Gambling Industry Financial News — Weekly Round-up for November 3, 2017

By Brian Cullingworth, Last updated Nov 3, 2017

Netent Posts Q3-2017 And Interim Nine Month Reports

Successful quarter boosts year-to-date numbers

Online gambling games and software provider NetEnt has posted another set of impressive third quarter and January to September results, highlighting the following:

Third quarter 2017

* Revenues for the third quarter increased by 12.3 percent to SEK 401 (357) million;
* Operating profit up 20.5 percent year-on-year at SEK 156 (129) million;
* Operating margin was 38.9 (36.2) percent;
* Profit after tax up 19.4 percent SEK 142 (119) million;
* 8 new customer agreements were signed and 10 new customers’ casinos were launched.

Important events in the third quarter

* Retail deal signed with Eurogames in Italy for land-based gaming machines;
* Live Rewards launched for Live Casino;
* New game functionality was introduced as part of NetEnt Engage;
* Free-round functionality was launched with first customer in New Jersey.

First nine months 2017

* Revenues up 14.3 percent y-o-y at SEK 1,206 (1,055) million;
* Operating profit up 15 percent at SEK 437 (380) million;
* Operating margin was 36.3 (36.0) percent;
* Profit after tax up 122.9 percent at SEK 400 (355) million;
* 29 new customer agreements were signed and 24 new customers’ casinos were launched.

NetEnt chief executive Per Eriksson, said:

“The third quarter was another solid quarter for NetEnt. Revenues increased by 12 percent and the operating margin was significantly better than in the third quarter of last year. Mobile games and regulated markets such as the UK, Italy and Spain contributed the most to our growth.”

He revealed that mobile games accounted for 52 percent of total revenues in the quarter, and that NetEnt systems managed 10.2 billion gaming transactions during Q3-2017, an increase of 18 percent compared to the corresponding period of last year.

Detailing future plans, Eriksson said that in the final quarter of the year NetEnt has already released thrilling new games such as Planet of the Apes and Finn and the Swirly Spin, the latter of which has been developed to provide the ultimate mobile gaming experience.

“Live Casino is showing solid growth, especially the mobile product, which has been very well received by our customers, Eriksson said. “In the third quarter, we continued to roll out Live Rewards, which is an innovative set of bonus functions that make our games more thrilling for players and operators. We have expanded our Live studio in Malta and going forward, we will be offering more exclusive tables to our customers.

“In the fourth quarter we are making our Live Casino offering more complete by launching Standard Black Jack for mobile, which has been on our customers’ wish list for some time.”

Reporting strong growth outside the Nordic region, Eriksson revealed that Great Britain and Italy contributed the most growth in the quarter, but strong growth was also seen in other regulated markets such as Spain and Denmark.

He held out optimistic hopes for Pennsylvania following Thursday’s news that the state Legislature has finally approved licensed and regulated online gambling.

“We also see interesting future opportunities in Latin America, and in early October we signed our second customer agreement for the regulated market in Mexico, with Caliente, which is one of the leading operators in that market,” he said.

Eriksson says NetEnt’s future remains bright, supported by solid growth and increasing market share in the United Kingdom. Plans include increasing headcount in order to strengthen output capacity, enter more regulated markets and integrate many new customers.

Kindred Revenue Climbs 36 Percent In Q3-2017

32Red acquisition has been particularly successful for online gambling group

The Kindred publicly listed online gambling group has posted its Q3-2017 and nine-month performance figures, claiming all-time high results in revenue and profits, and highlighting:


* Group revenues up 36 percent y-o-y at GBP 194 million;
* EBITDA of GBP 46 million (Q3-2016: GBP 33 million), with recent acquisition 32Red contributing GBP 3.7 million of that;
* 32Red contributed GBP 18.6 million of GGR;
* 1.2 million active customers across group brands, over 120,000 of these generated by 32Red;
* GGR from the mobile channel soared 51 percent y-o-y, contributing 71 percent of group GGR;
* Operating profits of GBP 29.9 million (Q3 2016: GBP 21 million);
* Profit before tax at GBP35 million (GBP 24.8 million);
* Profit after tax at GBP 29.9 million (GBP 21 million);
* Net Cash of GBP 83.7 million (GBP 20 million);
* Bank debt of GBP 247.8 million (GBP 60.2 million).

