act of 1933, as amended, the maximum price per share and maximum aggregate offering price are based on the average of the $41.29 (high) and $39.52 (low) sale price of the registrant’s ordinary shares as reported on The Nasdaq Global Market on September 2, 2021, which date is within five business days prior to filing this Registration Statement.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.​

The information in this preliminary prospectus is not complete and may be changed. The selling shareholders ay not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and neither the Company nor any selling shareholder is soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 7, 2021

PRELIMINARY PROSPECTUS

3,457,346 ORDINARY SHARES

NO PAR VALUE

This prospectus relates to the resale by the selling shareholders named herein of 3,457,346 of our ordinary shares.

We are not selling any ordinary shares under this prospectus, and we will not receive any of the proceeds from the offer and sale of ordinary shares by the selling shareholders.

The underwriters may also exercise their option to purchase up to an aggregate of 518,601 additional ordinary shares from Caesars Entertainment, Inc., one of the selling shareholders, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus.

Our ordinary shares are listed on The Nasdaq Global Market under the symbol ‘‘NGMS.” On September 3, 2021, the closing price of our ordinary shares was $41.71 per ordinary share.

Investing in our ordinary shares involves risks. See “Risk Factors” beginning on page 20.

We are both an “emerging growth company” and a “foreign private issuer” under applicable United States Securities and Exchange Commission (the “SEC”) rules and are eligible for reduced public company disclosure requirements. See “Prospectus Summary — Implications of Being an ‘Emerging Growth Company’ and a ‘Foreign Private Issuer.’”

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Public Offering Price	$	$
Underwriting Discounts(1)	$	$
Proceeds to the Selling Shareholders (before expenses)	$	$

(1) We refer you to “Underwriting” for additional information regarding underwriting compensation.

The underwriters expect to deliver the shares to purchasers on or about September 14, 2021 through the book-entry facilities of The Depository Trust Company.

J.P. Morgan Deutsche Bank Securities

BofA Securities Macquarie Capital Truist Securities Stifel

                 , 2021

TABLE OF CONTENTS

Prospectus Summary	1
Risk Factors	21
Use of Proceeds	52
Dividend Policy	53
Capitalization	54
Management’s Discussion and Analysis of Financial Condition and Results of Operations	55
Business	73
Management	95
Principal and Selling Shareholders	101
Related Party Transactions	103
Description of Share Capital and Articles of Association	108
Shares Eligible for Future Sale	125
Material Tax Considerations	126
Underwriting	133
Expenses Related to the Offering	141
Legal Matters	142
Experts	142
Enforcement of Civil Liabilities	143
Where You Can Find More Information	145
Index to Financial Statements	F-1

You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We have not and the selling shareholders have not authorized anyone to provide you with different information. The selling shareholders are offering to sell, and seeking offers to buy, our ordinary shares only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of ordinary shares.

For investors outside the United States: Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our ordinary shares and the distribution of this prospectus outside the United States.

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ABOUT THIS PROSPECTUS

Except where the context otherwise requires or otherwise indicated, the terms “NeoGames” and the “Company” refer to NeoGames S.A. together with its consolidated subsidiaries, as a group, and the terms “we,” “us” and “our” refer to the Company, together with NeoPollard Interactive LLC (“NPI”), as a group.

References to the “Exchange Act” are to the Securities Exchange Act of 1934, as amended;

References to “Nasdaq” are to the Nasdaq Global Market;

References to “Ordinary Shares” are to the Company’s ordinary shares, no par value;

References to the “SEC” are to the United States Securities and Exchange Commission;

References to the “Securities Act” are to the Securities Act of 1933, as amended;

“B2B” means business-to-business;

“B2C” means business-to-consumer;

“B2G” means business-to-government;

“Gross Gaming Revenue” or “GGR” means gross sales less winnings paid to players;

“iLottery Penetration” means, with respect to the gross sales generated by either Instants, DBGs, an individual lottery or by lotteries within a given market, the percentage of such gross sales that was generated by iLottery offerings;

“Net Gaming Revenue” or “NGR” means (i) in North America, gross sales less winnings paid to players and any promotion dollar incentives granted to players, and (ii) in Europe, gross sales less winnings paid to players, any gambling tax or duty paid on such sales and any promotion incentives granted to players; and

References to “dollar,” “USD” and “$” are to U.S. dollars, “NIS” or “Shekels” are to New Israeli Shekels, “pound sterling,” “pence” or “£” are to the legal currency of the United Kingdom, “€” or “euro” are to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the treaty establishing the European Community, as amended, and “C$” is to Canadian dollars.

PRESENTATION OF FINANCIAL INFORMATION

We report under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”). None of the Company’s financial statements were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). We present our consolidated financial statements in U.S. dollars. NPI’s financial statements included in this prospectus were prepared in accordance with U.S. GAAP. We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them.

Throughout this prospectus, we provide a number of key performance indicators used by our management and often used by competitors in our industry. These and other key performance indicators are discussed in more detail in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Key Performance Indicators.”

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MARKET AND INDUSTRY DATA

Unless otherwise indicated, information in this prospectus concerning our industry, our markets and our competitive position is based on information from our own internal estimates and research as well as from publicly available information, industry and general publications and research, surveys and studies conducted by third parties such as the American Gaming Association, Eilers & Krejcik Gaming, GamblingCompliance, H2 Gambling Capital (“H2GC”) and La Fleur’s TLF Publications, in addition to reports from state lottery commissions.

Industry publications and forecasts generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. See “Cautionary Statement Regarding Forward-Looking Statements.”

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

We have proprietary rights to trademarks used in this prospectus which are important to our business, many of which are registered under applicable intellectual property laws.

Solely for convenience, the trademarks, service marks, logos and trade names referred to in this prospectus are without the ® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This prospectus contains additional trademarks, service marks and trade names of others, which are the property of their respective owners. All trademarks, service marks and trade names appearing in this prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that relate to our current expectations and views of future events. These forward-looking statements are contained principally in the sections titled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed in “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

In some cases, these forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions.

These forward-looking statements are subject to risks, uncertainties and assumptions, some of which are beyond our ability to control or predict. In addition, these forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Actual outcomes may differ materially from the information contained in the forward-looking statements as a result of a number of factors, including, without limitation, the risk factors set forth in “Risk Factors” and the following:

• we have a concentrated customer base, and our failure to retain our contracts with our existing customers could have a significant adverse effect on our business;

• we are dependent on Pollard Banknote Limited (“Pollard”) with respect to our joint operation of the Michigan iLottery;

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• we do not have a formal joint venture agreement or any other operating or shareholders’ agreement with Pollard with respect to NPI, our joint venture with Pollard, through which we conduct a substantial amount of our business;

• a reduction in discretionary consumer spending could have an adverse impact on our business;

• the growth of our business largely depends on our continued ability to procure new contracts;

• we incur significant costs related to the procurement of new contracts, which we may be unable to recover in a timely manner, or at all;

• intense competition exists in the iLottery industry, and we expect competition to continue to intensify;

• our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions;

• in addition to competition with other iLottery providers, we and our customers also compete with providers of other online offerings;

• the gaming and lottery industries are heavily regulated, and changes to the regulatory framework in the jurisdictions in which we operate could harm our existing operations; and

• while we have not experienced a material impact to date, the ongoing COVID-19 and similar health epidemics and contagious disease outbreaks could significantly disrupt our operations and adversely affect our business, results of operations, cash flows or financial condition.

Many important factors, in addition to the factors described above and in other sections of this prospectus, could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results or performance may be materially different from what we expect.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all the information that may be important to you, and we urge you to read this entire prospectus carefully, including the “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and our consolidated audited and condensed consolidated unaudited financial statements, including the notes thereto, included in this prospectus, before deciding to invest in our Ordinary Shares.

Overview

We are a technology-driven business that is an innovator in the lottery industry. As a global B2G and B2B technology and service provider to state lotteries and other lottery operators, we offer our customers a full-service solution that includes all of the elements required for the offering of lottery games, including Instants and DBGs (both as defined below), via personal computers, smartphones and handheld devices (“iLottery”). These elements include technology platforms, a range of value-added services and a game studio with a large portfolio of games. The value-added services that we offer facilitate various aspects of the iLottery offering including regulation and compliance, payment processing, risk management, player relationship management and player value optimization. Our complete solution allows our customers to enjoy the benefits of marketing their brands and generating traffic to their iLottery sales channels. We believe that we are the only full-service company exclusively focused on the iLottery industry.

NeoGames was established as an independent company in 2014, following a spin-off from Aspire Global Plc (formerly known as NeoPoint Technologies Limited) (“Aspire” and, together with its subsidiaries, the “Aspire Group”), a B2C and B2B service provider in the iGaming industry. Prior to the spin-off from Aspire, our management team was responsible for the iLottery business of Aspire, which derived the majority of its revenues from the sale of iLottery games to various lotteries in Europe. In 2014, we began to focus on the U.S. iLottery market, which opened in 2012 with the introduction of online lottery ticket sales in Illinois. In order to access this significant market opportunity, we partnered with Pollard, one of the leading vendors to the global lottery industry. In 2014, we entered into our first turnkey solution contract in the United States with the Michigan State Lottery (the “MSL”), as a sub-contractor to Pollard.

In July 2014 we formed NPI, a joint venture with Pollard, for the purpose of identifying, pursuing, winning and executing iLottery contracts in the North American lottery market. NPI combines our technology and iLottery business and operational experience with Pollard’s infrastructure, administrative capabilities and relationships with lotteries in North America. NPI is managed by an executive board of four members, consisting of two members appointed by NeoGames and two members appointed by Pollard. NPI has its own general manager and dedicated workforce and operates as a separate entity. However, it relies on NeoGames and Pollard for certain services, such as technology development, business operations and support services from NeoGames and corporate services, including legal, banking and certain human resources services, from Pollard.

Since its inception, NPI has secured iLottery contracts with the Virginia Lottery (the “VAL”), the New Hampshire Lottery Commission (the “NHL”) (as a sub-contractor to Intralot, Inc. (‘‘Intralot’’)), the North Carolina Education Lottery (the ‘‘NCEL’’) and the Alberta Gaming, Liquor and Cannabis Commission (the “AGLC”). All of our iLottery business in North America is conducted through NPI, except in Michigan, where the contract is between the MSL and Pollard and we support the Michigan iLottery as a subcontractor of Pollard. We continue to conduct all of our business outside of North America through NeoGames.

We are a 100% digital business that is using technology to transform the traditional retail-based lottery market. Lotteries are a crucial revenue source for our customers as they provide much-needed contributions to state budgets to fund public projects and initiatives.  The iLottery industry, and we as a company, benefit from long-term, multi-year contracts with our customers that generally start with an initial term of four to seven years with additional embedded extension option. Moreover, our software-as-a-service business model allows our platform to be highly scalable in a growing industry while benefitting from a visible revenue stream tied to our customers’ gaming revenues. There are also significant barriers to enter the iLottery industry due to complexities surrounding regulatory and government contracts and specialized technology requirements. Understanding these dynamics, we have developed a leading market position in the United States. We currently provide iLottery solutions to the largest number of U.S. iLottery customers, including the highest-grossing iLottery program in the United States (the Michigan iLottery). Our revenues (which, for reporting purposes, exclude our share of NPI’s revenues) for the six months ended June 30, 2021 were $26.2 million, an increase of 18.9% compared to our revenues of $22.1 million in the six months ended June 30, 2020, and our revenues for the year ended December 31, 2020 were $49.2 million, an increase of 48.8% and 40.8% compared to our revenues of $33.1 million and $23.5 million for the years ended December 31, 2019 and 2018, respectively.

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Global Customer Base

The Lottery Industry

Lottery is a well-established and accepted form of gambling that has been used to fund public projects and good causes. Forms of lotteries are offered through over 200 organizations around the world and generated gross sales of more than $300 billion in 2019, according to La Fleur’s 2020 World Lottery Almanac (“La Fleur’s”). These lotteries are typically operated or overseen by governments or state-owned organizations (which rely on private contractors) and serve an important role in funding state budgets. In the year ended December 31, 2019, U.S. lotteries generated $25.3 billion in profits for U.S. state governments, according to La Fleur’s. In turn, state governments use lottery profits to fund a wide range of socially beneficial causes including education, economic development, environment initiatives, healthcare, sports facilities, construction and infrastructure projects, cultural activities and tax relief. In our experience, many jurisdictions have come to rely on the proceeds from lottery operations as a significant source of funding for such causes.

In order to protect the lottery’s stability and dependability as a source of funding for government budgets, governments have instituted practices and protocols that prospective vendors to the lotteries must follow in order to compete for lottery contracts, including the:

•          use of complex official public procurement processes, requiring substantial commitments from participating vendors, such as performance bonds;

•          inclusion of termination at will provisions in contracts; and

•          requirement for specialized technology specifically for lottery that complies with lottery rules.

Governments also have tended not to frequently change lottery vendors while lottery operations are ongoing, to avoid the risks inherent to such change.

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Currently, the number of companies that service the lottery industry is limited given the meaningful cost and required expertise.

Though the forms of lottery games vary, the basic structure of all lottery games involves the drawing of numbers at random for the chance of winning a cash prize. Lottery has generally been separated into two primary products:

• draw based games (“DBGs”), such as Powerball, in which players select numbers and the winning combination or ticket is determined by a scheduled draw; and

• instant tickets (“Instants”) in which players can instantly reveal a pre-determined result through which they can learn whether their ticket entitles them to a prize.

Instants are relatively more popular in North America than in Europe, representing 61.3% of lottery gross sales in North America compared to only 28.9% of lottery gross sales in Europe during 2019. Retail gross sales from Instants totaled approximately $51.1 billion in the United States in 2019, according to La Fleur’s.

The global lottery industry has seen steady growth since 2003, with gross sales increasing at a compounded annual growth rate (“CAGR”) of 3.5%, according to H2GC. Growth in this market has been relatively uninterrupted by economic events or recessions, illustrating its stable nature. The industry’s steady performance is characteristic of its traditional game offerings, which have proved perpetually popular and have seen few dramatic innovations since the introduction of Instants in 1980. Traditionally, Instants and DBGs have only been distributed through retail channels. In the United States, which has been our main revenue driver for the past five years, lottery is offered in 45 states and the District of Columbia representing $91.1 billion in retail gross sales in 2020.

The iLottery Industry

Globally, lotteries are introduced through online sales channels in order to mitigate the effect of a maturing market, increase revenues and remain viable as an entertainment option in an increasingly competitive landscape. Certain European markets, which were early to adopt online lottery channels, have seen significant iLottery Penetration, particularly in countries like Norway (49.5% in 2018; $129 per capita), Finland (42.4% in 2018; $125 per capita) and the United Kingdom (31.1% in 2020; $48 per capita), according to GamblingCompliance. However, in the United States, where iLottery was introduced in 2012, iLottery Penetration has only exceeded 20% in Michigan.

iLottery Penetration in the U.S. and Select Mature European Markets

Source: GamblingCompliance, state lottery commissions.

¹ Represents digital sales as a percentage of total sales for the national lottery.

² Represents iLottery gross sales from Instants in Michigan, Pennsylvania, New Hampshire, Georgia and Kentucky as a percentage of total lottery gross sales from Instants in the United States.

The iLottery industry shares many characteristics with the traditional lottery industry, including an important role within government budgets, a high degree of regulation, limited competition and a long procurement process. These shared characteristics include:

• long sale cycles and substantial upfront investment;

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• long-term relationships with limited turnover; and

• growth alongside other forms of gambling.

iLottery has been able to grow alongside the traditional lottery, suggesting that typical iLottery players may have a distinct profile from that of typical traditional retail lottery players.

European Market Gaming Vertical GGR CAGR Comparison (2003-2019)

Source: H2GC. Includes European Union and United Kingdom.

¹ For 2007 – 2019 (as 2007 was the first year of available data in H2GC for the United Kingdom).

Industry Growth Drivers

The global iLottery industry has emerged as a fast growing segment within the global lottery market, with GGR increasing at a CAGR of 24.0% between 2003 and 2019, according to H2GC. The most significant drivers of this growth include technological improvements, changing player preferences and deregulation.

Deregulation for lotteries and online gambling activities has also contributed to industry growth. This trend has been particularly prevalent in the United States, in which the number of states offering iLottery solutions (excluding states that offer only subscription-based iLottery) has grown to nine since the first iLottery launched in 2012.

We believe that the success of these iLottery offerings and the increasing budgetary shortfalls in many U.S. states will accelerate the pace of deregulation and lead to further growth of the iLottery industry for several reasons:

• lottery plays a significant role in state budgets, which have been materially impacted by the COVID-19 crisis;

• public policy stakeholders generally view lottery games as a more socially acceptable form of gambling;

• lotteries, which effectively function as both regulator and operator, generally have more flexibility in their offerings compared to commercial casino operators; and

• lotteries are well-known, respected, long-established and generally accepted by local communities.

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Impact of COVID-19

As a leading provider of iLottery solutions, we have seen significant growth in revenues from existing and new players in recent periods, as the COVID-19 pandemic has shifted players to online entertainment. NGR for the six months ended June 30, 2021 increased by 16.2% and  113.9% in Michigan and New Hampshire, respectively, relative to the six months ended June 30, 2020. At the same time, monthly active players in Michigan and New Hampshire increased by 31.5% and 104.9%, respectively, between the six months ended June 30, 2020 and 2021. For more information on the impact of COVID-19 see “Business — Impact of COVID-19.”

Increase in NGR (1H 2021 vs 1H 2020)

Increase in Monthly Active Players (1H 2021 vs 1H 2020)

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Our Solutions and Services

We offer iLottery solutions through two distinct business lines — turnkey solutions and games. Our turnkey solutions are tailored to each customer and can include a combination of any of our platforms, value-added services and game studio. Our games offering is related to our game studio, but consists solely of offering our portfolio of iLottery games to lotteries.

We also provide certain software development services to the Aspire Group and NPI and sublicense certain platforms to William Hill Organization Limited (“William Hill”). For more information on our contracts with William Hill and Aspire, see “Related Party Transactions.”

Our Technology Platforms

NeoSphere

The central technology platform we offer, NeoSphere, delivers comprehensive iLottery capabilities through its player account management (“PAM”) module, and acts as the system of record for all transactions.

NeoDraw

   NeoDraw is one of only four central gaming systems certified by the U.S. Multi-State Lottery Association for the issuance, sale and operation of DBGs. The proprietary technology of NeoDraw has been developed specifically for the iLottery market and online players and is fully-integrated with the NeoSphere platform to facilitate the rapid implementation of DBGs as part of the complete turnkey solution.

NeoPlay

NeoPlay is the technology platform we offer that manages online Instants. It facilitates configurations, including prize tables, payouts, ticket series setups, ticket price points and many other variables, and supports channels, including mobile, desktop and applications.

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Our Services

With more than ten years of experience in the iLottery industry (including our management team’s operation of the iLottery business of Aspire), we have gained substantial knowledge and direct experience in the full spectrum of marketing and business operations which is essential to enable the revenue growth of our customers. The insights that we continue to gain from our broad view of analytics, game performance, player support, payment solutions management and more allows us to act as a strategic partner to our customers in jointly developing their iLottery businesses.

We provide services to our customers across four key areas: marketing operations, player operations, technology operations and business operations.

• Marketing operations  — we provide targeted marketing services and data analytics to our North American customers through the entire player life cycle, from digital acquisition and onboarding to game participation.

• Player operations  — leveraging years of experience managing players on behalf of our customers, we provide to our North American customers various services designed to offer the best possible experience to iLottery players.

• Technology operations  — these operations, which we provide to many of our customers, are meant to provide the full spectrum of monitoring and maintenance of the platforms we deploy for our customers and protect the integrity of our back-end iLottery software.

• Business operations — we facilitate payment processing services by third-party vendors and manage customer-facing personnel.

Our Game Studio

    We believe that, while operating the iLottery business of Aspire, we were the first to build a separate business unit exclusively for the development of iLottery games. We believe that we have one of the largest iLottery game portfolios in the global lottery industry, having produced more than 350 proprietary games.

We believe that the competitive advantage of our exclusive focus on iLottery platforms also extends to our game studio. Games offered by lotteries need to comply with strict regulations and guidelines. We believe that our focus solely on iLottery enables us to produce the best iLottery games that meet such regulations and guidelines, while providing an entertaining and diverse player experience. We believe this ability is derived from our vast experience and deep understanding of the boundaries established by such regulations and guidelines and our proven ability to “innovate inside the box.”

Our Competitive Strengths

Technology design and flexibility

Our focus on iLottery allows us to prioritize the improvement of our iLottery technology and services ahead of other business opportunities. We believe that our focus on iLottery solutions, building upon years of expertise and deep exposure to U.S. customers, has given us a superior understanding of iLottery customers and players that allows us to continue to outperform our competitors in iLottery solutions and games.

In-house game studio

We have produced more than 350 proprietary iLottery games, and we operate our own in-house game studio. Historically, our games have performed strongly relative to our competitors’ in terms of profitability and popularity. Our game studio allows us to offer our customers a complete solution, while certain of our competitors must use third-party vendors in order to provide their customers with games. In addition, our extensive game portfolio allows us to extend our customer base to customers who do not need our full turnkey solution, but are looking to expand their online games offering for greater variety of entertaining content.

7

 

iLottery business operations experience

Our experience as a B2C and B2B gaming operator, initially within Aspire, followed by years of hands on experience managing players on behalf of our U.S. customers as part of our player operations service, has helped inform how we manage and engage iLottery players. We have also gained substantial knowledge about the iLottery market and its participants in the past decade through our operations in Europe and the United States. Our experience provides us a deep understanding of the characteristics of iLottery players, allowing us to customize our solutions to such players’ needs and interests.

Time to market

We have deployed our turnkey solution to more U.S. lotteries that engaged a full-service iLottery provider than any of our competitors. The experience we gained in such deployments has allowed us to improve our implementation process and shorten our time to market. In addition, because our central lottery system is already fully-integrated with our turnkey solution, we are able to reduce the complexity, resources and time involved in the integration of third-party systems, which also contributes to shorter time to market. For example, we launched our turnkey solution for the NHL within seven months of being awarded the contract.

Brand awareness and credibility

Given the important role of lotteries in government budgets, winning the trust of customers is critical for lottery platform and service providers to be awarded new contracts, and reputation and brand are important to winning that trust. While only entering the U.S. market in 2014, we believe we have emerged as a well- known and respected name in the iLottery industry in the United States and globally because of our performance supporting our customers’ growth. The Michigan iLottery has served as a model to other U.S. states seeking to offer iLottery, and we believe that state lotteries are aware of our operating acumen and the role our technology has played in driving that success.

Cooperation with various market players

Our openness to pursue opportunities that bring together strengths from different vendors has brought us to successfully cooperate with other vendors in the iLottery industry. We believe this approach allows us access to contracts that would otherwise have not been available for public procurement. For example, with respect to the NHL, we serve as a sub-contractor to Intralot and, with respect to the AGLC, we are cooperating with International Game Technology PLC (‘‘IGT’’) to offer access to their suite of casino games, an area in which they specialize, to the benefit of the offering. We expect to continue to see similar opportunities, including opportunities to provide our successful game portfolio in cooperation with other vendors to the benefit of the state lotteries.

Our Growth Strategy

Our growth strategy is built upon five pillars:

• expanding the penetration of our existing customer contracts;

• winning new turnkey contracts in the United States;

• growing our game studio customer base;

• expanding the scope of our existing customer contracts; and

• expanding our range of offerings and geographical presence.

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Increase iLottery Penetration within Existing Customer Contracts

Our performance in Michigan proves a compelling case study on our potential to disrupt a market for the better. Since its launch in 2014, the Michigan iLottery has accounted for a growing percentage of gross sales from Instants in Michigan. In the twelve months ended September 30, 2020 (the most recently completed fiscal year of the Michigan iLottery), our iLottery Penetration of Instants was 43.7% and iLottery Penetration of total lottery sales was 34.0%. From fiscal year 2014 to 2020, the CAGR of Instants sales in Michigan was 25.7%, and the CAGR of gross lottery sales in Michigan over the same period was 13.7%.

Instants in Michigan: Gross Sales and iLottery Penetration

Source: Michigan Lottery, GamblingCompliance. Represents fiscal years.

Over this same period, gross sales from Instants in Michigan have grown significantly faster than lottery sales in Michigan and elsewhere in the United States.

Michigan Lottery Outperformance: Gross Sales CAGR (2014-2020)¹

Source: MSL, GamblingCompliance. Represents fiscal years.

¹ Some states calculate gross sales in different ways than others. In New Hampshire, for example, the reported total lottery gross sales includes the GGR from iLottery Instants as opposed to the gross sales from iLottery instants. Due to a lack of uniform disclosure and available information, this figure is based on the sales as reported for all states excluding Michigan.

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This increase in gross sales directly leads to a surge in GGR, on which our revenues are based. The below table presents Michigan’s iLottery GGR from Instants by fiscal year. In the twelve months ended September 30, 2020 (the most recently completed fiscal year of the Michigan iLottery), GGR per capita from Instants was $22.

Michigan iLottery GGR from Instants ($mm, Except Per Capita)

Source: MSL, GamblingCompliance. Represents fiscal years.

Our more recent turnkey solution launches have experienced even quicker success than we experienced in Michigan, driven by our improved product, operational acumen, and favorable market conditions. In Virginia, for example, we launched our turnkey solution in July 2020 and experienced first month per capita gross sales of $4.06.

First Month Per Capita iLottery Gross Sales

  

Source: iGBNorth America

In the first six months of operation ended December 31, 2020, the VAL saw $281.3 million in iLottery gross sales, representing 19.0% of the VAL’s total gross sales during the period.

iLottery Penetration (Instants) by State (FY 2020)

                                                                                          

Source: State lottery commissions.

¹ Represents VAL’s total (Instants and DBG) iLottery Penetration in the first six months of operation (July — December 2020). VAL publishes information regarding iLottery Penetration of Instants and DBG only on an aggregate basis.

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Virginia iLottery Gross Sales (Instants) ($mm)¹

Source: Company data, GamblingCompliance.

1.     Source: Eilers& KrejcikGaming’s U.S. iLottery Tracker – 1Q21.

2.     Includes Michigan, New Hampshire and Virginia. Excludes North Carolina, which offered only DBGs online during this time period.

3.     Includes Pennsylvania, Kentucky and Georgia.

December 2020 Gross iLottery Sales per Capita¹

Source: Eilers& KrejcikGaming’s U.S. iLottery Tracker – 1Q21.

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Based on our prior experience in certain European markets, we believe there remains considerable room for growth above the current level of iLottery Penetration in the United States. Leveraging our operational expertise and technology, we plan to work closely with our customers to strengthen the reach of our offering in each market.

Increase Scope of Existing Customer Contracts

Certain of our contracts only include some of the platforms and services we can provide. We believe there is significant potential to offer additional games and services, including feature enhancements, to our existing customers in the future. For example, when we procured our contract with the VAL in 2015, we offered only online subscription DBGs. However, in March 2020 following a change in legislation, the VAL chose to expand our contract to include both Instants and DBG offerings. The offering under the expanded contract launched in July 2020 and has an initial term through 2026 plus the option to extend for five additional years. A number of our contracts are in their early years and, as such, provide us ample time to expand the offerings we provide to our existing customers.

   We believe the scope of services that we can provide to our current customers, directly or indirectly, is broad, as evidenced by our most recent turnkey customer contract, launched in September 2020, pursuant to which we provide the AGLC with their full suite of online gaming offerings including iLottery, casino games, sports betting, poker, live dealer games and bingo. We are also responsible for marketing initiatives undertaken by the lottery, which we believe will enhance the overall experience for players.

We have gained substantial knowledge about the iLottery market and its participants in the past decade through our operations in Europe and the United States, and our experience provides us with a deep understanding of the characteristics of iLottery players, allowing us to customize our solutions to such players’ needs and interests. We believe this will lead to a stronger relationship with our customers.

Win New Contracts in the United States

   We are a market leader in iLottery in the United States. With 67% market share of U.S. iLottery gross wagers in the second quarter of 2021 according to Eilers& Krejcik Gaming’s U.S. iLottery Tracker, we drive a majority of U.S. iLottery GGR.

   We continuously seek to expand our operations by securing new contracts. While lottery is offered in 45 states and the District of Columbia, online Instants or DBGs are currently offered in only nine states and the District of Columbia (excluding states that offer only subscription-based iLottery). As a result, 77% of the U.S. population in states that offer lotteries do not currently have access to iLotteries. We believe that many more states will elect to offer iLottery, and we believe we will continue to win new contracts.

 

Current United States iLottery Landscape¹

¹ Excludes New York and North Dakota, which sell online subscription-only limited game portfolios.

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Population in U.S. States with State Lotteries

Sources: La Fleur’s 2020 World Lottery Almanac; Eilers & Krejcik Gaming.

2Q21 U.S. iLottery Gross Wager Market

Share by Platform Provider

Source: Eilers& KrejcikGaming’s SGMS includes ND and IGT includes NY, both of which offer online subscriptions.

Grow our Game Studio Customer Base

As we have observed in the evolution  of iGaming,  where  the market moved from  single content  vendors to a large number of content providers, the strong performance of our games places us in a good position to capitalize on the content expansion trend that is now beginning to develop in the lottery market as we see lotteries look for new and innovative games from providers  other  than  their  incumbent  iLottery  provider. Our ‘Queen of Diamonds’ game was named the world's highest grossing iLottery game in 2017 by La Fleur's magazine.

 

We intend to further expand our revenue base by offering our popular iLottery games to new customers who use the platforms of other iLottery providers. We currently operate four contracts in Europe pursuant to which we only provide games, and we plan to expand this offering model into the United States. This will   allow us to realize a greater share of iLottery GGR and to benefit from additional states adding an iLottery offering.

We expect that this expanded offering of our games will be enhanced by upward trends in the market related particularly to Instants. In iLottery, as in traditional lottery, Instants are more popular in North America than in Europe, representing 75.7% of the North American iLottery market in 2019 compared to only 12.0% of the European iLottery market, according to La Fleur’s 2020 Internet Report. In the United States, the popularity of Instants has contributed to the growth in lottery sales as a whole. We also believe that Instants benefit from a “cross-sell” of players acquired through the more commonly known DBGs but attracted to Instants for their entertaining experience. As a market leader in online Instants, we are well positioned to take advantage of this potential market opportunity.

Michigan: Gross Sales from Instants as a Percentage of Total Lottery Gross Sales

Source: Michigan State Lottery. Represents fiscal years.

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Michigan and New Hampshire iLottery GGR (FY 2020)

Expanding our Range of Offerings and Geographical Presence

We are currently focused on expanding our North American business to become the dominant iLottery provider in the market. In doing so, we invest our resources and expertise into building top-tier iLottery technology and content. With a history of successful iLottery offerings developed for the North American market, we believe we have the ability to expand our offerings around the world. While we are currently focused on the North American market, we may decide to pursue additional opportunities around the world in the future.

We have already demonstrated our ability to provide successful offerings internationally. Our contract with Sazka in the Czech Republic was signed in 2015 and was renewed in 2020 for a term that extends through 2025. This contract includes a full online gaming solution with Instants, DBGs, and online casino, as well as the integration of a sport betting solution. The Czech Republic has a population of 10.7 million, and Sazka generated €286 million of revenue in the Czech Republic in fiscal year 2019, according to Sazka’s annual report.

Furthermore, while we have focused our efforts on iLottery technology and content so far, we may decide to pursue additional opportunities, such as the offering of gaming products like online casino and sports betting. As demonstrated by our PAM development for William Hill and the broad scope of services we provide to Sazka and the AGLC, we believe that we can expand our offering to other gaming products.

Expanding our Range of Offerings and Geographical Presence

We are currently focused on expanding our North American business to become the dominant iLottery provider in the market. In doing so, we invest our resources and expertise into building top-tier iLottery technology and content. With a history of successful iLottery offerings developed for the North American market, we believe we have the ability to expand our offerings around the world. While we are currently focused on the North American market, we may decide to pursue additional opportunities around the world in the future.

We have already demonstrated our ability to provide successful offerings internationally. Our contract with Sazka in the Czech Republic was signed in 2015 and was renewed in 2020 for a term that extends through 2025. This contract includes a full online gaming solution with Instants, DBGs, and online casino, as well as the integration of a sport betting solution. The Czech Republic has a population of 10.7 million, and Sazka generated €286 million of revenue in the Czech Republic in fiscal year 2019, according to Sazka’s annual report.

Furthermore, while we have focused our efforts on iLottery technology and content so far, we may decide to pursue additional opportunities, such as the offering of gaming products like online casino and sports betting. As demonstrated by our PAM development for William Hill and the broad scope of services we provide to Sazka and the AGLC, we believe that we can expand our offering to other gaming products.

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Corporate Information

We were organized under the laws of the Grand Duchy of Luxembourg (“Luxembourg”) as a private limited liability company (société à responsabilité limitée) on April 10, 2014 and converted into a public limited liability company (société anonyme) under the laws of Luxembourg on November 10, 2020. As part of the conversion we executed a 1:8.234 reverse share split. Our registered office is located at 5, rue Bonnevoie, L-1260 Luxembourg, Grand Duchy of Luxembourg and our telephone number at this address is +352-2040119020.

Our principal executive offices are located at 10 Habarzel Street, Tel Aviv, 6971014, Israel. Our telephone number at this address is +972-73-372-3107. Our website address is https://www.neogames.com. The information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus. We have included our website address as an inactive textual reference only.

Risks Associated with Our Business

Our business is subject to a number of risks of which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth in the “Risk Factors” section in deciding whether to invest in our securities. Among these important risks are the following:

• we have a concentrated customer base, and our failure to retain our existing contracts with our customers could have a significant adverse effect on our business;

• we are dependent on Pollard with respect to our joint operation of the Michigan iLottery;

• we do not have a formal joint venture agreement or any other operating or shareholders’ agreement with Pollard with respect to NPI, through which we conduct a substantial amount of our business;

• a reduction in discretionary consumer spending could have an adverse impact on our business;

• the growth of our business largely depends on our continued ability to procure new contracts;

• we incur significant costs related to the procurement of new contracts, which we may be unable to recover in a timely manner, or at all;

• intense competition exists in the iLottery industry, and we expect competition to continue to intensify;

• our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions;

• in addition to competition with other iLottery providers, we and our customers also compete with providers of other online offerings; and

• the gaming and lottery industries are heavily regulated, and changes to the regulatory framework in the jurisdictions in which we operate could harm our existing operations.

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Implications of Being an “Emerging Growth Company” and a “Foreign Private Issuer”

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of exemptions from certain reporting requirements that are applicable to other publicly traded entities that are not emerging growth companies. These exemptions include:

• not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes- Oxley Act of 2002 (the “Sarbanes-Oxley Act”);

• not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

• not being required to submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes;”

• not being required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation; and

We may take advantage of these provisions until the last day of our financial year following the fifth anniversary of the completion of our initial public offering or such earlier time that we are no longer an emerging growth company. As a result, we do not know if some investors will find our Ordinary Shares less attractive. The result may be a less active trading market for our Ordinary Shares, and the price of our Ordinary Shares may become more volatile.

We will remain an emerging growth company until the earliest of: (i) the last day of the first financial year in  which our  annual gross revenues exceed $1.07 billion; (ii) the last day of the financial year following the fifth anniversary of the completion of our initial public offering; (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Ordinary Shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter; or (iv) the date on which we have issued more than $1 billion in non-convertible debt securities during any three-year period.

We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

• the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

• the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

• the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specific information, or current reports on Form 8-K, upon the occurrence of specified significant events.

Both foreign private issuers and emerging growth companies are also exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company, but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer. Additionally, as a foreign private issuer whose shares are listed on Nasdaq, we have the option to follow certain home country corporate governance practices rather than those of Nasdaq, including with respect to the requirement of a majority independent board. Although we have not chosen to follow and home country rules as of the date of this offering, we may choose to do so in the future.

16

Recent Developments

Since our initial public offering in November 2020, the following events have occurred:

• Pollard signed a four-year extension of the MSL Agreement through July 2026.

 

• We launched Instant games with the Austrian Lotteries (Österreichische Lotterien) and signed contracts to offer Instant games with the Ukranian National Lottery and with Lottomatica in Italy.

• We introduced a linked multi-game progressive jackpot in New Hampshire with plans to introduce across other markets.

• We were issued supplier licenses in Virginia, West Virginia, Michigan and Tennessee as part of the WHG License (as defined below) granting an affiliate of William Hill, a subsidiary of Caesars Entertainment, Inc. (“Caesars”) and our largest shareholder, access to our NeoSphere platform.

• We appointed Lisbeth McNabb as a member of our board of directors and chairperson of its audit committee.

• On August 30, 2021, our board of directors allocated up to 135,000 restricted share units, or RSUs, for award to employees in amounts to be determined by management. The RSUs will be granted under the Company's 2020 Incentive Award Plan and will vest in four equal annual installments commencing on January 1, 2022.

• We obtained a pre-ruling from the Israeli Tax Authority regarding the transfer of certain intellectual property rights relating to the online lottery business of NeoGames S.A. to its wholly owned Israeli subsidiary, NeoGames Systems Ltd. (“NGS”). See “Material Tax Considerations – Tax Ruling of the Israeli Tax Authority.”

 

• The U.S. Department of Justice declined to appeal the decision of a U.S. federal court of appeals supporting a lower court decision that the U.S. federal Wire Act of 1961 was only applicable to sports betting and related activities.

 

• In conjunction with this offering, we expect to enter into a $100 million revolving credit facility with J.P. Morgan Securities LLC and Deutsche Bank Securities Inc., two of the underwriters of this offering. See "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources."

• William Hill was acquired by Caesars in April 2021.

17

THE OFFERING

 

Ordinary shares offered by the Selling Shareholders 3,457,346 Ordinary Shares (3,975,947 Ordinary Shares if the underwriters exercise their option to purchase additional Ordinary Shares Selling Shareholders from the selling shareholders in full)

Ordinary shares issued and outstanding 25,520,666 Ordinary Shares

Selling Shareholders See “Principal and Selling Shareholders.”

Use of proceeds We will not receive any proceeds from the sale of the Ordinary Shares in this offering. See “Use of Proceeds.”

Dividend policy We do not anticipate paying any cash dividends on our Ordinary Shares in the foreseeable future. See “Dividend Policy.”

Risk factors See “Risk Factors” and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in our Ordinary Shares.

Listing Our Ordinary Shares are listed on The Nasdaq Global Market under the symbol “NGMS.”

    Unless otherwise indicated, the number of our Ordinary Shares issued and outstanding is provided as of August 14, 2021 and excludes the following:

• 1,182,566 Ordinary Shares issuable upon the exercise of share options outstanding as of August 14, 2021 at a weighted average exercise price of $2.98 per share; and

• 57,024 Ordinary Shares reserved for future issuance under our 2020 Incentive Award Plan, or the 2020 Plan, as of August 14, 2021, and Ordinary Shares that may become available pursuant to provisions in the 2020 Plan that automatically increase the share reserve under the 2020 Plan.

Unless otherwise indicated, all information contained in this prospectus assumes or gives effect to:

• no exercise of the outstanding options described above after August 14, 2021; and

• no exercise by the underwriters of their option to purchase additional Ordinary Shares from the selling shareholders in this offering.

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SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

NeoGames prepares its consolidated financial statements in accordance with IFRS as issued by IASB.  The following summary consolidated statement of operations data for the years ended December 31, 2020, 2019 and 2018 and summary consolidated statement of financial position data as of December 31,2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The following summary consolidated financial statement of operations data for the six months ended June 30, 2021 and 2020 and summary consolidated statement of financial position data as of June 30, 2021 have been derived from the unaudited financial statements included elsewhere in this prospectus. Our historical results do not necessarily indicate results expected for any future period.

The financial data set forth below should be read in conjunction with, and are qualified by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included elsewhere in this prospectus.

Statement of Operations Data:

	Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2020			2019			2018
	Unaudited						Audited
(in thousands)
Revenues	$	26,236		$	22,071		$	49,202		$	33,062		$	23,478
Distribution expenses		5,086			2,863			6,685			4,252			4,519
Development expenses		4,174			3,436			7,452			6,877			5,782
Selling and marketing expenses		607			764			1,483			1,981			1,457
General and administrative expenses		5,542			3,252			7,496			4,957			4,948
Initial public offering expenses		—			1,089			2,796			—			—
Depreciation and amortization		6,907			5,539			11,657			9,685			7,759
Profit (loss) from operations		3,920			5,128			11,633			5,310			(987	)
Interest expense with respect to funding from related parties		2,414			2,053			4,343			3,792			2,309
Finance income		—			(22	)		(21	)		(53	)		—
Finance expenses		235			482			747			382			195
Profit (loss) before income taxes expense		1,271			2,615			6,564			1,189			(3,491	)
Income taxes expense		(1,069	)		(426	)		(1,443	)		(1,243	)		(586	)
Profit (loss) after income taxes expense		202			2,189			5,121			(54	)		(4,077	)
Company’s share in gains (losses) of NPI		6,523			(676	)		1,393			(3,924	)		(1,898	)
Net and total comprehensive income (loss)	$	6,725		$	1,513		$	6,514		$	(3,978	)	$	(5,975	)

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Statement of Cash Flows Data:

	Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2020			2019			2018
	Unaudited						Audited
(in thousands)
Net cash provided by operating activities	$	8,828		$	8,819		$	24,518		$	15,040		$	5,378
Net cash used in investing activities		(1,613	)		(7,418	)		(12,696	)		(17,424	)		(11,721	)
Net cash provided by (used in) financing activities		(1,587	)		(702	)		41,929			5,166			6,000
Net increase (decrease) in cash and cash equivalents	$	5,628		$	699		$	53,751		$	2,782		$	(343	)

Statement of Financial Position Data:

	As of June 30, 2021		As of December 31, 2020
	Unaudited		Audited
(in thousands)
Cash and cash equivalents	$	65,395	$	59,767
Total assets		105,896		94,585
Total liabilities		47,079		43,764
Total equity		58,817		50,821

Key Performance Indicators (unaudited):

 

	Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2020		2019		2018
	(in millions, except for monthly active players)
Network GGR(1)	$	411	$	194	$	482	$	213	$	153
Network NGR(2)	$	383	$	181	$	448	$	203	$	147
Monthly active players(3)		​636,119		​394,117		​437,524		277,005		207,349

_________________________________

(1) We define “GGR” as gross sales less winnings paid to players. We measure Network GGR as the total GGR generated by Instants and DBGs on our platform.

(2) We define “NGR” as (i) in North America, gross sales less winnings paid to players and any promotion dollar incentives granted to players, and (ii) in Europe, gross sales less winnings paid to players, any gambling tax or duty paid on such sales and any promotion dollar incentives granted to players. We measure Network NGR as the total NGR generated by Instants and DBGs on our platform.

(3) We define an “active player” as a player who took at least one action on our platform in any given month that resulted in a financial transaction. We track the number of active players for each of the customers using our turnkey solutions. We define “monthly active players” for a given period as the average of the number of active players in each month during that period.

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RISK FACTORS

You should carefully consider the risks described below before making an investment decision. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. The trading price and value of our Ordinary Shares could decline due to any of these risks, and you may lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus.

Risks Relating to Our Business and Industry

We have a concentrated customer base, and our failure to retain our existing contracts with our customers could have a significant adverse effect on our business.

     Our financial condition is heavily dependent on our ability to maintain our existing turnkey contracts and our large games contracts. We cannot guarantee that our existing contracts will be renewed or that we will be able to win a procurement process for a new contract. Even if we are successful in renewing agreements with customers, there is no assurance that such renewals will be on the same terms, and it is possible that renewals of existing agreements will be on less preferable terms. This has occurred in the past when certain customers required certain concessions upon the renewal of existing agreements. As is typical with many government contracts, most of our customers can terminate our contracts for convenience. Loss of any of our customer contracts would result in a substantial decline in our revenues, which also could hinder our ability to pursue growth initiatives, both in the form of new or enhanced products and services and in expansion into new markets. The loss of any of our customers could damage our reputation, which could materially damage our financial condition.

We are dependent on Pollard with respect to our joint operation of the Michigan iLottery for the MSL.

We act as a subcontractor to Pollard with respect to its agreement (the “MSL Agreement”) to provide development, implementation, operational support and maintenance (including technology platforms, games and added value services) to the Michigan State Lottery (the “MSL”). The Michigan iLottery accounted for 49.7% of our revenues in the six months ended June 30, 2021, 54.5% of our revenues in the year ended December 31, 2020 and 40.2% of our revenues in the year ended December 31, 2019.

If Pollard breaches or does not perform its obligations under the MSL Agreement to the satisfaction of the MSL or if there is otherwise a dispute between Pollard and the MSL, the MSL could seek to terminate the MSL Agreement prior to its expiration or seek to amend the terms of the MSL Agreement in a manner that would negatively impact the financial and other benefits we derive indirectly from the MSL Agreement. In addition, such an amendment to the MSL Agreement could cause Pollard to seek to amend the terms of our agreement with Pollard with respect to the MSL (the “Michigan JV Agreement”) in a way that is less favorable to us. If the MSL terminates the MSL Agreement or if any disputes arise between Pollard and the MSL, our business, financial conditions and results of operations could be adversely affected as a result of our association with Pollard and the MSL.

We do not have a formal joint venture agreement or any other operating or shareholders’ agreement with Pollard with respect to NPI, through which we conduct a substantial amount of our business.

In 2014, following the procurement process for the predecessor to the MSL Agreement, we and Pollard established NPI to pursue other iLottery opportunities in the North American market. While the current MSL Agreement remains between Pollard and the MSL, NPI has since been awarded iLottery contracts with the Virginia Lottery (the “VAL”) in August 2015, the New Hampshire Lottery Commission (the “NHL”) in September 2018 (as a subcontractor to Intralot, Inc. (“Intralot”)), the North Carolina Education Lottery (the “NCEL”) in October 2019 and the Alberta Gaming, Liquor and Cannabis Commission (the “AGLC”) in March 2020.

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Although we and Pollard have certain rights and obligations prescribed by law as equity holders of NPI, there is no joint venture agreement, shareholders’ agreement or any other type of operating agreement between us and Pollard with respect to NPI, and we and Pollard operate NPI based on a term sheet that was executed in 2014 and expired in 2015. While to date the parties have been successfully operating NPI on the basis of non-contractual understandings, the absence of a written agreement with clearly defined rights, roles and responsibilities of each party may increase the likelihood of disputes between us and Pollard and could make the outcome of any potential dispute more uncertain. Furthermore, conducting a business through a jointly-owned entity such as NPI entails risks that are commonly associated with joint ventures, including the failure to maintain a good working relationship, differing economic and business interests and goals, and liability or reputational harm resulting from each other’s actions. Differences in views between us and Pollard, or a change in the ownership of Pollard, may also result in delayed decision-making or disputes at the shareholder and board level that could negatively impact the operations of NPI and its relationship with customers.

Upon the termination of the Michigan JV Agreement, neither we nor Pollard will be obligated to cooperate with each other in pursuing iLottery opportunities in North America, and both we and Pollard may choose to pursue future iLottery opportunities without each other. The termination of our business relationship with Pollard would pose several potential risks for us. In the event that our relationship with Pollard is terminated, there can be no assurance that any of NPI’s employees will remain with NPI. In addition, Pollard manages the procurement process, and our ability to pursue new contracts in North America may be hindered as a result of a need to build certain legal, administrative and customer relations capabilities and functions in our North American operations, which Pollard currently contributes to NPI and which we do not currently offer in North America. As such, if we pursue future opportunities alone, we cannot assure you that we will be able to secure additional contracts in North America. Further, if we decide to collaborate with new partners with whom we have no prior relationship or track record of successful cooperation, we may fail to achieve the same degree of success that we have achieved with Pollard. We may also be delayed in pursuing future opportunities if we are required to negotiate new agreements and business arrangements with these new partners, and the terms we negotiate with these new partners may be less favorable than those we currently have with Pollard.

A reduction in discretionary consumer spending could have an adverse impact on our business.

Lottery and gaming represent discretionary expenditures, which are subject to volatility during times of economic, social and political change. Changes in discretionary spending or player preferences are driven by changes outside of our control, such as, but not limited to, the following economic or socio-political factors:

• recessions or other economic slowdowns;

• perceptions by potential players of weak or weakening economic conditions;

• tax increases, including on lottery winnings;

• significant declines in stock markets;

• decreased liquidity in certain financial markets;

• general tightening of credit;

• civil unrest, terrorist activities or other forms of socio-political turbulence; and

• pandemics, epidemics and the spread of contagious diseases.

We generate the majority of our revenues from customer contracts based on a revenue sharing model, with our portion calculated as a percentage of GGR or NGR. Widespread reductions in disposable income could lead to a reduction in the number of lottery players and the amounts such players are willing and able to wager. Given the nature of our revenue sharing arrangements, fewer players and lower spending per player could have a significant adverse effect on our business.

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Because our customers’ offerings are typically available only to players within their geographic borders, our revenue is highly concentrated in a limited number of locations. A significant portion of our revenue is generated from the Michigan iLottery, and any adverse impact resulting from any of the foregoing economic factors would be magnified to the extent that it disproportionately impacts players in Michigan or other jurisdictions from which we derive revenues.

As our revenue sharing arrangements result in an intertwined relationship between our and our customers’ financial condition, we also face significant risks during times of uncertain and unfavorable economic and socio-political conditions affecting our customers. Unfavorable economic and socio-political factors and conditions could result in budgetary and liquidity concerns for our customers, which may reduce the likelihood that we will be able to renew our existing contracts on substantially similar commercial terms or win new contracts with terms as favorable to us as the terms of our existing contracts.

The growth of our business largely depends on our continued ability to procure new contracts.

While much of our revenue growth over the past few years has come from increasing NGR generated by the Michigan iLottery, and we expect the Michigan iLottery to continue to account for a large portion of our revenues, the addition of new iLottery contracts has begun to contribute substantially to the growth of our business. In particular, NPI began recognizing revenues from new turnkey contracts supporting the NHL and the NCEL in 2018 and 2019, respectively, and these two contracts accounted collectively for 31.1% of NPI’s revenues for the six months ended June 30, 2021 and 56.1% of NPI’s revenues for the year ended December 31, 2020.

We may not continue to procure new customer contracts at the same rate as in the past, or at all. There can be no assurance that additional U.S. states will seek to implement iLottery offerings or that U.S. states seeking to implement iLottery offerings will do so through a process in which NPI can compete to be the turnkey solution provider. In particular, certain of our competitors currently serve as central lottery system providers for certain U.S. states, and if these states decide to implement iLottery offerings, they may choose to do so by expanding their existing relationships with our competitors without launching a public procurement process or by including iLottery in a broader lottery system procurement process in which we may not be able to successfully compete.

Even if additional U.S. states seek to implement iLottery offerings through a public procurement process, there can be no assurance that NPI will procure any new contracts. Our failure to win new contracts could materially limit the growth of our business.

We incur significant costs related to the procurement of new contracts, which we may be unable to recover in a timely manner, or at all.

The tender process to obtain a new contract is highly competitive and typically requires a significant upfront capital investment. The efforts and resources required to participate and win a request for proposal, commence operations of an iLottery program and procure revenues from that program is relatively long and may take several months or years to complete. This investment, which includes our management’s time, may never be recovered in the event that we fail in our bid. A typical request for proposals or a tender requires us to spend substantial time and effort assisting potential customers in evaluating our products and services, including providing demonstrations and benchmarking against other available offerings by our competitors. This process can be costly and time consuming, and we often do not know if any given sales efforts will be successful until the latter stages of those efforts. After being awarded a contract, it can take years to set up the iLottery system and for the contract to become profitable. The long procurement cycle creates a significant time gap between the time we participate in a tender and dedicate the necessary resources, and the time we can recognize revenue or income from that program, if at all. This time gap creates pressure on our cash flow, as it requires significant funding up front, and in the interim period, and may not result in any income, or result in income that will only be achieved quarters after the resources have been dedicated. If we are unable to forecast market demand and conditions, we may not be able to expand our sales efforts at appropriate times and our revenues and related results of operations could be materially adversely affected.

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Intense competition exists in the iLottery industry, and we expect competition to continue to intensify.

We face significant competition in the evolving iLottery industry. We compete in the iLottery market with respect to our offering of technology solutions, games and related operational services on the basis of the content, features, quality, functionality, accuracy, reliability, innovation and price of such offerings. If we do not consistently deliver innovative, high-quality and reliable products and services, our ability to remain viable within the iLottery industry may suffer, especially as the level of competition increases.

Some of our competitors and potential competitors have substantially greater financial and other resources (including human resources) or experience than we do. Some of our competitors also have existing relationships and insight as the legacy retail lottery provider of certain U.S. states and may realize synergies that we cannot. Competitors may devote more resources towards developing and testing products and services, undertake more extensive marketing campaigns, offer more favorable pricing terms, pursue aggressive growth initiatives or otherwise develop more commercially successful products or services. In addition, certain of our competitors may enter into contracts with less favorable terms to prevent us from procuring new contracts or renewing our existing contracts. Such potential competitive disadvantages may make it difficult for us to retain existing contracts or secure new contracts without being willing to accept less favorable terms.

In addition to risks directly tied to our relative lack of resources, experience and longevity, we face risks that:

• we may fail to anticipate and adapt to changes in customer expectations at the same rate as our competitors;

• customers who currently utilize platforms offered by our competitors may be satisfied with such solutions or may determine that it is too costly and/or time consuming to adopt our platform and solutions. Lotteries may face significant switching costs if their platforms have been integrated with those of a competitor, potentially reducing the likelihood of us being the successful tenderer;

• lotteries that we currently view as potential customers may decide to develop internally products and services which compete with our products and services; and

• new competitors, including large global corporations or large software vendors operating in adjacent industries, may enter our market.

Moreover, current and future competitors may establish cooperative relationships among themselves or with others, including our current or future strategic partners. By doing so, these competitors may increase their ability to meet the needs of our existing and prospective customers and their players. These developments could make it more difficult for us to renew our existing contracts or win new contracts. If we are unable to compete effectively, successfully and at reasonable cost against our existing and future competitors, our results of operations, cash flows and financial condition could be adversely impacted.

Our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions.

The secure maintenance and transmission of player information is a critical element of our operations. Our information technology and other systems that maintain and transmit player information, or those of service providers, business partners or employee information may be compromised by a malicious third-party penetration of our network security, or that of a third-party service provider or business partner, or impacted by intentional or unintentional actions or inactions by our employees, or those of a third-party service provider or business partner. As a result, our players’ information may be lost, disclosed, accessed or taken without their consent. We have experienced in the past, and expect to continue to experience in the future, attempts to breach our systems and other similar incidents. To date these attempts have not had a material impact on our operations or financial results, but we cannot provide assurance that they will not have a material impact in the future.

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We rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information, including credit card numbers. Advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect transaction data or other confidential and sensitive information from being breached or compromised. In addition, websites are often attacked through compromised credentials, including those obtained through phishing and credential stuffing. Our security measures, and those of our third-party service providers, may not detect or prevent all attempts to breach our systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by our websites, networks and systems or that we or such third parties otherwise maintain, including payment card systems, which may subject us to fines or higher transaction fees or limit or terminate our access to certain payment methods. Threats to information security are constantly evolving, including in diversity and sophistication. We and such third parties may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers.

In addition, security breaches can also occur as a result of non-technical issues, including intentional or inadvertent breaches by our employees or by third parties. These risks may increase over time as the number of our employees and the complexity and number of technical systems and applications we use also increase. Breaches of our security measures or those of our third-party service providers or cybersecurity incidents could result in unauthorized access to our sites, networks and systems; unauthorized access to and misappropriation of player information, including players’ personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware or other malware being served from our sites, networks or systems; deletion or modification of content or the display of unauthorized content on our sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; litigation, regulatory action and other potential liabilities. In the past, we have experienced social engineering, phishing, malware and similar attacks and threats of denial-of-service attacks, none of which to date has been material to our business; however, such attacks could in the future have a material adverse effect on our operations. Pursuant to a software license agreement with Pollard in respect of the offering to the MSL (the “Pollard Software License Agreement”), our iLottery software is installed on Pollard’s servers, through which it is made available to the MSL. Pollard is responsible for the security measures on its servers, and the Pollard Software License Agreement contains no representations or undertakings with regard to such security measures. A breach of Pollard’s server security could expose our software to the risks noted above. If any of these breaches of security should occur, our reputation and brand could be damaged, customers may terminate their contracts with us, our business may suffer, we could be required to expend significant capital and other resources to alleviate problems caused by such breaches, and we could be exposed to a risk of loss, litigation or regulatory action and possible liability. We cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss. Actual or anticipated attacks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.

In addition, any party who is able to illicitly obtain a player’s password may be able access such player’s transaction data or personal data (including payment information), resulting in the perception that our systems are insecure. Any compromise or breach of our security measures, or those of our third-party service providers, could violate applicable privacy, data protection, data security, network and information systems security and other laws, potentially trigger private rights of action under certain laws and cause significant legal and financial exposure, negative publicity and a loss of confidence in our security measures, which could have a material adverse effect on our business, reputation, financial condition, results of operations and prospects. We continue to devote significant resources to protect against security breaches and we may in the future need to address problems caused by breaches, including notifying affected players and responding to any resulting litigation, which in turn, would divert resources from the growth and expansion of our business.

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We maintain liability insurance policies covering certain security and privacy damages. However, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.

In addition to competition with other iLottery providers, we and our customers also compete with providers of other online offerings.

In addition to competition from iLottery providers, we also face competition from providers of other online offerings, including iGaming, sports betting, mobile games and eSports. While we believe that our customers’ iLottery offerings target different players and provide a differentiated experience than these other online offerings, the introduction of such offerings may allow new competitors to establish a foothold in regions where we currently provide the iLottery offering. For example, on January 22, 2021, iGaming and online sports betting was launched in Michigan. The Michigan iLottery accounted for approximately 49.7% of our revenues in the six months ended June 30, 2021, 54.5% of our revenues in the year ended December 31, 2020 and approximately 40.2% of our revenues in the year ended December 31, 2019, and the introduction of other online gaming offerings, which is typically accompanied by significant marketing efforts to attract players, may adversely affect the revenue of the Michigan iLottery program, which would have an adverse effect on our results of operations.

We operate in an industry that is affected by technological improvements and evolving player preferences.

The iLottery industry continues to experience rapid development of technological advances and player preferences. In some instances, advancements in technology trigger a change in player preferences. For example, as digital graphics improve, players may demand games with higher definition and a superior user interface. Our success depends on our ability to accurately anticipate and quickly respond to evolving industry standards and player preferences. We cannot assure you that we will be able to respond to such changes with innovative, high-quality, reliable and popular products and services or make the required adjustments to our existing products and services on a timely basis. In addition, the introduction of new products or updated versions of existing products has inherent risks, including, but not limited to:

• the timing with which we may realize the benefits of the commonly-required significant, upfront capital investments;

• the accuracy of our estimates of player preferences, and the fit of the new products and features to such preferences;

• the ability to adequately maintain our main technology systems, such as the NeoDraw platform;

• the quality of our products and services, including the possibility of software defects, which could result in claims against us or the inability to sell our products and services;

• the need to educate our sales, marketing and services personnel to work with the enhanced or new products and features, which may strain our resources and lengthen sales cycles;

• market acceptance of new product releases; and

• competitor product introductions or regulatory changes that render our products obsolete.

In light of the costs required to create and introduce new or enhanced products and services, if our new or enhanced products fail to achieve commercial success, we will struggle to remain commercially viable, especially in the face of heightened competition.

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We have incurred operating losses in the past, may incur operating losses in the future and may not be able to maintain sustainable profit margins.

We generated a net profit of $6.5 million in the year ended December 31, 2020, which was the first reporting period that we generated a net profit since incorporation. We have continued to generate net profit in the first two fiscal quarters of 2021. We expect to continue the development and expansion of our business, and we anticipate additional costs in connection with legal, accounting and other administrative expenses related to operating as a public company. While our revenue has grown in recent years, if our revenue declines or fails to grow at a rate sufficient to offset increases in our operating expenses, we may generate losses. We cannot ensure that we will sustain profitability in the future.

Certain of our directors and shareholders may experience a conflict of interest between their duties to us and to Aspire.

We were established as an independent company in 2014, following a spin-off from Aspire Global Plc (formerly known as NeoPoint Technologies Limited) (“Aspire” and, together with its subsidiaries, the “Aspire Group”). Prior to our spin-off from Aspire, our management team was responsible for the iLottery business of Aspire. Barak Matalon and Aharon Aran, members of our board of directors, are also members of Aspire’s board of directors. Further, Barak Matalon, Elyahu Azur, Pinhas Zahavi and Aharon Aran (collectively, the “Founding Shareholders”), who collectively own a majority of the shares of Aspire, may have substantial influence over the outcome of matters submitted to our shareholders for approval. Such directors and shareholders could experience a conflict of interest between their duties to us and Aspire in the future, which may have an adverse effect on our business and prospects.

For example, the Aspire Software License Agreement (as defined  below in “Related Party Transactions - Relationship with Aspire - Aspire Software License Agreement”) does not prevent NeoGames from using the Mixed-Use Software (as defined  below in “Related Party Transactions - Relationship with Aspire - Aspire Software License Agreement”) to design, develop and implement games content, so long as it is not sold through certain platform providers or white label companies which are competitors of Aspire, and provided that we do not design, develop and implement casino and slot content to games aggregators. See “Related Party Transactions - Relationship with Aspire - Aspire Software License Agreement.” Accordingly, both we and Aspire could compete in future engagements for provision of games content or for a contract with a white label provider. Furthermore, the Aspire Software License Agreement does not prevent either NeoGames or Aspire from using the Mixed-Use Software for (i) B2B customers in the iGaming and sports betting business in the United States, (ii) B2G customers in the iLottery business anywhere outside the United States, and (iii) offering games content to customers worldwide except for B2G customers in the United States and for customers who are providers of iLottery content which are NeoGames competitors. Accordingly, both we and Aspire could compete for the same B2B iGaming and sports betting customers in the United States or B2G iLottery customers outside the United States. In the event that such circumstances arise, the shared directors or shareholders may decide to prevent NeoGames from pursuing such opportunities in favor of Aspire.

Our Founding Shareholders have significant influence over the nominations and elections of members of our board of directors and other matters submitted for shareholder approval.

    Our Founding Shareholders have the exclusive right under our amended and restated articles of association (“articles of association”) to nominate up to 50% of our directors so long as they own in the aggregate at least 40.0% of our issued and outstanding share capital. Following the completion of this offering, the Founding Shareholders will hold approximately 48.5% of our issued and outstanding share capital (and 48.5% if the underwriters' option to purchase additional Ordinary Shares is exercised in full). As a result, the Founding Shareholders will also have significant influence over the outcomes of other matters submitted to shareholders for approval. The Founding Shareholders are entitled to vote their shares according to their own interests, and such interests may be different than the interests of our other shareholders and may delay, deter or prevent a change in control or other business combination that might otherwise be beneficial to our shareholders. See “Related Party Transactions - Voting Agreement,” and “Management - Board Composition.”

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We have engaged in transactions with related parties, and such transactions present possible conflicts of interest that could have an adverse effect on our business and results of operations.

     We provide a sub-license to the NeoSphere platform to William Hill, a subsidiary of Caesars and our largest shareholder, and certain software services to Aspire. The revenues received from William Hill and Aspire amounted to approximately 18.3% of our revenues in the six months ended June 30, 2021, 18.6% of our revenues in the year ended December 31, 2020 and approximately 29.5% of our revenues in the year ended December 31, 2019. We may have achieved more favorable terms if such transactions had not been entered into with related parties.

We have also entered into certain intellectual property licenses and cost-sharing arrangements with Aspire. Transactions with our significant shareholders or entities in which our significant shareholders hold ownership interests present potential for conflicts of interest, as the interests of these parties and their stockholders may not align with the interests of our shareholders.

We have loans outstanding under the WH Credit Facility and the Aspire Promissory Notes (each as defined in ‘‘Related Party Transactions’’). For more information, see ‘‘Related Party Transactions.’’

Our existing and future contractual arrangements could restrict our ability to compete effectively, which may affect our ability to grow our business and enter into new markets.

From time to time, we enter into contractual agreements that contain restrictive covenants (such as non-compete, exclusivity and license agreements) that restrict us from entering into new markets to which we may desire to expand our businesses. Our contractual arrangements with Pollard, Aspire and William Hill contain certain provisions that may restrict our ability to grow our business, enter into new markets and compete effectively.

Pursuant to the Michigan JV Agreement, until its expiration, we are restricted from exploring any opportunities for further marketing, distribution and exploitation of our internet lottery, scratch cards, instant win games and slots and other online games to other national and state lotteries in the United States and Canada without Pollard. Both the Company and Pollard have the exclusive and pre-emptive right to exploit any and all such additional opportunities that may be conceived, and the participation of NPI in any such additional opportunity is subject to mutual approval of the Company and Pollard. Accordingly, as long as the Michigan JV Agreement remains in effect, the Company is unable to independently pursue any such opportunities, enter into agreements with additional lotteries in the United States and Canada or enter into new partnerships in the United States and Canada. This may negatively impact the future growth of our business or cause our business, financial conditions and results of operations to be harmed.

Additionally, pursuant to the Aspire Software License Agreement, Aspire granted NeoGames a license to use Mixed-Use Software for certain purposes. However, the Aspire Software License Agreement restricts NeoGames from using the Mixed-Use Software to (i) design, develop or implement casino and slot games for games aggregators and (ii) design, develop and implement games content for customers who are platform providers or white-label companies which are competitors of Aspire. See “Related Party Transactions - Relationship with Aspire - Aspire Software License Agreement.” While we have only focused on the iLottery business to date, these restrictions may limit our ability to enter into the market of casino, slot games and sports betting in the future and may affect our ability to expand our customer base.

Further, pursuant to a binding term sheet entered into in 2018 (the “WH Term Sheet”) with WHG (International) Ltd. (“WHG”), an affiliate of William Hill, we are prohibited from using the NeoSphere platform to compete with WHG in the B2C sports betting industry in the United States. While this has not impeded our ability to grow our business to date, it may limit our ability to expand into the B2C sports betting market in the future.

To the extent that such restrictive contractual provisions prevent us from taking advantage of business opportunities, our business, financial position and cash flows may be adversely affected.

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While we have not experienced a material impact to date, the ongoing COVID-19 and similar health epidemics and contagious disease outbreaks could significantly disrupt our operations and adversely affect our business, results of operations, cash flows or financial condition.

In December 2019, a novel strain of coronavirus (“COVID-19”) was identified, and on March 11, 2020, the World Health Organization declared COVID-19 as a global pandemic. Numerous state and local jurisdictions have imposed, and others in the future may impose, “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19. In particular, the governments in jurisdictions where our employees are located have imposed limitations on gatherings, social distancing measures and restrictions on movement, only allowing essential businesses to remain open. Such restrictions have resulted in temporary store closures, work stoppages, slowdowns and delays, travel restrictions and cancellation of events, among other restrictions, any of which may negatively impact workforces, customers, consumer sentiment and economies in many markets and, along with decreased consumer spending, have led to an economic downturn throughout much of the world.

Our business is largely tied to the disposable income of lottery players. While we have not experienced a material impact to date, the global economic and financial uncertainty may result in significant declines to the number of players using our customers’ offerings and the amount of money that players are able and willing to wager. See “- A reduction in discretionary consumer spending could have an adverse impact on our business.”

In response to the COVID-19 pandemic, we transitioned many of our employees to remote working arrangements and temporarily closed our offices in Israel, Ukraine and Michigan. More recently, we have gradually permitted employees to return to our offices in phases while maintaining hybrid office, remote workplace arrangements. While we have not experienced a material impact to date, it is possible that this could have a negative impact on the execution of our business plans and operations. If a natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. The increase in remote working may also result in player privacy, IT security and fraud concerns as well as increase our exposure to potential wage and hour issues.

The degree to which the COVID-19 pandemic affects our financial results and operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the governmental actions and regulations imposed to contain the virus or treat its impact, how quickly and to what extent pre-pandemic economic and operating conditions can resume and overall changes in players’ behavior.

Our limited operating history makes it difficult to evaluate our current business and future prospects.

The market for our offerings is relatively new and evolving, and we have a limited operating history under the majority of our customer agreements. As a result, our business and future prospects are difficult to evaluate and our ability to accurately forecast our future results of operations is limited and subject to a number of uncertainties.

We entered into our first customer agreement in 2014, and a majority of our customer agreements are in their initial terms. In 2018 and 2019, we began providing turnkey solutions to the NHL and NCEL, respectively. Furthermore, during 2020 we transitioned the VAL solution into a full iLottery program and launched a new turnkey solution with the province of Alberta in Canada. In February 2021 we launched Instant games with the Austrian Lotteries (Österreichische Lotterien). Our limited operating history in certain markets makes it difficult to accurately assess our future prospects and increase the risk associated with your investment. Any future changes to our revenue model could materially and adversely affect our business.

Our historical revenue growth should not be considered indicative of our future performance. In future periods, our revenue growth could slow and our revenues could decline for a number of reasons, including declining player demand, increasing competition, decreasing growth of the iLottery market or our failure to continue entering into new arrangements. We will continue to encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries. If our assumptions regarding these risks, uncertainties or future revenue growth are incorrect, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

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We are subject to substantial penalties for failure to perform.

Our lottery contracts in the United States and in other jurisdictions and other service contracts often require performance bonds or letters of credit to secure our performance under such contracts and require us to pay substantial monetary liquidated damages in the event of non-performance by us.

As of June 30, 2021, we had outstanding performance bonds and letters of credit in an aggregate amount of approximately $3.8 million. These instruments present a potential expense for us and divert financial resources from other uses. Claims on performance bonds, drawings on letters of credit, and payment of liquidated damages could individually or in the aggregate have a material adverse effect on our results of operations, business, financial condition or prospects.

We rely on information technology and other systems and platforms, and any failures, errors, defects or disruptions in our systems or platforms could diminish our brand and reputation, subject us to liability, disrupt our business, affect our ability to scale our technical infrastructure and adversely affect our business.

Our technology infrastructure is critical to the performance of our platform and offerings and to customer and player satisfaction. We devote significant resources to network and data security to protect our systems and data. However, our systems and the systems of any third-party service providers on which we rely may not be adequately designed with the necessary reliability and redundancy to avoid performance delays or outages that could be harmful to our business. We cannot assure you that the measures we take to prevent or hinder cyber-attacks and protect our systems, data and player information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches, including a disaster recovery strategy for server and equipment failure and back-office systems and the use of third parties for certain cybersecurity services, will provide absolute security. We have experienced, and we may in the future experience, website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. Such disruptions have not had a material impact on us; however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties, could result in a wide range of negative outcomes, each of which could materially adversely affect our business, financial condition, results of operations and prospects.

Additionally, our software may contain errors, bugs, flaws or corrupted data. If a particular product offering is unavailable when players attempt to access it or navigation through our platforms is slower than they expect, players may be less likely to return to our customers’ platforms as often, if at all. Furthermore, programming errors, defects and data corruption could disrupt our operations, adversely affect the experience of players, harm our reputation and cause players to stop utilizing our customers’ offerings.

Our current systems may be unable to support a significant increase in online traffic or increased player numbers, especially during peak times or events (such as for significant jackpot runs). If there is a system disruption, customers may be able to make a contractual claim for damages against us.

We may at any time be required to expend significant capital or other resources, including staff and management time, to reduce the risk of network or IT failure or disruption, including replacing or upgrading existing business continuity systems, procedures and security measures. If such protective measures are implemented unsuccessfully or inefficiently, the quality of our products and services may be materially and adversely affected.

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We rely on third-party service providers for key functions in our operations.

We rely upon various third-party service providers to maintain continuous operation of our platform, servers, hosting services, payment processing and various other key functions of our business. Know-your-customer and geolocation programs and technologies supplied by third parties are an important aspect of certain of our products and services. These services are costly and their failure or inadequacy could materially affect our operations.

Additionally, we rely on third-party service providers for payment processing services, including the processing of credit and debit cards. Our business could be materially disrupted if these third-party service providers become unwilling or unable to provide these services to us.

Certain of these services discussed above are only provided by a limited number of third-party providers and in the event that any of these providers cease to provide us with their services (due to the termination of their agreement, a dispute between us and any such providers or for any other reason), we may struggle to locate a suitable replacement on commercially reasonable terms, if at all, which could lead to harmful disruptions to our operations.

If we fail to protect or enforce our intellectual property rights, our business could be materially affected.

    We rely on a combination of trademark, copyright, trade secret, and domain-name-protection laws as well as contractual restrictions to protect our technology and intellectual property rights. While it is our policy to protect and defend our rights to our intellectual property, we cannot predict whether steps taken by us to protect our intellectual property will be adequate to prevent infringement, misappropriation, dilution or other violation of our intellectual property rights. Effective intellectual property protection may not be available in every country in which we operate or intend to operate our business. Third parties may infringe our proprietary rights (knowingly or unknowingly) and challenge proprietary rights held by us, and any potential future trademark and patent applications may not be approved. We have been required and in the future may be required to expend significant time and expense to prevent infringement or to enforce our rights. We also cannot guarantee that others will not independently develop technology with the same or similar functions to any proprietary technology we rely on to conduct our business and differentiate ourselves from our competitors. Unauthorized parties may also attempt to copy or obtain and use our technology to develop offerings with the same functionality as our solutions, and policing unauthorized use of our technology and intellectual property rights is difficult and may not be effective. Any unauthorized use of our brand, technology or intellectual property could result in revenue loss as well as have an adverse impact on our reputation. We may be required to incur significant expenses in registering, monitoring and protecting our intellectual property rights. Any litigation could result in significant expense to us, including the diversion of management time and may not ultimately be resolved in our favor. Changes in the law or adverse court rulings may also negatively affect our ability to prevent others from using our technology.

We attempt to protect our intellectual property, technology and confidential information by requiring certain of our employees and consultants to enter into confidentiality and assignment of inventions agreements and certain third parties to enter into nondisclosure agreements. These agreements may not effectively grant all necessary rights to any inventions or works that may have been developed or created by the employees or consultants party thereto. In addition, these agreements may not effectively prevent unauthorized use or disclosure of our confidential information, intellectual property or technology and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, intellectual property, or technology.

We currently hold rights to the neogames.com internet domain name and various other related domain names. The regulation of domain names is subject to change. Regulatory bodies could establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names. In addition, third parties may already have registered, or may register in the future, domain names similar or identical to our registered and unregistered trademarks. As a result, we may not be able to acquire or maintain all domain names that use the name neogames or are otherwise important for our business.

We also have certain registered and unregistered trademarks that are important to our business, such as the NEOGAMES trademark. If we fail to adequately protect or enforce our rights under this trademark, we may lose the ability to use this trademark or to prevent others from using it, which could adversely harm our reputation, business, results of operations and financial condition.

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Our software, games and marketing materials are protected in these works with copyright law, and some also benefit from trade secret protection. We have chosen not to register any copyrights under the Library of Congress. In order to bring a copyright infringement lawsuit in the United States, the copyright must be registered. Accordingly, the remedies and damages available to us for unauthorized use of our software, games and materials may be limited.

We rely on third-party intellectual property. We cannot guarantee that such intellectual property will continue to be available.

We rely on third-party technologies, trademarks and other intellectual property. There can be no assurance that these licenses, or support for such licensed products and technology, will continue to be available to us on commercially reasonable terms, if at all. In addition, the future success of our business may depend, in part, on our ability to obtain or expand licenses for lottery or gaming technologies we do not currently possess. In the event that we cannot retain, renew or expand existing licenses, we may be required to modify, limit or discontinue certain of our products or services, which could materially affect our business, financial condition and results of operations. In addition, the regulatory review process and licensing requirements of our government customers may preclude us from using technologies owned or developed by third parties if those parties are unwilling to subject themselves to regulatory review or do not meet regulatory requirements.

While we own most of the software in our platform, we license certain core legacy software from Aspire, as further described in “Related Party Transactions.” The Aspire Software License Agreement does not prohibit Aspire from depositing the source code of the software licensed to us with an escrow agent. While Aspire has not yet done this, if Aspire were to do so and a release event were to occur, Aspire’s third-party designees would gain rights and access to source code that is material to our business which could materially and adversely affect our business, prospects, financial condition and results of operations. The Aspire Software License Agreement also allows both Aspire and the Company to develop modifications to the Mixed-Use Software, and any modifications developed by the Company or Aspire are owned by the developing party and licensed to the other party for certain purposes. This results in a risk to the confidentiality and exclusivity of any modifications and improvements we may create to such software.

As part of our effort to migrate off of using any Mixed-Use Software in our product and service offerings, we are currently adopting a “microservice” approach pursuant to which we have different software modules for each product and service. We may encounter technological challenges that render such transition impossible, or may determine that such transition is too costly or time intensive to complete. The result might be that we need to continue to rely on the Mixed-Use Software. Although our license from Aspire for the Mixed-Use Software is exclusive, perpetual and irrevocable, Aspire could argue that certain uses we are making of the Mixed-Use Software are outside of the scope of the license. In addition, if our license from Aspire were found to be invalid or not perpetual for any reason, this could materially and adversely affect our business, prospects, financial condition and results of operations.

The gaming industry is historically litigious with respect to intellectual property and there can be no assurance that our platforms will not infringe on the rights of others.

    There is a risk that our operations, platforms and services may infringe, or be alleged to infringe, the intellectual property rights of third parties. We have incurred and in the future may incur substantial time and expense in defending against third-party infringement claims, regardless of their merit. Additionally, due to diversion of management time, expenses required to defend against any claim and the potential liability associated with any lawsuit, any litigation could significantly harm our business, financial condition and results of operations. If we were found to have infringed the intellectual property rights of a third party, we could be liable for license fees, royalty payments, lost profits or other damages, and may be subject to injunctive relief to prevent us from using such intellectual property rights in the future. Such liability (if significant) or injunctive relief could materially and adversely affect our business, prospects, financial condition and results of operations.

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We are exposed to costs associated with changes in levies and taxes.

We must comply with tax laws in the jurisdictions in which we operate. Tax rules or their interpretation may change in the markets in which we operate and in any markets we may enter in the future. Any changes to the corporate tax rate application in different jurisdictions, withholding taxes, transfer pricing rules, levels of value added tax, industry specific taxes and other levies, royalties and imposts could materially and adversely affect our financial position, performance and prospects. For example, there is a risk that we will not be able to pass on to our customers any additional gaming levies or taxes that apply to us. In addition, certain of our positions regarding the taxes that apply to us in the different jurisdictions in which we operate may not be accepted by the tax authorities in such jurisdictions, which could adversely affect our financial condition. On May 18, 2021, we obtained a pre-ruling from the Israeli Tax Authority regarding the transfer of certain intellectual property rights relating to the online lottery business of NeoGames S.A. to NGS. We cannot guarantee that the ruling will be acceptable with the Luxembourg tax authorities. See "Material Tax Considerations – Tax Ruling of the Israeli Tax Authority."

 

We are subject to taxation in multiple jurisdictions, which is complex and often requires making subjective determinations subject to scrutiny by, and disagreements with, tax regulators.

    We are subject to different forms of taxation in each of the countries and regions we or our subsidiaries are formed and/or conduct our business, including, but not limited to, income tax, withholding tax, gaming taxes, property tax, VAT, social security and other payroll-related taxes. Tax law and administration is complex, subject to change and varying interpretations and often requires us to make subjective determinations. In addition, we take positions in the course of our business with respect to various tax matters, including in connection with our operations. Tax authorities worldwide are increasingly rigorous in their scrutiny of corporate tax structures and may not agree with the determinations that are made, or the positions taken, by us with respect to the application of tax law. Such disagreements could result in lengthy legal disputes, an increased overall tax rate applicable to us and, ultimately, in the payment of substantial amounts of tax, interest and penalties, which could have a material adverse effect on our business, results of operations and financial condition.

    For example, in August 2021 we received a request from the Israeli Tax Authority to provide certain information and documents related to our Israeli subsidiary Neogames Systems Ltd. with respect to the years 2016-2019. Such audits may result in assessments, fines, settlements, or increased tax rates. While we believe we comply with applicable tax laws, we cannot anticipate the results of such audit, and we have not set aside any reserves to provide for any outcomes related to the tax audits. The ultimate outcome of the Israeli tax audit, and any other audits that may commence by any other tax authority, and of any related litigation, could have a material adverse effect on our consolidated financial statements.

Our platform contains third-party open source software components, which may pose particular risks to our proprietary software, technologies, products and services in a manner that could negatively affect our business.

Our platform contains software modules licensed to us by third-party authors under “open source” licenses and we expect to use open source software in the future. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code. To the extent that our platform depends upon the successful operation of open source software, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new introduction of new solutions, result in a failure of our platform and injure our reputation. For example, undetected errors or defects in open source software could render it vulnerable to breaches or security attacks, and, subsequently, make our systems more vulnerable to data breaches. In addition, the public availability of such software may make it easier for others to compromise our platform.

Some open source licenses require that source code for modifications or derivative works we created based on such open source software be made publicly available as open source software. If we combine our proprietary software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar offerings with less investment of development effort and time and ultimately could result in a loss of our competitive advantages. Alternatively, to avoid the public release of the affected portions of our source code, we could be required to expend substantial time and resources to re-engineer some or all of our software.

Although we monitor our use of open source software to avoid subjecting our platform to conditions we do not intend, the terms of many open source licenses have not been interpreted by United States or foreign courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to provide or distribute our platform. From time to time, there have been claims challenging the ownership of open source software against companies that incorporate open source software into their solutions. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software. Moreover, we cannot assure you that our processes for controlling our use of open source software in our platform will be effective. If we are held to have breached or failed to fully comply with all the terms and conditions of an open source software license, we could face infringement or other liability, or be required to seek costly licenses from third parties, to continue providing our offerings on terms that are not economically feasible, to re-engineer our platform, to discontinue or delay the provision of our offerings if re-engineering could not be accomplished on a timely basis or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, financial condition and results of operations.

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We are highly dependent on our key personnel. If we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

We rely on the expertise, industry experience, customer relationships and leadership of our senior management, and the departure, death or disability of any one of our executive officers or other extended or permanent loss of any of their services, or any negative market or industry perception with respect to any of them or their loss, could have a material adverse effect on our business.

We depend on our technical and operational employees for the design and development of our innovative products and services. The competition for these types of personnel is intense and we compete with other potential employers, including certain of our strategic partners, for the services of our employees. As a result, we may not succeed in retaining the key employees that we need in order to maintain and grow our business.

If we do not succeed in attracting, hiring, and integrating qualified personnel, or retaining and motivating existing personnel, we may be unable to grow effectively and our business could be adversely affected. We deploy our employees to certain of our customers’ worksites to assist in the development of their IT systems and platforms. The loss of employees who have been involved in the development of intellectual property and know-how and the development and maintenance of key strategic relationships with customers may result in the subsequent loss of key customers. If key employees were to leave, we may be unable to deliver our existing services or develop new products until such employees have been replaced. As our employees have very specific skillsets and are highly qualified, we may face difficulties in replacing them with new employees, and even if we succeed in recruiting new employees, we may incur substantial costs in the recruiting, training and integration of such new employees.

We may require additional capital to support our growth plans, and such capital may not be available on terms acceptable to us, if at all. This could hamper our growth and adversely affect our business.

Our business generally requires significant upfront capital expenditures for software customization and implementation and systems and equipment installation and configuration. In connection with a renewal of or bid for a lottery or gaming contract, a customer may seek to impose new service requirements, which may require additional capital expenditures in order to retain or win the contract, as applicable.

To the extent that we do not have sufficient liquidity levels to fund such capital expenditures, our ability to procure new contracts and renew existing contracts would depend on, among other things, our ability to obtain additional financing on commercially reasonable terms. Our ability to obtain additional capital, if and when required, will depend on, among other factors, our business plans, investor demand and the capital markets.

We have historically funded our operations with, among other things, borrowings under the WH Credit Facility (as defined in “Related Party Transactions”). On October 20, 2020, we entered into a loan agreement with William Hill Finance Limited, an affiliate of William Hill, which sets out amended terms and an amended repayment schedule with respect to our outstanding loans under the WH Credit Facility and prohibits us from making any additional draws under the WH Credit Facility. See “Related Party Transactions - Relationship with William Hill - WH Credit Facility.”

We completed our public listing on November 23, 2020 raising a total net amount of $43 million and our total cash balance as of June 30, 2021 was approximately $65.4 million.

     In conjunction with this offering, we expect to enter into a $100 million revolving credit facility with J.P. Morgan Securities LLC and Deutsche Bank Securities Inc., two of the underwriters of the offering. See "Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources."

Any financing through the sale of equity securities may dilute the value of our outstanding Ordinary Shares. Any debt financing may require us to comply with various financial covenants and may restrict our activities. We also can provide no assurance that the funds we raise will be sufficient to finance any future capital requirements. If we are unable to obtain additional capital when required on satisfactory terms, our ability to continue to grow our business could be adversely affected.

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Our management team has limited experience managing a public company.

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies listed in the United States. Our management team may not successfully or efficiently manage the Company, which is subject to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. These obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, prospects, financial condition and results of operations.

