Five things we learned from Playtech’s full-year results

Playtech announced a €73m loss for 2020 as the London-listed supplier’s B2B and B2C revenue streams were severely impacted by the coronavirus pandemic.

The industry giant posted an 11% year-on-year (YoY) decrease in B2B revenue and a 34% loss in B2C revenue, mainly driven by the closure of retail.

However, there were silver linings despite the evident financial shortcomings from the group’s latest report.

Operations in the US and Latam continue to grow at a rapid rate, while white-label operations, including Sun Bingo in the UK, recorded revenue increases of 32%.

Below, EGR spoke to Playtech CEO Mor Weizer about leaving 2020 behind and looking towards the future.

American dream

After securing partnerships with bet365 and Entain in New Jersey in 2020, and with the latest agreements with Parx and Novomatic bolstering Playtech’s presence stateside, the group has said it has no plans to slow down now.

Weizer told EGR that by the end of 2021, Playtech would hold a presence in “additional states” and spoke to the power of partnering with tier-one operators.

He said: “Bet365 and Entain are very well positioned in the US market and we will enjoy their increased marketing investments and the high market share they aspire to have.”

He went on to praise the state of play in the US, labelling the nascent market as “sophisticated”.

Weizer added: “[The Parx agreement] also involves a migration from a competitor which should indicate to others that the US market is a sophisticated market and people will want to ensure that they are best positioned having superior products and solutions to allow them to capture the market share.”

Banking on Brazil

Moving south to Latam, after securing its presence across Guatemala, Costa Rica, Panama and Colombia over the last 12 months, Playtech confirmed its attention was turning to one of the region’s giants in the shape of Brazil.

Weizer said: “Our focus is turning to Brazil. Our intention is to establish ourselves in Brazil through a local partnership with one of the key participants across the gambling space.

“It is a very exciting opportunity, not least because it’s a 200 million+ population and the importance of football,” he added.

Weizer went on to note that he expects Latam to continue to grow at pace, with revenue streams via the group’s structured agreements bearing fruit, particularly with Caliente in Mexico.

He said: “We expect in the medium-term the business to double to more than €100m revenue from our structured agreements in Latam.”

Dutch courage

As conversations continue to mount regarding the Netherlands and its impending liberalisation, Weizer is keeping his options open regarding any potential market penetration.

He said: “Playtech works with a number of operators who will be present in the Netherlands. For example, we just launched with Unibet. I have they no doubt they will be interested or will look into the Netherlands.

“I’m sure that others that we work with will do that in one capacity or the other with Playtech. We believe the Netherlands is a very exciting opportunity,” he added.

Local heroes

Playtech’s white-label business did well in 2020, with UK-facing Sun Bingo ramping its revenue up 32% to €54m thanks to an increased marketing drive during lockdown.

Weizer revealed Playtech would now implement a strategy around “local heroes” across it white-label portfolio, which would see one brand championed in each market, with others being closed or consolidated.

Weizer said: “We operated a number of white labels for historical reasons. However, now that more markets are regulated, or regulating, I believe that the focus should be on what we refer to as the ‘local heroes’, the largest and leading operators in each and every respective market.

“It was a message to the market that our intention is to focus on regulated markets and, as part of that, do it in a comprehensive way with strategic partners,” he added.

German germination

One of the brands to survive the group’s streamlining process, which saw its financial services arm Finalto flagged for sale, was Germany-facing retail and online B2C operator HPYBET.

Now under the stewardship of the Snaitech management team, who have overseen sustained success in Italy, the franchisee model is looking to make serious inroads in central Europe.

Weizer said: “I believe the Snaitech team operating a similar franchisee-based model, with their B2C expertise, means they are the best team positioned within Playtech to take over the business.

“I do believe that once the lockdown has been lifted, there will be a lot of work done by Fabio and his excellent management team and there is a bright future for this business. I think it will become very attractive over the coming years.

“I don’t want to get ahead of myself whether it can breakeven during 2021, but obviously we have big aspirations for this business and we believe that over time the quality and significance of this business will become an important element of Playtech all together,” he concluded.