For the nine months January to September 2017:

* Group revenues of GBP 513.4 million (GBP 391.3 million);
* EBITDA at GBP 106.5 million (GBP 81.8 million);
* Profit before tax: GBP 76.1 million (GBP 62.7 million);
* Profit after tax: GBP 66.6 million (GBP 54.5 million).

Group CEO Henrik Tjärnström attributed the outstanding results to strong growth across Kindred’s major markets and solid cost controls.

“Despite the absence of major football events this quarter, the organic gross winnings revenue growth in constant currency was 17 percent compared to the same period last year, which demonstrates that we continue to gain market share,” he said, noting that the acquisition of 32Red brought new expertise to Kindred and additional locally regulated revenue and opportunities for future revenue and cost synergies.

41 percent of the group’s GGR in the third quarter came from locally regulated markets, Tjärnström revealed.

Turning to mobile operations, the Kindred chief said that GGR from mobile soared 51 percent year-on-year, and amounted to 71 percent of total gross winnings revenue.

Tjärnström remains optimistic regarding future operations, noting that the group has increased its marketing coverage with the start of a new European football season, launching new cross-market sportsbook campaigns and securing new football partnerships.

“In the period up to 22 October 2017, with approximately 50 percent higher than normal sportsbook margins, average daily gross winnings revenue in GBP was 68 percent higher compared to the same period in 2016, he revealed. “Adjusting for the acquisition of 32Red and the impact of exchange rate changes, the growth was 57 percent.”

Flat Quarter For Kambi

Third quarter saw revenues flat and a reduction in operating profit

Online sports betting provider Kambi has reported a rather quiet Q3-2017, with revenues flat and operating profit down. On Friday the company posted KPIs for the third quarter:

* Revenue flat at Euro 14.8 million;
* Operating profit down at Euro 1.1 million on a margin of 7 percent (Q3-2016: Euro 3.1 million on margin of 21 percent);
* Profit after tax down from Euro 2.7 million in Q3-2016 to Euro 800,000 this year.

January to September 2017 results:

* Revenue at Euro 43.1 million, encouragingly up on the Euro 41.7 million in the same period last year;
* Operating profit down at Euro 2.7 million compared to last year’s Euro 7 million;
* Profit after tax declined from Euro 6.3 million last year to Euro 2 million in the current period;
* Margin of 6.6 percent.

CEO Kristian Nylén noted the absence of major football competitions, but said this had not inhibited a 16 percent year-on-year rise in operator turnover.

“This strengthens our belief that while margins will fluctuate due to the outcome of sporting events, we don’t see any long-term trends that suggest any continued downward pressure,” he said.

Loto-Quebec Posts Modest Growth In H1-2017

But online operations shine with a 42.3 percent rise in revenues

Loto-Quebec’s otherwise rather average results in fiscal H1-2017 were boosted by an outstanding performance from the group’s Espace Jeux online division, which delivered a 42.3 percent year-on-year increase in revenue at Cdn$ 50 million.

Overall, group revenue for the six month period ended September 25 this year reached Cdn$ 1.814 billion – up 3.5 percent year-on-year, whilst net income rose 6.2 percent at Cdn$ 678.6 million.

In the second quarter ended September 25 the group reported a 1 percent rise in revenue to Cdn$931.3 million – its tenth quarter of growth – and profits up 3.4 percent at Cdn$ 353.5 million.

The company reported that the Cdn$ 35 million increase in H1 revenues is primarily attributable to sales of the new terminal-based Grande Vie game launched on October 18, 2016. Loto-Québec’s market share of this pan-Canadian lottery remains high at 34.7 percent.

Loto-Quebec’s three national products (Lotto Max, Lotto 6/49 and Grande Vie), had the best sales performance among the five Canadian lottery corporations.

During the six-month period, the Corporation paid out close to 9,200 prizes or prize shares worth over Cdn$1,000 to lottery winners, including 48 prizes worth over Cdn$1 million.