We may become subject to litigation, from which we could incur significant monetary and reputational harm, irrespective of the merit of such claim or outcome of such litigation.

There is a risk that we may become subject to litigation and other claims and disputes in the ordinary course of business, including contractual disputes and indemnity claims, misleading and deceptive conduct claims, employment-related claims, and intellectual property disputes and claims, including those based on allegations of infringement, misappropriations or other violations of intellectual property rights. We may incur significant expense defending or settling such litigation.

Any litigation to which we are a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal, or in payments of substantial monetary damages or fines, the posting of bonds requiring significant collateral, letters of credit or similar instruments, or we may decide to settle lawsuits on similarly unfavorable terms. These proceedings could also result in reputational harm, criminal sanctions, consent decrees or orders preventing us from offering certain products or requiring a change in our business practices in costly ways or requiring development of non-infringing or otherwise altered products or technologies. Litigation and other claims and regulatory proceedings against us could result in unexpected disciplinary actions, expenses and liabilities, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Our results of operations may be adversely affected by fluctuations in currency values.

The Company’s consolidated financial results are affected by foreign currency exchange rate fluctuations. Foreign currency exchange rate exposures arise from current transactions and anticipated transactions denominated in currencies other than U.S. dollars and from the translation of foreign currency denominated balance sheet accounts into U.S. dollar-denominated balance sheet accounts. The Company is exposed to currency exchange rate fluctuations because portions of its expenses are denominated in currencies other than the U.S. dollar.

Approximately 84.7% of the Company’s revenues in six months ended June 30, 2021 were denominated in U.S. dollars, 4.3% in euros and 11.0% in other currencies. However, 10.6% of the Company’s liabilities were denominated in New Israeli Shekels. For example, almost all of the Company’s current employees are domiciled in Israel and paid in New Israeli Shekels. In 2020, the U.S. dollar / New Israeli Shekel exchange rate decreased from NIS 3.456 per $1 on December 31, 2019, to NIS 3.215 per $1 on December 31, 2020 (and then increased to 3.260 on June 30, 2021). The decrease from year end 2019 to year end 2020 adversely affected our costs and liabilities that are denominated in Shekels compared to our dollar-denominated income. Any further devaluation of the U.S. dollar compared to the New Israeli Shekel may result in further increases in employee liabilities and other expenses, which may adversely affect the Company’s profit and financial performance. Exchange rate fluctuations have in the past adversely affected the Company’s operating results and cash flows and may adversely affect the Company’s results of operations and cash flows and the value of its assets outside the United States in the future. A devaluation of local currency in a jurisdiction in which the Company is paid in such currency may require the Company’s customers located in such jurisdiction to adjust the amounts paid in local currency for the Company’s products and services, which they may be unable or unwilling to make. We do not currently employ any foreign exchange hedging, although we may do so in the future.

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Expansion into new markets may be important to the growth of our business in the future, and if we do not manage the business and economic risks of this expansion effectively, it could materially and adversely affect our business and results of operations.

We expect to continue to expand our operations to additional U.S. states and to expand our international operations. Any new markets or countries which we attempt to access may not be receptive. For example, we may not be able to expand further in some markets if we are not able to satisfy certain government requirements. In addition, our operations in new jurisdictions subject us to risks customarily associated with such operations, including the complexity of local laws, regulations and markets, the uncertainty of enforcement of remedies in foreign jurisdictions, the impact of local labor laws and disputes, the economic, tax and regulatory policies of local governments and the ability to attract and retain key personnel in new jurisdictions. Foreign jurisdictions could impose tariffs, quotas, trade barriers, and other similar restrictions on our international sales. In addition, our ability to expand successfully involves other risks, including difficulties in integrating operations, risks associated with entering jurisdictions in which we may have little experience and the day-to-day management of a growing and increasingly geographically diverse company.

Our investments in new jurisdictions often entail entering into joint ventures or other business relationships with locally-based entities, especially in jurisdictions in which governments prefer or are required to use locally-based entities. Our reliance on partnerships with locally-based entities can involve additional risks arising from our lack of sole decision-making authority, our reliance on a partner’s financial condition, inconsistency between our business interests or goals and those of our partners and disputes between us and our partners.

We may not realize the operating efficiencies, competitive advantages or financial results that we anticipate from our investments in new jurisdictions and our failure to effectively manage the risks associated with our operations in new jurisdictions could have a material adverse effect on our financial position, performance and prospects.

As a significant amount of our net profits and cash flows are generated outside Luxembourg, the repatriation of funds currently held in foreign jurisdictions may result in higher effective tax rates for us. In addition, there have been proposals, at international level, and in particular at the level of the OECD, to change tax laws that could significantly impact how multinational corporations, such as the Company, are taxed on foreign earnings. Although we cannot predict the certainty, timing, scope or terms of any such laws, if enacted, certain of the proposed changes, such as those seeking to limit the deferral of taxes, could have a material adverse impact on our tax expense and cash flow.

Our insurance may not provide adequate levels of coverage against claims.

We maintain insurance that we believe is customary for businesses of our size and type. However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Moreover, any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis. Such losses could adversely affect our business prospects, results of operations, cash flows and financial condition.

If we fail to detect fraud or theft, including by our employees and our customers and their players, our reputation may suffer which could harm our brand and negatively impact our business, financial condition and results of operations and subject us to investigations and litigation.

We may incur losses, whether directly or indirectly through our revenue share with our customers, from various types of financial fraud, including use of stolen or fraudulent credit card data, claims of unauthorized payments by our customers’ players and attempted payments by such players with insufficient funds. Bad actors use increasingly sophisticated methods to engage in illegal activities involving personal data, such as unauthorized use of another person’s identity, account information or payment information and unauthorized acquisition or use of credit or debit card details, bank account information and mobile phone numbers and accounts.

Acts of fraud may involve various tactics, including collusion. Successful exploitation of our systems could have negative effects on our product offerings, services and player experience and could harm our reputation. Failure to discover such acts or schemes in a timely manner could result in harm to our operations.

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In addition, negative publicity related to such schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and prospects. In the event of the occurrence of any such issues with our existing platform or product offerings, substantial engineering and marketing resources and management attention, may be diverted from other projects to correct these issues, which may delay other projects and the achievement of our strategic objectives.

In addition, any misappropriation of, or access to, players’ personal data or other proprietary information or other breach of our information security could result in legal claims or legal proceedings, including regulatory investigations and actions, or liability for failure to comply with privacy and information security laws, including for failure to protect personal data or for misusing personal data, which could disrupt our operations, force us to modify our business practices, damage our reputation and expose us to claims from our customers, their players, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition, results of operations and prospects.

We cannot guarantee that any measures we have taken or may take in the future to detect and reduce the occurrence of fraudulent or other malicious activity on our platform will be effective or will scale efficiently with our business. Our failure to adequately detect or prevent fraudulent transactions could harm our reputation or brand, result in litigation or regulatory action and lead to expenses that could adversely affect our business, financial condition and results of operations.

Should we deem it necessary or appropriate to pursue acquisitions in the future, our lack of experience in effectuating acquisitions and/or our inability to successfully complete and integrate future acquisitions could limit our future growth or otherwise be disruptive to our ongoing business.

Since our inception, we have not consummated any acquisitions in support of our strategic goals, and we therefore have no experience in integration of new acquisitions. If we do decide to pursue new acquisition as part of our growth strategy, there can be no assurance that acquisition opportunities will be available on acceptable terms or at all or that we will be able to obtain necessary financing or regulatory approvals to complete potential acquisitions. Our ability to succeed in implementing our strategy will depend to some degree upon the ability of our management to identify, complete and successfully integrate commercially viable acquisitions. Acquisition transactions may disrupt our ongoing business and distract management from other responsibilities. In connection with any such acquisitions, we could face significant challenges in managing and integrating our expanded or combined operations, including acquired assets, operations, and personnel.

The Company’s inability to successfully complete and integrate future acquisitions could limit its future growth or otherwise be disruptive to its ongoing business.

From time to time, we expect we will pursue acquisitions in support of our strategic goals. There can be no assurance that acquisition opportunities will be available on acceptable terms or at all or that we will be able to obtain necessary financing or regulatory approvals to complete potential acquisitions. Our ability to succeed in implementing our strategy will depend to some degree upon the ability of our management to identify, complete and successfully integrate commercially viable acquisitions. Acquisition transactions may disrupt our ongoing business and distract management from other responsibilities. In connection with any such acquisitions, we could face significant challenges in managing and integrating our expanded or combined operations, including acquired assets, operations, and personnel.

We are subject to risks related to corporate social responsibility, responsible lottery and gaming, reputation and ethical conduct.

Many factors affect our reputation and the value of our brand, including the perception held by our customers, business partners, investors, other key stakeholders and the communities in which we operate, such as our social responsibility, corporate governance and responsible lottery practices. We have faced, and will likely continue to face, increased scrutiny related to social, governance and responsible lottery and gaming activities, and our reputation and the value of our brands can be materially adversely harmed if we fail to act responsibly in a number of areas, such as diversity and inclusion, workplace conduct, responsible gaming, human rights, philanthropy and support for local communities. Any harm to our reputation could impact employee engagement and retention and the willingness of customers and partners to do business with us, which could have a materially adverse effect on our business, results of operations and cash flows. We believe that our reputation is critical to our role as a leader in the iLottery and gaming industries and as a publicly traded company. Our management is heavily focused on the integrity of our directors, officers, senior management, employees, other personnel and third-party suppliers and partners. Illegal, unethical or fraudulent activities perpetrated by any of such individuals, suppliers or partners for personal gain could expose us to potential reputational damage and financial loss.

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The illegal gaming market could negatively affect our business.

A significant threat to the lottery and gaming industry arises from illegal activities. Such illegal activities may drain significant betting volumes away from the regulated industry. In particular, illegal gaming could take away a portion of the present players that are the focus of our business. The loss of such players could have a material adverse effect on our results of operations, business, financial condition or prospects. Further, public trust is critical to the long-term success of regulated gaming, including lottery. Illegal gaming activities could impact the reputation of our customers, which would have an adverse impact on their revenues and our revenues.

Termination of our relationship with William Hill or failure to realize the anticipated benefits of such relationship could have an adverse effect on our business, prospects, financial condition and results of operations.

Pursuant to the WH Term Sheet, we granted WHG a sub-license to our NeoSphere platform to operate its U.S. iGaming business. In addition, we customize the NeoSphere platform to assist William Hill in meeting the regulatory requirements of the states in which it operates our systems.

Upon a change of control of the Company, William Hill will have the right to purchase a perpetual sub-license to the NeoSphere platform and any software updates and development that we provided to WHG (the “IP Option”) for a price of £15 million. We have also agreed to provide WHG with the IP Option following the completion of a four year period from the date of the WH Term Sheet. For additional information on our relationship with William Hill, see “Related Party Transactions - Relationship with William Hill.” Revenues received from William Hill in exchange for the sub-license to use the NeoSphere platform and the related services accounted for 14.7% of the Company’s revenues in the six months ended June 30, 2021, 13.6% of the Company’s revenues in the year ended December 31, 2020 and 17.0% of the Company’s revenues in the year ended December 31, 2019. In the event that WHG terminates the WH Term Sheet, we will cease to generate revenues from William Hill. Additionally, the termination of our strategic relationship with William Hill could be negatively perceived by the market and could harm our brand and reputation.

Risks Relating to Regulation of Our Business

The gaming and lottery industries are heavily regulated, and changes to the regulatory framework in the jurisdictions in which we operate could harm our existing operations.

We and our customers are subject to extensive laws and regulations, which vary across the jurisdictions in which we and they operate. The regulatory environment, including lottery and gaming laws, in any particular jurisdiction may change in the future, which may limit some or all of our or our customers’ existing operations in such jurisdiction. There can be no assurance that our and our customers’ existing operations, or the iLottery industry as a whole, in such jurisdictions will continue to be permitted. Further, even if we are still permitted to operate in a given jurisdiction, regulations may be imposed that make continued operations cost-prohibitive.

We may become subject to additional regulations in any new jurisdiction in which we decide to operate in the future. The complexity of the regulatory environment may create challenges for us with respect to our ability to comply with applicable regulations, renew contracts, pursue tender offers and otherwise develop our business.

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We may not be able to capitalize on the expansion of internet use and other changes in the lottery industry as a consequence of lack of legislative approvals, changes in regulations or regulatory uncertainty. We aim to take advantage of the liberalization of internet and mobile gaming, both within the United States and internationally. These industries involve significant risks and uncertainty, including legal, business and financial risks. This dynamic environment can make it difficult to plan strategically and can provide opportunities for competitors to grow revenues at our expense. Our ability to successfully pursue interactive lottery and gaming strategies depends on the regulation of gambling through online channels. Regulations and laws relating to internet gaming are evolving and we cannot predict the timing, scope or terms of any such state, federal or foreign regulations, or the extent to which any such regulations will facilitate or hinder our interactive strategies. Any such changes to regulations or laws could have a material adverse effect on our business, results of operations, financial condition and prospects.

Failure to comply with regulations may result in the revocation or suspension of our or certain of our customers’ respective licenses to operate.

Our and our customers’ respective licenses to operate are subject to suspension or revocation by applicable regulatory authorities as a result of noncompliance with applicable regulatory requirements. In the event of our noncompliance, such authorities may pursue enforcement proceedings against us or certain of our customers. We can provide no assurance as to whether such proceedings would be likely to result in a favorable outcome. Further, such proceedings, irrespective of their outcome, may cause us or our customers to incur substantial costs, require operational changes and result in reputational damage, among other negative impacts, which could have a material adverse effect on our business, results of operations, financial condition and prospects.

We may incur substantial costs in order to meet the varied and complex regulatory requirements to which we are subject in the different jurisdictions in which we operate.

The form and scope of regulatory requirements within the iLottery, iGaming and online sports betting industries vary by jurisdiction. This lack of uniformity can increase the costs and burden of compliance, as well as increase the difficulty associated with expansion into new jurisdictions.

     Regulatory frameworks associated with the iLottery, iGaming and online sports betting industries exist across a wide spectrum, including within particular countries. We currently operate in 17 jurisdictions, including several U.S. states where we hold supplier licenses as part of the WHG License (as defined below), and plan to expand our operations into new jurisdictions. Expansion into new jurisdictions will subject us to a wider range of different, and potentially conflicting, regulatory requirements, which may cause it to incur increased costs and expend a greater degree of time in ensuring compliance. Our business and operations may be adversely affected by inaccurate predictions of the financial cost and administrative burden of compliance in connection with expansion into new jurisdictions. Further, the likelihood of noncompliance may be heightened in the event of expansion, which could result in payment of liquidated damages or termination of contracts in the event of material noncompliance.

Negative publicity concerning the gambling industry could result in increased regulations and reputational harm.

The industries in which we operate are at times subject to negative publicity with regard to harmful gambling behavior, such as addiction, gambling by minors, risks related to digital gambling and alleged association with money laundering. Publicity regarding problem gambling and other concerns with the lottery and other gambling industries, even if not directly connected to us, could adversely impact our business, results of operations, and financial condition. For example, if the perception develops that the gaming industry is failing to address such concerns adequately, the resulting political pressure may result in the industry becoming subject to increased regulation and restrictions on operations. Such an increase in regulation could adversely impact our results of operations, business, financial condition or prospects.

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We are subject to laws and regulations related to data privacy, data protection and information security and consumer protection across different markets where we conduct our business, including in the United States and the European Union (“EU”), and we are also required to comply with certain industry standards including the Payment Card Industry Data Security Standard. Our actual or perceived failure to comply with such obligations could harm our business.

In the United States and other jurisdictions in which we operate, we are subject to various consumer protection laws and related regulations. If we are found to have breached any consumer protection laws or regulations in any such jurisdiction, we may be subject to enforcement actions that require us to change our business practices in a manner which may negatively impact our revenues, as well as expose us to litigation, fines, civil and/or criminal penalties and adverse publicity that could cause our customers to lose trust in us, negatively impacting our reputation and business in a manner that harms our financial position.

As part of our business and on behalf of our customers, we collect information about individuals, also referred to as personal data, and other potentially sensitive and/or regulated data. Laws and regulations in the United States and around the world restrict how personal data is collected, processed, stored, used and disclosed, as well as set standards for its security, implement notice requirements regarding privacy practices, and provide individuals with certain rights regarding the use, disclosure and sale of their protected personal data.

In the United States, both the federal and various state governments have adopted or are considering, laws, guidelines or rules for the collection, distribution, use and storage of information collected from or about consumers or their devices. For example, California enacted the California Consumer Privacy Act (the “CCPA”), which came into force in 2020. The CCPA creates individual privacy rights for California residents and increases the privacy and security obligations of businesses handling personal data. The CCPA is enforceable by the California Attorney General and there is also a private right of action relating to certain data security incidents.

Additionally, the California Privacy Rights Act (the “CPRA”) which was approved on November 3, 2020 imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. Further, on March 2, 2021, Virginia enacted the Virginia Consumer Data Protection Act (the “CDPA”), a comprehensive privacy statute that shares similarities with the CCPA, CPRA and legislation proposed in other states. In addition, on July 7, 2021, Colorado enacted the Colorado Privacy Act (“COCPA”), becoming the third comprehensive consumer privacy law to be passed in the United States (after the CCPA and CDPA). Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. If we become subject to laws, guidelines or rules such as the CCPA, CRPA CDPA, or COCPA, we may be required to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.

Several foreign jurisdictions, including the EU and the European Economic Area (“EEA”), have laws and regulations which are more restrictive in certain respects than those in the United States. For example, in the EU we are subject to the General Data Protection Regulation 2016/679 (the “GDPR”) in relation to our collection, control, processing, sharing, disclosure and other use of data relating to an identifiable living individual (personal data). The GDPR, and national implementing legislation in EEA Member States, impose a strict data protection compliance regime including: providing detailed disclosures about how personal data is collected and processed (in a concise, intelligible and easily accessible form); demonstrating that an appropriate legal basis is in place or otherwise exists to justify data processing activities; granting rights for data subjects in regard to their personal data (including data access rights, the right to be “forgotten” and the right to data portability); requirements to take appropriate technical and organizational security measures; requirements to have data processing agreements in place to govern the processing of personal data on behalf of other organizations; introducing the obligation to notify data protection regulators or supervisory authorities (and in certain cases, affected individuals) of significant data breaches; maintaining a record of data processing; and complying with the principal of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit.

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We are also subject to EU rules with respect to cross-border transfers of personal data out of the EEA. Recent legal developments in Europe have created complexity and uncertainty regarding transfers of personal data from the EEA to the United States. Most recently, on July 16, 2020, the Court of Justice of the EU (the “CJEU”) invalidated the EU-US Privacy Shield Framework (the “Privacy Shield”) under which personal data could be transferred from the EEA to U.S. entities who had self-certified under the Privacy Shield scheme. While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on standard contractual clauses alone may not necessarily be sufficient in all circumstances. Use of the standard contractual clauses must now be assessed on a case-by-case basis, taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place, however, the nature of these additional measures is currently uncertain. The CJEU went on to state that if a competent supervisory authority believes that the standard contractual clauses cannot be complied with in the destination country and the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer. The European Commission has published revised standard contractual clauses for data transfers from the EEA: the revised clauses must be used for relevant new data transfers from September 27, 2021; existing standard contractual clauses arrangements must be migrated to the revised clauses by December 27, 2022. We will be required to implement the revised standard contractual clauses, in relation to relevant existing contracts and certain additional contracts and customer arrangements, within the relevant time frames. There is some uncertainty around whether the revised clauses can be used for all types of data transfers, particularly whether they can be relied on for data transfers to non-EEA entities subject to the GDPR.

We have relied and currently rely on standard contractual clauses to transfer personal data outside the EU, including to the U.S. among other data transfer mechanisms pursuant to the GDPR, such as transfer to jurisdictions recognized by the European Commission as providing sufficient safeguards for the processing of personal data (adequacy decision).

We have previously relied on our relevant providers’ Privacy Shield certification for the purposes of transferring personal data from the EU to the U.S. in compliance with the GDPR’s data export conditions.

These recent developments may require us to review and amend the legal mechanisms by which we make and/or receive personal data transfers to/in the U.S. As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the standard contractual clauses cannot be used, and/or start taking enforcement action, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

We depend on a number of third parties in relation to the operation of our business, a number of which process personal data on our behalf. With each such provider we attempt to mitigate the associated risks of using third parties by performing security assessments and detailed due diligence, entering into contractual arrangements to ensure that providers only process personal data according to our instructions, and that they have sufficient technical and organizational security measures in place. Where we transfer personal data outside the EU or the United Kingdom to such third parties, we do so in compliance with the relevant data export requirements, as described above. There is no assurance that these contractual measures and our own privacy and security-related safeguards will protect us from the risks associated with the third-party processing, storage and transmission of such information. Any violation of data or security laws by our third-party processors could have a material adverse effect on our business and result in the fines and penalties outlined below.

We also act as a data processor on behalf of our customers and have data protection obligations to our customers, including in relation to notifying customers if we suffer a personal data breach, assisting customers with data subject rights requests in relation to the personal data we process, requirements for the use of sub-processors and restrictions on transferring personal data outside of the EU.

We are subject to the supervision of local data protection authorities in those EU jurisdictions where we are established or otherwise subject to the GDPR. Fines for certain breaches of the GDPR are significant, such as an amount equal to the greater of €20 million or 4% of total global annual turnover. In addition to the foregoing, a breach of the GDPR could result in regulatory investigations, reputational damage, orders to cease/ change our processing of our data, enforcement notices, and/or assessment notices (for a compulsory audit). We may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.

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We are also subject to evolving EU privacy laws on cookies and e-marketing. In the EU, regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are likely to be replaced by an EU regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance. In the EU, informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing. The GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. While the text of the ePrivacy Regulation is still under development, a recent European court decision, regulators’ recent guidance and recent campaigns by a not-for-profit organization are driving increased attention to cookies and tracking technologies. If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities. Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand users.

Restrictions on the collection, use, sharing or disclosure of personal data or additional requirements and liability for security and data integrity could require us to modify our solutions and features, possibly in a material manner, could limit our ability to develop new products and features and could subject us to increased compliance obligations and regulatory scrutiny.

These laws and regulations constantly evolve and remain subject to significant change. In addition, the application and interpretation of these laws and regulations are often uncertain. New privacy laws add additional complexity, requirements, restrictions and potential legal risk, require additional investment in resources to compliance programs, and could impact trading strategies and availability of previously useful data. Such new laws may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment in resources to compliance programs, and could impact strategies and availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.

We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, including the Payment Card Industry Data Security Standard (the “PCI DSS”), a security standard applicable to companies that collect, store or transmit certain data regarding credit and debit cards, holders and transactions. Any failure to comply with the PCI DSS may violate payment card association operating rules, federal and state laws and regulations, and the terms of our contracts with payment processors and merchant banks. Such failure to comply may result in the loss of our ability to accept credit and debit card payments, subject us to fines, penalties and damages. In addition, there is no guarantee that PCI DSS compliance will prevent illegal or improper use of our payment systems or the theft, loss or misuse of data pertaining to credit and debit cards, credit and debit card holders, and credit and debit card transactions.

We are subject to anti-money laundering laws and regulations in the United States and other jurisdictions in which we operate.

We are subject to reporting, recordkeeping and anti-money laundering provisions in the United States, and are subject to similar requirements in other jurisdictions in which we operate. Recently, there has been increased regulatory scrutiny by the United States and other regulators and law enforcement agencies on companies in the gaming industry and compliance with anti-money laundering laws and regulations. Anti-money laundering laws and regulations are evolving quickly and could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Any determination that we have violated such laws or regulations, or any accusations of money laundering or regulatory investigations into possible money laundering activities, could have an adverse effect on our business, financial condition and results of operations and cash flows, and changes in these laws or regulations could result in increased operating costs.

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We are subject to global anti-corruption laws, including the U.S. Foreign Corrupt Practices Act.

We are subject to anti-corruption, anti-bribery and similar laws and regulations in the various jurisdictions in which we operate, including the U.S. Foreign Corrupt Practices Act (the “FCPA”). The FCPA prohibits us and our officers, directors, employees, agents and business partners acting on our behalf, from corruptly offering, promising, authorizing or providing anything of value to a “foreign official” for the purposes of influencing official decisions or otherwise securing an improper advantage to obtain or retain business. The FCPA further requires companies listed on U.S. stock exchanges to make and keep books and records that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. We conduct business directly and indirectly (through third-party vendors) with U.S. and non-U.S. governments. We are also subject to governmental oversight around the world, which may bring our officers, directors, employees and business partners acting on our behalf, including agents, into contact with government officials, all of which creates compliance risks.

We will implement and maintain policies and procedures designed to comply with applicable anti-corruption laws and regulations. However, we cannot provide assurance that our internal controls and compliance systems will always protect us from liability for acts committed by employees, agents or business partners of ours that would violate U.S. and/or non-U.S. laws, including the laws governing payments to government officials, bribery, fraud, kickbacks and other related laws. Any such improper actions or allegations of such acts could subject us to civil or criminal fines and penalties, disgorgement of profits, injunctions and debarment from government contracts, as well as related stockholder lawsuits and other remedial measures, all of which could adversely affect our reputation, business, financial condition and results of operations. Investigations of alleged violations can also be disruptive and cause us to incur significant legal and investigatory fees.

Conditions in the jurisdictions where we operate could materially and adversely affect our business.

Our offices are located in Tel Aviv, Israel, and a number of our officers and directors are living in Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations. Since the establishment of the State of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring countries. Any hostilities involving Israel could adversely affect our operations and results of operations.

In addition, one of our offices is located in Kyiv, Ukraine, where a large part of our development team is located. The political and civil situation in Ukraine cannot be accurately predicted since the removal of President Yanukovych from power by the Ukrainian parliament in February 2014, which was followed by reports of Russian military activity in the Crimean region, and the election of Volodymyr Zelensky in May 2019. Ukraine’s political activities remain fluid and beyond our control. While we continue to monitor the situation in Ukraine closely, any prolonged or expanded unrest, military activities, or sanctions, should they be implemented, could have a material adverse effect on our operations.

Risks Relating to the Ownership of Our Ordinary Shares

The trading price of our Ordinary Shares is likely to be volatile, and you may lose all or part of your investment.

 The following factors, in addition to other risks described in this prospectus, may have a significant effect on the market price of our Ordinary Shares:

• variations in our operating results;

• actual or anticipated changes in the estimates of our operating results;

• changes in stock market analyst recommendations regarding our Ordinary Shares, other comparable companies or our industry generally;

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• macro-economic conditions in the countries in which we do business;

• currency exchange fluctuations and the denominations in which we conduct business and hold our cash reserves;

• market conditions in our industry;

• actual or expected changes in our growth rates or our competitors’ growth rates;

• changes in regulation applicable to our industry;

• changes in the market valuation of similar companies;

• the trading volume of our shares on Nasdaq;

• sales of our Ordinary Shares by us or our shareholders, including the selling shareholders; and

• the adoption or modification of regulations, policies, procedures or programs applicable to our business.

In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of our Ordinary Shares could decline for reasons unrelated to our business, financial condition or operating results. The trading price of our Ordinary Shares might also decline in reaction to events that affect other companies in our industry, even if these events do not directly affect us. Each of these factors, among others, could harm the value of your investment in our Ordinary Shares. In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially adversely affect our business, operating results and financial condition.

If a U.S. person is treated as owning at least 10% of our Ordinary Shares, such holder may be subject to adverse United States federal income tax consequences.

If a U.S. person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or voting power of our Ordinary Shares, such person may be treated as a “U.S. shareholder” with respect to each “controlled foreign corporation” in our group (if any). Because our group includes a U.S. subsidiary, certain of our non-U.S. subsidiaries will be treated as controlled foreign corporations (regardless of whether or not we are treated as a controlled foreign corporation). A U.S. shareholder of a controlled foreign corporation may be required to report annually and include in its United States taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. An individual that is a U.S. shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a U.S. shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject a U.S. shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder’s United States federal income tax return for the year for which reporting was due from starting. We cannot provide any assurance that we will assist investors in determining whether we are or any of our non-U.S. subsidiaries is treated as a controlled foreign corporation or whether any investor is treated as a U.S. shareholder with respect to any such controlled foreign corporation or furnish to any U.S. shareholders information that may be necessary to comply with the aforementioned reporting and tax paying obligations. A U.S. investor should consult its advisers regarding the potential application of these rules to an investment in our Ordinary Shares.

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Ownership in our Ordinary Shares is restricted by gambling laws, and persons found “unsuitable” may be required to dispose of their shares.

Gambling authorities or lottery authorities, as applicable, have the right to investigate any individual or entity having a relationship to, or involvement with, us or any of our subsidiaries or joint ventures, to determine whether such individual or entity is suitable as a business associate of ours. Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of voting securities of a gambling company to report the acquisition to the local regulatory authorities, and those authorities may require such holders to apply for qualification or a finding of suitability, subject to limited exceptions for “institutional investors” that hold a company’s voting securities for investment purposes only.

Gambling and/or lottery authorities have very broad discretion in determining whether an applicant should be deemed suitable. Subject to certain administrative proceeding requirements, these regulators have the authority to deny any application or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found suitable or approved, for any cause deemed reasonable by those authorities.

Any person found unsuitable by a competent authority may be precluded from holding direct, indirect, beneficial or record ownership of any voting security, nonvoting security or debt security of any public corporation which is registered with the relevant gambling or lottery authority beyond the time prescribed by such authority.

Our failure, or the failure of any of our major shareholders, directors, officers, key employees, products or technology, to obtain or retain a required license or approval in one jurisdiction could negatively impact our ability (or the ability of any of our major shareholders, directors, officers, key employees, products or technology) to obtain or retain required licenses and approvals in other jurisdictions.

In light of these regulations and the potential impact on our business, our articles of association allow for the restriction of stock ownership by persons or entities who fail to comply with informational or other regulatory requirements under applicable gambling laws, who are found unsuitable to hold our shares by competent authorities, whose stock ownership adversely affects our ability to obtain, maintain, renew or qualify for a license, contract, franchise or other regulatory approval from a gambling or lottery authority or a purported transferee of a stockholder who acquires shares made invalid pursuant to our articles of association. The licensing procedures and background investigations of the authorities that regulate our businesses and the restriction in our articles of association may inhibit potential investors from becoming significant stockholders or inhibit existing stockholders from retaining or increasing their ownership.

We do not anticipate paying dividends in the foreseeable future.

We do not anticipate paying any cash dividends on our Ordinary Shares in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. Any future determination to pay dividends will be made at the discretion of our board of directors, subject to compliance with applicable laws and covenants under any future credit facility, which may restrict or limit our ability to pay dividends. The amount of any future dividend payments we may make will depend on, among other factors, our strategy, future earnings, financial condition, cash flow, working capital requirements, capital expenditures and applicable provisions of our articles of association. Unless and until we declare and pay dividends, any return on your investment will only occur if the value of our Ordinary Shares appreciates.

Additionally, under Luxembourg law, at least 5% of our net profits per year must be allocated to the creation of a legal reserve until such reserve has reached an amount equal to 10% of our issued share capital. The allocation to the legal reserve becomes compulsory again when the legal reserve no longer represents 10% of our issued share capital. Our legal reserve is not available for distribution.

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Future sales or the perception of future sales of our Ordinary Shares could adversely affect the price of our Ordinary Shares.

We, all of our directors and executive officers, and the selling shareholders entered or will enter into lock-up agreements pursuant to which we and they will be subject to certain restrictions with respect to the sale or other disposition of our Ordinary Shares until the date that is 90 days following the date of this prospectus. J.P. Morgan Securities LLC and Deutsche Bank Securities Inc., as the representatives of the underwriters, at any time and without notice, may release all or any portion of the Ordinary Shares subject to the foregoing lock-up agreements. See "Underwriting" for more information on these agreements.

If the restrictions under the lock-up agreements are waived, then the Ordinary Shares, subject to compliance with the Securities Act or exceptions therefrom, will be available for sale into the public markets, which could cause the market price of our Ordinary Shares to decline and impair our ability to raise capital. Sales of a substantial number of shares upon expiration of the lock-up agreements or the perception that such sales may occur may also cause the market price of our Ordinary Shares to fall or make it more difficult for you to sell your Ordinary Shares at a time and price that you deem appropriate.

The coverage of our business or our Ordinary Shares by securities or industry analysts or the absence thereof could adversely affect the trading price and trading volume of our Ordinary Shares.

Our Ordinary Shares are listed on Nasdaq. However, we cannot assure you that an active trading market for our Ordinary Shares will be sustained. The trading market for our securities is influenced in part by the research and other reports that industry or securities analysts publish about us or our business or industry from time to time. We do not control these analysts or the content and opinions included in their reports. We may be slow to attract equity research coverage, and the analysts who publish information about our securities will have had relatively little experience with our company, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates. If no or few analysts commence equity research coverage of us, the trading price and volume of our securities would likely be negatively impacted. If analysts do cover us and one or more of them downgrade our securities, or if they issue other unfavorable commentary about us or our industry or inaccurate research, our stock price would likely decline. Furthermore, if one or more of these analysts cease coverage or fail to regularly publish reports on us, we could lose visibility in the financial markets. Any of the foregoing would likely cause our stock price and trading volume to decline. Accordingly, we cannot assure you of the likelihood that an active trading market will be sustained, the liquidity of any trading market, your ability to sell your Ordinary Shares when desired or the price that you may be able to obtain in any such sale.

We are an emerging growth company, as defined in the Securities Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Ordinary Shares less attractive to investors because we may rely on these reduced disclosure requirements.

We are an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we could continue to be an emerging growth company for up to five years following the completion of our initial public offering.

For as long as we continue to be an emerging growth company, we may also take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including presenting only limited selected financial data and not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act (“Section 404”). As a result, our shareholders may not have access to certain information that they may deem important. We cannot predict if investors will find our Ordinary Shares less attractive because we may rely on these exemptions. If some investors find our Ordinary Shares less attractive as a result, there may be a less active trading market for our Ordinary Shares and our share price may be more volatile.

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We are a foreign private issuer and, as a result, we are not subject to U.S. proxy rules and are subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

We report under the Exchange Act as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information. In addition, foreign private issuers are not required to file their annual report on Form 20-F as promptly as U.S. domestic issuers. In addition, we are permitted to disclose limited compensation information for our executive officers on an individual basis. Further, we are not required to comply with Regulation FD, which restricts the selective disclosure of material nonpublic information to, among others, broker-dealers and holders of a company’s securities under circumstances in which it is reasonably foreseeable that the holder will trade in the company’s securities on the basis of the information. These exemptions and leniencies reduce the frequency and scope of information and protections afforded to shareholders of a company that is not a foreign private issuer.

Additionally, as a foreign private issuer whose shares are listed on Nasdaq, we have the option to follow certain home country corporate governance practices rather than those of Nasdaq, including with respect to Nasdaq’s rule with respect to a majority independent board. Although we have not chosen to follow and home country rules as of the date of this offering, we may choose to do so in the future.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2022. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting securities are owned by U.S. residents and (2) a majority of our directors or executive officers are U.S. citizens or residents, or we fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq rules. As a U.S.-listed public company that is not a foreign private issuer, we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer.

Our articles of association designate the federal district courts of the United States as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders.

Our articles of association provide that, unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts shall be the sole and exclusive forum for any claim asserting a cause of action arising under the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may increase the costs associated with such lawsuits, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our articles of association inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. Any person or entity purchasing or otherwise acquiring any interest in our share capital shall be deemed to have notice of and to have consented to the choice of forum provisions of our articles of association described above. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

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We may be classified as a passive foreign investment company, as well as a controlled foreign corporation, which could result in adverse United States federal income tax consequences to United States Holders (as defined below) of our Ordinary Shares.

We would be classified as a passive foreign investment company (“PFIC”) for any taxable year if, after the application of certain look-through rules, either: (i) 75% or more of our gross income for such year is “passive income” (as defined in the relevant provisions of the Internal Revenue Code (as defined below)), or (ii) 50% or more of the value of our gross assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. Based on our market capitalization and the composition of our income, assets and operations, we believe we were not a PFIC for the year ending December 31, 2020 and do not expect to be a PFIC for United States federal income tax purposes for the current taxable year or in the foreseeable future. However, this is a factual determination that must be made annually after the close of each taxable year. Moreover, the aggregate value of our assets for purposes of the PFIC determination may be determined by reference to the trading price of our Ordinary Shares, which could fluctuate significantly. Therefore, there can be no assurance that we will not be classified as a PFIC for the current taxable year or in the future. United States Holders should consult their tax advisers regarding the application of these rules. Certain adverse United States federal income tax consequences could apply to a United States Holder if we are treated as a PFIC for any taxable year during which such United States Holder holds our Ordinary Shares. See “Material Tax Considerations - Material United States Federal Income Tax Considerations for United States Holders - Passive Foreign Investment Company.”

We continue to incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices.

As a public company, and particularly after we are no longer an emerging growth company, we will continue to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, Nasdaq rules and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel continue to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations continue to increase our legal and financial compliance costs and continue to make some activities more time-consuming and costly. For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and could also make it more difficult for us to attract and retain qualified members of our board of directors.

We continue to evaluate these rules and regulations and cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. These rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other information in our annual reports and provide an annual management report on the effectiveness of control over financial reporting. Though we are required to disclose material changes in internal control over financial reporting on an annual basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. Additionally, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. We currently have limited accounting personnel and we have begun the process of evaluating the adequacy of our accounting personnel staffing level and other matters related to our internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. As a result, the market price of our Ordinary Shares could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

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Risks Relating to Our Incorporation in Luxembourg

The rights of our shareholders may differ from the rights they would have as shareholders of a United States corporation, which could adversely impact trading in our Ordinary Shares and our ability to conduct equity financings.

The Company’s corporate affairs are governed by the Company’s articles of association and the laws of Luxembourg, including the Luxembourg Company Law, as amended from time to time (loi du 10 août 1915 concernant les sociétés commerciales, telle qu’elle a été modifiée). The rights of our shareholders and the responsibilities of our directors and officers under Luxembourg law are different from those applicable to a corporation incorporated in the United States. For example, under Delaware law, the board of directors of a Delaware corporation bears the ultimate responsibility for managing the business and affairs of a corporation. In discharging this function, directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and its shareholders. Luxembourg law imposes a duty on directors of a Luxembourg company to: (i) act in good faith with a view to the best interests of a company; and (ii) exercise the care, diligence, and skill that a reasonably prudent person would exercise in a similar position and under comparable circumstances. Additionally, under Delaware law, a shareholder may bring a derivative action on behalf of a company to enforce a company’s rights. Under Luxembourg law, the board of directors has sole authority to decide whether to initiate legal action to enforce a company’s rights (other than, in certain circumstances, an action against members of our board of directors, which may be initiated by the general meeting of the shareholders, or, subject to certain conditions, by minority shareholders holding together at least 10% of the voting rights in the company). Further, under Luxembourg law, there may be less publicly available information about us than is regularly published by or about U.S. issuers. In addition, Luxembourg laws governing the securities of Luxembourg companies may not be as extensive as those in effect in the United States, and Luxembourg laws and regulations in respect of corporate governance matters might not be as protective of minority shareholders as are state corporation laws in the United States. Therefore, our shareholders may have more difficulty in protecting their interests in connection with actions taken by our directors, officers or principal shareholders than they would as shareholders of a corporation incorporated in the United States. As a result of these differences, our shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. issuer.

The Company is organized under the laws of Luxembourg and a substantial amount of its assets are not located in the United States. It may be difficult for you to obtain or enforce judgments or bring original actions against us or the members of our board of directors in the United States.

The Company is organized under the laws of the Grand Duchy of Luxembourg. Most of the members of our board of directors, our senior management and the experts named in this prospectus reside outside the United States and a substantial portion of their assets are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon these individuals or upon us or to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. securities laws against us in the United States. Awards of punitive damages in actions brought in the United States or elsewhere are generally not enforceable in Luxembourg and penalty clauses and similar clauses on damages or liquidated damages are allowed to the extent that they provide for a reasonable level of damages and the courts of Luxembourg have the right to reduce or increase the amount thereof if it is unreasonably high or low.

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As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and the Grand Duchy of Luxembourg, courts in Luxembourg will not automatically recognize and enforce a final judgment rendered by a U.S. court. A valid judgment obtained from a court of competent jurisdiction in the United States may be entered and enforced through a court of competent jurisdiction in Luxembourg, subject to compliance with the enforcement procedures (exequatur). The enforceability in Luxembourg courts of judgments rendered by U.S. courts will be subject, prior to any enforcement in Luxembourg, to the procedure and the conditions set forth in the Luxembourg procedural code, which conditions may include that:

• the judgment of the U.S. court is final and enforceable (exécutoire) in the United States;

• the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);

• the U.S. court has applied to the dispute the substantive law that would have been applied by Luxembourg courts. Based on recent case law and legal doctrine, it is not certain that this condition would still be required for an exequatur to be granted by a Luxembourg court;

• the judgment was granted following proceedings where the counterparty had the opportunity to appear and, if it appeared, to present a defense, and the decision of the foreign court must not have been obtained by fraud, but in compliance with the rights of the defendant;

• the U.S. court has acted in accordance with its own procedural laws; and

• the decisions and the considerations of the U.S. court must not be contrary to Luxembourg international public policy rules, must not have been given in proceedings of a tax or criminal nature and must not have been rendered subsequent to an evasion of Luxembourg law (fraude à la loi).

In addition, actions brought in a Luxembourg court against us, the members of our board of directors, our officers or the experts named herein to enforce liabilities based on U.S. federal securities laws may be subject to certain restrictions. In particular, Luxembourg courts do generally not award punitive damages. It is possible that awards of damages made under civil liabilities provisions of the U.S. federal securities laws or other laws (for example, fines or punitive damages) would be classified by Luxembourg courts as being of a penal or punitive nature and would not be recognized by Luxembourg courts. Ordinarily an award of monetary damages would not be considered as a penalty, but if the monetary damages include punitive damages, such punitive damages may be considered as a penalty.

Derivative actions are generally not available to shareholders under Luxembourg law. However, minority shareholders holding securities entitled to 10% of the voting rights at the general meeting that resolved on the granting of discharge to the directors may bring an action against the directors on behalf of the company. Minority shareholders holding at least 10% of the voting rights of a company may also ask the directors questions in writing concerning acts of management of the company or one of its subsidiaries, and if the company fails to answer these questions within one month, these shareholders may apply to the Luxembourg courts to appoint one or more experts instructed to submit a report on these acts of management. This provision of Luxembourg law does not apply to claims under the U.S. federal securities laws. Furthermore, consideration would be given by a Luxembourg court in summary proceedings to acts that are alleged to constitute an abuse of majority rights against the minority shareholders.

Litigation in Luxembourg also is subject to rules of procedure that differ from the U.S. rules, including with respect to the taking and admissibility of evidence, the conduct of the proceedings and the allocation of costs. Proceedings in Luxembourg would have to be conducted in the French or German language, and all documents submitted to the court would, in principle, have to be translated into French or German.

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There exists no published case law in Luxembourg in relation to the recognition of limited recourse provisions by which a party agrees to limit its recourse against the other party to the assets available at any given point in time with such other party and there exists no published case law in Luxembourg in relation to the recognition of foreign law governed subordination provisions whereby a party agrees to subordinate its claims of another party. If a Luxembourg court had to analyze the enforceability of such provisions, it is likely that such a court would consider the position taken by Belgian and Luxembourg legal scholars according to which limited recourse provisions are enforceable against the parties thereto but not against third parties.

A contractual provision allowing the service of process against a party to a service agent could be overridden by Luxembourg statutory provisions allowing the valid serving of process against a party subject to and in accordance with the laws of the country where such party is domiciled.

For these reasons, it may be difficult for a U.S. investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against us, the members of our board of directors, our executive officers and the experts named in this prospectus. In addition, even if a judgment against us, the non-U.S. members of our board of directors, senior management or the experts named in this prospectus based on the civil liability provisions of the U.S. federal securities laws is obtained, a U.S. investor may not be able to enforce it in U.S. or Luxembourg courts.

Luxembourg and European insolvency and bankruptcy laws are substantially different than U.S. insolvency laws and may offer our shareholders less protection than they would have under U.S. insolvency and bankruptcy laws.

As a company organized under the laws of Luxembourg and with its registered office in Luxembourg, the Company is subject to Luxembourg insolvency and bankruptcy laws in the event any insolvency proceedings are initiated against us including, among other things, Council and European Parliament Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast). Should courts in another European country determine that the insolvency and bankruptcy laws of that country apply to us in accordance with and subject to such EU regulations, the courts in that country could have jurisdiction over the insolvency proceedings initiated against us. Insolvency and bankruptcy laws in Luxembourg or the relevant other European country, if any, may offer our shareholders less protection than they would have under U.S. insolvency and bankruptcy laws and make it more difficult for them to recover the amount they could expect to recover in a liquidation under U.S. insolvency and bankruptcy laws.

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USE OF PROCEEDS

We will not receive any of the proceeds from the sale of our Ordinary Shares in this offering. The selling shareholders will receive all of the proceeds from this offering.

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DIVIDEND POLICY

We do not anticipate paying any cash dividends on our Ordinary Shares in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business.

There are no legislative or other legal provisions currently in force in Luxembourg or arising under our articles of association that restrict the payment of dividends or distributions to holders of our Ordinary Shares not residing in Luxembourg, except for withholding tax requirements and regulations restricting the remittance of dividends, distributions and other payments in compliance with United Nations and EU sanctions. Under Luxembourg law the amount and payment of dividends or other distributions is determined by a simple majority vote at a general meeting of shareholders based on the recommendation of our board of directors, except in certain limited circumstances. Pursuant to our articles of association, our board of directors has the power to pay interim dividends or make other distributions in accordance with applicable Luxembourg law.

Distributions (in the form of either dividends, share premium or capital surplus reimbursements) may be lawfully declared and paid if our net profits and/or distributable reserves are sufficient under Luxembourg law.

• Under Luxembourg law, at least 5% of our net profits per year must be allocated to the creation of a legal reserve until such reserve has reached an amount equal to 10% of our issued share capital. The allocation to the legal reserve becomes compulsory again when the legal reserve no longer represents 10% of our issued share capital As of December 31, 2020 we had a legal reserve in the amount of $4 thousand.

• Under Luxembourg law, the amount of distributions paid to shareholders (including in the form of dividends, share premium reimbursements or capital surplus reimbursements) may not exceed the amount of profits at the end of the last financial year plus any profits carried forward and any amounts drawn from reserves that are available for that purpose, less any losses carried forward and sums to be placed in reserve in accordance with Luxembourg law or our articles of association. Furthermore, no distributions (including in the form of dividends, share premium reimbursements or capital surplus reimbursements) may be made if net assets were, at the end of the last financial year (or would become, following such a distribution), less than the amount of the subscribed share capital plus the non-distributable reserves. Distributions in the form of dividends may only be made out of net profits and profits carried forward, whereas distributions in the form of share premium reimbursements may only be made out of available share premium and distributions in the form of capital surplus reimbursements may only be made out of available capital surplus.

The amount of any future dividend payments we may make will depend on, among other factors, our strategy, future earnings, financial condition, cash flow, working capital requirements, capital expenditures and applicable provisions of our articles of association. Any profits we declare as dividends and any share premium or capital surplus we distribute will not be available to be reinvested in our operations.

We have not declared nor paid dividends in the six months ended June 30, 2021 or in any of the years ended December 31, 2018, 2019 and 2020.

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CAPITALIZATION

The table below sets forth our cash and cash equivalents and capitalization as of June 30, 2021 derived from our unaudited financial statements included elsewhere in this prospectus.

   Investors should read this table in conjunction with our audited financial statements included in this Prospectus as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no significant adjustments to our capitalization since June 30, 2021. Note that following the exercise of share options between May 17, 2021 and June 30, 2021, the share capital of the Company was increased by an aggregate amount of $877.96, representing 495,873 new shares (the "Exercised Option Shares"). Such share capital increases were formally documented and confirmed by a mandatory Luxembourg law process that was concluded by a notarial deed dated July 30, 2021.

	As of June 30, 2021
	Actual
	Unaudited (in thousands)
Cash and cash equivalents	$	65,395
Total debt and lease liabilities, including current portion	$	33,787
Equity:
Ordinary shares, no par value: 25,479,728 shares issued and outstanding, actual		44
Share premium and capital reserves		85,391
Accumulated losses		(26,618	)
Total equity		58,817
Total capitalization	$	92,604

   The number of our Ordinary Shares shown as outstanding in the table above is based on 25,479,728 Ordinary Shares outstanding as of June 30, 2021 (including the Exercised Option Shares) and excludes 1,225,630 Ordinary Shares issuable upon the exercise of share options outstanding as of June 30, 2021 at a weighted average exercise price of $2.93 per share.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our consolidated financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of this prospectus. Actual results could differ materially from those contained in any forward-looking statements. 

Our Company

We are a technology-driven business that is an innovator in the lottery industry. As a global B2G and B2B technology and service provider to state lotteries and other lottery operators, we offer our customers a full-service solution that includes all of the elements required for the offering of lottery games including Instants and DBGs via personal computers, smartphones and handheld devices. These elements include technology platforms, a range of value-added services and a game studio with a large portfolio of games. The value-added services that we offer facilitate various aspects of the iLottery offering including regulation and compliance, payment processing, risk management, player relationship management and player value optimization. Our complete solution allows our customers to enjoy the benefits of marketing their brands and generating traffic to their iLottery sales channels. We believe that we are the only full-service company exclusively focused on the iLottery industry.

NeoGames was established as an independent company in 2014, following a spin-off from Aspire. Prior to the spin-off from Aspire, our management team was responsible for the iLottery business of Aspire, which derived the majority of its revenues from the sale of iLottery games to various lotteries in Europe. In 2014, we began to focus on the U.S. iLottery market, which opened in 2012 with the introduction of online lottery ticket sales in Illinois. In order to access this significant market opportunity, we partnered with Pollard, one of the leading vendors to the global lottery industry. In 2014, we entered into our first turnkey solution contract in the United States with the MSL, as a sub-contractor to Pollard.

In July 2014 we formed NPI, a joint venture with Pollard, for the purpose of identifying, pursuing, winning and executing iLottery contracts in the North American lottery market. NPI combines our technology and iLottery business and operational experience with Pollard’s infrastructure, administrative capabilities and relationships with lotteries in North America. NPI is managed by an executive board of four members, consisting of two members appointed by NeoGames and two members appointed by Pollard. NPI has its own general manager and dedicated workforce and operates as a separate entity. However, it relies on NeoGames and Pollard for certain services, such as technology development, business operations and support services from NeoGames and corporate services, including legal, banking and certain human resources services, from Pollard.

Since its inception, NPI has secured iLottery contracts with the VAL, the NHL (as a sub-contractor to Intralot), the NCEL and the AGLC. All of our iLottery business in North America is conducted through NPI, except in Michigan, where the contract is between the MSL and Pollard and we support the Michigan iLottery as a subcontractor of Pollard. We continue to conduct all of our business outside of North America through NeoGames.

Our Customer Contracts

The core of our business model is our turnkey solution, which is our main revenue generator and the area in which we invest most of our time and resources. Turnkey contracts generate long-term revenue streams that we believe we can increase over time, as in Michigan, to provide a strong return on investment.

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We currently have, directly and through Pollard, Intralot and NPI, contracts to provide a turnkey solution to the MSL, the VAL, the NHL, the NCEL, the AGLC and Sazka. We already generate revenues from all of these contracts. Our turnkey solution for the Michigan iLottery launched in August 2014, followed by our turnkey solution for Sazka, which launched in 2017. The rest of our turnkey contracts are in the early stages. Our turnkey solutions for the NHL and NCEL were launched in September 2018 and October 2019, respectively, and the VAL began operating a full iLottery program in July 2020 and our turnkey solution for the AGLC launched on September 30, 2020.

In addition to our long-term turnkey contracts, we currently have five games contracts with European customers, and we believe that we will secure additional games contracts in  the future. Because we utilize the games that we develop for our turnkey contracts, our marginal costs for every additional games contract are not significant. We therefore expect that as we increase our number of games contracts, our revenues from games contracts will become a more significant part of our overall revenues, positively impacting our profitability.

For the six months ended June 30, 2021 and 2020, we generated 14.7% and 14.0% of our revenues, respectively, from our contracts with William Hill and 3.5% and 6.1% of our revenues, respectively, from our contracts with the Aspire Group. For the years ended December 31, 2020, 2019  and 2018, we generated 13.6%,17.1% and 10.4% of our revenues, respectively, from our contracts with William Hill and 4.9%,12.4% and 14.6% of our revenues, respectively, from our contracts with the Aspire Group.. Although we expect these contracts to continue to represent a significant portion of our revenues over the next few years, we expect that the proportion of our revenues generated from William Hill and the Aspire Group will decline over time.

Our revenues from North America represented 81.2% and 80.2% of our revenues for the six months ended June 30, 2021 and 2020, respectively, and 80.0% and 69.1% of our revenues in the years ended December 31, 2020 and 2019, respectively. NPI generates 100% of its revenues from North America.

NeoPollard Interactive

We generated 14.2% and 7.9% of our revenues for the six month period ended June 30, 2021 and 2020, respectively, from services provided to NPI, such as development services. For the years ended December 31, 2020 and 2019, we generated 9.0% and 8.8% of our revenues, respectively, from such services provided to NPI We account for the financial results of NPI in our financial statements in accordance with the equity method. Although NPI’s results of operations can materially impact our profit (loss), the results of operations of NPI are only reflected in one line item in our consolidated statements of comprehensive income (loss) (Company’s share in gains (losses) of NPI) and our revenue and operating expenses do not reflect the results of operations of NPI.

However, we have included the audited financial statements of NPI for the years ended December 31, 2020 and 2019 in this prospectus. In order to provide more visibility into the results of operations of NPI, we have also included under “- Results of Operations of NPI” below a discussion of the period to period comparison of NPI’s results of operations.

Factors Affecting our Financial Condition and Results of Operations

Our financial condition and results of operations have been, and will continue to be, affected by a number of important factors, including the following:

iLottery Penetration

The iLottery Penetration in each of the markets where we provide our turnkey solution varies and is dependent on a number of factors, including the range of iLottery products provided, the acceptable forms of payments and iLottery marketing budgets. The level of iLottery Penetration in any market where we operate has a direct impact on our or NPI’s revenues and any increase in iLottery Penetration is expected to increase such revenues.

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Deregulation of lotteries in the United States

Lottery is a highly regulated industry. While lottery is offered in 45 states and the District of Columbia, iLottery Instants or DBGs are currently offered in only nine states and the District of Columbia (excluding states that offer only subscription-based iLottery). Expanding our business into additional U.S. states is an important part of our growth strategy and it is our belief that the growing credibility and brand awareness of certain iLottery platform and service providers, the demonstrated success of states with iLottery offerings and the increasing budgetary shortfalls in many U.S. states will accelerate the pace of deregulation and increase our growth potential.

The level of competition in the iLottery industry and the number of competitors

The iLottery industry is less exposed to new market entrants than other gambling markets due to the considerable barriers to entry imposed by government regulations and the need for unique and iLottery-tailored technology solutions. There is, however, intense competition among the few existing iLottery providers with respect to new iLottery contracts. We compete both for contracts to supply our turnkey solution and for contracts to supply our games.

The level of competition and number of competitors in our market is an important factor affecting our ability to win new contracts and to expand our business.

Key Performance Indicators

We use a multitude of key performance indicators (“KPIs”) on a daily basis to monitor our operations and inform decisions to drive further growth.

The KPIs included below offer a perspective on the historical performance of our platform in the aggregate across jurisdictions in which we operate. We believe these are useful indicators of the overall health of our business.

Network GGR

We define “GGR” as gross sales less winnings paid to players. We measure Network GGR as the total GGR generated by Instants and DBGs on our platform. We spend substantial time and efforts assisting our customers in increasing their GGR through our marketing and player acquisition tools. Tracking our network GGR provides us with valuable insight as to the level of effectiveness of such tools and their implementation.

	Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2020		2019		2018
	(in millions)
Network GGR	$	411	$	194	$	482	$	213	$	153

Network NGR

We define “NGR” as (i) in North America, gross sales less winnings paid to players and any promotion dollar incentives granted to players, and (ii) in Europe, gross sales less winnings paid to players, any gambling tax or duty paid on such sales and any promotion dollar incentives granted to players. We measure Network NGR as the total NGR generated by Instants and DBGs on our platform.

As most of our revenue share contracts are based on NGR, tracking Network NGR provides us with insight as to the marginal contribution of GGR growth to our revenues and allows us to detect inefficiencies in our GGR growth strategy.

	Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2020		2019		2018
	(in millions)
Network NGR	$	383	$	181	$	448	$	203	$	147

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Monthly active players

We define an “active player” as a player who took at least one action on our platform in any given month that resulted in a financial transaction. We track the number of active players for each of the customers using our turnkey solution. We define “monthly active players” for a given period as the average of the number of active players in each month during that period.

By measuring the number of monthly active players, we can track player rate of adoption of our interactive products and the effectiveness of marketing and retention activities being executed by our customers.

	Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2020		2019		2018
Monthly active players		636,119		394,117		437,524		277,005		207,349

Non-IFRS Information

This prospectus includes EBIT, EBITDA and Adjusted EBITDA, which are financial measures not presented in accordance with IFRS that we use to supplement our results presented in accordance with IFRS. We define “EBIT” as net profit (loss), plus income taxes, and interest and finance-related expenses. We define “EBITDA” as EBIT, plus depreciation and amortization. We define Adjusted EBITDA as EBITDA, plus initial public offering expenses, share-based compensation and the Company’s share of NPI’s depreciation and amortization.

We believe EBIT, EBITDA and Adjusted EBITDA are useful in evaluating our operating performance, as they are similar to measures reported by other public companies in our industry and are regularly used by security analysts, institutional investors and others in analyzing operating performance and prospects. Adjusted EBITDA is not intended to be a substitute for any IFRS financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We include these non-IFRS financial measures because they are used by our management to evaluate our operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. EBIT, EBITDA and Adjusted EBITDA exclude certain expenses that are required in accordance with IFRS because they are non-cash or are not associated with the operational activity of the business.

The following table reconciles our EBIT, EBITDA and Adjusted EBITDA to our net and total comprehensive income (loss), the closest IFRS measure, for the periods indicated:

	Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2020		2019
	Unaudited				Audited
	(in thousands)
Net and total comprehensive income (loss)	$	6,725	$	1,513	$	6,514	$	(3,978	)
Income taxes		1,069		426		1,443		1,243
Interest and finance-related expenses		2,649		2,513		5,069		4,121
EBIT		10,443		4,452		13,026		1,386
Depreciation and amortization		6,907		5,539		11,657		9,685
EBITDA		17,350		9,991		24,683		11,071
Initial public offering costs		-		1,089		2,796		—
Share based compensation		540		523		969		615
Company share of NPI depreciation and amortization(1)		108		100		203		168
Adjusted EBITDA	$	17,998	$	11,703	$	28,651	$	11,854

(1) Represents 50% of NPI’s depreciation and amortization (i) for the six months ended June 30, 2021 and 2020 of $215,000 and $199,000, respectively, and (ii) for the years ended December 31, 2020 and 2019 of $405,000 and $335,000, respectively. In accordance with IFRS, NeoGames’ share of NPI’s expense is not recorded in our consolidated statements of comprehensive income (loss), but is rather reflected in our consolidated financial statements in accordance with the equity method, as we share in 50% of the profit (loss) of NPI with certain adjustments. See Note 7A to our consolidated financial statements included elsewhere in this prospectus.

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Components of Results of Operations

Revenues

We generate revenues from our turnkey solutions, games, our contracts with William Hill and the Aspire Group, our joint operation of the Michigan iLottery for the MSL (the “Michigan Joint Operation”) and development services we provide to NPI.

Our turnkey solution contracts and certain of our games contracts provide for a revenue share model that entitles us, either directly, or indirectly through Pollard, Intralot or NPI, to a predetermined share of either the NGR or the GGR generated by iLotteries using our platforms and/or games. Our share of NGR or GGR varies between customers and generally depends on the type and scope of value-added services provided to the customer. Our contract with Jogos Santa Casa for providing games in Portugal is the only contract we have that is based on a fixed fee per annum. We entered into this contract on September 24, 2019 for a fixed fee of EUR 2,670,000, which we recognize as revenue on a straight-line basis over the contract’s three-year term. Our contract with Intralot Interactive S.A for providing games to the Croatian lottery is the only contract we have that is based on gross sales. The initial term of this contract expired in 2014 and the contract has been renewed for 12-month periods, with the most recent renewal extending the contract to December 31, 2021. This contract provides for a fee that is determined based on the volume of tickets sold by the customer.

We record as revenues at least 50% of the revenues earned by the Michigan Joint Operation from the MSL, with an incremental 3 to 5% above our 50% share of royalties earned by the Michigan Joint Operation from certain games subsequently developed and provided by NeoGames as compensation for our development of such games. We record as revenues 100% of the revenues earned from our European customers.

As with the revenues earned by the Michigan Joint Operation, we are entitled to at least 50% of the revenues earned by NPI from our customers, with an incremental 3 to 5% above our 50% share of royalties earned by NPI from certain games subsequently developed and provided by NeoGames as compensation for our development of such games (which we refer to collectively as our “NPI Revenues Interest”). However, while our revenues earned from the Michigan Joint Operation are reflected as revenues in our consolidated statement of operations, our NPI Revenues Interest is not recorded as revenues, but is rather reflected in our financial statements in accordance with the equity method. We share in 50% of the profit (loss) of NPI, subject to certain adjustments (including the incremental royalties mentioned above).

We generate revenues from William Hill in the form of a monthly fee charged to William Hill for its access to the sub-licensed NeoSphere platform. The monthly fee is calculated on a margin over cost basis.

We also record as revenue a monthly fee we receive from each of Aspire, the Michigan Joint Operation and NPI for certain software development and support services, which is calculated on a margin over cost basis.

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The table below presents the royalties and other revenues generated by NeoGames (including through the Michigan Joint Operation), as well as NeoGames’ NPI Revenues Interest, for the six months ended June 30, 2021 and 2020 and for the years ended December 31, 2020 and 2019.

	Six Months Ended June 30,				Year Ended December 31,
	2021		2020		2020		2019
	Unaudited				Audited
	(in thousands)
Royalties from turnkey contracts(1)	$	16,065	$	14,430	$	32,252	$	17,240
Royalties from games contracts		979		800		2,006		2,189
Use of IP rights		3,864		3,094		6,697		5,662
Development and other services – Aspire		928		1,348		2,430		4,099
Development and other services – NPI(2)		3,724		1,744		4,404		2,914
Development and other services – Michigan Joint Operation		676		655		1,413		958
Revenues	$	26,236	$	22,071	$	49,202	$	33,062
NeoGames’ NPI Revenues Interest(3)	$	16,754	$	2,579	$	9,535	$	1,956

(1) Includes NeoGames’ revenues from the Michigan Joint Operation and Sazka.

(2) Represents revenues recognized by NeoGames for services provided to NPI. Such amounts were also recognized as expenses by NPI. We share in 50% of the profit (loss) of NPI.

(3) Represents 50% of NPI’s revenues (i) in the six months ended June 30, 2021 and 2020 of $31.7 million and $4.9 million, respectively, plus an incremental $907 thousand and $135 thousand, respectively, of royalties from certain games as compensation for our subsequent development of such games and (ii) in the years ended December 31, 2020 and 2019 of $18.0 million and $3.7 million, respectively, plus an incremental $519 thousand and $86 thousand, respectively, of royalties from certain games as compensation for our subsequent development of such games. We refer to this, collectively, as our “NPI Revenues Interest” — however, in accordance with IFRS, our NPI Revenues Interest is not recorded as revenues in our consolidated statements of comprehensive income (loss), but is rather reflected in our consolidated financial statements in accordance with the equity method, as we share in 50% of the profit (loss) of NPI subject to certain adjustments (including the incremental royalties mentioned above). See Note 7A to our consolidated financial statements included elsewhere in this prospectus.

Operating expenses

Distribution expenses. Distribution expenses are primarily comprised of traffic-related costs, including processing fees (including geo-location costs and ID verification costs), call center expenses (including hardware and software maintenance costs, and telecommunication expenses), personnel-related costs associated with these functions and occupancy costs associated with the facilities where these functions are performed.

Development expenses. Our research and development expenses are primarily comprised of costs of our research and development personnel, contractor services in Ukraine and other development-related expenses. Research and development costs are expensed when incurred, except to the extent that such costs qualify for capitalization. We believe continued investments in research and development are important to maintain our competitive strengths and expect research and development costs to increase in absolute dollars, but to decrease as a percentage of total revenues.

Selling and marketing expenses. Our selling and marketing expenses are primarily comprised of costs of our marketing personnel, travel expenses and other sales and marketing-related expenses. Selling and marketing expenses are expensed as incurred. We intend to continue to invest in our sales and marketing capabilities in the future to continue to increase our brand awareness and, although our selling and marketing expenses have decreased in recent periods due to the effect of the COVID-19 pandemic on international traveling, conventions and marketing events, we expect these costs to increase on an absolute dollar basis as we grow our business.

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General and administrative expenses. General and administrative expenses primarily include costs of our executive, finance, legal, business development and other administrative personnel and service providers. General and administrative expenses are expensed as incurred. We expect that our general and administrative expenses will increase in absolute dollars for the foreseeable future as we expand our business, as well as to cover the additional cost and expenses associated with becoming a publicly listed company.

Depreciation and amortization

Our depreciation and amortization expenses are primarily comprised of amortization of capitalized research and development costs we incur in connection with our technical group personnel. We amortize these capitalized costs on a straight-line basis beginning when development is complete and the asset is available for use and continuing over their useful life, which we define as three years. We began to follow the directives of IFRS 16 in 2019, recognizing the annual costs of our leased premises within the amount of depreciation and amortization expenses.

Interest expense with respect to funding from related parties

Our interest expenses are primarily comprised of interest we incur on loans under the WH Credit Facility and the Aspire Promissory Notes (each as defined in “Related Party Transactions”). For more information, see “Related Party Transactions.”

Income taxes expense

    We are subject to Luxembourg corporation taxes on profits derived from activities carried out in Luxembourg. NGS is subject to Israeli corporate tax. NPI, NeoGames US, LLP and NeoGames Solutions LLC are subject to U.S. federal income tax as well as certain state income taxes. Due to the resources invested in growing and developing our business, we have, until recently, generated losses. As of December 31, 2020, 2019 and 2018, we had cumulative carry forward tax losses generated of $59.9 million, $63.0 million and $54.7 million, respectively. On May 18, 2021, we obtained a pre-ruling from the Israeli Tax Authority regarding the transfer of certain intellectual property rights relating to the online lottery business of NeoGames S.A. to NGS, the transfer price for which was determined by a third-party study to be $57.0 million, which will have the effect of reducing our cumulative carry forward tax losses by the same amount.

Company’s share in gains (losses) of NPI

We own 50% of the equity of NPI and we record 50% of NPI’s profit or loss as our profit or loss, as adjusted to compensate the Company for our games development and DBG sales.

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Results of Operations

The following table sets forth our results of operations in U.S. dollars and as a percentage of total revenues for the periods presented.

	Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2020			2019			2018
	Unaudited						Audited
Consolidated Statements (in thousands) of Operations Data
Revenues	$	26,236		$	22,071		$	49,202		$	33,062		$	23,478
Distribution expenses		5,086			2,863			6,685			4,252			4,519
Development expenses		4,174			3,436			7,452			6,877			5,782
Selling and marketing expenses		607			764			1,483			1,981			1,457
General and administrative expenses		5,542			3,252			7,496			4,957			4,948
Initial public offering expenses		—			1,089			2,796			—			—
Depreciation and amortization		6,907			5,539			11,657			9,685			7,759
Profit (loss) from operations		3,920			5,128			11,633			5,310			(987	)
Interest expense with respect to funding from related parties		2,414			2,053			4,343			3,792			2,309
Finance income		—			(22	)		(21	)		(53	)		—
Finance expenses		235			482			747			382			195
Profit (loss) before income taxes expense		1,271			2,615			6,564			1,189			(3,491	)
Income taxes expense		(1,069	)		(426	)		(1,443	)		(1,243	)		(586	)
Profit (loss) after income taxes expense		202			2,189			5,121			(54	)		(4,077	)
Company’s share in gains (losses) of NPI		6,523			(676	)		1,393			(3,924	)		(1,898	)
Net and total comprehensive income (loss)	$	6,725		$	1,513		$	6,514		$	(3,978	)	$	(5,975	)

	Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2020			2019			2018
	Unaudited						Audited
	(as a % of revenues in absolute numbers)
Consolidated Statements of Operations Data:
Revenues		100.00	%		100.00	%		100.00	%		100.00	%		100.00	%
Distribution expenses		19.4			13			13.6			12.9			19.2
Development expenses		15.9			15.6			15.1			20.8			24.6
Selling and marketing expenses		2.3			3.5			3.0			6.0			6.2
General and administrative expenses		21.1			14.7			15.2			15.0			21.1
Initial public offering expenses		0.0			4.9			5.7			0.0			0.0
Depreciation and amortization		26.3			25.1			23.7			29.3			33.0
Profit (loss) from operations		14.9			23.2			23.6			16.0			4.2
Interest expense with respect to funding from related parties		9.2			9.3			8.8			11.5			9.8
Finance income		0.0			0.1			0.0			0.2			0.0
Finance expenses		0.9			2.2			1.5			1.2			0.8
Profit (loss) before income taxes expense		4.8			11.8			13.3			3.6			14.9
Income taxes expense		4.1			1.9			2.9			3.8			2.5
Profit (loss) after income taxes expense		0.8			9.9			10.4			0.2			17.4
Company’s share in gains (losses) of NPI		24.9			3.1			2.8			11.9			8.1
Net and total comprehensive income   (loss)		25.6	%		6.9	%		13.2	%		12.0	%		25.4	%

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Six months ended June 30, 2021 compared to six months ended June 30, 2020

Revenues

Revenues for the six months ended June 30, 2021 were $26.2 million, an increase of $4.1 million, or 18.9%, compared to $22.1 million for the six months ended June 30, 2020.

Revenues from our turnkey solution contracts for the six months ended June 30, 2021 increased by 11.3% to $16.0 million, compared to $14.4 million for the six months ended June 30, 2020. The increase was primarily driven by an increase in NGR generated by MSL and GGR generated by Sazka.

Revenues from our games increased for the six months ended June 30, 2021 by 22.4% to $1.0 million, compared to $0.8 million for the six months ended June 30, 2020. The increase was primarily driven by the addition of one additional European portfolio customer.

Revenues from our contracts with William Hill and the Aspire Group and certain software services we provide to NPI and the Michigan Joint Operation increased by 34.4% for the six months ended June 30, 2021 to $9.2 million, compared to $6.9 million for the six months ended June 30, 2020. This increase was primarily driven by an increase in the revenue generated from William Hill’s platform access, and by an increase in the revenue generated from NPI due to the launch of our turnkey solution for the AGLC in September 2020.

Distribution expenses

Distribution expenses for the six months ended June 30, 2021 were $5.1 million, an increase of $2.2 million, or 77.6%, compared to $2.9 million for the six months ended June 30, 2020. The increase was primarily driven by an increase in the number of employees in our call center and an increase in expenses of the Michigan Joint Operation due to concessions made in the context of renewal of the MSL Agreement.

Development expenses

Development expenses for the six months ended June 30, 2021 were $4.2 million, an increase of $0.8 million, or 21.5%, compared to $3.4 million for the six months ended June 30, 2020. The increase was primarily driven by an increase in the  number of employees in our Ukraine and Tel Aviv research and development centers.

Selling and marketing expenses

Selling and marketing expenses for the six months ended June 30, 2021 were $0.6 million, a decrease of $0.2 million, or 20.5%, compared to $0.8 million for the six months ended June 30, 2020. The decrease was primarily driven by a decrease in travel expenses due to the effect of COVID-19 on international traveling, conventions and marketing events.

General and administrative expenses

General and administrative expenses for the six months ended June 30, 2021 were $5.5 million, an increase of $2.2 million, or 70.4%, compared to $3.3 million for the six months ended June 30, 2020. The increase was primarily driven by added costs associated with operating a publicly traded company and an increase in the number of employees in our Tel Aviv office.

Depreciation and amortization

Depreciation and amortization for the six months ended June 30, 2021 was $6.9 million, an increase of $1.4 million, or 24.7%, compared to $5.5 million for the six months ended June 30, 2020. The increase was primarily driven by an increase in the amortization of our capitalized software costs.

Interest expense with respect to funding from related parties

Interest expense with respect to funding from related parties for the six months ended June 30, 2021 was $2.4 million, an increase of $0.3 million, or 17.6%, compared to $2.1 million for the six months ended June 30, 2020. The increase was primarily driven by the amount associated with the discount amortization schedule for the Aspire Promissory Notes.

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Income taxes expense

Income taxes expense for the six months ended June 30, 2021 was $1.1 million, an increase of $0.7 million, or 150.9%, compared to $0.4 million for the six months ended June 30, 2020. The increase was primarily driven by an increase in the combined profits of the Company and NPI.

Company’s share in gains (losses) of NPI

The Company’s share in the profits of NPI for the six months ended June 30, 2021 was $6.5 million, an increase of $7.2 million, or 1064.9%, compared to loss of $0.7 million for the six months ended June 30, 2020. This increase was primarily driven by an increase of $14.1 million in the revenues generated by NPI under its turnkey solutions with the VAL, NHL, NCEL and AGLC.

Year ended December 31, 2020 compared to year ended December 31, 2019

Revenues

Revenues for the year ended December 31, 2020 were $49.2 million, an increase of $16.1 million, or 48.8%, compared to $33.1 million for the year ended December 31, 2019.

Revenues from our turnkey solution contracts increased in 2020 by 87.1% to $32.3 million, compared to $17.2 million in 2019. The increase was primarily driven by an increase in the NGR generated by the MSL and GGR generated by Sazka.

Revenues from our games decreased in 2020 by 8.4% to $2.0 million, compared to $2.2 million in 2019.

Revenues from our contracts with William Hill and Aspire and certain software services we provide to NPI increased by 9.6% in 2020 to $14.9 million, compared to $13.6 million in 2019. This increase was primarily driven by a full year of revenue generated from William Hill’s platform access associated with licensing the platform in a larger number of states, and by an increase of 51.1% in the revenue generated from NPI due to the launch of our turnkey solution for the AGLC in September 2020.

Distribution expenses

Distribution expenses for the year ended December 31, 2020 were $6.7 million, an increase of $2.4 million, or 57.2%, compared to $4.3 million for the year ended December 31, 2019. The increase was primarily driven by an increase of $4.0 million in processing fees due to an increase of 101.7% in NGR generated by the MSL compared to the year ended December 31, 2019.

Development expenses

Development expenses for the year ended December 31, 2020 were $7.5 million, an increase of $0.6 million, or 8.4%, compared to $6.9 million for the year ended December 31, 2019. The increase was primarily driven by the recruitment of additional employees in our Ukraine and Tel Aviv research and development centers.

Selling and marketing expenses

Selling and marketing expenses for the year ended December 31, 2020 were $1.5 million, a decrease of $0.5 million, or 25.1%, compared to $2.0 million for the year ended December 31, 2019. The decrease was primarily driven by a decrease in travel expenses due to the effect of COVID-19 on international traveling, conventions and marketing events.

General and administrative expenses

General and administrative expenses for the year ended December 31, 2020 were $7.5 million, an increase of $2.5 million, or 51.2%, compared to $5.0 million for the year ended December 31, 2019. The increase was primarily driven by the addition of employees in our Tel Aviv office and bonus provisions for certain key employees. In addition, the increase was due to additional professional fees following the change from a private to a public company.

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Depreciation and amortization

Depreciation and amortization for the year ended December 31, 2020 was $11.7 million, an increase of $2.0 million, or 20.4%, compared to $9.7 million for the year ended December 31, 2019. The increase was primarily driven by an increase in the amortization of our capitalized software costs.

Interest expense with respect to funding from related parties

Interest expense with respect to funding from related parties for the year ended December 31, 2020 was $4.3 million, an increase of $0.5 million, or 14.5%, compared to $3.8 million for the year ended December 31, 2019. The increase was primarily driven by the annual amount associated with the discount amortization schedule for the Aspire Promissory Notes.

Income taxes expense

Income taxes expense for the year ended December 31, 2020 was $1.4 million, an increase of $0.2 million, or 16.1%, compared to $1.2 million for the year ended December 31, 2019.

Company’s share in gains (losses) of NPI

Our share in the profit of NPI for the year ended December 31, 2020 was $1.4 million, an increase of $5.3 million compared to $3.9 million losses for the year ended December 31, 2019. This increase was primarily driven by an increase of $7.6 million in the revenues generated by NPI under its turnkey solutions with the VAL, NHL, NCEL and AGLC.

Year ended December 31, 2019 compared to year ended December 31, 2018

Revenues

Revenues for the year ended December 31, 2019 were $33.1 million, an increase of $9.6 million, or 41.0%, compared to $23.5 million for the year ended December 31, 2018.

Revenues from our turnkey solution contracts increased in 2019 by 26.0% to $17.2 million, compared to $13.7 million in 2018. The increase was primarily driven by an increase in the NGR generated by the generated by the MSL and GGR generated by Sazka.

Revenues from our games increased in 2019 by 4.0% to $2.2 million, compared to $2.1 million in 2018. Revenues from our contracts with William Hill and Aspire and certain software services we provide to NPI increased by 77.0% in 2019 to $13.6 million, compared to $7.7 million in 2018. This increase was primarily driven by a full year of revenue generated from William Hill’s higher usage of the NeoSphere platform through a larger number of developers and by an increase of 135% in the revenue generated from NPI due to the launch of our turnkey solution for the NCEL in October 2019.

Distribution expenses

Distribution expenses for the year ended December 31, 2019 were $4.3 million, a decrease of $0.2 million, or 6.0%, compared to $4.5 million for the year ended December 31, 2018. The decrease was primarily driven by $0.2 million of distribution expenses recognized in the year ended December 31, 2018 resulting from PayPal clearing fees for the year ended December 31, 2017, as the Company’s accounting estimate for such expenses in the year ended December 31, 2017 was short by approximately $0.2 million at the approval date of the financial statements for that year and as such, was treated within the directives of changes in accounting estimates in the following reporting period.

Development expenses

Development expenses for the year ended December 31, 2019 were $6.9 million, an increase of $1.1 million, or 19.0%, compared to $5.8 million for the year ended December 31, 2018. The increase was primarily driven by the recruitment of additional employees in our Tel Aviv research and development center.

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Selling and marketing expenses

Selling and marketing expenses for the year ended December 31, 2019 were $2.0 million, an increase of $0.5 million, or 36.0%, compared to $1.5 million for the year ended December 31, 2018. The increase was primarily driven by an increase in the number of employees in our games studio and marketing operations in the United States.

General and administrative expenses

General and administrative expenses for both years ended December 31, 2019 and 2018 were $5.0 million. Despite no material change in our overall general and administrative expenses, our labor and related and professional fees increased by $0.9 million, which was offset by a decrease in rental expenses associated with the implementation of IFRS 16.

Depreciation and amortization

Depreciation and amortization for the year ended December 31, 2019 was $9.7 million, an increase of $1.9 million, or 25.0%, compared to $7.8 million for the year ended December 31, 2018. The increase was primarily driven by the implementation of IFRS 16 relating to rental expenses.

Interest expense with respect to funding from related parties

Interest expense with respect to funding from related parties for the year ended December 31, 2019 was $3.8 million, an increase of $1.5 million, or 64.0%, compared to $2.3 million for the year ended    December 31, 2018. The increase was primarily driven by an increase in the principal amount outstanding under the WH Credit Facility.

Income taxes expense

Income taxes expense for the year ended December 31, 2019 was $1.2 million, an increase of $0.6 million, or 112.0%, compared to $0.6 million for the year ended December 31, 2018. The increase was primarily driven by a one off provision of $0.5 million associated with costs attributable to the 2015 Plan (as defined in “Management — Long-Term Incentive Plans — 2015 Plan (Amended 2019)”).

Company’s share in gains (losses) of NPI

Our share in the losses incurred by NPI for the year ended December 31, 2019 was $3.9 million, an increase of $2.0 million, or 107.0%, compared to $1.9 million for the year ended December 31, 2018. This increase in the losses incurred by NPI was primarily driven by significant up-front expenses related to the launch of our turnkey solution for the NCEL in October 2019.

Results of Operations of NPI

	Year Ended December 31,
	2020		2019
	Audited (in thousands)
Revenues	$	18,032	$	3,740
Distribution expenses		16,116		10,480
Selling, general and marketing expenses		776		1,067
Depreciation		405		335
Net and total comprehensive income (loss)	$	735		(8,142	)
Net and total comprehensive income (loss) 50%		367		(4,071	)
Adjustments		1,026		147
Share in profits (losses) of NPI		1,393		(3,924	)

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Year ended December 31, 2020 compared to year ended December 31, 2019

Revenue

Revenues for the year ended December 31, 2020 were $18.0 million, an increase of $14.3 million, or 382.1%, compared to $3.7 million for the year ended December 31, 2019. This increase was primarily driven by an increase in the revenues generated under our turnkey solutions with the VAL, NHL and NCEL and the new solution with the AGLC.

Distribution expenses

Distribution expenses for the year ended December 31, 2020 were $16.1 million, an increase of $5.6 million, or 53.8% compared to $10.5 million for the year ended December 31, 2019. This increase was primarily driven by the set-up costs associated with the launch of our turnkey solution for the AGLC and by increase in processing fees due to increase in revenues.

Selling, general and marketing expenses

Selling and marketing expenses for the year ended December 31, 2020 were $0.8 million, a decrease of $0.3 million, or 27.3% compared to $1.1 million for the year ended December 31, 2019. This decrease was primarily driven by a decrease in marketing expenses due to the effect of the COVID-19 pandemic on conventions and marketing events and by the legal charges incurred by NPI in the litigation with the DoJ in 2019.

Liquidity and Capital Resources

We measure liquidity in terms of our ability to fund the cash requirements of our business operations, including working capital and capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Since our inception, we have financed our operations primarily through the Aspire Promissory Notes and the WH Credit Facility.

Our primary requirements for liquidity and capital resources are to finance working capital, capital expenditures (including the deposit of performance bonds required under our U.S. contracts) and general corporate purposes. We also fund 50% of the losses of NPI (with Pollard funding the remaining 50%), subject to certain adjustments. We believe that our sources of liquidity and capital resources will be sufficient to meet our business needs for at least the next 12 months.

As of June 30, 2021, we had $58.8 million equity, $45.5 million working capital and $65.4 million cash and cash equivalents, compared to $50.8 million equity, $56.1 million working capital and $59.8 million cash and cash equivalents as of December 31, 2020.

During 2018, we borrowed $4.0 million with a stated annual interest rate of 5.0% and $2.0 million with a stated annual interest rate of 1.0% under the WH Credit Facility. The proceeds were used to fund the costs of new implementation projects during 2018 with the NHL and NCEL. During 2019, we borrowed a total of $6.5 million with a stated annual interest rate of 1.0% under the WH Credit Facility to secure the guarantees and bonding facilities for new contracts with the NCEL and additional prospective customers. During 2020, we borrowed $2.5 million with a stated annual interest of 1.0% and approximately $2.0 million with a stated annual interest of 5.0% under the WH Credit Facility. The proceeds were used to refinance a portion of our debt under the WH Credit Facility and to pay off all interest accrued under the WH Credit Facility. In the six months ended June 30, 2021, we made payments on the WH Credit Facility in the amount of $2.1 million. For further information regarding the WH Credit Facility, see “Related Party Transactions - WH Credit Facility.”

The difference in the interest rates between the calculated fair value interest rate and interest due on these loans was recorded as loan discounts to be amortized over the funding repayment period as additional finance expenses. Accordingly, we recorded interest expenses of $1.2 million in 2019, $1.4 million in 2020 and $0.7 million in the six month period ended June 30, 2021 based on the fair value market interest rate.

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    In conjunction with this offering, we expect to enter into a $100 million senior secured credit facility (the "revolving credit facility") with J.P. Morgan Securities LLC and Deutsche Bank Securities Inc., two of the underwriters of this offering. The revolving credit facility will be guaranteed on a secured basis by the Company and will have a first priority interest in all tangible and intangible U.S. assets that will be senior to existing debt, if allowable. Our ability to borrow under the revolving credit facility, which will have a term of three years, will be subject to compliance with certain financial covenants. This summary is qualified in its entirety by reference to the credit agreement for the revolving credit facility, the form of which has been filed as an exhibit to the registration statement of which this prospectus is a part.

Cash Flows

The Company generates its inbound cash flow through the collection of revenues being charged to its customers monthly. The Company’s share of cash generated through North American turnkey contracts is being delivered through regular monthly settlements of net collections of customers’ revenues less NPI’s or Pollard’s share of costs contributed by us to support delivery commitments.

