bet365′s main supplier Playtech has unveiled a 30% year-on-year rise in revenue to €79.9m in three months to the end of September, boosted by an Asian-facing licensee of its PTTS services division and its stake in William Hill Online.
Playtech’s profit share from its 29% stake in William Hill’s online arm was up 50% to €12.8m. Revenues generated by licensees from the Asia Pacific region grew 91% year-on-year to account for 29% of the total, up from just 20% 12 months earlier, with those from the more regulated European region correspondingly contracting from 74% to 65%, despite growing in absolute terms by 13%.
VP of finance, Ron Hoffman, soon to take over from David Mathewson as CFO, said in the company’s Q3 earnings call today: “Asia is mainly done in regions like Malaysia, the Philippines, China, and some additional areas, but these are the three main countries. It’s mainly casino and live casino products.”
China and Malaysia were among the three territories classified in Playtech’s prospectus for its recent move to London’s Main List as falling into the highest category of regulatory risk for the company, due to local laws which explicitly criminalise the offer of online gambling, the other being Germany.
CEO Mor Weizer however emphasised they did not expect the burgeoning Asian business - and the company’s exposure to these largely unregulated markets through its licensees - to continue growing at such an exponential rate. “I think the existing relationship, and the relationship with PTTS established with an Asian facing licensee…from this point onwards, we will see continuous growth, but it will be organic growth.” Hoffman added that: [We] don’t expect it to increase significantly more than Europe, or other parts of the world we are active in.”
Weizer also revealed added that the company also saw new regulation in the region as forthcoming. ”We do believe there are changes in Asia that present a great opportunity for us to esablish ourselves in a regulated way in Asia. So you should expect some good news from us in the coming few quarters with regard to our expansion in Asia in a fully regulated way.”
Most operators active in Asia are licensed in the Philippines, the only country to license online gambling in the region, and are prone to periodic crackdowns in countries such as China and Malaysia. Shanghai police announced last week that they had busted a gambling ring which had placed a mammoth US$11.2bn on behalf of customers on 20 offshore gambling sites between January and July of this year.
Boosted by revenues in Asia, Playtech’s dominant casino segment – representing close to 50% of the total in the quarter – were up a third to €38.5m, while bingo grew by 17% to €4.4m. Poker however fell 27% to €4.1 million,
Services revenue, from the PTTS division acquired from founder and major shareholder Teddy Sagi for €280m, was up 38% to €26.9m. Weizer said: “PTTS continues to be a game changer for us, and we are in discussion with operators over JVs and full turnkey solutions.”
Article written by Stephen Carter