Land casino revenues were up, with visitors rising 4.6 percent to 222,000, whilst gaming halls delivered a good performance, drawing in increasing numbers of people. Gaming halls welcomed some 34,000 more visitors (+8 percent) than in the preceding year.

Loto-Quebec’s strategic plan for the next hree years has been published and seeks to place the customer at the heart of all decisions; develop new growth opportunities that combine gaming with entertainment; improve the social following of the business and offerings; and improve group flexibility and performance.

Tabcorp Releases Fiscal Q1-2017/18 Results

Revenues up 5.4 percent overall, but Luxbet and UK online operation continued to struggle

Australian gambling group Tabcorp published its fiscal Q1-2017/18 results this week, recording an overall 5.4 percent y-o-y rise in revenue at A$ 578.8 million, but noting that its UK online venture with a local newspaper, Sunbet, continues to struggle.

The group’s flagship performer remained its Wagering & Media division, which posted revenue up 4.5 percent at A$481.5 million, thanks mainly to a good digital performance.

Overall wagering turnover rose 3.5 percent, with the digital component up 17 percent at A$1.1 billion; retail betting turnover fell 1 percent to A$1.55 billion.

Problem areas in digital included Luxbet, which the company has had on review following A$13 million in earning losses so far this year, and Sunbet, the group’s UK venture in partnership with the News UK media group. The report notes that struggling Sunbet remains a challenging proposition for the company with revenues up 5.3 percent at A$1.1 million but still below expectations.

Sunbets, which launched in August last year, lost A$18 million in its first half-year and has been the target for improvements to its online casino and sportsbook by Tabcorp. Like Luxbet, the operation remains under review.

Tabcorp’s chairperson Paula Dwyer told shareholders that for now the group would continue to support and improve Sunbet, but in the continued absence of real improvement would have to consider exercising its rights to shutter the enterprise.

Tabcorp still awaits news of whether its proposed merger with Tatts can go ahead following a federal court decision in September which sent the merger back to the Australian Competition Tribunal for review of its earlier decision to let the deal progress.

The company advised it will maintain its high dividend pay-out ratio of 90 percent of NPAT before significant items and amortisation.

Spanish Market Shows Good Growth In Third Quarter

Appetite for online Sportsbetting and Casino continues

Quarter three online gambling results released Tuesday by Spain’s Dirección General de Ordenación del Juego (DGOJ) show total gross gaming revenue up 37.3 percent year-on-year despite a 3 percent decline in advertising spend.

Key performance metrics for the three month period ending September 30, 2017 include:

Consolidated gross gaming revenues (GGR) amounted to Euro 140.5 million, up 16.63 percent compared to the previous quarter and 37.35 percent y-o-y.

Total Deposits reached Euro 421.94 million, a 14.51 percent increase over the previous quarter and 49.22 percent y-o-y.

In terms of GGR, all segments show growth in respect to the previous quarter: Bets – 27.77 percent, Poker – 2.05 percent, Casino – 4.56 percent, Bingo – 0.66 percent and prize competitions 104.25 percent.

Active users totaled 613,812, a decrease of 5 percent over Q2, and an increase of 13.44 percent y-o-y.

Registered users amounted to 709,716, up 17.65 percent on Q2, and 8.79 percent y-o-y.

Advertising expenses decreased 19.8 percent to Euro 18.92 million compared to the second quarter, and dropped 3.03 percent y-o-y.

Bonusing accounted for Euro 22.77 million, an increase on the previous quarter of 6.8 percent and a decrease of 18.22 percent y-o-y.

In terms of total GGR, sports betting led the pack accounting for 54.78 percent, followed by casino with 31.22 percent, Poker with 10,48 percent, Bingo – 2.03 percent and prize competitions – 1.51 percent.


Online poker decreased 0.71 percent in terms of wagers but increased 2.05 percent in terms of GGR amounting to Euro 14.73 million over last quarter.

Of the Euro 380.54 million played in the Poker segment, cash poker accounted for Euro 238.33 million or 62.63 percent and tournament’s Euro 142.21 million or 37.37 percent.

Cash poker delivered Euro 5.93 million in GGR, and tournaments Euro 8.79 million, a decrease of 7.03 percent and an increase of 18.66 percent over the previous quarter respectively.