The following table presents the summary cash flows information for the periods presented:

	Six Months Ended June 30,						Year Ended December 31,
	2021			2020			2020			2019			2018
	Unaudited						Audited
(in thousands)
Net cash provided by operating activities	$	8,828		$	8,819		$	24,518		$	15,040		$	5,378
Net cash used in investing activities		(1,613	)		(7,418	)		(12,696	)		(17,424	)		(11,721	)
Net cash provided by (used in) financing activities		(1,587	)		(702	)		41,929			5,166			6,000
Net increase (decrease) in cash and cash equivalents	$	5,628		$	699		$	53,751		$	2,782		$	(343	)

Net cash provided by operating activities

Net cash provided by operating activities for the six months ended June 30, 2021 was $8.8 million, compared to $8.8 million for the six months ended June 30, 2020.

Net cash provided by operating activities for the year ended December 31, 2020 was $24.5 million, an increase of $9.5 million, compared to $15.0 million for the year ended December 31, 2019. The increase primarily resulted from a continued increase in the NGR generated by the MSL.

Net cash provided by operating activities for the year ended December 31, 2019 was $15.0 million, an increase of $9.6 million, compared to $5.4 million for the year ended December 31, 2018. The increase primarily resulted from a full year of revenues generated from William Hill for its use of our NeoSphere platform and related services as well as a continued increase in the NGR generated by the MSL and the GGR generated by Sazka.

Net cash used in investing activities

Net cash used in investing activities for the six months ended June 30, 2021 was $1.6 million, a decrease of $5.4 million, compared to $7.4 million for the six months ended June 30, 2020. The decrease primarily resulted from an increase in proceeds received from NPI in the six months ended June 30, 2021 compared to funding NPI in the six months ended June 30, 2020.

Net cash used in investing activities for the year ended December 31, 2020 was $12.7 million, a decrease of $4.7 million, compared to $17.4 million for the year ended December 31, 2019. The increase was primarily driven by an increase in proceeds received from NPI in 2020 compared to funding to NPI in 2019.

Net cash used in investing activities for the year ended December 31, 2019 was $17.4 million, an increase of $5.7 million, compared to $11.7 million for the year ended December 31, 2018. The increase was primarily driven by the increased number of development personnel, whose contribution was capitalized.

Net cash provided by (used in) financing activities

Net cash used in financing activities for the six months ended June 30, 2021 was $1.6 million, which was primarily the result of a principal payment made pursuant to the WH Credit Facility in the amount of $1.5 million.

Net cash provided by financing activities for the year ended December 31, 2020 was $41.9 million, which was primarily the result of net proceeds from the Company’s initial public offering.

Net cash provided by financing activities for the year ended December 31, 2019 was $5.2 million, which was primarily the result of drawdowns from the WH Credit Facility.

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Net cash provided by financing activities for the year ended December 31, 2018 was $6.0 million, which was primarily the result of drawdowns from the WH Credit Facility.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations and commitments as of December 31, 2020:

As of December 31, 2020
In 3 months	Between 3 months and 1 year	More than 1 year	Total
(in thousands)

Capital notes and accrued interest due to the Aspire Group	$	—	$	—	$	22,419	$	22,419
Loans from William Hill		—		2,022		11,155		13,177
Lease liabilities		—		1,651		1,855		3,506
Trade and other payables		4,910		—		—		4,910
Total	$	4,910	$	3,673	$	35,429	$	44,012

The following table summarizes our contractual obligations and commitments as of June 30, 2021:

As of June 30, 2021
In 3 months	Between 3 months and 1 year	More than 1 year	Total
Unaudited (in thousands)
		$

Capital notes and accrued interest due to the Aspire Group	$	—	$	22,420		—	$	22,420
Loans from William Hill		—		—		11,212		11,212
Lease liabilities		—		1,486		1,198		2,684
Trade and other payables		4,619		—		—		4,619
Total	$	4,619	$	23,906	$	12,410	$	40,935

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Off-Balance Sheet Arrangements

We do not currently engage in off-balance sheet financing arrangements. In addition, we do not have any interest in entities referred to as variable interest entities, which includes special purpose entities and other structured finance entities.

Quantitative and Qualitative Disclosures About Market Risk

Our operations are exposed to a variety of financial risks: market and currency risk, interest rate risk, contractual risk, credit risk and liquidity risk. Our overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance.

Risk management is carried out by management under policies approved by our board of directors.

Further quantitative information in respect of these risks is presented throughout our consolidated financial statements included elsewhere in this prospectus.

There have been no substantive changes in our exposure to financial instrument risks, our objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated below.

Market and Currency Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign exchange rates.

We have exposure to foreign currency risk. Sales invoicing to customers is denominated primarily in U.S. dollars and euros and the Company’s most material expenses, such as labor, are denominated in New Israeli Shekels.

Our board of directors carefully monitors exchange rate fluctuations and reviews their impact on our net assets and position. Exchange rates are negotiated with our main provider of banking services as and when needed. We do not enter into any derivative financial instruments to manage our exposure to foreign currency risk.

 A decrease of 5% in the U.S. dollar/NIS exchange rate would have increased our cost of revenue and operating expenses by approximately 2.8%, 2.7% and 3.4% during the six months ended June 30, 2021 and years ended December 31, 2020 and 2019, respectively.

Since December 31, 2019, we have seen significant macro-economic uncertainty as a result of the COVID-19 outbreak. The scale and duration of this development remains uncertain and could impact our earnings and cash flow. As part of our risk management process, we are closely monitoring the situation, including factors as outlined elsewhere in this prospectus as it relates to the Company’s ability to continue as a going concern.

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Interest Rate Risk

Due to our minimal exposure to interest rate risk, we have not prepared any sensitivity analysis.

Contractual Risk

In the ordinary course of business, we contract with various parties. These contracts may include performance obligations, indemnities and contractual commitments and termination for convenience clauses. Also, in certain contracts we are committed to follow strict service-level agreement delivery commitments associated with heavy liquidated damages for events of failures. Our management monitors our performance under contracts with any relevant counterparties against such contractual conditions to mitigate the risk of material, adverse non-compliance.

Credit Risk

Credit risk is the financial loss if a customer or counterparty to financial instruments fails to meet its contractual obligation. Credit risk arises from our cash and cash equivalents and trade and other balances. The concentration of our credit risk is considered by counterparty, geography and currency. We give careful consideration to which organizations we use for our banking services in order to minimize credit risk.

An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows, although there have been no such impairments over the review year. We use forward looking information in their analysis of expected credit losses for all instruments, which is limited to the carry value of cash and cash equivalents and trade and other balances. Our management considers the above measures to be sufficient to control the credit risk exposure.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet our financial obligations when due. This risk relates to our prudent liquidity risk management and implies maintaining sufficient cash. Ultimate responsibility for liquidity risk management rests with our board of directors. Our board of directors manages liquidity risk by regularly reviewing our cash requirements by reference to short-term cash flow forecasts and medium-term working capital projections prepared by management.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that are the most important to the portrayal of the Company’s financial condition and results of operations, and that require the most difficult, subjective and complex judgments. While the Company’s and NPI’s significant accounting policies are described in more detail in the notes to their respective consolidated financial statements, the most critical accounting policies, discussed below, pertain to areas where judgment of management, historical factors and estimates require a high degree of involvement when determining the final reported balance in the Company’s consolidated financial statements.

Funding transactions with related parties

The fair values of our funding transactions with related parties, the reserve relating to the funding transactions with a related group and the related interest expenses are recorded based on discounted cash flow of the anticipated repayments, discounted by an annual market interest rate determined by a reputable appraiser.

Capitalization of development costs

Costs relating to internally generated intangible assets are capitalized if the criteria for recognition as assets are met. The initial capitalization of costs is based on management’s judgment that technological and economic feasibility criteria are met. In making this judgment, management considers the progress made in each development project and its latest forecasts for each project.

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Share based payments/compensation

Share options are vested over service periods, but exercisable only upon consummation of certain events as provided in the grants. Share based compensation expenses are recorded based on the fair values of the options, using the Black-Scholes model assumptions as well as the likelihood of the fulfilment of such events at the respective grant dates.

Revenue Recognition

Revenues are recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring services to a customer. The Company generates its revenues through three streams:

• royalties from licensing of technological platforms and provision of proprietary games content (which are recognized in the accounting periods in which the gaming transactions occur);

• fees from use of intellectual property rights (which are recognized over the useful periods of the intellectual property rights); and

• fees from development services (which are recognized in the accounting periods in which services are provided).

Recent Accounting Pronouncements

Our recent accounting pronouncements are shown in Note 2, W to our consolidated financial statements.

JOBS Act

We are an emerging growth company, as defined in the JOBS Act. We intend to rely on certain of the exemptions and reduced reporting requirements provided by the JOBS Act. As an emerging growth company, we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, and (ii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis).

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BUSINESS

Our Company

We are a technology-driven business that is an innovator in the lottery industry. As a global B2G and B2B technology and service provider to state lotteries and other lottery operators, we offer our customers a full-service solution that includes all of the elements required for the offering of lottery games, including Instants and DBGs (both as defined below), via personal computers, smartphones and handheld devices (“iLottery”). These elements include technology platforms, a range of value-added services and a game studio with a large portfolio of games. The value-added services that we offer facilitate various aspects of the iLottery offering including regulation and compliance, payment processing, risk management, player relationship management and player value optimization. Our complete solution allows our customers to enjoy the benefits of marketing their brands and generating traffic to their iLottery sales channels. We believe that we are the only full-service company exclusively focused on the iLottery industry.

NeoGames was established as an independent company in 2014, following a spin-off from Aspire Global Plc (formerly known as NeoPoint Technologies Limited) (“Aspire” and, together with its subsidiaries, the “Aspire Group”), a B2C and B2B service provider in the iGaming industry. Prior to the spin-off from Aspire, our management team was responsible for the iLottery business of Aspire, which derived the majority of its revenues from the sale of iLottery games to various lotteries in Europe. In 2014, we began to focus on the U.S. iLottery market, which opened in 2012 with the introduction of online lottery ticket sales in Illinois. In order to access this significant market opportunity, we partnered with Pollard Banknote Limited (“Pollard”), one of the leading vendors to the global lottery industry. In 2014, we signed our first turnkey solution contract in the United States with the MSL, as a sub-contractor to Pollard.

In July 2014 we formed NPI, a joint venture with Pollard, for the purpose of identifying, pursuing, winning and executing iLottery contracts in the North American lottery market. NPI combines the Company’s technology and iLottery business and operational experience with Pollard’s infrastructure, administrative capabilities and relationships with lotteries in North America. NPI is managed by an executive board of four members, consisting of two members appointed by NeoGames and two members appointed by Pollard. NPI has its own general manager and dedicated workforce and operates as a separate entity. However, it relies on NeoGames and Pollard for certain services, such as technology development, business operations and support services from NeoGames and corporate services, including legal, banking and certain human resources services, from Pollard.

Since its inception, NPI has secured iLottery contracts with the VAL, the NHL (as a sub-contractor to Intralot), the NCEL and the AGLC. All of our iLottery business in North America is conducted through NPI, except in Michigan, where the contract is between the MSL and Pollard and we support the Michigan iLottery as a subcontractor of Pollard. We continue to conduct all of our business outside of North America through NeoGames.

We are a 100% digital business that is using technology to transform the traditional retail-based lottery market. Lotteries are a crucial revenue source for our customers as they provide much-needed contributions to state budgets to fund public projects and initiatives.  The iLottery industry, and we as a company, benefit from long-term, multi-year contracts with our customers that generally start with an initial term of four to seven years with additional embedded extension option. Moreover, our software-as-a-service business model allows our platform to be highly scalable in a growing industry while benefitting from a visible revenue stream tied to our customers’ gaming revenues. There are also significant barriers to enter the iLottery industry due to complexities surrounding regulatory and government contracts and specialized technology requirements. Understanding these dynamics, we have developed a leading market position in the United States. We currently provide iLottery solutions to the largest number of U.S. iLottery customers, including the highest-grossing iLottery program in the United States (the Michigan iLottery). Our revenues (which, as discussed in “Financial Condition and Results of Operations - Components of Results of Operations - Revenues,” excludes our NPI Revenues Interest (as defined therein)) were $26.2 million for the six months ended June 30, 2021, an increase of 18.9% compared to our revenues of $22.1 million in the six months ended June 30, 2020, and were $49.2 million, $33.1 million and $23.5 million for the year ended December 31, 2020, 2019 and 2018, respectively, representing an increase 48.8% and 40.8%, respectively.

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Global Customer Base⁽¹⁾

(1) As of March 31, 2021

The Lottery Industry

Lottery is a well-established and accepted form of gambling that has been used to fund public projects and good causes. Forms of lotteries are offered through over 200 organizations around the world and generated gross sales of more than $300 billion in 2019, according to La Fleur’s 2020 World Lottery Almanac (“La Fleur’s”). These lotteries are typically operated or overseen by governments or state-owned organizations (which rely on private contractors) and serve an important role in funding state budgets. In the year ended December 31, 2019, U.S. lotteries generated $25.3 billion in profits for U.S. state governments, according to La Fleur’s. In turn, state governments use lottery profits to fund a wide range of socially beneficial causes including education, economic development, environment initiatives, healthcare, sports facilities, construction and infrastructure projects, cultural activities and tax relief. In our experience, many jurisdictions have come to rely on the proceeds from lottery operations as a significant source of funding for such causes.

In order to protect the lottery’s stability and dependability as a source of funding for government budgets, governments have instituted practices and protocols that prospective vendors to the lotteries must follow in order to compete for lottery contracts, including the:

• use of complex official public procurement processes, requiring substantial commitments from participating vendors, such as performance bonds;

• inclusion of termination at will provisions in contracts; and

• requirement for specialized technology specifically for lottery that complies with lottery rules.

Governments also have tended not to frequently change lottery vendors while lottery operations are ongoing, to avoid the risks inherent to such change.

Currently, the number of companies that service the lottery industry is limited given the meaningful cost and required expertise.

Though the forms of lottery games vary, the basic structure of all lottery games involves the drawing of numbers at random for the chance of winning a cash prize. Lottery has generally been separated into two primary products:

• draw based games (“DBGs”), such as Powerball, in which players select numbers and the winning combination or ticket is determined by a scheduled draw; and

• instant tickets (“Instants”) in which players can instantly reveal a pre-determined result through which they can learn whether their ticket entitles them to a prize.

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Instants are relatively more popular in North America than in Europe, representing 61.3% of lottery gross sales in North America compared to only 28.9% of lottery gross sales in Europe during 2019. Retail gross sales from Instants totaled approximately $51.1 billion in the United States in 2019, according to La Fleur's.

The global lottery industry has seen steady growth since 2003, with gross sales increasing at a CAGR of 3.5%, according to H2GC. Growth in this market has been stable and relatively uninterrupted by economic events or recessions, illustrating its stable nature. The industry’s steady performance is characteristic of its traditional game offerings, which have proved perpetually popular and have seen few dramatic innovations since the introduction of Instants in 1980.

Traditionally, Instants and DBGs have only been distributed through retail channels. In the United States, which has been our main revenue driver for the past five years, lottery is offered in 45 states and the District of Columbia representing $91.1 billion in retail gross sales in 2020.

The global lottery market had gross sales of approximately $310 billion in 2019.

 

Source: La Fleur’s 2020 World Lottery Almanac, United Nations.

The iLottery Industry

Globally, lotteries are introduced through online sales channels in order to mitigate the effect of a   maturing market, increase revenues and remain viable as an entertainment option in an increasingly competitive landscape. Certain European markets, which were early to adopt online lottery channels, have seen significant iLottery Penetration, particularly in countries like Norway (49.5% in 2018;  $129 per   capita), Finland (42.4% in 2018; $125 per capita) and the United Kingdom (31.1% in 2020; $48 per capita), according to GamblingCompliance. However, in the United States, where iLottery was introduced in 2012, iLottery Penetration has only exceeded 20% in Michigan.

iLottery Penetration in the U.S. and Select Mature European Markets

Source: GamblingCompliance, state lottery commissions.

¹ Represents digital sales as a percentage of total sales for the national lottery.

² Represents iLottery gross sales from Instants in Michigan, Pennsylvania, New Hampshire, Georgia and Kentucky as a percentage of total lottery gross sales from Instants in the United States.

The iLottery industry shares many characteristics with the traditional lottery industry, including an important role within government budgets, a high degree of regulation, limited competition and a long procurement process. These shared characteristics include:

• long sale cycles and substantial upfront investment;

• long-term relationships with limited turnover; and

• growth alongside other forms of gambling.

iLottery has been able to grow alongside the traditional lottery, suggesting that typical iLottery players may have a distinct profile from that of typical traditional retail lottery players.

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Long sale cycles and substantial upfront investment

Launching a full iLottery program requires a considerable upfront investment in time and capital to develop what we refer to as “specialized technology” (the technology that is developed specifically for the lottery industry and requires considerable expertise), create a portfolio of tailored games and establish facilities to host the operations and data processing within the jurisdiction in which iLottery is offered.

   Unlike in traditional retail lottery, where a single state may have multiple service providers for Instants and   a separate service provider for DBGs, for iLottery a customer typically expects a single service provider to support the full suite of Instants and DBGs. These upfront investments are further amplified by a procurement process for government customers that involves significant restrictions and formalities, and a general requirement for an iLottery provider to deposit performance bonds to guaranty the program’s level   of performance.

A typical roll-out of our turnkey solution for a new customer requires a significant upfront capital investment and generally takes a number of months until full integration is achieved. The key variables regarding cost of implementation and time to market are:

• the range of online games offered by the customer;

• the complexity of technological integration, which may include the integration of our technology with third-party systems for know-your-customer, point-of-sale, banking and payment applications;

• the required level of configuration and customization of our technology platforms to the specific requirements of the lottery and the relevant regulatory regime (e.g. lottery gameplay guidelines and taxation laws);

• the extent of regulatory requirements and other compliance guidelines within a particular jurisdiction;

• the amount required to be provided in a performance bond as a guarantee against the potential failure of the service provider to meet its contractual obligations; and

• the potential investment required for the deployment of hardware, networking and software equipment into local data centers, in order to comply with the most stringent regulatory requirements.

Long-term relationships

In the traditional lottery industry, the significant upfront time and capital investment required to launch a new offering has typically resulted in long-term contracts (generally in excess of four years) that include extension options. Lotteries have generally kept their incumbent central lottery system providers when contracts expire, given the substantial incremental cost and lengthy transition periods of switching   providers. For example, since 2010, only seven of 46 lotteries in operation in the United States have    changed their central lottery system providers.

Given the limited number of competitors with specialized iLottery technology and content developed in order to satisfy jurisdiction-specific requirements, we expect that contract turnover in the iLottery industry will be similarly low and incumbent iLottery vendors will be well positioned to secure new contracts. In some cases, rather than administer a lengthy procurement process followed by a complicated system conversion involving potential service revenue disruptions, customers may negotiate for incremental technology and services in return for an extension of the contracts with their incumbent provider. Since our founding, when a contract has reached its term, we have successfully extended or renewed through procurement each of those customer contracts in Europe and the United States.

In the traditional retail lottery industry, the limited contract turnover facilitates high returns on invested capital on established contracts, and also provides visibility into future earnings. We expect that the same   will be true of contracts in the iLottery industry. Moreover, once a credible and successful technology platform and database of games is created, subsequent iLottery contract wins can generate higher returns on invested capital compared to earlier contracts. We generally seek to recover our upfront invested capital during the initial term of the contract.

Growth alongside traditional lottery and other forms of gambling

We believe that iLottery can grow alongside traditional retail lottery. Many states that have authorized robust iLottery solutions (such as Georgia, Kentucky, Michigan and Pennsylvania) have experienced growth of both the iLottery and traditional lottery segments. In Michigan, for example, from the introduction of iLottery in 2014 through 2019, gross sales from traditional lottery have grown at a CAGR of 7.8%, which is higher than the growth of traditional lotteries in most U.S. states that have not implemented iLottery. We believe this demonstrates the positive influence and additive nature of an iLottery offering, as well as its ability to introduce a new player demographic to lottery games.

We also believe that the iLottery player base and revenue streams do not substantially overlap with other forms of online gambling. iLottery games are designed to be simple to play and appeal to the mass market. They differ from sports betting and other types of gambling in that these other forms of gambling typically require more complex decision making. The risk profile of iLottery games (with many tickets providing a small “win” and a few tickets providing for extraordinary wins) also provide a different player experience, which we believe appeals to the mass market of casual players. The ability of iLottery to grow alongside other forms of online gambling is evidenced by the European markets. According to H2GC, from 2003 through 2019, the European Union 27 group and the United Kingdom experienced the following results:

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European Market Gaming Vertical GGR CAGR Comparison (2003-2019)

Source: H2GC. Includes European Union and United Kingdom.

¹ For 2007 – 2019 (as 2007 was the first year of available data in H2GC for the United Kingdom).

Industry Growth Drivers

The global iLottery industry has emerged as a fast growing segment within the global lottery market, with GGR increasing at a CAGR of 24.0% between 2003 and 2019, according to H2GC. The most significant drivers of this growth include technological improvements, changing player preferences and deregulation.

Technological improvements

• Increased internet access — increased levels of internet access, improved internet infrastructure, greater confidence in the security of the internet for transacting, rapid growth in usage of internet- connected smartphones, tablets and other devices and product innovation by iLottery platform and service providers have provided the foundation on which the iLottery industry has been able to grow.

• Increased ownership of mobile devices — globally, the number of devices and connections is growing faster than the population, which is accelerating the average number of devices per household.

• Improved entertainment experience — advancements in technology have improved the ability of entertainment providers to provide a meaningful entertainment experience online or through mobile and handheld devices, making iLottery more attractive to players. Vendors have also been able to use digital and social media to enhance the user experience and as such vendors are able to access a broader group of end users (such as a younger demographic).

Changing player preferences

• Demand for instant access — as consumers spend more time on their smartphones with easy access to internet and cellular data, they seek instant access to their sources of entertainment. iLottery allows players to play games at any time and from anywhere in the lottery jurisdiction. This allows players to access a wide range of game options at any time, without having to be physically present in the retail environment.

• Demand for mobile channels — the traditional lottery market is maturing. Physical retail sales channels account for a lower proportion of shopping by a younger demographic compared to older generations, and as such, traditional lotteries have developed an aging customer base. iLottery, however, has introduced lottery style games with added entertainment value to the online domain, tapping into a new demographic of typically younger players more inclined to engage through the usage of mobile and   other online channels. This broader appeal has expanded the total lottery market by attracting a new generation of players.

Certain of these drivers, such as the demand for instant access and mobile channels, have been amplified by the COVID-19 pandemic, which has accelerated customer traffic into online channels. See “— Impact of COVID-19.”

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Deregulation

Deregulation for lotteries and online gambling activities has also contributed to industry growth. This trend has been particularly prevalent in the United States, in which the number of states offering iLottery solutions (excluding states that offer only subscription-based iLottery) has grown to nine since the first iLottery launched in 2012. The table below shows the iLottery offerings available in the United States today:

	Population		FY19 Retail Lottery Gross Sales		FY19 Retail Lottery Gross Sales Per Capita		iLottery		Offering
State	(in millions)		(in millions)		(in millions)		DBG		Instants
Pennsylvania		12.8	$	4,503	$	352		X		X
Georgia		10.6		4,455		420		X		X
Michigan		10.0		3,884		389		X		X
Illinois		12.7		2,975		235		X
North Carolina		10.5		2,860		273		X
Virginia		8.5		2,294		269		X		X
Kentucky		4.5		1,130		253		X		X
New Hampshire		1.4		384		283		X		X
Rhode Island		1.1		263		249		X		X
New York(1)		19.5		8,208		422
California		39.5		7,388		187
Florida		21.5		7,151		333
Texas		29.0		6,252		216
Massachusetts		6.9		5,492		797
New Jersey		8.9		3,549		400
Ohio		11.7		3,361		288
Maryland		6.0		2,197		363
South Carolina		5.1		1,981		385
Tennessee		6.8		1,690		247
Missouri		6.1		1,466		239
Indiana		6.7		1,348		200
Connecticut		3.6		1,334		374
Arizona		7.3		1,077		148
Washington		7.6		803		105
Wisconsin		5.8		713		122
Colorado		5.8		680		118
Minnesota		5.6		637		113
Louisiana		4.6		524		113
Arkansas		3.0		516		171
Iowa		3.2		391		124
Oregon		4.2		380		90
Maine		1.3		300		223
Kansas		2.9		295		101
Idaho		1.8		288		161
Oklahoma		4.0		242		61
Washington, D.C.		0.7		213		302
West Virginia		1.8		201		112
Delaware		1.0		196		202
Nebraska		1.9		192		99
New Mexico		2.1		144		68
Vermont		0.6		139		223
South Dakota		0.9		63		71
Montana		1.1		60		56
Wyoming		0.6		37		64
North Dakota(1)		0.8		35		46
Mississippi		3.0		—		—

Sources: La Fleur’s; Eilers & Krejcik Gaming

(1) New York and North Dakota offer subscription-based lottery.

We believe that the success of these iLottery offerings and the increasing budgetary shortfalls in many U.S. states will accelerate the pace of deregulation and lead to further growth of the iLottery industry for several reasons:

• lottery plays a significant role in state budgets, which have been materially impacted by the COVID-19 crisis;

• public policy stakeholders generally view lottery games as a more socially acceptable form of gambling;

• lotteries, which effectively function as both regulator and operator, generally have more flexibility in their offerings compared to commercial casino operators; and

• lotteries are well-known, respected, long-established and generally accepted by local communities.

iLottery Markets

The global iLottery market has exhibited significant growth in recent years. From 2015 through 2019, the iLottery market size in GGR increased at a CAGR of 19.0%, with strong growth in North America as depicted below. The relatively low growth in Europe is a result of the maturity of the European market,   which has had iLottery since 2003.

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iLottery GGR CAGR by Region (2015 – 2019)

Source: H2GC

Europe

Europe is the largest, and a relatively mature, iLottery market, with several European lotteries having been early adopters of online sales channels. Many European lotteries chose to establish online sales solutions independently through their respective in-house platforms, but in the last few years they have started to engage iLottery providers such as NeoGames, primarily for iLottery content.

North America

iLottery is offered in both the United States and Canada. Although iLottery is a relatively new industry in North America, the North American market features per capita spending on lotteries among the highest in   the world, as well as the highest adoption rate of Instants and one of the highest internet penetration rates globally, making it appealing and positioned for a transition from a traditional retail lottery-only model to a hybrid model combining traditional retail lottery and iLottery.

Although certain iLotteries were launched in 2012, the first public procurement process resulted in our launch of the Michigan iLottery in partnership with Pollard in 2014. As such, the iLottery industry in the United States is currently in its nascent stages compared to more mature markets like Europe.

The Canadian iLottery market is different than the United States market in that in Canada, provincial regulators and their lotteries typically seek a full online solution that includes all gaming verticals in addition to an iLottery offering. For example, in Alberta we have been awarded a contract to provide the entire online gaming suite, including iLottery, casino games and sports betting.

Other Markets

iLottery is offered around the world and presents significant opportunities outside of Europe and North America. We constantly monitor these markets and will explore additional opportunities on a case-by-case basis. At this time, however, we believe our resources are best spent focusing on the significant market opportunity in North America, in which we believe we have already established ourselves as a market leader.

Our Solutions and Services

We offer iLottery solutions through two distinct business lines - turnkey solutions and games. Our turnkey solutions are tailored to each customer and can include a combination of any of our platforms, value-added services and game studio. Our games offering is related to our game studio, but consists solely of offering our portfolio of iLottery games to lotteries.

We also provide certain software development services to the Aspire Group and NPI and sub-license certain platforms to William Hill. For more information on our contracts with William Hill and Aspire, see “Related Party Transactions.”

Our Technology Platforms

Though the forms of lottery games vary, the basic structure of all lottery games involves the drawing of numbers at random for the chance of winning a cash prize. Lottery has generally been separated into two primary products:

• draw based games (“DBGs”), such as Powerball, in which players select numbers and the winning combination or ticket is determined by a scheduled draw; and

• instant tickets (“Instants”) in which players can instantly reveal a pre-determined result through which they can learn whether their ticket entitles them to a prize.

NeoSphere

The central technology platform we offer, NeoSphere, delivers comprehensive iLottery capabilities through its player account management (“PAM”) module, and acts as the system of record for all transactions.

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The NeoSphere platform provides and controls the functionality related to the management of players throughout their entire lifecycle. This includes registration (regardless of the digital channel used by the player), age and identification verification, geolocation sign-in, responsible gaming monitoring, product usage, issue resolution, player compliance, player retention, marketing and player services, as well as the functionality required for wallet transactions. The PAM module is where we collect, process and record every transaction associated with a player’s identification across the entire turnkey solution. The data collected through these online interactions gives us an insight into player preferences, and consequently informs the execution of player segmentation strategies to drive insightful iLottery campaigns. Utilizing our responsible gaming and compliance features embedded throughout our solution, we also monitor gaming activity and provide controls and alerts customized for each player’s profile.

We believe the highly flexible and versatile PAM that we offer can power the management and operations of many forms of online gaming and is trusted by our customers for its performance and reliability. For example, this PAM serves as the central platform for William Hill’s U.S. online sports betting and iGaming offerings, supports the significant growth of lottery and casino games and sports betting under our agreement with Sazka and powers the entire suite of iGaming offerings under our agreement with the AGLC.

NeoDraw

     NeoDraw is one of only four central gaming systems certified by the U.S. Multi-State Lottery Association for the issuance, sale and operation of DBGs. The proprietary technology of NeoDraw has been developed specifically for the iLottery market and online players and is fully-integrated with the NeoSphere platform to facilitate the rapid implementation of DBGs as part of the complete turnkey solution.

NeoDraw is an example of specialized technology. Providers of online casino games or sports betting typically cannot apply their technology used for online casino and sports betting to DBG offerings given the multifaceted nuances of lottery game mechanics and math.

The main advantages of NeoDraw include:

• Greater flexibility for the lottery - NeoDraw can operate independently or in parallel with an existing retail central lottery system and is not constrained by limitations of traditional lottery systems.

• Quicker time to market - NeoDraw is fully-integrated with NeoSphere. This reduces the complexity, resources and time required to integrate with a third-party system to launch traditional games.

• Additional functionality - NeoDraw enables us and our lottery customers to introduce new innovations related to online purchase flows, shopping cart functionality and in-game features that are in some cases not available with legacy central lottery systems.

Currently, all of our U.S. customers have opted to employ NeoDraw to launch their iLottery offerings.

NeoPlay

NeoPlay is the technology platform we offer that manages online Instants. It facilitates configurations, including prize tables, payouts, ticket series setups, ticket price points and many other variables, and supports channels, including mobile, desktop and applications.

Our Services

With more than ten years of experience in the iLottery industry (including our management team’s operation of the iLottery business of Aspire), we have gained substantial knowledge and direct experience in the full spectrum of marketing and business operations which is essential to enable the revenue growth of our customers. The insights that we continue to gain from our broad view of analytics, game performance, player support, payment solutions management and more allows us to act as a strategic partner to our customers in jointly developing their iLottery businesses.

We provide services to our customers across four key areas: marketing operations, player operations, technology operations and business operations.

• Marketing operations - we provide targeted marketing services and data analytics to our North American customers through the entire player lifecycle, from digital acquisition and onboarding to game participation. Such operations include:

• implementation of promotional campaigns tailored to player segments;

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• maximization of the return generated from a player;

• results-based analytics of player behavior;

• player-level segmentation-based evaluation of the player’s activity status, game orientation, deposit characteristics, reaction to previous promotional campaigns and account balance status;

• predictive analysis of the lifetime value of players acquired from different marketing and promotional campaigns; and

• information regarding the decision on which player acquisition strategies and marketing campaigns to focus and which to abandon.

• Player operations - leveraging years of experience managing players on behalf of our customers, we provide to our North American customers various services designed to offer the best possible services to iLottery players. Such operations include:

• a customer service center based in Lansing, Michigan, which services our North American customers;

• responsible gaming services to proactively detect and react to player gaming behaviors;

• compliance services including anti-money-laundering (“AML”) and know-your-customer solutions to meet the customer’s local requirements; and

• facilitating the flow of funds throughout the entire player lifecycle, from funding to cash-outs.

• Technology operations - these operations, which we provide to many of our customers, are meant to provide the full spectrum of monitoring and maintenance of the platforms we deploy for our customers and protect the integrity of our back-end iLottery software. Such operations include:

• the deployment of our technology platforms in the form of a SaaS offering;

• ongoing deployments of advanced versions of our software;

• handling of all reported production incidents;

• verification of technological defects, and potential escalation to the development team; and

• monitoring the network’s performance for degradation and potentially fraudulent activity.

• Business operations - we facilitate payment processing services by third-party vendors and manage customer-facing personnel. Such operations include:

• integrating third-party payment solutions into our platforms to allow for credit and debit card transactions and bank transfers;

• serving as merchant of record on behalf of our customers;

• recruiting, training and managing customer service representatives; and

• developing and managing the project plan required to deploy each solution.

Our Game Studio

     We believe that, while operating the iLottery business of Aspire, we were the first to build a separate business unit exclusively for the development of iLottery games. We believe that we have one of the largest iLottery game portfolios in the global lottery industry, having produced more than 350 proprietary games.

We believe that the competitive advantage of our exclusive focus on iLottery platforms also extends to our game studio. Games offered by lotteries need to comply with strict regulations and guidelines. We believe that our focus solely on iLottery enables us to produce the best iLottery games that meet such regulations and guidelines, while providing an entertaining and diverse player experience. We believe this ability is derived from our vast experience and deep understanding of the boundaries established by such regulations and guidelines and our proven ability to “innovate inside the box.”

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Our games are developed by the highly dedicated members of our studio with experience across art design and advanced multimedia animations, software development, engineering and mathematics. Prior to and during the production of a game, we consider a number of fundamental factors, including:

• Entertainment value - the level of player interaction as part of the game, the complexity level of playing the game, the multimedia experience (design, animation and audio), and the duration of a game.

• Mathematics - controlling the risk level of the game and optimizing the game experience to the risk profile of iLottery players (given the target payout ratio).

Competitive Landscape

While competition in the lottery industry is limited as a result of various barriers explained above, the innovative nature of iLottery created an opportunity for a singularly-focused company to enter and compete with long-time incumbents of traditional lottery. Our experience suggests that brand awareness, compelling customer business results and credibility in solid delivery and services will remain vital for success within the iLottery industry. Just as it has with traditional lottery, we believe this will lead to stable contracts with limited turnover.

We believe that the iLottery industry is less exposed to new market entrants than other gambling markets, due to the considerable barriers to entry imposed by the government procurement process, regulations and the need for specialized technology, among other factors. There is, however, intense competition among the few existing iLottery providers with respect to new iLottery contracts. We compete both for contracts to supply our full turnkey solution and for contracts to supply our portfolio of games.

We compete primarily against International Game Technology PLC (“IGT”), Scientific Games Corp. (“SGMS”) and Intralot for turnkey solutions contracts. With the exception of Intralot, we compete against the same companies for game contracts, in addition to several other companies, such as Instant Win Gaming Ltd. Although these other companies, which do not offer turnkey solutions, may capture some content market share, they will need to host their games on platforms like ours. Other companies may in the future choose to enter the iLottery industry, but we believe the expertise and experience required to build and operate a successful iLottery technology platform will limit this expansion.

We have deployed our turnkey solution to more U.S. lotteries that engaged a full-service iLottery provider than any of our competitors. The chart below presents the contracts held by existing lottery and iLottery providers within each sub-vertical of the lottery industry.

			iLottery Contract
	Incumbent Retail Provider		Provider	Launch Year	iLottery Penetration from Instants(1)
State	Instant	DBG
Illinois	SGMS	Intralot	Camelot	2012	N/R
Georgia	SGMS / IGT	IGT	IGT	2012	2.3%
Michigan	SGMS / Pollard / IGT	IGT	NPI(3)	2014	47.0%
Kentucky	SGMS / Pollard	IGT	IGT	2016	4.2%
Pennsylvania	SGMS	SGMS	SGMS	2018	22.8%
New Hampshire	SGMS	Intralot	NPI	2018	23.0%
North Carolina	IGT	IGT	NPI	2019	N/R
Rhode Island	IGT	IGT	IGT	2020	1.1%
Virginia(2)	IGT	IGT	NPI	2020	22.9%

N/R = Not Reported

(1)  iLottery Penetration is for fiscal year 2020.

(2) Our relationship with the VAL began in 2016 with the launch of online subscriptions for DBGs. The launch of online instants began in July 2020.

(3)  The contract is between MSL and Pollard and we support the Michigan iLottery as a subcontractor of Pollard.

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Our Competitive Strengths

Technology design and flexibility

      Our focus on iLottery allows us to prioritize the improvement of our iLottery technology and services ahead of other business opportunities. We believe that our focus on iLottery solutions, building upon years of expertise and deep exposure to U.S. customers, has given us a superior understanding of iLottery customers and players that allows us to continue to outperform our competitors in iLottery solutions and games. 

The fully-integrated iLottery turnkey solution that we offer is designed to be flexible, responsive and readily adaptable to meet each customer’s needs, as well as support future growth and innovation over time. The open architecture we utilize in the development of our technology provides several benefits to our customers. With a single code base, our platforms can be continuously adapted and improved without any hindrance or restrictions from third-party suppliers. This means that all of our customers can run the same core software version and receive the same advancements and updates in a relatively short period of time, allowing us to evolve our platforms and games at a fast pace and large scale.

In-house game studio

    We have produced more than 350 proprietary iLottery games, and we operate our own in-house game studio. Historically, our games have performed strongly relative to our competitors’ in terms of profitability and popularity. Our game studio allows us to offer our customers a complete solution, while certain of our competitors must use third party vendors in order to provide their customers with games. In addition, our extensive game portfolio allows us to extend our customer base to customers who do not need our full turnkey solution, but are looking to expand their online games offering for greater variety of entertaining content.

iLottery business operations experience

Our experience as a B2C and B2B gaming operator, initially within Aspire, followed by years of hands-on experience managing players on behalf of our U.S. customers as part of our player operations service, has helped inform how we manage and engage iLottery players. We have also gained substantial knowledge about the iLottery market and its participants in the past decade through our operations in Europe and the United States. Our experience provides us a deep understanding of the characteristics of iLottery players, allowing us to customize our solutions to such players’ needs and interests.

We analyze our customers’ player game data daily to gain insights into game play mechanics and player preferences across multiple jurisdictions. Our focus is on the players and understanding their characteristics, perception of gambling, loyalty to the lottery brand and other attributes. We believe this understanding has contributed to the success of our game studio.

     Evidence of our strong operational acumen is evident in the performance of our U.S. contracts. Between 2015 and 2020, GGR from Instants for the Michigan iLottery grew at a CAGR of 63.9%. The chart below presents the gross sales and GGR of U.S. states with iLottery offerings (excluding states that only offer subscription-based iLottery) during the 2020 fiscal year, as reported by the respective state lottery commissions.

		iLottery Instant Ticket						Per Capita​
State	Launch Year	Gross Sales (in millions)		GGR (in millions)		Population (in millions)		Gross Sales		GGR
Michigan	2014	$	1,807	$	219		10.0	$	181	$	22
Pennsylvania	2018	$	731	$	94		12.8	$	57	$	7
New Hampshire	2018	$	81	$	12		1.4	$	60	$	9
Georgia	2012	$	81		N/R		10.5	$	8		N/R
Kentucky	2016	$	33	$	7		4.4	$	7	$	2
Rhode Island	2020	$	1		N/R		1.1	$	1		N/R
Illinois(1)	2012		N/R		N/R		12.7		N/R		N/R
North Carolina(1)	2019		N/R		N/R		10.4		N/R		N/R
Virginia	2020	$	267	$	35		8.5	$	31	$	4

N/R = Not Reported

(1)  Illinois and North Carolina provide for DBGs only.

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Time to market

We have deployed our turnkey solution to more U.S. lotteries that engaged a full-service iLottery provider than any of our competitors. The experience we gained in such deployments has allowed us to improve our implementation process and shorten our time to market. In addition, because our central lottery system is already fully-integrated with our turnkey solution, we are able to reduce the complexity, resources and time involved in the integration of third-party systems, which also contributes to shorter time to market. For example, we launched our turnkey solution for the NHL within seven months of being awarded the contract.

Brand awareness and credibility

Given the important role of lotteries in government budgets, winning the trust of customers is critical for lottery platform and service providers to be awarded new contracts, and reputation and brand are important to winning that trust. While only entering the U.S. market in 2014, we believe we have emerged as a well-known and respected name in the iLottery industry in the United States and globally because of our performance supporting our customers’ growth. The Michigan iLottery has served as a model to other U.S. states seeking to offer iLottery, and we believe that state lotteries are aware of our operating acumen and the role our technology has played in driving that success.

Cooperation with various market players

Our openness to pursue opportunities that bring together strengths from different vendors has brought us to successfully cooperate with other vendors in the iLottery industry. We believe this approach allows us access to contracts that would otherwise have not been available for public procurement. For example, with respect to the NHL, we serve as a sub-contractor to Intralot and, with respect to the AGLC, we are cooperating with IGT to offer access to their suite of casino games, an area in which they specialize, to the benefit of the offering. We expect to continue to see similar opportunities, including opportunities to provide our successful game portfolio in cooperation with other vendors to the benefit of the state lotteries.

Our Growth Strategy

Our growth strategy is built upon five pillars:

• expanding the penetration of our existing customer contracts;

• winning new turnkey contracts in the United States;

• growing our game studio customer base;

• expanding the scope of our existing customer contracts; and

• expanding our range of offerings and geographical presence.

Increase iLottery Penetration within Existing Markets

    Our performance in Michigan proves a compelling case study on our potential to disrupt a market for the better. Since its launch in 2014, the Michigan iLottery has accounted for a growing percentage of gross sales from Instants in Michigan. In the twelve months ended September 30, 2020 (the most recently completed fiscal year of the Michigan iLottery), iLottery Penetration of Instants was 43.7% and iLottery Penetration of total lottery sales was 34.0%. From fiscal year 2014 to 2020, the CAGR of Instants sales in Michigan was 25.7%, and the CAGR of gross lottery sales in Michigan over the same period was 13.7%.

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Instants in Michigan: Gross Sales and iLottery Penetration

$0 $15 $39 $62 $77 $96 $159

iLottery Gross Sales from Instants Per Capita

____________________________________

Source: MSL, GamblingCompliance. Represents fiscal years.

Over this same period, gross sales from Instants in Michigan have grown significantly faster than lottery sales in Michigan and elsewhere in the United States.

Michigan Lottery Outperformance: Gross Sales CAGR (2014-2020)¹

Source: MSL, GamblingCompliance. Represents fiscal years.

¹ Some states calculate gross sales in different ways than others. In New Hampshire, for example, the reported total lottery gross sales includes the GGR from iLottery Instants as opposed to the gross sales from iLottery instants. Due to a lack of uniform disclosure and available information, this figure is based on the sales as reported for all states excluding Michigan.

This increase in gross sales directly leads to a surge in GGR, on which our revenues are based. The below table presents Michigan’s iLottery GGR from Instants by fiscal year. In the twelve months ended September 30, 2020 (the most recently completed fiscal year of the Michigan iLottery), GGR per capita from Instants was $22.

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Michigan iLottery GGR from Instants ($mm, Except Per Capita)

____________________________________

Source: MSL, GamblingCompliance. Represents fiscal years

Our more recent turnkey solution launches have experienced even quicker success than we experienced in Michigan, driven by our improved product, operational success, and favorable market conditions. In Virginia, for example, we launched our turnkey solution in July 2020 and experienced first month per capita sales of $4.06.

First Month Per Capita iLottery Gross Sales

____________________________________

Source: iGBNorth America

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In the six months ended December 31, 2020, the VAL saw $281.3 million in iLottery gross sales, representing 19% of the VAL’s total gross sales during the period.

iLottery Penetration (Instants) by State (FY 2020)

Source: State lottery commissions.

¹ Represents VAL’s total (Instants and DBG) iLottery Penetration in the first six months of operation (July — December 2020). VAL publishes information regarding iLottery Penetration of Instants and DBG only on an aggregate basis.

Virginia iLottery Gross Sales (Instants) ($mm)¹

Source: Company data, GamblingCompliance.

1.     Source: Eilers& KrejcikGaming’s U.S. iLottery Tracker – 1Q21.

2.     Includes Michigan, New Hampshire and Virginia. Excludes North Carolina, which offered only DBGs online during this time period.

3.     Includes Pennsylvania, Kentucky and Georgia.

December 2020 iLottery Gross Sales per Capita¹

Source: Eilers& KrejcikGaming’s U.S. iLottery Tracker – 1Q21.

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Based on our prior experience in certain European markets, we believe there remains considerable room for growth above the current level of iLottery Penetration in the United States. Leveraging our operational expertise and technology, we plan to work closely with our customers to strengthen the reach of our offering in each market.

Increase Scope of Existing Customer Contracts

Certain of our contracts only include some of the platforms and services we can provide. We believe there is significant potential to offer additional games and services, including feature enhancements, to our existing customers in the future. For example, when we procured our contract with the VAL in 2015, we offered only online subscription DBGs However, in March 2020, following a change in legislation, the VAL chose to expand our contract to include both Instants and DBG offerings. The offering under the expanded contract launched in July 2020 and has an initial term through 2026 plus the option to extend for five additional years. A number of our contracts are in their early years and, as such, provide us ample time to expand the offerings we provide to our existing customers.

We believe the scope of services that we can provide to our current customers is broad, as evidenced by our most recent turnkey customer contract, launched in September 2020, pursuant to which we provide the AGLC with their full suite of online gaming offerings including iLottery, casino games, sports betting, poker, live dealer games and bingo. This contract, which includes a seven-year initial term and a five-year extension option, grants NPI the right to create and power the only regulated gaming website in Alberta. We are also responsible for marketing initiatives undertaken by the lottery, which we believe will enhance the overall experience for players. The province of Alberta has a population of 4.4 million, and in fiscal year 2020 the AGLC had sales of C$917.9 million, according to the AGLC 2019-2020 Annual Report. On September 30, 2020, the AGLC officially launched its offering, PlayAlberta, powered by our turnkey solution.

We have gained substantial knowledge about the iLottery market and its participants in the past decade through our operations in Europe and the United States, and our experience provides us with a deep understanding of the characteristics of iLottery players, allowing us to customize our solutions to such players’ needs and interests. We believe this will lead to a stronger relationship with our customers.

Win New Contracts in the United States

    We are a market leader in iLottery in the United States. With 67% market share of U.S. iLottery gross wagers in the second quarter of 2021 according to Eilers& Krejcik Gaming’s U.S. iLottery Tracker, we drive a majority of U.S. iLottery GGR.

    We continuously seek to expand our operations in the U.S. by securing new contracts. While lottery is offered in 45 states and the District of Columbia, iLottery Instants or DBGs are currently offered in only nine states and the District of Columbia as depicted in the map below (excluding states that offer only subscription-based iLottery). As a result, 77% of the U.S. population in states that offer lotteries do not currently have access to iLotteries. We believe that many more states will elect to offer iLottery, and we believe we will continue to win new contracts.

Current United States iLottery Landscape¹

¹ Excludes New York and North Dakota, which sell online subscription-only limited game portfolios.

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Population in U.S. States with State Lotteries

____________________________________

Sources: La Fleur’s 2020 World Lottery Almanac; Eilers & Krejcik Gaming.

2Q21 U.S. iLottery Gross Wager Market

Share by Platform Provider

Source: Eilers & Krejcik Gaming; SGMS includes ND and IGT includes NY, both of which offer online subscriptions.

Grow our Game Studio Customer Base

As we have observed in the evolution of iGaming, where the market moved from single content vendors to a large number of content providers, the strong performance of our games places us in a good position to capitalize on the content expansion trend that is now beginning to develop in the lottery market as we see lotteries look for new and innovative games from providers other than their incumbent iLottery provider. Our ‘Queen of Diamonds’ game was named the world’s highest grossing iLottery game in 2017 by La Fleur’s magazine.

We intend to further expand our revenue base by offering our popular iLottery games to new customers who use the platforms of other iLottery providers. We currently operate four contracts in Europe pursuant to which we only provide games, and we plan to expand this offering model into the United States. This will allow us to realize a greater share of iLottery GGR and to benefit from additional states adding an iLottery offering.

We expect that this expanded offering of our games will be enhanced by upward trends in the market related particularly to Instants. In iLottery, as in traditional lottery, Instants are more popular in North America than in Europe, representing 75.7% of the North American iLottery market in 2019 compared to only 12.0% of the European iLottery market, according to La Fleur’s 2020 Internet Report. In the United States, the popularity of Instants has contributed to the growth in lottery sales as a whole. We also believe that Instants benefit from a “cross-sell” of players acquired through the more commonly known DBGs but attracted to Instants for their entertaining experience. As a market leader in online Instants, we are well positioned to take advantage of this potential market opportunity.

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Michigan: Gross Sales from Instants as a Percentage of Total Lottery Gross Sales

____________________________________

Source: MSL. Represents fiscal years.

 Michigan and New Hampshire iLottery GGR (FY 2020)

Expanding our Range of Offerings and Geographical Presence

We are currently focused on expanding our North American business to become the dominant iLottery provider in the market. In doing so, we invest our resources and expertise into building top-tier iLottery technology and content. With a history of successful iLottery offerings developed for the North American market, we believe we have the ability to expand our offerings around the world. While we are currently focused on the North American market, we may decide to pursue additional opportunities around the world in the future.

     We have already demonstrated our ability to provide successful offerings internationally. Our contract with Sazka in the Czech Republic, our largest European lottery customer, was signed in 2015 and was renewed in 2020 for a term that extends through 2025. This contract includes a full online gaming solution with Instants, DBGs, and online casino, as well as the integration of a sport betting solution. The Czech Republic has a population of 10.7 million, and Sazka generated €286 million of revenue in the Czech Republic in fiscal year 2019, according to Sazka’s annual report. 30% of Sazka's GGR was generated from its online channel in 2020.

Furthermore, while we have focused our efforts on iLottery technology and content so far, we may decide to pursue additional opportunities, such as the offering of gaming products like online casino and sports betting. As demonstrated by our PAM development for William Hill and the broad scope of services we provide to Sazka and the AGLC, we believe that we can expand our offering to other gaming products.

Impact of COVID-19

     As a leading provider of iLottery solutions, we have seen significant growth in revenues from existing and new players in recent periods, as the COVID-19 pandemic has shifted players to online entertainment. NGR for the six months ended June 30, 2021 increased by 16.2% and 113.9% in Michigan and New Hampshire, respectively, relative to the six months ended June 30, 2020. At the same time, monthly active players in Michigan and New Hampshire increased by 31.5% and 104.9%, respectively, between the six months ended June 30, 2020 and 2021.

Our costs in the six months ended June 30, 2021 increased by 30.2% compared to the six months ended June 30, 2020. This increase was mainly attributable to an increases in clearing and know your customer fees due to increased traffic in our Michigan and New Hampshire operations.

The increase in the relative use of online lottery platforms has allowed us to introduce our products to a new group of potential players gravitating to the online space (such as older generations and traditional lottery players), significantly increasing our player base. While the lasting impact of the COVID-19 pandemic on the iLottery market is uncertain, we believe that the changes in player behaviors may have a permanent effect on the lottery market and our business.

As a result of the COVID-19 pandemic and the shift to online entertainment, certain states, such as Massachusetts, that do not operate an online lottery platform have faced significant pressure from various stakeholders to authorize an iLottery offering in an effort to counteract the substantial decrease in the traditional retail lottery traffic. In addition, certain state lotteries, such as the VAL, have begun expediting their regulatory approval process to build their online presence.

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Intellectual property

We currently own most of the intellectual property required for our operations and control the remainder of the intellectual property required for our operations through a perpetual, assignable license. We are in the process of replacing the intellectual property that we do not own with our own technology.

Most of the intellectual property we use is created by us or by related parties. See “Related Party Transactions - Relationship with Aspire - Aspire Software License Agreement.” We have also obtained rights to use intellectual property of third parties through licenses and service agreements with those third parties. Although we believe these licenses are sufficient for the current operation of the company, such licenses typically limit our use of the third parties’ intellectual property to specific uses and for specific time periods. We believe that we have the personnel needed to manage and adapt our intellectual property as necessary to support our business operations.

Most of our intellectual property is in the form of rights in software code and trade secrets that we use in the operation of our iLottery offering and related services, as well as registered and unregistered trademarks. We rely on a combination of copyright, trademark and trade secret laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, to protect our proprietary technology. We also protect our intellectual property rights by implementing a policy that requires our employees and independent contractors involved in development of intellectual property to enter into agreements acknowledging that all intellectual property generated or conceived by them on our behalf are our property, and assigning to us any rights that they may claim or otherwise have in those works or property, to the extent allowable under applicable law. Our confidential information is protected by a combination of information security systems and non-disclosure agreements with third parties, including our employees and independent contractors.

Our agreements with business partners and lotteries to which we provide our iLottery offering and services contain provisions safeguarding our rights to our intellectual property.

Regulation

The provision of the PAM module and operation of lotteries in the United States and internationally is subject to extensive regulation. Although certain features of a lottery (such as the limited number of lotteries, the percentage of gross sales that must be paid back to players in prize money and the allocation of revenues generated from gross sales) are usually set by legislation, lottery regulatory authorities (and, occasionally, the lottery corporation itself) generally exercise significant discretion, including with respect to the determination of the types of games played, the price of each wager, the manner in which the lottery is marketed and the selection of suppliers of equipment, technology and services, and retailers of lottery products.

To ensure the integrity of contract awards and lottery operations, most U.S. jurisdictions require detailed background disclosure on a continuous basis from, and conduct background investigations of, vendors and their officers, directors, subsidiaries, affiliates and principal stockholders. Background investigations of the vendors’ employees who will be directly responsible for the operation of lottery systems are also occasionally conducted and most states reserve the right to require the removal of employees who they deem to be unsuitable or whose presence they believe may adversely affect the operational security or integrity of the lottery. Certain jurisdictions also require extensive personal and financial disclosure and background checks from persons and entities that hold (either legally, beneficially or through voting rights) a specified percentage (typically five percent or more) of a vendor’s securities. Although most jurisdictions provide that “institutional investors” (as defined by a particular jurisdiction) can seek a waiver of these requirements, the granting of such a waiver may be conditioned on a regulatory investigation designed to ascertain that the applicant meets the definition of “institutional investor.”

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The failure of our officers, directors and holders of our Ordinary Shares to submit to background checks and provide such disclosure could result in the imposition of penalties and could jeopardize the award of a contract to us or provide grounds for termination of an existing contract. Generally, any person or entity who fails or refuses to apply for a finding of suitability or a license within the prescribed period after being advised by a competent authority that such person or entity is required to do so may be found unsuitable or denied a license, as applicable. If any director, officer, employee or significant shareholder is found unsuitable (including due to the failure to submit required documentation) by a competent regulator or authority, we may deem it necessary, or be required, to sever our relationship with such person or entity.

Furthermore, we may be subject to disciplinary action or our licenses may be in peril if, after we receive notice that a person or entity is unsuitable, we (i) pay that person or entity any dividend or interest upon our Ordinary Shares, (ii) allow that person or entity to exercise, directly or indirectly, any voting right conferred through Ordinary Shares held by that person or entity, (iii) pay remuneration in any form to that person or entity for services rendered or otherwise or (iv) fail to pursue all lawful efforts to require such unsuitable person or entity to relinquish its Ordinary Shares.

Subject to all applicable law and regulation, our articles of association provide for the suspension of certain rights attached to our Ordinary Shares that are held by unsuitable shareholders and the disposal of any of our Ordinary Shares owned or controlled by an unsuitable person or its affiliates by transfer to one or more third-party transferees. If such unsuitable person fails to dispose of our Ordinary Shares within the required period of time, we may in good faith dispose (or procure the disposal) of such Ordinary Shares to a designated third party at the highest price reasonably attainable or, subject to applicable law and regulation and our articles of association, acquire such Ordinary Shares by way of a redemption.

The awarding of lottery contracts and ongoing operations of lotteries in international jurisdictions is also extensively regulated, although international regulations typically vary from those prevailing in the United States and tend to focus more on the vendor and its senior management, rather than on individual shareholders.

The U.S. federal Wire Act of 1961 (the “Wire Act”) provides that anyone engaged in the business of betting or wagering that knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, will be fined or imprisoned, or both. In 2011, the U.S. Department of Justice (the “DoJ”) issued an opinion (the “2011 Opinion”) to the effect that the conduct prohibited by the Wire Act was limited to sports gambling. In January 2019, the DoJ published an opinion (the “2019 Opinion”) reversing that position. As a result of the 2019 Opinion, NPI, along with the NHL and Pollard, commenced litigation in federal district court in New Hampshire challenging the 2019 Opinion. In June 2019, the U.S. District Court for the District of New Hampshire ruled that the Wire Act is only applicable to sports betting and related activities (the “NH Decision”). The NH Decision also set aside the 2019 Opinion, leaving the 2011 Opinion as the DoJ’s only stated opinion on the subject. The DoJ appealed the NH Decision in October 2019, and a hearing on the appeal took place in June 2020. In January 2021, the United States Court of Appeals for the First Circuit denied the appeal by DoJ seeking to uphold the 2019 Opinion. By denying the appeal, the Court confirmed the previous 2011 Opinion, which concluded that the Act applies only to sports betting. In June 2021, the DoJ declined to appeal the decision of the United States Court of Appeals for the First Circuit, permitting state-run lotteries and their suppliers to continue to sell lottery products online without the immediate threat of federal prosecution for such activities.

Social Responsibility and Responsible Gaming

We are committed to the integration of corporate social responsibility within our businesses, supporting the continued generation of sustainable value and enhancing our ability to deliver on its strategic objectives. We believe that our true value is reflected not simply by our balance sheet but through our intangible assets such as goodwill, our people and our reputation. As a leader in the iLottery industry, we take our responsibilities to our customers and regulators seriously and are focused on cooperating with both on issues of responsible gambling. We provide our customers with robust solutions that facilitate responsible gaming for players, including embedded systems that assist in ensuring a safe playing environment for all. By embracing policies and behaviors governing social responsibility, we create more valuable relationships with our stakeholders by demonstrating our focus on managing material non-financial risks in the business.

Our responsible gaming platform features include:

• Advanced self-management module, which enables players to define their responsible gaming limits within a wide range of parameters;

• Operator-controlled module, which enables lottery customers to define and enforce policies and limitations on their players; and

• Application programming interface, which connects to government and other gaming databases to provide in-game alerts to remind players to play responsibly.

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Litigation

From time to time, we may be involved in various claims and legal proceedings related to claims arising out of our operations. Other than as described above in “—Regulation,” we are not currently a party to any material legal proceedings, including any such proceedings that are pending or threatened, of which we are aware.

Employees

As of June 30, 2021, the Company had 160 employees located predominantly in Israel and an additional 176 dedicated contractors located in Ukraine.

Our goal is to attract and retain highly qualified and motivated personnel. We also engage contractors to support our efforts. None of our employees and service providers are subject to a collective bargaining agreement. We consider our employee relations to be good and we have never experienced a work stoppage.

We are committed to maintaining a working environment in which diversity and equality of opportunity are actively promoted and all unlawful discrimination is not tolerated. We are committed to ensuring employees are treated fairly and are not subjected to unfair or unlawful discrimination. We value diversity and to that end recognize the educational and business benefits of diversity amongst our employees, applicants and other people with whom we have dealings.

Facilities

The Company has an office in Tel Aviv, Israel, where it leases approximately 27,200 square feet of office space. The lease for this facility had an initial term of 60 months from the commencement date, and was extended until January 31, 2022. The lease for this facility was extended for an additional five years effective April 15, 2022 and will automatically extend for an additional five years unless we terminate it upon prior notice. A large part of our development team is located in Kyiv, Ukraine, where we lease approximately 17,500 square feet of office space. The lease for this facility will expire on January 15, 2024. NPI serves our iLottery customers in North America through an office space of approximately 18,100 square feet in Lansing, Michigan, USA. This facility is leased by Pollard iLottery Inc., and because it is used solely for the benefit of the operations of NPI and the MSL, the Company participates in 50% of its monthly costs. The original lease agreement for the facility expired on March 31, 2020, and was extended by seven years until March 31, 2027.

We believe that our current facilities are adequate to meet our needs for the near future and that suitable additional or alternative space will be available on commercially reasonable terms to accommodate our foreseeable future operations.

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NeoGames Corporate Structure 

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MANAGEMENT

Executive Officers and Directors

The following table presents information about our executive officers and directors, including their ages as of August 14, 2021:

Name	Age	Position
Executive Officers
Moti Malul	50	Chief Executive Officer, Co-Managing Director and Director
Raviv Adler	47	Chief Financial Officer
Oded Gottfried	51	Chief Technology Officer
Rinat Belfer	41	Chief Operations Officer
Non-Executive Directors
Barak Matalon	51	Non-Executive Director
Aharon Aran	71	Non-Executive Director
Laurent Teitgen (1)	42	Non-Executive Director
Lisbeth McNabb (1)	61	Non-Executive Director
John E. Taylor, Jr. (1)	55	Non-Executive Director, Chairman

(1) Independent director in accordance with SEC regulations and Nasdaq rules requirements applicable to the Company.

Unless otherwise indicated, the current business addresses for each of our executive officers and each of the members of our board of directors is c/o NeoGames S.A., 5, rue Bonnevoie, L-1260 Luxembourg, Grand Duchy of Luxembourg.

Executive Officers

The following is a brief summary of the business experience of our executive officers.

Moti Malul has served as our Chief Executive Officer since October 2018 and as a member of our board of directors since October 2018. Prior to that, Mr. Malul served as our Executive Vice President of Sales and Business Development for three years. Prior to our spin-off from Aspire in 2014, Mr. Malul served in various roles at Aspire for five years. Prior to joining Aspire, Mr. Malul served for over 12 years in key marketing and management positions in the telecommunications and internet industries, for companies such as Ericsson and Smile Media. Mr. Malul holds a B.A. in Business Administration from Bar-Ilan University in Israel, and an M.B.A from Tel Aviv University in Israel.

Raviv Adler has served as our Chief Financial Officer since 2013. Mr. Adler joined Aspire in 2010 and served as its Director of Finance until 2013. Prior to joining Aspire, Mr. Adler served, and accumulated more than a decade of experience, in key finance roles in a range of multinational companies, such as “Hewlett Packard” and “Ernst & Young”, as well as start-up companies. Mr. Adler holds a B.A. in Business Administration and Accounting from the College of Management Academic Studies in Israel and he is a Certified Public Accountant in Israel.

Oded Gottfried has served as our Chief Technology Officer since our spin-off from Aspire in 2014 and the Chief Technology Officer of NGS, our Israeli subsidiary, since January 2015. Prior to our spin-off from Aspire, Mr. Gottfried served as the Chief Technology Officer of Aspire since 2008. Prior to joining Aspire in 2008 Mr. Gottfried founded two companies and served as their Chief Executive Officer. He also served as an engineer for the Israel Defense Forces. Mr. Gottfried holds a B.Sc in Mathematics & Computer Science from Tel Aviv University in Israel.

Rinat Belfer has served as our Chief Operations Officer since January 2019 after serving as Vice President of Projects of NGS between January 2015 and December 2018. Prior to our spin-off from Aspire in 2014, Ms. Belfer served in a number of roles with Aspire since 2009. Ms. Belfer holds a B.Tech degree in Industrial Engineering and Management from Shenkar College in Israel and an MBA from Ben Gurion University in Israel.

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Non-Executive Directors

The following is a brief summary of the business experience of the non-executive members of our board of directors.

Barak Matalon, the co-founder of Aspire, has served as a member of our board of directors since our spin-off from Aspire in 2014. Mr. Matalon currently serves on the board of directors of Lotym Holdings Ltd., Loty Holdings Ltd. and Aspire and is a member of Aspire’s remuneration committee. Mr. Matalon holds a B.A. in Economics from the Academic College of Tel Aviv Jaffa in Israel.

Aharon Aran has served as member of our board of directors since September 2019. Mr. Aran served as the Chief Executive Officer of TMF Media, Omnicom Media Group-Israel office from 2007 until 2019, and has served as the Chief Executive Officer of the Israeli Audience Research Board since August 2019. Mr. Aran currently serves on the board of directors of Aspire and is a member of its audit committee. Mr. Aran holds a B.A. in Economics and an M.B.A. from Tel Aviv University in Israel.

Laurent Teitgen has served as a member of our board of directors since April 2017. Mr. Teitgen currently serves on the board of directors of Ellomay Luxembourg Holdings S.à r.l., Chelsey Investissement S.C.A., Menora Central Europe Investments S.A., MiddleCap Group S.A. and Kaman Lux Holding S.à r.l, and he is Head of Accounting Department at Fiduciaire Jean-Marc Faber S.à r.l. Mr. Teitgen is a resident of Luxembourg and previously held positions with BDO, Intertrust, and TASL (now Orangefield/Vistra).  Mr. Teitgen holds a B.A. in Accounting and Financial Management with a specialization in Accounting Review from Université de Lorraine, IUT Henri Poincaré, France.

Lisbeth McNabb was appointed in January 2021 as a non-voting member in an observer capacity on our board of directors and has served as a voting member of our board of directors since May 2021. Ms. McNabb currently serves on the board of directors, serves on the audit committee and is the former chair of audit committee of Nexstar Media Group (Nasdaq: NXST). Over the past 20 years, Ms. McNabb has served in senior leadership roles with category-defining companies including match.com and Linux Foundation. Prior to that, she began her career in various finance and managerial roles at AT&T, American Airlines and Pepsico Frito-Lay. Ms. McNabb holds a BS in Business from the University of Nebraska and an MBA from Southern Methodist University.

John E. Taylor, Jr. has served as a member of our board of directors since November 2020. Mr. Taylor served as Chairman of the board of directors of Twin River Worldwide Holdings (NYSE: TRWH) from 2010 to 2016 and as Executive Chairman from 2017 to 2019. Mr. Taylor was formerly the Chief Executive Officer and President of GameLogic, Inc., a provider of internet based games for the regulated gaming industry. Mr. Taylor also served as the President and Chief Executive Officer of Dreamport, the gaming and entertainment subsidiary of GTECH Corporation, a then-NYSE listed company while also serving as a member of the Executive Management Committee of GTECH. Earlier in his career he served as a senior advisor to the Governor of Rhode Island. Mr. Taylor currently serves as a Trustee of Johnson & Wales University and holds a Bachelor of Science degree from Rhode Island College.

Board Composition

Our board of directors is currently comprised of six members, each of whom was elected for a term ending at the occasion of the 2022 General Meeting. A director may be re-appointed. Our directors are elected at our general meeting of shareholders in accordance with our articles of association. Pursuant to our articles of association, for so long as the Founding Shareholders (i) own in the aggregate at least 40.0% of the issued and outstanding share capital of the Company, a number of directors equal to 50.0% of the total number of directors will be elected from nominees selected by the Founding Shareholders, (ii) own in the aggregate less than 40% of the issued and outstanding share capital of the Company, but still own in the aggregate at least 25.0% of the issued and outstanding share capital of the Company, a number of directors equal to 33.0% of the total number of directors will be elected from nominees selected by the Founding Shareholders, and (iii) own in the aggregate less than 25% of the issued and outstanding share capital of the Company, but still own in the aggregate at least 15.0% of the issued and outstanding share capital, one director will be elected from nominees selected by the Founding Shareholders.

Foreign Private Issuer Status

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

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Controlled Company Status

Following the completion of this offering, we will no longer qualify as a “controlled company” and will no longer be able to rely on the exemptions provided to controlled companies under Nasdaq rules.

Board Committee Composition

Our board of directors has established an audit committee, a compensation committee and a nominating and corporate governance committee.

Audit Committee

The audit committee, which consists of Lisbeth McNabb, John E. Taylor, Jr. and Laurent Teitgen, assists the board in overseeing our accounting and financial reporting processes and the audits of our financial statements. Lisbeth McNabb serves as chair of the committee. The audit committee consists exclusively of members of our board of directors who are financially literate, and John E. Taylor, Jr. is considered an “audit committee financial expert” as defined by the SEC. Our board has determined that John E. Taylor, Jr., Laurent Teitgen and Lisbeth McNabb meet the “independence” requirements set forth in Rule 10A-3 under the Exchange Act. The audit committee is governed by a charter that complies with Nasdaq rules.

The audit committee is responsible for:

• recommending the appointment of the independent auditor to the general meeting of shareholders;

• the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;

• pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services;

• evaluating the independent auditor’s qualifications, performance and independence, and presenting its conclusions to our board of directors on at least an annual basis;

• reviewing and discussing with our board of directors and the independent auditor our annual audited financial statements and quarterly financial statements prior to the filing of the respective annual and quarterly reports;

• reviewing our compliance with laws and regulations, including major legal and regulatory initiatives and also reviewing any major litigation or investigations against us that may have a material impact on our financial statements; and

• approving or ratifying any related person transaction (as defined in our related person transaction policy) in accordance with our related person transaction policy.

The audit committee meets as often as one or more members of our audit committee deem necessary, but in any event meets at least four times per year. The audit committee meets at least once per year with our independent accountant, without our executive officers being present.

Compensation Committee

The compensation committee, which consists of John E. Taylor, Jr., Laurent Teitgen and Lisbeth McNabb, assists our board of directors in determining executive officer compensation. John E. Taylor, Jr. serves as chair of the committee. The committee recommends to our board of directors the compensation of each of our executive officers. Under SEC and Nasdaq rules, there are heightened independence standards for members of our compensation committee, including a prohibition against the receipt of any compensation from us other than standard board member fees. All of our compensation committee members meet this heightened standard.

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The compensation committee is responsible for:

• identifying, reviewing and approving corporate goals and objectives relevant to executive officer compensation;

• analyzing the possible outcomes of the variable remuneration components and how they may affect the remuneration of our executive officers;

• evaluating each executive officer’s performance in light of such goals and objectives and determining each executive officer’s compensation based on such evaluation;

• determining any long-term incentive component of each executive officer’s compensation in line with the remuneration policy and reviewing our executive officer compensation and benefits policies generally;

• periodically reviewing, in consultation with our Chief Executive Officer, our management succession planning; and

• reviewing and assessing risks arising from our compensation policies and practices for our employees and whether any such risks are reasonably likely to have a material adverse effect on us.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee, which consists of John E. Taylor, Jr., and Laurent Teitgen and Lisbeth McNabb, assists our board of directors in identifying individuals qualified to become members of our board of directors consistent with criteria established by our board of directors and in developing our corporate governance principles. John E. Taylor, Jr. serves as chair of the committee.

The nominating and corporate governance committee is responsible for:

• drawing up selection criteria and appointment procedures for board members;

• reviewing and evaluating the composition, function and duties of our board of directors;

• recommending nominees for selection to our board of directors and its corresponding committees;

• making recommendations to our board of directors as to determinations of board member independence;

• leading our board of directors in a self-evaluation, at least annually, to determine whether it and its committees are functioning effectively;

• overseeing and recommending for adoption by the general meeting of shareholders the compensation for our board members; and

• developing and recommending to our board of directors our rules governing the board of directors and code of business conduct, reviewing and reassessing the adequacy of such rules and recommending any proposed changes to our board of directors.

Code of Ethics and Conduct

We have adopted a Code of Ethics and Conduct that applies to all our employees, officers and directors, including our principal executive, principal financial and principal accounting officers. Our Code of Ethics and Conduct addresses, among other things, the handling of conflicts of interest, compliance issues and other corporate policies such as equal opportunity and non-discrimination standards.

Duties of Board Members and Conflicts of Interest

Under Luxembourg law, members of our board of directors have a duty of loyalty to act honestly, in good faith and with a view to our best interests. The members of our board of directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, the members of our board of directors must ensure compliance with our articles of association. In certain limited circumstances, a shareholder has the right to seek damages if a duty owed by a member of our board is breached.

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Pursuant to Luxembourg law, any director having a direct or indirect financial interest in a transaction submitted for approval to our board of directors may not participate in the deliberations and vote thereon, unless the transaction is not in the ordinary course of our business and conflicts with our interest, in which case the director shall be obliged to advise our board of directors thereof and to cause a record of such director’s statement to be included in the minutes of the meeting. He or she may not take part in these deliberations nor vote on such a transaction. At the next general meeting of shareholders, before any other resolution is put to a vote, a special report shall be made on any transactions in which any of the directors may have had an interest that conflicts with our interest.

Executive Officer and Board Member Compensation

The compensation for each of our executive officers is comprised of the following elements: base salary, bonus, contractual benefits, and pension contributions. The total amount of compensation paid and benefits in kind provided to our executive officers and members of our board of directors, other than our independent directors, for the 2020 financial year was $1,502,978. This amount includes $130,812 set aside or accrued to provide pension, severance, retirement or similar benefits or expenses. The amount of compensation paid to our independent directors is as follows: Mr. John E. Taylor Jr. received cash compensation of $40,000 and equity compensation in the form of a grant of 48,581 options, vesting over a period of two years annually from November 18, 2020, with an exercise price of $17 per option; and Mr. Laurent Teitgen received cash compensation of $5,142. We do not currently maintain any bonus or profit-sharing plan for the benefit of our executive officers; however, upon approval of the compensation committee of the board of directors we intend to offer to certain of our executive officers annual bonuses pursuant to terms to be approved by the board of directors. We make monthly contributions to pension, retirement or similar benefits to our executive officers as required under Israeli law or any other relevant jurisdiction.

Executive Officer and Board Member Employment Agreements

Each of the Company’s executive officers is employed under an employment agreement for an indefinite period of time. These agreements contain customary provisions regarding noncompetition, nonsolicitation, confidentiality of information and assignment of inventions.

Long-Term Incentive Plans

2015 Plan (Amended 2019)

The 2015 Option Plan was adopted on January 29, 2015 and amended thereafter (the “2015 Plan”). The 2015 Plan provides for the grant of options to acquire Ordinary Shares. As of August 14, 2021, there were outstanding options granted under the 2015 Plan covering 1,106,840 Ordinary Shares at a weighted average exercise price of $1.47, out of which 810,749 were vested and 296,091 were unvested.

All our employees and consultants are eligible to participate in the 2015 Plan. Most of the outstanding options to purchase Ordinary Shares granted under the 2015 Plan that are held by employees and former employees of NGS are subject to the beneficial tax arrangement known as the trustee capital gains route of Section 102 of the Israeli Income Tax Ordinance [New Version] 1961.

Our board of directors determines the terms and conditions of the options granted including the vesting terms and the exercise price. The terms and conditions are set forth in the applicable options agreement. The terms and conditions of individual options may vary.

Following the completion of our initial public offering, the Company ceased granting options under the 2015 Plan. Any options granted under the 2015 Plan that expire will be added to the pool of the 2020 Plan (as defined below). The 2015 Plan will continue to apply to all options granted under the 2015 Plan prior to our initial public offering.

2020 Plan

  In connection with our initial public offering, we adopted an omnibus equity plan by the name of 2020 Incentive Award Plan (the “2020 Plan”), which allows for the grant of various equity awards such as options, share appreciation rights, restricted shares, restricted share units and other equity based awards. The 2020 Plan initially included a pool of 132,750 Ordinary Shares which shall be increased automatically upon expiration of any option granted under the 2015 Plan and by an annual increase on the first day of each calendar year beginning January 1, 2021 and ending on and including January 1, 2030, equal to the lesser of (A) 3% of the aggregate number of shares outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of shares as is determined by our board of directors. As of August 14, 2021, there were outstanding options granted under the 2020 Plan covering 75,726 Ordinary Shares at a weighted average exercise price of $25.03, of which 1,519 were vested and 74,207 were unvested. On August 30, 2021, our board of directors allocated up to 135,000 restricted share units, or RSUs, for award to employees in amounts to be determined by management. The RSUs will be granted under the Company's 2020 Incentive Award Plan and will vest in four equal annual installments commencing on January 1, 2022.

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The 2020 Plan is managed by our board of directors or by a committee thereof nominated for the purpose of administrating the 2015 Plan.

The administrator has the authority to determine the terms and conditions of the awards granted under the 2020 Plan. However, the exercise price of options and share appreciation rights must be no less than the fair market value of the shares at the time of grant.

The 2020 Plan includes an Israeli sub-plan for the purpose of enabling the Company to grant Israeli employees awards under the tax beneficial route known as the trustee capital gains route of Section 102 of the Israeli Income Tax Ordinance [New Version] 1961.

Insurance and Indemnification

We provide liability insurance for our directors and officers against certain liabilities, which they may incur in connection with their activities on our behalf.

Our articles of association provide that directors and officers, past and present, are entitled to indemnification from us to the fullest extent permitted by Luxembourg law, against liabilities and all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit, or proceeding in which he or she is involved by virtue of him or her being or having been a director or officer of the Company and against amounts paid or incurred by him or her in the settlement thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions of our articles of association or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer, or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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PRINCIPAL AND SELLING SHAREHOLDERS

 

      The following table sets forth information relating to the beneficial ownership of our Ordinary Shares as of August 14, 2021 and immediately following this offering by:

• each person, or group of affiliated persons, known by us to beneficially own 5% or more of our outstanding Ordinary Shares;

• each of our executive officers and directors;

• all of our executive officers and directors as a group; and

• each selling shareholder.

For further information regarding material transactions between us and principal shareholders, see “Related Party Transactions.”

The number of Ordinary Shares beneficially owned by each entity, person, executive officer or director is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the person has sole or shared voting power or investment power. Additionally, Ordinary Shares that a person has the right to acquire within 60 days of August 14, 2021 through the exercise of any option, warrant or other right are deemed to be outstanding and to be beneficially owned by such person for purposes of computing the percentage ownership of such person, but are not deemed outstanding for purposes of computing the percentage ownership of any other person, except with respect to the percentage ownership of all executive officers and directors as a group. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all Ordinary Shares held by that person.

The percentage of Ordinary Shares beneficially owned is computed on the basis of 25,520,666 Ordinary Shares outstanding as of August 14, 2021.

The information set forth below regarding the beneficial ownership for each of our principal shareholders has been furnished by such shareholders. Unless otherwise indicated below, the address for each beneficial owner listed is NeoGames S.A., 10 Habarzel Street, Tel Aviv, 6971014, Israel.

						Shares beneficially owned after the offering
	Shares beneficially owned prior to the offering					If underwriters’ option to purchase additional shares from the selling shareholders is not exercised					If underwriters’ option to purchase additional shares from the selling shareholders is exercised in full
Name of Beneficial Owner	Shares		%			Shares		%			Shares		%
5% or Greater Shareholders:
Caesars Entertainment, Inc.(1)		6,127,257		24.0	%		3,063,628		12.0	%		2,545,027		10.0	%
Elyahu Azur(2)		3,193,717		12.5	%		3,093,717		12.1	%		3,093,717		12.1	%
Pinhas Zahavi (3)		3,193,717		12.5	%		3,000,000		11.8	%		3,000,000		11.8	%
Executive officers and directors
Moti Malul(4)		282,323		1.1	%		282,323		1.1	%		282,323		1.1	%
Raviv Adler(5)		*		*			*		*			*		*
Oded Gottfried(6)		333,970		1.3	%		333,970		1.3	%		333,970		1.3	%
Rinat Belfer(7)		*		*			*		*			*		*
Barak Matalon(8)		5,109,948		20.0	%		5,109,948		20.0	%		5,109,948		20.0	%
Aharon Aran(9)		1,277,486		5.0	%		1,177,486		4.6	%		1,177,486		4.6	%
Laurent Teitgen		*		*			*		*			*		*
John E. Taylor, Jr.(10)		*		*			*		*			*		*
Lisbeth McNabb		*		*			*		*			*		*
All directors and executive officers as a group (9 persons)(11)		7,127,835		27.5	%		7,027,835		27.1	%		7,027,835		27.1	%

* Indicates beneficial ownership of less than 1% of the total outstanding Ordinary Shares.

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(1) The address for Caesars Entertainment, Inc. is 100 West Liberty Street, 12th Floor, Reno, NV 89501.

(2) Based on information reported on a Schedule 13G filed on February 16, 2021, Mr. Azur holds 3,193,717 Ordinary Shares. The address for Mr. Azur is 6 Hertzel St., Tel-Aviv, Israel.

(3) Based on information reported on a Schedule 13G filed on February 16, 2021, Mr. Zahabi holds 3,193,717 Ordinary Shares. The address for Mr. Zahavi is 4 Voiotias St., Limassol, Cyprus.

(4) Shares beneficially owned includes 282,323 options currently exercisable for Ordinary Shares.

(5) Shares beneficially owned includes 78,428 options currently exercisable for Ordinary Shares.

(6) Shares beneficially owned includes 3,492 options currently exercisable for Ordinary Shares.

(7) Shares beneficially owned includes 30,971 options currently exercisable for Ordinary Shares.

(8) Based on information reported on a Schedule 13G filed on February 16, 2021, Mr. Matalon holds 5,109,948 Ordinary Shares. The address for Mr. Matalon is 10 Habarzel St., Tel Aviv, Israel.

(9) Based on information reported on a Schedule 13G filed on February 16, 2021, Mr. Aran holds 1,277,486 Ordinary Shares. The address for Mr. Aran is 32 Tuval St. Ramat Gan, Israel.

(10) The address for Mr. Taylor is 10 Habarzel St., Tel Aviv, Israel.

(11) Shares beneficially owned includes 6,632,621 Ordinary Shares and 395,214 options exercisable for Ordinary Shares.

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RELATED PARTY TRANSACTIONS

The following is a description of our ongoing or presently proposed related party transactions since January 1, 2018.

Relationship with Aspire

NeoGames was established as an independent company in 2014, following a spin-off from Aspire, a B2C and B2B service provider in the iGaming industry. Barak Matalon and Aharon Aran, members of our board of directors, are also members of Aspire’s board of directors. Further, Barak Matalon, Elyahu Azur, Pinhas Zahavi and Aharon Aran, who collectively own a majority of the shares of Aspire, currently hold approximately 51.1% of our Ordinary Shares and will hold approximately 48.5% of our issued and outstanding Ordinary Shares following the completion of this offering (and 48.5% if the underwriters' option to purchase additional Ordinary Shares is exercised in full).

Prior to our spin-off from Aspire, our management team was responsible for the iLottery business of Aspire. As part of the spin-off, NeoGames has entered into the following agreements with the Aspire Group:

Framework Agreement

On April 24, 2015, with effect as of April 30, 2014, NeoGames entered into an agreement (the “Aspire Framework Agreement”) with Aspire and AG Software Limited (“AG Software”), a member of the Aspire Group that provides the framework for the restructuring and the separate operation of each of the parties and their respective businesses. NeoGames acquired from the Aspire Group the suite of software products used solely in the iLottery market, as well as the rights to certain contracts held by the Aspire Group, in consideration for the Aspire Promissory Notes.

Transition Services Agreement

On June 15, 2015, with effect as of April 30, 2014, NeoGames entered into a transition services agreement (as amended on August 6, 2015, the “Aspire Transition Services Agreement”) with Aspire and William Hill pursuant to which NeoGames agreed to provide Aspire with certain dedicated development, maintenance and support services necessary for the operation of Aspire’s business. These services are now primarily provided by teams that are dedicated to Aspire and are employees of Aspire, but NeoGames’ employees supervise the software development work of Aspire’s employees to ensure that their work is released within the overall release plan and does not interfere with other functions of the platform. We received approximately $0.9 million, $2.4 million, $4.0 million and $3.4 million pursuant to the Aspire Transition Services Agreement in the six months ended June 30, 2021 and the years ended December 31, 2020, 2019 and 2018, respectively. Pursuant to the terms of the Aspire Transition Services Agreement, rights in the work product created by Aspire for the sole benefit of Aspire are owned by Aspire and rights in the work product created by NeoGames for the sole benefit of NeoGames are owned by NeoGames. However, rights in the work product created for the benefit of both NeoGames and Aspire are owned by NeoGames and licensed to Aspire under the terms of the Aspire Software License Agreement.

Trademark License Agreement

On April 24, 2015, NeoGames entered into a trademark license agreement with Aspire and William Hill (as amended and restated on August 6, 2015, the “Aspire Trademark License Agreement”) pursuant to which Aspire granted to NeoGames an exclusive license to use the “NEOGAMES” trademark in connection with our business. In September 2020, Aspire and NeoGames executed a trademark assignment agreement and filed deeds of assignment in respect of the registered NEOGAMES trademarks in the EU and the United States that has been recorded in the public registrar.

Aspire Promissory Notes

On April 24, 2015, with effect as of April 30, 2014, NeoGames issued to Aspire and AG Software promissory notes (as amended and restated, the “Aspire Promissory Notes”) in aggregate principal amounts of approximately $3.0 million and $5.5 million, respectively. On May 18, 2017, the aggregate principal amount of the promissory note issued to Aspire was increased from $3.0 million to $16.3 million (bringing the aggregate principal amount of the Aspire Promissory Notes to approximately $21.8 million). The Aspire Promissory Notes bear interest at a rate of 1.0% per annum, payable on a quarterly basis in arrears, and mature on March 31, 2022.

