Playtech claims poker recovery

Playtech has claimed its revenues from online poker returned to growth from November, on the back of the iPoker network’s liquidity programme and the addition of new licensees Betclic Everest, Gala Coral and Betfair.

CFO Ron Hoffman told analysts in yesterday’s Q4 earnings call that: “Poker showed an expected decrease of 3% over Q3, but revenues from November actually grew, benefitting from the liquidity programme introduced in Q3 and new licenses including Betclic Everest and Betfair which migrated to the iPoker network during the fourth quarter.”

Chief executive Mor Weizer also commented that he was confident the stabilisation and return to growth in the final months of 2012 “will continue in 2013, adding that: ” We believe it will be driven by more licensees coming on board, but also by existing licensees feeling more comfortable wth the new programme we introduced, feeling more comfortable investing more money into poker.”

According to Hoffman, Playtech had also seen “a significant improvement in the drain of the licensees, so money is not flowing outside the [Tier 1] licensees from players losing to other players in the network, it is more maintained within the licensees”. The software provider split its poker network into two tiers from September based on a network scoring mechanism, aimed at protecting the players and marketing investments of its most valuable licensees, with Betfair joining bet365, Paddy Power, William Hill, Titan, Everest, Winner and Poker770 on the top tier.

Weizer also told analysts that the company “continued to develop our dot.com strategy, which experience has shown to be important in supporting our activities in regulated and soon-to-be-regulated markets.”  Accoring to Weizer: “A strong dot.com poker network provides liquidity that can be enjoyed by markets such as Denmark and the UK, that allow operators to share the global pool. This remains an important part of our poker strategy, especially as regulated jurisdictions have indicated they are considering removing the restrictions to ring-fence their own markets.”

The improvement during the final two months of 2012 was insufficient to prevent poker revenues falling by 27% year-on-year in the quarter to €4m, and by 18% to €17.8m for 2012.

This was however the one black spot in Playtech’s figures, as double digit growth across all product verticals drove a 20% rise in total revenues in the final three months of 2012. Revenues from its core casino component were up 27% to €41.7m, with those from its services division – consisting of the PTTS turnkey division acquired from company founder Teddy Sagi – up 17% to €27m, the latter “as a result of the Asian marketing contract entered into in Q1 2012 and organic growth” according to Hoffman.

The share of Playtech’s business coming from the largely unregulated Asia Pacific region accounted for 27% of the company’s revenues in the further quarter, up from 20% a year earlier. This figure was 26% for 2012, as revenues from this region grew by 98% during the year.

Revenues from its Virtue Fusion bingo network also continued to show strong growth, up 14% on a year ago, “namely as a result of ten weeks of revenue from Gala Bingo and seasonal promotions in December, said Hoffman. Weizer said of the Gala Coral migration completed in Q4 that “initial results are exceeding our expectations”.

Article written by Stephen Carter


Casino Choice journalist

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