Online Casino:

Wagers and GGR increased 4.79 percent and 4.56 percent respectively compared to the previous quarter

Of the Euro 1,545.48 million wagered, slots amounted to Euro 602.12 million or 38.96 percent. Blackjack accounted for Euro 225 million or 14.58 percent.

Roulette amounted to Euro 717.93 million or 46.45 percent, of which Live Roulette accounted for Euro 423.7 million or 59.02 percent and Conventional Roulette Euro 294.23 million or 40.98.

Total casino GGR amounted to Euro 43.87 million, of which slots accounted for 50.88 percent, Blackjack – Euro 5.58 million and Roulette – Euro 15.97 million.

Online sportsbetting:

The sport betting segment decreased 6.54 percent compared to the second quarter in terms of wagers and increased 27.77 percent in terms of GGR.

Of the Euro 1,321.04 million wagers placed, conventional betting accounted for 28.67 percent or Euro 363 million, Live Betting – Euro 903.3 million or 71.33 percent and horserace betting Euro 23.77 million or 1.8 percent.

Sports betting GGR amounted to Euro 76.95 million, of which conventional betting accounted for Euro 29.74 million or 40.8 percent, live betting – Euro 44.47 million or 59.92 percent and horserace betting – Euro 1.83 million or 2.38 percent.


The bingo segment declined in terms of wagers by 0.29 percent and GGR increased 0.66 percent compared to the previous quarter but grew 34.18 percent and 30.49 percent respectively y-o-y.

Macau Gambling Revenues Up 22 Percent In October

Fifteenth consecutive month of growth

National holiday week traffic during October helped boost gambling revenues on the Chinese island of Macau by 22 percent year-on-year to 26.6 billion patacas (US$3.3 billion) according to official figures released Wednesday.

The increase in revenue, which is ahead of analyst predictions, represents the fifteenth consecutive month of gains in Macau and is the best in terms of revenue since 2014..

Philippines Regulator-Operator Reports On Latest Results

Pagcor net income soars 36.3 percent in January-September period

The Philippine Amusement and Gaming Corp. (Pagcor) which both regulates and operates gambling assets in the Philippines has posted its results for the period January – September 2017, highlighting:

* Net income up 36.3 percent y-o-y at of P4.4 billion;
* Income from gaming operations P42.4 billion;
* After tax total income up 15.7 percent at P22.2 billion;
* Gross expenses up at P17.7 billion.

Working with national government, Pagcor is currently evaluating its land casino assets with a view to privatising the portfolio at some future point.

Paddy Power Betfair Reports On Third Quarter

Australian market results particularly good

Online and land gambling group Paddy Power Betfair posted its Q3-2017 results Wednesday, highlighting:

* Revenue up 9 percent year-on-year to GBP 440 million, driven by 11 percent growth in sports revenue;

* Underlying EBITDA up 7 percent to GBP 121 million on a margin of 28 percent, notwithstanding marketing investment in the Draft acquisition and a strong contribution from Euro 2016 in the prior year;

* Anticipates FY 2017 underlying EBITDA will be between GBP 450 million and GBP 465 million;

* Underlying operating profit up 5 percent at GBP 101 million.

* Online revenue was down 3 percent to GBP 216 million against a tough comparative period that included a strong contribution from the concluding stages of the Euro 2016 tournament;

* Sportsbook stakes were up 10 percent, but sportsbook revenue was down 2 percent due to a 0.8 percentage point decrease in the sportsbook margin to 6.6 percent;

* Moves by the Western Australian state government to introduce a point of consumption wagering tax from 1 January 2019 at a rate of 15 percent of wagering revenue will cost company subsidiary Sportsbet around A$12 million a year;

* Group retail revenue rose 12 percent to GBP 85 million, with a 7 percent increase in sportsbook revenues, driven by 2 percent stakes growth and improved sports results, and machine gaming growth of 8 percent. The group currently operates 623 betting shops, with more planned;

* Newly acquired US daily fantasy sports subsidiary Draft incurred GBP 8 million of start-up losses in the quarter and is expected to record FY EBITDA losses of approximately GBP 15 million.