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Aspire Software License Agreement

In April 2015, NeoGames entered into a software license agreement (as amended in August 2015 and in June 2018, the “Aspire Software License Agreement”) with AG Software, Aspire and William Hill, pursuant to which ownership of intellectual property in a suite of software products was allocated between NeoGames and Aspire. In accordance with the Aspire Software License Agreement, software used in both the iLottery business and the iGaming business (the “Mixed-Use Software”) remained in the ownership of Aspire but was exclusively and irrevocably licensed to NeoGames for use in our iLottery business. The Mixed-Use Software includes components such as the wallet, cashier functions and random numbers generator used in our iLottery offerings.

The license from Aspire allows NeoGames to use the Mixed-Use Software to (i) facilitate its iLottery business worldwide, (ii) design, develop and implement online gaming, lottery or sports products and services for B2B customers in the gaming and sports businesses in the United States, (iii) grant a sub-license to William Hill for use when William Hill is operating under its own brand, and under certain circumstances when William Hill is operating under third-party brands, for its gaming and sports business and (iv) design, develop and implement games content (including scratch card, instant win, table and casino games) to customers (except for platform providers or white label companies who are competitors of Aspire) worldwide. The license from Aspire allows NeoGames to make broad use of the Mixed-Use Software in connection with the foregoing rights, including but not limited to adapting, modifying or enhancing it, granting sub-licenses, and distributing and selling it.

Meanwhile, Aspire can use the Mixed-Use Software to (i) facilitate its B2C gaming or sports business worldwide, (ii) facilitate its B2C iLottery business worldwide (except in jurisdictions where NeoGames operates its iLottery business), (iii) design, develop and implement online gaming, lottery or sports products and services for B2G customers in the iLottery business (except in the United States) and (iv) offer online games content (including scratch card, instant win, table and casino games) to customers (except for B2G customers in the United States and certain competitors of NeoGames) worldwide.

Pursuant to the terms of the Aspire Software License Agreement, the WH Features (as defined below) and modifications to the Mixed-Use Software developed by NeoGames and used exclusively in the iLottery offering are owned by NeoGames and licensed to Aspire on the same terms as Aspire’s rights to use the Mixed-Use Software set forth above. Pursuant to the terms of the Aspire Software License Agreement, modifications to the Mixed-Use Software developed by Aspire and used exclusively in the iGaming offering are owned by Aspire and licensed to NeoGames on the same terms as NeoGames’ license to the Mixed-Use Software set forth above.

In accordance with the terms of the Aspire Software License Agreement, NeoGames is not permitted to design, develop or implement casino and slots content for games aggregators, and Aspire is not permitted to design, develop and implement scratch and instant content for games aggregators.

Cost Allocation Agreement

On July 8, 2015, with effect as of June 15, 2014, NGS entered into a cost allocation agreement with Aspire Global Marketing Solutions pursuant to which each party has agreed to bear certain costs that are then recovered at cost from the other party. We paid $0.8 million, $1.4 million, $1.5 million and $1.5 million and received $0.1 million, $0.2 million, $0.2 million and $0.2 million in the six months ended June 30, 2021 and the years ended December 31, 2020, 2019 and 2018, respectively.

Relationship with William Hill

We have a strategic partnership with William Hill, who is our client (with respect to certain software development projects and licensing rights described below), our lender (with respect to the credit facility described below) and our largest shareholder. William Hill was acquired by Caesars Entertainment, Inc. on April 22, 2021.

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Shareholders’ Agreement

On August 6, 2015, we entered into an Investment and Framework Shareholders’ Agreement with William Hill and certain of our shareholders (the “Shareholders’ Agreement”), pursuant to which we issued 56,003,584 of our Ordinary Shares to William Hill for an aggregate purchase price of $25.0 million. Pursuant to the Shareholders’ Agreement, William Hill also had the right to appoint a member of our board of directors.

Pursuant to the Shareholders’ Agreement, William Hill was granted two option rights to purchase the Ordinary Shares held by certain of our shareholders. The first option lapsed in 2019 and was not exercised. The second option allows William Hill to purchase the Ordinary Shares held by certain of our shareholders at the greater of $182.0 million and a price per share based on a multiple (between seven and 12.5, depending on the portion of the Company’s revenues attributable to the Michigan iLottery) of the Company’s earnings before interest and taxes for the year ended December 31, 2020. William Hill waived this option prior to the completion of our initial public offering.

Upon the completion of our initial public offering, the Shareholders’ Agreement terminated.

WH Credit Facility

On August 6, 2015, William Hill made available to us a credit facility (the “WH Credit Facility”) in the principal amount of $15.0 million, bearing interest at the rate of 5.0% per annum. On June 18, 2018, the WH Credit Facility was amended so that $10.0 million out of the $15.0 million would bear interest at the rate of 1.0% per annum and the remaining $5.0 million would continue to bear interest at the rate of 5.0% per annum.

On October 20, 2020, we entered into a loan agreement with William Hill Finance Limited (“WHFL”), an affiliate of William Hill, which sets out amended terms and repayment schedule with respect to our outstanding loans under the WH Credit Facility (the “Loan Agreement”).

In the years ended December 31, 2018 and 2019, WHFL extended to us the following loans under the WH Credit Facility: (a) on March 13, 2018, an amount of $4.0 million (“Tranche A”), (b) on October 11, 2018, an amount of $2.0 million (“Tranche B”), (c) on January 29, 2019, an amount of $3.0 million (“Tranche C”) and (d) on September 27, 2019, an amount of $3.5 million (“Tranche D”).

On September 18, 2020, WHFL extended to us a loan of $2.5 million (“Tranche E”), which was immediately used to pay off a portion of Tranche A. On September 18, 2020, WHFL also extended to us a loan of $2.0 million under the WH Credit Facility (“Tranche F”), which was immediately used to pay off the remaining principal amount of Tranche A and all interest accrued under the WH Credit Facility as of such date. According to the terms of the Loan Agreement, as of June 30, 2021 the Company paid in full both the principal and accrued interest associated with Tranche F in a total amount of $2.1 million.

Pursuant to the Loan Agreement, the maturity date for Tranches B, C, D and E is June 15, 2023. As of December 31, 2020, we may not draw any additional funds under the WH Credit Facility. Tranches B, C, D and E bear interest at a rate of 1.0% per annum.

Pursuant to the Loan Agreement, WHFL has the right to appoint an observer to attend each of our board of director meetings until the full repayment of the loan facilities.

Pursuant to the Loan Agreement, all present and future amounts owed under the WH Credit Facility must be secured by a pledge over the shares of NGS and NeoGames US, LLP, wholly owned subsidiaries of the Company.

Upon a change of control in the Company, WHFL is entitled to cancel the WH Credit Facility and declare all amounts outstanding thereunder, together with all other amounts accrued under the Loan Agreement, due and payable upon not less than five business days’ notice.

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WHG License

On June 18, 2018, we entered into a binding term sheet (the “WH Term Sheet”) with WHG (International) Ltd. (“WHG”), an affiliate of William Hill. Pursuant to the WH Term Sheet, we granted WHG a sub-license (the “WHG License”) to use the NeoSphere platform, subject to certain branding restrictions, through any channel and for use in any product offering.

The WHG License is irrevocable for the term of the WH Term Sheet, which is in effect until a Master Software Development License Agreement (contemplated by the WH Term Sheet) is entered into by the parties (the “MSDLA”).

Furthermore, pursuant to the WH Term Sheet, we granted WHG the option to convert the WHG License into a perpetual license (the “IP Option”) for a payment of £15.0 million upon the earlier of the termination of the MSDLA, once entered into, or a change of control of NeoGames. We have also agreed to provide WHG with the IP Option following the completion of a four year period from the date of the WH Term Sheet. The Company and WHG are in the process of negotiating the MSDLA.

Pursuant to the WH Term Sheet, we have agreed to make available to WHG a dedicated team that provides support services (the “WH Services”) for WHG projects related to the NeoSphere platform.

Our revenues from these arrangements were approximately $3.8 million, $6.7 million, $5.7 million and $2.4 million in the six months ended June 30, 2021 and years ended December 31, 2020, 2019 and 2018, respectively.

NeoGames and WHG have agreed on certain exclusivity obligations in the United States. WHG is prohibited from using the NeoSphere platform in competition with NeoGames in the iLottery business. NeoGames is prohibited from using the NeoSphere platform in competition with WHG in the B2C sports betting business, but is not prohibited from independently using the NeoSphere platform in the B2B sports betting business.

All intellectual property developed in connection with the WH Services, including both features developed by NeoGames for WHG (“WH Features”) and features jointly developed by WHG and NeoGames, are owned by, and fully vested in, NeoGames. We are generally prohibited from providing the WH Features to any party other than our existing customers and Aspire, subject to certain limitations.

Consultant Agreement

On June 1, 2015, NGS and LOTYM HOLDINGS LTD. (“LOTYM”) entered into an agreement pursuant to which LOTYM provides to NGS consulting services through Barak Matalon (one of the Founding Shareholders) for a monthly consideration in the amount of NIS 45,000 (plus VAT). The agreement has an unlimited term, and may be terminated for convenience by either party, subject to 180-days’ prior written notice. Mr. Matalon and LOTYM have signed undertakings, effective through the term of the agreement and for 12 months following its termination, regarding (i) ownership in inventions by, and assignment thereof to, the Company, (ii) non-competition against the Company, and (iii) non-solicitation of its employees, consultants, suppliers, customers, investors and any party commercially engaged by it. The Company paid to the LOTYM $82 thousand, $158 thousand, $153 thousand and $149 thousand in the six months ended June 30, 2021 and years ended December 31, 2020, 2019 and 2018, respectively.

Voting Agreement

Our Founding Shareholders have the exclusive right under our articles of association to nominate up to 50% of our directors so long as they own in the aggregate at least 40.0% of our issued and outstanding share capital. In furtherance of the foregoing, the Founding Shareholders have entered into a voting agreement pursuant to which the Founding Shareholders vote as one group with regard to any matter relating to the nomination, election, appointment or removal of directors.

Other Agreements with Directors and Executive Officers

We have entered into employment agreements with each of our executive officers in the ordinary course of business. The agreements provide for the terms of each individual’s employment or service with the Company. Since our inception, we have also granted to our executive officers and to certain of our directors options to purchase Ordinary Shares. For a description of transactions and arrangements with our directors and executive officers, see “Compensation - Executive Officer and Board Member Compensation” and “Compensation - Executive Officer and Board Member Employment Agreements.”

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Indemnification Agreements

We have entered into indemnification agreements with our directors and executive officers. See "Management – Insurance and Indemnification" for a description of these indemnification agreements.

Policies and Procedures for Related Party Transactions

Our board of directors has adopted a policy providing that the audit committee will review and approve or ratify material transactions, arrangements, or relationships in which we participate and in which any related person has or will have a direct or indirect material interest. A “related person” is a director, director-nominee, executive officer, or beneficial holder of more than 5% of any class of our voting securities or an immediate family member thereof. A transaction involving an amount in excess of $120,000 is presumed to be a material transaction, though transactions involving lower amounts may be material based on the facts and circumstances. Direct or indirect material interests may arise by virtue of control or significant influence of the related person to the transaction or by a direct or indirect pecuniary interest of the related person in the transaction. Under this policy, the audit committee shall review whether the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related person’s interest in the transaction, and shall also take into account the conflicts of interest and corporate opportunity provisions of the Code of Ethics and Conduct that we have adopted. All of the transactions described above were entered into prior to the adoption of this policy.

Certain of the foregoing disclosures are summaries of agreements, and are qualified in their entirety by reference to such agreements. See “Where You Can Find More Information.”

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DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION

The following is a summary of some of the terms of our Ordinary Shares, based on our articles of association and Luxembourg law. The following summary is not complete and is subject to, and is qualified in its entirety by reference to, the provisions of our articles of association, which has been filed as an exhibit to the registration statement of which this prospectus is a part. You may obtain copies of our articles of association as described under “Where You Can Find More Information” in this prospectus.

Share Capital

During the extraordinary general shareholders’ meeting of the Company held on November 10, 2020, the shareholders approved an initial authorized share capital of up to $194,724.90 represented by a number of shares, no par value, to be determined in the board of directors’ discretion. Pursuant to resolutions of our board of directors dated November 11, 2020 and resolutions of the pricing committee dated November 18, 2020 and November 22, 2020, respectively, the share capital of the Company was increased by $5,289.68, representing 2,987,625 new shares, to $44,234.66, represented by 24,983,855 shares, no par value. Following the exercise of share options between May 17, 2021 and June 30, 2021 the share capital of the Company was increased by an aggregate amount of $877.96, representing 495,873 new shares (the "Exercised Option Shares"), to $45,112.62, represented by 25,479,728 shares, no par value. Such share capital increase were formally documented and confirmed by a mandatory Luxembourg law process that was concluded by a notarial deed dated July 30, 2021. As a result, the current authorized capital of the Company is set at $188,557.26 represented by a number of shares to be freely determined by our board of directors, each without par value (but with a par accounting value at least equivalent to the par accounting value of the existing shares from time to time) (as acknowledged by a notarial deed of confirmation dated July 30, 2021). As of June 30, 2021, there were seven registered holders of our Ordinary Shares (including the Exercised Option Shares).

All of our outstanding Ordinary Shares are validly issued, fully paid and non-assessable. Our Ordinary Shares are not redeemable and have certain preemptive rights that can be waived by our board of directors as further described below under “- Issuance of Ordinary Shares and Preemptive Right.”

Articles of Association

We are registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B186309. Our corporate purpose, as stated in Article 4 of our articles of association, is to develop activities in relation with iLottery and iGaming solutions and services as well as any related areas. This includes the (i) the acquisition, holding and disposal, in any form, by any means, whether directly or indirectly, of participations, rights and interests in, and obligations of, Luxembourg and foreign companies, (ii) the acquisition by purchase, subscription, or in any other manner, as well as the transfer by sale, exchange or in any other manner of stock, partnership interests, bonds, debentures, notes and other securities or financial instruments of any kind (including notes or parts or units issued by Luxembourg or foreign mutual funds or similar undertakings) and receivables, claims or loans or other credit facilities and agreements or contracts relating thereto, and (iii) the ownership, administration, development and management of a portfolio of assets (including, among other things, the assets referred to in (i) and (ii) above).

The Company may borrow in any form. It may enter into any type of loan agreement and it may issue notes, bonds, debentures, certificates, shares, beneficiary parts, warrants and any kind of debt or equity securities including under one or more issuance programs. The Company may further list all or part of its shares on a regulated or unregulated stock exchange in or outside of the European Union. The Company may lend funds including the proceeds of any borrowings and/or issues of securities to its subsidiaries, affiliated companies or any other company.

The Company may also give guarantees and grant security interests over some or all of its assets including, without limitation, by way of pledge, transfer or encumbrance, in favor of or for the benefit of third parties to secure its obligations or the obligations of its subsidiaries, affiliated companies or any other company.

The Company may enter into, execute and deliver and perform any swaps, futures, forwards, derivatives, options, repurchase, stock lending and similar transactions. The Company may generally use any techniques and instruments relating to investments for the purpose of their efficient management, including, but not limited to, techniques and instruments designed to protect it against credit, currency exchange, interest rate risks and other risks.

The Company may carry out any commercial, industrial, and financial operations, which are directly or indirectly connected with its purpose or which may favor its development. In addition, the Company may acquire and sell real estate properties, for its own account, either in the Grand Duchy of Luxembourg or abroad and it may carry out all operations relating to real estate properties.

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In general, the Company may take any controlling and supervisory measures and carry out any operation or transaction which it considers necessary or useful in the accomplishment and development of its purpose.

The descriptions above are to be construed broadly and their enumeration is not limiting. The Company’s purpose shall include any transaction or agreement which is entered into by the Company, provided it is not inconsistent with the foregoing matters.

Issuance of Ordinary Shares and Preemptive Right

Pursuant to Luxembourg law, the issuance of Ordinary Shares requires approval by a quorum of at least one half of the share capital, and a two-thirds majority vote is required for the amendment of articles of association. The shareholders, at any general meeting of shareholders, may approve an authorized share capital and authorize the board of directors to issue Ordinary Shares, up to the maximum amount of such authorized share capital, for a maximum period of five years after the date that the minutes of the relevant general meeting approving such authorization are published in the Luxembourg official gazette (Recueil électronique des Sociétés et Associations). The shareholders, at any general meeting of shareholders, may amend, renew, or extend such authorized share capital and such authorization to the board of directors to issue Ordinary Shares.

The board of directors will resolve on the issuance of such Ordinary Shares out of the authorized share capital (capital autorisé) in accordance with the quorum and voting thresholds set forth in articles of association. The board of directors also will resolve on the applicable procedures and timelines to which such issuance will be subjected. If the proposal of the board of directors to issue new Ordinary Shares exceeds the limits of our authorized share capital, our board of directors must then convene the shareholders to an extraordinary general meeting to be held in the presence of a Luxembourg notary for the purpose of increasing the issued share capital. Such meeting will be subject to the quorum and majority requirements required for amending the articles of association.

Under Luxembourg law, existing shareholders benefit from a preemptive subscription right on the issuance of Ordinary Shares for cash consideration. However, on November 10, 2020, our shareholders have authorized for a period of five years the board of directors to cancel or limit any preemptive subscription rights of shareholders provided by law to the extent that the board of directors deems such cancellation or limitation advisable for any issuance of Ordinary Shares within the scope and conditions of our authorized share capital. The general meeting of shareholders, convened within the conditions required for an amendment to the articles of association to approve a capital increase or authorized share capital may, by two-thirds majority vote, cancel or limit such preemptive rights (or renew or amend such cancellation or limitation), in each case, for a period not to exceed five years. Such Ordinary Shares may be issued above, at, or below market value, but in any event not below the nominal value or below the accounting par value per ordinary share. The Ordinary Shares also may be issued by way of incorporation of available reserves (including share premium).

Repurchase of Ordinary Shares

We cannot subscribe for our own Ordinary Shares. We may, however, repurchase issued Ordinary Shares or have another person repurchase issued Ordinary Shares for our account, subject to the following conditions:

• except in the case of Ordinary Shares acquired either by us or by a person acting in his or her own name but on behalf of us for the distribution thereof to our staff or to the staff of a company with which we are in a control relationship, prior authorization by a simple majority vote must be obtained at an ordinary general meeting of shareholders, which authorization sets forth:

• the terms and conditions of the proposed repurchase and in particular the maximum number of Ordinary Shares to be repurchased;

• the duration of the period for which the authorization is given (which may not exceed five years); and

• in the case of repurchase for consideration, the minimum and maximum consideration per Ordinary Share;

• only fully paid-up Ordinary Shares may be repurchased;

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• the repurchases may not have the effect of reducing net assets below the amount of the issued share capital plus reserves (which may not be distributed by law or under our articles of association);

• the voting and dividend rights attached to the repurchased shares will be suspended as long as the repurchased Ordinary Shares are held by us; and

• the repurchase offer must be made on the same terms and conditions to all the shareholders who are in the same position, except for repurchases which were unanimously decided by a general meeting at which all the shareholders were present or represented (and except in accordance with Article 430-15, 4° of the Luxembourg Company Law).

The shareholder authorization described above will be valid for a period ending on the earlier of five years from the date of such shareholder authorization and the date of its renewal by a subsequent general meeting of shareholders. Pursuant to such authorization, the board of directors is authorized to acquire and sell our Ordinary Shares under the conditions set forth in Article 430-15 of the Luxembourg Company Law. Such purchases and sales may be carried out for any authorized purpose or any purpose that is authorized by the laws and regulations in force.

On November 10, 2020, our shareholders authorized the Company for a period of five years to repurchase up to 50% of the aggregate Ordinary Shares in issues from time to time. The purchase price per Ordinary Share in such circumstance shall be determined by the board but (i) not less than 50% of the lowest closing price per share and (ii) not more than 50% above the highest closing price per share, in each case as reported by the New York City edition of the Wall Street Journal, or, if not reported therein, any other authoritative sources to be selected by the board of directors, over the ten trading days preceding the date of the purchase (or the date of the commitment to the transaction).

In addition, pursuant to Luxembourg law, we may directly or indirectly repurchase Ordinary Shares by a resolution of our board of directors without the prior approval of the general meeting of shareholders if such repurchase is deemed by our board of directors to be necessary to prevent serious and imminent harm to us or if the repurchase of Ordinary Shares has been made with the intent of the distribution thereof to our employees and/or the employees of any entity having a controlling relationship with us (i.e., our subsidiaries or controlling shareholder).

Form and Transfer of Ordinary Shares

Our Ordinary Shares are issued in registered form only and are freely transferable under Luxembourg law and our articles of association. Our board of directors may, however, impose transfer restrictions for Ordinary Shares that are registered, listed, quoted, dealt in, or that have been placed in certain jurisdictions in compliance with the requirements applicable therein. Luxembourg law does not impose any limitations on the rights of Luxembourg or non-Luxembourg residents to hold or vote our Ordinary Shares.

Under Luxembourg law, the ownership of registered Ordinary Shares is prima facie established by the inscription of the name of the shareholder and the number of Ordinary Shares held by him or her in the shareholders’ register.

Without prejudice to the conditions for transfer by book entry where Ordinary Shares are recorded in the shareholders’ register on behalf of one or more persons in the name of a depository, each transfer of Ordinary Shares shall be effected by written declaration of transfer to be recorded in the shareholders’ register, with such declaration to be dated and signed by the transferor and the transferee or by their duly appointed agents. We may accept and enter into the shareholders’ register any transfer effected pursuant to an agreement or agreements between the transferor and the transferee, true and complete copies of which have been delivered to us.

If our Ordinary Shares are not listed on a stock exchange in the United States, a shareholders’ register will be maintained by us at our registered office in Luxembourg. Transfer of record ownership of Ordinary Shares is effected by a written deed of transfer acknowledged by us or by our transfer agent and registrar acting as our agent on our behalf.

Liquidation Rights and Dissolution

In the event of our dissolution, liquidation or winding-up, any surplus of the assets remaining after allowing for the payment of all of our liabilities will be paid out to the shareholders pro rata according to their respective shareholdings. The decisions to dissolve, liquidate, or wind-up require approval by an extraordinary general meeting of our shareholders.

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Merger and De-Merger

A merger by absorption whereby one Luxembourg company, after its dissolution without liquidation, transfers all of its assets and liabilities to another company in exchange for the issuance of Ordinary Shares in the acquiring company to the shareholders of the company being acquired, or a merger effected by transfer of assets to a newly incorporated company, must, in principle, be approved at an extraordinary general meeting of shareholders of the Luxembourg company, enacted in front of a Luxembourg notary. Similarly, a de-merger of a subsidiary of a Luxembourg company is generally subject to the approval by an extraordinary general meeting of shareholders, enacted in front of a Luxembourg notary.

No Appraisal Rights

Neither Luxembourg law nor articles of association provide for appraisal rights of dissenting shareholders.

General Meeting of Shareholders

Any regularly constituted general meeting of shareholders represents the entire body of our shareholders.

Without prejudice to any exceptional legal regimes applicable from to time in view of the COVID-19 pandemic, a holder of our share capital is entitled to attend our general meeting of shareholders, either in person or by proxy, to address the general meeting of shareholders and to exercise voting rights, subject to the provisions of our articles of association. Each Ordinary Share entitles the holder to one vote at a general meeting of shareholders, unless such holder has a beneficiary certificate. Our articles of association provide that our board of directors shall adopt all other regulations and rules concerning the attendance to the general meeting, the availability of access cards, and the availability of proxy forms in order to enable shareholders to exercise their right to vote as our board of directors deems fit.

When convening a general meeting of shareholders, we will send a convening notice by registered mail to the registered address of each shareholder at least eight days before the meeting. The convening notices for every general meeting shall contain the agenda and shall take the form of announcements filed with the register of commerce and companies, published on the Luxembourg official gazette (Recueil Electronique des Sociétés et Associations), and published in a Luxembourg newspaper at least 15 days before the meeting. No proof is required that this formality has been complied with. The board of directors may impose a record date formality in the convening notice which shall condition the exercise of the voting right.

Our articles of association provide that if our Ordinary Shares are listed on a regulated market, the general meeting also will be convened in accordance with the publicity requirements of such regulated market applicable to us.

A shareholder may participate in general meetings of shareholders by appointing another person as his or her proxy, the appointment of which shall be in writing. Our articles of association also provide that, in the case of Ordinary Shares held through the operator of a securities settlement system or depository, a holder of such Ordinary Shares wishing to attend a general meeting of shareholders should receive from such operator or depository a certificate in proper form. Our board may determine the formal requirements with which such certificates must comply.

The ordinary general meeting of shareholders must be held within six months from the end of the respective financial year at our registered office or in any other place in Luxembourg as notified to the shareholders.

Luxembourg law provides that the board of directors is obliged to convene a general meeting of shareholders if shareholders representing, in the aggregate, 10% of the issued share capital so request in writing with an indication of the meeting agenda. In such case, the general meeting of shareholders must be held within one month of the request. If the requested general meeting of shareholders is not held within one month, shareholders representing, in the aggregate, 10% of the issued share capital may petition the competent president of the district court in Luxembourg to have a court appointee convene the meeting. Luxembourg law provides that shareholders representing, in the aggregate, 10% of the issued share capital may request that additional items be added to the agenda of a general meeting of shareholders. That request must be made by registered mail sent to our registered office at least five days before the general meeting of shareholders.

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Voting Rights

Each Ordinary Share entitles the holder thereof to one vote. Additionally, each beneficiary certificate, when issued, entitles the holder thereof to one vote. The beneficiary certificates, when issued and subject to certain exceptions, may not be transferred, and shall automatically be canceled for no consideration in case of sale or transfer of the Ordinary Share to which they are linked. The beneficiary certificates carry no economic rights.

Neither Luxembourg law nor our articles of association contain any restrictions as to the voting of our Ordinary Shares by non-Luxembourg residents.

Luxembourg law distinguishes general meetings of shareholders and extraordinary general meetings of shareholders with respect to voting rights.

Ordinary General Meeting. At an ordinary general meeting, there is no quorum requirement and resolutions are adopted by a simple majority of validly cast votes. Abstentions are not considered “votes.”

Extraordinary General Meeting. Extraordinary resolutions are required for any of the following matters, among others: (i) an increase or decrease of the authorized or issued capital, (ii) a limitation or exclusion of preemptive rights, (iii) approval of a statutory merger or de-merger (scission), (iv) our dissolution and liquidation, and (v) any and all amendments to our articles of association. Pursuant to our articles of association, for any resolutions to be considered at an extraordinary general meeting of shareholders, the quorum shall be at least one half (50%) of our issued share capital unless otherwise required by law. If the said quorum is not present, a second meeting may be convened, for which Luxembourg law does not prescribe a quorum. Any extraordinary resolution shall be adopted at a quorate general meeting (save as otherwise provided by mandatory law) by at least a two-thirds majority of the votes validly cast on such resolution. When the resolution of the general meeting of shareholders would change the respective rights attached to the beneficiary certificates, the resolution must, in order to be valid, fulfill the above-mentioned conditions as to attendance and majority with respect to the holders of beneficiary certificates. Abstentions are not considered “votes.”

Minority Action Right. Luxembourg law provides for a provision whereby the shareholders and/or future holders of beneficiary certificates holding, in the aggregate, 10% of the securities having a right to vote at the general meeting may act on our behalf to discharge the members of our board of directors for misconduct against our interests or for a violation of the law or our articles of association.

Dividend Rights

All of our Ordinary Shares rank pari passu with respect to the payment of dividends or other distributions unless the right to dividends or other distributions has been suspended in accordance with our articles of association or applicable law. Holders of beneficiary certificates, when issued, shall not be entitled to receive any dividend payments with respect to such beneficiary certificates. The dividend entitlement lapses upon the expiration of a five-year prescription period as from the date of the dividend distribution. The unclaimed dividends return to our accounts.

Board of Directors

Our board of directors will appoint a chair from among its members. It also may appoint a secretary, who need not be a director and who will be responsible for keeping the minutes of the meetings of our board of directors and of our shareholders. Our board of directors will meet upon call by the chair. A meeting must be convened if any of two directors so require. The chair will preside at all meetings of our board of directors and of our shareholders (if required), except that in the absence of the chair, our board of directors may appoint another director and the general meeting of shareholders may appoint another person as chair pro tempore by vote of the majority present or represented at such meeting.

A quorum of our board of directors shall be at least one half of its members present or represented, and resolutions may be duly adopted by the vote of a simple majority of the members of our board of directors present or represented. No valid decision of our board of directors may be taken if the necessary quorum has not been reached. In case of an equality of votes, the chair or chair pro tempore shall have the right to cast the deciding vote. Our board of directors also may take decisions by means of resolutions in writing signed by all directors. Each director has one vote.

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Pursuant to our articles of association, for so long as the Founding Shareholders (i) own in the aggregate at least 40.0% of the issued and outstanding share capital of the Company, a number of directors equal to 50.0% of the total number of directors will be elected from nominees selected by the Founding Shareholders, (ii) own in the aggregate less than 40% of the issued and outstanding share capital of the Company, but still own in the aggregate at least 25.0% of the issued and outstanding share capital of the Company, a number of directors equal to 33.0% of the total number of directors will be elected from nominees selected by the Founding Shareholders, and (iii) own in the aggregate less than 25% of the issued and outstanding share capital of the Company, but still own in the aggregate at least 15.0% of the issued and outstanding share capital of the Company, one director will be elected from nominees selected by the Founding Shareholders.

Shareholders elect directors and decide their respective terms, and may dismiss one or more directors at any time, with or without cause, by a simple majority of votes cast at a general meeting of shareholders. Under Luxembourg law, directors may be reelected, but the term of their office may not exceed six years. If our board of directors has a vacancy, the remaining directors have the right to fill (pursuant to the affirmative vote of a majority of the remaining directors) such vacancy on a temporary basis until the following general meeting of shareholders. However, the election of any temporary director shall be requested definitively at the next general meeting of shareholders.

Within the limits provided for by law and subject to our articles of association, our board of directors may delegate our daily management and the authority to represent us to one or more persons. In addition, our board of directors may set up an executive committee and entrust the latter with any powers of our board of directors, with the exception of (i) our general strategic direction, and (ii) those acts reserved to our board of directors by Luxembourg law. The Company’s board of directors has used such powers to appoint Mordechay (Moti) Malul as general director (Directeur Général) in accordance with Luxembourg law.

No director, solely as a result of being a director, shall be prevented from contracting with us, either with regard to such director’s tenure in any office, or place of profit, or as vendor, purchaser, or in any other manner whatsoever, nor shall any contract in which any director is in any way interested be liable to be voided merely on account of his or her position as director, nor shall any director who is so interested be liable to account to us or the shareholders for any remuneration, profit or other benefit realized by the contract by reason of the director holding that office or of the fiduciary relationship thereby established.

Any director having a direct or indirect financial interest in a transaction submitted for approval at a meeting of our board of directors shall immediately inform the board of directors of such interest at that meeting and shall cause a record of such a statement to be included in the minutes of the meeting, unless such transaction is made in the ordinary course of business of the Company entered and on arm’s length terms. Such director may not take part in these deliberations nor vote on such a transaction. At the next general meeting of shareholders, a special report shall be made on any transactions in which any of the directors may have had an interest that conflicts with our interest.

Our articles of association provide that directors and officers, past and present, are entitled to indemnification from us to the fullest extent permitted by Luxembourg law, against liabilities and all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit, or proceeding in which he or she is involved by virtue of him or her being or having been a director or officer of the Company and against amounts paid or incurred by him or her in the settlement thereof.

There is no mandatory retirement age for directors under Luxembourg law and no minimum shareholding requirement for directors.

Unsuitable Shareholders

Subject to all applicable law and regulation, our articles of association provide for the suspension of certain rights attached to our Ordinary Shares that are held by unsuitable shareholders and the disposal of any of our Ordinary Shares owned or controlled by an unsuitable person or its affiliates by transfer to one or more third-party transferees. If such unsuitable person fails to dispose of our Ordinary Shares within the required period of time, we may in good faith dispose (or procure the disposal) of such Ordinary Shares to a designated third party at the highest price reasonably attainable or, subject to applicable law and regulation and our articles of association, acquire such Ordinary Shares by way of a redemption

Amendment of Articles of Association

Shareholder Approval Requirements. Luxembourg law requires an extraordinary general meeting of shareholders to resolve upon an amendment of the articles of association to be made by extraordinary resolution.

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The agenda of the extraordinary general meeting of shareholders must indicate the proposed amendments to the articles of association. An extraordinary general meeting of shareholders convened for the purposes of amending the articles of association must have a quorum of at least 50% of our issued share capital. If the said quorum is not present, a second meeting may be convened at which Luxembourg law does not prescribe a quorum. Irrespective of whether the proposed amendments will be subject to a vote at any duly convened extraordinary general meeting of shareholders, the amendment is subject to the approval of at least two-thirds of the votes cast at such extraordinary general meeting of shareholders. When the resolution of the general meeting of shareholders is to change the respective rights attached to the beneficiary certificates, the resolution must, in order to be valid, fulfill the above-mentioned conditions as to attendance and majority with respect to the holders of beneficiary certificates.

Formalities. Any resolutions to amend our articles of association must be taken before a Luxembourg notary, and such amendments must be published in accordance with Luxembourg law.

Exclusive Forum

Our articles of association provide that, unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts shall be the sole and exclusive forum for any claim asserting a cause of action arising under the Securities Act. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees and may increase the costs associated with such lawsuits, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our articles of association inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. Any person or entity purchasing or otherwise acquiring any interest in our share capital shall be deemed to have notice of and to have consented to the choice of forum provisions of our articles of association described above. This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

Differences in Corporate Law

We are incorporated under the laws of Luxembourg. The following discussion summarizes certain material differences between the rights of holders of our Ordinary Shares and the rights of holders of the Ordinary Shares of a typical corporation incorporated under the laws of the State of Delaware, which result from differences in governing documents and the laws of Luxembourg and Delaware.

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Board of Directors

Pursuant to Luxembourg law, our board of directors must be composed of at least three directors. They are appointed by the general meeting of shareholders (by proposal of the board of directors, the shareholders or a spontaneous candidacy) by a simple majority of the votes cast. Directors may be reelected, but the term of their office may not exceed six years.

Pursuant to our articles of association, directors are elected by a simple majority vote at a general meeting. Abstentions are not considered “votes.”

Our articles of association provide, that in case of a vacancy, the remaining members of the board of directors may elect a director to fill the vacancy until the following general meeting.

Each director has one vote.

Our articles of association provide that the board of directors may set up committees and determine their composition, powers, and rules.

A typical certificate of incorporation and bylaws would provide that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the authorized directors. Under Delaware law, a board of directors can be divided into classes, and cumulative voting in the election of directors is only permitted if expressly authorized in a corporation’s certificate of incorporation.

Interested Shareholders

Under Luxembourg law, no restriction exists as to the transactions that a shareholder may conclude with us. The transaction must, however, be in our corporate interest and be made on arm’s length terms.

Section 203 of the Delaware General Corporation Law (the “DGCL”) generally prohibits a Delaware corporation from engaging in specified corporate transactions (such as mergers, stock and asset sales, and loans) with an “interested shareholder” for three years following the time that the shareholder becomes an interested shareholder. Subject to specified exceptions, an “interested shareholder” is a person or group that owns 15% or more of the corporation’s outstanding voting stock (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights only), or is an affiliate or associate of the corporation and was the owner of 15% or more of the voting stock at any time within the previous three years.

A Delaware corporation may elect to “opt out” of, and not be governed by, Section 203 of the DGCL through a provision in either its original certificate of incorporation, or an amendment to its original certificate or bylaws that was approved by majority shareholder vote. With a limited exception, this amendment would not become effective until 12 months following its adoption.

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Amendment of Governing Documents

Under Luxembourg law, amendments to our articles of association require an extraordinary general meeting of shareholders held in front of a public notary at which at least one half of the share capital is represented. The notice of the extraordinary general meeting shall set out the proposed amendments to the articles of association.

If the aforementioned quorum is not reached, a second meeting may be convened by means of a notice published in the Luxembourg official gazette (Recueil Electronique des Sociétés et Associations) and in a Luxembourg newspaper 15 days before the meeting. The second meeting shall be validly constituted regardless of the proportion of the share capital represented.

At both meetings, resolutions will be adopted if approved by at least two-thirds of the votes cast (unless otherwise required by Luxembourg law or the articles of association). Where classes of shares exist and the resolution to be adopted by the general meeting of shareholders changes the respective rights attaching to such shares, the resolution will be adopted only if the conditions as to quorum and majority set out above are fulfilled with respect to each class of shares. This also applies with respect to the beneficiary certificates. An increase of the commitments of its shareholders require, however, the unanimous consent of the shareholders (and bondholders, if any).

Our articles of association provide that for any extraordinary resolutions to be considered at a general meeting, the quorum shall be at least one-half of our issued share capital. If the said quorum is not present, a second meeting may be convened at which Luxembourg law does not prescribe a quorum. Any extraordinary resolution shall be adopted at a quorate general meeting (save as otherwise provided by mandatory law) by a two-thirds majority of the votes validly cast on such resolution. Abstentions are not considered “votes.”

In very limited circumstances, the board of directors may be authorized by the shareholders to amend the articles of association, albeit always within the limits set forth by the shareholders at a duly convened shareholders’ meeting. This is the case in the context of our authorized share capital within which the board of directors is authorized to issue further Ordinary Shares or in the context of a share capital reduction and cancellation of Ordinary Shares. The board of directors is then authorized to appear in front of a notary public to record the capital increase or decrease and to amend the share capital set forth in the articles of association. The above also applies in case of the transfer of our registered office outside the current municipality.

Under the DGCL, amendments to a corporation’s certificate of incorporation require the approval of shareholders holding a majority of the outstanding shares entitled to vote on the amendment. If a class vote on the amendment is required by the DGCL or the certificate of incorporation, a majority of the outstanding stock of the class is required, unless a greater proportion is specified in the certificate of incorporation or by other provisions of the DGCL. Under the DGCL, the board of directors may amend bylaws if so authorized in the charter. The shareholders of a Delaware corporation also have the power to amend bylaws.

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Meetings of Shareholders

Pursuant to Luxembourg law, at least one general meeting of shareholders must be held each year within six months as from the close of the financial year. The purpose of such ordinary general meeting is to approve the annual accounts, allocate the results, proceed to statutory appointments, and grant discharge to the directors. The ordinary general meeting must be held within six months of the end of each financial year.

Other meetings of shareholders may be convened.

Pursuant to Luxembourg law, the board of directors is obliged to convene a general meeting so that it is held within a period of one month of the receipt of a written request of shareholders representing one-tenth of the issued capital. Such request must be in writing and indicate the agenda of the meeting.

Quorum Requirements:

Luxembourg law distinguishes ordinary resolutions and extraordinary resolutions.

Extraordinary resolutions relate to proposed amendments to the articles of association and certain other limited matters. All other resolutions are ordinary resolutions.

Ordinary Resolutions: Pursuant to Luxembourg law, there is no requirement of a quorum for any ordinary resolutions to be considered at a general meeting, and such ordinary resolutions shall be adopted by a simple majority of votes validly cast on such resolution. Abstentions are not considered “votes.”

Extraordinary Resolutions: Extraordinary resolutions are required for any of the following matters, among others: (i) an increase or decrease of the authorized or issued capital, (ii) a limitation or exclusion of preemptive rights, (iii) approval of a statutory merger or de-merger (scission), (iv) dissolution, and (v) an amendment of the articles of association.

Pursuant to Luxembourg law for any extraordinary resolutions to be considered at a general meeting, the quorum shall generally be at least one half (50%) of the issued share capital. If the said quorum is not present, a second meeting may be convened at which Luxembourg law does not prescribe a quorum. Any extraordinary resolution shall be adopted at a quorate general meeting (save as otherwise provided by mandatory law) by a two-thirds majority of the votes validly cast on such resolution. Abstentions are not considered “votes.

Typical bylaws provide that annual meetings of shareholders are to be held on a date and at a time fixed by the board of directors. Under the DGCL, a special meeting of shareholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation or the bylaws.

Under the DGCL, a corporation’s certificate of incorporation or bylaws can specify the number of shares that constitute the quorum required to conduct business at a meeting, provided that in no event shall a quorum consist of less than one-third of the shares entitled to vote at a meeting.

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Shareholder Approval of Business Combinations

Under Luxembourg law and our articles of association, the board of directors has the broadest power to take any action necessary or useful to achieve the corporate objective. The board of directors’ powers are limited only by law and our articles of association.

Any type of transaction that would require an amendment to the articles of association, such as a merger, de-merger, consolidation, dissolution, or voluntary liquidation, requires an extraordinary resolution of a general meeting of shareholders.

Transactions such as a sale, lease, or exchange of substantial company assets require only the approval of the board of directors. Neither Luxembourg law nor our articles of association contain any provision specifically requiring the board of directors to obtain shareholder approval of the sale, lease, or exchange of substantial assets of ours.

Generally, under the DGCL, completion of a merger, consolidation, or the sale, lease, or exchange of substantially all of a corporation’s assets or dissolution requires approval by the board of directors and by a majority (unless the certificate of incorporation requires a higher percentage) of outstanding stock of the corporation entitled to vote.

The DGCL also requires a special vote of shareholders in connection with a business combination with an “interested shareholder” as defined in section 203 of the DGCL. See “- Interested Shareholders” above.

Shareholder Action Without a Meeting

A shareholder meeting must always be called if the matter to be considered requires a shareholder resolution under Luxembourg law or our articles of association.

Without prejudice to any exceptional legal regimes applicable from time to time in view of the COVID-19 pandemic, pursuant to Luxembourg law, shareholders of a public limited liability company may not take actions by written consent. All shareholder actions must be approved at an actual meeting of shareholders held before a notary public or under private seal, depending on the nature of the matter. Shareholders may vote by proxy.

Under the DGCL, unless otherwise provided in a corporation’s certificate of incorporation, any action that may be taken at a meeting of shareholders may be taken without a meeting, without prior notice, and without a vote if the holders of outstanding stock, having not less than the minimum number of votes that would be necessary to authorize such action, consent in writing. It is not uncommon for a corporation’s certificate of incorporation to prohibit such action.

Distributions

Under Luxembourg law, the amount and payment of dividends or other distributions is determined by a simple majority vote at a general meeting of shareholders based on the recommendation of our board of directors, except in certain limited circumstances. Pursuant to our articles of association, our board of directors has the power to pay interim dividends or make other distributions in accordance with applicable Luxembourg law.

Distributions (in the form of either dividends, share premium reimbursements or capital surplus reimbursements) may be lawfully declared and paid if our net profits and/or distributable reserves are sufficient under Luxembourg law.

The DGCL permits a corporation to declare and pay dividends out of statutory surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or for the preceding fiscal year as long as the amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets.

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Under Luxembourg law, the amount of a distribution paid to shareholders (including in the form of dividends or share premium reimbursements) may not exceed the amount of the profits at the end of the last financial year plus any profits carried forward and any amounts drawn from reserves that are available for that purpose, less any losses carried forward and sums to be placed in reserve in accordance with Luxembourg law or our articles of association.

Furthermore, no distributions (including in the form of dividends or share premium reimbursements) may be made if net assets were, at the end of the last financial year (or would become, following such a distribution), less than the amount of the subscribed share capital plus the non-distributable reserves. Distributions in the form of dividends may only be made out of net profits and profits carried forward, whereas distributions in the form of share premium reimbursements may only be made out of available share premium and distributions in the form of capital surplus reimbursements may only be made out of capital surplus.

Under Luxembourg law, at least 5% of our net profits per year must be allocated to the creation of a legal reserve until such reserve has reached an amount equal to 10% of our issued share capital. The allocation to the legal reserve becomes compulsory again when the legal reserve no longer represents 10% of our issued share capital. The legal reserve is not available for distribution.

Repurchases and Redemptions

Pursuant to Luxembourg law, we (or any party acting on our behalf) may repurchase our own shares and hold them in treasury, provided that:

• the shareholders at a general meeting have previously authorized our board of directors to acquire our Ordinary Shares. The general meeting shall determine the terms and conditions of the proposed repurchase and in particular the maximum number of Ordinary Shares to be acquired, the period for which the authorization is given (which may not exceed five years), and, in the case of repurchase for consideration, the maximum and minimum consideration, provided that the prior authorization shall not apply in the case of Ordinary Shares acquired by either us or by a person acting in its own name but on our behalf for the distribution thereof to our staff or to the staff of a company with which we are in a control relationship;

Under the DGCL, any corporation may purchase or redeem its own shares, except that generally it may not purchase or redeem these shares if the capital of the corporation is impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or redeem out of capital shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the shares are to be retired and the capital reduced.

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• the acquisitions, including Ordinary Shares previously acquired by us and held by us and shares acquired by a person acting in his or her own name but on our behalf, may not have the effect of reducing the net assets below the amount of the issued share capital plus the reserves (which may not be distributed by law or under the articles of association);

• the Ordinary Shares repurchased are fully paid-up; and

• the acquisition offer must be made on the same terms and conditions to all the shareholders who are in the same position, except for acquisitions which were unanimously decided by a general meeting at which all the shareholders were present or represented (and except for acquisitions made on Nasdaq).

No prior authorization by shareholders is required (i) if the acquisition is made to prevent serious and imminent harm to us, provided that the board of directors informs the next general meeting of the reasons for and the purpose of the acquisitions made, the number and nominal values or the accounting value of the Ordinary Shares acquired, the proportion of the subscribed capital which they represent, and the consideration paid for them, and (ii) in the case of Ordinary Shares acquired by either us or by a person acting on our behalf with a view to redistributing the Ordinary Shares to our staff or its controlled subsidiaries, provided that the distribution of such shares is made within 12 months from their acquisition.

Luxembourg law provides for further situations in which the above conditions do not apply, including the acquisition of shares pursuant to a decision to reduce our capital or the acquisition of shares issued as redeemable shares. Such acquisitions may not have the effect of reducing net assets below the aggregate of subscribed capital and reserves (which may not be distributed by law and are subject to specific provisions on reductions in capital and redeemable shares under Luxembourg law).

Any shares acquired in contravention of the above provisions must be resold within a period of one year after the acquisition or be cancelled at the expiration of the one-year period.

As long as shares are held in treasury, the voting rights attached thereto are suspended. Further, to the extent the treasury shares are reflected as assets on our balance sheet a non-distributable reserve of the same amount must be reflected as a liability. Our articles of association provide that shares may be acquired in accordance with the law.

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Transactions with Officers or Directors

There are no rules under Luxembourg law preventing a director from entering into contracts or transactions with us to the extent the contract or the transaction is in our corporate interest.

Luxembourg law prohibits a director from participating in deliberations and voting on a transaction if (i) such director has a direct or indirect financial interest therein, and (ii) the interests of such director or conflict with our interests. The relevant director must disclose his or her personal financial interest to the members of the board of directors and abstain from voting. The transaction and the director’s interest therein shall be reported to the next succeeding general meeting of shareholders.

Our articles of association may require that certain transactions between a director and us be submitted for approval by our board of directors and/or shareholders. Our articles of association provide that no director, solely as a result of being a director, shall have any duty to refrain from any decision or action to enforce its rights under any agreement or contract with us. A director who has an interest in a transaction carried out other than in the ordinary course of business that conflicts with our interests must advise the board of directors accordingly and have the statement recorded in the minutes of the meeting. The director concerned may not take part in the deliberations concerning that transaction. A special report on the relevant transaction is submitted to the shareholders at the next general meeting of shareholders, before any vote on the matter.

Under the DGCL, some contracts or transactions in which one or more of a corporation’s directors has an interest are not void or voidable because of such interest, provided that some conditions, such as obtaining the required approval and fulfilling the requirements of good faith and full disclosure, are met. Under the DGCL, either (i) the shareholders or the board of directors must approve in good faith any such contract or transaction after full disclosure of the material facts, or (ii) the contract or transaction must have been “fair” as to the corporation at the time it was approved. If the board of directors’ approval is sought, the contract or transaction must be approved in good faith by a majority of disinterested directors after full disclosure of material facts, even though less than a majority of a quorum.

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Fiduciary Duties of Directors

The board of directors must act as a collegial body in the corporate interest of a company and has the power to take any action necessary or useful to realize the corporate objects of a company, with the exception of the powers reserved by Luxembourg law or by the articles of association to the general meeting of shareholders. Luxembourg law imposes a duty on directors of a Luxembourg company to: (i) act in good faith with a view to the best interests of the company; and (ii) exercise the care, diligence, and skill that a reasonably prudent person would exercise in a similar position and under comparable circumstances. The standard of care required from directors in the execution of their mandate vis-à-vis the company is the standard that an ordinary prudent or reasonable person would apply to his or her own affairs. The standard of care is more onerous where a director has special skills or where such director receives remuneration for his or her office.

In addition, Luxembourg law imposes specific duties on directors and officers of a company to comply with Luxembourg law and the articles of association of a company.

Under the DGCL, except as otherwise provided in a company’s certificate of incorporation, the board of directors of a Delaware company bears the ultimate responsibility for managing the business and affairs of a corporation. In discharging this function, directors of a Delaware company owe fiduciary duties of care and loyalty to a company and its shareholders. Delaware courts have decided that the directors of a Delaware company are required to exercise an informed business judgment in the performance of their duties. An informed business judgment means that the directors have informed themselves of all material information reasonably available to them. Delaware courts have also subjected directors’ actions to enhanced scrutiny in certain situations, including if directors take certain actions intended to prevent a threatened change in control of a company or in connection with transactions involving a conflicted controlling shareholder. In addition, under Delaware law, when the board of directors of a Delaware corporation determines to sell or break-up a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the shareholders at that time.

Dissenters’ Rights

Neither Luxembourg law nor our articles of association provide for appraisal rights.

Under the DGCL, a shareholder of a corporation participating in some types of major corporate transactions may, under varying circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive cash in the amount of the fair market value of his or her shares in lieu of the consideration he or she would otherwise receive in the transaction.

Shareholder Suits

Under Luxembourg law, the board of directors has sole authority to decide whether to initiate legal action to enforce a company’s rights (other than, in certain circumstances, an action against board members).

Shareholders do not have the authority to initiate legal action on a company’s behalf. Shareholders and/or future holders of beneficiary certificates holding at least 10.0% of the securities of a company having a right to vote at the general meeting may bring an action against the directors on behalf of the company.

This provision of Luxembourg law does not apply to claims under the U.S. federal securities laws.

Under Delaware law, a shareholder may bring a derivative action on a company’s behalf to enforce the rights of a company. An individual also may commence a class action lawsuit on behalf of himself or herself and other similarly situated shareholders if the requirements for maintaining a class action lawsuit under Delaware law are met. An individual may institute and maintain a class action lawsuit only if such person was a shareholder at the time of the transaction that is the subject of the lawsuit or his or her shares thereafter devolved upon him or her by operation of law. In addition, the plaintiff must generally be a shareholder through the duration of the lawsuit.

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Luxembourg law does not provide for class action lawsuits.

Delaware law requires that a derivative plaintiff make a demand on the directors of the corporation  to assert the corporate claim before the lawsuit may be prosecuted, unless such demand would be futile.

Cumulative Voting

Not applicable.

Under the DGCL, a corporation may adopt in its bylaws that its directors shall be elected by cumulative voting. When directors are elected by cumulative voting, a shareholder has a number of votes equal to the number of shares held by such shareholder times the number of directors nominated for election. The shareholder may cast all of such votes for one director or among the directors in any proportion.

Anti-Takeover Measures

Pursuant to Luxembourg law, it is possible to create an authorized share capital from which the board of directors is authorized by the shareholders to issue further Ordinary Shares and, under certain conditions, to limit, restrict, or waive preferential subscription rights of existing shareholders. The rights attached to the shares issued within the authorized share capital will be equal to those attached to existing shares and set forth in our articles of association.

The authority of the board of directors to issue additional Ordinary Shares is valid for a period of up to five years starting from the date of the publication of the minutes of the extraordinary general meeting resolving upon such authorization in the Luxembourg official gazette (Recueil Electronique des Sociétés et Associations), unless renewed by vote of the holders of at least two-thirds of the votes cast at a shareholders meeting.

Our articles of association authorize our board of directors to issue Ordinary Shares within the limits of the authorized share capital at such times and on such terms as our board of directors or its delegates may decide for a period ending five years after November 10, 2020 (unless such period is extended, amended or renewed). Accordingly, our board of directors will be authorized to issue Ordinary Shares up to the limits of authorized share capital until such date. We currently intend to seek renewals and/or extensions as required from time to time.

Under the DGCL, the certificate of incorporation of a corporation may give the board of directors the right to issue new classes of preferred shares with voting, conversion, dividend distribution, and other rights to be determined by the board of directors at the time of issuance, which could prevent a takeover attempt and thereby preclude shareholders from realizing a potential premium over the market value of their shares.

In addition, Delaware law does not prohibit a corporation from adopting a shareholder rights plan, or “poison pill,” which could prevent a takeover attempt and also preclude shareholders from realizing a potential premium over the market value of their shares.

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Listing

Our Ordinary Shares are listed on Nasdaq under the symbol “NGMS.”

Transfer Agent and Registrar

The U.S. transfer agent and registrar for the Ordinary Shares is American Stock Transfer & Trust Company.

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SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of our Ordinary Shares in the public market could adversely affect market prices prevailing from time to time. Furthermore, because only a limited number of Ordinary Shares will be available for sale shortly after this offering due to existing contractual and legal restrictions on resale as described below, there may be sales of substantial amounts of our Ordinary Shares in the public market after such restrictions lapse. This may adversely affect the prevailing market price of our Ordinary Shares and our ability to raise equity capital in the future.

We had 25,520,666 Ordinary Shares outstanding as of August 14, 2021. Following the completion of this offering, all 3,457,346 Ordinary Shares (or all 3,975,974 Ordinary Shares if the underwriters exercise their option in full to purchase additional Ordinary Shares) sold in this offering will be freely transferable without restriction or registration under the Securities Act, except for any Ordinary Shares purchased by one of our existing “affiliates,” as that term is defined in Rule 144 under the Securities Act The remaining Ordinary Shares, excluding those purchased in our initial public offering, are “restricted shares” as defined in Rule 144. Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rules 144 or 701 of the Securities Act. After the expiration of the contractual 90-day lock-up period described below, these Ordinary Shares may be sold in the public market only if registered or pursuant to the provisions of Rules 144 and 701, which are summarized below.

  Additionally, options exercisable for an aggregate of 419,505 Ordinary Shares will be vested as of the expiration of the contractual 90-day lock-up period described below. 

Rule 144

In general, a person who has beneficially owned our Ordinary Shares that are restricted shares for at least six months would be entitled to sell such securities, provided that (i) such person is not deemed to have   been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (ii) we are subject to, and in compliance with certain of, the Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who have beneficially owned our Ordinary Shares that are restricted shares for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three month period only a number of securities that does not exceed the greater of either of the following:

• 1% of the number of our Ordinary Shares then outstanding, which will equal approximately 255,206 Ordinary Shares immediately after this offering; or

• the average weekly trading volume of our Ordinary Shares on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

provided, in each case, that we are subject to, and in compliance with certain of, the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales both by affiliates and by non-affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144 to the extent applicable.

Regulation S

Regulation S provides generally that sales made in offshore transactions are not subject to the registration or prospectus-delivery requirements of the Securities Act.

Lock-Up Agreements

We, the Selling Shareholders, our executive officers and members of our board of directors have agreed, subject to limited exceptions, not to (1) offer, pledge, lend, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any of our Ordinary Shares or any securities convertible into or exercisable or exchangeable for our Ordinary Shares or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Ordinary Shares or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Ordinary Shares or such other securities, in cash or otherwise, in each case for a period of 90 days after the date of this prospectus, without the prior written consent of the Representatives. See “Underwriting” for additional information about the lock-up agreements.

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MATERIAL TAX CONSIDERATIONS

The following summary contains a description of certain Luxembourg and U.S. federal income tax consequences of the acquisition, ownership and disposition of Ordinary Shares, but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase Ordinary Shares. The summary is based upon the tax laws of Luxembourg and regulations thereunder and on the tax laws of the United States and regulations thereunder as of the date hereof, which are subject to change.

Material Luxembourg Tax Considerations

The following information is of a general nature only and it is not intended to be, nor should it be construed to be, legal or tax advice.

Prospective investors in the Ordinary Shares should therefore consult their own professional advisers as to the effects of state, local or foreign laws, including Luxembourg tax law, to which they may be subject.

Please be aware that the residence concept used under the respective headings below applies for Luxembourg income tax assessment purposes only. Any reference in the present section to a tax, duty, levy, impost or other charge or withholding of a similar nature, or to any other concepts, refers to Luxembourg tax law and/or concepts only. Also, please note that a reference to Luxembourg income tax encompasses corporation income tax (impôt sur le revenu des collectivités), municipal business tax (impôt commercial communal), a solidarity surcharge (contribution au fonds pour l’emploi) as well as personal income tax (impôt sur le revenu) generally. Investors may further be subject to net wealth tax (impôt sur la fortune) as well as other duties, levies or taxes. Corporate income tax, municipal business tax, the solidarity surcharge (together referred to as Luxembourg Corporation Taxes) as well as net wealth tax invariably apply to most corporate taxpayers resident of Luxembourg for tax purposes. Individual taxpayers are generally subject to personal income tax and the solidarity surcharge. Under certain circumstances, where an individual taxpayer acts in the course of the management of a professional or business undertaking, municipal business tax may apply as well.

Taxation of the Company

From a Luxembourg tax perspective, Luxembourg companies are considered as being resident in Luxembourg provided that they have either their registered office or their central administration in Luxembourg. The Company (a fully taxable company) will be considered as a resident of Luxembourg both for the purposes of Luxembourg domestic tax law and for the purposes of the double taxation treaties entered into by Luxembourg, and should therefore be able to obtain a residence certificate from the Luxembourg tax authorities.

The Company will be liable for Luxembourg Corporation Taxes. The standard applicable rate of Luxembourg Corporation Taxes for a company established in Luxembourg-city is 24.94% for the financial year ending on December 31, 2021. Luxembourg Corporation Taxes apply to the Company’s worldwide income (including capital gains), subject to the provisions of any relevant double taxation treaty. The taxable income of the Company is computed by application of all rules of the Luxembourg income tax law of December 4, 1967, as amended (loi concernant l’impôt sur le revenu), as commented and currently applied by the Luxembourg tax authorities (the “LIR”). Under the LIR, all income of the Company will be taxable in the financial period to which it economically relates and all deductible expenses of the Company will be deductible in the financial period to which they economically relate. Under certain conditions, dividends received by the Company from qualifying participations and capital gains realized by the Company on the sale of such participations may be exempt from Luxembourg Corporation Taxes under the Luxembourg participation exemption regime.

The Company will generally be subject to net wealth tax levied annually at a 0.5% rate. Under certain conditions, qualifying participations may be exempt from net wealth tax under the Luxembourg participation exemption regime.

Taxation of Holders of Ordinary Shares

Withholding tax

Under Luxembourg tax laws currently in force, dividends paid by the Company are in principle subject to a Luxembourg withholding tax equal to 15% of the gross dividend (17.65% of the net dividend if the Company bears the cost of the withholding tax, which is not mandatory under Luxembourg tax laws). Responsibility for the withholding of the tax is assumed by the Company.

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However, if a double tax treaty between Luxembourg and the country of residence of a holder of the Ordinary Shares applies, an exemption or a reduction of the Luxembourg withholding tax may be available pursuant to the relevant provisions of such double tax treaty.

In addition, pursuant to current Luxembourg tax laws, an exemption from Luxembourg dividend withholding tax may apply under the following conditions:

• the holder of Ordinary Shares receiving the dividends is either (i) a fully taxable Luxembourg resident collective entity, (ii) a collective entity resident in an EU Member State and falling within the scope of article 2 of the Council directive of November 30, 2011 (2011/96/EU) on the common system of taxation applicable in the case of parent companies and subsidiaries of different EU Member States, as amended (the “EU Parent-Subsidiary Directive”), (iii) the Luxembourg State, a Luxembourg municipality, an association of a Luxembourg municipality or an operation of Luxembourg public- law entity, (iv) a permanent establishment of an entity referred to at letters (i), (ii) or (iii) above, (v) a Swiss resident joint-stock company subject to corporate income tax in Switzerland without benefiting from any exemption, (vi) a joint-stock company or a cooperative company resident in an EEA country (other than an EU Member State) to the extent that such company is fully taxable and subject (in its country of residence) to a tax corresponding to Luxembourg Corporation Taxes, as well as a permanent establishment of such company, or (vii) a collective entity resident in a treaty country, to the extent that such entity is fully taxable and subject (in its country of residence) to a tax corresponding to Luxembourg Corporation Taxes, as well as a Luxembourg permanent establishment of such entity; and

• on the date on which the income is made available, the holder of Ordinary Shares holds or commits to hold directly (or even indirectly under certain conditions), for an uninterrupted period of at least twelve months, a participation of at least 10% in the share capital of the Company (or with an acquisition price of at least €1,200,000).

Income taxation

(i) Taxation of dividend income

Holders of our Ordinary Shares who are either Luxembourg resident individuals or Luxembourg fully taxable resident companies (or foreign shareholders having a permanent establishment in Luxembourg through which such shares are held) will in principle be subject to tax at the ordinary rates on any dividends received from the Company. However, under Luxembourg tax laws currently in force, 50% of the amount of any dividend may be tax exempt at the level of these holders of our Ordinary Shares.

The Luxembourg withholding tax levied at source on the dividends paid may, under certain conditions, be credited against the Luxembourg income tax due on these dividends.

Furthermore, certain corporate holders of our Ordinary Shares may benefit from an exemption from Luxembourg Corporation Taxes on dividend income under the following conditions:

• the holder of our Ordinary Shares receiving the dividends is either (i) a fully taxable Luxembourg resident collective entity, (ii) a Luxembourg permanent establishment of an EU resident collective entity falling within the scope of article 2 of the EU Parent-Subsidiary Directive, (iii) a Luxembourg permanent establishment of a joint-stock company that is resident in a jurisdiction with which Luxembourg has concluded a double tax treaty, or (iv) a Luxembourg permanent establishment of a joint-stock company or of a cooperative company which is a resident of an EEA Member State (other than an EU Member State); and

• on the date on which the income is made available, the holder of our Ordinary Shares holds or commits to hold directly (or even indirectly through certain entities) for an uninterrupted period of at least twelve months, a participation of at least 10% in the share capital of the Company (or with an acquisition price of at least €1,200,000).

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The holder of our Ordinary Shares which is a Luxembourg resident entity governed by (i) the law of 17 December 2010 on undertakings for collective investment, as amended, (ii) the law of 13 February 2007 on specialized investment funds, as amended, (iii) the law of May 11, 2007 on the family estate management company, as amended, or (iv) the law of July 23, 2016 on reserved alternative investment funds, as amended, and which does not fall under the special tax regime set out in article 48 of the law of July 23, 2016 on reserved alternative investment funds, as amended, is not subject to any Luxembourg Corporation Taxes in respect of dividends received from the Company. No tax credit is then available for Luxembourg withholding tax on dividends received from the Company.

Non-resident shareholders (not having a permanent establishment in Luxembourg through which the shares are held) will in principle not be subject to Luxembourg income tax on any dividends received from the Company (except for the withholding tax mentioned above, if applicable).

(ii) Taxation of capital gains

Under current Luxembourg tax laws, capital gains realized by a Luxembourg resident individual holder of our Ordinary Shares (acting in the course of the management of his/her private wealth) upon the disposal of his/her shares are not subject to Luxembourg income tax, provided this disposal takes place more than six months after the shares were acquired and he/she does not hold a Substantial Participation (as defined below). The participation is considered a “Substantial Participation” if the holder of our Ordinary Shares (i) holds or has held (either solely or together with his/her spouse or partner and minor children) directly or indirectly more than 10% of the share capital of the Company at any time during a period of five years before the realization of the capital gain or (ii) acquired his/her shares for free during the five years preceding the disposal of his/her shares or, in the case of subsequent gratuitous transfers, one of the previous holders has held (either solely or together with his/her spouse or partner and minor children) directly or indirectly more than 10% of the share capital of the Company at any time during a period of five years before the realization of the capital gain.

Capital gains realized upon the disposal of shares by a Luxembourg resident corporate Shareholder (fully subject to Luxembourg Corporation Taxes) are in principle fully taxable. However, an exemption from Luxembourg Corporation Taxes applies under the following conditions:

• the holder of our Ordinary Shares realizing the capital gains is either (i) a fully taxable Luxembourg resident collective entity, (ii) a Luxembourg permanent establishment of an EU resident collective entity falling within the scope of article 2 of the EU Parent-Subsidiary Directive, (iii) a Luxembourg permanent establishment of a joint-stock company that is resident in a jurisdiction with which Luxembourg has concluded a double tax treaty, or (iv) a Luxembourg permanent establishment of a joint-stock company or of a cooperative company which is a resident of an EEA Member State (other than an EU Member State); and

• on the date on which the disposal takes place, the holder of our Ordinary Shares has held for an uninterrupted period of at least twelve months a participation of at least 10% in the share capital of the Company (or with an acquisition price of at least €6,000,000).

The holder of our Ordinary Shares which is a Luxembourg resident entity governed by (i) the law of December 17, 2010 on undertakings for collective investment, as amended, (ii) the law of February 13, 2007 on specialized investment funds, as amended, (iii) the law of May 11, 2007 on the family estate management company, as amended, or (iv) the law of July 23, 2016 on reserved alternative investment funds, as amended, and which does not fall under the special tax regime set out in article 48 of the law of July 23, 2016 on reserved alternative investment funds, as amended, is not subject to any Luxembourg Corporation Taxes in respect of capital gains realized upon disposal of its shares.

Under Luxembourg tax laws currently in force (subject to the provisions of double taxation treaties), capital gains realized by a holder of our Ordinary Shares (not acting via a permanent establishment or a permanent representative in Luxembourg through which/whom the shares are held) are not taxable in Luxembourg unless (a) the holder of our Ordinary Shares holds a Substantial Participation in the Company and the disposal of the shares takes place less than six months after the shares were acquired or (b) the holder of our Ordinary Shares has been a former Luxembourg resident for more than 15 years and has become a non-resident, at the time of transfer, less than five years ago.

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Net wealth taxation

A corporate holder of our Ordinary Shares that is either a resident of Luxembourg for tax purposes or that maintains a permanent establishment or a permanent representative in Luxembourg through which/​whom such shares are held is subject to Luxembourg wealth tax on such shares, except if the holder of our Ordinary Shares is governed by the law of May 11, 2007 on the family estate management company, as amended, by the law of December 17, 2010 on undertakings for collective investment, as amended, by the law of February 13, 2007 on specialized investment funds, as amended, by the law of July 23, 2016 on reserved alternative investment funds, as amended, or is a securitization company governed by the law of March 22, 2004 on securitization, as amended, or is a capital company governed by the law of June 15, 2004 on venture capital vehicles, as amended.

Please however note that securitisation companies governed by the law of March 22, 2004 on securitisation, as amended, capital companies governed by the law of June 15, 2004 on venture capital vehicles, as amended, or reserved alternative investment funds governed by the law of July 23, 2016 and which fall under the special tax regime set out under article 48 thereof may, under certain conditions, be subject to minimum net wealth tax.

Any holder of our Ordinary Shares which is (i) a Luxembourg resident fully taxable collective entity, (ii) a Luxembourg permanent establishment of an EU resident collective entity falling within the scope of article 2 of the EU Parent-Subsidiary Directive, (iii) a domestic permanent establishment of a joint-stock company that is resident in a State with which Luxembourg has concluded a double tax treaty, or (iv) a domestic permanent establishment of a joint-stock company or of a cooperative company which is a resident of an EEA Member State (other than an EU Member State) may be exempt from Luxembourg net wealth tax on its shares if it holds a participation of at least 10% in the share capital of the Company (or with an acquisition price of at least €1,200,000).

An individual holder of our Ordinary Shares, whether he/she is resident of Luxembourg or not, is not subject to Luxembourg wealth tax on his/her shares.

Other taxes

Under current Luxembourg tax laws, no registration tax or similar tax is in principle payable by the holder of our Ordinary Shares upon the acquisition, holding or disposal of the shares. However, a fixed registration duty of €12 may be due in the case where the shares are physically attached to a public deed or to any other document subject to mandatory registration, as well as in the case of a registration of the shares on a voluntary basis.

When the holder of our Ordinary Shares is a Luxembourg resident for inheritance tax assessment purposes at the time of his/her death, the shares are included in his/her taxable estate for Luxembourg inheritance tax assessment purposes.

Luxembourg gift tax may be due on a gift or donation of the shares if embodied in a notarial deed signed before a Luxembourg notary or recorded in Luxembourg.

Material United States Federal Income Tax Considerations for United States Holders

The following summary describes certain United States federal income tax considerations generally applicable to United States Holders (as defined below) of Ordinary Shares. This summary deals only with Ordinary Shares held as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). This summary also does not address the tax considerations that may be relevant to holders in special tax situations including, without limitation, dealers in securities, traders that elect to use a mark-to-market method of accounting, holders that own Ordinary Shares as part of a “straddle,” “hedge,” “conversion transaction,” or other integrated investment, banks or other financial institutions, individual retirement accounts and other tax-deferred accounts, insurance companies, tax-exempt organizations, United States expatriates, holders whose functional currency is not the U.S. dollar, holders subject to the alternative minimum tax, holders that acquired Ordinary Shares in a compensatory transaction, holders which are entities or arrangements treated as partnerships for United States federal income tax purposes or holders that actually or constructively through attribution own 10% or more of the total voting power or value of our outstanding Ordinary Shares.

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This summary is based upon the Internal Revenue Code, applicable United States Treasury regulations, administrative pronouncements and judicial decisions, in each case as in effect on the date hereof, all of which are subject to change (possibly with retroactive effect). No ruling will be requested from the Internal Revenue Service (the “IRS”) regarding the tax considerations described herein, and there can be no assurance that the IRS will agree with the discussion set forth below. This summary does not address any United States federal tax considerations other than United States federal income tax considerations (such as the estate and gift tax or the Medicare tax on net investment income).

As used herein, the term “United States Holder” means a beneficial owner of the Ordinary Shares that is, for United States federal income tax purposes, (i) a citizen or resident of the United States, (ii) a corporation or other entity taxable as a corporation created or organized under the laws of the United States or any state thereof or therein or the District of Columbia, (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust (a) that is subject to the supervision of a court within the United States and the control of one or more United States persons as described in Internal Revenue Code Section 7701(a)(30), or (b) that has a valid election in effect under applicable United States Treasury regulations to be treated as a “United States person.”

If an entity or other arrangement treated as a partnership for United States federal income tax purposes acquires Ordinary Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax adviser as to the particular United States federal income tax considerations of acquiring, owning, and disposing of Ordinary Shares in its particular circumstance.

THE SUMMARY OF UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS SET FORTH BELOW IS FOR GENERAL INFORMATION ONLY. UNITED STATES HOLDERS SHOULD CONSULT THEIR TAX ADVISERS AS TO THE PARTICULAR TAX CONSIDERATIONS TO THEM OF OWNING ORDINARY SHARES, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND NON-U.S. TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.

Dividends

As stated above under “Dividend Policy,” we do not anticipate paying any cash dividends on our Ordinary Shares in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. However, if we do pay any dividends, subject to the discussion below under “-Passive Foreign Investment Company,” the amount of dividends paid to a United States Holder with respect to Ordinary Shares before reduction for any Luxembourg taxes withheld therefrom will generally be included in the United States Holder’s gross income as ordinary income from foreign sources to the extent paid out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes). Distributions in excess of earnings and profits will be treated as a non-taxable return of capital to the extent of the United States Holder’s adjusted tax basis in those Ordinary Shares and thereafter as capital gain. However, we do not intend to calculate our earnings and profits under United States federal income tax principles. Therefore, United States Holders should expect to treat a distribution as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. The amount of any distribution paid in foreign currency will be equal to the U.S. dollar value of such currency, translated at the spot rate of exchange on the date such distribution is received, regardless of whether the payment is in fact converted into U.S. dollars at that time.

Foreign withholding tax (if any) paid on dividends on Ordinary Shares at the rate applicable to a United States Holder (taking into account any applicable income tax treaty) will, subject to limitations and conditions, be treated as foreign income tax eligible for credit against such holder’s United States federal income tax liability or, at such holder’s election, eligible for deduction in computing such holder’s United States federal taxable income. Dividends paid on Ordinary Shares will generally constitute “passive category income” for purposes of the foreign tax credit. However, if the Company is a “United States-owned foreign corporation,” solely for foreign tax credit purposes, a portion of the dividends allocable to our United States source earnings and profits may be re-characterized as United States source. A “United States-owned foreign corporation” is any foreign corporation in which United States persons own, directly or indirectly, 50% or more (by vote or by value) of the stock. In general, United States-owned foreign corporations with less than 10% of earnings and profits attributable to sources within the United States are excepted from these rules.

If the Company is or were to become a United States-owned foreign corporation, and if 10% or more of the Company’s earnings and profits are attributable to sources within the United States, a portion of the dividends paid on the Ordinary Shares allocable to our United States source earnings and profits will be treated as United States source, and, as such, a United States Holder may not offset any foreign tax withheld as a credit against United States federal income tax imposed on that portion of dividends. The rules governing the treatment of foreign taxes imposed on a United States Holder and foreign tax credits are complex, and United States Holders should consult their tax advisers about the impact of these rules in their particular situations.

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Dividends paid to a non-corporate United States Holder by a “qualified foreign corporation” may be subject to reduced rates of taxation if certain holding period and other requirements are met. “Qualified foreign corporation” generally includes a foreign corporation (other than a foreign corporation that is a PFIC with respect to the relevant United States Holder for the taxable year in which the dividends are paid or for the preceding taxable year) (i) whose Ordinary Shares are readily tradable on an established securities market in the United States, or (ii) which is eligible for benefits under a comprehensive United States income tax treaty that includes an exchange of information program and which the United States Treasury Department has determined is satisfactory for these purposes. Ordinary Shares are expected to be readily tradable on Nasdaq, an established securities market. United States Holders should consult their tax advisers regarding the availability of the reduced tax rate on dividends paid with respect to Ordinary Shares. The dividends will not be eligible for the dividends received deduction available to United States Holders that are corporations in respect of dividends received from other United States corporations.

Disposition of Ordinary Shares

Subject to the discussion below under “-Passive Foreign Investment Company,” a United States Holder will generally recognize capital gain or loss for United States federal income tax purposes on the sale or other taxable disposition of Ordinary Shares equal to the difference, if any, between the amount realized and the United States Holder’s tax basis in those Ordinary Shares. In general, capital gains recognized by a non-corporate United States Holder, including an individual, are subject to a lower rate if such United States Holder held the Ordinary Shares for more than one year. The deductibility of capital losses is subject to limitations. Any such gain or loss will generally be treated as United States source income or loss for purposes of the foreign tax credit. A United States Holder’s tax basis in Ordinary Shares will generally equal the cost of such Ordinary Shares.

Passive Foreign Investment Company

The Company would be a PFIC for any taxable year if, after the application of certain look-through rules, either: (i) 75% or more of its gross income for such year is “passive income” (as defined in the relevant provisions of the Internal Revenue Code), or (ii) 50% or more of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. Based on our market capitalization and the composition of our income, assets and operations, we believe we were not a PFIC for the year ending December 31, 2020 and do not expect to be a PFIC for United States federal income tax purposes for the current taxable year or in the foreseeable future. However, this is a factual determination that must be made annually after the close of each taxable year. Moreover, the aggregate value of our assets for purposes of the PFIC determination may be determined by reference to the trading price of Ordinary Shares, which could fluctuate significantly. Therefore, there can be no assurance that we will not be classified as a PFIC for the current taxable year or in the foreseeable future. Certain adverse United States federal income tax consequences could apply to a United States Holder if we are treated as a PFIC for any taxable year during which such United States Holder holds Ordinary Shares. Under the PFIC rules, if we were considered a PFIC at any time that a United States Holder holds Ordinary Shares, we would continue to be treated as a PFIC with respect to such holder’s investment unless (i) we cease to be a PFIC and (ii) the United States Holder has made a “deemed sale” election under the PFIC rules.

If we are a PFIC for any taxable year that a United States Holder holds Ordinary Shares, any gain recognized by the United States Holder on a sale or other disposition of Ordinary Shares would be allocated pro-rata over the United States Holder’s holding period for the Ordinary Shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or the highest rate in effect for corporations, as appropriate, for that taxable year, and an interest charge would be imposed. Further, to the extent that any distribution received by a United States Holder on Ordinary Shares exceeds 125% of the average of the annual distributions on the Ordinary Shares received during the preceding three years or the United States Holder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain on the sale or other disposition of Ordinary Shares if we were a PFIC, described above. Certain elections may be available that would result in alternative treatments, such as mark-to-market treatment, of the Ordinary Shares. Each United States Holder should consult its tax adviser as to whether a mark-to-market election would be available or advisable with respect to the Ordinary Shares. If we are treated as a PFIC with respect to a United States Holder for any taxable year, the United States Holder will be deemed to own equity in any of the entities in which we own equity that also are PFICs. However, an election for mark-to-market treatment would likely not be available with respect to any such entities. We do not expect to prepare or provide the information that would enable United States Holders to make a qualified electing fund election. If we are considered a PFIC, a United States Holder also will be subject to annual information reporting requirements. United States Holders should consult their tax advisers about the potential application of the PFIC rules to an investment in the Ordinary Shares.

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Information Reporting and Backup Withholding

Dividend payments and proceeds paid from the sale or other taxable disposition of Ordinary Shares may be subject to information reporting to the IRS. In addition, a United States Holder (other than an exempt holder who establishes its exempt status if required) may be subject to backup withholding on cash payments received in connection with any dividend payments and proceeds from the sale or other taxable disposition of Ordinary Shares made within the United States or through certain U.S.-related financial intermediaries.

Backup withholding will not apply, however, to a United States Holder who furnishes a correct taxpayer identification number, makes other required certification and otherwise complies with the applicable requirements of the backup withholding rules. Backup withholding is not an additional tax. Rather, any amount withheld under the backup withholding rules will be creditable or refundable against the United States Holder’s United States federal income tax liability, provided the required information is timely furnished to the IRS.

Foreign Financial Asset Reporting

Certain United States Holders are required to report their holdings of certain foreign financial assets, including equity of foreign entities, if the aggregate value of all of these assets exceeds certain threshold amounts. The Ordinary Shares are expected to constitute foreign financial assets subject to these requirements unless the Ordinary Shares are held in an account at certain financial institutions. United States Holders should consult their tax advisers regarding the application of these reporting requirements.

Tax Ruling of the Israeli Tax Authority

On May 18, 2021, the Israeli Tax Authority issued a pre-ruling, pursuant to which the Israeli Tax Authority confirmed that following the transfer of certain intellectual property rights relating to the online lottery business of NeoGames S.A. to NGS, the Company will be considered a "preferred technological enterprise" for Israeli tax purposes, and therefore, subject to the conditions set forth in the ruling and applicable law, will be entitled to certain tax benefits, including under certain circumstances a reduced corporate tax rate of 12% to 15%, a 20% tax rate on dividends to Israeli residents, and a 4% tax rate on dividends to non-Israeli corporations. The pre-ruling will expire after tax-year 2025.

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Underwriting

The Selling Shareholders are offering Ordinary Shares described in this prospectus through a number of underwriters.  J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. are acting as joint book‑running managers of the offering and as representatives of the underwriters.  We and the selling shareholders have entered into an underwriting agreement with the underwriters.  Subject to the terms and conditions of the underwriting agreement, the selling shareholders have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of Ordinary Shares listed next to its name in the following table:

Name	Number of Ordinary Shares
J.P. Morgan Securities LLC
Deutsche Bank Securities Inc.
BofA Securities, Inc.
Macquarie Capital (USA) Inc.
Truist Securities, Inc.
Stifel, Nicolaus & Company, Incorporated
Total		3,457,346

The underwriters are committed to purchase all the Ordinary Shares offered by the selling shareholders if they purchase any Ordinary Shares.  The underwriters may reject, modify or cancel an offer to purchase Ordinary Shares in whole or in part. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.

The underwriters propose to offer the Ordinary Shares directly to the public at the public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $           per share.  Any such dealers may resell shares to certain other brokers or dealers at a discount of up to $           per share from the public offering price.  After the offering of the Ordinary Shares to the public, if all of the Ordinary Shares are not sold at the public offering price, the underwriters may change the offering price and the other selling terms.  Sales of any shares made outside of the United States may be made by affiliates of the underwriters.

The underwriters have an option to buy up to 518,601 additional Ordinary Shares from Caesars Entertainment, Inc., one of the selling shareholders.  The underwriters have 30 days from the date of this prospectus to exercise this option to purchase additional shares. If any Ordinary Shares are purchased with this option to purchase additional Ordinary Shares, the underwriters will purchase Ordinary Shares in approximately the same proportion as shown in the table above. If any additional Ordinary Shares are purchased, the underwriters will offer the additional Ordinary Shares on the same terms.

The underwriting fee is equal to the public offering price per Ordinary Share less the amount paid by the underwriters to the selling shareholders per Ordinary Share.  The underwriting fee is $          per share.  The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional Ordinary Shares.

	Without option to purchase additional Ordinary Shares exercise	With full option to purchase additional Ordinary Shares exercise
Per Ordinary Share	$	$
Total	$	$

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We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $786,090. The selling shareholders have also agreed to reimburse the underwriters up to $30,000 for certain of their expenses incurred in connection with this offering.

A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in the offering.  The underwriters may agree to allocate a number of Ordinary Shares to underwriters and selling group members for sale to their online brokerage account holders.  Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.

We have agreed that we will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, or submit to, or file with, the Securities and Exchange Commission a registration statement under the Securities Act relating to, any Ordinary Shares or securities convertible into or exercisable or exchangeable for any Ordinary Shares, or publicly disclose the intention to undertake any of the foregoing, or (ii) enter into any swap or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of Ordinary Shares (regardless of whether any of these transactions are to be settled by the delivery of Ordinary Shares or such other securities, in cash or otherwise), in each case without the prior written consent of J.P. Morgan Securities LLC and Deutsche Bank Securities Inc. for a period of 90 days after the date of this prospectus.

The restrictions on our actions, as described above, do not apply to certain transactions, including (i) the issuance of options to acquire or other awards (including restricted stock units or similar awards) in respect of Ordinary Shares granted pursuant to our equity incentive plans described in this prospectus, (ii) the issuance of Ordinary Shares upon the exercise of any such options or upon the exercise of any option, warrant or convertible security outstanding on the date of this prospectus and (iii) the issuance of Ordinary Shares in an amount not to exceed 5% of the outstanding Ordinary Shares as of the date hereof in connection with an acquisition by the Company or an affiliate of the Company approved by the Company's board of directors.

Our directors and executive officers, and the selling shareholders (such persons, the “lock-up parties”) have entered into lock‑up agreements with the underwriters prior to the commencement of this offering pursuant to which each lock-up party, with limited exceptions, for a period of 90 days after the date of this prospectus (such period, the “restricted period”), may not (and may not cause any of their direct or indirect affiliates to), without the prior written consent of J.P. Morgan Securities LLC and Deutsche Bank Securities Inc., (1) offer, sell, contract to sell (including any short sales), pledge, lend, hypothecate, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, grant any option, right or warrant for the sale of, purchase of or transfer, or grant any rights with respect to, directly or indirectly, any Ordinary Shares or any securities convertible into or exercisable or exchangeable for any Ordinary Shares (including, without limitation, Ordinary Shares or such other securities which may be deemed to be beneficially owned by such lock-up parties in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant (collectively with the Ordinary Shares, the “lock-up securities”)), or (2) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the lock-up securities, whether any such aforementioned transaction is to be settled by delivery of the lock-up securities or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement.

The restrictions described in the immediately preceding paragraph and contained in the lock-up agreements between the underwriters and the lock-up parties do not apply, subject in certain cases to various conditions, to certain transactions, including (a) transfers of lock-up securities: (i) as bona fide gifts, (ii) to any trust for the direct or indirect benefit of the lock-up party or any immediate family member, or (ii) as part of a sale of lock-up securities acquired in open market transactions after the completion of this offering; and (b) the sale of our Ordinary Shares pursuant to: (i) the terms of the underwriting agreement and (ii) a written plan meeting the requirements of Rule 10b-5 under the Exchange Act entered into by the undersigned prior to the date hereof.

J.P. Morgan Securities LLC and Deutsche Bank Securities Inc., in their sole discretion, may release the securities subject to any of the lock-up agreements with the underwriters described above, in whole or in part at any time.

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We and the selling shareholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.

Our Ordinary Shares are listed on Nasdaq under the symbol “NGMS”.

In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling Ordinary Shares in the open market for the purpose of preventing or retarding a decline in the market price of the Ordinary Shares while this offering is in progress. These stabilizing transactions may include making short sales of Ordinary Shares, which involves the sale by the underwriters of a greater number of Ordinary Shares than they are required to purchase in this offering, and purchasing Ordinary Shares on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their option to purchase additional Ordinary Shares, in whole or in part, or by purchasing Ordinary Shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase Ordinary Shares through the option to purchase additional Ordinary Shares. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Ordinary Shares in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase Ordinary Shares in the open market to cover the position.

