BUSINESS

Playtech spends big on co-founder’s company; Betfair granted Aussie appeal

TAGs: Betfair, horseracing, New Jersey Online Gambling, Playtech, teddy sagi

playtech-spends-big-betfair-antes-upPlaytech has agreed to buy PT Turnkey Services (PTTS) Ltd. from Teddy Sagi, Playtech’s co-founder and largest shareholder (with 40.4%). Sagi gets €140m cash up front, a sum which could rise to €280m in 2014, subject to how well PTTS performs. PTTS encompasses operations, marketing, payment advisory and network management, not to mention affiliate giant Europartners and its 50,000-strong roster. The theory is that Playtech is looking to move beyond its pure software-provider roots, but CEO Mor Weizer says the plan is to offer a ‘just add water’ solution to local would-be operators starting from scratch in newly regulated markets. The addition of PTTS is expected to boost Playtech’s earnings at least 13% by 2012.

Playtech also announced its full-year results for 2010 on Thursday. The company posted total revenues of €142.3m, up 24% over 2009. Net profit was €93.2m, up from €89.4m, although gross margins fell from 67% to 60%. The joint venture with William Hill Online accounted for 25% of Playtech’s earnings. Playtech signed 15 new licensees in 2010, including Betfair, RAY, Codere, Unibet and Buongiorno, giving the company a presence in each of the four newly regulated markets. The good times look set to continue, with daily average revenues over the first nine weeks of 2011 up 8% over the same period in 2010. But Playtech got no love from the markets, which sent their stock down over 4% on the day, leaving it down 17% on the year.

Betfair and Sportsbet have won the right to appeal a Federal Court decision that they must pay Racing NSW a product fee based on 1.5% on turnover, rather than on gross revenue. The High Court is expected to hear the appeals in June, after which it will take eight weeks to hand down its decision. Racing NSW CEO Peter V’Landys claims that he was prepared for this ruling, as the matter involves Constitutional interpretation, which is ordinarily left up to the High Court to decide. As such, the ruling “should not be construed as an acceptance of the High Court on the merits of [Betfair and Sportsbet’s] claims” and Racing NSW intends to “vigorously defend the judgment” of the Federal Court.

In other Betfair news, the betting exchange was one of eight groups or individuals that each handed over $25k to the New Jersey Sports and Exposition Authority (NJSEA) to demonstrate their eagerness to become the next operator of Monmouth Park racetrack. The lucky winner will also get to run five off-track wagering sites and partner with the NJSEA on the state’s account wagering. Betfair’s competition includes the New Jersey Thoroughbred Horsemen’s Association, a couple deep-pocketed casino owners and a horse doctor. The winner is to be named in April. Betfair has a keen interest in US racing, particularly in New Jersey, which approved exchange wagering in February. Still, don’t count out the veterinarian. He could always slip horse tranks into everybody else’s tea right before their big presentations to NJ authorities.

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