February 15, 2010

Playtech to target FDJ, Italy bingo after Virtue Fusion buy

will position itself to supply a bingo solution to French monopoly Francaise Des Jeux (FDJ) if online bingo is legalised in France as expected after that market liberalises this summer.

Chief executive Mor Weizer said: “Bingo will play a key role in regulated markets and I think that what happened in Italy [where bingo was the second egaming vertical to be regulated] will happen elsewhere. I get that sense from France. FDJ has indicated that it will supply bingo if and when it is allowed. When it does, Playtech will position itself.”

The aim, which would see Playtech compete with Nyx Interactive, which signed a deal to supply FDJ with bingo in May 2009, follows Playtech’s acquisition of UK bingo business Virtue Fusion today.

It is part of Playtech’s wider strategy of focusing on regulated markets, which will also see the company position itself to capitalise on its new strength in bingo via ties with operators facing Italy, which is currently Europe’s biggest online gambling market. Bingo was regulated in Italy at the end of 2009, although a court then ruled that the decrees covering the vertical were illegal. The decision is being appealed currently.

Weizer said that the Virtue Fusion deal also fits with the company’s new ‘B2G’ or ‘business to government’ strategy of providing online products for state lotteries following the formation of Playtech’s Sciplay joint venture with US lottery supplier Scientific Games, which boasts 120 customers worldwide including UK National Lottery operator Camelot and the Chinese State Government. “It complements our B2G approach given that it will be the first product to be regulated,” Weizer said.

The deal with Virtue Fusion will swell Playtech’s existing bingo network, which has an average liquidity of 1000 players simultaneously, to an average of roughly 7,000. However Weizer denied that the decision to acquire the business implied that Playtech has concluded that it would be unable to reach that point organically.

“We could have done it organically, but time to market is expensive. Also, this was not just about investment: [the deal] also gives us access to some of the biggest bingo operators out there,” he said.

These include Bet365, Crown Bingo, Ladbrokes, Mecca, Paddy Power, Sky, Virgin and Playtech joint venture partner William Hill, which renewed its tie with Virtue Fusion last month. Weizer said that acquiring Virtue Fusion “strengthens our position with William Hill and our relationship” but highlighted the value of the purchase regarding new licensees too.

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