The underwriters have advised us that, pursuant to Regulation M of the Securities Act of 1933, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the Ordinary Shares, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase Ordinary Shares in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those Ordinary Shares as part of this offering to repay the underwriting discount received by them.

These activities may have the effect of raising or maintaining the market price of the Ordinary Shares or preventing or retarding a decline in the market price of the Ordinary Shares, and, as a result, the price of the Ordinary Shares may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the Nasdaq in the over‑the‑counter market or otherwise.

In addition, in connection with this offering certain of the underwriters (and selling group members) may engage in passive market making transactions in our Ordinary Shares on Nasdaq prior to the pricing and completion of this offering. Passive market making consists of displaying bids on Nasdaq no higher than the bid prices of independent market makers and making purchases at prices no higher than these independent bids and effected in response to order flow. Net purchases by a passive market maker on each day are generally limited to a specified percentage of the passive market maker’s average daily trading volume in the Ordinary Shares during a specified period and must be discontinued when such limit is reached. Passive market making may cause the price of our Ordinary Shares to be higher than the price that otherwise would exist in the open market in the absence of these transactions. If passive market making is commenced, it may be discontinued at any time.

Selling Restrictions

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

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European Economic Area

In relation to each Member State of the European Economic Area (each a “Relevant State”), none of the Ordinary Shares have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus in relation to the Ordinary Shares which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another EEA Member State and notified to the competent authority in that Relevant State, all in accordance with Regulation (EU) 2017/1129 (the “Prospectus Regulation”), except that offers of Ordinary Shares may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:

(a) to any legal entity which is a qualified investor as defined in of the Prospectus Regulation;

(b) to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the representative for any such offer; or

(c) in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of the Ordinary Shares shall require the Company or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation and each person who initially acquires any Ordinary Shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with each of the underwriters and the Company that it is a “qualified investor” within the meaning of Article 2(e) of the Prospectus Regulation. In the case of any Ordinary Shares being offered to a financial intermediary as that term is used in the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the Ordinary Shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances that may give rise to an offer of any Ordinary Shares to the public other than their offer or resale in a Relevant State to qualified investors as so defined or in circumstances in which the prior consent of the underwriters has been obtained to each such proposed offer or resale.

For the purposes of this provision, the expression an “offer to the public” in relation to any of the Ordinary Shares in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any Ordinary Shares to be offered so as to enable an investor to decide to purchase or subscribe for any Ordinary Shares.

United Kingdom

None of the Ordinary Shares have been offered or will be offered pursuant to the offering to the public in the United Kingdom prior to the publication of a prospectus in relation to the Ordinary Shares which has been approved by the Financial Conduct Authority, except that offers of Ordinary Shares may be made to the public in that United Kingdom at any time:

(a) to any legal entity which is a qualified investor as defined under Article 2 of the U.K. Prospectus Regulation;

(a) to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the U.K. Prospectus Regulation), subject to obtaining the prior consent of the representative for any such offer; or

(b) in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000 (as amended, the “FSMA”),

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provided that no such offer of the Ordinary Shares shall require the Company or the representative to publish a prospectus pursuant to Section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the U.K. Prospectus Regualtion. For the purposes of this provision, the expression an “offer to the public” in relation to any Ordinary Shares in the United Kingdom means the communication in any form and by any means of sufficient information on the terms of the offer and any Ordinary Shares to be offered so as to enable an investor to decide to purchase or subscribe for any Ordinary Shares and the expression “U.K. Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the U.K. Prospectus Regulation) (i) who have professional experience in matters relating to investments falling within Article 19(5) of the FSMA (Financial Promotion) Order 2005, as amended, or the “Order,” and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (e) of the Order (all such persons together being referred to as “relevant persons”) or otherwise in circumstances which have not resulted and will not result in an offer to the public of the shares in the United Kingdom within the meaning of the FSMA. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons. Any person in the UK who is not a relevant person must not act on or rely upon this document or any of its contents.

Israel

The Ordinary Shares offered by this prospectus have not been approved or disapproved by the Israel Securities Authority (the “ISA”), nor have such Ordinary Shares been registered for sale in Israel. The Ordinary Shares may not be offered or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus that has been approved by the ISA. The ISA has not issued permits, approvals or licenses in connection with this offering or publishing this prospectus, nor has it authenticated the details included herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the Ordinary Shares being offered.

This document does not constitute a prospectus under the Israeli Securities Law, 1968 (the “the Israeli Securities Law”) and has not been filed with or approved by the ISA. In the State of Israel, this document may be distributed only to, and may be directed only at, and any offer of the Ordinary Shares may be directed only at, (i) to the extent applicable, a limited number of persons in accordance with the Israeli Securities Law and (ii) investors listed in the first addendum to the Israeli Securities Law (the “Addendum”) consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange Ltd., underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors will be required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.

Canada

The Ordinary Shares may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions, and Ongoing Registrant Obligations. Any resale of the Ordinary Shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory of these rights or consult with a legal advisor.

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Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

Hong Kong

The Ordinary Shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong) (“Companies (Winding Up and Miscellaneous Provisions) Ordinance”) or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“Securities and Futures Ordinance”), or (ii) to "professional investors" as defined in the Securities and Futures Ordinance and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the Ordinary Shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Ordinary Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.

Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of Ordinary Shares may not be circulated or distributed, nor may the Ordinary Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (1) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (2) to a relevant person pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (3) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the Ordinary Shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Ordinary Shares pursuant to an offer made under Section 275 of the SFA except:

(i) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

(ii) where no consideration is or will be given for the transfer;

(iii) where the transfer is by operation of law;

(iv) as specified in Section 276(7) of the SFA; or

(v) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.

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Solely for the purposes of its obligations pursuant to Section 309B of the SFA, we have determined, and hereby notify all relevant persons (as defined in the CMP Regulations 2018), that the Ordinary Shares are “prescribed capital markets products” (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA N-16: Notice on Recommendations on Investment Products).

Japan

The Ordinary Shares have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended) (the “FIEA”). The Ordinary Shares may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of any resident of Japan, except pursuant to an exemption from the registration requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.

Australia

No placement document, prospectus, product disclosure statement, or other disclosure document has been lodged with the Australian Securities and Investments Commission (the “ASIC”) in relation to this offering. This prospectus does not constitute a prospectus, product disclosure statement, or other disclosure document under the Corporations Act 2001 (the “Corporations Act”) and does not purport to include the information required for a prospectus, product disclosure statement, or other disclosure document under the Corporations Act.

Any offer in Australia of the Ordinary Shares may only be made to persons (“Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act), or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the Ordinary Shares without disclosure to investors under Chapter 6D of the Corporations Act.

The Ordinary Shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring securities must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation, or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

Dubai International Financial Centre

This prospectus relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with exempt offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The Ordinary Shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Ordinary Shares offered should conduct their own due diligence on the Ordinary Shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

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Switzerland

The Ordinary Shares may not be publicly offered, directly or indirectly, in Switzerland within the meaning of the Swiss Financial Services Act ("FinSA") and no application has or will be made to admit the Ordinary Shares to trading on any trading venue (exchange or multilateral trading facility) in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the Ordinary Shares constitutes a prospectus pursuant to the FinSA, and neither this document nor any other offering or marketing material relating to the Ordinary Shares may be publicly distributed or otherwise made publicly available in Switzerland.

Other Relationships

Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.

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EXPENSES RELATED TO THE OFFERING

The Company will pay all expenses in connection with the offer and sale of our Ordinary Shares in the offering, after which it will be reimbursed for all such expenses on a pro-rata basis by the selling shareholders. Set forth below is an itemization of the total expenses which are expected to be incurred. With the exception of the SEC registration fee, all amounts are estimates.

Expenses	Amount
SEC registration fee	$	19,050
Financial Industry Regulatory Authority, Inc. ("FINRA") filing fee		27,040
Legal fees and expenses		600,000
Accounting fees and expenses		40,000
Miscellaneous expenses, including printing and engraving expenses		100,000
Total	$	786,090

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LEGAL MATTERS

The validity of our Ordinary Shares and certain other matters of Luxembourg law will be passed upon for us by Allen & Overy S.C.S. Certain matters of U.S. federal law will be passed upon for us by Latham & Watkins LLP. Certain matters of U.S. federal law will be passed upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP.

EXPERTS

The consolidated financial statements of NeoGames S.A. as of December 31, 2020, 2019 and 2018 and the financial statements of NeoPollard Interactive LLC as of December 31, 2020 and 2019 included in this prospectus and the registration statement of which this prospectus is a part have been so included in reliance on the report of Ziv Haft, Certified Public Accountants, Isr., BDO Member Firm, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

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ENFORCEMENT OF CIVIL LIABILITIES

We are a public limited liability company (société anonyme or S.A.) organized under the laws of the Grand Duchy of Luxembourg. Most of the members of our board of directors, our senior management and the experts named in this prospectus reside outside the United States and a substantial portion of their assets are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon these individuals or upon us or to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. securities laws against us in the United States. Awards of punitive damages in actions brought in the United States or elsewhere are generally not enforceable in Luxembourg and penalty clauses and similar clauses on damages or liquidated damages are allowed to the extent that they provide for a reasonable level of damages and the courts of Luxembourg have the right to reduce or increase the amount thereof if it is unreasonably high or low.

As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and the Grand Duchy of Luxembourg, courts in Luxembourg will not automatically recognize and enforce a final judgment rendered by a U.S. court. A valid judgment obtained from a court of competent jurisdiction in the United States may be entered and enforced through a court of competent jurisdiction in Luxembourg, subject to compliance with the enforcement procedures (exequatur). The enforceability in Luxembourg courts of judgments rendered by U.S. courts will be subject, prior to any enforcement in Luxembourg, to the procedure and the conditions set forth in the Luxembourg procedural code, which conditions may include that:

• the judgment of the U.S. court is final and enforceable (exécutoire) in the United States;

• the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);

• the U.S. court has applied to the dispute the substantive law that would have been applied by Luxembourg courts. Based on recent case law and legal doctrine, it is not certain that this condition would still be required for an exequatur to be granted by a Luxembourg court;

• the judgment was granted following proceedings where the counterparty had the opportunity to appear and, if it appeared, to present a defense, and the decision of the foreign court must not have been obtained by fraud, but in compliance with the rights of the defendant;

• the U.S. court has acted in accordance with its own procedural laws; and

• the decisions and the considerations of the U.S. court must not be contrary to Luxembourg international public policy rules, must not have been given in proceedings of a tax or criminal nature and must not have been rendered subsequent to an evasion of Luxembourg law (fraude à la loi).

In addition, actions brought in a Luxembourg court against us, the members of our board of directors, our officers or the experts named herein to enforce liabilities based on U.S. federal securities laws may be subject to certain restrictions. In particular, Luxembourg courts do generally not award punitive damages. It is possible that awards of damages made under civil liabilities provisions of the U.S. federal securities laws or other laws (for example, fines or punitive damages) would be classified by Luxembourg courts as being of a penal or punitive nature and would not be recognized by Luxembourg courts. Ordinarily an award of monetary damages would not be considered as a penalty, but if the monetary damages include punitive damages, such punitive damages may be considered as a penalty.

Derivative actions are generally not available to shareholders under Luxembourg law. However, minority shareholders holding securities entitled to 10% of the voting rights at the general meeting that resolved on the granting of discharge to the directors may bring an action against the directors on behalf of the company. Minority shareholders holding at least 10% of the voting rights of a company may also ask the directors questions in writing concerning acts of management of the company or one of its subsidiaries, and if the company fails to answer these questions within one month, these shareholders may apply to the Luxembourg courts to appoint one or more experts instructed to submit a report on these acts of management. This provision of Luxembourg law does not apply to claims under the U.S. federal securities laws. Furthermore, consideration would be given by a Luxembourg court in summary proceedings to acts that are alleged to constitute an abuse of majority rights against the minority shareholders.

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Litigation in Luxembourg also is subject to rules of procedure that differ from the U.S. rules, including with respect to the taking and admissibility of evidence, the conduct of the proceedings and the allocation of costs. Proceedings in Luxembourg would have to be conducted in the French or German language, and all documents submitted to the court would, in principle, have to be translated into French or German.

There exists no published case law in Luxembourg in relation to the recognition of limited recourse provisions by which a party agrees to limit its recourse against the other party to the assets available at any given point in time with such other party and there exists no published case law in Luxembourg in relation to the recognition of foreign law governed subordination provisions whereby a party agrees to subordinate its claims of another party. If a Luxembourg court had to analyze the enforceability of such provisions, it is likely that such a court would consider the position taken by Belgian and Luxembourg legal scholars according to which limited recourse provisions are enforceable against the parties thereto but not against third parties.

A contractual provision allowing the service of process against a party to a service agent could be overridden by Luxembourg statutory provisions allowing the valid serving of process against a party subject to and in accordance with the laws of the country where such party is domiciled.

For these reasons, it may be difficult for a U.S. investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against us, the members of our board of directors, our executive officers and the experts named in this prospectus. In addition, even if a judgment against us, the non-U.S. members of our board of directors, senior management or the experts named in this prospectus based on the civil liability provisions of the U.S. federal securities laws is obtained, a U.S. investor may not be able to enforce it in U.S. or Luxembourg courts.

144

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement (including any amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. Statements made in this prospectus concerning the contents of any contract, agreement or other document are not complete descriptions of all terms of these documents. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed for a complete description of its terms. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely.

We are subject to the informational requirements of the Exchange Act that are applicable to foreign private issuers. Accordingly, we are required to file or furnish reports and other information with the SEC. The SEC maintains an internet website at http://www.sec.gov, from which you can electronically access the registration statement and our other materials.

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We will send our transfer agent a copy of all notices of shareholders’ meetings and other reports, communications and information that are made generally available to shareholders. The transfer agent has agreed to mail to all shareholders a notice containing the information (or a summary of the information) contained in any notice of a meeting of our shareholders received by the transfer agent and will make available to all shareholders such notices and all such other reports and communications received by the transfer agent.

145

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2021

F - 1

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2021

CONTENTS

	Page
Interim Condensed Consolidated Statements of Financial Position	F-3 - F-4
Interim Condensed Consolidated Statements of Comprehensive Income	F-5
Interim Condensed Consolidated Statements of Changes in Equity	F-6 - F-7
Interim Condensed Consolidated Statements of Cash Flows	F-8 - F-9
Notes to the Interim Condensed Consolidated Financial Statements	F-10 - F-15

F - 2

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	Note		As of June 30, 2021		As of December 31, 2020
			Unaudited		Audited
			U.S. dollars (in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalent				65,395		59,767
Designated cash		6		2,917		-
Restricted deposit				12		12
Prepaid expenses and other receivables				2,312		1,446
Due from Aspire Group		3		787		56
Due from the Michigan Joint Operation and NPI				2,827		3,192
Trade receivables				3,869		3,701
Total current assets				78,119		68,174
NON-CURRENT ASSETS
Restricted deposit				159		164
Restricted deposits - Joint Venture		4		3,773		3,773
Property and equipment				1,308		1,301
Intangible assets				19,875		17,835
Right-of-use assets				2,389		3,127
Deferred taxes				273		211
Total non-current assets				27,777		26,411
TOTAL ASSETS				105,896		94,585

The accompanying notes are an integral part of these interim condensed consolidated financial statements

F - 3

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

	Note		As of June 30, 2021			As of December 31, 2020
			Unaudited			Audited
			U.S. dollars (in thousands)
LIABILITIES AND EQUITY (DEFICIT)
CURRENT LIABILITIES
Trade and other payables				4,619			4,910
Lease liabilities				1,486			1,651
Capital notes, loans and accrued interest due to Aspire Group		3		19,337			-
Loans and other due to William Hill, net		3		-			1,972
Employees withholding payable		6		2,917			-
Employees' related payables and accruals				4,241			3,562
Total current liabilities				32,600			12,095
NON-CURRENT LIABILITIES
Capital notes, loans and accrued interest due to Aspire Group		3		-			17,739
Loans and other due to William Hill, net		3		11,766			10,666
Company share of Joint Venture net liabilities		4		1,101			1,025
Lease liabilities				1,198			1,855
Accrued severance pay, net				414			384
Total non-current liabilities				14,479			31,669
EQUITY
Share capital				44			44
Reserve with respect to transaction under common control				(8,467	)		(8,467	)
Reserve with respect to funding transactions with related parties				20,072			20,072
Share premium				70,450			68,608
Share based payments reserve				3,336			3,907
Accumulated losses				(26,618	)		(33,343	)
Total equity				58,817			50,821
TOTAL LIABILITIES AND EQUITY				105,896			94,585

The accompanying notes are an integral part of these interim condensed consolidated financial statements

F - 4

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

			Six-month period ended June 30,
			2021			2020
	Note		Unaudited
			U.S. dollars (in thousands)
Revenues				26,236			22,071
Distribution expenses				5,086			2,863
Development expenses				4,174			3,436
Selling and marketing expenses				607			764
General and administrative expenses				5,542			3,252
Initial public offering expenses		1		-			1,089
Depreciation and amortization				6,907			5,539
				22,316			16,943
Profit from operations				3,920			5,128
Interest expenses with respect to funding from related parties		3		2,414			2,053
Finance income				-			(22	)
Finance expenses				235			482
Profit before income taxes expenses				1,271			2,615
Income taxes expenses				(1,069	)		(426	)
Profit after income taxes expenses				202			2,189
The Company' share in profits (losses) of Joint Venture		4		6,523			(676	)
Net and total comprehensive income			$	6,725			1,513
Net income per common share outstanding, basic ($)				0.27			0.07
Net income per common share outstanding, diluted ($)				0.25			0.06
Weighted average number of common shares outstanding, basic				25,067,083			21,994,408
Weighted average number of common shares outstanding, diluted				26,611,557			23,402,028

The accompanying notes are an integral part of these interim condensed consolidated financial statements

F - 5

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Six-month period ended June 30, 2021

	Share capital		Share premium		Accumulated losses			Share based payments reserve			Reserve with respect to funding transactions with related parties		Reserve with respect to transaction under common control			Total equity (deficit)
	Unaudited
	U.S. dollars (in thousands)
Balance as of January 1, 2021 (Audited)		44*		68,608		(33,343	)		3,907			20,072		(8,467	)		50,821
Changes in the period:
Comprehensive and net income for the period						6,725											6,725
Exercise of employee options to ordinary shares		**		1,842					(1,111	)							731
Share based compensation									540								540
Balance as of June 30, 2021		44*		70,450		(26,618	)		3,336			20,072		(8,467	)		58,817

*    25,479,728 shares, no par value, authorized issued and fully paid.

** Less than $1,000

The accompanying notes are an integral part of these interim condensed consolidated financial statements

F - 6

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIT

Six-month period ended June 30, 2020

	Share capital		Share premium		Accumulated losses			Share-based payments reserve			Reserve with respect to funding transactions with related parties		Reserve with respect to transaction under common control			Total deficit
	Unaudited
	U.S. dollars (in thousands)
Balance as of January 1, 2020 (Audited)		21		22,788		(39,857	)		2,967			16,940		(8,467	)		(5,608	)
Changes in the period:
Comprehensive and net income for the period						1,513											1,513
Benefit to the Company by certain of its equity holder with respect to funding transactions												2,515					2,515
Exercise of employee options to ordinary shares		*		2					(*	)							2
Share based compensation									523								523
Balance as of June 30, 2020		21		22,790		(38,344	)		3,490			19,455		(8,467	)		(1,055	)

*Less than $500

The accompanying notes are an integral part of these interim condensed consolidated financial statements

F - 7

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Cash flows from operating activities:
Net profit (loss) for the period		6,725			1,513
Adjustments for:
Amortization and depreciation		6,907			5,539
Income taxes expenses		1,069			426
Income taxes paid		(346	)		(214	)
Interest expenses with respect to lease liability		96			337
Interest expenses with respect to funding from related parties		2,414			2,053
Interest paid		(820	)		(328	)
Other finance expenses, net		235			460
Payments with respect to IP Option		239			369
Share-based compensation		540			523
The Company' share in profits (losses) of Joint Venture		(6,523	)		676
Decrease in trade receivables		129			510
Decrease (increase) in prepaid expenses and other receivables		(866	)		53
Decrease (increase) in Aspire Group		(731	)		211
Increase (decrease) in amounts due from the Michigan Joint Operation and NPI		365			(3,098	)
Decrease in trade and other payables		(1,314	)		(193	)
Increase (decrease) in employees' related payables and accruals		679			(21	)
Accrued severance pay, net		30			3
Total adjustment		2,103			7,306
Net cash generated from operating activities		8,828			8,819

The accompanying notes are an integral part of these interim condensed consolidated financial statements

F - 8

NEOGAMES S.A.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Cash flows from investing activities:
Purchase of property and equipment		(316	)		(199	)
Capitalized development costs		(7,901	)		(6,082	)
Restricted deposit - Joint Venture		-			(1,182	)
Changes in deposits		5			136
Proceeds from (funding to) the Joint Venture		6,599			(91	)
Net cash used in investing activities		(1,613	)		(7,418	)
Cash flows from Financing activities:
Repayment of loan from William Hill		(1,500	)		-
Repayments for lease liabilities		(818	)		(702	)
Exercise of employee options		731			-
Net cash generated from (used in) financing activities		(1,587	)		(702	)
Net increase in cash and cash equivalents		5,628			699
Cash and cash equivalents at the beginning of the period		59,767			6,016
Cash and cash equivalents at the end of the period		65,395			6,715

The accompanying notes are an integral part of these interim condensed consolidated financial statements

F - 9

NEOGAMES S.A.

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

NeoGames S.A. (together with its subsidiaries, the “Company”) was incorporated in Luxemburg on April 10, 2014. On November 10, 2020, the Company completed a 1: 8.234 (approximated) reverse split of its share capital which were applied retrospectively in this consolidated financial statement. The Company has been listed on Nasdaq since November 19, 2020, under the symbol “NGMS”.

The Company, together with a joint operation and a joint venture, is a leading global technology provider engaged in the development and operation of online lotteries and games, allowing lottery operators to distribute lottery products via online sales channels while using the Company’s technology.

The Company serves content and platform contracts across Europe and the United States of America through its wholly owned operating subsidiaries: NeoGames Systems Ltd. (“NGS”), incorporated in 2014, and NeoGames Ukraine, incorporated in 2018. In 2014, the Company incorporated NeoGames US LLP (“NeoGames US”) serving as the active arm for the North American market and in 2018 incorporated NeoGames S.R.O, in the Czech Republic to operate the Company’s Czech project.

The Company’s principal shareholders are William Hill Organization Limited (“William Hill”), Barak Matalon, Pinhas Zehavi, Elyahu Azur and Aharon Aran, that also collectively own a majority of Aspire Global Plc (“Aspire”), a publicly traded company which conducts iGaming operations through its subsidiaries (together with Aspire, the “Aspire Group”). The Company’s largest shareholder, William Hill, was acquired by Caesars Entertainment, Inc. on April 22, 2021.

On February 22, 2021, the Company announced the go-live of its eInstants games with the Austrian Lotteries, launching the Company’s first set of games on the win2day online gaming site. In connection with the agreement, the Company will grant the Austrian Lotteries (Österreichische Lotterien) full access to its Studio extensive portfolio of premium, award winning eInstant games.

The Company is carefully monitoring the outbreak and spread of the coronavirus (“COVID-19”) across the world and specifically in the United States. Proactive measures have been taken to reduce the risk to the Company’s staff and to ensure business continuity. The Company is an online organization where working remotely and meeting virtually are established ways of working. The Company’s operations, which are limited to iLottery, have not been negatively impacted and the Company does not expect its operations to be negatively impacted by the outbreak of COVID-19. However, depending on the duration of the pandemic, there could be a negative impact on the Company’s operations.

NOTE 2 – BASIS FOR PREPARATION

The interim condensed consolidated financial information ("Interim Financial Information") of the Company has been prepared in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’ ("IAS 34"), as issued by the International Accounting Standards Board ("IASB").

The Interim Financial Information has been prepared on the basis of the accounting policies adopted in the Company’s audited consolidated financial statements for the year ended December 31, 2020 ("Annual Financial Statements"), which were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). This Interim Financial Information should be read in conjunction with the Annual Financial Statements and notes thereto issued on April 16, 2021 ("Annual Financial Statements"). They do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company's financial position and performance since the last annual financial statements.

The Interim Financial Information is unaudited, does not constitute statutory accounts and does not contain all the information and footnotes required by accounting principles generally accepted under International Financial Reporting Standards for annual financial statements.

All significant judgements and estimates used by the Company remain unchanged from the Annual Financial Statements and all valuation techniques and unobservable inputs remain unchanged.

F - 10

NEOGAMES S.A.

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

NOTE 3 – RELATED PARTIES

A. William Hill:

Following Note 6 to the Annual Financials Statements the Company’s total revenues from this license agreement in the six-month period ended June 30, 2021 and 2020 amounted approximately $3.9 million and $3.1 million, respectively. The outstanding amounts due under this license agreement as of June 30, 2021 and December 31, 2020 amounted to approximately $2.4 million and $2.0 million, respectively, and are included in trade receivables.

In February 2020, the parties agreed to extend the original repayment schedule such that, all principal loan amounts are due for a full repayment (interest plus principal) on June 15, 2023 and the First Loan is due for repayment on June 30, 2021. The implied benefit of $2.5 million (reflecting the extension of the original repayment schedule) was accounted for as a modification of debt in accordance with IFRS 9, with a related party and therefore recorded in “Reserve with respect to funding transactions with related parties” in the statement of changes in equity (deficit) and will be amortized as additional interest expense over the remaining period of the loans.

On June 29, 2021 the Company repaid the loan in the amount of $1.5 million and interest in the amount of $0.6 million.

	As of June, 30, 2021			As of December 31, 2020
	Unaudited			Audited
	U.S. dollars (in thousands)
Loans and other due to WH, net:
Loan principals		11,000			12,500
Discounts		(1,926	)		(2,492	)
Accrued interest		212			677
Liability with respect to IP Option		3,450			3,450
Receivables on IP Option		(970	)		(1,497	)
		11,766			12,638

B. Aspire Group:

Following Note 6 to the Annual Financial Statements, in the reported periods, the Company provided and received certain services from Aspire Group, such as research and development services and administrative services as follows:

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Revenues generated from the Transition Services Agreement		928		1,348
Expenses derived by the Cost Allocation Agreement:
Labor (included in general and administrative expenses)		28		21
Right of use lease (included in depreciation and interest with respect to right of use)		595		470
Other (included in general and administrative expenses)		97		70
		720		561

F - 11

NEOGAMES S.A.

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

NOTE 3 - RELATED PARTIES (Cont.)

B. Aspire Group (Cont.):

Capital notes and accrued interest from Aspire Group:

	Principal amount		Balance*		Contractual interest rate		Effective interest rate
	U.S. dollars (in thousands)				%
As of June 30, 2021 (Unaudited)		21,838		19,337		1		20
As of December 31, 2020 (Audited)		21,838		17,739		1		20

* Including accrued interest of $582 thousand and $582 thousand as of June 30, 2021 and December 31, 2020, respectively.

C. Consultancy Agreement:

Following Note 6C to the Annual Financial Statements, the consulting fees in the six-month periods ended June 30, 2021 and 2020 amounted to $82 thousand and $77 thousand, respectively.

NOTE 4 - INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION

A. JOINT VENTURE

NPI has been included in the consolidated financial statements using the equity method.

NPI's summarized financial information:

	As of June, 30, 2021			As of December 31, 2020
	Unaudited			Audited
	U.S. dollars (in thousands)
Current assets		20,025			11,388
Non-current assets		1,419			1,597
Current liabilities		(20,851	)		(12,091	)
Non-current liabilities		(2,880	)		(2,910	)
Net assets (100%)		(2,287	)		(2,016	)
Net assets (50%)		(1,144	)		(1,008	)
Adjustments		43			(17	)
Company share of net assets (liabilities) (50%)		(1,101	)		(1,025	)

F - 12

NEOGAMES S.A.

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

NOTE 4 - INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION (Cont.)
 

A.   JOINT VENTURE (Cont.)
 

	For the Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Revenues		31,695			4,888
Distribution expenses		21,512			6,085
Selling, general and marketing expenses		406			373
Depreciation and amortization		313			307
Finance expenses		45			11
Net and total profit (loss) (100%)		9,419			(1,888	)
Net and total profit (loss) (50%)		4,710			(944	)
Adjustments		1,813			268
Share in profits (losses) of NPI		6,523			(676	)
Funding of (proceeds from) NPI		(6,599	)		91

In addition to the above, with respect to the development services provided to NPI by the Company, in the six-month periods ended June 30, 2021 and 2020, the Company recorded revenues totalling to $3.7 million and $1.7 million, respectively. The adjustments mostly represent royalty commissions earned by NPI on games developed and provided by the Company, whereby the Company's share of the underlying results is higher than 50%.

B. MICHIGAN JOINT OPERATION

The Michigan Joint Operation has been included in the consolidated financial statements as a share of Company’s interest in assets held jointly, and its share of revenues and expenses. Below are the Michigan Joint Operation’s revenues and operating expenses, 50% of which represent the Company’s interest and were included in the Company’s statement of comprehensive income:

	For the Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Revenues (100%)		24,196			22,585
Total operating expenses (100%)		(13,585	)		(9,900	)

In addition to the above-stated revenues, with respect to the development services provided to the Michigan Joint Operation by the Company, in the six-month periods ended June 30, 2021 and 2020, the Company recorded revenues totalling $0.7 million and $0.7 million, respectively. Further, the Company recorded additional royalty revenues with respect to games development efforts invested to enhance the Michigan Joint Operation’s games portfolio during the six-month period ended June 30, 2021 and 2020, totaling to $0.9 million and $0.9 million, respectively, which were also eliminated from Company's share in Michigan Joint Operation’s total operating expenses as stated in the above table.

As of June 30, 2021, and December 31, 2020, the Company’s interest in the Michigan Joint Operation’s assets was $746 thousand and $745 thousand, respectively, and mostly comprised of property and equipment, net.

F - 13

NEOGAMES S.A.

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

NOTE 5 - REVENUES

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Turnkey contracts		16,065		14,430
Games		979		800
Total royalties		17,044		15,230
Development and other services from Aspire (See also Note 3B)		928		1,348
Development and other services from NPI (See also Note 4A)		3,724		1,744
Development and other services from Michigan Joint Operation (See also Note 4B)		676		655
Total Development and other services		5,328		3,747
Use of IP rights (William Hill only, see also Note 3A)		3,864		3,094
Total Revenues		26,236		22,071

The Company generated revenues exceeding 10% of its consolidated revenues from four customers in the six-month period ended June 30, 2021 (of which two are a related party) and four customers in the six-month period ended June 30, 2020 (of which one is related parties, see Note 3). The Company generated 50% and 55% of the consolidated revenues in the six-month periods ended June 30, 2021 and 2020, respectively, from the Michigan Joint Operation and 12% and 10% of the consolidated revenues in the six-month periods ended June 30, 2021 and 2020 from Sazka.

As of June 30, 2021, and December 31, 2020, the Company had trade receivables outstanding, exceeding 10% of the Company’s consolidated trade receivables, from two customers. Sazka accounted 35% and 43% of the consolidated trade receivables outstanding as of June 30, 2021 and December 31, 2020, respectively, and William Hill accounted for 59% and 55% of the consolidated trade receivables outstanding as of June 30, 2021 and December 31, 2020.

NOTE 6 - SHARE BASED PAYMENTS

On May 26, 2021, the Company granted to its chair of the audit committee and a board of directors’ member 15,000 options to purchase its shares that will be vested over a service period of 8 months.

The fair value of the options granted was estimated as of the grant date to $304 thousand using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		37.7	%
Risk free interest rate		0.87	%
Expected life	5.33 years
Weighted average exercise price	$	57.56
Price per share	$	57.56

During June 2021, the Company withheld income taxes totaling to $2.9 million associated with exercising employees’ stock options and trading shares during the reporting period. The amount was transferred to the ITA, subsequent to the end of the reporting period.

F - 14

NEOGAMES S.A.

NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS

NOTE 7 - INCOME PER SHARE

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Basic and diluted earnings per share:
Net income attributable to equity holders of the company		6,725		1,513
Weighted average number of issued ordinary shares		25,067,083		21,994,408
Dilutive effect of share options		1,544,474		1,407,620
Weighted average number of diluted ordinary shares		26,611,557		23,402,028
Income (loss) per share, basic ($)		0.27		0.07
Income (loss) per share, diluted ($)		0.25		0.06

NOTE 8 - LEGAL PROCEEDINGS

Following Note 19 to the Annual Financial Statements, in June 2021, the U.S. Department of Justice (“DoJ”) decided to appeal the decision of the federal Court of Appeals for the First Circuit, permitting state-run lotteries and their suppliers to continue to sell lottery products online without the immediate threat of federal prosecution for such activities.

F - 15

NEOGAMES S. A.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020

F - 16

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020

CONTENTS

	Page
Report of Independent Registered Public Accounting Firm	F-18
Consolidated Statements of Financial Position	F-19 - F-20
Consolidated Statements of Comprehensive Income (Loss)	F-21
Consolidated Statements of Changes in Equity (Deficit)	F-22
Consolidated Statements of Cash Flows	F-23
Notes to the Consolidated Financial Statements	F-24 - F-42

F - 17

 

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

NeoGames S.A.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of NeoGames S.A. and its subsidiaries (“the Company”), as of December 31, 2020 and 2019, the related consolidated statements of comprehensive income (loss), changes in equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Change in Accounting Principle

As discussed in Note 2W to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2019, due to the adoption of International Financial Reporting Standard 16, Leases.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ziv Haft

Ziv Haft

Certified Public Accountants (Isr.)

BDO Member Firm

We have served as the Company’s auditor since 2014.

April 16, 2021

Tel Aviv, Israel

F - 18

NEOGAMES S.A.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

			December 31,
			2020		2019
	Note		U.S. dollars (in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents				59,767		6,016
Restricted deposits				12		138
Prepaid expenses and other receivables				1,446		905
Aspire Group		6		56		296
Due from the Michigan Joint Operation and NPI		7		3,192		250
Trade receivables				3,701		2,737
				68,174		10,342
NON-CURRENT ASSETS
Restricted deposits				164		150
Restricted deposits - Joint Venture		7		3,773		2,000
Company share of Joint Venture net assets		7		-		603
Property and equipment		4		1,301		849
Intangible assets		5		17,835		14,413
Right-of-use assets		2		3,127		4,688
Deferred taxes		15		211		130
				26,411		22,833
TOTAL ASSETS				94,585		33,175

The accompanying notes are an integral part of these consolidated financial statements.

F - 19

NEOGAMES S.A

 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31

			December 31,
			2020			2019
	Note		U.S. dollars (in thousands)
LIABILITIES AND EQUITY (DEFICIT)
CURRENT LIABILITIES
Trade and other payables		8		4,910			1,855
Lease liabilities		2		1,651			1,455
Loans and other due to William Hill, net		6		1,972			14,245
Employees' related payables and accruals				3,562			2,583
				12,095			20,138
NON-CURRENT LIABILITIES
Capital notes, loans and accrued interest due to Aspire Group		6		17,739			14,987
Loans and other due to William Hill, net		6		10,666			-
Company share of Joint Venture net liabilities		7		1,025			-
Lease liabilities		2		1,855			3,382
Accrued severance pay, net		9		384			276
				31,669			18,645
EQUITY (DEFICIT)
Share capital				44			21
Reserve with respect to transaction under common control		2		(8,467	)		(8,467	)
Reserve with respect to funding transaction with related parties				20,072			16,940
Share premium				68,608			22,788
Share based payments reserve		18		3,907			2,967
Accumulated losses				(33,343	)		(39,857	)
				50,821			(5,608	)
TOTAL LIABILITIES AND EQUITY (DEFICIT)				94,585			33,175

The accompanying notes are an integral part of these consolidated financial statements.

F - 20

NEOGAMES S.A

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)            

			For the year ended December 31,
			2020			2019			2018
	Note		U.S. dollars (in thousands)
Revenues		11		49,202			33,062			23,478
Distribution expenses		12		6,685			4,252			4,519
Development expenses				7,452			6,877			5,782
Selling and marketing expenses				1,483			1,981			1,457
General and administrative expenses		13		7,496			4,957			4,948
Initial public offering expenses				2,796			-			-
Depreciation and amortization		4,5		11,657			9,685			7,759
				37,569			27,752			24,465
Profit (loss) from operations				11,633			5,310			(987	)
Interest expenses with respect to funding from related parties		6		4,343			3,792			2,309
Finance income		14		(21	)		(53	)		-
Finance expenses		14		747			382			195
Profit (loss) before income taxes expenses				6,564			1,189			(3,491	)
Income taxes expenses		15		(1,443	)		(1,243	)		(586	)
Profit (loss) after income taxes expenses				5,121			(54	)		(4,077	)
The Company's share in gains (losses) of the Joint Venture		7		1,393			(3,924	)		(1,898	)
Net and total comprehensive income (loss)				6,514			(3,978	)		(5,975	)
Net income (loss) per common share outstanding, basic ($)				0.29			(0.18	)		(0.27	)
Net income(loss) per common share outstanding, diluted ($)				0.27			(0.18	)		(0.27	)
Weighted average number of common shares outstanding, basic		17		22,329,281			21,983,757			21,983,757
Weighted average number of common shares outstanding, diluted		17		23,898,477			21,983,757			21,983,757

The accompanying notes are an integral part of these consolidated financial statements.

F - 21

            NEOGAMES S.A

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

	Share capital			Share premium			Accumulated gains (losses)			Share based payments reserve			Reserve with respect to funding transactions with related parties		Reserve with respect to transaction under common control			Total equity (deficit)
	U.S. dollars (in thousands)
Balance as of January 1, 2018		21			22,788			(29,904	)		2,352			16,940		(8,467	)		3,730
Changes in the year:
Total comprehensive loss for the year								(5,975	)										(5,975	)
Balance as of December 31, 2018		21			22,788			(35,879	)		2,352			16,940		(8,467	)		(2,245	)
Changes in the year:
Share based compensation											615								615
Total comprehensive loss for the year								(3,978	)										(3,978	)
Balance as of December 31, 2019		21			22,788			(39,857	)		2,967			16,940		(8,467	)		(5,608	)
Changes in the year:
Share based compensation											969								969
Benefit to the Company by an equity holder with respect to funding transactions														3,132					3,132
Recapitalization of share capital		23			(23	)													—
Issuance of ordinary shares, net of issuance cost, in an initial public offering,		-			45,810														45,810
Exercise of employee options to ordinary shares		-			33						(29	)							4
Total comprehensive income for the year								6,514											6,514
Balance as of December 31, 2020		44	*		68,608			(33,343	)		3,907			20,072		(8,467	)		50,821

*    24,983,855 shares, no par value, authorized issued and fully paid.

**   On November 10, 2020, the Company completed a 1: 8.234 (approximated) reverse split of its share capital by way of conversion of its then existing 181,003,584 shares into 21,983,757 shares, which were applied retrospectively.

The accompanying notes are an integral part of these consolidated financial statements.

F - 22

            NEOGAMES S.A

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the year ended December 31,
	2020			2019			2018
	U.S. dollars (in thousands)
Cash flows from operating activities:
Net profit (loss) for the period		6,514			(3,978	)		(5,975	)
Adjustments for:
Amortization and depreciation		11,657			9,685			7,759
Income taxes expenses		1,443			1,243			586
Income taxes paid		(606	)		(461	)		(376	)
Interest expenses with respect to lease liability		672			366			-
Interest expenses with respect to funding from related parties		4,343			3,792			2,309
Interest paid		(684	)		(645	)		(223	)
Other finance expenses, net		726			329			202
Payments with respect to IP Option		478			825			-
Share based compensation		969			615			-
The Company share in losses (gains) of the Joint Venture		(1,393	)		3,924			1,898
Initial public offering expenses		2,430			-			-
Increase in trade receivables		(1,286	)		(304	)		(1,683	)
Increase in prepaid expenses and other receivables		(541	)		(397	)		(136	)
Decrease (Increase) in Aspire Group		240			(152	)		(42	)
Decrease (increase) in amounts due from the Michigan Joint Operation and NPI		(2,942	)		(60	)		498
Increase (decrease) in trade and other payables		1,411			(460	)		(68	)
Increase in employees' related payables and accruals		979			731			587
Accrued severance pay, net		108			(13	)		42
		18,004			19,018			11,353
Net cash generated from operating activities		24,518			15,040			5,378
Cash flows from investing activities:
Purchase of property and equipment		(928	)		(756	)		(392	)
Capitalized development costs		(13,128	)		(11,454	)		(8,033	)
Restricted deposits - Joint Venture		(1,773	)		(853	)		(1,147	)
Net change in deposits		112			(147	)		-
Proceeds from (funding to) the Joint Venture		3,021			(4,214	)		(2,149	)
Net cash used in investing activities		(12,696	)		(17,424	)		(11,721	)
Cash flows from financing activities:
Loans from William Hill		2,500			6,500			6,000
Repayment of loan from William Hill		(2,500	)		-			-
Repayments for lease liabilities		(1,455	)		(1,334	)		-
Exercise of employee options		4			-			-
Issuance of shares, net of issuance costs and other initial public offering expenses		43,380			-			-
Net cash generated from financing activities		41,929			5,166			6,000
Net increase (decrease) in cash and cash equivalents		53,751			2,782			(343	)
Cash and cash equivalents at the beginning of the year		6,016			3,234			3,577
Cash and cash equivalents at the end of the year		59,767			6,016			3,234

The accompanying notes are an integral part of these consolidated financial statements.

F - 23

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

Neogames S.A. (together with its subsidiaries, the “Company”) was incorporated in Luxemburg on April 10, 2014. On November 10, 2020 the Company changed its corporate form from a private limited liability company to public limited liability company, changed its name from Neogames S.à.r.l. to NeoGames S.A and completed a 1: 8.234 (approximated) reverse split of its share capital which were applied retrospectively in this consolidated financial statements. The Company has been listed on Nasdaq since November 19, 2020, under the symbol “NGMS”.

On November 24, 2020, the Company completed an initial public offering of 5,528,650 ordinary shares, no par value, including 721,128 ordinary shares sold pursuant to the full exercise of the underwriters’ overallotment option. The offering consisted of 2,987,625 ordinary shares offered by the Company and 2,541,025 ordinary shares offered by certain selling shareholders. The ordinary shares were sold at an offering price of $17.00 per ordinary share for an aggregate offering value of $94.0 million.

The Company, together with a joint operation and a joint venture, is a leading global technology provider engaged in the development and operation of online lotteries and games, allowing lottery operators to distribute lottery products via online sales channels while using the Company’s technology.

The Company serves content and platform contracts across Europe and the United States of America through its wholly owned operating subsidiaries: NeoGames Systems Ltd. (“NGS”), incorporated in 2014, and NeoGames Ukraine, incorporated in 2018. In 2014, the Company incorporated NeoGames US LLP (“NeoGames US”) serving as the active arm for the North American market and in 2018 incorporated NeoGames S.R.O, in the Czech Republic to operate the Company’s Czech project.

The Company’s principal shareholders are William Hill Organization Limited (“William Hill”), Barak Matalon, Pinhas Zehavi, Elyahu Azur and Aharon Aran, that collectively own a majority of Aspire Global Plc (“Aspire”), a publicly traded company which conducts iGaming operations through its subsidiaries (together with Aspire, the “Aspire Group”).

William Hill funded the Company’s growth in a form of a credit facility (see Note 6). William Hill also had options to acquire the remaining share capital of the Company in consideration for performance-based amounts, of which one was expired in 2019 and the second was waived on September 9, 2020, as a result of the Board of Directors’ resolution that the Company will take the necessary steps to prepare for an initial public offering.

The Company, together with a publicly traded Canadian Company, Pollard Banknote Limited (“Pollard”), developed, established and operate a licensed iLottery platform on behalf of the State of Michigan in the United States (the “Michigan Joint Operation”), whereby the relating contract was extended in December 2020 through July 2026.

On July 31, 2014, Pollard and NeoGames US jointly established an equal ownership share, NeoPollard Interactive LLC (“NPI” or the “Joint Venture”) in order to participate in iLottery tenders in the North American market. NPI has operated the Virginia State Lottery online e-Subscription program, since 2015, whereby the relating contract was extended in May 2020 and expanded to include a digital instant games portfolio, through October 2026, the iLottery platform on behalf of New Hampshire Lottery since September 2018 (initial terms of seven years) and the North Carolina Education Lottery iLottery platform since October 2019 (initial terms of five years with an option to extend for additional five years).

In April 2017, the Company developed, established and launched the Digital Entertainment Hub solution together with the leading lottery operator in the Czech Republic, SAZKA a.s., whereby the relating contract was extended on March 31, 2020  through the end of December 2025.

On March 19, 2020, NPI signed an agreement with Alberta Gaming, Liquor and Cannabis Commission (“AGLC”) to develop, deploy and maintain its digital solutions and power its proposed interactive offering. This contract has an initial term of seven years, with an option to extend for five years. The solution was launched on September 30, 2020.

The Company is carefully monitoring the outbreak and spread of the coronavirus (“COVID-19”) across the world and specifically in the United States. Proactive measures have been taken to reduce the risk to the Company’s staff and to ensure business continuity. The Company is an online organization where working remotely and meeting virtually are established ways of working. The Company’s operations, which are limited to iLottery, have not been negatively impacted and the Company does not expect its operations to be negatively impacted by the outbreak of COVID-19. However, depending on the duration of the pandemic, there could be a negative impact on the Company’s operations.

F - 24

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed in the preparation of the financial statements, on a consistent basis, unless otherwise stated, are:

A. Accounting principles

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Profit or loss accounts are presented and analyzed by their nature rather than their function within the entity as such method provides reliable and more relevant information on the Company's operations.

B. Comparative information

Comparative figures stated in the statements of comprehensive income (loss), financial position and cash flows have been reclassified to conform to the current year's presentation format for the purpose of adequate presentation.

C. Basis of consolidation

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. The consolidated financial statements present the results of the Company as though NeoGames S.A and its subsidiaries formed a single entity. Intercompany transactions and balances between NeoGames S.A and its subsidiaries are therefore eliminated in full.

D. Foreign currency

The financial statements of the Company are prepared in US dollars (the functional currency), which is the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company’s transactions. Balances in foreign currencies are translated into US dollars in accordance with the principles set forth by International Accounting standard (IAS) 21 (“The Effects of Changes in Foreign Exchange Rates”). Accordingly, transactions and balances in currencies other than the functional currency have been translated into US dollars as follows:

Monetary assets and liabilities — at the rate of exchange applicable at the end of the reporting year; Income and expense items — at exchange rates applicable as of the date of recognition of those items; Non-monetary items — at the rate of exchange at the time of the transaction.

E. Transaction under common control

Acquisition of intangible assets under common control is accounted for based on their book value as was accounted for by the seller, and the difference between the fair value of the consideration and the book value of the intangible assets was recorded as a capital reserve with respect to transaction under common control in the statement of changes in equity (deficit).

F. Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less.

G. Financial instruments

Financial assets and financial liabilities are recognized in the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value and subsequently measured at amortized cost based on the effective interest rate, as applicable.

F - 25

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

H. Trade receivables

Trade receivables are initially recognized at transaction price and subsequently measured at amortized cost and principally comprise amounts due from related parties and iLottery companies. The Company has applied the standard simplified approach and has calculated the Expected credit losses based on lifetime of expected credit losses, with de-minimis results. Bad debts (if any) are written off when there is objective evidence that the full amount may not be collected.

I. Investment in a joint operation

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to that arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the consent of all parties to the joint control.

The consolidated financial statements include the Company’s interest in any assets held jointly by the Michigan Joint Operation, and the Company’s share of revenues and expenses of the Michigan Joint Operation.

J. Investment in a joint venture

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets only. The Company’s investment in a joint venture is accounted for based on the equity method. Under the equity method, the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company’s share of the profit and losses and other comprehensive income (losses) of the joint venture.

K. Employee benefits

The Israeli subsidiary, NGS, has adopted the general authorization in accordance with Section 14 of the Severance Pay Law, 1963 (“Section 14”), according to which deposits to the pension funds and/or policies of insurance companies exempt the subsidiary from additional payments. However, the Company’s liabilities for severance pay, attributed to certain employees that are not subject to Section 14 are computed on the basis of the employee’s most recent salary as of the end of the period date, in accordance with the Severance Pay Law, and are partially covered by monthly deposits with insurance policies and/or other funds in favor of the employees and the remaining are accrued for in the consolidated financial statements.

As most of NGS’s employees are covered by Section 14, and due to immateriality, the Company does not use actuarial estimates and calculations for severance obligations. The Company accounts for such employees who are not subject to Section 14, by measuring accruals on the full amounts assuming that all of these employees will be terminated as of the end of the period date of each period (shut-down method).

L. Provisions

Provisions, which are liabilities of uncertain timing or amounts, are recognized when the Company has a legal or constructive obligation as a result of past events, if it is probable that an outflow of funds will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

M. Property and equipment

Property and equipment comprise of data center (servers), computers, leasehold improvements, office furniture and equipment and are stated at cost less accumulated depreciation and any accumulated impairment.

F - 26

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Depreciation is calculated to write off the cost of fixed assets to their residual amounts on a straight line basis over the expected useful lives of the assets concerned. The principal annual rates used for this purpose, are:

	%
Computers and computers equipment	25-50
Office furniture and equipment	7
Leasehold improvements	Over the shorter of the term of the lease or useful lives

Subsequent expenditures are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Company and losses on disposals are determined by comparing proceeds with carrying amount and are recognized in profit or loss.

The depreciation method and the estimated useful life of an asset are reviewed at least each year-end and the changes are accounted for as a change in accounting estimate on a prospective basis.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

N. Intangible assets

Intangible assets of the Company comprise development costs capitalization, which are amortized over their useful life and reviewed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at each year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are treated prospectively as a change in accounting estimates.

Research expenditures are recognized in profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project is recognized if the Company can demonstrate:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale.

• The Company's intention to complete the intangible asset and use or sell it.

• The ability to use or sell the intangible asset.

• How the intangible asset will generate future economic benefits.

• The availability of adequate technical, financial and other resources to complete the intangible asset; and

• The ability to measure reliably the respective expenditure asset during its development.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit of 3 years.

O. Impairment of non-financial assets

The Company evaluates the need to record an impairment of the carrying amount of fixed assets and intangible assets whenever events or changes in the circumstances indicate that the carrying amount is not recoverable. If the carrying amount of the above assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of the net sale price and value in use. In measuring value in use, the expected cash flows are discounted using a pre-tax discount rate that reflects the specific risks of the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in the statement of comprehensive income (loss).

F - 27

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

P. Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring services to a customer.

The Company generates its revenues through three streams:

• Royalties from licensing of technological platforms and provision of proprietary games content (which are recognized in the accounting periods in which the gaming transactions occur).

• Fees from access to intellectual property rights (which are recognized over the useful periods of the intellectual property rights).

• Fees from development services (which are recognized in the accounting periods in which services are provided).

Q. Reserve with respect to funding transactions with related parties

Transactions with related parties are accounted for based on fair value. Any difference between the nominal value and the fair value that arises in transactions with related parties are recorded directly into equity to a “Reserve with respect to funding transactions with related parties”.

R. Share-based payment

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income (loss) over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income (loss) over the remaining vesting period. Where the terms and conditions of options are modified after they vest, the increase in the fair value of the options measured and recorded in the consolidated statement of comprehensive income (loss) immediately after the modification.

S. Finance income and expenses

Finance income comprises of net currencies with exchange rates differences, while finance expenses are comprised of interest on related parties funding, net currencies exchange rates differences, interest on leases liabilities and banks charges.

T. Income taxes

Provision for income taxes is calculated in accordance with the tax legislation and applicable tax rates in force at the end of the reporting year in the countries in which Neogames S.A. and its subsidiaries have been incorporated. A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. This measurement is required to be based on the assumption that each of the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising from:

• The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

• Investments in subsidiaries and joint operations where the Company is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date, and that amount is are expected to apply when the deferred tax liabilities/assets are settled/recovered.

The Company recognized deferred tax assets (if any) only when their recoverability is more likely than not.

F - 28

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

U. Fair value measurement hierarchy

The Company measures certain financial instruments, including derivatives, at fair value at the end of each reporting period. Fair value is the price that would be received or paid in an orderly transaction between market participants at a particular date, either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for that asset or liability accessible to the Company.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

V. Earnings (loss) per share

Basic earnings (loss) per share

Basic earnings (loss) per share is calculated by dividing the earnings (loss) attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year, adjusted for ordinary shares issued during the year, if applicable.

Diluted earnings per share

Diluted earnings (loss) per share adjusts the figures used in the determination of basic earnings per share to take into account the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of options takes place as expected; and the addition of the shares to be derived from realization must have a dilutive effect.

W. Leases

Effective January 1, 2019, the Company accounts for its leases under IFRS 16, according to which:

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) or low value assets.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The lease liability is presented as a separate line in the consolidated statement of financial position, including the separation between current and non-current.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

In profit or loss, amortization expenses of the right-of-use asset and interest expenses in respect of the lease liability recognized. In the statement of cash flows, payments in respect of the principal portion of the lease liability classified as financing activity and payments in respect of the interest portion of the lease liability classified in accordance with the Company’s policy regarding classification of interest payments as operating activity.

In the prior period financial statements operating leases expenses recorded on a straight line basis within the operating expenses.

On December 26, 2018, NeoGames Ukraine entered into a lease agreement for an office space. The agreement commenced on January 15, 2019 for a period of 60 months. The annual lease payment and related expenses is approximately $1 million. For a description of the lease arrangement with the Aspire Group, see Note 6.

F - 29

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of consolidated financial statements under IFRS requires the Company to make estimates and judgments that affect the application of policies and reported amounts. Estimates and judgments are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Included in this note are accounting policies and/or estimates that cover areas for which the Directors and Management require judgments and/or assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities in the future. These policies together with references to the related notes to the financial statements, which include further commentary on the nature of the estimates and judgments made, can be found below:

Funding transactions with related parties:

The fair values of the funding transactions with related parties, the reserve relating to the funding transactions with related parties and the related interest expenses are recorded based on discounted cash flow of the anticipated repayments, calculated using a market interest rate determined by a reputable appraiser. For further details, see Note 6.

Capitalization of development costs:

Costs relating to internally generated intangible assets are capitalized if the criteria for recognition as assets are met. The initial capitalization of costs is based on Management’s judgment that technological and economic feasibility criteria are met. In making this judgment, Management considers the progress made in each development project and its latest forecasts for each project.

Share based payments/compensation:

The compensation expenses of stock options are vested over service periods, but exercisable only upon consummation of certain events as provided in the letter of grants. Stock based compensation expenses were recorded based on the fair values of the options, using the Black-Scholes model assumptions as well as the likelihood of the fulfillment of such events at the respective grant dates. For further details see Note 10.

NOTE 4 - PROPERTY AND EQUIPMENT, NET

	Computers and computers equipment		Office furniture and equipment		Leasehold improvements		Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2020		2,107		257		200		2,564
Additions during the year		373		364		191		928
		2,480		621		391		3,492
Accumulated depreciation:
Balance as of January 1, 2020		1,536		36		143		1,715
Additions during the year		461		7		8		476
		1,997		43		151		2,191
Net Book Value:
As of December 31, 2020		483		578		240		1,301

F - 30

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - PROPERTY AND EQUIPMENT, NET (Cont.)

	Computers and computers equipment		Office furniture and equipment		Leasehold improvements		Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2019		1,461		190		157		1,808
Additions during the year		646		67		43		756
		2,107		257		200		2,564
Accumulated depreciation:
Balance as of January 1, 2019		1,115		32		137		1,284
Additions during the year		421		4		6		431
		1,536		36		143		1,715
Net Book Value:
As of December 31, 2019		571		221		57		849

NOTE 5 - INTANGIBLE ASSETS

	As of December 31,
	2020		2019
	U.S. dollars (in thousands)
Cost:
Balance at beginning of the period		45,070		33,616
Additions		13,128		11,454
As of December 31,		58,198		45,070
Accumulated amortization:
Balance at beginning of the period		30,657		22,885
Amortization		9,706		7,772
As of December 31,		40,363		30,657
Net Book Value:
As of December 31,		17,835		14,413

NOTE 6 - RELATED PARTIES

A. WILLIAM HILL:

On June 18, 2018, the Company entered into a license agreement with WHG (International) Ltd. (“WHG”), an affiliate of William Hill. Pursuant to the license agreement, the Company has granted WHG a sub-license to use the NeoSphere Platform (the “Licensed IP”) for a period of four years (the “Initial Period”) to operate in the US iGaming market and additional jurisdictions agreed to by the parties. It was also agreed that William Hill will compensate the Company for the right to use the Licensed IP as well as costs associated with adjustments (“Developed IP”) required to be made to the Licensed IP so that the Licensed IP would be deemed complaint with specific market requirements and other market practices. Upon a change in control of the Company, WHG has the option (the “IP Option”) to convert the license into a perpetual license for a payment of £15.0 million. The Company has also agreed to provide WHG with the IP Option following the completion of a four-year period from the date of the term sheet. The fair value of the IP Option liability was valued with the assistance of a third-party appraiser to be approximately $3.45 million.

F - 31

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - RELATED PARTIES (Cont.)

A. WILLIAM HILL (Cont.):

The Company’s total revenues from this license agreement in the year ended December 31, 2020 and 2019 amounted approximately $6.7 million and $5.7 million, respectively. The outstanding amounts due under this license agreement as of December 31, 2020 and 2019 amounted to approximately $2.0 million and $1.5 million, respectively, and are included in trade receivables.

During 2018, the Company borrowed $4.0 million with a stated annual interest rate of 5.0% (the “First Loan”) and $2.0 million with a stated annual interest rate of 1.0% from the credit facility being made available by William Hill pursuant to the Investment and Framework Shareholders’ Agreement dated August 6, 2015. During 2019, the Company borrowed a total of $6.5 million with a stated annual interest rate of 1.0% from this credit facility. All three loans were due in August 2020; however, all the loans were extended in 2020 as described below.

In February 2020, the parties agreed to extend the original repayment schedule such that, all principal loan amounts are due for a full repayment (interest plus principal) on June 15, 2023 and the First Loan is due for repayment on June 30, 2021. The implied benefit of $2.5 million (reflecting the extension of the original repayment schedule) was accounted for as a modification of debt in accordance with IFRS 9, with a related party and therefore recorded in “Reserve with respect to funding transactions with related parties” in the statement of changes in equity (deficit) and will be amortized as additional interest expense over the remaining period of the loans.

On September 18, 2020, the Company borrowed $2.5 million from the credit facility to partially early repay the principal of the First Loan. The loan bears an annual interest rate of 1.0%, which is below market interest rate, and is due in full on June 15, 2023. Therefore, the $0.6 million difference in discounted cash flows to be paid for the outstanding amount based on the market annual interest rate of 12% amounted to $1.9 million, and its face value was recorded directly into the statement of changes in equity (deficit) under “Reserve with respect to funding transactions with related parties” as “Benefit to the Company by an equity holder with respect to funding transactions” and will be amortized as additional interest expense over the period of the loan.

The difference in the interest rates between the calculated annual market interest rate of 12% and interest due on these loans was recorded as loan discounts to be amortized over the funding repayment period as additional finance expenses. Accordingly, the Company recorded interest expenses on the loans based on the fair value market interest rate of $1.4 million, $1.3 million and $0.2 million in 2020, 2019 and 2018, respectively.

Loans and other due to William Hill, net:

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Loan principals		12,500			12,500
Discounts		(2,492	)		(465	)
Accrued interest		677			421
Liability with respect to IP Option		3,450			3,450
Receivables on IP Option		(1,497	)		(1,661	)
		12,638			14,245

F - 32

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - RELATED PARTIES (Cont.)

B. ASPIRE GROUP:

On August 6, 2015, the Company entered into a services agreement with Aspire and William Hill pursuant to which the Company has provided Aspire with certain dedicated development, maintenance and support services necessary for the operation of Aspire's business (the “Transition Service Agreement”). On July 8, 2015, the Company entered into a cost allocation agreement with Aspire (mainly with respect to the office lease in the reported periods) pursuant to which each party has agreed to bear certain costs that are then recovered on a pass through basis from the other party, including a sublease to the Company's Israeli offices, provided to the Company by Aspire until 2021 (the “Cost Allocation Agreement”). The sublease and related charges totaled $1 million.

In the reported periods, the Company provided and received certain services from the Aspire Group, such as research and development services and administrative services as follows:

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Revenues generated from the Transition Services Agreement		2,430		4,099		3,421
Expenses derived by the Cost Allocation Agreement:
Labor (included in general and administrative expenses)		66		68		289
Rent (included in depreciation and interest with respect to right of use)		1,064		1,047		1,036
Other (included in general and administrative expenses)		160		177		232
Total expenses		1,290		1,292		1,557

Capital notes and accrued interest from the Aspire Group:

On May 18, 2017, the parties agreed to extend the original repayment schedule of the capital notes and the accrued interest, such that the outstanding amounts would have been repaid in 2018 or 2020 if William Hill would have exercised its call options  or in March 2022, if the call options would have expired (see Note 1 for the expiration and the waiver of the call options). The extension was accounted for as a modification of debt in accordance with IFRS 9, with a related party, therefore the $6.4 million difference of the discounted cash flows to be paid for the outstanding amounts based on the annual market interest rate of 20% amounted to $9.6 million and their face value, was recorded directly into the statement of changes in equity under "Reserve with respect to funding transactions with related parties" as "Benefit to the Company by certain of its equity holders with respect to funding transactions" and has been amortized as additional interest expense over the remaining period of the capital notes.

As of December 31,	Principal amount		Balance*		Contractual interest rate		Effective interest rate
	U.S. dollars (in thousands)				%
2020		21,838		17,739		1		20
2019		21,838		14,987		1		20

* including accrued interest of $582 thousand and $582 thousand as of December 31, 2020 and 2019, respectively.

The interest expenses for the years ended December 31, 2020, 2019 and 2018 amounted to $3 million, $2.5 million and 2.1 million, respectively.

F - 33

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - RELATED PARTIES (Cont.)

C.     Consultancy Agreement:

On June 1, 2015, Barak Matalon, a member of the Company's board of directors and owner of more than 5% of the Company's ordinary shares, entered into a consultancy service agreement with the Company that calls for a monthly payment of NIS 45,000 (plus VAT) in consideration of services being rendered by Mr. Matalon to the Company. The consulting fees under such agreement, which remains in effect, for the years ended December 31, 2020, 2019 and 2018 amounted to $158 thousand, $153 thousand and $149 thousand, respectively, and are included within general and administrative expenses.

NOTE 7 - INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION

A. JOINT VENTURE

NPI has been included in the consolidated financial statements using the equity method (see Note 1).

NPI summarized financial information:

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Current assets		11,388			3,211
Non-current assets		1,597			2,025
Current liabilities		(12,091	)		(3,214	)
Non-current liabilities		(2,910	)		(631	)
Net assets (liabilities) (100%)		(2,016	)		1,391
Net assets (liabilities) (50%)		(1,008	)		696
Adjustments		(17	)		(93	)
Company share of Joint Venture net assets (liabilities)		(1,025	)		603

	For the year ended December 31,
	2020			2019			2018
	U.S. dollars (in thousands)
Revenues		18,032			3,740			1,127
Distribution expenses		16,116			10,480			4,447
Selling, general and marketing expenses		776			1,067			293
Depreciation		405			335			224
Net and total profit (loss) (100%)		735			(8,142	)		(3,837	)
Net and total profit (loss) (50%)		367			(4,071	)		(1,919	)
Adjustments		1,026			147			21
Share in profits (losses) of NPI		1,393			(3,924	)		(1,898	)
Funding of (proceeds from) NPI		(3,021	)		4,214			2,149

F - 34

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION (Cont.)

A. JOINT VENTURE (Cont.)

In addition to the above, with respect to the development services provided to NPI by the Company, in 2020, 2019 and 2018, the Company recorded revenues totalling to $4.4 million, $2.9 million and $1.2 million, respectively. The adjustments mostly represent royalty commissions earned by NPI on games developed and provided by the Group, whereby the Group's share of the underlying results is higher than 50%.

As of December 31, 2018, the Company had an outstanding amount of approximately $1.1 million held by Pollard on behalf of NPI to be used as a restricted deposit to establish a bonding facility to secure performance and payments bonds with respect to NPI’s prospective and existing contracts with the New Hampshire and North Carolina lotteries. As of December 31, 2019, the restricted deposit increased to an outstanding amount of $2 million. The increase in the restricted deposit amount was to secure a bid bond with respect to a new Request for Proposal with the Ohio lottery.

As of December 31, 2020, the restricted deposit increased to an outstanding amount of $3.8 million. The increase in the restricted deposit amount was to secure a performance bond with respect to NPI’s new contract with the AGLC lottery.

The outstanding amount with NPI was $1,477 thousand and $56 thousand as of December 31, 2020 and 2019, respectively.

B. MICHIGAN JOINT OPERATION

The Michigan Joint Operation has been included in the consolidated financial statements as a share of Company's interest in assets held jointly, and its share of revenues and expenses (see Note 1).

Below are the Michigan Joint Operation’s revenues and operating expenses, 50% of which represent the Company’s interest and were included in the Company’s statement of comprehensive income (loss):

	For the year ended December 31,
	2020			2019			2018
	U.S. dollars (in thousands)
Revenues (100%)		49,779			24,665			20,675
Total operating expenses (100%)		(22,021	)		(14,264	)		(13,361	)

In addition to the above-stated revenues, with respect to the development services provided to the Michigan Joint Operation by the Company, in 2020, 2019 and 2018, the Company recorded revenues totaling $1.4 million, $1.0 million and $0.6 million, respectively. Further, the Company recorded additional royalty revenues with respect to games development efforts invested to enhance the Michigan Joint Operation’s games portfolio during 2020, 2019 and 2018, totaling $1.9 million, $1.0 million and $0.8 million, respectively, which were also eliminated from Company's share in Michigan Joint Operation’s total operating expenses as stated in the above table.

As of December 31, 2020, and 2019, Company's share interest in Joint Operator's assets was $745 thousand and $240 thousand, respectively, and mostly comprised of property and equipment, net.

The outstanding amount with the Joint Operation was $1,715 thousand and $194 thousand as of December 31, 2020 and 2019, respectively.

F - 35

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - TRADE AND OTHER PAYABLES

 

	As of December 31,
	2020		2019
	U.S. dollars (in thousands)
Trade payables		1,693		561
Governmental authorities		1,258		488
Accrued expenses		1,959		806
		4,910		1,855

NOTE 9 - EMPLOYEE BENEFIT LIABILITIES

 

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Non- current
Accrued severance pay		2,350			1,991
Less - funds		(1,966	)		(1,715	)
		384			276
Current
Accrued vacation		522			279
Accrued recuperation		11			8
		533			287

NOTE 10- SHARE BASED PAYMENTS

During the first quarter of 2019, the Company reached an agreement with Company’s former Chief Executive Officer following his termination of employment, to extend the expiration date of the options granted to him on May 20, 2015 by four years.

The fair value of the extended options was estimated as of the June 30, 2019, using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		31	%
Risk free interest rate		2.48	%
Expected life	2 years
Weighted average exercise price	$	0.17
Price per share	$	0.52
Grant date fair value of each option	$	0.36

As a result of the above mentioned modification during 2019, the Company recorded $250 thousand of share based compensation expenses.

On May 13, 2019, the Company granted to certain employees 4,321,500 options to purchase its shares that will be vested over a service period of four years.

F - 36

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10- SHARE BASED PAYMENTS (Cont.)

The fair value of the options granted was estimated as of the Grant Date using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		29.67%-30.2	%
Risk free interest rate		2.21%-2.28	%
Expected life	5.5-7 years
Weighted average exercise price	$	0.17
Price per share	$	0.52
Grant date weighted average fair value per option	$	0.38

On July 1, 2019, the Company has amended to certain employees, who agreed to it, certain terms of options granted as part of 2015 and 2017 plans. According to the amendment, the exercise of the options shall no longer be conditioned upon M&A transaction or IPO. The options, which are no longer conditioned, are considered as being granted on July 1, 2019 and are vested over a period of two years from the new grant date.

The fair value of the options granted was estimated as of the new Grant Date using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		29.3%-29.86	%
Risk free interest rate		1.8%-1.85	%
Expected life	5.12-6 years
Weighted average exercise price	$	0.21
Price per share	$	0.52
Grant date weighed average fair value of an option	$	0.34

On July 13, 2020, the Company granted to certain employees options to purchase an aggregate of 415,000 of its ordinary shares that will vest over a service period of four years.

The fair value of the options granted was estimated to be $0.6 million as of the July 13, 2020 grant date using the Black-Scholes model:

Dividend Yield		0	%
Expected volatility		39.4%-37	%
Risk free interest rate		0.35%-0.48	%
Expected life	5.5-7 years
Weighted average exercise price	$	0.17
Price per share	$	1.5

On November 18, 2020, the Company granted to the Chairman of the Board options to purchase an aggregate of 48,581 of its ordinary shares that will vest over a service period of two years. On the same date the Company granted to certain consultant options to purchase an aggregate of 12,145 of its ordinary shares that will vest over a service period of four years.

The fair value of the options granted was estimated to be $0.4 million as of the November 18, 2020 grant date using the Black-Scholes model:

Dividend Yield		0	%
Expected volatility		39%-42	%
Risk free interest rate		0.42%-0.64	%
Expected life	5.13-7 years
Weighted average exercise price	$	17
Price per share	$	17

F - 37

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10- SHARE BASED PAYMENTS (Cont.)

The following table summarizes option activities for the years ended December 31, 2020, 2019 and 2018:

	2020					2019					2018
	Weighted average exercise price ($)		Number			Weighted average exercise price ($)		Number			Weighted average exercise price ($)		Number
Outstanding at January 1,		1.48		1,632,220			1.56		1,113,218			1.56		1,118,077
Granted during the year		9.92		111,129			1.40		524,867			-		-
Exercised during the year		1.40		(12,473	)		-		-			-		-
Forfeited during the year		1.73		(22,856	)		1.81		(5,865	)		2.96		(4,859	)
Outstanding at December 31,		2.02		1,708,020			1.48		1,632,220			1.56		1,113,218
Vested and exercisable at December 31,		1.52		1,203,456			1.48		1,045,076			1.48		1,055,701

On November 10, 2020 the Company completed a 1: 8.234 reverse split of its share and the numbers of options and the exercise price were adjusted accordingly in the tables above.

As of December 31, 2020, the Company had unrecognized share-based compensation expenses related to options of $1.3 million, which is expected to be recognized over a weighted average period of approximately 1.8 years.

NOTE 11 - REVENUES

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Turnkey contracts		32,252		17,240		13,684
Games		2,006		2,189		2,098
Total royalties		34,258		19,429		15,782
Development and other services from Aspire (See also Note 6B)		2,430		4,099		3,421
Development and other services from NPI (See also Note 7A)		4,404		2,914		1,244
Development and other services from Michigan Joint Operation (See also Note 7B)		1,413		958		594
Total Development and other services		8,247		7,971		5,259
Use of IP rights (William Hill only, see also Note 6A)		6,697		5,662		2,437
Total Revenues		49,202		33,062		23,478

F - 38

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - DISTRIBUTION EXPENSES

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Labor and related		1,335		998		1,023
Call center		728		781		641
Processing fees		3,962		2,207		2,421
Other		660		266		434
		6,685		4,252		4,519

NOTE 13 - GENERAL AND ADMINISTRATIVE EXPENSES

	For the year ended 31 December
	2020		2019		2018
	U.S. dollars (in thousands)
Labor and related		3,109		2,048		1,490
Labor and related from a Related Company		42		46		266
Professional fees		1,983		1,114		798
Rent and related from a Related Company		168		96		1,036
Municipality and maintenance from Related Company		160		177		232
Travelling		63		292		259
Office		414		408		273
Other		1,557		776		594
		7,496		4,957		4,948

NOTE 14 - OTHER FINANCE EXPENSES AND INCOME, NET

	For the year ended 31 December
	2020		2019		2018
	U.S. dollars (in thousands)
A.      Finance income:
Currency exchange rate differences		-		53		-
Interest income		21		-		-
		21		53		-
B.      Finance expenses:
Currency Exchange rate differences		197		-		134
Interest expense with respect to lease liabilities		461		366		-
Bank charges		89		16		61
		747		382		195

F - 39

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 – TAXATION

A. Tax rates applicable to the Company companies and other related

The Company is tax registered in Luxemburg and is subject to the Luxemburg corporation tax at 26.01% in 2018 and 24.94% thereafter on profits derived from activities carried out in Luxemburg. The estimated carry forward losses as of December 31, 2020 was $59.9 million, the Company has not recorded relating deferred income taxes asset as its recoverability was not more likely than not. All the Company’s tax years are subject to examination.

NGS was subject to Israeli corporate tax rate of 23% in 2018 thereafter. Considering the statute of limitation, NGS 2015’s tax year is final and the following tax years are subject to examination.

NeoGames US, including its shares in NPI and the Michigan Joint Operation, is subject to US federal income taxes rate of 21% in 2018 thereafter as well as certain states income taxes rates. All NeoGames US tax years are subject to examination.

The Company’s other subsidiaries are subject to different corporate tax rates.

B. Income taxes expenses included in the statements of comprehensive income (loss)

 

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Current taxes		1,224		836		552
Deferred taxes		81		6		14
Taxes with respect to previous years		138		401		20
		1,443		1,243		586

NOTE 16 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company is exposed to a variety of financial risks, which result from its financing, operating and investing activities. The objective of financial risk management is to minimize exposures in these financial risks and to mitigate a negative impact on the Company’s financial performance and position. The Company’s financial instruments are its cash and cash equivalents, trade and other receivables, capital notes and loans from related parties, lease liabilities, trade and other payables and employee benefit liabilities. The Company actively measures, monitors and manages its financial risk exposures by various functions pursuant to the segregation of duties and principals. The risks arising from the Company’s financial instruments are mainly credit risks and currency risk. The risk management policies employed by the Company to manage these risks are discussed below.

A. Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the end of the reporting year.

The Company closely monitors the activities of its counterparties enabling it to ensure the prompt collection of customer balances. Furthermore, the Company engages only with reputable customers.

The Company generated revenues exceeding 10% of its consolidated annual revenues from three customers in the year ended December 31, 2020 (of which one is a related party), four customers in the year ended December 31, 2019 (of which two are related parties) and four customers in the year ended December 31, 2018 (of which two are related parties). For revenues from related parties, see Note 6. We generated 54%, 40% and 47% of our revenues in the years ended December 31, 2020, 2019 and 2018, respectively, from the Michigan Joint Operation and 11%, 12% and 11% of our revenues in the years ended December 31, 2020, 2019 and 2018, respectively, from Sazka.

As of December 31, 2020, and 2019, the Company had trade receivables outstanding, exceeding 10% of the Company’s consolidated trade receivables, from two customers. Sazka accounted for 43% and 35% of trade receivables outstanding

F - 40

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Cont.)

A. Credit risk (Cont.)

As of December 31, 2020 and 2019, respectively, and William Hill accounted for 55.0% and 56.0% of trade receivables outstanding as of December 31, 2020 and 2019, respectively.

B. Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

Foreign exchange risk also arises when Company operations are entered into in currencies denominated in a currency other than the functional currency.

The Company has discretion to hedge some or all of its forecast operational costs in Israel up to 12 months. Currency exposures are monitored by the Company monthly.

C. Sensitivity analysis to the currency risk

The Company has not presented a sensitivity analysis for the impact on its statement of comprehensive income (loss) of potential movements in currencies rates, as the change in the fair value of its financial instruments would be negligible.

D. Liquidity risk

The Company monitors its liquidity in order to ensure that sufficient liquid resources are available to allow it to meet its obligations.

The following table details the contractual maturity analysis of the Company’s financial liabilities (representing undiscounted contractual cash-flows):

	As of December 31, 2020
	In 3 months		Between 3 months and 1 year		More than 1 year		Total
	U.S. dollars (in thousands)
Capital notes and accrued interest due to Aspire Group						22,419		22,419
Loans due to WH				2,022		11,155		13,177
Lease liabilities				1,651		1,855		3,506
Trade and other payables		4,910						4,910
Total		4,910		3,673		35,429		44,012

	As of December 31, 2019
	In 3 months		Between 3 months and 1 year		More than 1 year		Total
	U.S. dollars (in thousands)
Capital notes and accrued interest due to Aspire Group						22,419		22,419
Loans due to WH				12,920		-		12,920
Lease liabilities				1,455		3,382		4,837
Trade and other payables		1,855						1,855
Total		1,855		14,375		25,801		42,031

F - 41

NEOGAMES S.A

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 - INCOME (LOSS) PER SHARE

	For the year ended December 31,
	2020		2019			2018
	U.S. dollars (in thousands)
Basic and diluted earnings per share:
Net income (loss) attributable to equity holders of the company		6,514		(3,978	)		(5,975	)
Weighted average number of issued ordinary shares		22,329,281		21,983,757			21,983,757
Dilutive effect of share options		1,569,196		-			-
Weighted average number of diluted ordinary shares		23,898,477		21,983,757			21,983,757
Income (loss) per share, basic ($)		0.29		(0.18	)		(0.27	)
Income (loss) per share, diluted ($)		0.27		(0.18	)		(0.27	)

NOTE 18 - RESERVES

The following describes the nature and purpose of each reserve within equity:

Reserve	Description and purpose
Share premium	Amount subscribed for share capital in excess of nominal value.
Share based payments reserve	Fair value of the vested employees' options to purchase Company shares.
Reserve with respect to transaction under common control	The reserve represents the difference between the fair value of the consideration and the book value of the intangible assets as was accounted for by the seller, with respect to acquisition under common control.
Reserve with respect to funding  transactions from related parties	See Note 6

NOTE 19 - LEGAL PROCEEDINGS

In January 2019, the U.S. Department of Justice (“DoJ”) issued a new interpretation of its previous 2011 interpretation relating to the applicability of the Wire Act to internet gaming conducted by state lotteries. The 2011 interpretation had determined that the Wire Act only applied to sports betting. The new January 2019 interpretation reverses this view and, in effect, indicates the Wire Act covers all forms of gambling. On January 15, 2019, the Deputy Attorney General issued a memorandum stating that Department of Justice attorneys should adhere to the 2018 Opinion, but that as an exercise of discretion, the Department would refrain from applying the new interpretation to persons who engaged in conduct in reliance on the interpretation set forth in the 2011 Opinion prior to the date of the new 2018 Opinion and for 90 days thereafter.
 

On February 15, 2019, NPI filed a motion with the U.S. District Court for the District of New Hampshire (“District Court”) requesting a formal declaratory judgement clarifying that the Wire Act only applies to sports betting.

In June 2019, the District Court rulled in favor of NPI and determined (without qualification) that the Wire Act does not apply to State lotteries. The DoJ has appealed that decision in October 2019 and a hearing on the appeal took place in June 2020.

A decision of the First Circuit was received on January 20, 2021. The First Circuit of the U.S. Court ruled in favor of the Company and unequivocally reconfirmed that the federal Wire Act is limited to sports betting and, therefore, does not pertain to state-run lotteries. If the government wishes to seek further review in the U.S. Supreme Court, it must file its petition to do so by June 21, 2021.  If review is sought, the U.S. Supreme Court will have discretion to hear the case or decline to do so.

Although NPI was successful at the District Court and the Circuit Court level, the Company cannot predict whether the case will be reviewed by the U.S. Supreme Court, or how the U.S. Supreme Court would decide the issue if it granted review.  The Company's management is therefore of the opinion, based on the advice of its legal counsel, that the final outcome of the proceedings cannot be fully assessed as of the approval date of these consolidated financial statements. The Company’s management does not anticipate that operations will be negatively affected within the next 12 months.

NOTE 20 - SUBSEQUNET EVENT

On February 22, 2021, the Company announced the go-live of its eInstants games with the Austrian Lotteries, launching the Company’s first set of games on the win2day online gaming site. In connection with the agreement, the Company will grant the Austrian Lotteries (Österreichische Lotterien) full access to its Studio extensive portfolio of premium, award winning eInstant games.

F - 42

NeoPollard Interactive LLC

FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020

F - 43

FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2020

CONTENTS

	Page
Auditors' Report	F-45
Balance Sheets	F-46 - F-47
Statements of Comprehensive Income (Loss)	F-48
Statements of Changes in Members' Equity (Deficit)	F-49
Statements of Cash Flows	F-50
Notes to the Financial Statements	F-51 - F-57

F - 44

INDEPENDENT AUDITORS' REPORT

To the Members of NeoPollard Interactive LLC

Report on the Financial Statements

We have audited the accompanying financial statements of NeoPollard Interactive LLC (“Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the related statements of comprehensive income (loss), changes in members' equity (deficit) and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statement in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"); this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations, changes in members' equity (deficit) and cash flows for the years then ended, in accordance with U.S. GAAP.

/s/ Ziv Haft

Ziv Haft

Certified Public Accountants (Isr.)

BDO Member Firm

April 16, 2021

Tel Aviv, Israel

F - 45

NeoPollard Interactive LLC

BALANCE SHEETS AS OF DECEMBER 31

		2020		2019
	Note	U.S. dollars (in thousands)
ASSETS
CURRENT ASSETS
Cash and Cash equivalents			286		-
Restricted cash	3		5,656		2,148
Trade receivables			5,252		950
Prepaid expenses			194		113
			11,388		3,211
NON-CURRENT ASSETS
Property and equipment, net	4		1,205		1,417
Right of use asset	2		392		608
			1,597		2,025
TOTAL ASSETS			12,985		5,236

F - 46

NeoPollard Interactive LLC

BALANCE SHEETS AS OF DECEMBER 31

		2020			2019
	Note	U.S. dollars (in thousands)
LIABILITIES AND EQUITY (DEFICIT)
CURRENT LIABILITIES
Trade payables and accrued expenses	6		2,269			329
Due to related companies	5		3,088			239
Deferred revenues			566			-
Lease liabilities	2		147			211
Due to lotteries	3		5,656			2,148
Accrued payroll and benefits			365			287
			12,091			3,214
NON-CURRENT LIABILITIES
Deferred revenues			2,655			229
Lease liabilities	2		255			402
			2,910			631
EQUITY (DEFICIT)
Accumulated contributions			13,864			18,006
Accumulated losses			(15,880	)		(16,615	)
			(2,016	)		1,391
TOTAL LIABILITIES AND MEMBERS' EQUITY (DEFICIT)			12,985			5,236

F - 47

NeoPollard Interactive LLC

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)  

		For the year ended December 31,
		2020		2019
	Note	U.S. dollars (in thousands)
Revenues	7		18,032		3,740
Distribution expenses	8		16,116		10,480
Selling, general and administrative expenses	9		776		1,067
Depreciation	4		405		335
Net income (loss) and total comprehensive loss			735		(8,142	)

F - 48

NeoPollard Interactive LLC

STATEMENTS OF CHANGES IN MEMBERS' EQUITY (DEFICIT)

	Accumulated losses			Accumulated Contributions (distributions)			Total members' equity (deficit)
	U.S. dollars (in thousands)
Balance as of January 1, 2019		(8,473	)		9,563			1,090
Comprehensive loss		(8,142	)		-			(8,142	)
Contributions		-			8,443			8,443
Balance as of December 31, 2019		(16,615	)		18,006			1,391
Comprehensive income		735			-			735
Distributions, net		-			(4,142	)		(4,142	)
Balance as of December 31, 2020		(15,880	)		13,864			(2,016	)

F - 49

NeoPollard Interactive LLC

STATEMENTS OF CASH FLOWS

	For the year ended December 31,
	2020			2019
	U.S. dollars (in thousands)
Cash flows from operating activities:
Net profit (loss) for the year		735			(8,142	)
Adjustments for:
Depreciation		405			335
Increase in trade receivables		(4,302	)		(615	)
Decrease (increase) in prepaid expenses		(81	)		25
Increase (decrease) in deferred revenues		2,992			(265	)
Increase in due to related companies		2,854			551
Increase in trade payables and accrued expenses		1,940			193
Increase in due to lotteries		3,508			1,833
Increase in accrued payroll and benefits		78			132
		7,394			2,189
Net cash generated from (used in) operating activities		8,129			(5,953	)
Cash flows from investing activities:
Purchase of property and equipment		(193	)		(657	)
Net cash used in investing activities		(193	)		(657	)
Cash flows from financing activities:
Members' contributions (distributions)		(4,142	)		8,443
Net cash generated from (used in) financing activities		(4,142	)		8,443
Net increase in cash and restricted cash		3,794			1,833
Restricted cash at the beginning of the year		2,148			315
Cash and restricted cash at the end of the year		5,942			2,148

F - 50

NeoPollard Interactive LLC

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 - GENERAL

NeoPollard Interactive LLC (the "Company"), was incorporated in Delaware, United States of America (“U.S.”) on March 6, 2014, as a limited liability company.