* Group net cash at 30 September 2017 was GBP 125 million, excluding customer balances, after the payment of the interim 2017 dividend of GBP 50 million.

Outgoing CEO Breon Corcoran, reported to shareholders:

“Q3 was an encouraging quarter, with good stakes growth despite the absence of a major football tournament.

“Our international businesses performed particularly well,” he said, singling out Australia, where revenues rose 29 percent driven by a 33 percent increase in stakes, and the United States where an 18 percent rise was recorded with sports revenue up 18 percent and gaming revenue up 16 percent. TVG, Betfair New Jersey and Draft were all contributors to US revenues.

Corcoran said that the group’s retail division outperformed the market through its sports-led proposition and is well positioned to respond to regulatory changes.

He said that the integration of group technology platforms is nearing completion, and that in 2018 customers will start to benefit from an increased pace of new product delivery across Betfair and Paddy Power brands.

The new Paddy Power desktop and mobile front ends are currently being tested with a small number of customers, and the company anticipates that all Paddy Power customers will be migrated to the integrated platform by early 2018.

“Trading has been good in the period since our interim results and we now expect underlying EBITDA for the full year to be between GBP 450 million and GBP 465 million,” Corcoran concluded, noting that he will hand over to new CEO Peter Jackson on January 8 next year.

Sportech Loses Compound Interest Case Against HMRC (Update)

Claimed compound interest as opposed to simple interest on GBP 97 million VAT refund

The eight-year legal battle between Sportech and Her Majesty’s Revenue and Customs (HMRC) continues concerning its claim for compound interest on the repayment of GBP 97 million in overpaid VAT the company paid, reclaimed and was ultimately awarded back in December 2016 (see previous InfoPowa reports).

In the latest development, the Sportech board expressed its disappointment at a British Supreme Court ruling in favour of HMRC and against Littlewoods Limited and others in respect of the latter’s claim for compound interest on the amount as opposed to simple interest.

Richard McGuire, Chairman of Sportech, commented:

“Whilst this Supreme Court ruling is disappointing from the perspective of our own compound interest claim, it does not affect the operational progress at the Company, our growth opportunities or our ongoing strategic review.

“Following preliminary approaches to acquire the Company, we initiated a Formal Sales Process in October and, having signed several non-disclosure agreements to date, we will be engaging further with interested parties in the coming weeks. We will provide an update on this process within a scheduled trading update on Monday [November 6,2017].”

Scientific Games Pleased With Q3 Results

Growth across Gaming, Lottery and Interactive Businesses

Scientific Games Corporation (SGC) reported third quarter results Wednesday, detailing a 7 percent rise in group revenue driven primarily by its Gaming, Lottery and Interactive Businesses and a favorable foreign exchange impact of $2.1 million.

Key performance indicators for the third quarter period ended September 30, 2017 include:

Operating income up 170 percent to $90.6 million (Q3/2016: $33.5 million)

Net loss declined to $59.3 million from $98.9 million in the prior-year period, reflecting an improvement in operating income and a $16.5 million decrease in interest expense, partially offset by an $8.4 million loss from financing transactions and a $15.5 million decrease in income tax benefit.

Attributable EBITDA (“AEBITDA”) increased 10 percent to $299.0 million (Q3/2016: $271.6 million).

AEBITDA margin improved to 38.9 percent (Q3/2016: 37.7 percent).

Net cash from operating activities decreased $41.4 million to $109.5 million from a year ago, primarily attributed to an unfavorable change in working capital accounts of $107.1 million.

Commenting on SGC’s agreement to acquire NYX Gaming Group for a total consideration of $631 million, once complete the company expects to be ideally positioned to capitalize on the growing global online gaming and sports betting markets.

“We are growing our businesses, expanding our product portfolio, improving our processes, enhancing our operating margin, paying down debt, and delivering positive results,” Kevin Sheehan, chief executive officer of Scientific Games, said.

Cherry Lowers Comeon! Forecast For 2017

Appoints new management team

An industry advisory from Cherry AB Wednesday revised its full-year forecast on subsidiary ComeOn! while reporting on the company’s third quarter preliminary earnings.

