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Playtech Expected to Expand Business in Europe by 2011

Posted on November 3rd, 2010

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The online gaming industry will continue its surge, caused mainly by ompanies finding a rich resource of clients in Europe. Playtech, a software provider, will be announcing 10 new licenses by the next year. The company projects that that the majority of its operations are through partnerships with local operators and the breaking of former monopolies in markets that have just opened to new regulation. With this announcement, Playtech’s chief executive Mor Weizer also confirmed strong earning figures for the third quarter of the year. Weizer explained that these 10 new licenses for 2011 will be mainly poker licenses. But there will also be online casino and bingo licenses to be given. This comes as newly regulated markets, which include France and Italy, matured. Moreover, some other countries are also discussing regulation as of the moment, with the possibility of opening up to online gaming.

Weizer believes that there are opportunities for the company to partner up with local operators in these former monopolized markets. He projects that local companies for example, in the French market, would want to become investors in poker and sports betting. He thinks that by 2011, more local companies would want to be involved in the industry, and his company would like a piece of the action by forging relationships with these companies. He further explains, “This is all incremental revenues for us given the fact we had to close it down ahead of regulation. We will be looking at developing quality rather than quantity but with France looking to broaden its offering, Italy launching casino games and cash poker early next year and a deal signed with Finnish monopoly provider RAY – that is the sole provider of online gaming there – due to launch we are very confident growth will continue. Finland may be an 11th the size of the UK but it has 19,000 land-based slot machines compared to the UK’s 37,000 catering for a population of 60m people.”

This year has so far been very good to Playtech. The firm’s gross income for the third quarter has increased by 30 percent to €41.3 million. This is a substantial raise from €31.9 million of the third quarter of last year. Meanwhile, total revenues also rose by 17 percent to €32.5 million from €27.7 million the same quarter of 2009. From January to September of this year, the company’s gross income has increased by 31percent to €129.2 million so far from last year’s first nine months figure of €98.8 million. Also, total revenues of the company have risen to €105.4 million, from January to September 2009’s €84.4 million. Weizer also said that revenues in poker remain to cloud the otherwise cheerful picture, as figures have been down 30 percent from to €8.2 million to €5.7 million. However, he also said that September and October figures have picked up, as poker activity has increased recently. He explained that the World Cup may have lessened the number of people playing poker. However, he is counting on medium to longer-term figures to be better, with regulation in various countries loosening.

He also reports, “Our licensees are growing, Italy is growing fast, France is building up, we’ve just established ourselves with one license that’s gone live, we have three more soon to be launched with well established casino groups to be launched in the fourth quarter and other waiting for regulatory approval. Then we have Serbia and Finland. The UK and Italy are our biggest regulated markets.” He cites Italy as the market where the company had accelerated growth from 2008 until now. The company is now the largest software provider in the country with a market share of 16 percent. Playtech introduced bingo to the country and the firm has established themselves as the leader in the Italian market with a market share of 25 percent.

Aside from that, three licenses have been launched recently in the country and by 2011, bingo, casino games and cash poker will already be in operation. He claims, “The majority of our revenue is now generated from regulated markets. It’s building up on the back of activity in the UK, Italy and Finland, which is looking at regulating soon.”