The Company is 50% owned by Pollard Holdings Inc. ("PH" or “Pollard”), which is wholly owned by a publicly TSX traded Canadian corporation - Pollard Banknote Limited ("PBL"), a leading lottery partner to more than 60 lotteries worldwide, and 50% by NeoGames US LLP ("NUL"), which is wholly owned by a publicly NASDAQ traded company - NeoGames S.A. ("Neogames"), a leading global technology provider (PH and NUL - the "Members").  The Company was established to provide iLottery services for North American lotteries. Since 2015, the Company has operated the Virginia State Lottery (“VAL”) online e-Subscription program, since September 2018 the iLottery platform on behalf of New Hampshire Lottery (“NHL”) and since October 2019 the North Carolina Education Lottery (“NCEL”) iLottery platform.

On March 19, 2020, the Company signed with Alberta Gaming, Liquor and Cannabis Commission ("AGLC") an agreement to develop, deploy and maintain its digital solutions and operate its proposed interactive offering. This contract has an initial term of 7 years, plus an option to extend for 5 years. The solution for AGLC Lottery was launched in September 2020.

In May 2020, the Company expanded its contract with the Virginia State Lottery (“VAL”) to include a digital instant games portfolio in addition to the online e-Subscription program. The full iLottery program launched on July 1, 2020.

The Company is carefully monitoring the outbreak and spread of the COVID-19 (coronavirus) across the world and the U.S. Pro-active measures have been taken to reduce the risk for the staff and to ensure business continuity.

The Company is an online organization where working remotely and meeting virtually are established ways of working. The Company's operations which are limited to iLottery, have not been negatively impacted and does not expect to be, by the outbreak of COVID-19. However, due to unknown duration of the pandemic and related uncertainty associated with COVID-19, the long-term impact on the operations of the company cannot be determined at this time.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed in the preparation of the financial statements, on a consistent basis, are:

A. Accounting principles

These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Statement of comprehensive income (loss) accounts are presented and analyzed by their nature rather than their function within the entity as this method provides reliable and more relevant information on the Company's operations.

B. Functional currency

The financial statements of the Company are prepared in U.S. dollars (the functional currency), which is the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company's transactions.

F - 51

NeoPollard Interactive LLC

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

C. Provisions

Provisions, which are liabilities of uncertain timing or amount, are recognized when the Company has a legal or constructive obligation as a result of past events, if it is probable that an outflow of funds will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

D. Property and equipment

Property and equipment consists of data center servers, computers, leasehold improvements and office furniture and equipment are stated at cost less accumulated depreciation.

Depreciation is calculated on a straight-line basis over the expected useful lives of the assets. The principal annual rates used for this purpose are:

	%
Computer equipment	15-25
Leasehold improvements	Over the shorter of the term of the lease or useful lives

Subsequent expenditures are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to statements of comprehensive income (loss) during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognized in statements of comprehensive income (loss).

The Company evaluates the need to record an impairment of the carrying amount of property and equipment whenever events or changes in the circumstances indicate that the carrying amount is not recoverable. If the carrying amount of the assets exceeds their expected undiscounted cash flows to be generated from them, the assets are reduced to their fair value amounts. Impairment losses are recognized in the statement of comprehensive income (loss).

E. Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring services to a customer.

The Company generates its revenues from customers through three streams:

Royalties from licensed technology and the provision of proprietary games content via digital channels are recognized in the accounting periods in which the gaming transactions occur.

Set up fees from establishment of a new solution to a client are recognized ratably over the contract period commencing on the launch date.

Customers' relationships management ("CRM") services revenues are recognized in the accounting periods in which the services are provided.

F - 52

NeoPollard Interactive LLC

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.)

F. Income Taxes

For U.S. income tax purposes, the Company is treated as a partnership. The Members are taxed on their proportionate share of the Company’s taxable results. Accordingly, no income taxes for U.S. federal and state income taxes have been recorded in the Company’s financial statements.

G. Leases

Arrangements meeting the definition of a lease are classified as operating or financing leases and are recorded on the balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term.

The lease liability was measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate. The weighted-average rate applied was 4%. Right-of-use assets were measured at an amount equal to the lease liability.

For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. Variable lease expenses are recorded when incurred. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election and recognizes rent expenses on a straight-line basis over the lease term.

The Company has a 3-year lease agreement for its data centers in New Hampshire beginning 2018, with an annual lease payment of $125 thousand, and a 5 year lease agreement for its data centers in North Carolina beginning 2019 with an annual lease payment of $108 thousand.

NOTE 3 - RESTRICTED CASH AND DUE TO LOTTERIES

As part of the agreements with certain iLottery customers, the Company is required to provide all cash processing services related to the iLottery activity. The Company acts as the merchant of record for the bank accounts held on behalf of its customers.

Restricted cash reflects mainly proceeds received from players and not yet transferred to the Company’s customers as of the end of the reporting period. Due to lotteries reflects proceeds owed by the Company and not yet transferred to its iLottery customers.

F - 53

NeoPollard Interactive LLC

NOTES TO THE FINANCIAL STATEMENTS

NOTE 4 - PROPERTY AND EQUIPMENT, NET

	Computer equipment			Leasehold improvements			Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2020		2,111			24			2,135
Additions during the year		191			2			193
		2,302			26			2,328
Accumulated depreciation:
Balance as of January 1, 2020		(715	)		(3	)		(718	)
Depreciation during the year		(403	)		(2	)		(405	)
		(1,118	)		(5	)		(1,123	)
Net Book Value:
As of December 31, 2020		1,184			21			1,205

	Computer equipment			Leasehold improvements			Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2019		1,470			8			1,478
Additions during the year		641			16			657
		2,111			24			2,135
Accumulated depreciation:
Balance as of January 1, 2019		(382	)		(1	)		(383	)
Depreciation during the year		(333	)		(2	)		(335	)
		(715	)		(3	)		(718	)
Net Book Value:
As of December 31, 2019		1,396			21			1,417

F - 54

NeoPollard Interactive LLC

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5 - RELATED PARTY TRANSACTIONS

Since its incorporation, the Company has engaged both of its Members for the provisioning of services which were required to support its ongoing operations in the areas of technology support, CRM, account management and a number of corporate functions such as finance, legal and HR.

In the reported periods the Company received certain services from related companies:

	For the year ended December 31,
	2020		2019
	U.S. dollars (in thousands)
Marketing and security services - Neogames		419		228
Royalties - Neogames		1,038		171
Technical support - Neogames		4,533		2,885
Technical support - Pollard		1,920		2,682
Labor and benefits - Neogames		137		27
Labor and benefits - Pollard		3,036		2,293
Other - Pollard		40		-
Other - Neogames		585		445
		11,708		8,731

NOTE 6 - TRADE PAYABLES AND ACCRUED EXPENSES

	As of December 31,
	2020		2019
	U.S. dollars (in thousands)
Trade payables		1,890		293
Governmental authorities		181		-
Accrued expenses		198		36
		2,269		329

NOTE 7 - REVENUES AND SIGNIFICANT CLIENTS

	For the year ended December 31,
	2020		2019
	U.S. dollars (in thousands)
Royalties		17,510		3,335
Set up fees		242		125
CRM services		280		280
		18,032		3,740

F - 55

NeoPollard Interactive LLC

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7 - REVENUES AND SIGNIFICANT CLIENTS (Cont.)

For the year ended December 31, 2020, four of Company's clients A, B, C and D each accounted for more than 10% of its total revenue, accounting for approximately 23%, 34%, 30% and 13%, respectively. For the year ended December 31, 2019, three of Company's clients A, B, and C each accounted for more than 10% of its total revenue, accounting for approximately 52%, 23% and 25%, respectively.

As of December 31, 2020, four of Company's clients A, B, C and D each accounted for more than 10% of its trade receivables balances, accounting for approximately 11%, 13%, 40% and 36%, respectively. As of December 31, 2019, three of Company's clients A, B and C each accounted for more than 10% of its trade receivables balances, accounting for approximately 24%, 58% and 18%, respectively.

NOTE 8 - DISTRIBUTION EXPENSES

	For the year ended December 31,
	2020		2019
	U.S. dollars (in thousands)
Labor and benefits		3,173		2,320
Call center		1,290		787
Processing fees		2,076		540
3rd Party Content		805		-
Technical support		6,453		5,567
Other		2,319		1,266
		16,116		10,480

NOTE 9 - SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	For the year ended 31 December
	2020		2019
	U.S. dollars (in thousands)
Labor and benefits		419		228
Marketing		103		547
Professional fees		210		235
Travelling		44		57
		776		1,067

NOTE 10 - REGULATORY DEVELOPMENT

In January 2019, the U.S. Department of Justice Office of Legal Counsel ("DOJ") published an opinion (“2018 Opinion”) that reinterpreted the statutory provisions of the Wire Act, 18 U.S.C. §1084 concluding that the prohibitions contained in the statute apply not only to sports gambling, but to all types of gaming.  This reversal of 2011 opinion (“2011 Opinion”) of the DOJ created uncertainty as to the lawfulness of the interstate transmission of data associated with lawful state lotteries.   On January 15, 2019, the Deputy Attorney General issued a memorandum stating that Department of Justice attorneys should adhere to the 2018 Opinion, but that as an exercise of discretion, the Department would refrain from applying the new interpretation to persons who engaged in conduct in reliance on the interpretation set forth in the 2011 Opinion prior to the date of the 2018 Opinion and for 90 days thereafter.

F - 56

NeoPollard Interactive LLC

NOTES TO THE FINANCIAL STATEMENTS

NOTE 10 - REGULATORY DEVELOPMENT (Cont.)

On February 15, 2019, the Company filed a complaint for declaratory relief and a motion for summary judgment with the U.S. District Court for the District of New Hampshire ("District Court") requesting a formal declaratory judgement that the Wire Act does not prohibit the use of a wire communication facility to transmit in interstate commerce bets, wagers, receipts, money, credits, or any other information related to any type of gaming other than gambling on sporting events and contests.

In June 2019, the U.S. District Court ruled in favor of the Company and declared (without qualification) that the Wire Act applies only to transmissions related to bets or wagers on a sporting event or contest. The U.S. District Court further directed that the 2018 Opinion be “set aside”. The DOJ filed a notice of appeal on August 16, 2019 and its opening brief on December 20, 2019. The Company filed its response brief on February 26, 2020.  The DOJ’s reply brief was filed on May 22, 2020.  Oral arguments were heard on June 28, 2020.

A decision of the First Circuit was received on January 20, 2021. The First Circuit of the U.S. Court ruled in favor of the Company and unequivocally reconfirmed that the federal Wire Act is limited to sports betting and therefore, does not pertain to state-run lotteries. If the government wishes to seek a further review in the U.S. Supreme Court, it must file its petition to do so by June 21, 2021.  If a review is sought, the U.S. Supreme Court will have discretion to hear the case or decline to do so.

Although the Company was successful at the District Court and the Circuit Court level, the Company cannot predict whether the case will be reviewed by the U.S. Supreme Court, or how the U.S. Supreme Court would decide the issue if it granted a review. The Company's management is therefore of the opinion, based on the advice of its legal counsel, that the final outcome of the proceedings cannot be fully assessed as of the approval date of these financial statements. The Company’s management does not anticipate that operations will be negatively affected within the next 12 months.

F - 57

NeoGames S.A.

3,457,346 Ordinary Shares

Prospectus

             , 2021

PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 6. Indemnification of Directors and Officers

We provide liability insurance for our directors and officers against certain liabilities, which they may incur in connection with their activities on our behalf.

Our articles of association provide that directors and officers, past and present, are entitled to indemnification from us to the fullest extent permitted by Luxembourg law, against liabilities and all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit, or proceeding in which he or she is involved by virtue of him or her being or having been a director or officer of the Company and against amounts paid or incurred by him or her in the settlement thereof.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions of our articles of association or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer, or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

Item 7. Recent Sales of Unregistered Securities

During the past three years, we have issued and sold the securities described below without registration under the Securities Act. None of these transactions involved any public offering, any underwriter or any underwriting discount or commission. We believe that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation S under the Securities Act regarding sales by an issuer in offshore transactions, Regulation D under the Securities Act, Rule 701 under the Securities Act or pursuant to Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering.

    Since January 1, 2018, we granted our directors, officers, employees and consultants options to purchase an aggregate of 667,295 Ordinary Shares, at a weighted average exercise price of $4.08 per share, under either the 2015 Option Plan or the 2020 Incentive Award Plan. Following the completion of our initial public offering, the Company ceased granting options under the 2015 Option Plan. As of August 14, 2021, options to purchase 1,182,566 Ordinary Shares granted to our directors, officers, employees and consultants remain outstanding under either the 2015 Option Plan or the 2020 Incentive Award Plan.

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Item 8. Exhibits

(a) The following documents are filed as part of this registration statement:

1.1*	Form of Underwriting Agreement.
3.1	Amended and Restated Articles of Association of NeoGames S.A..
4.5	Description of Securities (filed as Exhibit 2.1 to NeoGames S.A.’s Annual Report on Form 20-F filed on April 16, 2021, File No. 001-397213, and incorporated herein by reference).
5.1*	Opinion of Allen & Overy S.C.S., counsel to the Registrant, as to the validity of the Ordinary Shares.
10.1	Form of Amended and Restated Promissory Note, dated May 18, 2017, between Neogames S.à r.l. and Aspire Global Limited (filed as Exhibit 10.1 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
10.2	Form of Amended and Restated Promissory Note, dated May 18, 2017, between Neogames S.à r.l. and AG Software Limited (filed as Exhibit 10.2 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
10.3#	Consulting Agreement, dated June 1, 2015, between NeoGames Systems Ltd. and Lotym Holdings (filed as Exhibit 10.3 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
10.4	Form of Loan Agreement, dated October 20, 2020, between Neogames S.à r.l. and William Hill Finance Limited (filed as Exhibit 10.4 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
10.5**	Form of Letter, dated June 18, 2018, between Neogames S.à r.l. and WHG (International) Limited (filed as Exhibit 10.5 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
10.6**	Form of Joint Venture Agreement, dated January 14, 2014, between NeoGames Network Limited and Pollard Banknote Limited (filed as Exhibit 10.6 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
10.7	Neogames S.à r.l. — 2015 Option Plan (Amended 2019) (filed as Exhibit 10.7 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
10.8	NeoGames S.A. 2020 Incentive Award Plan (filed as Exhibit 10.8 to NeoGames S.A.’s Form F-1 filed on November 12, 2020, File No. 333-249683, and incorporated herein by reference).
10.9	Form of Indemnification Agreement (filed as Exhibit 10.9 to NeoGames S.A.’s Form F-1 filed on November 12, 2020, File No. 333-249683, and incorporated herein by reference).
10.10	Second Amended and Restated Software License Agreement, dated as of June 2018, among Neogames S.à r.l., AG Software Ltd., Aspire Global Plc and William Hill Organization Limited (filed as Exhibit 10.10 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
21.1	List of subsidiaries (filed as Exhibit 21.1 to NeoGames S.A.’s Form F-1 filed on October 27, 2020, File No. 333-249683, and incorporated herein by reference).
23.1*	Consent of Ziv Haft, a member firm of BDO.
23.2*	Consent of Allen & Overy S.C.S., counsel to the Registrant (included in Exhibit 5.1).
24.1*	Powers of attorney (included on signature page to the registration statement).
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101)

#         Unofficial English translation from Hebrew original

*         Filed herewith

**       Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10)(iv) because it is both not material and would likely cause competitive harm to the registrant if publicly disclosed. The Registrant hereby agrees to furnish an unredacted copy of the exhibit to the Commission upon request.

(b) Financial Statement Schedules

None.

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Item 9. Undertakings

a. The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

b. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions referenced in Item 6 of this Registration Statement, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. ​

c. The undersigned registrant hereby undertakes that: ​

1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; and ​

2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Tel Aviv, Israel, on September 7, 2021.

NeoGames S.A.
By:	/s/ Moti Malul
	Name:	Moti Malul
	Title:	Chief Executive Officer

By:	/s/  Raviv Adler
	Name:	Raviv Adler
	Title:	Chief Financial Officer

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KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Moti Malul and Raviv Adler and each of them, individually, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead in any and all capacities, in connection with this registration statement, including to sign in the name and on behalf of the undersigned, this registration statement and any and all amendments thereto, including post-effective amendments and registrations filed pursuant to Rule 462 under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on September 7, 2021 in the capacities indicated:

Name	Title
/s/ ​Moti Malul	Chief Executive Officer and Board Member (principal executive officer)
​Moti Malul
/s/ ​Raviv Adler	Chief Financial Officer (principal financial officer and principal accounting officer)
​Raviv Adler
/s/ Barak Matalon	Member of the Board
​Barak Matalon
/s/ Aharon Aran	Member of the Board
​Aharon Aran
/s/ ​Laurent Teitgen	Member of the Board
​Laurent Teitgen
/s/ John E. Taylor	Member of the Board
​John E. Taylor
/s/ Lisbeth McNabb	Member of the Board
Lisbeth McNabb

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SIGNATURE OF AUTHORIZED U.S. REPRESENTATIVE OF REGISTRANT

Pursuant to the requirements of the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of NeoGames S.A. has signed this registration statement on September 7, 2021.

By:	/s/ Donald J. Puglisi
	Name:	Donald J. Puglisi
	Title:	Managing Director, Puglisi & Associates

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EX-1.1

Exhibit 1.1

UNDERWRITING AGREEMENT

[●], 2021

J.P. Morgan Securities LLC

Deutsche Bank Securities Inc.

As representatives of the several Underwriters
named in Schedule I hereto

c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005

Ladies and Gentlemen:

Certain shareholders named in Schedule II hereto (the “Selling Shareholders”) of NeoGames S.A., a Luxembourg public limited liability company (société anonyme) (the “Company”), propose to sell to the several underwriters named in Schedule I hereto (the “Underwriters”) for whom you are acting as representatives (the “Representatives”), and the Underwriters, acting severally and not jointly, agree to purchase, an aggregate of [●] ordinary shares (the “Firm Shares”), no par value per share, of the Company (“Ordinary Shares”). Caesars Entertainment, Inc. (“Caesars”) also proposes to sell to the several Underwriters, at the option of the Underwriters, up to an additional [●] Ordinary Shares (the “Option Shares”). The Firm Shares and the Option Shares are hereinafter referred to collectively as the “Shares”.

The Company and the Selling Shareholders confirm as follows their respective agreements with the Representatives and the several other Underwriters.

1.(a) The Company represents and warrants to, and agrees with, each of the Underwriters that, as of the date hereof and as of the Closing Date and each Option Closing Date, if any, except for any representations and warranties that speak as of a specific date, in which case only as of such date:

(i)A registration statement on Form F-1 (File No. 333-[●]) in respect of the Shares and one or more pre-effective amendments thereto (together, the “Initial Registration Statement”) have been filed with the Securities and Exchange Commission (the “Commission”); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered to the Representatives, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration Statement”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”), which became effective upon filing, no other document with respect to the Initial Registration Statement has heretofore been filed with the Commission; no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued, no proceeding for that purpose has been initiated or, to the knowledge of the Company, threatened by the Commission and any request on the part of the Commission for additional information from the Company has been satisfied in all material respects; any preliminary prospectus included in the Initial Registration Statement, as originally filed or as part of any amendment thereto, or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act is hereinafter called a “Preliminary Prospectus”; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all schedules and exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act and deemed by virtue of Rule 430A under the Securities Act to be part of the Initial Registration Statement at the time it was declared effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, each as amended at the time such part of the Initial Registration Statement became effective, are hereinafter collectively called the “Registration Statement”; the Preliminary Prospectus relating to the Shares that was included in the Registration Statement immediately prior to the Applicable Time is hereinafter called the “Pricing Prospectus”; such final prospectus, in the form first filed pursuant to Rule 424(b) under the Securities Act, is hereinafter called the “Prospectus”; and any “issuer free writing prospectus” as defined in Rule 433 under the Securities Act relating to the Shares is hereinafter called an “Issuer Free Writing Prospectus”; and all references to the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus, the Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”). From the time of initial submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “Emerging Growth Company”). “Testing-the-Waters Communication” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the Securities Act.

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(ii)(1) at the respective times the Initial Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto became effective and at the Closing Date (and, if any Option Shares are purchased, at each Option Closing Date), the Initial Registration Statement, any Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission thereunder (the “Rules and Regulations”) and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (2) at the time the Prospectus or any amendments or supplements thereto were issued and at the Closing Date (and, if any Option Shares are purchased, at each Option Closing Date), neither the Prospectus nor any amendment or supplement thereto included or will include an untrue statement of a material fact or omitted or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the representations and warranties in clauses (1) and (2) above do not apply to statements in or omissions from the Registration Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement to any of the foregoing made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representatives or by or on behalf of a Selling Shareholder, in its capacity as such, expressly for use in the Registration Statement or the Prospectus, it being understood and agreed that the only such information provided by any Underwriter is that described as such in Section 10(c) hereof and the only information provided by any Selling Shareholder is that described as such in Section 10(b) hereof. No order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission.

2

Each Preliminary Prospectus, Pricing Prospectus, Issuer Free Writing Prospectus and the Prospectus filed as part of the Initial Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the requirements of the Securities Act and the Rules and Regulations and each Preliminary Prospectus, Pricing Prospectus, Issuer Free Writing Prospectus and the Prospectus delivered to the Underwriters for use in connection with this offering was identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(iii)For the purposes of this Agreement, the “Applicable Time” is [●] [a.m.][p.m.] (Eastern time) on the date of this Agreement; the Pricing Prospectus as supplemented by the information listed on Schedule III(b) hereto, taken together (collectively, the “Pricing Disclosure Package”), as of the Applicable Time, did not and, at the Closing Date and each Option Closing Date, if any, will not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus and/or Written Testing-the-Waters Communication (as hereinafter defined) listed on Schedule III hereto does not conflict with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus and each such Issuer Free Writing Prospectus and/or Written Testing-the-Waters Communication, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties set forth in this Section 1(a)(iii) shall not apply to statements or omissions made in an Issuer Free Writing Prospectus or Written Testing-the-Waters Communication in reliance upon and in strict conformity with information furnished in writing to the Company by an Underwriter through the Representatives or by or on behalf of a Selling Shareholder in its capacity as such, expressly for use therein it being understood and agreed that the only such information furnished by any Underwriter is the information described as such in Section 10(c) hereof and the only such information provided by any Selling Shareholder is the information described as such in Section 10(b) hereof.

3

(iv)The Company has filed a registration statement pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to register the Ordinary Shares, and such registration statement has been declared effective.

(v)At the time of filing the Initial Registration Statement the Company was not, and the Company is not, an “ineligible issuer,” as defined under Rule 405 under the Securities Act.

(vi)The Company has been duly incorporated (or organized) and is validly existing as a corporation (or other organization) under the laws of Luxembourg, with power and authority (corporate and other) to own, lease and operate its properties and conduct its business as described in the Pricing Prospectus and the Prospectus and to enter into and perform its obligations under this Agreement, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing (where such concept exists) under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure so to qualify or be in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse change affecting the general affairs, business, prospects, management, financial position, shareholders’ equity or results of operations of the Company and the Subsidiaries, considered as one enterprise.

(vii)Each of NeoPollard Interactive LLC (“NPI”) and each subsidiary of the Company (together with NPI, but excluding Online Mobile Generation Corp., the “Subsidiaries” and each a “Subsidiary”) has been duly incorporated (or organized) and is validly existing as a corporation (or other organization) in good standing (where such concept exists) under the laws of the jurisdiction of its incorporation (or organization), with power and authority to own, lease and operate its properties and conduct its business as described in the Pricing Prospectus and the Prospectus, and has been duly qualified as a foreign corporation (or other organization) for the transaction of business and is in good standing (where such concept exists) under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure so to qualify or be in good standing would not have a Material Adverse Effect; all of the issued and outstanding share capital (or other ownership interests) of each Subsidiary has been duly and validly authorized and issued, is fully paid and non-assessable and, except as otherwise disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, is owned by the Company, directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.

(viii)The Company has a capitalization as set forth in the Pricing Prospectus and the Prospectus, and all of the issued and outstanding share capital of the Company has been duly and validly issued, is fully paid and non-assessable and conforms to the descriptions thereof contained in the Pricing Prospectus and the Prospectus and, except as required by law, none of the issued and outstanding share capital of the Company is subject to any preemptive or similar rights.

(ix)The Shares have been duly and validly authorized and issued, are fully paid and non-assessable and conform in all material respects to the descriptions thereof contained in the Pricing Prospectus and the Prospectus.

4

(x)The Shares are eligible for listing on the NASDAQ Global Market (the “Exchange”).

(xi)This Agreement has been duly authorized, executed and delivered by the Company.

(xii)The execution of this Agreement by the Company and the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions herein contemplated will not (1) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries is bound or to which any of the property or assets of the Company or any of the Subsidiaries is subject, (2) result in any violation of the provisions of any organization document of the Company or any of the Subsidiaries, or (3) result in a violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries or any of their properties, except, in the case of clauses (1) and (3), for such conflicts, breaches or violations that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required by the Company for the sale of the Shares hereunder or the consummation by the Company of the transactions contemplated by this Agreement, except for the registration under the Securities Act of the Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities laws in connection with the purchase and distribution of the Shares by the Underwriters.

(xiii)Ziv Haft, a member of BDO (“BDO”), who have certified certain financial statements of the Company and its subsidiaries and NPI, are independent public accountants as required by the Securities Act and the Rules and Regulations. The financial statements, together with related notes, included in the Registration Statement comply in all material respects with the requirements of the Securities Act and present fairly in all material respects the consolidated financial position, results of operations and changes in financial position of the Company and the Subsidiaries on the basis stated in the Registration Statement, the Pricing Prospectus and the Prospectus at the respective dates or for the respective periods to which they apply; such statements and related notes have been prepared in accordance with international financial reporting standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), except for the financial statements of NPI included therein, which, together with their related notes, have been prepared in accordance with generally accepted accounting principles as applied in the United States, in each case, consistently applied throughout the periods involved; and the selected financial data and the summary financial data included in the Registration Statement, the Pricing Prospectus and the Prospectus present fairly in all material respects the information shown therein and have been compiled on a basis consistent with that of the financial statements included in the Registration Statement, the Pricing Prospectus and the Prospectus. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

5

(xiv)Neither the Company nor any Subsidiary has sustained since the date of the latest audited financial statements included in the Pricing Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, (1) there has not been any change in the share capital or long-term debt of the Company or any of the Subsidiaries except for changes resulting from the exercise of stock options or other equity incentives pursuant to the Company’s equity incentive plans as described in the Pricing Prospectus and the Prospectus, (2) there has not been any material adverse change, or any development involving a prospective material adverse change, in or affecting the Company and the Subsidiaries, considered as one enterprise, (3) there have been no transactions entered into by, and no obligations or liabilities, contingent or otherwise, incurred by the Company or any of the Subsidiaries, whether or not in the ordinary course of business, which are material to the Company and the Subsidiaries, considered as one enterprise, or (4) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its share capital, in each case, otherwise than as set forth or contemplated in the Pricing Prospectus and the Prospectus.

(xv)Neither the Company nor any of the Subsidiaries is (1) in violation of any of its organization documents, (2) in violation of any law, ordinance, administrative or governmental rule or regulation applicable to the Company or any of the Subsidiaries, (3) in violation of any decree of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries, or (4) in default in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness or in any agreement, indenture, lease or other instrument to which the Company or any of the Subsidiaries is a party or by which any of them or any of their respective properties may be bound, except, in the case of clauses (2), (3) and (4), where any such violation or default, individually or in the aggregate, would not have a Material Adverse Effect.

(xvi)Each of the Company and each Subsidiary has good and marketable title to all real and personal property owned by it, in each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Prospectus and the Prospectus or such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company or any Subsidiary; and any real property and buildings held under lease by the Company or any Subsidiary are held under valid, subsisting and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company or any Subsidiary.

(xvii)Other than as set forth in the Pricing Prospectus and the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of the Subsidiaries is a party or of which any property of the Company or, to the knowledge of the Company, any of the Subsidiaries, is or could reasonably be expected to become the subject which, if determined adversely to the Company or the Subsidiary, individually or in the aggregate, would have or may reasonably be expected to have a Material Adverse Effect, or would prevent or impair the consummation of the transactions contemplated by this Agreement, or which are required to be described in the Registration Statement, the Pricing Prospectus or the Prospectus; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or others.

6

(xviii)The Company and the Subsidiaries possess all permits, licenses, approvals, consents and other authorizations (collectively, “Permits”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the businesses now operated by them as described in the Registration Statement, the Pricing Prospectus and the Prospectus. The Company and the Subsidiaries are in compliance with the terms and conditions of all such Permits and all of the Permits are valid and in full force and effect, except, in each case, where the failure so to comply or where the invalidity of such Permits or the failure of such Permits to be in full force and effect, individually or in the aggregate, would not have a Material Adverse Effect; and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or material modification of any such Permits.

(xix)Except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect, (1) the conduct of the businesses of the Company and the Subsidiaries as currently conducted does not infringe, misappropriate or otherwise violate and has not infringed, misappropriated or otherwise violated any third party’s Intellectual Property; (2) the Company and the Subsidiaries own or possess a license or other right to use, or can acquire a license or other right to use on reasonable terms, all copyrights, trade secrets and other intellectual property rights in know-how (including unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names, patents and patent rights (collectively “Intellectual Property”) used in the conduct of the businesses currently conducted by them as described in the Pricing Prospectus; and (3) neither the Company nor any Subsidiary has received any written correspondence relating to any notice of infringement of or conflict with any Intellectual Property of third parties by the conduct of the businesses of the Company or any of the Subsidiaries as currently conducted, or which, if the subject of an adverse decision by a governmental authority, would render any Intellectual Property owned by the Company or any of the Subsidiaries invalid or inadequate to protect the interest of the Company and the Subsidiaries.

(xx)Except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect: (1) the Company and each of the Subsidiaries have complied, and are presently in compliance, with their privacy and security policies and with all privacy- and data security-related contractual obligations, laws and regulations regarding their collection, use, transfer, distribution, security, storage, protection, disposal or disclosure of personally identifiable information or personal data; (2) the Company and each of the Subsidiaries have taken commercially reasonable steps to protect the information technology systems and data within their control; (3) the Company and each of the Subsidiaries have established commercially reasonable disaster recovery measures for their businesses, including, without limitation, for the information technology systems and data within their control; and (4) to the knowledge of the Company, there has been no security breach or attack or other compromise of or relating to any such information technology system or data.

(xxi)No material labor dispute with the employees of the Company or any of the Subsidiaries exists, or, to the knowledge of the Company, is imminent. The Company is not aware of any existing or imminent labor disturbance by the employees of its or any Subsidiary’s principal suppliers, manufacturers, customers or contractors, which, individually or in the aggregate, may reasonably be expected to result in a Material Adverse Effect.

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(xxii)The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company reasonably believes are prudent and customary in the businesses in which they are engaged; neither the Company nor any Subsidiary has been refused any insurance coverage sought or applied for; and the Company has no reason to believe that either it or any Subsidiary will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect;

(xxiii)The Company and each of the Subsidiaries have made and keep books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company and the Subsidiaries. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (1) transactions are executed in accordance with management’s general or specific authorizations; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS as issued by the IASB and to maintain accountability for assets; (3) access to assets is permitted only in accordance with management’s general or specific authorization; (4) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (5) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement is in conformity with IFRS as issued by the IASB and is updated as necessary to comply in all material respects with the requirements of the Securities Act and the Commission’s rules and guidelines applicable thereto and present fairly the consolidated financial position, results of operations and changes in financial position of the Company and the Subsidiaries on the basis stated in the Registration Statement at the respective dates or for the respective periods to which they apply.

(xxiv)Since the date of the latest audited financial statements included in the Pricing Prospectus and the Prospectus, (a) the Company has not been advised of (i) any significant deficiencies in the design or operation of internal controls that could adversely affect the ability of the Company and each of the Subsidiaries to record, process, summarize and report financial data, (ii) any material weaknesses in internal controls, or (iii) any fraud, whether or not material, that involves management or other employees who have a significant role in the internal controls of the Company and each of the Subsidiaries, and (b) since that time, there has been no change in the Company’s internal control over financial reporting that has materially and adversely affected, or is reasonably likely to materially and adversely affect, the Company’s internal control over financial reporting.

(xxv)The Company maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15 (e) of the Exchange Act) that comply with the requirements of the Exchange Act and such disclosure controls and procedures are effective for the functions for which they were established. The Company has carried out an evaluation of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

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(xxvi)The Company and the Subsidiaries have filed all tax returns that are required to have been filed by them pursuant to applicable law and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company or any Subsidiary except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with IFRS and except insofar as the failure to file such returns or pay such taxes, individually or in the aggregate, would not result in a Material Adverse Effect. The charges, accruals and reserves on the books of the Company and the Subsidiaries in respect of any income and corporation tax liability for any years not finally determined are adequate to meet any assessments that can be reasonably made for additional income tax for any years not finally determined.

(xxvii)There are no statutes, regulations, documents or contracts of a character required to be described in the Registration Statement or the Pricing Prospectus or the Prospectus or to be filed as an exhibit to the Registration Statement which are not described or filed as required.

(xxviii)Neither the Company nor any of the Subsidiaries is in violation of any applicable statute or any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, production, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “environmental laws”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim, individually or in the aggregate, would have a Material Adverse Effect; and to the knowledge of the Company there is no pending investigation which might lead to such a claim.

(xxix)Each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), that is maintained, administered or contributed to by the Company or any Subsidiary for employees or former employees of the Company and its affiliates has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”), except to the extent that failure to so comply, individually or in the aggregate, would not have a Material Adverse Effect. No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption, except to the extent that any such prohibited transaction would not have a Material Adverse Effect.

(xxx)Neither the Company nor any of the Subsidiaries, nor their respective directors, officers or employees (excluding any employees not directly employed by the Company or its Subsidiaries and employees that are employed by NPI), nor to the knowledge of the Company, any agent, affiliate, employees of NPI or other person associated with or acting on behalf of the Company or any of the Subsidiaries, has (1) taken any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment, giving or receipt of money, property, gifts or anything else of value, directly or indirectly, to any government official (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for on behalf of any of the foregoing, or any political party or party official or candidate for political office) (“Government Official”) in order to influence official action, or to any person in violation of any applicable anti-corruption laws; (2) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (3) made any direct or knowingly indirect unlawful payment to any Government Official from corporate funds; (4) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offence under the Bribery Act 2010 of the United Kingdom or any other applicable anti-bribery or anti-corruption law; or (5) made any bribe, unlawful rebate, payoff, influence payment, kickback or other unlawful payment or promise to pay.

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(xxxi)The operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of all jurisdictions where the Company or any of the Subsidiaries conducts business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental or regulatory agency, authority or body or any arbitrator involving the Company or any of the Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

(xxxii)None of the Company nor any of the Subsidiaries, nor any of their respective directors or officers, nor, to the Company’s knowledge, any other employee, agent, affiliate or person associated with or acting on behalf of the Company or any of the Subsidiaries is currently subject to any sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”) (including, without limitation, the designation as a “specially designated national” or “blocked person”) (collectively, “Sanctions”), nor is the Company or any Subsidiary located, organized or resident in a country or territory that is the subject of Sanctions, including, without limitation, Cuba, Iran, North Korea, Sudan, Syria and Crimea (each, a “Sanctioned Country”).

(xxxiii)There are no persons with registration rights or other similar rights to have securities registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act, except for rights that have been effectively waived.

(xxxiv)The Company is not required to be registered as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

(xxxv)The Company is a “foreign private issuer” (as defined in Rule 3b-4(c) under the Exchange Act).

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(xxxvi)The Company has not distributed and, prior to the later to occur of the Closing Date and completion of distribution of the Shares, will not distribute any offering materials in connection with the offering and sale of the Shares as contemplated hereunder, other than the Pricing Prospectus, the Prospectus and, subject to compliance with Section 6 hereof, any Issuer Free Writing Prospectus; and the Company has not taken and will not take, directly or indirectly, any action designed to cause or result in, or which constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale of the Shares. The Company (a) has not alone engaged in any Testing-the-Waters Communication other than Testing-the-Waters Communications with the consent of the Representatives with entities that are qualified institutional buyers within the meaning of Rule 144A under the Securities Act or institutions that are accredited investors within the meaning of Rule 501 under the Securities Act and (b) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company has not distributed in connection with the offering and sale of the Shares as contemplated hereunder any Written Testing-the-Waters Communications other than those listed on Schedule III hereto. “Written Testing-the-Waters Communication” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the Securities Act.

(xxxvii)The statistical and market and industry-related data included in the Pricing Prospectus and the Prospectus are based on or derived from sources which the Company reasonably believes to be reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources, and the Company or the Representatives have obtained the written consent to the use of such data from sources to the extent required.

(xxxviii)Other than as set forth in the Registration Statement, Pricing Prospectus or the Prospectus, neither the Company nor any of the Subsidiaries has sent or received any written communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in the Pricing Prospectus or the Prospectus, or referred to or described in, or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Company or any of the Subsidiaries or, to the Company’s knowledge, any other party to any such contract or agreement, except as would not reasonably be expected to have a Material Adverse Effect.

(xxxix)The Company does not expect to be a “passive foreign investment company” (“PFIC”) for United States federal income tax purposes for the current taxable year or in the foreseeable future.

(xl)No relationship, direct or indirect, exists between or among the Company or any of the Subsidiaries, on the one hand, and the directors, managers, officers, shareholders or other affiliates of the Company or any of the Subsidiaries, on the other, that would be required by the Securities Act to be described in a registration statement to be filed with the Commission and that is not so described in the Registration Statement, the Pricing Prospectus and the Prospectus.

(xli)It is not necessary under the laws of Luxembourg that any of the Selling Shareholders or the Underwriters be licensed, qualified or entitled to carry on business in Luxembourg, as the case may be, (1) to enable any of them to enforce their respective rights under this Agreement or (2) solely by reason of the execution, delivery or performance of this Agreement.

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(xlii)The indemnification and contribution provisions set forth in Section 10 hereof do not contravene Luxembourg law, public order, mandatory law or public policy.

(xliii)Except as otherwise disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, no approvals are currently required in Luxembourg in order for the Company to pay dividends or other distributions declared by the Company with respect to the Ordinary Shares. Under current laws and regulations of Luxembourg, any amounts payable with respect to the Ordinary Shares upon liquidation of the Company or upon redemption thereof and dividends and other distributions declared and payable on the Ordinary Shares may be paid by the Company in U.S. dollars and freely transferred out of Luxembourg. Except as otherwise disclosed in the Registration Statement, the Pricing Prospectus and the Prospectus, no payments of dividends made to holders of Ordinary Shares who are non-residents of Luxembourg currently are subject to income, withholding or other taxes in Luxembourg under laws and regulations of Luxembourg or any political subdivision or taxing authority thereof or therein and such payments will be free and clear of any other tax, duty, withholding or deduction in Luxembourg or any political subdivision or taxing authority thereof or therein without the necessity of obtaining any governmental authorization in Luxembourg or any political subdivision or taxing authority thereof or therein.

(xliv)There is no tax, duty, levy, impost, deduction, charge or withholding imposed by Luxembourg or any political subdivision thereof or taxing authority therein, including interest and penalties, payable by or on behalf of the Underwriters either (a) on or by virtue of the Underwriters’ execution, delivery, performance or enforcement of this Agreement or (b) on any payment to be made pursuant to this Agreement.

(xlv)There are no documentary, stamp, other issuance or transfer taxes, sales or value added taxes or duties or other similar fees or charges and no capital gains, income, withholding or other taxes required to be paid by or on behalf of the Underwriters or the Company in Luxembourg or any other taxing jurisdiction where the Company is incorporated or resident for tax purposes or any political subdivision or taxing authority thereof in connection with (1) the execution and delivery of this Agreement, and (2) the delivery of any payment to be made by the Company to the Underwriters pursuant to this Agreement.

(xlvi)This Agreement is in proper legal form under the laws of Luxembourg for the enforcement thereof in the Luxembourg courts against the Company. To ensure the legality, validity, enforcement or admissibility into evidence of this Agreement in a legal or administrative proceeding in Luxembourg, it is not necessary that this Agreement or any other document related hereto be filed or recorded with any governmental or regulatory authority or court. Under current Luxembourg tax laws, no registration tax, stamp duty or similar tax is required to be paid by the Underwriters upon the acquisition, holding or disposal of the Shares. However, a fixed registration duty of EUR12 may be due upon registration of the Shares in Luxembourg in the case of legal proceedings before Luxembourg courts, in case the Shares must be produced before an official Luxembourg authority, or in the case of a registration of the Shares on a voluntary basis.

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(xlvii)[Reserved]

(xlviii)No exchange control authorization or any other authorization, approval, consent or license of any governmental or regulatory authority or court in Luxembourg is required for the payment of any amounts payable to the Underwriters under this Agreement.

(xlix)Any final judgment for a fixed or determined sum of money rendered by any federal court located in the City of New York, New York having jurisdiction under its own laws in respect of any suit, action or proceeding against the Company based upon this Agreement would be declared enforceable against the Company by the courts of Luxembourg, without reconsideration or reexamination of the merits; provided that (1) the judgment of the New York Court is final and enforceable (exécutoire) in the United States, (2) such federal court had jurisdiction over the subject matter leading to the judgment according to both its own laws and the Luxembourg conflict of jurisdiction rules, (3) such federal court has applied to the dispute the substantive laws that would have been applied by Luxembourg courts, (4) the judgment was granted following proceedings where the counterparty had the opportunity to appear and, if it appeared, to present a defense, (5) such federal court has acted in accordance with its own procedural laws, (6) the judgment of such federal court does not contravene Luxembourg international public policy and (7) the judgement must not have been rendered as a result of or in connection with an evasion of Luxembourg law (“fraude à la loi”).

(l)The choice of laws of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of Luxembourg and will be recognized by the courts of Luxembourg in accordance with and subject to the provisions of EC Regulation 593/2008 of 17 June 2008 on the law applicable to contractual obligations, except that a Luxembourg court may refuse to apply the law of another jurisdiction if it is deemed to be contrary to Luxembourg international public policy order and/or in certain circumstances Luxembourg mandatory law.

(li)The Company has the power to submit, and pursuant to Section 18 has legally, validly, effectively and irrevocably submitted to the jurisdiction of any federal court located in the City of New York, New York. The Company has the power to designate, appoint and empower, and pursuant to Section 21 has legally, validly and effectively designated, appointed and empowered an agent for service of process in any suit or proceeding related to this Agreement in any federal court located in the City of New York, New York. Service of process effected in the manner set forth in this Agreement, assuming validity under the laws of the State of New York, will be effective, insofar as the laws of Luxembourg are concerned, to confer valid personal jurisdiction over the Company.

(lii)Neither the Company nor any of the Subsidiaries, nor any of their respective properties or assets, have any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the laws of or from any court of (1) any jurisdiction in which it owns or leases property or assets, (2) the United States of America or the State of New York or (3) Luxembourg. If the Company or any Subsidiary or any of their respective properties or assets may have or hereafter acquire immunity from any such law or court, the Company has, pursuant to Section 20 hereof, waived and it will waive, or will cause the Subsidiary to waive, such immunity to the full extent permitted by law.

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(b)          Each Selling Shareholder severally and not jointly represents and warrants to, and agrees with, each of the Underwriters that, as of the date hereof and as of the Closing Date and, only with respect to Caesars, each Option Closing Date, if any (provided that any representations and warranties related to the Paying Agent Agreement shall not apply to Caesars):

(i)          All consents, approvals, authorizations and orders necessary for the execution and delivery by such Selling Shareholder of this Agreement and the Paying Agent Agreement (as defined herein), to the extent applicable, for the sale and delivery of the Shares to be sold by such Selling Shareholder hereunder have been obtained, except for the registration under the Securities Act of the Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities laws in connection with the purchase and distribution of the Shares by the Underwriters; and such Selling Shareholder has full right, power and authority to enter into this Agreement and the Paying Agent Agreement, to the extent applicable, and to sell, assign, transfer and deliver the Shares to be sold by such Selling Shareholder hereunder.

(ii)Such Selling Shareholder, if not an individual, has been duly incorporated (or organized) and is validly existing as a corporation (or other organization) in good standing (where such concept exists) under the laws of its jurisdiction (or organization).

(iii)          The sale of the Shares to be sold by such Selling Shareholder hereunder, the execution of this Agreement and the Paying Agent Agreement, to the extent applicable, by such Selling Shareholder and the compliance by such Selling Shareholder with all of the provisions of this Agreement and the Paying Agent Agreement, to the extent applicable, and the  consummation of the transactions herein and therein contemplated will not (1) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which such Selling Shareholder is a party or by which such Selling Shareholder is bound or to which any of the property or assets of such Selling Shareholder is subject, (2) result in any violation of the provisions of any organization document of such Selling Shareholder or (3) result in the violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over such Selling Shareholder or any of its properties, except in the case of clauses (1) and (3) for such violations that would not, individually or in the aggregate, materially impair the ability of such Selling Shareholder to consummate the transactions contemplated by this Agreement; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the execution and delivery by such Selling Shareholder of the Agreement and the Paying Agent Agreement, to the extent applicable, the sale of the Shares to be sold by such Selling Shareholder hereunder or the consummation by such Selling Shareholder of the transactions contemplated by this Agreement and the Paying Agent Agreement, to the extent applicable, except the registration under the Securities Act of the Shares and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities laws in connection with the purchase and distribution of the Shares by the Underwriters.

(iv)Such Selling Shareholder has, and immediately prior to the Closing Date will have, good and valid title to, or a valid “security entitlement” within the meaning of Section 8-501 of the New York Uniform Commercial Code in respect of, the Shares to be sold by such Selling Shareholder hereunder on such date free and clear of all liens, encumbrances, equities or claims; and, upon delivery of such Shares and payment therefor pursuant hereto, good and valid title to such Shares, free and clear of all liens, encumbrances, equities or claims, will pass to the several Underwriters.

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(v)Such Selling Shareholder has not taken and will not take, directly or indirectly, any action designed to cause or result in, or which constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

(vi)          There are no legal or governmental proceedings pending to which such Selling Shareholder is a party or of which any property of such Selling Shareholder is the subject which, if determined adversely to such Selling Shareholder, individually or in the aggregate, would prevent or materially impair the consummation of the transactions contemplated by this Agreement and the Paying Agent Agreement, to the extent applicable.

(vii)The sale of the Shares by such Selling Shareholder pursuant to this Agreement is not prompted by any material information concerning the Company or any Subsidiary that is not set forth in the Registration Statement, the Pricing Prospectus and the Prospectus.

(viii)Such Selling Shareholder has not distributed and will not distribute any prospectus or other offering materials in connection with the offering and sale of the Shares as contemplated hereunder.

(ix)There is no tax, duty, levy, impost, deduction, charge or withholding imposed by any taxing jurisdiction where such Selling Shareholder is incorporated or resident for tax purposes or any political subdivision thereof or taxing authority therein, including interest and penalties, payable by or on behalf of the Underwriters either (a) on or by virtue of the Underwriters’ execution, delivery, performance or enforcement of this Agreement or (b) on any payment to be made pursuant to this Agreement.

(x)There are no documentary, stamp, other issuance or transfer taxes, sales or value added taxes or duties or other similar fees or charges and no capital gains, income, withholding or other taxes required to be paid by or on behalf of the Underwriters or such Selling Shareholder in Luxembourg or any other taxing jurisdiction where the Company or such Selling Shareholder is incorporated or resident for tax purposes or any political subdivision or taxing authority thereof in connection with (1) the offer, sale and delivery by such Selling Shareholder of the Shares to or for the respective accounts of such Underwriters, (2) the sale and delivery by such Underwriters of the Shares to the initial purchasers thereof, (3) the execution and delivery of this Agreement, (4) the delivery of any payment to be made pursuant to this Agreement and (5) the consummation of the transactions contemplated by this Agreement.

(xi)This Agreement is in proper legal form under the laws of the jurisdiction in which such Selling Shareholder is incorporated or resident for the enforcement thereof in such jurisdiction against such Selling Shareholder. To ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement, it is not necessary that this Agreement or any other document related hereto be filed, registered or recorded with or executed or notarized before any governmental or regulatory authority or agency of the jurisdiction in which such Selling Shareholder is incorporated or resident.

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(xii)Any final judgment for a fixed or determined sum of money rendered by any federal court located in the City of New York, New York having jurisdiction under its own laws in respect of any suit, action or proceeding against such Selling Shareholder based upon this Agreement would be declared enforceable against such Selling Shareholder by the courts in the jurisdiction in which such Selling Shareholder is incorporated or resident, without reconsideration or reexamination of the merits.

(xiii)The choice of laws of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of the jurisdiction in which such Selling Shareholder is incorporated or resident and will be recognized by the courts of the jurisdiction in which such Selling Shareholder is incorporated or resident.

(xiv)Such Selling Shareholder has the power to submit, and pursuant to Section 18 has legally, validly, effectively and irrevocably submitted to the jurisdiction of any federal court located in the City of New York, New York. Such Selling Shareholder has the power to designate, appoint and empower, and pursuant to Section 21 has legally, validly and effectively designated, appointed and empowered an agent for service of process in any suit or proceeding related to this Agreement in any federal court located in the City of New York, New York. Service of process effected in the manner set forth in this Agreement, assuming validity under the laws of the State of New York, will be effective to confer valid personal jurisdiction over such Selling Shareholder.

(xv)The indemnification and contribution provisions set forth in Section 10 hereof do not contravene law or public policy of the jurisdiction in which such Selling Shareholder is incorporated or resident.

(xvi)Neither such Selling Shareholder nor any of its subsidiaries, nor any of their respective properties or assets, have any immunity from the jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution or otherwise) under the laws of or from any court of (1) any jurisdiction in which it owns or leases property or assets, (2) the United States of America or the State of New York or (3) the jurisdiction in which such Selling Shareholder is incorporated or resident. If such Selling Shareholder or any of its subsidiaries or any of their respective properties or assets may have or hereafter acquire immunity from any such law or court, such Selling Shareholder has, pursuant to Section 20 hereof, waived and it will waive, or will cause its subsidiaries to waive, such immunity to the full extent permitted by law.

(xvii)Such Selling Shareholder will not knowingly use the proceeds of the offering of the Shares, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person, (1) to fund or facilitate any activities or business of or with any person or in any country or territory that, at the time of such funding or facilitation, is the target of Sanctions; or (2) in any other manner that will result in a violation of Sanctions by any person (including any person participating in the offering pursuant to this Agreement, whether as underwriter, advisor, investor or otherwise).

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(xviii)          This Agreement and the Paying Agent Agreement,  to the extent applicable, have each been duly authorized, executed and delivered by such Selling Shareholder; and the Paying Agent Agreement, to the extent applicable, constitutes the legal, valid and binding obligation of such Selling Shareholder, enforceable against such Selling Shareholder in accordance with its terms.

2.Subject to the terms and conditions herein set forth, (a) each Selling Shareholder agrees, severally and not jointly, to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from each Selling Shareholder, at a purchase price per share of $[●] (the “Purchase Price”), the number of Firm Shares (to be adjusted by the Representatives so as to eliminate fractional shares) determined by multiplying the aggregate number of Firm Shares to be sold by such Selling Shareholder as set forth opposite the name of such Selling Shareholder in Schedule II hereto by a fraction, the numerator of which is the aggregate number of Firm Shares to be purchased by such Underwriter as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the aggregate number of Firm Shares to be purchased by all of the Underwriters from the Selling Shareholders hereunder and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Option Shares as provided below, Caesars agrees to sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from Caesars, at the Purchase Price, the number of Option Shares (to be adjusted by the Representatives so as to eliminate fractional shares) determined by multiplying the number of Option Shares opposite the name of such Underwriter in Schedule I hereto by a fraction, the numerator of which is the number of Option Shares as to which such election has been exercised and the denominator of which is the maximum number of Option Shares to be sold by Caesars as set forth on Schedule II hereto.

Caesars hereby grants to the Underwriters the right to purchase at their election up to [●] Option Shares at the Purchase Price. The Underwriters may exercise their option to acquire Option Shares in whole or in part from time to time only by written notice from the Representatives to the Company and Caesars, given within a period of 30 calendar days after the date of this Agreement and setting forth the aggregate number of Option Shares to be purchased and the date on which such Option Shares are to be delivered, as determined by the Representatives but in no event earlier than the Closing Date or, unless the Representatives, the Company and Caesars otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.

3.It is understood that the several Underwriters propose to offer the Firm Shares for sale to the public upon the terms and conditions set forth in the Prospectus.

4.                 The Selling Shareholders will deliver the Firm Shares to the Representatives through the facilities of the Depository Trust Company (“DTC”) for the accounts of the Underwriters, against payment of the purchase price therefor in federal (same day) funds by official bank check or checks or wire transfer drawn to or on behalf of the Selling Shareholders, pro rata based on the number of Firm Shares sold by each of them, under instructions from the Selling Shareholders at the office of Latham & Watkins LLP, 1271 Sixth Avenue New York, NY 10020 USA, at 10:00 A.M., New York time, on [●], 2021, or at such other time not later than seven full business days thereafter as the Representatives and the Company determine, such time being herein referred to as the “Closing Date”.

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On the Closing Date, and in accordance with that certain Paying Agent Agreement by and among Deutsche Bank Securities Inc., the Selling Shareholders (other than Caesars) and the Paying Agent, dated as of the date hereof, substantially in the form attached as Exhibit B hereto (the “Paying Agent Agreement”), any payment payable hereunder to the Selling Shareholders (other than Caesars) shall be paid to, and retained by, IBI Trust Management, acting as paying agent for the Seller Shareholders (other than Caesars) (the “Paying Agent”) for the benefit of each such Selling Shareholder (other than Caesars) for a period of 180 days from Closing Date, or until an earlier date requested in writing by such Selling Shareholder (other than Caesars) (the “Withholding Drop Date”), during which time no payments shall be made to the Selling Shareholders (other than Caesars) and the Paying Agent shall not withhold any Israeli taxes on such consideration, and during which time each such Selling Shareholder (other than Caesars) may obtain a certification or ruling issued by the Israel Tax Authority, in form and substance reasonably acceptable to the Paying Agent, (a) exempting the Paying Agent from the duty to withhold Israeli taxes with respect to the applicable consideration of such Selling Shareholder, (b) determining the applicable rate of Israeli tax to be withheld from the applicable consideration of such Selling Shareholder, or (c) providing any other instructions regarding the payment or withholding with respect to the applicable consideration of such Selling Shareholder (other than Caesars) (the “Valid Certificate”). In the event that no later than three (3) Business Days prior to the Withholding Drop Date, a Selling Shareholder (other than Caesars) submits a Valid Certificate, the Paying Agent shall act in accordance with the provisions of such Valid Certificate. If any Selling Shareholder (other than Caesars) (a) does not provide the Paying Agent with a Valid Certificate, by no later than three (3) Business Days prior to the Withholding Drop Date, or (b) submits a written request to the Paying Agent to release such Selling Shareholder’s (other than Caesars’s) portion of the applicable consideration held by the Paying Agent prior to the Withholding Drop Date and fails to submit a Valid Certificate at or before such time, then the amount to be withheld from such Selling Shareholder’s (other than Caesars’s) portion of the amount payable to such Selling Shareholder (other than Caesars) shall be calculated according to the applicable withholding rate as reasonably determined by the Paying Agent. To the extent any such amount is so deducted or withheld, such amounts shall be treated for all purposes as having been paid to such Selling Shareholder. Any payment made by the Underwriters to the Paying Agent for further disbursement by the Paying Agent to Selling Shareholders (other than Caesars) shall be treated for all purposes as having been paid to such Selling Shareholders (other than Caesars). Any withholding made in New Israeli Shekels (“NIS”) with respect to payments made by the Paying Agent hereunder in U.S. dollars shall be calculated based on a U.S. dollars-to-NIS exchange rate known on the date of the actual payment. Any currency conversion commissions will be borne by the applicable recipient Selling Shareholders and deducted from payments and deliveries to be made thereto.

For purposes of Rule 15c6-1 under the Exchange Act, the Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Firm Shares. Each time for the delivery of and payment for the Option Shares, being herein referred to as an “Option Closing Date”, which may be the Closing Date, shall be determined by the Representatives as provided above. Caesars will deliver the Option Shares being purchased on each Option Closing Date to the Representatives through the facilities of DTC for the accounts of the Underwriters, against payment of the purchase price therefor in federal (same day) funds by wire transfer drawn to or on behalf of Caesars at the above office of Latham & Watkins LLP, at 10:00 A.M., New York time, on the applicable Option Closing Date.

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5.The Company covenants and agrees with each of the Underwriters as follows:

(a)The Company, subject to Section 5(b), will comply with the requirements of Rule 430A under the Securities Act, and will notify the Representatives promptly, and confirm the notice in writing (including by way of email), (i) when any post-effective amendment to the Registration Statement shall become effective, or any supplement to the Prospectus or any amended prospectus shall have been filed, to furnish the Representatives with copies thereof (to the extent not available on EDGAR or the Company’s public website), and to file promptly all material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Securities Act, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any Preliminary Prospectus or Issuer Free Writing Prospectus, or of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes; and (v) if the Company ceases to be an Emerging Growth Company at any time prior to the later of (A) completion of the distribution of the Shares within the meaning of the Securities Act and (B) completion of the 90-day restricted period referred to in Section 5(i) hereof. The Company will promptly effect the filings necessary pursuant to Rule 424(b) under the Securities Act and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order described in this section and, if any such stop order is issued, to obtain the lifting thereof at the earliest possible moment.

(b)The Company will give the Representatives notice of its intention to file or prepare any amendment to the Registration Statement (including any filing under Rule 462(b) under the Securities Act), or any amendment, supplement or revision to the Prospectus, or any Issuer Free Writing Prospectus, will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.

(c)The Company will use its reasonable best efforts to qualify the Shares for offering and sale under the securities laws of such jurisdictions as the Representatives may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Shares, provided that nothing in this Section 5(c) shall require the Company to qualify as a foreign corporation in any jurisdiction in which it is not already so qualified, or to file a general consent to service of process in any jurisdiction.

(d)If requested by the Representatives, the Company will deliver to the Representatives, without charge, three (3) signed copies of the Initial Registration Statement as originally filed, any Rule 462(b) Registration Statement and of each amendment to each (including exhibits filed therewith or incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also, upon request of the Representatives, deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

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(e)The Company has delivered to each Underwriter, without charge, as many written and electronic copies of each Preliminary Prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the Securities Act. The Company will furnish to each Underwriter, without charge, prior to 5:00 P.M., New York time, on the business day next succeeding the date of this Agreement (or such later time as may be agreed to by the Company and the Representatives) and from time to time thereafter during the period when the Prospectus is required to be delivered in connection with sales of the Shares under the Securities Act or the Exchange Act or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act, such number of written and electronic copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(f)The Company will comply with the Securities Act and the Rules and Regulations so as to permit the completion of the distribution of the Shares as contemplated in this Agreement and in the Prospectus. If at any time when, in the opinion of counsel for the Underwriters, a prospectus is required by applicable law to be delivered in connection with sales of the Shares under the Securities Act or the Exchange Act (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act), any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to amend the Registration Statement or amend or supplement the Prospectus in order that the Prospectus will not include any untrue statements of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, or if it shall be necessary, in the opinion of either such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the Securities Act or the Rules and Regulations, the Company will as promptly as practical, prepare and file with the Commission, subject to Section 5(b), such amendment or supplement as may be necessary to correct such untrue statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters such number of written and electronic copies of such amendment or supplement as the Underwriters may reasonably request. The Company will provide the Representatives with notice of the occurrence of any event during the period specified above that may give rise to the need to amend or supplement the Registration Statement or the Prospectus as provided in the preceding sentence promptly after the occurrence of such event. If at any time following the distribution of any Written Testing-the-Waters Communication there occurred or occurs an event or development as a result of which such Written Testing-the-Waters Communication included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Written Testing-the-Waters Communication to eliminate or correct such untrue statement or omission.

(g)The Company will make generally available (within the meaning of Section 11(a) of the Securities Act) to its security holders and to the Representatives (which may be satisfied by filing with EDGAR) as soon as practicable, but not later than 45 days (or, if the effective date of the Registration Statement occurs in its fourth fiscal quarter, 120 days) after the end of its fiscal quarter in which the first anniversary date of the effective date of the Registration Statement occurs, an earnings statement (in form complying with the provisions of Rule 158 under the Securities Act, which need not be reviewed or audited by the Company’s auditors) covering a period of at least twelve consecutive months beginning with the first full fiscal quarter of the Company occurring after the effective date of the Registration Statement.

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(h)[Reserved]

(i)The Company will use its best efforts to effect and maintain the listing of the Ordinary Shares (including the Shares) on the Exchange.

(j)During a period of 90 days from the date of the Prospectus (the “Lock-Up Period”), the Company will not, without the prior written consent of the Representatives, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, or submit to, or file with, the Commission a registration statement under the Securities Act relating to, any Ordinary Shares or any securities convertible into or exercisable or exchangeable for Ordinary Shares, or publicly disclose the intention to undertake any of the foregoing, or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of Ordinary Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Ordinary Shares or such other securities, in cash or otherwise, other than (1) the issuance of options to acquire or other awards (including restricted stock units or similar awards) in respect of Ordinary Shares granted pursuant to the Company’s benefit plans existing on the date hereof that are referred to in the Pricing Prospectus and the Prospectus, as such plans may be amended, (2) the issuance of Ordinary Shares upon the exercise of any such options or upon the exercise of any option, warrant or convertible security outstanding on the date hereof and (3) the issuance of Ordinary Shares in an amount not to exceed 5% of the outstanding Ordinary Shares as of the date hereof in connection with an acquisition by the Company or an affiliate of the Company approved by the Company’s board of directors, provided that in the case of clause (3), each recipient of such Ordinary Shares shall execute a lock-up letter on substantially the same terms as the “lock-up” agreement described in Section 9(q) hereof for the remainder of the Lock-Up Period.

(k)[Reserved]

(l)The Company, during the period when the Prospectus is required to be delivered in connection with sales of the Shares under the Securities Act or the Exchange Act (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act), will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the rules and regulations of the Commission thereunder.

(m)[Reserved]

(n)If the Company elects to rely upon Rule 462(b) under the Securities Act, the Company will file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and at the time of filing either to pay to the Commission the filing fee for the Rule 462(b) Registration Statement or to give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Securities Act.

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(o)If so requested by the Representatives, the Company shall cause to be prepared and delivered, at its expense, within one business day from the effective date of this Agreement (or such later time as may be agreed to by the Company and the Representatives), to the Representatives an “electronic Prospectus” to be used by the Underwriters in connection with the offering and sale of the Shares. As used herein, the term “electronic Prospectus” means a form of the most recent Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus, and any amendment or supplement thereto, that meets each of the following conditions: (i) it shall be encoded in an electronic format, reasonably satisfactory to the Representatives, that may be transmitted electronically by the Representatives and the other Underwriters to offerees and purchasers of the Shares, (ii) it shall disclose the same information as such paper Preliminary Prospectus, Issuer Free Writing Prospectus or the Prospectus, as the case may be; and (iii) it shall be in or convertible into a paper format or an electronic format, reasonably satisfactory to the Representatives, that will allow investors to store and have continuously ready access to such Preliminary Prospectus, Issuer Free Writing Prospectus or the Prospectus at any future time, without charge to investors (other than any fee charged for subscription to the Internet generally). The Company hereby confirms that, if so requested by the Representatives, the Company has included or will include in the Prospectus filed with the Commission an undertaking that, upon receipt of a request by an investor or his or her Representatives, the Company shall transmit or cause to be transmitted promptly, without charge, a paper copy of such paper Preliminary Prospectus, Issuer Free Writing Prospectus or the Prospectus to such investor or Representatives.

(p)The Company shall deliver to each Underwriter a properly completed and executed Certification Regarding Beneficial Owners of Legal Entity Customers, together with copies of identifying documentation, and any additional supporting documentation as each Underwriter may reasonably request in connection with the verification thereof.

(q)All payments to be made by the Company under this Agreement shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless the Company is compelled by law to deduct or withhold such taxes, duties or charges. If any such withholding or deduction is required by law of Luxembourg or any political subdivision or taxing authority thereof (other than those measured by net income), the Company shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made, except to the extent that such withholding or deduction was imposed due to any past or present connection of an Underwriter with the taxing jurisdiction other than solely by entering into this Agreement or receipt of payments hereunder. All payments made by the Company under this Agreement shall be exclusive of any value added tax or any other tax of a similar nature (“VAT”) which is chargeable thereon, and if any VAT is or becomes chargeable in respect of any such payment, the Company shall pay the amount of such VAT. The Company further agrees to indemnify and hold harmless the Underwriters against any documentary, stamp, financial transaction or similar issuance or recordation tax, including any interest and penalties, on the placement of the Shares and on the execution and delivery of this Agreement unless, in the case of legal proceedings before Luxembourg courts, if the Shares must be produced before an official Luxembourg authority.

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6.          (a) The Company represents and agrees that, without the prior consent of the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act; each Underwriter represents and agrees that, without the prior consent of the Company and the Representatives, it has not made and will not make any offer relating to the Shares that would constitute a free writing prospectus; any such free writing prospectus the use of which has been consented to by the Company and the Representatives is listed on Schedule III hereto.

(b)Each Selling Shareholder represents and agrees that it has not made and will not make, without the prior written consent of the Company and the Representatives, any offer relating to the Shares in connection with the offering and sale of the Shares as contemplated hereunder that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act.

(c)The Company has complied and will comply with the requirements of Rule 433 under the Securities Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; the Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Securities Act to avoid a requirement to file with the Commission any electronic road show.

(d)The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives or by or on behalf of a Selling Shareholder in its capacity as such expressly for use therein, it being understood and agreed that the only such information provided by any Underwriter is that described as such in Section 10(c) hereof and the only such information provided by any Selling Shareholder is the information described as such in Section 10(b) hereof.

7.Each Selling Shareholder covenants and agrees with each of the Underwriters as follows:

(a)Such Selling Shareholder will deliver to the Representatives, prior to or at the Closing Date, a properly completed and executed United States Internal Revenue Service Form W-9 (or other applicable form or statement specified by the Treasury Department regulations in lieu thereof) or an appropriate Form W-8.

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(b)All payments to be made by such Selling Shareholder under this Agreement (including, for the avoidance of doubt, any underwriting discount treated as a fee or other amount subject to withholding) shall be made without withholding or deduction for or on account of any present or future taxes, duties or governmental charges whatsoever unless such Selling Shareholder is compelled by law to deduct or withhold such taxes, duties or charges. If any such withholding or deduction is required by law of Luxembourg or any other taxing jurisdiction where the Company or such Selling Shareholder is incorporated or resident for tax purposes or any political subdivision or taxing authority thereof (other than those measured by net income), such Selling Shareholder shall pay such additional amounts as may be necessary in order that the net amounts received after such withholding or deduction shall equal the amounts that would have been received if no withholding or deduction had been made, except to the extent that such withholding or deduction was imposed due to any past or present connection of an Underwriter with the taxing jurisdiction other than solely by entering into this Agreement or receipt of payments hereunder. All payments made by such Selling Shareholder under this Agreement shall be exclusive of any VAT which is chargeable thereon, and if any VAT is or becomes chargeable in respect of any such payment, such Selling Shareholder shall pay the amount of such VAT. Such Selling Shareholder further agrees to indemnify and hold harmless the Underwriters against any documentary, stamp, financial transaction or similar issuance or recordation tax, including any interest and penalties, on the placement of the Shares and on the execution and delivery of this Agreement unless, in the case of legal proceedings before Luxembourg courts, if the Shares must be produced before an official Luxembourg authority.

8.The Company and the Selling Shareholders covenant and agree with the several Underwriters that, whether or not the transactions contemplated by this Agreement are consummated, (a) the Selling Shareholders will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including (i) the fees, disbursements and expenses of the Company’s counsel, accountants and other advisors; (ii) filing fees and all other expenses in connection with the preparation, printing and filing of the Registration Statement, each Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (iii) the cost of printing or producing this Agreement, closing documents (including any compilations thereof) and such other documents as may be required in connection with the offering, purchase, sale and delivery of the Shares; (iv) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(c), including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification (it being agreed and understood that the expenses of counsel under this clause (iv) and clause (vi) below, in the aggregate, shall not exceed $30,000); (v) all fees and expenses in connection with listing the Ordinary Shares (including the Shares) on the Exchange; (vi) the filing fees incident to, and the reasonable fees and disbursements of counsel for the Underwriters in connection with, securing any required review by FINRA of the terms of the sale of the Shares (it being agreed and understood that the expenses of counsel under this clause (vi) and clause (iv) above, in the aggregate, shall not exceed $30,000); (vii) all fees and expenses in connection with the preparation, issuance and delivery of the certificates representing the Shares to the Underwriters, including any stock or other transfer taxes and any stamp or other similar duties payable upon the sale, issuance or delivery of the Shares to the Underwriters; (viii) the cost and charges of any transfer agent or registrar; (ix) the transportation and other expenses incurred by the Company in connection with presentations to prospective purchasers of Shares; and (x) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 8; provided that neither the Company nor any Selling Shareholder shall be required to pay any expenses related to any legal counsel or other advisor to any of the Underwriters other than as provided in clauses (iv) and (vi) above; and (b) each Selling Shareholder will pay or cause to be paid all expenses incurred by such Selling Shareholder incident to the performance of such Selling Shareholders’ obligations under this Agreement which are not otherwise specifically provided for in this Section 8, including (i) all expenses incident to and transfer taxes and any stamp or other similar duties payable upon the sale and delivery of the Shares to be sold by such Selling Shareholder to the Underwriters hereunder, but excluding any share transfer taxes payable in resale of any of the Shares by the Underwriters and (ii) the fees, disbursements and expenses of the Selling Shareholders’ counsel and other advisors, if any.

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9.The several obligations of the Underwriters hereunder to purchase the Shares on the Closing Date or each Option Closing Date, as the case may be, are subject to the performance by the Company and each of the Selling Shareholders of their respective obligations hereunder and to the following additional conditions:

(a)The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Securities Act within the applicable time period prescribed for such filing by the Rules and Regulations and in accordance with Section 5(a); all material required to be filed by the Company pursuant to Rule 433(d) under the Securities Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433 under the Securities Act; if the Company has elected to rely upon Rule 462(b) under the Securities Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof or the Prospectus or any part thereof or any Issuer Free Writing Prospectus shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission or any state securities commission; and all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of the Representatives.

(b)The respective representations and warranties of the Company and the Selling Shareholders contained herein are true and correct on and as of the Closing Date or the Option Closing Date, as the case may be, as if made on and as of the Closing Date or the Option Closing Date, as the case may be, except for any representations and warranties that speak as of a specific date, in which case they are true and correct as of such date, and each of the Company and the Selling Shareholders shall have complied with all agreements and all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or the Option Closing Date, as the case may be.

(c)Subsequent to the execution and delivery of this Agreement and prior to the Closing Date or the Option Closing Date, as the case may be, there shall not have occurred any downgrading, nor shall any notice have been given of (i) any downgrading, (ii) any intended or potential downgrading or (iii) any review or possible change that does not indicate an improvement, in the rating accorded any securities of or guaranteed by the Company or any Subsidiary by any “nationally recognized statistical rating organization”, as such term is defined for purposes of Rule 436(g)(2) under the Securities Act.

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(d) (i) The Company and the Subsidiaries, taken as a whole, shall not have sustained since the date of the latest audited financials statement included in the Pricing Prospectus and the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus and the Prospectus, and (ii) since the respective dates as of which information is given in the Registration Statement, the Pricing Prospectus and the Prospectus, (1) there shall not have been any change in the share capital or long-term debt of the Company or any Subsidiary, except for (i) changes in share capital related to the conversion of the Company from a private limited liability company to a public limited liability company, (ii) changes resulting from the exercise of stock options or other equity incentives, or grants of restricted stock units or other similar awards pursuant to the Company’s equity incentive plans as described in the Pricing Prospectus and the Prospectus and (iii) changes in long-term debt resulting from any credit facility provided to the Company by any of the Underwriters or any of their respective affiliates and (2) there shall not have been any material adverse change, or any development that would reasonably be expected to have a material adverse change, in or affecting the general affairs, business, prospects, management, financial position, shareholders’ equity or results of operations of the Company and the Subsidiaries, considered as one enterprise, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Closing Date or Option Closing Date, as the case may be, on the terms and in the manner contemplated in the Pricing Prospectus.

(e)the Representatives shall have received on and as of the Closing Date or the Option Closing Date, as the case may be, (i) a certificate of two executive officers of the Company, at least one of whom has specific knowledge about the Company’s financial matters, in form and substance reasonably satisfactory to the Representatives, to the effect (1) set forth in Sections 9(b) (with respect to the respective representations, warranties, agreements and conditions of the Company) and 9(c), (2) that none of the situations set forth in clause (i) or (ii) of Section 9(d) shall have occurred and (3) that no stop order suspending the effectiveness of the Registration Statement has been issued and to the knowledge of the Company, no proceedings for that purpose have been instituted or are pending or contemplated by the Commission, and (ii) a certificate of the Selling Shareholders, in form and substance reasonably satisfactory to the Representatives, to the effect set forth in Section 9(b) (with respect to the respective representations, warranties, agreements and conditions of the Selling Shareholders).

(f)On the Closing Date or Option Closing Date, as the case may be, Allen & Overy S.C.S., counsel for the Company, shall have furnished to the Representatives their favorable written opinion, dated the Closing Date or the Option Closing Date, as the case may be, in form and substance reasonably satisfactory to the Representatives.

(g)On the Closing Date or Option Closing Date, as the case may be, Latham & Watkins LLP, counsel for the Company, shall have furnished to the Representatives their favorable written opinion, dated the Closing Date or the Option Closing Date, as the case may be, in form and substance reasonably satisfactory to the Representatives.

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(h)On the Closing Date or Option Closing Date, as the case may be, Herzog Fox & Neeman, counsel for the Company, shall have furnished to the Representatives their favorable written opinion, dated the Closing Date or the Option Closing Date, as the case may be, in form and substance satisfactory to counsel for the Representatives.

(i)On the Closing Date or Option Closing Date, as the case may be, Latham & Watkins LLP, counsel for Caesars, shall have furnished to the Representatives their favorable written opinion, dated the Closing Date or the Option Closing Date, as the case may be, in form and substance reasonably satisfactory to the Representatives.

(j)                 On the Closing Date, Herzog Fox & Neeman, counsel for Elyahu Azur and Aharon Aran, shall have furnished to the Representatives their favorable written opinion, dated the Closing Date, in form and substance satisfactory to counsel for the Representatives.

(k)                On the Closing Date, Raz, Dlugin & Co., counsel for Pinhas Zahavi, shall have furnished to the Representatives their favorable written opinion, dated the Closing Date, in form and substance reasonably satisfactory to the Representatives.

(l)On the effective date of the Registration Statement and, if applicable, the effective date of the most recently filed post-effective amendment to the Registration Statement, BDO shall have furnished to the Representatives a letter, dated the date of delivery thereof, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Pricing Prospectus and the Prospectus.

(m)On the Closing Date or Option Closing Date, as the case may be, the Representatives shall have received from BDO a letter, dated the Closing Date or Option Closing Date, as the case may be, to the effect that they reaffirm the statements made in the letter furnished pursuant to Section 9(l), except that the specified date referred to shall be a date not more than three business days prior to the Closing Date or Option Closing Date, as the case may be.

(n)On the effective date of the Registration Statement and the effective date of any post-effective amendment thereto filed subsequent to the date hereof, the Representatives shall have received from the Company a certificate of the Chief Financial Officer of the Company, dated the date of delivery thereof, in form and substance reasonably satisfactory to the Representatives, with respect to certain data contained in the Registration Statement, the Pricing Prospectus and the Prospectus, providing “management comfort” with respect to such information.

(o)On the Closing Date or Option Closing Date, as the case may be, the Representatives shall have received from the Company a certificate of the Chief Financial Officer of the Company, dated the Closing Date or Option Closing Date, as the case may be, to the effect that he reaffirms the statements made in the certificate furnished pursuant to Section 9(l).

(p)On the Closing Date or Option Closing Date, as the case may be, Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, shall have furnished to the Representatives their favorable opinion, dated the Closing Date or the Option Closing Date, as the case may be, with respect to the Registration Statement, the Prospectus and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters.

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(q)FINRA shall have confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and conditions.

(r)The Representatives shall have received “lock-up” agreements, each substantially in the form of Exhibit A hereto, from all the executive officers and directors of the Company as of the date hereof and all the Selling Shareholders, and such agreements shall be in full force and effect on the Closing Date or Option Closing Date, as the case may be.

(s)               On or prior to the Closing Date, the Selling Shareholders (other than Caesars), Deutsche Bank Securities Inc. and the Paying Agent shall have entered into the Paying Agent Agreement substantially in the form of Exhibit B hereto.

(t)               On or prior to the Closing Date, the Representatives shall have received a Declaration of Status for Israeli Income Tax Purposes executed by Caesars in the form attached as Exhibit C hereto.

(u)On or prior to the Closing Date or Option Closing Date, as the case may be, the Company and the Selling Shareholders shall have furnished to the Representatives such further information, certificates and documents as the Representatives shall reasonably request.

(v)On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the Exchange; (ii) a suspension or material limitation in trading in the Company’s securities on the Exchange; (iii) a general moratorium on commercial banking activities declared by any federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clauses (iv) or (v) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares being delivered at such Closing Date or Option Closing Date, as the case may be, on the terms and in the manner contemplated in the Prospectus.

If any condition specified in this Section 9 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated, subject to the provisions of Section 13, by the Representatives by notice to the Company at any time at or prior to the Closing Date or Option Closing Date, as the case may be, and such termination shall be without liability of any party to any other party, except as provided in Section 13.

10.(a) The Company agrees to indemnify and hold harmless each Underwriter, its partners, members, directors, officers, employees, agents, affiliates and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred (including without limitation, reasonable attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Initial Registration Statement, as originally filed or any amendment thereof, the Registration Statement, or any post-effective amendment thereof, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or in any supplement thereto or amendment thereof, any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company and the Selling Shareholders will not be liable in any such case to the extent that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made in the Initial Registration Statement, as originally filed, or any amendment thereof, the Registration Statement, or any post-effective amendment thereof, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or in any supplement thereto or amendment thereof, any Issuer Free Writing Prospectus, or any Written Testing-the-Waters Communication in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter is the information described as such in Section 10(c) hereof.

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(b)Each Selling Shareholder agrees, severally and not jointly, to indemnify and hold harmless each Underwriter, its partners, members, directors, officers, employees, agents, affiliates and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred (including without limitation, reasonable attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Initial Registration Statement, as originally filed or any amendment thereof, the Registration Statement, or any post-effective amendment thereof, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or in any supplement thereto or amendment thereof, any Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act, in reliance upon and in conformity with information furnished to the Company in writing by any such Selling Shareholder expressly for use therein, it being understood and agreed that the only such information furnished by any Selling Shareholder consists of the statements contained with respect to such Selling Shareholder under the caption “Principal and Selling Shareholders” in the Prospectus; provided, that the liability of a Selling Shareholder pursuant to this Section 10(b) shall not exceed the product of the number of Shares sold by such Selling Shareholder and the public offering price of the Shares as set forth in the Prospectus (net of any underwriting discounts and commissions but before deducting expenses) (with respect to each Selling Shareholder, the “Selling Shareholder Proceeds”).

(c)Each Underwriter severally, and not jointly, agrees to indemnify and hold harmless the Company, each Selling Shareholder, each of the directors of the Company, each of the officers of the Company who shall have signed the Registration Statement, and each other person, if any, who controls the Company or a Selling Shareholder within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever as incurred (including without limitation, reasonable attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Initial Registration Statement, as originally filed or any amendment thereof, the Registration Statement, or any post-effective amendment thereof, or any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or in any supplement thereto or amendment thereof, any Issuer Free Writing Prospectus or any Written Testing-the-Waters Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with information furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the [last] paragraph at the bottom of the cover page concerning the terms of the offering by the Underwriters, the concession and reallowance figures appearing in the [eighth] paragraph under the caption “Underwriting” and the information contained in the [sixteenth] paragraph under the caption “Underwriting”.

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(d)Promptly after receipt by an indemnified party under Section 10(a), 10(b) or 10(c) of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such Section, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have under this Section 10). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and jointly with any other indemnifying party similarly notified, to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnified party). Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, which counsel, in the event of indemnified parties under Section 10(a), shall be selected by the Representatives. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

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(e)If the indemnification provided for in this Section 10 is unavailable to or insufficient to hold harmless an indemnified party under Section 10(a), 10(b) or 10(c) in respect of any losses, liabilities, claims, damages or expenses (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, liabilities, claims, damages or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Shareholders on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Selling Shareholders on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Shareholders on the one hand and the Underwriters on the other from the offering of the Shares shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Selling Shareholders bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Selling Shareholders on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company, the Selling Shareholders and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 10(e) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 10(e). The amount paid or payable by an indemnified party as a result of the losses, liabilities, claims, damages or expenses (or actions in respect thereof) referred to above in this Section 10(e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10(e), (i) no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission and (ii) the contribution by each Selling Shareholder pursuant to this Section 10(e) shall not exceed its Selling Shareholder Proceeds.

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No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this Section 10(e) to contribute are several in proportion to their respective underwriting obligations and not joint and the Selling Shareholders’ and the Company’s obligations in this Section 10(e) to contribute are several in proportion to the Selling Shareholder Proceeds received and not joint.

(f)The obligations contained in this Section 10 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

11.If any Underwriter or Underwriters default in its or their obligations to purchase Shares hereunder on the Closing Date or any Option Closing Date and the aggregate number of Shares that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total number of Shares that the Underwriters are obligated to purchase on such Closing Date or Option Closing Date, as the case may be, the Representatives may make arrangements satisfactory to the Company and the Selling Shareholders for the purchase of such Shares by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date or Option Closing Date, as the case may be, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Shares that such defaulting Underwriters agreed but failed to purchase on such Closing Date or Option Closing Date, as the case may be. If any Underwriter or Underwriters so default and the aggregate number of Shares with respect to which such default or defaults occur exceeds 10% of the total number of Shares that the Underwriters are obligated to purchase on such Closing Date or Option Closing Date, as the case may be, and arrangements reasonably satisfactory to the Representatives and the Selling Shareholders for the purchase of such Shares by other persons are not made within 36 hours after such default, this Agreement will terminate, subject to the provisions of Section 13, without liability on the part of any non-defaulting Underwriter, the Company or the Selling Shareholders, except as provided in Section 13. Nothing herein will relieve a defaulting Underwriter from liability for its default.

In the event of any such default which does not result in a termination of this Agreement, either the Representatives or the Selling Shareholders shall have the right to postpone the Closing Date or the relevant Option Closing Date, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section 11.

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12.Notwithstanding anything herein contained, this Agreement (or the obligations of the several Underwriters with respect to any Option Shares which have yet to be purchased) may be terminated, subject to the provisions of Section 13, in the absolute discretion of the Representatives, by notice given to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date or the Option Closing Date, as the case may be, (a) trading generally on the New York Stock Exchange, the NYSE American, or on the NASDAQ Global Select Market or the NASDAQ Global Market shall have been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, FINRA or any other governmental or regulatory authority, (b) trading of any securities of or guaranteed by the Company or any Subsidiary shall have been suspended on any exchange or in any over-the-counter market, (c) a general moratorium on commercial banking activities in New York shall have been declared by any federal or New York State authorities or a new restriction materially adversely affecting the distribution of the Firm Shares or the Option Shares, as the case may be, shall have become effective, or (d) there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable to market the Shares to be delivered on the Closing Date or Option Closing Date, as the case may be, or to enforce contracts for the sale of the Shares.

If this Agreement is terminated pursuant to this Section 12, such termination will be without liability of any party to any other party except as provided in Section 13 hereof.

13.The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers, of the Selling Shareholders and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Company, any Selling Shareholder, or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Shares. If this Agreement is terminated pursuant to Section 9, 11 or 12 or if for any reason the purchase of any of the Shares by the Underwriters is not consummated, the Company and the Selling Shareholders shall remain responsible for the expenses to be paid or reimbursed by them pursuant to Section 8, the respective obligations of the Company, the Selling Shareholders and the Underwriters pursuant to Section 10 and the provisions of Sections 13, 14 and 17 shall remain in effect and, if any Shares have been purchased hereunder the representations and warranties in Section 1 and all obligations under Section 5, Section 6 and Section 7 shall also remain in effect. If this Agreement shall be terminated by the Underwriters, or any of them, under Section 9 or otherwise because of any failure or refusal on the part of the Company or the Selling Shareholders to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason any of the Company or the Selling Shareholders shall be unable to perform its obligations under this Agreement or any condition of the Underwriters’ obligations cannot be fulfilled, the Company agrees to reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and expenses of its counsel) reasonably incurred by the Underwriters in connection with this Agreement or the offering contemplated hereunder.

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14.This Agreement shall inure to the benefit of and be binding upon the Company, the Selling Shareholders and the Underwriters, the officers and directors of the Company referred to herein, any controlling persons referred to herein and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Shares from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase.