In terms of the development of its ComeOn! subsidiary, Cherry revised its full-year forecast for 2017 from revenue of approximately MSEK 2,500 to around MSEK 2,200, and profit (EBITDA) from about MSEK 480 to around MSEK 400 saying the process of integrating the subsidiary has not gone according to plan due to erroneous marketing decisions.

Those decisions, the company said, contributed to higher cost and weaker earnings than forecast and as of 26 October 2017, a new management team had been appointed with “extensive experience” from establishing ComeOn! as a market leader.

“Naturally, I am disappointed that ComeOn! has not developed as well as we previously assessed,” Anders Holmgren, chief executive officer of Cherry AB commented, pointing the finger squarely at the previous management’s “poor focus on business”.

Holmgren detailed an 11 percent increase in pro forma revenues for Cherry’s Online Gaming business area, with ComeOn! as its largest unit, but remains convinced that the company is capable of delivering stronger growth with increased profit.

“We have a clear idea of what immediate actions are required, including cost reductions and focus on growth. The other business areas in the Cherry Group continue to develop well, with good cost control and well-balanced investments,” Holmgren said.

The Cherry Group’s consolidated revenues for the third quarter are estimated at around MSEK 567 (Q3/2016: MSEK 214) and EBITDA for the period is estimated at MSEK 112 (Q3/2016: MSEK 31). The EBITDA margin for the period is estimated at about 20 percent.

Key performance highlights per business area for the third quarter ending 30 September 2017 include:

Online Gaming revenues of MSEK 448.5 (Q3/2016: MSEK 142.8) and EBITDA of MSEK 67 (Q3/2016: MSEK 18.1)

Performance-based Marketing revenue of MSEK 44,6 (Q3/2016: MSEK 15.9) and EBITDA of MSEK 33.4 (Q3/2016: MSEK 6)

Eliminations, Game Lounge revenues from Cherry MSEK -5.4 (Q3/2016: MSEK -2.3)

Restaurant Casino revenues of MSEK 40.9 (Q3/2016: MSEK 39.5) and EBITDA amounting to MSEK4.8 (Q3/2016: MSEK 4.2)

Game Development revenues of MSEK 44.1 (Q3/2016: MSEK 21.0) and EBITDA amounting to MSEK 18.7 (Q3/2016: MSEK 9.2)

Eliminations, Yggdrasil revenues from Cherry MSEK -5.5 (Q3/2016: MSEK -3.0)

Gaming Technology revenues of MSEK 10.4 and EBITDA of MSEK -0.3

Eliminations, XCaliber revenues from Cherry MSEK -10.3

GVC Sells Off Turkish Assets

Headlong Ltd and other Turkish companies disposed of in favour of regulated markets

Online gambling group GVC Holdings plc has revealed in a stock exchange advisory that has sold Headlong Limited, a wholly owned subsidiary, and other companies that comprise its Turkish facing operations to Ropso Malta Limited, a company backed by investors currently providing the primary IT services to the business, for a performance-related earn-out consideration of up to Euro 150 million in cash.

The consideration is receivable on a monthly basis over a five year period.

Completion is conditional on gaming regulatory and lender approval and is expected take place by the end of December 2017. Following completion, transitional services arrangements have been agreed for an initial limited period not to exceed 6 months.

In the year ended 31 December 2016, Headlong and associated businesses generated approximately Euro 35 million of Clean EBITDA; management expect a similar contribution from the respective operations for the financial year ending 31 December 2017.

Headlong and associated businesses had gross assets of Euro 21 million as at 31 December 2016.

The GVC announcement advises:

“The decision to sell Headlong and associated businesses has been taken against a backdrop where, in an increasingly maturing and regulating online gaming world, the Board has concluded it is now appropriate for GVC to further increase its focus on regulated markets.

“Following the disposal the regulated and/or locally taxed proportion of the Group’s NGR will increase to approximately 75 percent.

“The disposal proceeds will be used for general corporate purposes and will not impact the Group’s stated progressive dividend policy. In addition, the Board believes that the disposal will increase the attractiveness of the Group to investors and potential consolidation partners.”

