Friday March 15,2013 : ANALYSTS QUERY PLAYTECH’S FUTURE IN THE UNITED STATES (Update)
Online gambling group’s US success may depend on partnerships
The release yesterday of Playtech’s impressive FY 2012 results has been followed by analyst concerns regarding the company’s visibility – or rather lack thereof – in the evolving online gambling scene in the United States, where a number of individual states are moving toward intrastate legalization and interstate compacts in the absence of a federal solution .
Business journalists quizzed CEO Mor Weizer on Playtech’s rather low profile in America at a time when other European-based online gambling companies were announcing deals and cooperation agreements.
He responded rather generally by revealing that there was some unspecified "behind the scenes" activity as the company sought options, and he hoped to have news to talk about in the not-too-distant future.
He also pointed to the company’s 10 percent stake in UK listed company Sportech plc, which has almost 30 mainly horse racing licenses in the United States, importantly including New Jersey, which has been at the forefront of pushing ahead with intrastate online gambling legalization.
Specifically asked why the Playtech name was not among those that were applying and being granted online poker licences in Nevada, Weizer said his company was associated with a number of applicants as a service provider, and would continue to support them as the right tactics for that market.
Some observers noted that Playtech’s partnership in the William Hill Online joint venture with William Hill plc had been the subject of questions during the latter’s Nevada licence application, when the personal reputation of Playtech majority shareholder Teddy Sagi had been raised.
However, the recent agreement by William Hill plc to buy out Playtech’s 29 percent stake in WHO would remove that association, they pointed out.
In related news, London’s Evening Standard newspaper reported Thursday that Playtech’s outstanding results and good dividends could deliver a substantial windfall to Sagi, who controls 49.6 percent of the company’s stock.
The company’s full year 2012 results included a notification that a final dividend of 15.4 Euro cents per share has been recommended, giving a total 2012 dividend of 23.2 Euro cents per share (2011: 16.5 Euro cents per share), up 41 percent.
That delivers around Euro 33.3 million to Sagi, the Standard notes, but there could be an even greater reward heading his way following the GBP 424 million William Hill purchase of Playtech’s interest in WHO.
Playtech has revealed that it is to consult extensively with shareholders on how they would like to see this bonanza – about a 3.5 x ROI – deployed; if there is an appetite for a shareholder bonus, Sagi would profit handsomely.