15.All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given upon receipt thereof by the recipient if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives, (i) c/o J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179; Attention: Equity Syndicate Desk and (ii) c/o Deutsche Bank Securities Inc., 60 Wall Street, New York, New York 10005, Attention: Equity Capital Markets—Syndicate Desk, with a copy at the same address to General Counsel, Fax: (646) 374-1071, with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, One Manhattan West, New York, 10001-8602, Attention: David J. Goldschmidt, Esq. Notices to the Company shall be given to it at NeoGames S.A., 5, rue de Bonnevoie, L-1260 Luxembourg, Grand Duchy of Luxembourg. Notices to Caesars shall be given to [●] at [●] and notices to each of the other Selling Shareholders shall be given to [●] at [●], Attention: [●].

16.This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.

17.THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO SUCH STATE’S PRINCIPLES OF CONFLICTS OF LAWS.

18.The parties hereby submit to the jurisdiction of and venue in the federal courts located in the City of New York, New York in connection with any dispute related to this Agreement, any transaction contemplated hereby or any other matter contemplated hereby (except for proceedings instituted in regard to the enforcement of a judgment of any such court). The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit or proceeding related to this Agreement, any transaction contemplated hereby or any other matter contemplated hereby in the federal courts located in the City of New York, New York and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

19.This Agreement has been negotiated and executed by the parties in English. In the event any translation of this Agreement is prepared for convenience or any other purpose, the provisions of the English version shall prevail.

20.To the extent that the Company or any Selling Shareholder has or hereafter may acquire any immunity (whether on the basis of sovereignty or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to itself or any of its property, the Company and such Selling Shareholder hereby irrevocably waive and agree not to plead or claim such immunity in respect of its obligations under this Agreement.

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21.The Company and each Selling Shareholder have appointed Puglisi & Associates, at its offices located at 850 Library Avenue, Suite 204, Newark, DE 19711, as their authorized agent (“Authorized Agent”) upon whom process may be served in any suit or proceeding related to this Agreement, any transaction contemplated hereby or any other matter contemplated hereby that may be instituted in any federal courts located in the City of New York, New York by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or by any person who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act. Such appointment shall be irrevocable. Each of the Company and each Selling Shareholder hereby represents and warrants that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and the Company and each Selling Shareholder agree to take any and all action, including the filing of any and all documents that may be necessary to continue such appointment in full force and effect for a period of seven years from the date of this Agreement. Service of process in compliance with applicable requirements upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Company and each Selling Shareholder.

22.Each reference in this Agreement to U.S. dollars is of the essence. The obligations of the Company and each of the Selling Shareholders in respect of any amount due to any Underwriter under this Agreement will, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), not be discharged until the first business day following payment in such other currency on which (and only to the extent that) such Underwriter may, in accordance with normal banking procedures, purchase U.S. dollars with such other currency. If the U.S. dollars that may be so purchased on such date (or, if higher, the U.S. dollars actually purchased) for any reason falls short of the amount originally due (for example, as a result of (a) a judgment or order for any amount due by the Company or such Selling Shareholder hereunder being given or made and expressed and paid in a currency other than U.S. dollars and (b) any variation between (i) the rate of exchange at which the U.S. dollar amount is converted into the judgment currency for the purpose of such judgment or order and (ii) the rate of exchange at which the Underwriter is able to purchase U.S. dollars with the amount of the judgment currency actually received by the Underwriter), then the Company agrees to indemnify each Underwriter against any loss so incurred by such Underwriter. The foregoing indemnity shall constitute a separate and independent obligation of the Company and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, U.S. dollars. If the U.S. dollars that may be so purchased are greater than the sum originally due to the Underwriter, the Underwriter agrees to pay to the Company or Selling Shareholder, as applicable, an amount equal to the excess of the U.S. dollars so purchased over the sum originally due to the Underwriter.

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23.The Company and each of the Selling Shareholders acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement, including the determination of the public offering price of the Shares and any related discounts and commissions, is an arm’s-length commercial transaction between the Company and the Selling Shareholders on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, the Selling Shareholders or their respective shareholders, creditors, employees or any other party, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company or any Selling Shareholders with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or any Selling Shareholder on other matters) or any other obligation to the Company or any Selling Shareholder except the obligations expressly set forth in this Agreement, and (iv) the Company and each of the Selling Shareholders has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company and each of the Selling Shareholders severally agrees that each will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company or such Selling Shareholder, in connection with such transaction or the process leading thereto. Any review by the Representatives and the other Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representative and the other Underwriters and shall not be on behalf of the Company or the Selling Shareholders. Moreover, each Selling Shareholder acknowledges and agrees that, although the Representatives may be required or choose to provide certain Selling Shareholders with certain Regulation Best Interest and Form CRS disclosures in connection with the offering, the Representatives and the other Underwriters are not making a recommendation to any Selling Shareholders to participate in the offering, enter into a “lock-up” agreement, or sell any Ordinary Shares at the price determined in the offering, and nothing set forth in such disclosures is intended to suggest that the Representatives or any Underwriter is making such a recommendation.

24.The Company acknowledges that the Underwriters’ research analysts and research departments are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriters’ research analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from the views of their respective investment banking divisions. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriters’ investment banking divisions. The Company acknowledges that each of the Underwriters is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the accounts of its customers and hold long or short positions in debt or equity securities of the companies that may be the subject of the transactions contemplated by this Agreement.

25.Notwithstanding anything herein to the contrary, the Company and the Selling Shareholders are authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company and the Selling Shareholders relating to that treatment and structure, without the Underwriters imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.

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26.This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company, the Selling Shareholders and the Underwriters, or any of them, with respect to the subject matter hereof.

27.The Company, the Selling Shareholders and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

28.In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. For purposes of this Section 28, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument will become a binding agreement among the Company, the Selling Shareholders and the Underwriters.

Very truly yours,

NEOGAMES S.A.

By:                                                
Name:
Title:

CAESARS ENTERTAINMENT, INC.

By:                                                                                                
Name:
Title:

[SELLING SHAREHOLDERS]

By:                                                                                               
Name:
Title:

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Accepted as of the date hereof:

J.P. MORGAN SECURITIES LLC

DEUTSCHE BANK SECURITIES INC.

By: J.P. Morgan Securities LLC

By:                                                    
Title:

By: Deutsche Bank Securities Inc.

By:                                                    
Title:

By:                                                    
Title:

For themselves and as Representatives of the other Underwriters named in Schedule I hereto

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SCHEDULE I

Underwriter	Number of Firm Shares to be Purchased
J.P. Morgan Securities LLC	[●]
Deutsche Bank Securities Inc.	[●]
BofA Securities, Inc.	[●]
Macquarie Capital (USA) Inc.	[●]
Truist Securities, Inc.	[●]
Stifel, Nicolaus & Company, Incorporated	[●]
Total	[●]

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SCHEDULE II

	Number of Firm Shares to be Sold	Maximum Number of Option Shares to be Sold
Caesars Entertainment, Inc.	[●]	[●]
Elyahu Azur	[●]	[●]
Pinhas Zahavi	[●]	[●]
Aharon Aran	[●]	[●]
Total	[●]	[●]

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SCHEDULE III

(a) Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package:

Electronic roadshow, dated August [●], 2021.

(b) Pricing Terms included in the Pricing Disclosure Package:

Public offering price per share: $[●].

Number of Firm Shares purchased by the Underwriters: [●].

Number of Option Shares: [●].

(c) Written Testing-the-Waters Communications:

[None.]

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EXHIBIT A

LOCK-UP AGREEMENT

J.P. Morgan Securities LLC

Deutsche Bank Securities Inc.

c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179

c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, New York 10005

Ladies and Gentlemen:

The undersigned refers to the proposed Underwriting Agreement (the “Underwriting Agreement”) among NeoGames S.A., a Luxembourg public limited liability company (société anonyme) (the “Company”), J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., as representatives (the “Representatives”) of the several underwriters named therein (the “Underwriters”), and the selling shareholders named therein. As an inducement to the Representatives to execute the Underwriting Agreement in connection with the proposed public offering of shares of the Company’s ordinary shares, no par value per share, of the Company (“Ordinary Shares”), pursuant to a Registration Statement on Form F-1, the undersigned hereby agrees that from the date hereof and until 90 days after the public offering date set forth on the final prospectus used to sell the Ordinary Shares (the “Public Offering Date”) pursuant to the Underwriting Agreement (such 90 day period being referred to herein as the “Lock-Up Period”), the undersigned will not (and will cause any spouse or immediate family member of the spouse or the undersigned living in the undersigned’s household, any partnership, corporation or other entity within the undersigned’s control, and any trustee of any trust that holds Ordinary Shares or other securities of the Company for the benefit of the undersigned or such spouse or family member not to) offer, sell, contract to sell (including any short sale), pledge, lend, hypothecate, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), grant any option, right or warrant for the sale of, purchase any option or contract to sell, sell any option or contract to purchase, or otherwise encumber, dispose of or transfer, or grant any rights with respect to, directly or indirectly, any Ordinary Shares or securities convertible into or exchangeable or exercisable for any Ordinary Shares, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Ordinary Shares, whether any such aforementioned transaction is to be settled by delivery of the Ordinary Shares or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of the Representatives, which consent may be withheld in the Representatives’ sole discretion.

The foregoing restrictions shall not apply to bona fide gifts by the undersigned, provided that (a) each resulting transferee of the Company’s securities executes and delivers to the Representatives an agreement reasonably satisfactory to the Representatives certifying that such transferee is bound by the terms of this Agreement and has been in compliance with the terms hereof since the date first above written as if it had been an original party hereto, (b) to the extent any interest in the Company’s securities is retained by the undersigned (or such spouse or family member), such securities shall remain subject to the restrictions contained in this Agreement and (c) no filing under Section 16 of the Exchange Act, or other public filing, report or announcement reporting a reduction in beneficial ownership of Ordinary Shares shall be required or shall be voluntarily made during the Lock-Up Period.

The foregoing restrictions shall not apply to Ordinary Shares sold by the undersigned pursuant to (a) the Underwriting Agreement or (b) a written plan meeting the requirements of Rule 10b-5 under the Exchange Act entered into by the undersigned prior to the date hereof, provided that (i) such plan is not amended during the Lock-Up Period, (ii) any required public announcement, report or filing under Section 16 of Exchange Act made during the Lock-Up Period with respect to such plan states that any sale or transfer of the undersigned’s Ordinary Shares were made pursuant to a Rule 10b-5 plan entered into prior to the Public Offering Date and (iii) the undersigned does not otherwise voluntarily effect any public announcement, report or filing under section 16 of the Exchange Act regarding such plan during the Lock-Up Period.

In addition, the undersigned agrees that, during the period commencing on the date hereof and ending 90 days after the Public Offering Date, without the prior written consent of the Representatives (which consent may be withheld in its sole discretion): (a) the undersigned will not request, make any demand for or exercise any right with respect to, the registration of any Ordinary Shares or any security convertible into or exercisable or exchangeable for Ordinary Shares and (b) the undersigned waives any and all notice requirements and rights with respect to the registration of any such security pursuant to any agreement, understanding or otherwise to which the undersigned is a party.

Any Ordinary Shares received upon exercise of options granted to the undersigned will also be subject to this Agreement. Any Ordinary Shares acquired by the undersigned in the open market on or after the Public Offering Date (except Ordinary Shares acquired pursuant to a “friends and family” or directed share program) will not be subject to this Agreement, provided that no filing under Section 16 of the Exchange Act, or other public filing, report or announcement reporting a reduction in beneficial ownership of Ordinary Shares shall be required or shall be voluntarily made during the Lock-Up Period. A transfer of Ordinary Shares to a family member or a trust for the benefit of the undersigned or a family member may be made, provided that (a) the transferee agrees in writing prior to such transfer to be bound by the terms of this Agreement as if it were a party hereto and (b) no filing under Section 16 of the Exchange Act, or other public filing, report or announcement reporting a reduction in beneficial ownership of Ordinary Shares shall be required or shall be voluntarily made during the Lock-Up Period.

A - 2

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to (a) decline to make any transfer of Ordinary Shares if such transfer would constitute a violation or breach of this Agreement and (b) place legends and stop transfer instructions on any such Ordinary Shares owned or beneficially owned by the undersigned.

The undersigned acknowledges and agrees that the Underwriters have not provided any recommendation or investment advice nor have the Underwriters solicited any action from the undersigned with respect to the public offering of the Ordinary Shares and the undersigned has consulted their own legal, accounting, financial, regulatory and tax advisors to the extent deemed appropriate. The undersigned further acknowledges and agrees that, although the Representatives may be required or choose to provide certain Regulation Best Interest and Form CRS disclosures to you in connection with the public offering, the Representatives and the other Underwriters are not making a recommendation to you to participate in the public offering, enter into this Agreement, or sell any Ordinary Shares at the price determined in the public offering, and nothing set forth in such disclosures is intended to suggest that the Representatives or any Underwriter is making such a recommendation.

The undersigned and the Representatives hereby consent to receipt of this Agreement in electronic form and understand and agree that this Agreement may be signed electronically. In the event that any signature is delivered by facsimile transmission, electronic mail, or otherwise by electronic transmission evidencing an intent to sign this Agreement (including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com), such facsimile transmission, electronic mail or other electronic transmission shall create a valid and binding obligation of the undersigned with the same force and effect as if such signature were an original. Execution and delivery of this Agreement by facsimile transmission, electronic mail or other electronic transmission is legal, valid and binding for all purposes.

This Agreement is irrevocable and shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to choice of law rules. This Agreement shall lapse and become null and void if the Public Offering Date shall not have occurred on or before October 31, 2021.

Very truly yours,

Printed Name:                             

Date:                                           

A - 3

EXHIBIT B

Form of Paying Agent Agreement

Exhibit C

Declaration of Status for Israeli Income Tax Purposes

EX-3

Exhibit 1.1

Registre de Commerce et des Sociétés

Numéro RCS : B186309

Référence de dépôt : L200254401

Déposé et enregistré le 09/12/2020

« Neogames S.A. »

Société anonyme

5 rue de Bonnevoie

L-1260 Luxembourg

R.C.S. Luxembourg : B186309

 

Constituée sous la dénomination «Neogames S.à r.l.» suivant acte reçu par Maître Gérard LECUIT, alors notaire de résidence à Luxembourg, en date du 23 avril 2014, publié au Mémorial C, Recueil des Sociétés et Associations numéro 1666 du 27 juin 2014.

Les statuts ont été modifiés en dernier lieu suivant acte reçu par Maître Henri HELLINCKX, notaire de résidence à Luxembourg, en date du 30 juillet 2021, non encore publié au Recueil Electronique des Sociétés et Associations (RESA).

STATUTS COORDONNÉS

Au 30 juillet 2021

ARTICLE 1.          Form and name

There exists a public limited liability company (société anonyme) under the name of “NeoGames S.A.” (the Company), governed by the laws of the Grand Duchy of Luxembourg and in particular the law dated 10 August 1915 on commercial companies, as amended (the Companies Act) and by the present articles of incorporation (the Articles, and a reference to an “Article” shall be construed as a reference to an article of these Articles).

ARTICLE 2.          Registered office

2.1          Place and transfer of the registered office

The registered office of the Company is established in the municipality of Luxembourg. It may be transferred within such municipality or to any other place in the Grand Duchy of Luxembourg by a resolution of board of directors of the Company (the Board), which is authorised to amend the Articles, to the extent necessary, to reflect the transfer and the new location of the registered office.

2.2          Branches, offices, administrative centres and agencies

The Board shall further have the right to set up branches, offices, administrative centres and agencies wherever it shall deem fit, either within or outside the Grand Duchy of Luxembourg.

ARTICLE 3.          Duration

3.1          Unlimited duration

The Company is formed for an unlimited duration.

3.2          Dissolution

The Company may be dissolved, at any time, by a resolution of the general meeting of the shareholders of the Company (the General Meeting) adopted in the manner provided for in Article 11 with respect to the amendments of the Articles.

ARTICLE 4.          Purpose

The corporate purpose of the Company is to develop activities in relation with iLottery and iGaming solutions and services as well as any related areas. This includes the (i) the acquisition, holding and disposal, in any form, by any means, whether directly or indirectly, of participations, rights and interests in, and obligations of, Luxembourg and foreign companies, (ii) the acquisition by purchase, subscription, or in any other manner, as well as the transfer by sale, exchange or in any other manner of stock, partnership interests, bonds, debentures, notes and other securities or financial instruments of any kind (including notes or parts or units issued by Luxembourg or foreign mutual funds or similar undertakings) and receivables, claims or loans or other credit facilities and agreements or contracts relating thereto, and (iii) the ownership, administration, development and management of a portfolio of assets (including, among other things, the assets referred to in (i) and (ii) above).

The Company may borrow in any form. It may enter into any type of loan agreement and it may issue notes, bonds, debentures, certificates, shares, beneficiary parts, warrants and any kind of debt or equity securities including under one or more issuance programs. The Company may further list all or part of its shares on a regulated or unregulated stock exchange in or outside of the European Union. The Company may lend funds including the proceeds of any borrowings and/or issues of securities to its subsidiaries, affiliated companies or any other company.

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The Company may also give guarantees and grant security interests over some or all of its assets including, without limitation, by way of pledge, transfer or encumbrance, in favor of or for the benefit of third parties to secure its obligations or the obligations of its subsidiaries, affiliated companies or any other company.

The Company may enter into, execute and deliver and perform any swaps, futures, forwards, derivatives, options, repurchase, stock lending and similar transactions. The Company may generally use any techniques and instruments relating to investments for the purpose of their efficient management, including, but not limited to, techniques and instruments designed to protect it against credit, currency exchange, interest rate risks and other risks.

The Company may carry out any commercial, industrial, and financial operations, which are directly or indirectly connected with its purpose or which may favor its development. In addition, the Company may acquire and sell real estate properties, for its own account, either in the Grand Duchy of Luxembourg or abroad and it may carry out all operations relating to real estate properties.

In general, the Company may take any controlling and supervisory measures and carry out any operation or transaction which it considers necessary or useful in the accomplishment and development of its purpose.

The descriptions above are to be construed broadly and their enumeration is not limiting. The Company's purpose shall include any transaction or agreement which is entered into by the Company, provided it is not inconsistent with the foregoing matters.

ARTICLE 5.          Share capital

5.1          Outstanding share capital

The share capital is set at USD 45,112.62 (forty-five thousand one hundred and twelve United States Dollar and sixty-two cents), represented by 25,479,728 (twenty-five million four hundred and seventy-nine thousand seven hundred twenty-eight) shares, without nominal value.

5.2          Share capital increase and share capital reduction

The share capital of the Company may be increased or reduced by a resolution adopted by the General Meeting in the manner required for amendment of the Articles, as provided for in Article 11.

5.3          Pre-emptive rights

In the case of an issuance of shares in consideration for a payment in cash or an issuance in consideration for a payment in cash of those instruments covered in article 420-27 of the Companies Act, including, without limitation, convertible bonds that entitle their holders to subscribe for or to be allocated with shares, the shareholders shall have pro rata pre-emptive rights with respect to any such issuance in accordance with the Companies Act.

The preferential subscription period is decided by the Board but must be of at least fourteen (14) days as from the date of the publication of the offering in the RESA (Recueil électronique des sociétés et associations) and a journal published in Luxembourg (the Preferential Subscription Period).

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Third parties may take part in the capital increase at the end of the Preferential Subscription Period, except if the Board decides that preferential subscription rights (the PSR) shall be exercised, in proportion to the capital represented by their shares, by the holders of such PSR (the PSR Holders) who already exercised their PSR during the Preferential Subscription Period. In that case, the subscription terms of the PSR Holders shall be determined by the Board.

The General Meeting may limit or withdraw the PSR or authorise the Board to do so (as the case may be) under the conditions prescribed for under article 420-26(5) of the Companies Act.

5.4          Contributions to a “capital surplus” account

The General Meeting is authorised to approve capital contributions without the issuance of new shares by way of a payment in cash or a payment in kind or otherwise, on the terms and conditions set by the General Meeting. A capital contribution without the issuance of new shares shall be booked in a “capital surplus” account.

The General Meeting has the option (but not the obligation) to decide that any contribution in cash or in kind made by any shareholder as “capital surplus” will be booked in a specific “capital surplus” account allocated to the relevant shareholder and will be available only (i) for the purpose of distributions, whether by dividend, share redemption or otherwise, to the relevant shareholder or (ii) to be incorporated in the share capital to issue shares corresponding to the relevant shareholder only.

5.5          Authorisation for the Board to increase the share capital

(a)          Size of the authorisation

The authorised capital of the Company is set at USD 188,557.26 (one hundred eighty-eight thousand five hundred fifty-seven United States Dollars and twenty-six cents) (the Authorised Capital Amount) represented by a number of shares to be freely determined by the Board, each without nominal value (but with a par accounting value at least equivalent to the par accounting value of the existing shares from time to time).

(b)          Conditions of the authorisation

The Board is authorised, during a period starting on 10 November 2020  and expiring on the fifth anniversary of such date (the Period), to increase the current share capital up to the Authorised Capital Amount, in whole or in part from time to time: (i) by way of issuance of shares in consideration for a payment in cash, (ii) by way of issuance of shares in consideration for a payment in kind, and/or (iii) by way of capitalisation of distributable profits and reserves, including share premium and capital surplus, with or without an issuance of new shares.

The Board is authorised to determine the terms and conditions attaching to any subscription and issuance of shares pursuant to the authority granted under this Article 5.5, including by setting the time and place of the issuance or the successive issuances of shares, the issue price, with or without share premium, and the terms and conditions of payment for the shares under any documents and agreements including, without limitation, convertible loans, option agreements or stock option plans.

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During the Period, the Board is authorised to issue (a) convertible bonds, or any other convertible debt instruments, bonds carrying subscription rights or any other instruments entitling their holders to subscribe for or be allocated with shares, such as, without limitation, warrants (the Instruments), and (b) issue shares subject to and effective as of the exercise of the rights attached to the Instruments, until, with respect to both items (a) and (b), the amount of increased share capital that would be reached as a result of the exercice of the rights attached to the Instruments is equal to the authorised share capital and (ii) issue shares pursuant to the exercise of the rights attached to the Instruments until the amount of increased share capital resulting from such issuance of shares is equal to the authorised share capital, at any time, whether or not during the Period; provided that the Instruments are issued during the Period within the limits of the Authorised Capital Amount. The issuance of the shares following the exercise of the rights attached to the Instruments may be carried out by a payment in cash, a payment in kind or a capitalisation of distributable profits and reserves, including share premium and capital surplus during or after the Period.

The Board is authorised to (i) determine the terms and conditions of the Instruments, including the price, the interest rate, the exercise rate, conversion rate or the exchange rate, and the repayment conditions, and (ii) issue such Instruments.

(c)          Authorisation to cancel or limit the pre-emptive rights

The Board is authorised to cancel or limit the pre-emptive rights of the shareholders set out in the Companies Act, as reflected in Article 5.3, in connection with an issue of new shares and Instruments made pursuant to the authority granted under this Article 5.5.

(d)          Recording of capital increases in the Articles

Article 5 of the Articles shall be amended so as to reflect each increase in share capital pursuant to the use of the authorisation granted to the Board under this Article 5 and the Board shall take or authorise any person to take any necessary steps for the purpose of the recording of such increase and the consequential amendments to the Articles before a notary.

ARTICLE 6.          Shares

6.1          Form of the shares

The shares of the Company are in registered form (actions nominatives) only.

6.2          Share register and share certificates

A share register will be kept at the registered office, where it will be available for inspection by any shareholder. Such register shall set forth the name of each shareholder, its residence or elected domicile, the number of shares held by it, the nominal value (if any) or accounting par value paid in on each such share, the issuance of shares, the transfer of shares and the dates of such issuance and transfers. Without prejudice to Article 6.3, the ownership of the registered shares will be established by the entry in this register.

6.3          Deposit

Notwithstanding the foregoing in this Article 6, where shares are recorded in the register of shareholders in the name of or on behalf of a securities settlement system or the operator of such system and recorded as book-entry interests in the accounts of a professional depositary or any sub-depositary (any depositary and any sub-depositary being referred to hereinafter as a Depositary), the Company -subject to having received from the Depositary a certificate in proper form - will permit the Depository of such book-entry interests to exercise the rights attaching to the shares corresponding to the book-entry interests of the relevant shareholder, including receiving notices of general meetings, admission to and voting at general meetings, and shall consider the Depository to be the direct holder of the shares corresponding to the book-entry interests for all purposes in these Articles. The Board may determine the formal requirements with which such certificates must comply.

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Notwithstanding the other provisions of these Articles, the Company will make any and all payments (including any dividend payments and any other distributions) in respect of shares recorded in the name of a Depositary, or deposited with any of them, as the case may be, whether in cash, shares or other assets, only to such Depositary, or otherwise in accordance with such Depositary’s instructions, and that payment shall release the Company from any and all obligations for such payments.

6.4          Ownership and co-ownership of shares

The Company will recognise only one holder per share. In the event that a share is held by more than one person, the Company has the right to suspend the exercise of all rights attached to that share until one person has been appointed as sole holder in relation to the Company. The person appointed as the sole holder of the shares towards the Company in all matters by all the joint holders of those shares shall be named first in the register.

Only the joint holder of a share first named in the register, as appointed by all the joint holders of such share, shall be entitled, in its capacity as sole holder towards the Company of that share jointly held, to exercise the rights attached to such share, including without limitation:

(i) to be served notices by the Company, including convening notices relating to general meetings, (ii) to attend general meetings and to exercise the voting rights attached to the share jointly held at any such meetings, and (iii) to receive dividend payments in respect of the share jointly held.

6.5          Share redemptions

Without prejudice to Article 6.3 above, the Company may redeem its own shares within the limits set forth by law.

Any shares redeemed in accordance with this Article 6.5 may be cancelled or held for an unlimited duration as treasury shares by the Company without any voting rights and, unless otherwise decided, as the case may be, by the Board or the General Meeting without any right to any distributions whatsoever, in which case the distributions otherwise payable under such treasury shares will be allocated, and become payable, on a pro rata basis to the benefit of the remaining outstanding shares).

Such treasury shares may be distributed at any time to existing shareholders (it being understood that no preferential subscription rights or equivalent shall apply in this event) or third parties, subject to compliance with the Company’s corporate interest, by a decision of the Board.

6.6          Suspension of rights of shareholders

(a) If at any time the Company determines that a Shareholder Regulatory Event has occurred, it may at any time, by written notice (a Shareholder Regulatory Event Notice) to the holder(s) of any interest(s) in any shares (the Relevant Shares) in the Company to whom a Shareholder Regulatory Event relates (or to whom the Company reasonably believes it to relate), in its absolute discretion with immediate effect (or with effect from such date as is specified in such Shareholder Regulatory Event Notice), suspend one or more of the following rights attaching to such Relevant Shares (and the holder of such Relevant Shares shall be deemed to have irrevocably waived):

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(a)  the voting rights attached to the Relevant Shares, in accordance with article 450-1 (9) of the Companies Act;

(b)  the right to receive any payment or distribution (whether by way of dividend, interest, or otherwise) in respect of any Relevant Shares, or receive any other form of remuneration, including for services rendered; and

(c)the right to the subscribe to any further issuance of shares (and consequently to not exercise any preferential subscription rights) or other securities in respect of the Relevant Shares.

6.7          Required disposal of Disposal Shares

If at any time the Company determines that a Shareholder Regulatory Event has occurred it may, in its absolute discretion at any time, by written notice (a Disposal Notice) to a holder of any interest(s) in any shares in the Company to whom the Shareholder Regulatory Event relates (or to whom the Company reasonably believes it to relate), require the recipient of the Disposal Notice or any person named therein as interested in (or reasonably believed to be interested in) shares of the Company to dispose of such number of shares as is specified in the Disposal Notice (the Disposal Shares) and for evidence in a form reasonably satisfactory to the Company that such disposal shall have been effected to be supplied to the Company within fourteen (14) days (or such other time required by a Gambling Regulatory Authority) from the date of the Disposal Notice or within such other period as the Company shall (in its absolute discretion) consider reasonable. The Company may withdraw a Disposal Notice so given whether before or after the expiration of the period referred to therein if it appears to the Company that the ground or purported grounds for its service do not exist or no longer exist.

6.8          Right of Company to sell Disposal Shares

If a Disposal Notice is not complied with in accordance with its terms or otherwise not complied with to the satisfaction of the Company within the time specified, and has not been withdrawn, the Company shall, in its absolute discretion, be entitled, (a) so far as it is able, to dispose (or procure the disposal) of the Disposal Shares to a designated third party at the highest price reasonably obtainable by the Company or its agents in the circumstances (or such amount permitted by the Gambling Regulatory Authority) and shall give written notice of any such disposal to those persons on whom the Disposal Notice was served, and/or (b) subject to all applicable law and regulation, to acquire the Disposal Shares by way of a redemption in accordance with applicable law.

Any such disposal by the Company shall be completed as soon as reasonably practicable after expiry of the time specified in the Disposal Notice and, in any event, within ninety (90) days after the expiry of the time specified in the Disposal Notice provided that a disposal may be suspended during any period when dealings by the directors in the Company’s shares are not permitted by applicable law or regulation but any disposal of Disposal Shares so suspended shall be completed within thirty (30) days after the expiry of the period of such suspension. To the extent necessary, the holder of the Disposal Shares grants an irrevocable power of attorney to the Company (and any of its directors, officer, employee or agent) to carry out any action and execute any document necessary or useful in relation to the disposal of the Disposal Shares.

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6.9          Steps to be taken in connection with the sale of Disposal Shares

Neither the Company nor any director, officer, employee or agent of the Company shall be liable to any holder of or any person having any interest in Disposal Shares disposed of in accordance with Articles 6.6 to 6.11 (inclusive) or to any other person provided that, in disposing of such Disposal Shares, the Company acts in good faith within the time periods specified above. For the purpose of effecting any disposal of Disposal Shares held in uncertificated form, the Company may make such arrangements on behalf of the registered holder of the Disposal Shares as it may think fit to transfer title to those shares through a relevant system. For the purpose of effecting any disposal of Disposal Shares held in certificated form, the Company may authorise in writing any, director, officer, employee or agent of the Company to execute any necessary transfer on behalf of the registered holder(s) and may issue a new share certificate or other document of title to the purchaser and enter the name of the transferee in the register. The net proceeds of any such disposal shall be received by the Company whose receipt shall be a good discharge for the purchase money and shall be paid (without interest being payable thereon) to the former registered holder of the Disposal Shares upon surrender by him of all relevant share certificate(s) or other documents of title in respect of such Disposal Shares. The transferee shall not be bound to see the application of such proceeds and once the name of the transferee has been entered into the register in respect of the Disposal Shares, the validity of the transfer of the Disposal Shares shall not be questioned. Any delay on the part of the Company in exercising any or all of its rights under Articles 6.6 to 6.11 (inclusive) shall not in any way invalidate the transfer of any Disposal Shares made hereunder or any other steps undertaken in connection therewith. Save as otherwise specifically provided by Articles 6.6 to 6.11 (inclusive), the manner, timing and terms of any disposal of Disposal Shares by (or on behalf of) the Company shall be determined by the Company and the Company may take advice from such persons as are considered by it to be appropriate as to the manner, timing and terms of any such disposal. The holder(s) of the Relevant Shares to whom such Shareholder Regulatory Event relates shall be liable to reimburse the Company for all expenses incurred by the Company in performing its obligations and exercising its rights hereunder, including attorney’s fees.

6.10          Meaning of Shareholder Regulatory Event

For the purposes of Articles 6.6 to 6.11 (inclusive), a Shareholder Regulatory Event shall occur if:

(a) a Gambling Regulatory Authority informs the Company or any member of its group that any member of the Company or any person interested or believed to be interested in shares of the Company is for whatever reason:

(i)unsuitable to be a person interested in shares of the Company;

(ii)  not licensed or qualified to be a person interested in shares of the Company;

(iii)disqualified as a holder of interests in shares of the Company, under any legislation regulating the operation of any gambling activity or any activity ancillary or related thereto undertaken or to be undertaken by the Company or any member of its group or any other company, partnership, body corporate or other entity in which the Company or any member of its group is interested; or

(iv)failing to reasonably cooperate fully with an investigation by a Gambling Regulatory Authority which as a result jeopardizes the Company’s ability to obtain or maintain any license or registration.

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(b) a Gambling Regulatory Authority by reason, in whole or in part, of the interest of any person or persons in shares of the Company (or by its belief as to the interest of any person or persons in such shares) has:

(i) refused, revoked, cancelled, opposed, or indicated to the Company or any member of its group or any other company, partnership, body corporate or other entity in which the Company or any member of its group is interested that it will or is likely to or may refuse, revoke, cancel or oppose, in relation to; or

(ii)imposed any condition or limitation which may have a material adverse impact upon the operation of any gambling activity or any activity ancillary or related thereto undertaken or to be undertaken by the Company or other entity in which the Company or any member of its group is interested, or upon the benefit of which the Company or any other member of its group derives or is likely to derive from the operation by any other member of its group or any other company, partnership, body corporate, or other entity in which the Company or any member of its group is interested in any gambling activity or any activity ancillary or related thereto or indicated to the Company or any member of its group or any such other company, partnership, body corporate or other entity that it will or is likely to or may impose any such condition or limitation, in relation to, the grant, renewal, or the continuance of any registration, licence, approval, finding of suitability, consent, or certificate required by any legislation regulating (or code of conduct or practice recognised or endorsed by the Gambling Regulatory Authority relevant to) the operation of any gambling activity or any activity ancillary or related thereto undertaken or to be undertaken by the Company or any member of its group or any other company, partnership, body corporate or other entity in which the Company or any member of its group is interested, which is held by or has been applied for by the Company or any member of its group or other such person.

6.11          Interpretation of provisions regarding Shareholder Regulatory Event

For the purpose of Articles 6.6 to 6.11 (inclusive):

(c)the Company may, in determining the reason for any action or potential action of a Gambling Regulatory Authority, have regard to any statements or comments made by any members, officers, employees or agents of the Gambling Regulatory Authority whether or not such statements or comments form part of or are reflected in any official determination issued by the Gambling Regulatory Authority, and may act notwithstanding any appeal in respect of the decision of any Gambling Regulatory Authority;

(d)  a Gambling Regulatory Authority means any authority wherever located (whether a government department, independent body established by legislation, a government, self-regulating organisation, court, tribunal, commission, board, committee or otherwise) vested with responsibility (with or without another or others) for the conduct of any gambling activity or any activity ancillary, or related thereto;

(e)  the Board may exercise the powers of the Company under Articles 6.6 to 6.11 (inclusive) and any powers, rights or duties conferred by Articles 6.6 to 6.11 (inclusive) on the Company and exercisable by the Board may be exercised by a duly authorised committee of the Board or any person(s) to whom authority has been delegated by the Board or any such committee of the Board, as applicable;

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(f) any resolution or determination of, or any decision or the exercise of any discretion or power under Articles 6.6 to 6.11 (inclusive) by the Company, the Board, a duly authorised committee of the Board or any person to whom authority has been delegated thereby shall be final and conclusive and binding on all concerned, and neither the Company, the Board, nor any person acting under the authority thereof shall be obliged to give any reason(s) therefor;

(g)gambling activity or any activity ancillary or related thereto includes (but is not limited to) the provision of online services to customers in connection with such activity or activities and shall include the provision of financial services.

ARTICLE 7.          Transfer of registered shares

A transfer of registered shares may be effected by a written declaration of transfer entered in the share register of the Company, such declaration of transfer to be executed by the transferor and the transferee or by persons holding suitable powers of attorney, and in accordance with the provisions applying to the transfer of claims provided for in article 1690 of the Luxembourg civil code.

The Company may also accept as evidence of transfer other instruments of transfer evidencing the consent of the transferor and the transferee to the satisfaction of the Company.

ARTICLE 8.          Debt securities

Debt securities issued by the Company shall be in registered form only.

ARTICLE 9.          Powers of the General Meeting

In the case of a plurality of shareholders, any regularly constituted General Meeting shall represent the entire body of shareholders of the Company.

ARTICLE 10.         Annual general meeting of the shareholders – Other meetings

The annual general meeting shall be held, in accordance with Luxembourg law, in the Grand Duchy of Luxembourg at the address of the registered office of the Company or at such other in the Grand Duchy of Luxembourg and at such time as specified in the convening notice of the meeting.

Other general meetings may be held at such a place and time as are specified in the respective convening notices of the relevant meetings.

ARTICLE 11.         Notice, quorum, convening notices, powers of attorney and vote

11.1          Right and obligation to convene a general meeting

The Board, as well as the internal auditors, if any, may convene a general meeting. They shall be obliged to convene it so that it is held within a period of one month, if shareholders representing one-tenth of the capital require this in writing, with an indication of the agenda. One or more shareholders representing at least one-tenth of the subscribed capital may request that the entry of one or more items be added to the agenda of any general meeting. This request must be addressed to the Company at least five (5) days before the relevant general meeting.

11.2          Procedure to convene a general meeting

General Meetings shall be convened in accordance with the provisions of the Companies Act and as long as the shares of the Company are listed on a foreign stock exchange, in accordance with the requirements of such foreign stock exchange applicable to the Company.

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If all the shareholders of the Company are present or represented at a general meeting, and consider themselves as being duly convened and informed of the agenda of the general meeting set by the Board or by the internal auditors, as the case may be, the general meeting may be held without prior notice.

The documents mentioned under article 461-6 of the Companies Act shall be made available at the registered office of the Company for inspection by the shareholders at least eight (8) days prior to the general meeting.

11.3          Voting rights attached to the shares

Each share entitles its holder to one vote (provided that the Board may impose a record date formality in the convening notice which shall condition the exercise of the voting right).

The Board may, in its sole discretion, suspend the voting rights of any shareholder in the case that such shareholder has, by action or omission, failed to fulfil its obligations under the Articles or under its subscription agreement.

Any shareholder may, partly or entirely, waive the exercise of its voting rights with respect to some or all of its shares. Such waiver will be binding on the relevant shareholder and will be enforceable towards the Company following its notification by the relevant shareholder in writing.

11.4          Quorum, majority requirements and reconvening of general meeting for lack of quorum

Except as otherwise required by law or by these Articles, resolutions at a general meeting will be passed by the majority of the votes expressed by the shareholders present or represented, no quorum of presence being required.

However, resolutions to amend the Articles or to change the nationality of the Company may only be passed in a general meeting where at least one half of the share capital is represented (the Presence Quorum provided that shares with waived/suspended voting rights shall not be considered for such quorum calculation) and the agenda indicates the proposed amendments to the Articles and, as the case may be, the text of those which pertain to the purpose or the form of the Company. If the Presence Quorum is not reached, a second meeting may be convened by an announcement filed with the Trade and Companies Register and published in the RESA (Recueil électronique des sociétés et associations) and in a Luxembourg newspaper at least fifteen (15) days before the relevant meeting. Such convening notice shall reproduce the agenda and indicate the date and the results of the previous general meeting. The second general meeting shall deliberate validly regardless of the proportion of the capital represented. At both meetings, resolutions, in order to be passed, must be carried by at least two-thirds of the votes expressed at the relevant general meeting.

In calculating the majority with respect to any resolution at a general meeting, the votes expressed shall not include the votes relating to shares in which the shareholder abstains from voting, casts a blank (blanc) or spoilt (nul) vote or does not participate.

The commitments of the shareholders may only be increased with the unanimous vote of all the shareholders.

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11.5          Participation by proxy

A shareholder may act at any general meeting by appointing another person, who need not be a shareholder, as its proxy in writing. Copies of written proxies that are transmitted by telefax or e-mail may be accepted as evidence of such written proxies at a general meeting. In order to be taken into account, a copy of the proxy must be received by the Company before the relevant general meeting at such time as specified in the convening notice.

11.6          Vote by correspondence

The shareholders may vote in writing (by way of a voting bulletin provided that the written voting bulletins include: (i) the name, first name, address and signature of the relevant shareholder, (ii) an indication of the shares for which the shareholder will exercise such right, (iii) the agenda as set forth in the convening notice with the proposals for resolutions relating to each agenda item , and (iv) the vote (approval, refusal, abstention) on the proposals for resolutions relating to each agenda item. In order to be taken into account, a copy of the voting bulletins must be received by the Company before the relevant general meeting at such time as specified in the convening notice.

11.7          Participation in a general meeting by conference call, video conference or similar means of communications

Any shareholder may participate in a general meeting by conference call, video conference or similar means of communication, as shall be determined by the Board, whereby: (i) the shareholders attending the meeting can be identified, (ii) all persons participating in the meeting can hear and speak to each other, (iii) the transmission of the meeting is performed on an ongoing basis, and (iv) the shareholders can properly deliberate. Participation in a meeting by such means shall constitute presence in person at such meeting.

11.8          Bureau

The president chairman of the Board presides at the general meeting as chairman. The chairman shall appoint a secretary and the shareholders shall appoint a scrutineer. The chairman, the secretary and the scrutineer together form the bureau of the general meeting.

11.9          Minutes and certified copies

The minutes of the general meeting will be signed by the members of the bureau of the general meeting and by any shareholder who wishes to do so.

However, where decisions of the general meeting have to be certified, copies or extracts for use in court or elsewhere must be signed by the chairman of the Board or by any two (2) other directors.

ARTICLE 12.          Management

12.1          Minimum number of directors and term of directorship

The General Meeting shall determine the number of directors, their remuneration and their term of office providing that (i) there must be at least three (3) and no more than nine (9) directors in the Company and (ii) the members of the Board shall be elected for a term not exceeding six (6) years and shall be eligible for re-election.

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12.2          Permanent representative

Where a legal entity is elected as a director (the Legal Entity), the Legal Entity must designate a natural person as permanent representative (représentant permanent) who will represent the Legal Entity as a member of the Board in accordance with article 441-3 of the Companies Act.

12.3          Election, removal and vacancy

The director(s) shall be elected by the General Meeting.

A director may be removed with or without cause and/or replaced, at any time, by a resolution adopted by the General Meeting.

In the event of vacancy in the office of one or more directors because of death, resignation or otherwise, the remaining directors may elect at a meeting of the Board the director(s), by a majority vote, to fill such vacancy or vacancies, as the case may be, until the following general meeting.

12.4          Right to nominate

For as long as Barak Matalon, Aharon Aran, Eliyaho Azur, and Pinhas Zahavi, (the Founding Shareholders) own in the aggregate at least 40% of the issued and outstanding share capital of the Company, a number of directors equal to 50% of the total number of directors will be elected by the General Meeting from nominees selected by the Founding Shareholders.

For so long as the Founding Shareholders own in the aggregate less than 40% of the issued and outstanding share capital of the Company, but still own in the aggregate at least 25% of the issued and outstanding share capital of the Company, a number of directors equal to 33% of the total number of directors will be elected by the General Meeting from nominees selected by the Founding Shareholders.

For the purposes of paragraphs 1 and 2 of this Article 12.4, should the number of directors to be elected from nominees selected by the Founding Shareholders be a fractional number, such number shall be rounded down to the nearest whole number.

For so long as the Founding Shareholders own in the aggregate less than 25% of the issued and outstanding share capital of the Company, but still own in the aggregate at least 15% of the issued and outstanding share capital of the Company, one director will be elected by the General Meeting from nominees selected by the Founding Shareholders.

If the Founding Shareholders own in the aggregate less than 15% of the issued and outstanding share capital of the Company, their rights to nominate directors for election shall be the same as any other shareholder.

Where the Founding Shareholders have the right to nominate (for election by the General Meeting) members of the Board pursuant to this Article 12.4, no other shareholder shall be entitled to nominate members of the Board for election to those Board seats.

ARTICLE 13.          Meetings of the Board

13.1          Chairman

The Board may appoint a chairman (the Chairman) from among its members and may choose a secretary, who need not be a director, and who shall be responsible for keeping the minutes of the meetings of the Board. The Chairman will chair all meetings of the Board. In his/her absence, the other members of the Board will appoint another chairman pro tempore who will chair the relevant meeting by simple majority vote of the directors present or represented at such meeting.

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13.2          Observer

The Board may allow the appointment of one or more observers to the Board, who will be entitled to attend each Board meeting of the Company and any committee thereof, and receive the written materials provided to the Board members, but shall not have any voting rights at any meeting of the Board or any committee thereof.

Any observer must keep confidential all information and documents received in such capacity and undertakes the same towards the Company.

13.3          Procedure to convene a board meeting

The Board shall meet upon call by the Chairman or any two directors at the place indicated in the meeting notice.

Written meeting notice of the Board shall be given to all the directors (and, in relation to meetings to which she/he is entitled to participate, the Observer) at least twenty-four (24) hours in advance of the day and the hour set for such meeting, except in circumstances of emergency, in which case the nature of such circumstances shall be set forth briefly in the convening notice of the meeting of the Board.

No such written meeting notice is required if all the members of the Board are present or represented during the meeting and if they state they have been duly informed and have had full knowledge of the agenda of the meeting. In addition, if all the members of the Board are present or represented during the meeting and they agree unanimously to set the agenda of the meeting, the meeting may be held without having been convened in the manner set out above.

A member of the Board may waive the written meeting notice by giving his/her consent in writing. Copies of consents in writing that are transmitted by telefax or e-mail may be accepted as evidence of such consents in writing at a meeting of the Board. Separate written notice shall not be required for meetings that are held at times and at places determined in a schedule previously adopted by a resolution of the Board.

13.4          Participation by conference call, video conference or similar means of communication

Any director may participate in a meeting of the Board by conference call, video conference or by similar means of communication whereby: (i) the directors attending the meeting can be identified, (ii) all persons participating in the meeting can hear and speak to each other, (iii) the transmission of the meeting is performed on an ongoing basis, and (iv) the directors can properly deliberate. Participation in a meeting by such means shall constitute presence in person at such meeting. A meeting of the Board held by such means of communication will be deemed to be held in Luxembourg.

13.5          Proceedings

(a)          Quorum and majority requirements

The Board may validly deliberate and make decisions only if at least one half of its members are present or represented. Decisions are made by the majority of the votes expressed by the members present or represented. If a member of the Board abstains from voting or does not participate to a vote, this abstention or non participation are not taken into account in calculating the majority.

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(b)          Participation by proxy

Any member of the Board may act at any meeting of the Board by appointing in writing another director as his or her proxy, under the condition however that at least two directors are present at the meeting. Copies of written proxies that are transmitted by telefax or by e-mail may be accepted as evidence of such written proxies at a meeting of the Board.

(c)          Casting vote of Chairman

In the case of a tied vote, the Chairman or the chairman pro tempore, as the case may be, shall have a casting vote.

13.6          Conflicts of interest

(a)          Procedure regarding a conflict of interest

In the event that a director of the Company has, directly or indirectly, a financial interest opposite to the interest of the Company in any transaction of the Company that is submitted to the approval of the Board, such director shall immediately make known to the Board such opposite interest at that board meeting and shall cause a record of his statement to be included in the minutes of the meeting. The director may not take part in the deliberations relating to that transaction, will not count in the quorum, and may not vote on the resolutions relating to that transaction. The transaction and the director’s interest therein, shall be reported to the following general meeting.

(b)          Exceptions regarding a conflict of interest

Article 13.6(a) does not apply to resolutions of the board of directors concerning transactions made in the ordinary course of business of the Company which are entered into on arm's length terms.

A Director of the Company who serves as director, manager, officer or employee of any company or firm with which the Company shall contract or otherwise engage in business shall not, solely by reason of such affiliation with such other company or firm, be held as having an interest opposite to the interest of the Company for the purpose of this Article 13.6.

(c)          Impact on quorum

Where, by reason of a conflict of interest, the number of directors required in order to validly deliberate and vote is not met, the Board may decide to submit the decision on this specific item to the General Meeting.

13.7          Written resolutions

Notwithstanding the foregoing, a resolution of the Board may also be passed in writing. Such resolution shall consist of one or more documents containing the resolutions, signed by each director, manually or electronically by means of an electronic signature which is valid under Luxembourg law. The date of such resolution shall be the date of the last signature.

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ARTICLE 14.          Minutes of meetings of the Board

14.1          Signature of board minutes

The minutes of any meeting of the Board shall be signed by the Chairman or the chairman pro tempore, as the case may be or by all the directors present at such meeting.

14.2          Signature of copies or extracts of board minutes

Copies or extracts of minutes or resolutions in writing from the Board, which may be produced in judicial proceedings or otherwise shall be signed by the Chairman, or any two members of the Board.

ARTICLE 15.          Powers of the Board

The Board is vested with the broadest powers to perform or cause to be performed any actions necessary or useful in connection with the purpose of the Company. All powers not expressly reserved by the Companies Act or by the Articles to the General Meeting fall within the authority of the Board.

ARTICLE 16.          Delegation of powers

16.1          Daily management

The Board may appoint one or more persons (délégué à la gestion journalière), who may be a shareholder or not, or who may be a member of the Board or not, who shall have full authority to act on behalf of the Company in all matters pertaining to the daily management and affairs of the Company.

16.2          General director (directeur général)/management committees (comités de direction)

The management of the Company may be delegated to a general director (directeur général) or to a management committee (comité de direction).

When a general director (directeur général) or a management commitee (comité de direction) is appointed, the Board is in charge of the supervision and control of the general director (directeur général) or management commitee (comité de direction).

16.3          Permanent representative of the Company

The Board may appoint a person, who may be a shareholder or not, and who may be a director or not, as permanent representative for any entity in which the Company is appointed as a member of the board of directors. This permanent representative will act with all discretion, in the name and on behalf of the Company, and may bind the Company in its capacity as a member of the board of directors of any such entity.

16.4          Delegation to perform specific functions

The Board is also authorised to appoint a person, either a director or not, for the purposes of performing specific functions at every level within the Company.

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16.5          Delegation to special committees

The Board may decide to put in place special committees. The composition of the special committees and the powers conferred to them are determined by the Board. The special committees perform their duties under the Board’s responsibility.

ARTICLE 17.          Binding signatures

17.1          Signatory powers of directors

The Company shall be bound towards third parties in all matters by the joint signatures of any two members of the Board.

17.2          Specific signatory powers

The Company will be bound by the sole signature or the joint signatures of any person(s) or committees to whom specific signatory powers is granted by the Board of the Company, only within the limits of such powers.

ARTICLE 18.          Indemnification

Subject to applicable laws, the Company shall indemnify all of its directors and officers, past and present, to the fullest extent permitted by Luxembourg law, against liabilities and all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit, or proceeding in which he or she is involved by virtue of him or her being or having been a director or officer of the Company and against amounts paid or incurred by him or her in the settlement thereof.

ARTICLE 19.          Internal auditor(s) (commissaire(s)) - Approved statutory auditor(s) (réviseur (s) d'entreprises agréé (s) or cabinet de révision agréé)

19.1          Internal auditor (commissaire)

The operations of the Company shall be supervised by one or more internal auditor(s) (commissaire(s)). The internal auditor(s) shall be appointed for a term not exceeding six (6) years and shall be eligible for re-appointment.

The internal auditor(s) will be appointed by the General Meeting, which will determine their number, their remuneration and the term of their office. The internal auditor(s) in office may be removed at any time by the General Meeting with or without cause.

19.2          Approved statutory auditor (réviseur d'entreprises agréé or cabinet de révision agréé)

However, no internal auditor(s) shall be appointed if, instead of appointing one or more internal auditor(s), one or more approved statutory auditors (réviseurs d'entreprises agrées or cabinets de révision agrées) are appointed by the General Meeting to perform the statutory audit of the annual accounts in accordance with applicable Luxembourg law. The approved statutory auditor(s) shall be appointed by the General Meeting in accordance with the terms of a service agreement to be entered into from time to time by the Company and the approved statutory auditor(s). The approved statutory auditor(s) may only be removed by the General Meeting for serious causes (motifs graves).

ARTICLE 20.          Accounting year

The accounting year of the Company shall begin on 1 January and shall end on 31 December of each year.

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ARTICLE 21.          Annual accounts

21.1          Responsibility of the Board

The Board shall draw up the annual accounts of the Company that shall be submitted to the approval of the General Meeting at the annual general meeting.

21.2          Submission of the annual accounts to the internal auditor(s)

At the latest one (1) month prior to the annual general meeting, the Board will submit the annual accounts together with the report of the Board (if any) and such other documents as may be required by law to the internal auditor(s) of the Company, or the approved statutory auditor(s), as the case may be, who will thereupon draw up its (their) report(s).

21.3          Availability of documents at the registered office

At the latest eight (8) days prior to the annual general meeting, the annual accounts, the report(s) of the Board (if any) and of the internal auditor(s) or the approved statutory auditor(s), as the case may be, and such other documents as may be required by law shall be deposited at the registered office of the Company, where they will be available for inspection by the shareholders during regular business hours.

ARTICLE 22.          Allocation of results

22.1          Allocation to the legal reserve

From the annual net profits of the Company (if any), five per cent (5%) shall be allocated to the reserve required by law. This allocation shall cease to be required once such legal reserve amounts to ten per cent (10%) of the share capital of the Company, but shall again be compulsory if the legal reserve falls below ten per cent (10%) of the share capital of the Company.

22.2          Allocation of results by the General Meeting at the annual general meeting

At the annual general meeting, the General Meeting shall decide on the allocation of the annual results and the declaration and payments of dividends, as the case may be, in accordance with Article 22.1 and the rules regarding distributions set out in this Article 22.

22.3          Rules regarding distributions

Distributions to the shareholders, whether by dividend, share redemption or otherwise, out of profits and distributable reserves available for that purpose, including share premium and “capital surplus”, if and when decided by the General Meeting, shall be made on all the shares on a pro rata basis.

22.4          Interim dividends

In accordance with article 461-3 of the Companies Act interim dividends may be distributed, at any time, by the Board under the following cumulative conditions:

(i)   an interim accounting situation (état comptable) is drawn up by the Board (the Interim Accounting Statement) (the Interim Accounting Statement shall be verified by an internal auditor (commissaire) or approved statutory auditor (réviseur d’entreprises agréé), as the case may be);

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(ii)   this Interim Accounting Statement shows that sufficient profits and other reserves (including without limitation share premium and capital surplus) are available for distribution, it being understood that the amount to be distributed may not exceed profits made since the end of the last financial year for which the annual accounts have been approved, if any, increased by carried forward profits and distributable reserves, and decreased by carried forward losses and the amount to be allocated to the legal reserves;

(iii)he decision to distribute interim dividends must be taken by the Board within two (2) months from the date of the Interim Accounting Statement; and

(iv)  the rights of the creditors of the Company are not threatened, taking into account the assets of the Company.

Where the interim dividends paid exceed the distributable profits at the end of the financial year, the relevant excess as acknowledged at the annual general meeting, shall, unless otherwise decided by the Board at the time of the dividend declaration, be deemed to be an advance payment for future dividends.

22.5          Payment of dividends

Dividends may be paid in euro or any other currency chosen by the Board and they may be paid at such places and times as may be determined by the Board within the limits of any decision made by the General Meeting (if any).

Dividends may be paid in kind in assets of any nature, and the valuation of those assets shall be set by the Board according to valuation methods determined at its discretion.

ARTICLE 23.          Dissolution and liquidation

23.1          Principles regarding the dissolution and the liquidation

The Company may be dissolved, at any time, by a resolution of the General Meeting adopted in the manner required for amendment of the Articles, as set out in Article 11. In the event of a dissolution of the Company, the liquidation shall be carried out by one or more liquidators (who may be physical persons or legal entities) appointed by the General Meeting deciding such liquidation. The General Meeting shall also determine the powers and the remuneration of the liquidator(s).

23.2          Distribution of liquidation surplus

Under the liquidation of the Company, the surplus assets of the Company available for distribution among shareholders shall be distributed on all the shares on a pro rata basis, by way of advance payments or after payment (or provisions, as the case may be) of the Company's liabilities.

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ARTICLE 24.          Federal jurisdiction clause

Unless the Company consents in writing to the selection of an alternative forum, and without prejudice to any forum that would be appropriate or mandatory per applicable laws to hear any other claims, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act of 1933, as amended. Any person or entity purchasing or otherwise acquiring any interest in any security of the Company shall be deemed to have notice of and consented to this Article 24. Notwithstanding the foregoing, the provisions of this Article 24 shall not apply to suits brought to enforce any liability or duty created by the U.S. Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts of the United States have exclusive jurisdiction. If any provision or provisions of this Article 24 shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever, (a) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article 24 shall not in any way be affected or impaired thereby and (b) the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.

ARTICLE 25.          Applicable law

All matters not expressly governed by the Articles shall be determined in accordance with Luxembourg law.”

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EX-5.1

Exhibit 5.1

To the board of directors of NeoGames S.A. 5, rue de Bonnevoie L-1260 Luxembourg Grand Duchy of Luxembourg	Allen & Overy société en commandite simple, inscrite au barreau de Luxembourg 5 avenue J.F. Kennedy  L-1855  Luxembourg Boîte postale 5017  L-1050  Luxembourg Tel           +352 4444 55 1 Fax          +352 4444 55 557 jacques.graas@allenovery.com
Our ref A&O/0129396-0000002 EUO3: 2005381098.4
Luxembourg, 7 September 2021

LUXEMBOURG EXHIBIT 5.1 OPINION — NEOGAMES S.A.

We are acting as legal advisers in the Grand Duchy of Luxembourg to Neogames S.A., a public limited liability company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 5, rue de Bonnevoie, L-1260 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg trade and companies register (Registre de commerce et des sociétés, Luxembourg) (the Register) under number B186309 (the Company) in connection with the Registration Statement on Form F-1 (the Registration Statement) filed with the U.S. Securities and Exchange Commission under the U.S. Securities Act of 1933, as amended, relating to the registration of 3,457,346 existing shares of the Company, without nominal value (the Shares).

We have examined, and relied on:

(i) an electronic copy of an extract of the Register pertaining to the Company dated as of the date hereof;

(ii) an electronic copy of a negative certificate (certificat négatif) issued by the Register in respect of the Company dated as of the date hereof; and

(iii) an email scanned copy of the restated articles of association (statuts coordonnés) of the Company (the Articles) as at 30 July 2021.

In giving this legal opinion, we have assumed, and we have not verified independently that all factual matters, documents and statements relied upon or assumed herein were, are and will be (as the case may be) true, complete, up-to-date and accurate.

Based upon, and subject to, the assumptions made above, we are of the opinion that, under the laws of the Grand Duchy of Luxembourg in effect, as construed and applied by the Luxembourg courts in published Luxembourg court decisions, on the date hereof:

1. Status

The Company is a validly existing public limited liability company (société anonyme) formed for an unlimited duration under the laws of the Grand Duchy of Luxembourg.

2. Shares

The Shares have been validly issued, fully paid and are non-assessable (within the meaning that the holder of such shares shall not be liable, solely because of his or her or its shareholder status, for additional payments to the Company or the Company’s creditors).

This legal opinion is as of the date hereof and we undertake no obligation to update it or advise of changes hereafter occurring. We express no opinion as to any matters other than those expressly set forth herein, and no opinion is, or may be, implied or inferred herefrom.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the heading “Legal Matters” as regards the Grand Duchy of Luxembourg in the prospectus contained therein. In giving such consent we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the U.S. Securities Act of 1933, as amended.

Yours faithfully,

/s/ Jacques Grass

Allen & Overy

Jacques Graas^*

Partner

Avocat à la Cour

^* This document is signed on behalf of Allen & Overy, a société en commandite simple, registered on list V of the Luxembourg bar. The individual signing this document is a qualified lawyer representing this entity.

2

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

NeoGames S.A.

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on form F-1, of our report dated April 16, 2021, relating to the consolidated financial statements as of December 31, 2020 and 2019 and for each of the years in the three-year period ended December 31, 2020 of NeoGames S.A., and our report dated April 16, 2021, relating to the financial statements as of December 31, 2020 and 2019 for the years then ended, of NeoPollard Interactive LLC, which are contained in that Prospectus.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ Ziv Haft

Ziv Haft

Certified Public Accountants (Isr.)

BDO Member Firm

September 7, 2021

Tel Aviv, Israel

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Document and Entity Information	6 Months Ended
	Jun. 30, 2021
Document Information [Line Items]
Document Type	F-1
Amendment Flag	false
Entity Registrant Name	NEOGAMES S.A.
Entity Central Index Key	0001821349
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Incorporation, State or Country Code	N4
Entity Address, Address Line One	5, RUE DE BONNEVOIE
Entity Address, Address Line Two	L-1260 LUXEMBOURG
City Area Code	352
Local Phone Number	2040119020
Business Contact [Member]
Document Information [Line Items]
Entity Address, Address Line One	850 Library Avenue
Entity Address, Address Line Two	Suite 204
Entity Address, Postal Zip Code	19711
Contact Personnel Name	Puglisi & Associates
City Area Code	302
Local Phone Number	738-6680
Entity Address, City or Town	Newark
Entity Address, State or Province	DE

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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019
CURRENT ASSETS
Cash and cash equivalent	$ 65,395	$ 59,767	$ 6,016
Designated cash	2,917	0
Restricted deposit	12	12	138
Prepaid expenses and other receivables	2,312	1,446	905
Due from Aspire Group	787	56	296
Due from the Michigan Joint Operation and NPI	2,827	3,192	250
Trade receivables	3,869	3,701	2,737
Total current assets	78,119	68,174	10,342
NON-CURRENT ASSETS
Restricted deposit	159	164	150
Restricted deposits - Joint Venture	3,773	3,773	2,000
Company share of Joint Venture net assets			603
Property and equipment	1,308	1,301	849
Intangible assets	19,875	17,835	14,413
Right-of-use assets	2,389	3,127	4,688
Deferred taxes	273	211	130
Total non-current assets	27,777	26,411	22,833
Total assets	105,896	94,585	33,175
CURRENT LIABILITIES
Trade and other payables	4,619	4,910	1,855
Lease liabilities	1,486	1,651	1,455
Capital notes, loans and accrued interest due to Aspire Group	19,337	0	22,419
Loans and other due to William Hill, net	0	1,972	14,245
Employees withholding payable	2,917	0
Employees' related payables and accruals	4,241	3,562	2,583
Total current liabilities	32,600	12,095	20,138
NON-CURRENT LIABILITIES
Capital notes, loans and accrued interest due to Aspire Group	0	17,739	14,987
Loans and other due to William Hill, net	11,766	10,666
Company share of Joint Venture net liabilities	1,101	1,025
Lease liabilities	1,198	1,855	3,382
Accrued severance pay, net	414	384	276
Total non-current liabilities	14,479	31,669	18,645
EQUITY
Share capital	44	44	21
Reserve with respect to transaction under common control	(8,467)	(8,467)	(8,467)
Reserve with respect to funding transactions with related parties	20,072	20,072	16,940
Share premium	70,450	68,608	22,788
Share based payments reserve	3,336	3,907	2,967
Accumulated losses	(26,618)	(33,343)	(39,857)
Total equity	58,817	50,821	(5,608)
TOTAL LIABILITIES AND EQUITY	$ 105,896	$ 94,585	$ 33,175

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Profit or loss [abstract]
Revenues	$ 26,236	$ 22,071	$ 49,202	$ 33,062	$ 23,478
Distribution expenses	5,086	2,863	6,685	4,252	4,519
Development expenses	4,174	3,436	7,452	6,877	5,782
Selling and marketing expenses	607	764	1,483	1,981	1,457
General and administrative expenses	5,542	3,252	7,496	4,957	4,948
Initial public offering expenses	0	1,089	2,796
Depreciation and amortization	6,907	5,539	11,657	9,685	7,759
Total operating expenses	22,316	16,943	37,569	27,752	24,465
Profit from operations	3,920	5,128	11,633	5,310	(987)
Interest expenses with respect to funding from related parties	2,414	2,053	4,343	3,792	2,309
Finance income	0	(22)	(21)	(53)	0
Finance expenses	235	482	747	382	195
Profit before income taxes expenses	1,271	2,615	6,564	1,189	(3,491)
Income taxes expenses	(1,069)	(426)	(1,443)	(1,243)	(586)
Profit after income taxes expenses	202	2,189	5,121	(54)	(4,077)
The Company' share in profits (losses) of Joint Venture	6,523	(676)	1,393	(3,924)	(1,898)
Net and total comprehensive income	$ 6,725	$ 1,513	$ 6,514	$ (3,978)	$ (5,975)
Net income per common share outstanding, basic ($)	$ 0.27	$ 0.07	$ 0.29	$ (0.18)	$ (0.27)
Net income per common share outstanding, diluted ($)	$ 0.25	$ 0.06	$ 0.27	$ (0.18)	$ (0.27)
Weighted average number of common shares outstanding, basic	25,067,083	21,994,408	22,329,281	21,983,757	21,983,757
Weighted average number of common shares outstanding, diluted	26,611,557	23,402,028	23,898,477	21,983,757	21,983,757

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) - USD ($) $ in Thousands	Share capital [Member]		Share Premium [Member]	Accumulated losses [Member]	Share based payments reserve [Member]		Reserve with respect to funding transactions with related parties [Member]	Reserve with respect to transaction under common control [Member]	Total
Balance at Dec. 31, 2017	$ 21		$ 22,788	$ (29,904)	$ 2,352		$ 16,940	$ (8,467)	$ 3,730
Changes in the period:
Comprehensive and net income for the period				(5,975)					(5,975)
Balance at Dec. 31, 2018	21		22,788	(35,879)	2,352		16,940	(8,467)	(2,245)
Changes in the period:
Comprehensive and net income for the period				(3,978)					(3,978)
Share based compensation					615				615
Balance at Dec. 31, 2019	21		22,788	(39,857)	2,967		16,940	(8,467)	(5,608)
Changes in the period:
Comprehensive and net income for the period				1,513					1,513
Benefit to the Company by certain of its equity holder with respect to funding transactions							2,515		2,515
Exercise of employee options to ordinary shares		[1]	2			[1]			2
Share based compensation					523				523
Balance at Jun. 30, 2020	21		22,790	(38,344)	3,490		19,455	(8,467)	(1,055)
Balance at Dec. 31, 2019	21		22,788	(39,857)	2,967		16,940	(8,467)	(5,608)
Changes in the period:
Comprehensive and net income for the period				6,514					6,514
Benefit to the Company by certain of its equity holder with respect to funding transactions							3,132		3,132
Recapitalization of share capital	23		(23)
Issuance of ordinary shares, net of issuance cost, in an initial public offering			45,810						45,810
Exercise of employee options to ordinary shares			33		(29)
Share based compensation					969				969
Balance at Dec. 31, 2020	44	[2],[3]	68,608	(33,343)	3,907		20,072	(8,467)	50,821
Changes in the period:
Comprehensive and net income for the period				6,725					6,725
Exercise of employee options to ordinary shares		[4]	1,842		(1,111)				731
Share based compensation					540				540
Balance at Jun. 30, 2021	$ 44	[3]	$ 70,450	$ (26,618)	$ 3,336		$ 20,072	$ (8,467)	$ 58,817

[1] Less than $500

[2] 24,983,855 shares, no par value, authorized issued and fully paid.

[3] 25,479,728 shares, no par value, authorized issued and fully paid.

[4] Less than $1,000

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands		6 Months Ended
	Nov. 10, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Statement of changes in equity [abstract]
Number of authorized shares		25,479,728		24,983,855
Shares isssued par value		$ 0
Exercise of employee options		$ 1,000	$ 500
Reverse split of share capital	1: 8.234
Number of shares existing	181,003,584
Number of converted shares	21,983,757

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net profit (loss) for the period	$ 6,725	$ 1,513	$ 6,514	$ (3,978)	$ (5,975)
Adjustments for:
Amortization and depreciation	6,907	5,539	11,657	9,685	7,759
Income taxes expenses	1,069	426	1,443	1,243	586
Income taxes paid	(346)	(214)	(606)	(461)	(376)
Interest expenses with respect to lease liability	96	337	672	366	0
Interest expenses with respect to funding from related parties	2,414	2,053	4,343	3,792	2,309
Interest paid	(820)	(328)	(684)	(645)	(223)
Other finance expenses, net	235	460	726	329	202
Payments with respect to IP Option	239	369	478	825	0
Share-based compensation	540	523	969	615	0
The Company' share in profits (losses) of Joint Venture	(6,523)	676	(1,393)	3,924	1,898
Initial public offering expenses			2,430	0	0
Decrease in trade receivables	129	510	(1,286)	(304)	(1,683)
Decrease (increase) in prepaid expenses and other receivables	(866)	53	(541)	(397)	(136)
Decrease (increase) in Aspire Group	(731)	211	240	(152)	(42)
Increase (decrease) in amounts due from the Michigan Joint Operation and NPI	365	(3,098)	(2,942)	(60)	498
Decrease in trade and other payables	(1,314)	(193)	1,411	(460)	(68)
Increase (decrease) in employees' related payables and accruals	679	(21)	979	731	587
Accrued severance pay, net	30	3	108	(13)	42
Total adjustments	2,103	7,306	18,004	19,018	11,353
Net cash generated from operating activities	8,828	8,819	24,518	15,040	5,378
Cash flows from investing activities:
Purchase of property and equipment	(316)	(199)	(928)	(756)	(392)
Capitalized development costs	(7,901)	(6,082)	(13,128)	(11,454)	(8,033)
Restricted deposit - Joint Venture	0	(1,182)	(1,773)	(853)	(1,147)
Changes in deposits	5	136	112	(147)	0
Proceeds from (funding to) the Joint Venture	6,599	(91)	3,021	(4,214)	(2,149)
Net cash used in investing activities	(1,613)	(7,418)	(12,696)	(17,424)	(11,721)
Cash flows from Financing activities:
Loans from William Hill			2,500	6,500	6,000
Repayment of loan from William Hill	(1,500)	0	(2,500)	0	0
Repayments for lease liabilities	(818)	(702)	(1,455)	(1,334)	0
Exercise of employee options	731	0	4	0	0
Issuance of shares, net of issuance costs and other initial public offering expenses			43,380	0	0
Net cash generated from (used in) financing activities	(1,587)	(702)	41,929	5,166	6,000
Net increase in cash and cash equivalents	5,628	699	53,751	2,782	(343)
Cash and cash equivalents at the beginning of the period	59,767	6,016	6,016	3,234	3,577
Cash and cash equivalents at the end of the period	$ 65,395	$ 6,715	$ 59,767	$ 6,016	$ 3,234

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GENERAL

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure Of General [Abstract]

GENERAL

NOTE 1 - GENERAL

NeoGames S.A. (together with its subsidiaries, the “Company”) was incorporated in Luxemburg on April 10, 2014. On November 10, 2020, the Company completed a 1: 8.234 (approximated) reverse split of its share capital which were applied retrospectively in this consolidated financial statement. The Company has been listed on Nasdaq since November 19, 2020, under the symbol “NGMS”.

The Company, together with a joint operation and a joint venture, is a leading global technology provider engaged in the development and operation of online lotteries and games, allowing lottery operators to distribute lottery products via online sales channels while using the Company’s technology.

The Company serves content and platform contracts across Europe and the United States of America through its wholly owned operating subsidiaries: NeoGames Systems Ltd. (“NGS”), incorporated in 2014, and NeoGames Ukraine, incorporated in 2018. In 2014, the Company incorporated NeoGames US LLP (“NeoGames US”) serving as the active arm for the North American market and in 2018 incorporated NeoGames S.R.O, in the Czech Republic to operate the Company’s Czech project.

The Company’s principal shareholders are William Hill Organization Limited (“William Hill”), Barak Matalon, Pinhas Zehavi, Elyahu Azur and Aharon Aran, that also collectively own a majority of Aspire Global Plc (“Aspire”), a publicly traded company which conducts iGaming operations through its subsidiaries (together with Aspire, the “Aspire Group”). The Company’s largest shareholder, William Hill, was acquired by Caesars Entertainment, Inc. on April 22, 2021.

On February 22, 2021, the Company announced the go-live of its eInstants games with the Austrian Lotteries, launching the Company’s first set of games on the win2day online gaming site. In connection with the agreement, the Company will grant the Austrian Lotteries (Österreichische Lotterien) full access to its Studio extensive portfolio of premium, award winning eInstant games.

The Company is carefully monitoring the outbreak and spread of the coronavirus (“COVID-19”) across the world and specifically in the United States. Proactive measures have been taken to reduce the risk to the Company’s staff and to ensure business continuity. The Company is an online organization where working remotely and meeting virtually are established ways of working. The Company’s operations, which are limited to iLottery, have not been negatively impacted and the Company does not expect its operations to be negatively impacted by the outbreak of COVID-19. However, depending on the duration of the pandemic, there could be a negative impact on the Company’s operations.

NOTE 1 - GENERAL

Neogames S.A. (together with its subsidiaries, the “Company”) was incorporated in Luxemburg on April 10, 2014. On November 10, 2020 the Company changed its corporate form from a private limited liability company to public limited liability company, changed its name from Neogames S.à.r.l. to NeoGames S.A and completed a 1: 8.234 (approximated) reverse split of its share capital which were applied retrospectively in this consolidated financial statements. The Company has been listed on Nasdaq since November 19, 2020, under the symbol “NGMS”.

On November 24, 2020, the Company completed an initial public offering of 5,528,650 ordinary shares, no par value, including 721,128 ordinary shares sold pursuant to the full exercise of the underwriters’ overallotment option. The offering consisted of 2,987,625 ordinary shares offered by the Company and 2,541,025 ordinary shares offered by certain selling shareholders. The ordinary shares were sold at an offering price of $17.00 per ordinary share for an aggregate offering value of $94.0 million.

The Company, together with a joint operation and a joint venture, is a leading global technology provider engaged in the development and operation of online lotteries and games, allowing lottery operators to distribute lottery products via online sales channels while using the Company’s technology.

The Company serves content and platform contracts across Europe and the United States of America through its wholly owned operating subsidiaries: NeoGames Systems Ltd. (“NGS”), incorporated in 2014, and NeoGames Ukraine, incorporated in 2018. In 2014, the Company incorporated NeoGames US LLP (“NeoGames US”) serving as the active arm for the North American market and in 2018 incorporated NeoGames S.R.O, in the Czech Republic to operate the Company’s Czech project.

The Company’s principal shareholders are William Hill Organization Limited (“William Hill”), Barak Matalon, Pinhas Zehavi, Elyahu Azur and Aharon Aran, that collectively own a majority of Aspire Global Plc (“Aspire”), a publicly traded company which conducts iGaming operations through its subsidiaries (together with Aspire, the “Aspire Group”).

William Hill funded the Company’s growth in a form of a credit facility (see Note 6). William Hill also had options to acquire the remaining share capital of the Company in consideration for performance-based amounts, of which one was expired in 2019 and the second was waived on September 9, 2020, as a result of the Board of Directors’ resolution that the Company will take the necessary steps to prepare for an initial public offering.

The Company, together with a publicly traded Canadian Company, Pollard Banknote Limited (“Pollard”), developed, established and operate a licensed iLottery platform on behalf of the State of Michigan in the United States (the “Michigan Joint Operation”), whereby the relating contract was extended in December 2020 through July 2026.

On July 31, 2014, Pollard and NeoGames US jointly established an equal ownership share, NeoPollard Interactive LLC (“NPI” or the “Joint Venture”) in order to participate in iLottery tenders in the North American market. NPI has operated the Virginia State Lottery online e-Subscription program, since 2015, whereby the relating contract was extended in May 2020 and expanded to include a digital instant games portfolio, through October 2026, the iLottery platform on behalf of New Hampshire Lottery since September 2018 (initial terms of seven years) and the North Carolina Education Lottery iLottery platform since October 2019 (initial terms of five years with an option to extend for additional five years).

In April 2017, the Company developed, established and launched the Digital Entertainment Hub solution together with the leading lottery operator in the Czech Republic, SAZKA a.s., whereby the relating contract was extended on March 31, 2020  through the end of December 2025.

On March 19, 2020, NPI signed an agreement with Alberta Gaming, Liquor and Cannabis Commission (“AGLC”) to develop, deploy and maintain its digital solutions and power its proposed interactive offering. This contract has an initial term of seven years, with an option to extend for five years. The solution was launched on September 30, 2020.

The Company is carefully monitoring the outbreak and spread of the coronavirus (“COVID-19”) across the world and specifically in the United States. Proactive measures have been taken to reduce the risk to the Company’s staff and to ensure business continuity. The Company is an online organization where working remotely and meeting virtually are established ways of working. The Company’s operations, which are limited to iLottery, have not been negatively impacted and the Company does not expect its operations to be negatively impacted by the outbreak of COVID-19. However, depending on the duration of the pandemic, there could be a negative impact on the Company’s operations.

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BASIS FOR PREPARATION

6 Months Ended

Jun. 30, 2021

Disclosure Of Detailed Information About Basis For Preparation [Abstract]

BASIS FOR PREPARATION

NOTE 2 – BASIS FOR PREPARATION

The interim condensed consolidated financial information ("Interim Financial Information") of the Company has been prepared in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’ ("IAS 34"), as issued by the International Accounting Standards Board ("IASB").

The Interim Financial Information has been prepared on the basis of the accounting policies adopted in the Company’s audited consolidated financial statements for the year ended December 31, 2020 ("Annual Financial Statements"), which were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). This Interim Financial Information should be read in conjunction with the Annual Financial Statements and notes thereto issued on April 16, 2021 ("Annual Financial Statements"). They do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company's financial position and performance since the last annual financial statements.

The Interim Financial Information is unaudited, does not constitute statutory accounts and does not contain all the information and footnotes required by accounting principles generally accepted under International Financial Reporting Standards for annual financial statements.

All significant judgements and estimates used by the Company remain unchanged from the Annual Financial Statements and all valuation techniques and unobservable inputs remain unchanged.

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SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2020

Disclosure of significant accounting policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed in the preparation of the financial statements, on a consistent basis, unless otherwise stated, are:

A. Accounting principles

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Profit or loss accounts are presented and analyzed by their nature rather than their function within the entity as such method provides reliable and more relevant information on the Company's operations.

B. Comparative information

Comparative figures stated in the statements of comprehensive income (loss), financial position and cash flows have been reclassified to conform to the current year's presentation format for the purpose of adequate presentation.

C. Basis of consolidation

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. The consolidated financial statements present the results of the Company as though NeoGames S.A and its subsidiaries formed a single entity. Intercompany transactions and balances between NeoGames S.A and its subsidiaries are therefore eliminated in full.

D. Foreign currency

The financial statements of the Company are prepared in US dollars (the functional currency), which is the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company’s transactions. Balances in foreign currencies are translated into US dollars in accordance with the principles set forth by International Accounting standard (IAS) 21 (“The Effects of Changes in Foreign Exchange Rates”). Accordingly, transactions and balances in currencies other than the functional currency have been translated into US dollars as follows:

Monetary assets and liabilities — at the rate of exchange applicable at the end of the reporting year; Income and expense items — at exchange rates applicable as of the date of recognition of those items; Non-monetary items — at the rate of exchange at the time of the transaction.

E. Transaction under common control

Acquisition of intangible assets under common control is accounted for based on their book value as was accounted for by the seller, and the difference between the fair value of the consideration and the book value of the intangible assets was recorded as a capital reserve with respect to transaction under common control in the statement of changes in equity (deficit).

F. Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less.

G. Financial instruments

Financial assets and financial liabilities are recognized in the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value and subsequently measured at amortized cost based on the effective interest rate, as applicable.

H. Trade receivables

Trade receivables are initially recognized at transaction price and subsequently measured at amortized cost and principally comprise amounts due from related parties and iLottery companies. The Company has applied the standard simplified approach and has calculated the Expected credit losses based on lifetime of expected credit losses, with de-minimis results. Bad debts (if any) are written off when there is objective evidence that the full amount may not be collected.

I. Investment in a joint operation

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to that arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the consent of all parties to the joint control.

The consolidated financial statements include the Company’s interest in any assets held jointly by the Michigan Joint Operation, and the Company’s share of revenues and expenses of the Michigan Joint Operation.

J. Investment in a joint venture

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets only. The Company’s investment in a joint venture is accounted for based on the equity method. Under the equity method, the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company’s share of the profit and losses and other comprehensive income (losses) of the joint venture.

K. Employee benefits

The Israeli subsidiary, NGS, has adopted the general authorization in accordance with Section 14 of the Severance Pay Law, 1963 (“Section 14”), according to which deposits to the pension funds and/or policies of insurance companies exempt the subsidiary from additional payments. However, the Company’s liabilities for severance pay, attributed to certain employees that are not subject to Section 14 are computed on the basis of the employee’s most recent salary as of the end of the period date, in accordance with the Severance Pay Law, and are partially covered by monthly deposits with insurance policies and/or other funds in favor of the employees and the remaining are accrued for in the consolidated financial statements.

As most of NGS’s employees are covered by Section 14, and due to immateriality, the Company does not use actuarial estimates and calculations for severance obligations. The Company accounts for such employees who are not subject to Section 14, by measuring accruals on the full amounts assuming that all of these employees will be terminated as of the end of the period date of each period (shut-down method).

L. Provisions

Provisions, which are liabilities of uncertain timing or amounts, are recognized when the Company has a legal or constructive obligation as a result of past events, if it is probable that an outflow of funds will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

M. Property and equipment

Property and equipment comprise of data center (servers), computers, leasehold improvements, office furniture and equipment and are stated at cost less accumulated depreciation and any accumulated impairment.

Depreciation is calculated to write off the cost of fixed assets to their residual amounts on a straight line basis over the expected useful lives of the assets concerned. The principal annual rates used for this purpose, are:

	%
Computers and computers equipment	25-50
Office furniture and equipment	7
Leasehold improvements	Over the shorter of the term of the lease or useful lives

Subsequent expenditures are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Company and losses on disposals are determined by comparing proceeds with carrying amount and are recognized in profit or loss.

The depreciation method and the estimated useful life of an asset are reviewed at least each year-end and the changes are accounted for as a change in accounting estimate on a prospective basis.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

N. Intangible assets

Intangible assets of the Company comprise development costs capitalization, which are amortized over their useful life and reviewed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at each year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are treated prospectively as a change in accounting estimates.

Research expenditures are recognized in profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project is recognized if the Company can demonstrate:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale.

• The Company's intention to complete the intangible asset and use or sell it.

• The ability to use or sell the intangible asset.

• How the intangible asset will generate future economic benefits.

• The availability of adequate technical, financial and other resources to complete the intangible asset; and

• The ability to measure reliably the respective expenditure asset during its development.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit of 3 years.

O. Impairment of non-financial assets

The Company evaluates the need to record an impairment of the carrying amount of fixed assets and intangible assets whenever events or changes in the circumstances indicate that the carrying amount is not recoverable. If the carrying amount of the above assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of the net sale price and value in use. In measuring value in use, the expected cash flows are discounted using a pre-tax discount rate that reflects the specific risks of the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in the statement of comprehensive income (loss).

P. Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring services to a customer.

The Company generates its revenues through three streams:

• Royalties from licensing of technological platforms and provision of proprietary games content (which are recognized in the accounting periods in which the gaming transactions occur).

• Fees from access to intellectual property rights (which are recognized over the useful periods of the intellectual property rights).

• Fees from development services (which are recognized in the accounting periods in which services are provided).

Q. Reserve with respect to funding transactions with related parties

Transactions with related parties are accounted for based on fair value. Any difference between the nominal value and the fair value that arises in transactions with related parties are recorded directly into equity to a “Reserve with respect to funding transactions with related parties”.

R. Share-based payment

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income (loss) over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income (loss) over the remaining vesting period. Where the terms and conditions of options are modified after they vest, the increase in the fair value of the options measured and recorded in the consolidated statement of comprehensive income (loss) immediately after the modification.

S. Finance income and expenses

Finance income comprises of net currencies with exchange rates differences, while finance expenses are comprised of interest on related parties funding, net currencies exchange rates differences, interest on leases liabilities and banks charges.

T. Income taxes

Provision for income taxes is calculated in accordance with the tax legislation and applicable tax rates in force at the end of the reporting year in the countries in which Neogames S.A. and its subsidiaries have been incorporated. A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. This measurement is required to be based on the assumption that each of the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising from:

• The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

• Investments in subsidiaries and joint operations where the Company is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date, and that amount is are expected to apply when the deferred tax liabilities/assets are settled/recovered.

The Company recognized deferred tax assets (if any) only when their recoverability is more likely than not.

U. Fair value measurement hierarchy

The Company measures certain financial instruments, including derivatives, at fair value at the end of each reporting period. Fair value is the price that would be received or paid in an orderly transaction between market participants at a particular date, either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for that asset or liability accessible to the Company.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

V. Earnings (loss) per share

Basic earnings (loss) per share

Basic earnings (loss) per share is calculated by dividing the earnings (loss) attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year, adjusted for ordinary shares issued during the year, if applicable.

Diluted earnings per share

Diluted earnings (loss) per share adjusts the figures used in the determination of basic earnings per share to take into account the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of options takes place as expected; and the addition of the shares to be derived from realization must have a dilutive effect.