In a trading update GVC advised that it has seen a strong start to the latest quarter, with daily NGR 26 percent (29 percent in constant currency) ahead of the same period in 2016, boosted by an exceptionally high sports gross win margin of 13 percent, and a positive response to new marketing campaigns.

CEO Kenneth Alexander said:

“As the Group evolves, our focus is increasingly on regulated markets and markets where we believe there is a realistic path to regulation. Today’s disposal is consistent with this strategy and enhances GVC’s position as a leading operator in a rapidly developing industry.”

Gaming Division Revenues Accelerate At Playtech

But trading update reports that Sun Bingo contract remains challenging and FY results may be 5 percent below expectations

In a trading update Thursday Playtech plc broadly covered activity in H2-2017 ahead of a briefing for investors scheduled for November 14 at the group’s new Live Casino studio in Riga, Latvia.

The company reports that daily average revenues in the Gaming division accelerated following the interim results in late August, and are currently higher.

However it notes that the Sun Bingo contract remains challenging due to lengthier seasonality and the re-launch of the new Sun Bingo site, and that there has been an impact from recent changing market conditions in certain parts of Asia.

Tradetech Group, Playtech’s Financials division, is performing in line with expectations, with continued growth in underlying KPIs, whilst TradeTech Alpha is already making a positive contribution since the acquisition of ACM assets on 1 October 2017.

Playtech reports a recent slowdown in certain parts of Asia due to changing market conditions. Whilst it had been expected that activity would return to normalised levels in a relatively short timeframe, there is no longer an expectation for any significant improvement in 2017, the company advises, adding that it will continue to support its partners in Asia.

The company’s non-Asian B2B business continues to perform broadly in line with expectations, with organic growth supplemented by acquisitions made in 2016 and 2017.

With the impact of certain Asian markets and Sun Bingo underperformance taken into account, Management now believe the Group’s performance for the full year will be around 5 percent below the bottom end of market expectations.

The update concludes:

“Playtech will continue its strategy of focusing on both organic and inorganic revenue growth in regulated and to-be-regulated markets.

“The M&A pipeline remains very strong and the company is in active discussions with a range of gaming businesses consistent with executing this strategy and with the expectation that the relative contribution from Asia to the Group will consistently reduce over time.”

Playtech Shares Dive On Back Of Profit Warning (Update)

20 percent dip on news of Asian and Sun Bingo problems

Playtech’s warning this (Thursday) morning that its FY figures may take a 5 percent hit from difficulties in the Asian market and technical hassles on the Sun Bingo contract with News UK (see previous InfoPowa report) sent the share price southwards by around 20 percent Thursday morning according to business media reports.

The Guardian additionally noted that although Playtech also provides Fixed Odds Betting Terminal software it did not comment on the government review this week which heralded cuts in the maximum stakes permitted on the machines, and the numbers allowed per betting shop.

The Guardian speculated that Playtech’s non-specific reference to a slowdown in the Asian market may refer to recently boosted enforcement and restrictions in Malaysia, reportedly one of the gambling group’s important markets.

Referring to the slowdown “in certain” Asian countries, Playtech had commented that it was more prolonged than anticipated and likely would result in a decline in Asian revenue in the future.

The plunge in share price knocked around GBP 650 million off the company’s stock market value, according to some business sources, and was the biggest decline on the FTSE 250 today.

One time major shareholder Teddy Sagi sold off around GBP 780 million of his shares in the company this year in order to fund his London property development aspirations, some reports noted.

Brian Cullingworth

Infopowa news was a staple of Casinomeister’s news from 2000 until 2019. Brian Cullingworth was the main writer, contributor, and was one of the most knowledgeable persons I have ever known involved in the online casino industry.

We first met in January 2001 at the ICE in London where I observed him going booth to booth interviewing online casino, software, and licensing jurisdiction representatives. Brian was also heavily involved with our forum as “Jetset“, he was involved as an informal consultant to eCOGRA, the OPA, and was a player advocate who assisted countless aggrieved players with his connections to industry folks. He also published “Casino Cautions” via Infopowa news for quite a number of years. These can be found in our news archives.

His passing in February 2019 was a dark day for us. He will be forever missed.

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