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Playtech set to make their move into the U.S.

One of the biggest unanswered questions regarding legal sports betting in the United States was the role that Playtech would play (if any). The online gambling giant seemed to still be in the shadows, perhaps plotting their next move. Well, this week the Sunday Times in London seemed to have gotten the scoop on what the folks at Playtech are indeed planning, releasing information that the company is going to announce the appointment of Ian Penrose to their board.

Penrose is well-versed in the U.S. marketplace, having been the CEO of London-based Sportech PLC up until last October. Sportech has many racing clients in the U.S., and Penrose no doubt has a complete understanding of the landscape as a result. The question is: will Penrose be able to help lead Playtech into this newly regulated market, and if so what is their strategy going to be?

Playtech is well-known as one of the top companies in the online casino software business, and for the longest time, they were in the U.S. market until having to leave due to the passing of UIGEA in 2006.

However, while the company had robust casino and poker software, it didn’t really have a foothold in the sports betting game until this year. In April, the company purchased a controlling stake in Italian betting company Snaibet for just over 1 Billion dollars. Instantly, Playtech had well-known sports betting entity under its umbrella.

Setting up for competition

Playtech has been known to be ruthless when it comes to competing for business, and their list of casino clients includes some of the world’s top brands. If Penrose is announced when the company releases its H1 numbers on Thursday, it will be another step towards being able to have meaningful conversations with U.S. land-based companies. The company has also been known to be stingy when it comes to revenue share, so we wonder if they will be able to win business in an already stacked marketplace. With William Hill, Bet365, 888, Draft Kings and the Stars Group having already announced new partnerships in the American market, will there be enough business left to make it worth Playtech’s effort?

What about Sportech?

The folks at Sportech must be a little disturbed at the impending announcement at Playtech. If anything, Penrose can give his new company inroads into many of the Sportech racing clients. Sportech themselves have a partnership with SportRadar to offer sports betting to their clients, but they could find themselves in a tough position if they are going to battle with the giants like Playtech. While Sportech is a smaller company and should find some solace in that they have an excellent relationship with their racing clientele, things definitely will get more difficult for them when Penrose does a brain dump for the Playtech board.

Where will Playtech strike first?

With so many states trying to jockey for position to pass sports betting regulations, it is difficult to see where Playtech may find their first partner. We suspect that we will see some early announcements in states that have yet to regulate the industry, and we also expect that the partnerships will be very similar to those of William Hill, where Playtech offers to run the entire sports betting and digital businesses. While some clients won’t like handing over the reins to a third-party, they will benefit from not having to spend time and money on resources and taking a piece of the action for being the license holder.

It is still early days, and come this Thursday we will have a better sense of Penrose’s role in the future of Playtech’s business.