W. Leases

Effective January 1, 2019, the Company accounts for its leases under IFRS 16, according to which:

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) or low value assets.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The lease liability is presented as a separate line in the consolidated statement of financial position, including the separation between current and non-current.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

In profit or loss, amortization expenses of the right-of-use asset and interest expenses in respect of the lease liability recognized. In the statement of cash flows, payments in respect of the principal portion of the lease liability classified as financing activity and payments in respect of the interest portion of the lease liability classified in accordance with the Company’s policy regarding classification of interest payments as operating activity.

In the prior period financial statements operating leases expenses recorded on a straight line basis within the operating expenses.

On December 26, 2018, NeoGames Ukraine entered into a lease agreement for an office space. The agreement commenced on January 15, 2019 for a period of 60 months. The annual lease payment and related expenses is approximately $1 million. For a description of the lease arrangement with the Aspire Group, see Note 6.

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CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

12 Months Ended

Dec. 31, 2020

Disclosure of critical accounting estimates and judgments [Abstract]

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

NOTE 3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of consolidated financial statements under IFRS requires the Company to make estimates and judgments that affect the application of policies and reported amounts. Estimates and judgments are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Included in this note are accounting policies and/or estimates that cover areas for which the Directors and Management require judgments and/or assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities in the future. These policies together with references to the related notes to the financial statements, which include further commentary on the nature of the estimates and judgments made, can be found below:

Funding transactions with related parties:

The fair values of the funding transactions with related parties, the reserve relating to the funding transactions with related parties and the related interest expenses are recorded based on discounted cash flow of the anticipated repayments, calculated using a market interest rate determined by a reputable appraiser. For further details, see Note 6.

Capitalization of development costs:

Costs relating to internally generated intangible assets are capitalized if the criteria for recognition as assets are met. The initial capitalization of costs is based on Management’s judgment that technological and economic feasibility criteria are met. In making this judgment, Management considers the progress made in each development project and its latest forecasts for each project.

Share based payments/compensation:

The compensation expenses of stock options are vested over service periods, but exercisable only upon consummation of certain events as provided in the letter of grants. Stock based compensation expenses were recorded based on the fair values of the options, using the Black-Scholes model assumptions as well as the likelihood of the fulfillment of such events at the respective grant dates. For further details see Note 10.

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PROPERTY AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2020

Disclosure of detailed information about property, plant and equipment [abstract]

PROPERTY AND EQUIPMENT, NET

NOTE 4 - PROPERTY AND EQUIPMENT, NET

	Computers and computers equipment		Office furniture and equipment		Leasehold improvements		Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2020		2,107		257		200		2,564
Additions during the year		373		364		191		928
		2,480		621		391		3,492
Accumulated depreciation:
Balance as of January 1, 2020		1,536		36		143		1,715
Additions during the year		461		7		8		476
		1,997		43		151		2,191
Net Book Value:
As of December 31, 2020		483		578		240		1,301

	Computers and computers equipment		Office furniture and equipment		Leasehold improvements		Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2019		1,461		190		157		1,808
Additions during the year		646		67		43		756
		2,107		257		200		2,564
Accumulated depreciation:
Balance as of January 1, 2019		1,115		32		137		1,284
Additions during the year		421		4		6		431
		1,536		36		143		1,715
Net Book Value:
As of December 31, 2019		571		221		57		849

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INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2020

Disclosure of detailed information about intangible assets [abstract]

INTANGIBLE ASSETS

NOTE 5 - INTANGIBLE ASSETS

	As of December 31,
	2020		2019
	U.S. dollars (in thousands)
Cost:
Balance at beginning of the period		45,070		33,616
Additions		13,128		11,454
As of December 31,		58,198		45,070
Accumulated amortization:
Balance at beginning of the period		30,657		22,885
Amortization		9,706		7,772
As of December 31,		40,363		30,657
Net Book Value:
As of December 31,		17,835		14,413

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RELATED PARTIES

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure of transactions between related parties [abstract]

RELATED PARTIES

NOTE 3 – RELATED PARTIES

A. William Hill:

Following Note 6 to the Annual Financials Statements the Company’s total revenues from this license agreement in the six-month period ended June 30, 2021 and 2020 amounted approximately $3.9 million and $3.1 million, respectively. The outstanding amounts due under this license agreement as of June 30, 2021 and December 31, 2020 amounted to approximately $2.4 million and $2.0 million, respectively, and are included in trade receivables.

In February 2020, the parties agreed to extend the original repayment schedule such that, all principal loan amounts are due for a full repayment (interest plus principal) on June 15, 2023 and the First Loan is due for repayment on June 30, 2021. The implied benefit of $2.5 million (reflecting the extension of the original repayment schedule) was accounted for as a modification of debt in accordance with IFRS 9, with a related party and therefore recorded in “Reserve with respect to funding transactions with related parties” in the statement of changes in equity (deficit) and will be amortized as additional interest expense over the remaining period of the loans.

On June 29, 2021 the Company repaid the loan in the amount of $1.5 million and interest in the amount of $0.6 million.

	As of June, 30, 2021			As of December 31, 2020
	Unaudited			Audited
	U.S. dollars (in thousands)
Loans and other due to WH, net:
Loan principals		11,000			12,500
Discounts		(1,926	)		(2,492	)
Accrued interest		212			677
Liability with respect to IP Option		3,450			3,450
Receivables on IP Option		(970	)		(1,497	)
		11,766			12,638

B. Aspire Group:

Following Note 6 to the Annual Financial Statements, in the reported periods, the Company provided and received certain services from Aspire Group, such as research and development services and administrative services as follows:

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Revenues generated from the Transition Services Agreement		928		1,348
Expenses derived by the Cost Allocation Agreement:
Labor (included in general and administrative expenses)		28		21
Right of use lease (included in depreciation and interest with respect to right of use)		595		470
Other (included in general and administrative expenses)		97		70
		720		561

Capital notes and accrued interest from Aspire Group:

	Principal amount		Balance*		Contractual interest rate		Effective interest rate
	U.S. dollars (in thousands)				%
As of June 30, 2021 (Unaudited)		21,838		19,337		1		20
As of December 31, 2020 (Audited)		21,838		17,739		1		20

* Including accrued interest of $582 thousand and $582 thousand as of June 30, 2021 and December 31, 2020, respectively.

C. Consultancy Agreement:

Following Note 6C to the Annual Financial Statements, the consulting fees in the six-month periods ended June 30, 2021 and 2020 amounted to $82 thousand and $77 thousand, respectively.

NOTE 6 - RELATED PARTIES

A. WILLIAM HILL:

On June 18, 2018, the Company entered into a license agreement with WHG (International) Ltd. (“WHG”), an affiliate of William Hill. Pursuant to the license agreement, the Company has granted WHG a sub-license to use the NeoSphere Platform (the “Licensed IP”) for a period of four years (the “Initial Period”) to operate in the US iGaming market and additional jurisdictions agreed to by the parties. It was also agreed that William Hill will compensate the Company for the right to use the Licensed IP as well as costs associated with adjustments (“Developed IP”) required to be made to the Licensed IP so that the Licensed IP would be deemed complaint with specific market requirements and other market practices. Upon a change in control of the Company, WHG has the option (the “IP Option”) to convert the license into a perpetual license for a payment of £15.0 million. The Company has also agreed to provide WHG with the IP Option following the completion of a four-year period from the date of the term sheet. The fair value of the IP Option liability was valued with the assistance of a third-party appraiser to be approximately $3.45 million.

The Company’s total revenues from this license agreement in the year ended December 31, 2020 and 2019 amounted approximately $6.7 million and $5.7 million, respectively. The outstanding amounts due under this license agreement as of December 31, 2020 and 2019 amounted to approximately $2.0 million and $1.5 million, respectively, and are included in trade receivables.

During 2018, the Company borrowed $4.0 million with a stated annual interest rate of 5.0% (the “First Loan”) and $2.0 million with a stated annual interest rate of 1.0% from the credit facility being made available by William Hill pursuant to the Investment and Framework Shareholders’ Agreement dated August 6, 2015. During 2019, the Company borrowed a total of $6.5 million with a stated annual interest rate of 1.0% from this credit facility. All three loans were due in August 2020; however, all the loans were extended in 2020 as described below.

In February 2020, the parties agreed to extend the original repayment schedule such that, all principal loan amounts are due for a full repayment (interest plus principal) on June 15, 2023 and the First Loan is due for repayment on June 30, 2021. The implied benefit of $2.5 million (reflecting the extension of the original repayment schedule) was accounted for as a modification of debt in accordance with IFRS 9, with a related party and therefore recorded in “Reserve with respect to funding transactions with related parties” in the statement of changes in equity (deficit) and will be amortized as additional interest expense over the remaining period of the loans.

On September 18, 2020, the Company borrowed $2.5 million from the credit facility to partially early repay the principal of the First Loan. The loan bears an annual interest rate of 1.0%, which is below market interest rate, and is due in full on June 15, 2023. Therefore, the $0.6 million difference in discounted cash flows to be paid for the outstanding amount based on the market annual interest rate of 12% amounted to $1.9 million, and its face value was recorded directly into the statement of changes in equity (deficit) under “Reserve with respect to funding transactions with related parties” as “Benefit to the Company by an equity holder with respect to funding transactions” and will be amortized as additional interest expense over the period of the loan.

The difference in the interest rates between the calculated annual market interest rate of 12% and interest due on these loans was recorded as loan discounts to be amortized over the funding repayment period as additional finance expenses. Accordingly, the Company recorded interest expenses on the loans based on the fair value market interest rate of $1.4 million, $1.3 million and $0.2 million in 2020, 2019 and 2018, respectively.

Loans and other due to William Hill, net:

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Loan principals		12,500			12,500
Discounts		(2,492	)		(465	)
Accrued interest		677			421
Liability with respect to IP Option		3,450			3,450
Receivables on IP Option		(1,497	)		(1,661	)
		12,638			14,245

B. ASPIRE GROUP:

On August 6, 2015, the Company entered into a services agreement with Aspire and William Hill pursuant to which the Company has provided Aspire with certain dedicated development, maintenance and support services necessary for the operation of Aspire's business (the “Transition Service Agreement”). On July 8, 2015, the Company entered into a cost allocation agreement with Aspire (mainly with respect to the office lease in the reported periods) pursuant to which each party has agreed to bear certain costs that are then recovered on a pass through basis from the other party, including a sublease to the Company's Israeli offices, provided to the Company by Aspire until 2021 (the “Cost Allocation Agreement”). The sublease and related charges totaled $1 million.

In the reported periods, the Company provided and received certain services from the Aspire Group, such as research and development services and administrative services as follows:

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Revenues generated from the Transition Services Agreement		2,430		4,099		3,421
Expenses derived by the Cost Allocation Agreement:
Labor (included in general and administrative expenses)		66		68		289
Rent (included in depreciation and interest with respect to right of use)		1,064		1,047		1,036
Other (included in general and administrative expenses)		160		177		232
Total expenses		1,290		1,292		1,557

Capital notes and accrued interest from the Aspire Group:

On May 18, 2017, the parties agreed to extend the original repayment schedule of the capital notes and the accrued interest, such that the outstanding amounts would have been repaid in 2018 or 2020 if William Hill would have exercised its call options  or in March 2022, if the call options would have expired (see Note 1 for the expiration and the waiver of the call options). The extension was accounted for as a modification of debt in accordance with IFRS 9, with a related party, therefore the $6.4 million difference of the discounted cash flows to be paid for the outstanding amounts based on the annual market interest rate of 20% amounted to $9.6 million and their face value, was recorded directly into the statement of changes in equity under "Reserve with respect to funding transactions with related parties" as "Benefit to the Company by certain of its equity holders with respect to funding transactions" and has been amortized as additional interest expense over the remaining period of the capital notes.

As of December 31,	Principal amount		Balance*		Contractual interest rate		Effective interest rate
	U.S. dollars (in thousands)				%
2020		21,838		17,739		1		20
2019		21,838		14,987		1		20

* including accrued interest of $582 thousand and $582 thousand as of December 31, 2020 and 2019, respectively.

The interest expenses for the years ended December 31, 2020, 2019 and 2018 amounted to $3 million, $2.5 million and 2.1 million, respectively.

C.     Consultancy Agreement:

On June 1, 2015, Barak Matalon, a member of the Company's board of directors and owner of more than 5% of the Company's ordinary shares, entered into a consultancy service agreement with the Company that calls for a monthly payment of NIS 45,000 (plus VAT) in consideration of services being rendered by Mr. Matalon to the Company. The consulting fees under such agreement, which remains in effect, for the years ended December 31, 2020, 2019 and 2018 amounted to $158 thousand, $153 thousand and $149 thousand, respectively, and are included within general and administrative expenses.

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INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure of joint ventures [abstract]

INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION

NOTE 4 - INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION

A. JOINT VENTURE

NPI has been included in the consolidated financial statements using the equity method.

NPI's summarized financial information:

	As of June, 30, 2021			As of December 31, 2020
	Unaudited			Audited
	U.S. dollars (in thousands)
Current assets		20,025			11,388
Non-current assets		1,419			1,597
Current liabilities		(20,851	)		(12,091	)
Non-current liabilities		(2,880	)		(2,910	)
Net assets (100%)		(2,287	)		(2,016	)
Net assets (50%)		(1,144	)		(1,008	)
Adjustments		43			(17	)
Company share of net assets (liabilities) (50%)		(1,101	)		(1,025	)

	For the Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Revenues		31,695			4,888
Distribution expenses		21,512			6,085
Selling, general and marketing expenses		406			373
Depreciation and amortization		313			307
Finance expenses		45			11
Net and total profit (loss) (100%)		9,419			(1,888	)
Net and total profit (loss) (50%)		4,710			(944	)
Adjustments		1,813			268
Share in profits (losses) of NPI		6,523			(676	)
Funding of (proceeds from) NPI		(6,599	)		91

In addition to the above, with respect to the development services provided to NPI by the Company, in the six-month periods ended June 30, 2021 and 2020, the Company recorded revenues totalling to $3.7 million and $1.7 million, respectively. The adjustments mostly represent royalty commissions earned by NPI on games developed and provided by the Company, whereby the Company's share of the underlying results is higher than 50%.

B. MICHIGAN JOINT OPERATION

The Michigan Joint Operation has been included in the consolidated financial statements as a share of Company’s interest in assets held jointly, and its share of revenues and expenses. Below are the Michigan Joint Operation’s revenues and operating expenses, 50% of which represent the Company’s interest and were included in the Company’s statement of comprehensive income:

	For the Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Revenues (100%)		24,196			22,585
Total operating expenses (100%)		(13,585	)		(9,900	)

In addition to the above-stated revenues, with respect to the development services provided to the Michigan Joint Operation by the Company, in the six-month periods ended June 30, 2021 and 2020, the Company recorded revenues totalling $0.7 million and $0.7 million, respectively. Further, the Company recorded additional royalty revenues with respect to games development efforts invested to enhance the Michigan Joint Operation’s games portfolio during the six-month period ended June 30, 2021 and 2020, totaling to $0.9 million and $0.9 million, respectively, which were also eliminated from Company's share in Michigan Joint Operation’s total operating expenses as stated in the above table.

As of June 30, 2021, and December 31, 2020, the Company’s interest in the Michigan Joint Operation’s assets was $746 thousand and $745 thousand, respectively, and mostly comprised of property and equipment, net.

NOTE 7 - INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION

A. JOINT VENTURE

NPI has been included in the consolidated financial statements using the equity method (see Note 1).

NPI summarized financial information:

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Current assets		11,388			3,211
Non-current assets		1,597			2,025
Current liabilities		(12,091	)		(3,214	)
Non-current liabilities		(2,910	)		(631	)
Net assets (liabilities) (100%)		(2,016	)		1,391
Net assets (liabilities) (50%)		(1,008	)		696
Adjustments		(17	)		(93	)
Company share of Joint Venture net assets (liabilities)		(1,025	)		603

	For the year ended December 31,
	2020			2019			2018
	U.S. dollars (in thousands)
Revenues		18,032			3,740			1,127
Distribution expenses		16,116			10,480			4,447
Selling, general and marketing expenses		776			1,067			293
Depreciation		405			335			224
Net and total profit (loss) (100%)		735			(8,142	)		(3,837	)
Net and total profit (loss) (50%)		367			(4,071	)		(1,919	)
Adjustments		1,026			147			21
Share in profits (losses) of NPI		1,393			(3,924	)		(1,898	)
Funding of (proceeds from) NPI		(3,021	)		4,214			2,149

In addition to the above, with respect to the development services provided to NPI by the Company, in 2020, 2019 and 2018, the Company recorded revenues totalling to $4.4 million, $2.9 million and $1.2 million, respectively. The adjustments mostly represent royalty commissions earned by NPI on games developed and provided by the Group, whereby the Group's share of the underlying results is higher than 50%.

As of December 31, 2018, the Company had an outstanding amount of approximately $1.1 million held by Pollard on behalf of NPI to be used as a restricted deposit to establish a bonding facility to secure performance and payments bonds with respect to NPI’s prospective and existing contracts with the New Hampshire and North Carolina lotteries. As of December 31, 2019, the restricted deposit increased to an outstanding amount of $2 million. The increase in the restricted deposit amount was to secure a bid bond with respect to a new Request for Proposal with the Ohio lottery.

As of December 31, 2020, the restricted deposit increased to an outstanding amount of $3.8 million. The increase in the restricted deposit amount was to secure a performance bond with respect to NPI’s new contract with the AGLC lottery.

The outstanding amount with NPI was $1,477 thousand and $56 thousand as of December 31, 2020 and 2019, respectively.

B. MICHIGAN JOINT OPERATION

The Michigan Joint Operation has been included in the consolidated financial statements as a share of Company's interest in assets held jointly, and its share of revenues and expenses (see Note 1).

Below are the Michigan Joint Operation’s revenues and operating expenses, 50% of which represent the Company’s interest and were included in the Company’s statement of comprehensive income (loss):

	For the year ended December 31,
	2020			2019			2018
	U.S. dollars (in thousands)
Revenues (100%)		49,779			24,665			20,675
Total operating expenses (100%)		(22,021	)		(14,264	)		(13,361	)

In addition to the above-stated revenues, with respect to the development services provided to the Michigan Joint Operation by the Company, in 2020, 2019 and 2018, the Company recorded revenues totaling $1.4 million, $1.0 million and $0.6 million, respectively. Further, the Company recorded additional royalty revenues with respect to games development efforts invested to enhance the Michigan Joint Operation’s games portfolio during 2020, 2019 and 2018, totaling $1.9 million, $1.0 million and $0.8 million, respectively, which were also eliminated from Company's share in Michigan Joint Operation’s total operating expenses as stated in the above table.

As of December 31, 2020, and 2019, Company's share interest in Joint Operator's assets was $745 thousand and $240 thousand, respectively, and mostly comprised of property and equipment, net.

The outstanding amount with the Joint Operation was $1,715 thousand and $194 thousand as of December 31, 2020 and 2019, respectively.

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TRADE AND OTHER PAYABLES

12 Months Ended

Dec. 31, 2020

Trade and other payables [abstract]

TRADE AND OTHER PAYABLES

NOTE 8 - TRADE AND OTHER PAYABLES

 

	As of December 31,
	2020		2019
	U.S. dollars (in thousands)
Trade payables		1,693		561
Governmental authorities		1,258		488
Accrued expenses		1,959		806
		4,910		1,855

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EMPLOYEE BENEFIT LIABILITIES

12 Months Ended

Dec. 31, 2020

Disclosure of defined benefit plans [abstract]

EMPLOYEE BENEFIT LIABILITIES

NOTE 9 - EMPLOYEE BENEFIT LIABILITIES

 

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Non- current
Accrued severance pay		2,350			1,991
Less - funds		(1,966	)		(1,715	)
		384			276
Current
Accrued vacation		522			279
Accrued recuperation		11			8
		533			287

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SHARE BASED PAYMENTS

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure of terms and conditions of share-based payment arrangement [abstract]

SHARE BASED PAYMENTS

NOTE 6 - SHARE BASED PAYMENTS

On May 26, 2021, the Company granted to its chair of the audit committee and a board of directors’ member 15,000 options to purchase its shares that will be vested over a service period of 8 months.

The fair value of the options granted was estimated as of the grant date to $304 thousand using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		37.7	%
Risk free interest rate		0.87	%
Expected life	5.33 years
Weighted average exercise price	$	57.56
Price per share	$	57.56

During June 2021, the Company withheld income taxes totaling to $2.9 million associated with exercising employees’ stock options and trading shares during the reporting period. The amount was transferred to the ITA, subsequent to the end of the reporting period.

NOTE 10- SHARE BASED PAYMENTS

During the first quarter of 2019, the Company reached an agreement with Company’s former Chief Executive Officer following his termination of employment, to extend the expiration date of the options granted to him on May 20, 2015 by four years.

The fair value of the extended options was estimated as of the June 30, 2019, using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		31	%
Risk free interest rate		2.48	%
Expected life	2 years
Weighted average exercise price	$	0.17
Price per share	$	0.52
Grant date fair value of each option	$	0.36

As a result of the above mentioned modification during 2019, the Company recorded $250 thousand of share based compensation expenses.

On May 13, 2019, the Company granted to certain employees 4,321,500 options to purchase its shares that will be vested over a service period of four years.

The fair value of the options granted was estimated as of the Grant Date using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		29.67%-30.2	%
Risk free interest rate		2.21%-2.28	%
Expected life	5.5-7 years
Weighted average exercise price	$	0.17
Price per share	$	0.52
Grant date weighted average fair value per option	$	0.38

On July 1, 2019, the Company has amended to certain employees, who agreed to it, certain terms of options granted as part of 2015 and 2017 plans. According to the amendment, the exercise of the options shall no longer be conditioned upon M&A transaction or IPO. The options, which are no longer conditioned, are considered as being granted on July 1, 2019 and are vested over a period of two years from the new grant date.

The fair value of the options granted was estimated as of the new Grant Date using the Black-Scholes model.

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		29.3%-29.86	%
Risk free interest rate		1.8%-1.85	%
Expected life	5.12-6 years
Weighted average exercise price	$	0.21
Price per share	$	0.52
Grant date weighed average fair value of an option	$	0.34

On July 13, 2020, the Company granted to certain employees options to purchase an aggregate of 415,000 of its ordinary shares that will vest over a service period of four years.

The fair value of the options granted was estimated to be $0.6 million as of the July 13, 2020 grant date using the Black-Scholes model:

Dividend Yield		0	%
Expected volatility		39.4%-37	%
Risk free interest rate		0.35%-0.48	%
Expected life	5.5-7 years
Weighted average exercise price	$	0.17
Price per share	$	1.5

On November 18, 2020, the Company granted to the Chairman of the Board options to purchase an aggregate of 48,581 of its ordinary shares that will vest over a service period of two years. On the same date the Company granted to certain consultant options to purchase an aggregate of 12,145 of its ordinary shares that will vest over a service period of four years.

The fair value of the options granted was estimated to be $0.4 million as of the November 18, 2020 grant date using the Black-Scholes model:

Dividend Yield		0	%
Expected volatility		39%-42	%
Risk free interest rate		0.42%-0.64	%
Expected life	5.13-7 years
Weighted average exercise price	$	17
Price per share	$	17

The following table summarizes option activities for the years ended December 31, 2020, 2019 and 2018:

	2020					2019					2018
	Weighted average exercise price ($)		Number			Weighted average exercise price ($)		Number			Weighted average exercise price ($)		Number
Outstanding at January 1,		1.48		1,632,220			1.56		1,113,218			1.56		1,118,077
Granted during the year		9.92		111,129			1.40		524,867			-		-
Exercised during the year		1.40		(12,473	)		-		-			-		-
Forfeited during the year		1.73		(22,856	)		1.81		(5,865	)		2.96		(4,859	)
Outstanding at December 31,		2.02		1,708,020			1.48		1,632,220			1.56		1,113,218
Vested and exercisable at December 31,		1.52		1,203,456			1.48		1,045,076			1.48		1,055,701

On November 10, 2020 the Company completed a 1: 8.234 reverse split of its share and the numbers of options and the exercise price were adjusted accordingly in the tables above.

As of December 31, 2020, the Company had unrecognized share-based compensation expenses related to options of $1.3 million, which is expected to be recognized over a weighted average period of approximately 1.8 years.

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REVENUES

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Revenue [abstract]

REVENUES

NOTE 5 - REVENUES

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Turnkey contracts		16,065		14,430
Games		979		800
Total royalties		17,044		15,230
Development and other services from Aspire (See also Note 3B)		928		1,348
Development and other services from NPI (See also Note 4A)		3,724		1,744
Development and other services from Michigan Joint Operation (See also Note 4B)		676		655
Total Development and other services		5,328		3,747
Use of IP rights (William Hill only, see also Note 3A)		3,864		3,094
Total Revenues		26,236		22,071

The Company generated revenues exceeding 10% of its consolidated revenues from four customers in the six-month period ended June 30, 2021 (of which two are a related party) and four customers in the six-month period ended June 30, 2020 (of which one is related parties, see Note 3). The Company generated 50% and 55% of the consolidated revenues in the six-month periods ended June 30, 2021 and 2020, respectively, from the Michigan Joint Operation and 12% and 10% of the consolidated revenues in the six-month periods ended June 30, 2021 and 2020 from Sazka.

As of June 30, 2021, and December 31, 2020, the Company had trade receivables outstanding, exceeding 10% of the Company’s consolidated trade receivables, from two customers. Sazka accounted 35% and 43% of the consolidated trade receivables outstanding as of June 30, 2021 and December 31, 2020, respectively, and William Hill accounted for 59% and 55% of the consolidated trade receivables outstanding as of June 30, 2021 and December 31, 2020.

NOTE 11 - REVENUES

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Turnkey contracts		32,252		17,240		13,684
Games		2,006		2,189		2,098
Total royalties		34,258		19,429		15,782
Development and other services from Aspire (See also Note 6B)		2,430		4,099		3,421
Development and other services from NPI (See also Note 7A)		4,404		2,914		1,244
Development and other services from Michigan Joint Operation (See also Note 7B)		1,413		958		594
Total Development and other services		8,247		7,971		5,259
Use of IP rights (William Hill only, see also Note 6A)		6,697		5,662		2,437
Total Revenues		49,202		33,062		23,478

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DISTRIBUTION EXPENSES

12 Months Ended

Dec. 31, 2020

Disclosure of distribution expenses [Abstract]

DISTRIBUTION EXPENSES

NOTE 12 - DISTRIBUTION EXPENSES

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Labor and related		1,335		998		1,023
Call center		728		781		641
Processing fees		3,962		2,207		2,421
Other		660		266		434
		6,685		4,252		4,519

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GENERAL AND ADMINISTRATIVE EXPENSES

12 Months Ended

Dec. 31, 2020

Disclosure of general and administrative expenses [Abstract]

GENERAL AND ADMINISTRATIVE EXPENSES

NOTE 13 - GENERAL AND ADMINISTRATIVE EXPENSES

	For the year ended 31 December
	2020		2019		2018
	U.S. dollars (in thousands)
Labor and related		3,109		2,048		1,490
Labor and related from a Related Company		42		46		266
Professional fees		1,983		1,114		798
Rent and related from a Related Company		168		96		1,036
Municipality and maintenance from Related Company		160		177		232
Travelling		63		292		259
Office		414		408		273
Other		1,557		776		594
		7,496		4,957		4,948

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OTHER FINANCE EXPENSES AND INCOME, NET

12 Months Ended

Dec. 31, 2020

Disclosure of other finance expenses and income, net [Abstract]

OTHER FINANCE EXPENSES AND INCOME, NET

NOTE 14 - OTHER FINANCE EXPENSES AND INCOME, NET

	For the year ended 31 December
	2020		2019		2018
	U.S. dollars (in thousands)
A.      Finance income:
Currency exchange rate differences		-		53		-
Interest income		21		-		-
		21		53		-
B.      Finance expenses:
Currency Exchange rate differences		197		-		134
Interest expense with respect to lease liabilities		461		366		-
Bank charges		89		16		61
		747		382		195

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TAXATION

12 Months Ended

Dec. 31, 2020

Major components of tax expense (income) [abstract]

TAXATION

NOTE 15 – TAXATION

A. Tax rates applicable to the Company companies and other related

The Company is tax registered in Luxemburg and is subject to the Luxemburg corporation tax at 26.01% in 2018 and 24.94% thereafter on profits derived from activities carried out in Luxemburg. The estimated carry forward losses as of December 31, 2020 was $59.9 million, the Company has not recorded relating deferred income taxes asset as its recoverability was not more likely than not. All the Company’s tax years are subject to examination.

NGS was subject to Israeli corporate tax rate of 23% in 2018 thereafter. Considering the statute of limitation, NGS 2015’s tax year is final and the following tax years are subject to examination.

NeoGames US, including its shares in NPI and the Michigan Joint Operation, is subject to US federal income taxes rate of 21% in 2018 thereafter as well as certain states income taxes rates. All NeoGames US tax years are subject to examination.

The Company’s other subsidiaries are subject to different corporate tax rates.

B. Income taxes expenses included in the statements of comprehensive income (loss)

 

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Current taxes		1,224		836		552
Deferred taxes		81		6		14
Taxes with respect to previous years		138		401		20
		1,443		1,243		586

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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

12 Months Ended

Dec. 31, 2020

Disclosure of detailed information about financial instruments [abstract]

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

NOTE 16 - FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company is exposed to a variety of financial risks, which result from its financing, operating and investing activities. The objective of financial risk management is to minimize exposures in these financial risks and to mitigate a negative impact on the Company’s financial performance and position. The Company’s financial instruments are its cash and cash equivalents, trade and other receivables, capital notes and loans from related parties, lease liabilities, trade and other payables and employee benefit liabilities. The Company actively measures, monitors and manages its financial risk exposures by various functions pursuant to the segregation of duties and principals. The risks arising from the Company’s financial instruments are mainly credit risks and currency risk. The risk management policies employed by the Company to manage these risks are discussed below.

A. Credit risk

Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the end of the reporting year.

The Company closely monitors the activities of its counterparties enabling it to ensure the prompt collection of customer balances. Furthermore, the Company engages only with reputable customers.

The Company generated revenues exceeding 10% of its consolidated annual revenues from three customers in the year ended December 31, 2020 (of which one is a related party), four customers in the year ended December 31, 2019 (of which two are related parties) and four customers in the year ended December 31, 2018 (of which two are related parties). For revenues from related parties, see Note 6. We generated 54%, 40% and 47% of our revenues in the years ended December 31, 2020, 2019 and 2018, respectively, from the Michigan Joint Operation and 11%, 12% and 11% of our revenues in the years ended December 31, 2020, 2019 and 2018, respectively, from Sazka.

As of December 31, 2020, and 2019, the Company had trade receivables outstanding, exceeding 10% of the Company’s consolidated trade receivables, from two customers. Sazka accounted for 43% and 35% of trade receivables outstanding

As of December 31, 2020 and 2019, respectively, and William Hill accounted for 55.0% and 56.0% of trade receivables outstanding as of December 31, 2020 and 2019, respectively.

B. Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

Foreign exchange risk also arises when Company operations are entered into in currencies denominated in a currency other than the functional currency.

The Company has discretion to hedge some or all of its forecast operational costs in Israel up to 12 months. Currency exposures are monitored by the Company monthly.

C. Sensitivity analysis to the currency risk

The Company has not presented a sensitivity analysis for the impact on its statement of comprehensive income (loss) of potential movements in currencies rates, as the change in the fair value of its financial instruments would be negligible.

D. Liquidity risk

The Company monitors its liquidity in order to ensure that sufficient liquid resources are available to allow it to meet its obligations.

The following table details the contractual maturity analysis of the Company’s financial liabilities (representing undiscounted contractual cash-flows):

	As of December 31, 2020
	In 3 months		Between 3 months and 1 year		More than 1 year		Total
	U.S. dollars (in thousands)
Capital notes and accrued interest due to Aspire Group						22,419		22,419
Loans due to WH				2,022		11,155		13,177
Lease liabilities				1,651		1,855		3,506
Trade and other payables		4,910						4,910
Total		4,910		3,673		35,429		44,012

	As of December 31, 2019
	In 3 months		Between 3 months and 1 year		More than 1 year		Total
	U.S. dollars (in thousands)
Capital notes and accrued interest due to Aspire Group						22,419		22,419
Loans due to WH				12,920		-		12,920
Lease liabilities				1,455		3,382		4,837
Trade and other payables		1,855						1,855
Total		1,855		14,375		25,801		42,031

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INCOME PER SHARE

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Income Loss Per Share Abstract

INCOME PER SHARE

NOTE 7 - INCOME PER SHARE

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Basic and diluted earnings per share:
Net income attributable to equity holders of the company		6,725		1,513
Weighted average number of issued ordinary shares		25,067,083		21,994,408
Dilutive effect of share options		1,544,474		1,407,620
Weighted average number of diluted ordinary shares		26,611,557		23,402,028
Income (loss) per share, basic ($)		0.27		0.07
Income (loss) per share, diluted ($)		0.25		0.06

NOTE 17 - INCOME (LOSS) PER SHARE

	For the year ended December 31,
	2020		2019			2018
	U.S. dollars (in thousands)
Basic and diluted earnings per share:
Net income (loss) attributable to equity holders of the company		6,514		(3,978	)		(5,975	)
Weighted average number of issued ordinary shares		22,329,281		21,983,757			21,983,757
Dilutive effect of share options		1,569,196		-			-
Weighted average number of diluted ordinary shares		23,898,477		21,983,757			21,983,757
Income (loss) per share, basic ($)		0.29		(0.18	)		(0.27	)
Income (loss) per share, diluted ($)		0.27		(0.18	)		(0.27	)

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RESERVES

12 Months Ended

Dec. 31, 2020

Disclosure of reserves within equity [abstract]

RESERVES

NOTE 18 - RESERVES

The following describes the nature and purpose of each reserve within equity:

Reserve	Description and purpose
Share premium	Amount subscribed for share capital in excess of nominal value.
Share based payments reserve	Fair value of the vested employees' options to purchase Company shares.
Reserve with respect to transaction under common control	The reserve represents the difference between the fair value of the consideration and the book value of the intangible assets as was accounted for by the seller, with respect to acquisition under common control.
Reserve with respect to funding  transactions from related parties	See Note 6

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LEGAL PROCEEDINGS

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure Of Legal Proceedings [Abstract]

LEGAL PROCEEDINGS

NOTE 8 - LEGAL PROCEEDINGS

Following Note 19 to the Annual Financial Statements, in June 2021, the U.S. Department of Justice (“DoJ”) decided to appeal the decision of the federal Court of Appeals for the First Circuit, permitting state-run lotteries and their suppliers to continue to sell lottery products online without the immediate threat of federal prosecution for such activities.

NOTE 19 - LEGAL PROCEEDINGS

In January 2019, the U.S. Department of Justice (“DoJ”) issued a new interpretation of its previous 2011 interpretation relating to the applicability of the Wire Act to internet gaming conducted by state lotteries. The 2011 interpretation had determined that the Wire Act only applied to sports betting. The new January 2019 interpretation reverses this view and, in effect, indicates the Wire Act covers all forms of gambling. On January 15, 2019, the Deputy Attorney General issued a memorandum stating that Department of Justice attorneys should adhere to the 2018 Opinion, but that as an exercise of discretion, the Department would refrain from applying the new interpretation to persons who engaged in conduct in reliance on the interpretation set forth in the 2011 Opinion prior to the date of the new 2018 Opinion and for 90 days thereafter.
 

On February 15, 2019, NPI filed a motion with the U.S. District Court for the District of New Hampshire (“District Court”) requesting a formal declaratory judgement clarifying that the Wire Act only applies to sports betting.

In June 2019, the District Court rulled in favor of NPI and determined (without qualification) that the Wire Act does not apply to State lotteries. The DoJ has appealed that decision in October 2019 and a hearing on the appeal took place in June 2020.

A decision of the First Circuit was received on January 20, 2021. The First Circuit of the U.S. Court ruled in favor of the Company and unequivocally reconfirmed that the federal Wire Act is limited to sports betting and, therefore, does not pertain to state-run lotteries. If the government wishes to seek further review in the U.S. Supreme Court, it must file its petition to do so by June 21, 2021.  If review is sought, the U.S. Supreme Court will have discretion to hear the case or decline to do so.

Although NPI was successful at the District Court and the Circuit Court level, the Company cannot predict whether the case will be reviewed by the U.S. Supreme Court, or how the U.S. Supreme Court would decide the issue if it granted review.  The Company's management is therefore of the opinion, based on the advice of its legal counsel, that the final outcome of the proceedings cannot be fully assessed as of the approval date of these consolidated financial statements. The Company’s management does not anticipate that operations will be negatively affected within the next 12 months.

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SUBSEUQNET EVENTS

12 Months Ended

Dec. 31, 2020

Disclosure of non-adjusting events after reporting period [abstract]

SUBSEUQNET EVENTS

NOTE 20 - SUBSEQUNET EVENT

On February 22, 2021, the Company announced the go-live of its eInstants games with the Austrian Lotteries, launching the Company’s first set of games on the win2day online gaming site. In connection with the agreement, the Company will grant the Austrian Lotteries (Österreichische Lotterien) full access to its Studio extensive portfolio of premium, award winning eInstant games.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2020

Disclosure of significant accounting policies [Abstract]

Accounting principles

A. Accounting principles

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). Profit or loss accounts are presented and analyzed by their nature rather than their function within the entity as such method provides reliable and more relevant information on the Company's operations.

Comparative information

B. Comparative information

Comparative figures stated in the statements of comprehensive income (loss), financial position and cash flows have been reclassified to conform to the current year's presentation format for the purpose of adequate presentation.

Basis of consolidation

C. Basis of consolidation

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. The consolidated financial statements present the results of the Company as though NeoGames S.A and its subsidiaries formed a single entity. Intercompany transactions and balances between NeoGames S.A and its subsidiaries are therefore eliminated in full.

Foreign currency

D. Foreign currency

The financial statements of the Company are prepared in US dollars (the functional currency), which is the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company’s transactions. Balances in foreign currencies are translated into US dollars in accordance with the principles set forth by International Accounting standard (IAS) 21 (“The Effects of Changes in Foreign Exchange Rates”). Accordingly, transactions and balances in currencies other than the functional currency have been translated into US dollars as follows:

Monetary assets and liabilities — at the rate of exchange applicable at the end of the reporting year; Income and expense items — at exchange rates applicable as of the date of recognition of those items; Non-monetary items — at the rate of exchange at the time of the transaction.

Transaction under common control

E. Transaction under common control

Acquisition of intangible assets under common control is accounted for based on their book value as was accounted for by the seller, and the difference between the fair value of the consideration and the book value of the intangible assets was recorded as a capital reserve with respect to transaction under common control in the statement of changes in equity (deficit).

Cash and cash equivalents

F. Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less.

Financial instruments

G. Financial instruments

Financial assets and financial liabilities are recognized in the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value and subsequently measured at amortized cost based on the effective interest rate, as applicable.

Trade receivables

H. Trade receivables

Trade receivables are initially recognized at transaction price and subsequently measured at amortized cost and principally comprise amounts due from related parties and iLottery companies. The Company has applied the standard simplified approach and has calculated the Expected credit losses based on lifetime of expected credit losses, with de-minimis results. Bad debts (if any) are written off when there is objective evidence that the full amount may not be collected.

Investment in a joint operation

I. Investment in a joint operation

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to that arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the consent of all parties to the joint control.

The consolidated financial statements include the Company’s interest in any assets held jointly by the Michigan Joint Operation, and the Company’s share of revenues and expenses of the Michigan Joint Operation.

Investment in a joint venture

J. Investment in a joint venture

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets only. The Company’s investment in a joint venture is accounted for based on the equity method. Under the equity method, the investment is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company’s share of the profit and losses and other comprehensive income (losses) of the joint venture.

Employee benefits

K. Employee benefits

The Israeli subsidiary, NGS, has adopted the general authorization in accordance with Section 14 of the Severance Pay Law, 1963 (“Section 14”), according to which deposits to the pension funds and/or policies of insurance companies exempt the subsidiary from additional payments. However, the Company’s liabilities for severance pay, attributed to certain employees that are not subject to Section 14 are computed on the basis of the employee’s most recent salary as of the end of the period date, in accordance with the Severance Pay Law, and are partially covered by monthly deposits with insurance policies and/or other funds in favor of the employees and the remaining are accrued for in the consolidated financial statements.

As most of NGS’s employees are covered by Section 14, and due to immateriality, the Company does not use actuarial estimates and calculations for severance obligations. The Company accounts for such employees who are not subject to Section 14, by measuring accruals on the full amounts assuming that all of these employees will be terminated as of the end of the period date of each period (shut-down method).

Provisions

L. Provisions

Provisions, which are liabilities of uncertain timing or amounts, are recognized when the Company has a legal or constructive obligation as a result of past events, if it is probable that an outflow of funds will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made.

Property and equipment

M. Property and equipment

Property and equipment comprise of data center (servers), computers, leasehold improvements, office furniture and equipment and are stated at cost less accumulated depreciation and any accumulated impairment.

Depreciation is calculated to write off the cost of fixed assets to their residual amounts on a straight line basis over the expected useful lives of the assets concerned. The principal annual rates used for this purpose, are:

	%
Computers and computers equipment	25-50
Office furniture and equipment	7
Leasehold improvements	Over the shorter of the term of the lease or useful lives

Subsequent expenditures are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Company and losses on disposals are determined by comparing proceeds with carrying amount and are recognized in profit or loss.

The depreciation method and the estimated useful life of an asset are reviewed at least each year-end and the changes are accounted for as a change in accounting estimate on a prospective basis.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

Intangible assets

N. Intangible assets

Intangible assets of the Company comprise development costs capitalization, which are amortized over their useful life and reviewed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at each year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are treated prospectively as a change in accounting estimates.

Research expenditures are recognized in profit or loss when incurred. An intangible asset arising from a development project or from the development phase of an internal project is recognized if the Company can demonstrate:

• The technical feasibility of completing the intangible asset so that it will be available for use or sale.

• The Company's intention to complete the intangible asset and use or sell it.

• The ability to use or sell the intangible asset.

• How the intangible asset will generate future economic benefits.

• The availability of adequate technical, financial and other resources to complete the intangible asset; and

• The ability to measure reliably the respective expenditure asset during its development.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete, and the asset is available for use. It is amortized over the period of expected future benefit of 3 years.

Impairment of non-financial assets

O. Impairment of non-financial assets

The Company evaluates the need to record an impairment of the carrying amount of fixed assets and intangible assets whenever events or changes in the circumstances indicate that the carrying amount is not recoverable. If the carrying amount of the above assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of the net sale price and value in use. In measuring value in use, the expected cash flows are discounted using a pre-tax discount rate that reflects the specific risks of the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in the statement of comprehensive income (loss).

Revenue recognition

P. Revenue recognition

Revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring services to a customer.

The Company generates its revenues through three streams:

• Royalties from licensing of technological platforms and provision of proprietary games content (which are recognized in the accounting periods in which the gaming transactions occur).

• Fees from access to intellectual property rights (which are recognized over the useful periods of the intellectual property rights).

• Fees from development services (which are recognized in the accounting periods in which services are provided).

Reserve with respect to funding transactions with related parties

Q. Reserve with respect to funding transactions with related parties

Transactions with related parties are accounted for based on fair value. Any difference between the nominal value and the fair value that arises in transactions with related parties are recorded directly into equity to a “Reserve with respect to funding transactions with related parties”.

Share-based payment

R. Share-based payment

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income (loss) over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income (loss) over the remaining vesting period. Where the terms and conditions of options are modified after they vest, the increase in the fair value of the options measured and recorded in the consolidated statement of comprehensive income (loss) immediately after the modification.

Finance income and expenses

S. Finance income and expenses

Finance income comprises of net currencies with exchange rates differences, while finance expenses are comprised of interest on related parties funding, net currencies exchange rates differences, interest on leases liabilities and banks charges.

Income Taxes

T. Income taxes

Provision for income taxes is calculated in accordance with the tax legislation and applicable tax rates in force at the end of the reporting year in the countries in which Neogames S.A. and its subsidiaries have been incorporated. A provision is recognized for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable. This measurement is required to be based on the assumption that each of the tax authorities will examine amounts they have a right to examine and have full knowledge of all related information when making those examinations.

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising from:

• The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

• Investments in subsidiaries and joint operations where the Company is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date, and that amount is are expected to apply when the deferred tax liabilities/assets are settled/recovered.

The Company recognized deferred tax assets (if any) only when their recoverability is more likely than not.

Fair value measurement hierarchy

U. Fair value measurement hierarchy

The Company measures certain financial instruments, including derivatives, at fair value at the end of each reporting period. Fair value is the price that would be received or paid in an orderly transaction between market participants at a particular date, either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for that asset or liability accessible to the Company.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

Earnings (loss) per share

V. Earnings (loss) per share

Basic earnings (loss) per share

Basic earnings (loss) per share is calculated by dividing the earnings (loss) attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year, adjusted for ordinary shares issued during the year, if applicable.

Diluted earnings per share

Diluted earnings (loss) per share adjusts the figures used in the determination of basic earnings per share to take into account the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of options takes place as expected; and the addition of the shares to be derived from realization must have a dilutive effect.

Leases

W. Leases

Effective January 1, 2019, the Company accounts for its leases under IFRS 16, according to which:

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) or low value assets.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The lease liability is presented as a separate line in the consolidated statement of financial position, including the separation between current and non-current.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

In profit or loss, amortization expenses of the right-of-use asset and interest expenses in respect of the lease liability recognized. In the statement of cash flows, payments in respect of the principal portion of the lease liability classified as financing activity and payments in respect of the interest portion of the lease liability classified in accordance with the Company’s policy regarding classification of interest payments as operating activity.

In the prior period financial statements operating leases expenses recorded on a straight line basis within the operating expenses.

On December 26, 2018, NeoGames Ukraine entered into a lease agreement for an office space. The agreement commenced on January 15, 2019 for a period of 60 months. The annual lease payment and related expenses is approximately $1 million. For a description of the lease arrangement with the Aspire Group, see Note 6.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of significant accounting policies [Abstract]

Schedule of Estimated Useful Life

	%
Computers and computers equipment	25-50
Office furniture and equipment	7
Leasehold improvements	Over the shorter of the term of the lease or useful lives

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PROPERTY AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of detailed information about property, plant and equipment [abstract]

Schedule of Property And Equipment, Net

	Computers and computers equipment		Office furniture and equipment		Leasehold improvements		Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2020		2,107		257		200		2,564
Additions during the year		373		364		191		928
		2,480		621		391		3,492
Accumulated depreciation:
Balance as of January 1, 2020		1,536		36		143		1,715
Additions during the year		461		7		8		476
		1,997		43		151		2,191
Net Book Value:
As of December 31, 2020		483		578		240		1,301

	Computers and computers equipment		Office furniture and equipment		Leasehold improvements		Total
	U.S. dollars (in thousands)
Cost:
Balance as of January 1, 2019		1,461		190		157		1,808
Additions during the year		646		67		43		756
		2,107		257		200		2,564
Accumulated depreciation:
Balance as of January 1, 2019		1,115		32		137		1,284
Additions during the year		421		4		6		431
		1,536		36		143		1,715
Net Book Value:
As of December 31, 2019		571		221		57		849

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INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of detailed information about intangible assets [abstract]

Schedule of Intangible Assets

	As of December 31,
	2020		2019
	U.S. dollars (in thousands)
Cost:
Balance at beginning of the period		45,070		33,616
Additions		13,128		11,454
As of December 31,		58,198		45,070
Accumulated amortization:
Balance at beginning of the period		30,657		22,885
Amortization		9,706		7,772
As of December 31,		40,363		30,657
Net Book Value:
As of December 31,		17,835		14,413

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RELATED PARTIES (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure of transactions between related parties [abstract]

Schedule Of Loans Other Due William Hill, Net

	As of June, 30, 2021			As of December 31, 2020
	Unaudited			Audited
	U.S. dollars (in thousands)
Loans and other due to WH, net:
Loan principals		11,000			12,500
Discounts		(1,926	)		(2,492	)
Accrued interest		212			677
Liability with respect to IP Option		3,450			3,450
Receivables on IP Option		(970	)		(1,497	)
		11,766			12,638

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Loan principals		12,500			12,500
Discounts		(2,492	)		(465	)
Accrued interest		677			421
Liability with respect to IP Option		3,450			3,450
Receivables on IP Option		(1,497	)		(1,661	)
		12,638			14,245

Schedule of Research and Development Services and Administrative Services

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Revenues generated from the Transition Services Agreement		928		1,348
Expenses derived by the Cost Allocation Agreement:
Labor (included in general and administrative expenses)		28		21
Right of use lease (included in depreciation and interest with respect to right of use)		595		470
Other (included in general and administrative expenses)		97		70
		720		561

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Revenues generated from the Transition Services Agreement		2,430		4,099		3,421
Expenses derived by the Cost Allocation Agreement:
Labor (included in general and administrative expenses)		66		68		289
Rent (included in depreciation and interest with respect to right of use)		1,064		1,047		1,036
Other (included in general and administrative expenses)		160		177		232
Total expenses		1,290		1,292		1,557

Schedule of Capital Notes and Accrued Interest

	Principal amount		Balance*		Contractual interest rate		Effective interest rate
	U.S. dollars (in thousands)				%
As of June 30, 2021 (Unaudited)		21,838		19,337		1		20
As of December 31, 2020 (Audited)		21,838		17,739		1		20

* Including accrued interest of $582 thousand and $582 thousand as of June 30, 2021 and December 31, 2020, respectively.

As of December 31,	Principal amount		Balance*		Contractual interest rate		Effective interest rate
	U.S. dollars (in thousands)				%
2020		21,838		17,739		1		20
2019		21,838		14,987		1		20

* including accrued interest of $582 thousand and $582 thousand as of December 31, 2020 and 2019, respectively.

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INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure of joint ventures [abstract]

Schedule of NPI Summarized Financial Information

	As of June, 30, 2021			As of December 31, 2020
	Unaudited			Audited
	U.S. dollars (in thousands)
Current assets		20,025			11,388
Non-current assets		1,419			1,597
Current liabilities		(20,851	)		(12,091	)
Non-current liabilities		(2,880	)		(2,910	)
Net assets (100%)		(2,287	)		(2,016	)
Net assets (50%)		(1,144	)		(1,008	)
Adjustments		43			(17	)
Company share of net assets (liabilities) (50%)		(1,101	)		(1,025	)

	For the Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Revenues		31,695			4,888
Distribution expenses		21,512			6,085
Selling, general and marketing expenses		406			373
Depreciation and amortization		313			307
Finance expenses		45			11
Net and total profit (loss) (100%)		9,419			(1,888	)
Net and total profit (loss) (50%)		4,710			(944	)
Adjustments		1,813			268
Share in profits (losses) of NPI		6,523			(676	)
Funding of (proceeds from) NPI		(6,599	)		91

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Current assets		11,388			3,211
Non-current assets		1,597			2,025
Current liabilities		(12,091	)		(3,214	)
Non-current liabilities		(2,910	)		(631	)
Net assets (liabilities) (100%)		(2,016	)		1,391
Net assets (liabilities) (50%)		(1,008	)		696
Adjustments		(17	)		(93	)
Company share of Joint Venture net assets (liabilities)		(1,025	)		603

	For the year ended December 31,
	2020			2019			2018
	U.S. dollars (in thousands)
Revenues		18,032			3,740			1,127
Distribution expenses		16,116			10,480			4,447
Selling, general and marketing expenses		776			1,067			293
Depreciation		405			335			224
Net and total profit (loss) (100%)		735			(8,142	)		(3,837	)
Net and total profit (loss) (50%)		367			(4,071	)		(1,919	)
Adjustments		1,026			147			21
Share in profits (losses) of NPI		1,393			(3,924	)		(1,898	)
Funding of (proceeds from) NPI		(3,021	)		4,214			2,149

Schedule Of Joint Operation Revenues Operating Expenses

	For the Six-month period ended June 30,
	2021			2020
	Unaudited
	U.S. dollars (in thousands)
Revenues (100%)		24,196			22,585
Total operating expenses (100%)		(13,585	)		(9,900	)

	For the year ended December 31,
	2020			2019			2018
	U.S. dollars (in thousands)
Revenues (100%)		49,779			24,665			20,675
Total operating expenses (100%)		(22,021	)		(14,264	)		(13,361	)

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TRADE AND OTHER PAYABLES (Tables)

12 Months Ended

Dec. 31, 2020

Trade and other payables [abstract]

Schedule of Trade and Other Payables

 

	As of December 31,
	2020		2019
	U.S. dollars (in thousands)
Trade payables		1,693		561
Governmental authorities		1,258		488
Accrued expenses		1,959		806
		4,910		1,855

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EMPLOYEE BENEFIT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of defined benefit plans [abstract]

Schedule of Employee Benefit Liabilities

 

	As of December 31,
	2020			2019
	U.S. dollars (in thousands)
Non- current
Accrued severance pay		2,350			1,991
Less - funds		(1,966	)		(1,715	)
		384			276
Current
Accrued vacation		522			279
Accrued recuperation		11			8
		533			287

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SHARE BASED PAYMENTS (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Disclosure of terms and conditions of share-based payment arrangement [abstract]

Schedule of Summarizes Underlying Assumptions

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		37.7	%
Risk free interest rate		0.87	%
Expected life	5.33 years
Weighted average exercise price	$	57.56
Price per share	$	57.56

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		31	%
Risk free interest rate		2.48	%
Expected life	2 years
Weighted average exercise price	$	0.17
Price per share	$	0.52
Grant date fair value of each option	$	0.36

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		29.67%-30.2	%
Risk free interest rate		2.21%-2.28	%
Expected life	5.5-7 years
Weighted average exercise price	$	0.17
Price per share	$	0.52
Grant date weighted average fair value per option	$	0.38

The following table summarizes the underlying assumptions used in the model:

Dividend Yield		0	%
Expected volatility		29.3%-29.86	%
Risk free interest rate		1.8%-1.85	%
Expected life	5.12-6 years
Weighted average exercise price	$	0.21
Price per share	$	0.52
Grant date weighed average fair value of an option	$	0.34

The fair value of the options granted was estimated to be $0.6 million as of the July 13, 2020 grant date using the Black-Scholes model:

Dividend Yield		0	%
Expected volatility		39.4%-37	%
Risk free interest rate		0.35%-0.48	%
Expected life	5.5-7 years
Weighted average exercise price	$	0.17
Price per share	$	1.5

The fair value of the options granted was estimated to be $0.4 million as of the November 18, 2020 grant date using the Black-Scholes model:

Dividend Yield		0	%
Expected volatility		39%-42	%
Risk free interest rate		0.42%-0.64	%
Expected life	5.13-7 years
Weighted average exercise price	$	17
Price per share	$	17

Schedule of Option Activities

	2020					2019					2018
	Weighted average exercise price ($)		Number			Weighted average exercise price ($)		Number			Weighted average exercise price ($)		Number
Outstanding at January 1,		1.48		1,632,220			1.56		1,113,218			1.56		1,118,077
Granted during the year		9.92		111,129			1.40		524,867			-		-
Exercised during the year		1.40		(12,473	)		-		-			-		-
Forfeited during the year		1.73		(22,856	)		1.81		(5,865	)		2.96		(4,859	)
Outstanding at December 31,		2.02		1,708,020			1.48		1,632,220			1.56		1,113,218
Vested and exercisable at December 31,		1.52		1,203,456			1.48		1,045,076			1.48		1,055,701

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REVENUES (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Revenue [abstract]

Schedule of Revenues

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Turnkey contracts		16,065		14,430
Games		979		800
Total royalties		17,044		15,230
Development and other services from Aspire (See also Note 3B)		928		1,348
Development and other services from NPI (See also Note 4A)		3,724		1,744
Development and other services from Michigan Joint Operation (See also Note 4B)		676		655
Total Development and other services		5,328		3,747
Use of IP rights (William Hill only, see also Note 3A)		3,864		3,094
Total Revenues		26,236		22,071

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Turnkey contracts		32,252		17,240		13,684
Games		2,006		2,189		2,098
Total royalties		34,258		19,429		15,782
Development and other services from Aspire (See also Note 6B)		2,430		4,099		3,421
Development and other services from NPI (See also Note 7A)		4,404		2,914		1,244
Development and other services from Michigan Joint Operation (See also Note 7B)		1,413		958		594
Total Development and other services		8,247		7,971		5,259
Use of IP rights (William Hill only, see also Note 6A)		6,697		5,662		2,437
Total Revenues		49,202		33,062		23,478

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DISTRIBUTION EXPENSES (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of distribution expenses [Abstract]

Schedule of Distribution Expenses

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Labor and related		1,335		998		1,023
Call center		728		781		641
Processing fees		3,962		2,207		2,421
Other		660		266		434
		6,685		4,252		4,519

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GENERAL AND ADMINISTRATIVE EXPENSES (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of general and administrative expenses [Abstract]

Schedule of General and Administrative Expenses

	For the year ended 31 December
	2020		2019		2018
	U.S. dollars (in thousands)
Labor and related		3,109		2,048		1,490
Labor and related from a Related Company		42		46		266
Professional fees		1,983		1,114		798
Rent and related from a Related Company		168		96		1,036
Municipality and maintenance from Related Company		160		177		232
Travelling		63		292		259
Office		414		408		273
Other		1,557		776		594
		7,496		4,957		4,948

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OTHER FINANCE EXPENSES AND INCOME, NET (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of other finance expenses and income, net [Abstract]

Schedule of Other Finance Expenses and Income, Net

	For the year ended 31 December
	2020		2019		2018
	U.S. dollars (in thousands)
A.      Finance income:
Currency exchange rate differences		-		53		-
Interest income		21		-		-
		21		53		-
B.      Finance expenses:
Currency Exchange rate differences		197		-		134
Interest expense with respect to lease liabilities		461		366		-
Bank charges		89		16		61
		747		382		195

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TAXATION (Tables)

12 Months Ended

Dec. 31, 2020

Major components of tax expense (income) [abstract]

Schedule of Income Taxes Expenses Included in Statements of Comprehensive Loss

 

	For the year ended December 31,
	2020		2019		2018
	U.S. dollars (in thousands)
Current taxes		1,224		836		552
Deferred taxes		81		6		14
Taxes with respect to previous years		138		401		20
		1,443		1,243		586

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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Tables)

12 Months Ended

Dec. 31, 2020

Disclosure of detailed information about financial instruments [abstract]

Schedule of Contractual Maturity Analysis of Financial Liabilities

	As of December 31, 2020
	In 3 months		Between 3 months and 1 year		More than 1 year		Total
	U.S. dollars (in thousands)
Capital notes and accrued interest due to Aspire Group						22,419		22,419
Loans due to WH				2,022		11,155		13,177
Lease liabilities				1,651		1,855		3,506
Trade and other payables		4,910						4,910
Total		4,910		3,673		35,429		44,012

	As of December 31, 2019
	In 3 months		Between 3 months and 1 year		More than 1 year		Total
	U.S. dollars (in thousands)
Capital notes and accrued interest due to Aspire Group						22,419		22,419
Loans due to WH				12,920		-		12,920
Lease liabilities				1,455		3,382		4,837
Trade and other payables		1,855						1,855
Total		1,855		14,375		25,801		42,031

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INCOME PER SHARE (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2021

Dec. 31, 2020

Income Loss Per Share Abstract

Schedule of income per share

	For the Six-month period ended June 30,
	2021		2020
	Unaudited
	U.S. dollars (in thousands)
Basic and diluted earnings per share:
Net income attributable to equity holders of the company		6,725		1,513
Weighted average number of issued ordinary shares		25,067,083		21,994,408
Dilutive effect of share options		1,544,474		1,407,620
Weighted average number of diluted ordinary shares		26,611,557		23,402,028
Income (loss) per share, basic ($)		0.27		0.07
Income (loss) per share, diluted ($)		0.25		0.06

	For the year ended December 31,
	2020		2019			2018
	U.S. dollars (in thousands)
Basic and diluted earnings per share:
Net income (loss) attributable to equity holders of the company		6,514		(3,978	)		(5,975	)
Weighted average number of issued ordinary shares		22,329,281		21,983,757			21,983,757
Dilutive effect of share options		1,569,196		-			-
Weighted average number of diluted ordinary shares		23,898,477		21,983,757			21,983,757
Income (loss) per share, basic ($)		0.29		(0.18	)		(0.27	)
Income (loss) per share, diluted ($)		0.27		(0.18	)		(0.27	)

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GENERAL (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended		12 Months Ended				13 Months Ended
	Nov. 10, 2020	Mar. 19, 2020	Jul. 31, 2014	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Nov. 24, 2021	Jun. 30, 2021	Nov. 24, 2020
Disclosure of joint ventures [line items]
Reverse split of share capital	1: 8.234
Initial public offering	181,003,584
Offering price									$ 0
Proceeds from offering					$ 43,380	$ 0	$ 0
Initial public offering [Member]
Disclosure of joint ventures [line items]
Initial public offering										5,528,650
Offering price										$ 17.00
Proceeds from offering								$ 94,000
Underwriters [Member
Disclosure of joint ventures [line items]
Initial public offering										721,128
Parent [Member]
Disclosure of joint ventures [line items]
Initial public offering										2,987,625
Shareholders [Member]
Disclosure of joint ventures [line items]
Initial public offering										2,541,025
Alberta Gaming, Liquor and Cannabis Commission [Member] | Neopollard Interactive Llc [Member]
Disclosure of joint ventures [line items]
Initial term of contract		7 years
Extended Term Of Contract		5 years
Michigan Joint Operation [Member] | Pollard Banknote Limited [Member]
Disclosure of joint ventures [line items]
Expiry date of contract				Jul. 31, 2026
Virginia State Lottery online e-Subscription program [Member] | Neopollard Interactive Llc [Member]
Disclosure of joint ventures [line items]
Initial term of contract			5 years
Extended Term Of Contract			5 years
New Hampshire Lottery [Member] | Neopollard Interactive Llc [Member]
Disclosure of joint ventures [line items]
Initial term of contract			7 years
North Carolina Education Lottery iLottery platform [Member] | Neopollard Interactive Llc [Member]
Disclosure of joint ventures [line items]
Initial term of contract			5 years
Extended Term Of Contract			5 years

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SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - NeoGames Ukraine [Member] - Land [Member] $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Disclosure of maturity analysis of operating lease payments [line items]
Lease term	60 months
Annual lease payment and related expenses	$ 1

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SIGNIFICANT ACCOUNTING POLICIES (Schedule of Estimated Useful Life) (Details)	12 Months Ended
	Dec. 31, 2020
Computers and computers equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation rates (in %)	25-50
Office furniture and equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation rates (in %)	7
Leasehold improvements [Member]
Disclosure of detailed information about property, plant and equipment [line items]
Depreciation rates (in %)	Over the shorter of the term of the lease or useful lives

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PROPERTY AND EQUIPMENT, NET (Schedule of Property Plant and Equipment) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	$ 849
At December 31	1,301	$ 849
Computers and computers equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	571
At December 31	483	571
Office furniture and equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	221
At December 31	578	221
Leasehold improvements [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	57
At December 31	240	57
Cost [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	2,564	1,808
Additions during the year	928	756
At December 31	3,492	2,564
Cost [Member] | Computers and computers equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	2,107	1,461
Additions during the year	373	646
At December 31	2,480	2,107
Cost [Member] | Office furniture and equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	257	190
Additions during the year	364	67
At December 31	621	257
Cost [Member] | Leasehold improvements [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	200	157
Additions during the year	191	43
At December 31	391	200
Accumulated depreciation and amortisation [member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	1,715	1,284
Additions during the year	476	431
At December 31	2,191	1,715
Accumulated depreciation and amortisation [member] | Computers and computers equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	1,536	1,115
Additions during the year	461	421
At December 31	1,997	1,536
Accumulated depreciation and amortisation [member] | Office furniture and equipment [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	36	32
Additions during the year	7	4
At December 31	43	36
Accumulated depreciation and amortisation [member] | Leasehold improvements [Member]
Disclosure of detailed information about property, plant and equipment [line items]
At January 1	143	137
Additions during the year	8	6
At December 31	$ 151	$ 143

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INTANGIBLE ASSETS (Schedule of Intangible Assets) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Disclosure of detailed information about intangible assets [line items]
Balance at beginning of the period	$ 14,413
Balance at end of the period	17,835	$ 14,413
Cost [Member]
Disclosure of detailed information about intangible assets [line items]
Balance at beginning of the period	45,070	33,616
Additions	13,128	11,454
Balance at end of the period	58,198	45,070
Accumulated depreciation and amortisation [member]
Disclosure of detailed information about intangible assets [line items]
Balance at beginning of the period	30,657	22,885
Amortization	9,706	7,772
Balance at end of the period	40,363	30,657
Net book value [Member]
Disclosure of detailed information about intangible assets [line items]
Balance at beginning of the period	14,413
Balance at end of the period	$ 17,835	$ 14,413

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RELATED PARTIES (Narrative) (Details) ₪ in Thousands, $ in Thousands, £ in Millions		1 Months Ended				6 Months Ended		12 Months Ended
	Jun. 01, 2015 ILS (₪)	Sep. 18, 2020 USD ($)	Feb. 29, 2020 USD ($)	Jun. 18, 2018 GBP (£)	May 18, 2017 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 18, 2018 USD ($)	Jul. 08, 2015 USD ($)
Disclosure of transactions between related parties [line items]
Revenues						$ 26,236	$ 22,071	$ 49,202	$ 33,062	$ 23,478
Trade receivables outstanding						3,869		$ 3,701	2,737
Percentage of annual market interest rate								12.00%
Interest expense								$ 1,400	1,300	200
Reserve with respect to funding transactions with related parties			$ 2,500
First Loan [Member]
Disclosure of transactions between related parties [line items]
Borrowings										$ 4,000
Borrowing interest rate		1.00%								5.00%
Maturity date		Jun. 15, 2023	Jun. 30, 2021							Aug. 30, 2020
Credit facility		$ 2,500
Percentage of annual market interest rate		12.00%
Reserve with respect to funding transactions with related parties		$ 1,900
First Loan [Member] | Discounted Cash Flow [member]
Disclosure of transactions between related parties [line items]
Interest expense on loans		$ 600
Secure Guarantees Bonding Facilities [Member]
Disclosure of transactions between related parties [line items]
Borrowings									$ 6,500
Borrowing interest rate									1.00%
Maturity date										Aug. 30, 2020
Other Loan [Member]
Disclosure of transactions between related parties [line items]
Maturity date			Jun. 15, 2023
William Hill [Member]
Disclosure of transactions between related parties [line items]
Repayments of loan						1,500
Interest expense on loans						600
Reserve under equity deficit					$ 9,600
Liability with respect to IP Option						$ 3,450		$ 3,450	$ 3,450
Reserve with respect to funding transactions with related parties			$ 2,500
William Hill [Member] | Discounted Cash Flow [member]
Disclosure of transactions between related parties [line items]
Percentage of annual market interest rate					20.00%
Reserve under equity deficit					$ 6,400
William Hill [Member] | First Loan [Member]
Disclosure of transactions between related parties [line items]
Maturity date			Jun. 30, 2021
William Hill [Member] | Other Loan [Member]
Disclosure of transactions between related parties [line items]
Maturity date			Jun. 15, 2023
Aspire Group [Member]
Disclosure of transactions between related parties [line items]
Borrowing interest rate						20.00%		20.00%	20.00%
Interest expense								$ 3,000	$ 2,500	$ 2,100
License Agreement [Member] | WHG (International) Ltd. [Member]
Disclosure of transactions between related parties [line items]
Completion period of IP Option				4 years
Revenues								6,700	5,700
Trade receivables outstanding								2,000	1,500
Liability with respect to IP Option											$ 3,450
License Agreement [Member] | WHG (International) Ltd. [Member] | Pound Sterling [Member]
Disclosure of transactions between related parties [line items]
Perpetual license payment | £				£ 15.0
License Agreement [Member] | William Hill [Member]
Disclosure of transactions between related parties [line items]
Revenues						$ 3,900	3,100
Trade receivables outstanding						2,400		2,000
Investment Framework Shareholders Agreement [Member] | William Hill [Member]
Disclosure of transactions between related parties [line items]
Borrowings										$ 2,000
Borrowing interest rate										1.00%
Maturity date										Aug. 30, 2020
Cost Allocation Agreement [Member] | Aspire Group [Member]
Disclosure of transactions between related parties [line items]
Sublease and related charges												$ 1,000
Consultancy Agreement [Member]
Disclosure of transactions between related parties [line items]
Consulting fees						$ 82	$ 77	$ 158	$ 153	$ 149
Consultancy Agreement [Member] | Barak Matalon [Member]
Disclosure of transactions between related parties [line items]
Percentage ownership of equity interest	5.00%
Consultancy Agreement [Member] | Barak Matalon [Member] | Israel, New Shekels
Disclosure of transactions between related parties [line items]
Monthly payment for consultancy services | ₪	₪ 45,000

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RELATED PARTIES (Schedule of Loans and Other Due to William Hill, Net) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019
Disclosure of transactions between related parties [line items]
Loans and other due to William Hill, net	$ 0	$ 1,972	$ 14,245
William Hill [Member]
Disclosure of transactions between related parties [line items]
Loan principals	11,000	12,500	12,500
Discounts	(1,926)	(2,492)	(465)
Accrued interest	212	677	421
Liability with respect to IP Option	3,450	3,450	3,450
Receivables on IP Option	(970)	(1,497)	(1,661)
Loans and other due to William Hill, net	$ 11,766	$ 12,638	$ 14,245

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RELATED PARTIES (Schedule of Research and Development Services and Administrative Services) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Expenses derived by the Cost Allocation Agreement:
Rent and related from a Related Company			$ 168	$ 96	$ 1,036
Aspire Group [Member]
Disclosure of transactions between related parties [line items]
Revenues generated from the Transition Services Agreement	$ 928	$ 1,348	2,430	4,099	3,421
Expenses derived by the Cost Allocation Agreement:
Labor (included in general and administrative expenses)	28	21	66	68	289
Rent and related from a Related Company	595	470	1,064	1,047	1,036
Other (included in general and administrative expenses)	97	70	160	177	232
Total expenses	$ 720	$ 561	$ 1,290	$ 1,292	$ 1,557

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RELATED PARTIES (Schedule of Capital Notes and Accrued Interest) (Details) - Aspire Group [Member] - USD ($) $ in Thousands	Jun. 30, 2021		Dec. 31, 2020		Dec. 31, 2019
Disclosure of transactions between related parties [line items]
Principal amount	$ 21,838		$ 21,838		$ 21,838
Balance	$ 19,337	[1]	$ 17,739	[1],[2]	$ 14,987	[2]
Contractual interest rate	1.00%		1.00%		1.00%
Effective interest rate	20.00%		20.00%		20.00%
Accrued interest	$ 582		$ 582		$ 582

[1] Including accrued interest of $582 thousand and $582 thousand as of June 30, 2021 and December 31, 2020, respectively.

[2] including accrued interest of $582 thousand and $582 thousand as of December 31, 2020 and 2019, respectively.

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INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION (Narrative) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure of joint ventures [line items]
Revenues	$ 26,236	$ 22,071	$ 49,202	$ 33,062	$ 23,478
Restricted Deposit Non Current	159		164	150
Michigan Joint Operation [Member]
Disclosure of joint ventures [line items]
Revenues	24,196	22,585	49,779	24,665	20,675
Company share of Joint Venture net assets (liabilities)	746		745	240
Outstanding amount			1,715	194
Michigan Joint Operation [Member] | Development Services [Member]
Disclosure of joint ventures [line items]
Revenues	700	700	1,400	1,000	600
Michigan Joint Operation [Member] | Royalty Revenues [Member]
Disclosure of joint ventures [line items]
Revenues	900	900	1,900	1,000	800
Neopollard Interactive Llc [Member]
Disclosure of joint ventures [line items]
Revenues	31,695	4,888	18,032	3,740	1,127
Restricted Deposit Non Current			3,800	2,000	1,100
Company share of Joint Venture net assets (liabilities)	(1,101)		(1,025)	603
Outstanding amount			1,477	56
Neopollard Interactive Llc [Member] | Development Services [Member]
Disclosure of joint ventures [line items]
Revenues	$ 3,700	$ 1,700	$ 4,400	$ 2,900	$ 1,200

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INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION (Schedule of NPI Summarized Financial Information) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure of joint ventures [line items]
Current assets	$ 78,119		$ 68,174	$ 10,342
Non-current assets	27,777		26,411	22,833
Current liabilities	(32,600)		(12,095)	(20,138)
Non-current liabilities	(14,479)		(31,669)	(18,645)
Revenues	26,236	$ 22,071	49,202	33,062	$ 23,478
Finance expenses	235	482	747	382	195
Net and total profit (loss) (100%)	6,725	1,513	6,514	(3,978)	(5,975)
Neopollard Interactive Llc [Member]
Disclosure of joint ventures [line items]
Current assets	20,025		11,388	3,211
Non-current assets	1,419		1,597	2,025
Current liabilities	(20,851)		(12,091)	(3,214)
Non-current liabilities	(2,880)		(2,910)	(631)
Net assets (liabilities) (100%)	(2,287)		(2,016)	1,391
Net assets (liabilities) (50%)	(1,144)		(1,008)	696
Adjustments	43		(17)	(93)
Group share of net assets (liabilities) (50%)	(1,101)		(1,025)	603
Revenues	31,695	4,888	18,032	3,740	1,127
Distribution expenses	21,512	6,085	16,116	10,480	4,447
Selling, general and marketing expenses	406	373	776	1,067	293
Depreciation and amortization	313	307	405	335	224
Finance expenses	45	11
Net and total profit (loss) (100%)	9,419	(1,888)	735	(8,142)	(3,837)
Net and total profit (loss) (50%)	4,710	(944)	367	(4,071)	(1,919)
Adjustments	1,813	268	1,026	147	21
Share in profits (losses) of NPI	6,523	(676)	1,393	(3,924)	(1,898)
Advances To Joint Venture	$ (6,599)	$ 91	$ (3,021)	$ 4,214	$ 2,149

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INVESTMENT IN A JOINT VENTURE AND JOINT OPERATION (Schedule of Joint Operation Revenues And Operating Expenses) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure of joint operations [line items]
Revenues (100%)	$ 26,236	$ 22,071	$ 49,202	$ 33,062	$ 23,478
Total operating expenses (100%)	(22,316)	(16,943)	(37,569)	(27,752)	(24,465)
Michigan Joint Operation [Member]
Disclosure of joint operations [line items]
Revenues (100%)	24,196	22,585	49,779	24,665	20,675
Total operating expenses (100%)	$ (13,585)	$ (9,900)	$ (22,021)	$ (14,264)	$ (13,361)

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TRADE AND OTHER PAYABLES (Schedule of Trade and Other Payables) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019
Trade and other payables [abstract]
Trade payables		$ 1,693	$ 561
Governmental authorities		1,258	488
Accrued expenses		1,959	806
Total	$ 4,619	$ 4,910	$ 1,855

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EMPLOYEE BENEFIT LIABILITIES (Schedule of Employee Benefit Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Non- current
Accrued severance pay	$ 2,350	$ 1,991
Less - funds	(1,966)	(1,715)
Total Non- current	384	276
Current
Current Accrued Vacation	522	279
Current Accrued Recuperation	11	8
Total Current	$ 533	$ 287

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SHARE BASED PAYMENTS (Narrative) (Details) $ in Thousands				1 Months Ended		3 Months Ended	6 Months Ended	12 Months Ended
	Nov. 10, 2020	Jul. 13, 2020 USD ($)	May 13, 2019 USD ($)	May 26, 2021 USD ($) Share	Nov. 18, 2020 USD ($)	Mar. 31, 2019	Jun. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Disclosure of terms and conditions of share-based payment arrangement [line items]
Options granted to purchase shares		600			400			111,129	524,867	0
Share-based compensation expenses									$ 250
Options exercisable								1,203,456	1,045,076	1,055,701
Fair value of options granted to purchase shares				$ 304
Value of stock options and trading shares of income tax							$ 2,900
Unrecognized share-based compensation expenses related to options								$ 1,300
Unrecognized share-based compensation expenses related to options, period								1 year 9 months 18 days
Reverse split	1: 8.234
Board of directors [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Options granted to purchase shares | Share				15,000
Vesting period				8 months
Former Chief Executive Officer [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Expiration period						four years
Expiration date						May 20, 2015
Certain employees [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Options granted to purchase shares		415,000	4,321,500
Vesting period		four years	four years
Chairman of the Board [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Options granted to purchase shares					48,581
Vesting period					two years
Certain Consultant [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Options granted to purchase shares					12,145
Vesting period					four years

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SHARE BASED PAYMENTS (Schedule of Summarizes Underlying Assumptions) (Details)			1 Months Ended		3 Months Ended	6 Months Ended
	May 13, 2020 Year $ / shares	Jul. 01, 2019 Year $ / shares	May 26, 2021 Year $ / shares	Nov. 18, 2020 Year $ / shares	Mar. 31, 2019 Year $ / shares	Jul. 13, 2020 Year $ / shares
Disclosure of terms and conditions of share-based payment arrangement [line items]
Dividend Yield	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Expected volatility			37.70%		31.00%
Risk free interest rate			0.87%		2.48%
Expected life | Year			5.33		2
Weighted average exercise price | $ / shares	$ 0.17	$ 0.21	$ 57.56	$ 17	$ 0.17	$ 0.17
Price per share | $ / shares	0.52	0.52	$ 57.56	$ 17	0.52	$ 1.5
Grant date weighted average fair value per option | $ / shares	$ 0.38	$ 0.34			$ 0.36
Bottom of range [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Expected volatility	29.67%	29.30%		39.00%		39.40%
Risk free interest rate	2.21%	1.80%		0.42%		0.35%
Expected life | Year	5.5	5.12		5.13		5.5
Top of range [Member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Expected volatility	30.20%	29.86%		42.00%		37.00%
Risk free interest rate	2.28%	1.85%		0.64%		0.48%
Expected life | Year	7	6		7		7

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SHARE BASED PAYMENTS (Schedule of Option Activities) (Details) $ in Thousands		1 Months Ended	12 Months Ended
	Jul. 13, 2020 USD ($)	Nov. 18, 2020 USD ($)	Dec. 31, 2020 USD ($) $ / shares	Dec. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($) $ / shares
Weighted average exercise price
Outstanding | $ / shares			$ 1.48	$ 1.56	$ 1.56
Granted during the year | $ / shares			9.92	1.40	0
Exercised during the year | $ / shares			1.40	0	0
Forfeited during the year | $ / shares			1.73	1.81	2.96
Outstanding | $ / shares			2.02	1.48	1.56
Vested and exercisable at December 31, | $ / shares			$ 1.52	$ 1.48	$ 1.48
Number
Outstanding | $			1,632,220	1,113,218	1,118,077
Granted during the year | $	600	400	111,129	524,867	0
Exercised during the year | $			(12,473)	0	0
Forfeited during the year | $			(22,856)	(5,865)	(4,859)
Outstanding | $			1,708,020	1,632,220	1,113,218
Vested and exercisable at December 31, | $			1,203,456	1,045,076	1,055,701

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REVENUES (Narrative) (Details)	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Four customers [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	10.00%	10.00%		10.00%	10.00%
Michigan Joint Operation [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	50.00%	55.00%	54.00%	40.00%	47.00%
Sazka [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	12.00%	10.00%	11.00%	12.00%	11.00%
Sazka [Member] | Trade receivables [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	35.00%		43.00%	35.00%
Two customers [Member] | Trade receivables [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	10.00%		10.00%	10.00%
William Hill [Member] | Trade receivables [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	59.00%		55.00%

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REVENUES (Schedule of Revenues) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure of disaggregation of revenue from contracts with customers [line items]
Total royalties	$ 17,044	$ 15,230	$ 34,258	$ 19,429	$ 15,782
Total Development and other services	5,328	3,747	8,247	7,971	5,259
Use of IP rights	3,864	3,094	6,697	5,662	2,437
Total Revenues	26,236	22,071	49,202	33,062	23,478
Turnkey contracts [Member]
Disclosure of disaggregation of revenue from contracts with customers [line items]
Total royalties	16,065	14,430	32,252	17,240	13,684
Games [Member]
Disclosure of disaggregation of revenue from contracts with customers [line items]
Total royalties	979	800	2,006	2,189	2,098
Development and other services from Aspire [Member]
Disclosure of disaggregation of revenue from contracts with customers [line items]
Total Development and other services	928	1,348	2,430	4,099	3,421
Development and other services from NPI [Member]
Disclosure of disaggregation of revenue from contracts with customers [line items]
Total Development and other services	3,724	1,744	4,404	2,914	1,244
Development and other services from Michigan Joint Operation [Member]
Disclosure of disaggregation of revenue from contracts with customers [line items]
Total Development and other services	$ 676	$ 655	$ 1,413	$ 958	$ 594

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DISTRIBUTION EXPENSES (Schedule of Distribution Expenses) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure of distribution expenses [Abstract]
Labor and related			$ 1,335	$ 998	$ 1,023
Call center			728	781	641
Processing fees			3,962	2,207	2,421
Other			660	266	434
Total	$ 5,086	$ 2,863	$ 6,685	$ 4,252	$ 4,519

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GENERAL AND ADMINISTRATIVE EXPENSES (Schedule of General and Administrative Expenses) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Disclosure of general and administrative expenses [Abstract]
Labor and related			$ 3,109	$ 2,048	$ 1,490
Labor and related from a Related Company			42	46	266
Professional fees			1,983	1,114	798
Rent and related from a Related Company			168	96	1,036
Municipality and maintenance from Related Company			160	177	232
Travelling			63	292	259
Office			414	408	273
Other			1,557	776	594
Total	$ 5,542	$ 3,252	$ 7,496	$ 4,957	$ 4,948

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OTHER FINANCE EXPENSES AND INCOME, NET (Schedule of Other Finance Expenses and Income, Net) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
A. Finance income:
Currency exchange rate differences			$ 0	$ 53	$ 0
Interest income			21	0	0
Total	$ 0	$ 22	21	53	0
Financing Expenses [Abstract]
Currency Exchange rate differences			197	0	134
Interest expense with respect to lease liabilities	96	337	672	366	0
Bank charges			89	16	61
Total	$ 235	$ 482	$ 747	$ 382	$ 195

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TAXATION (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2020
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Estimated carry forward losses			$ 59.9
Luxemburg corporation [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Corporation tax rate	24.94%	26.01%
Israeli corporate tax rates [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Corporation tax rate		23.00%
US federal income taxes rate [Member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Corporation tax rate		21.00%

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TAXATION (Schedule of Income Taxes Expenses Included in Statements of Comprehensive Loss) (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Major components of tax expense (income) [abstract]
Current taxes			$ 1,224	$ 836	$ 552
Deferred taxes			81	6	14
Taxes with respect to previous years			138	401	20
Total	$ 1,069	$ 426	$ 1,443	$ 1,243	$ 586

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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Narrative) (Details)	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Three customers [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage			10.00%
Four customers [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	10.00%	10.00%		10.00%	10.00%
Michigan Joint Operation [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	50.00%	55.00%	54.00%	40.00%	47.00%
Sazka [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	12.00%	10.00%	11.00%	12.00%	11.00%
Sazka [Member] | Trade receivables [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	35.00%		43.00%	35.00%
Two customers [Member] | Trade receivables [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage	10.00%		10.00%	10.00%
William Hil [Member] | Trade receivables [Member]
Disclosure of major customers [line items]
Credit risk revenue and trade receivables, percentage			55.00%	56.00%

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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Schedule of Contractual Maturity Analysis of Financial Liabilities) (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019
Disclosure of financial liabilities [line items]
Current Capital Notes And Accrued Interest Due To Related Party	$ 19,337	$ 0	$ 22,419
Loans due to WH		13,177	12,920
Lease liabilities	1,486	1,651	1,455
Trade and other payables	$ 4,619	4,910	1,855
Total		44,012	42,031
In 3 months [Member]
Disclosure of financial liabilities [line items]
Trade and other payables		4,910	1,855
Total		4,910	1,855
Between 3 months and 1 year [Member]
Disclosure of financial liabilities [line items]
Loans due to WH		2,022	12,920
Lease liabilities		1,651	1,455
Total		3,673	14,375
More than 1 year [Member]
Disclosure of financial liabilities [line items]
Current Capital Notes And Accrued Interest Due To Related Party		22,419	22,419
Loans due to WH		11,155	0
Lease liabilities		1,855	3,382
Total		$ 35,429	$ 25,801

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INCOME PER SHARE (Schedule of Income Loss Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Basic and diluted earnings per share:
Net income (loss) attributable to equity holders of the company	$ 6,725	$ 1,513	$ 6,514	$ (3,978)	$ (5,975)
Weighted average number of issued ordinary shares	25,067,083	21,994,408	22,329,281	21,983,757	21,983,757
Dilutive effect of share options	1,544,474	1,407,620	1,569,196	0	0
Weighted average number of diluted ordinary shares	26,611,557	23,402,028	23,898,477	21,983,757	21,983,757
Income (loss) per share, basic ($)	$ 0.27	$ 0.07	$ 0.29	$ (0.18)	$ (0.27)
Income (loss) per share, diluted ($)	$ 0.25	$ 0.06	$ 0.27	$ (0.18)	$ (0.27)