Ladbrokes hopes to complete the migration of its online poker and casino from Microgaming to Playtech-owned software platforms “over the next few months”, boss Richard Glynn confirmed this morning.
Detailing the progress to date of the integration with Playtech following the five-year, performance-based software and services agreement announced in March, CEO Glynn added:
“[T]here’s still an awful lot to deliver over the next few months. We have to ensure the seamless transition to the new poker and casino product, we have to ensure that we develop fully the Mobenga mobile offering, we have to develop the single wallet integrated capability, especially to maximise the new sportsbook.”
Although careful not to mention main igaming supplier Microgaming by name, CFO Ian Bull told analysts during this morning’s H1 earnings call that it would cost Ladbrokes around £11m for the “early termination” of a number of current digital supply deals.
“[W]e are negotiating a number of supplier agreements, which may or may not lead to early termination in 2013. If that were to be the case in 2013, I would estimate the likely cost at around £11m, the benefit of which will facilitate early transition to Playtech product and IMS back office.”
The first stage of Ladbrokes’ digital partnership with Playtech saw it establish a wholly owned digital marketing arm in Israel, which Glynn said would be headed day-to-day by Mark Lauterstein, ex CEO of successful digital marketing business The Nation Traffic. The “hugely impressive” Lauterstein would work alongside incoming new director of digital and ex William Hill Online COO, Jim Mullen, “who will over time ensure that all of the knowledge and all of the learnings are diffused from the outset through the whole of the Ladbrokes business”, said Glynn.
The first signficant player-facing development arising from the freshly established online partnership, a Playtech-powered Vegas-branded casino tab on the Ladbrokes website providing 70 games, went live last month.
Glynn and Bull were speaking as the operator revealed first-half operating profit down nearly 20% to £85.7m, with increased machine gaming duty and higher costs of streaming racing content to shops accounting for the bulk of the £18.1m decline from retail.
Digital operating profit dipped £4.2m - or 28% year-on-year - to £10.8m, as a £3.7m uplift from the sportsbook driven by an improvement in margin was offset by a £3.7m slump from gaming, with £1.4m less from poker, and costs and duty rising £2.5m. Bull also admitted digital performance had also been impaired by the ongoing Playtech migration.
The bookie also said the Playtech digital deal would allow it to target new international markets, announcing today that it planned to take its Sportium-branded retail JV in Spain online during the next six months.
Glynn also revealed that it planned to have its Betdaq-powered, Ladbrokes-branded betting exchange running alongside its fixed odds sportsbook “by the end of the year, “30% of our regular sports customers already use an exchange. They should be using the Ladbrokes Exchange.”
