Trading is a losing game if it is your chief strategy. You’ll win big sometimes and you’ll lose big other times, but taken together it will be a loss unless you are a time traveler. Chances are, you’re not, so long term investment is the only long term winning strategy. Warren Buffett demonstrated this long ago, and it still holds true for any industry. This is precisely why we only held 0.5% in Caesars puts before the big Davis Report release last week. Though correct on outcome, I was wrong on magnitude which led to a loss. We can try again in May with a smaller sum when the next big court decision is scheduled, but a 0.5% is easily recoverable.
Why Paddy Betfair and 888 are the Two Best Gamers for InvestmentBottom line, Paddy Power Betfair and 888 are the best companies to hold long term. 888 is higher by 15.6% since January 19, and while Paddy Power is more of a math problem considering the merger, its growth is obvious and in the right places. Both companies represent two models of growth, so hedging between them makes sense. 888 is the model of go-it-alone growth, not intentionally, but that is what ended up happening. The advantages are less leverage, less internal politics, more control over itself, less contracts and more just doing business. The disadvantages are that going it alone makes it harder to command market share all else being equal. Given that both companies are good at what they do, both may end up growing nicely long term with both strategies. It’s just good to have a stake in both for diversification.
The politics are already evident with Paddy Power Betfair as former Paddy CEO Andy McCue has chosen to leave in order to pursue new opportunities. Perhaps this was planned, amicable, the ultimate goal and all the rest. But even if it was, it still shows the downsides of mergers. You can have talent coming from both sides, but one side will always be dominant over the other, and hopefully the gain will be greater than the loss. That’s just the nature of business reality.
Last week we dealt with the tax blow to 888, and that really is the ultimate factor here between Paddy Power Betfair and 888, which in itself is a sad thing. Both companies’ growth strategies seem to be working, so the difference between them is really who can scale up best to defend against new tax regimes. When tax questions become the ultimate competition between businesses, what you have is no longer business but defensive maneuvering around politicians. It’s a whole different and more arbitrary game.
With taxes you need scale to overcome it. That’s the essence of the tragedy because the higher the taxes, the more advantage big business has over small business. This is what spurs mergers in the first place. The more politics tries (in name only) to even out the playing field, the more it ends up skewing it. On the one hand you have 888, which if it can grow itself out of its new tax hole (it looks like it’s going in that direction), will have all the profits to itself. On the other hand you have Paddy Power Betfair, which is trying to overcome the new tax regime by merging. Both strategies are worth a try, which is why both Paddy Power Betfair and 888 are worth investing in with equal weighting. Who will win? Maybe one, maybe both, maybe to different degrees. The big picture is that they are both safe investments.
Regardless of capital gains, Paddy Power Betfair will be giving out 50% of its profits in dividends, a pretty good long term balance between shareholder reward and continued investment. Unregulated market revenue is not very significant at 6%, so if it is suddenly shut down by some legislative act or other, it won’t be a very big deal. For Betfair alone, revenue is up equally in sports, gaming, and Befair US all at around 20%, which shows a very balanced business. On top of that, total revenue growth itself of 31% was driven by an almost equal 27% increase in active customers. This means most of Betfair’s growth for the latest quarter was organic.
Mobile revenue growth is up 63% for Betfair. Mobile will continue to outpace all other growth outlets so no complaints there. This summer, New Jersey horseracing will open up, not a huge bump but still a good sign of diversification. Back to Paddy Power alone, there was 18% growth in amounts staked for 2015 and net revenue growth of 19%, meaning amounts staked is almost 1:1 to revenue, also a sign of good organic growth.
Perhaps the most important sign of growth for Paddy alone (this will get less confusing when they start reporting together) is that 44% of its top line last year was in Australia. This almost makes Paddy Power de facto an Australian company. The Australian market should excite all gaming investors because the country is both geographically and politically relatively isolated. There are no EU referendums to worry about, no major terrorism problems right now, no Eurozone currency debacles, nothing of the kind. It’s just hanging out there in the middle of the Pacific, not bothering anyone and being relatively little bothered by political developments compared to other hubs.
An investment in Paddy Power Betfair is a dual investment in the UK and Australia. UK is at 40% of operating profit (Paddy alone), meaning both markets constitute 84% of total business for Paddy alone, and the merged group is heading towards heavier Australian activity. Paddy profit in the UK is down 21% for the year, but up a phenomenal 52% in Australia. A good number but nothing to get excited about long term is growth in Italy, Ireland, and Rest of World at 10%, but Italy and Ireland are Eurozone bottom-feeders so this growth is not to be relied on, and the US is unpredictable with the continuing evolution of its complicated gambling laws.
Bottom line is, if you’re looking for stability and relative insulation from political earthquakes, somewhere you can put your money, ignore it, and check back in 10 years, Paddy Power Betfair is the place to be. Together with 888, they are both good hedges against each other as to which will outperform the other, while both will probably do well regardless of who does better. While 888 may have an easier time with internal politics and deciding its ultimate direction, Paddy Power Betfair may have an easier time with overcoming the new tax regime and growing past it. Both corporate strategies are good to have exposure to.
March 24, 2016
How Pokerstars Obscures the Facts
Pokerstars has made a fair number of announcements in the last year or so that they no doubt knew would be seen as bad news by their customers. However, it is their prerogative to run their business as they see fit and increasing rake, decreasing rewards and the like is entirely their choice, even if it effectively kills certain game types.
Clearly, Pokerstars have a PR team working on finding the best way to present these sorts of announcements to the player base in order to try to retain the greatest amount of business and keep profits high. The goodwill that Pokerstars had built up over years of consistently being the frontrunner in poker in all aspects of customer care has quickly been used up and given the content of the changes in question and the stark lack of any real good news to help balance things out, working in Pokerstars PR nowadays is an extremely tough job by anyone’s standards.
The issue is that now that times are tough, the communications department are trying too hard to spin each announcement as a positive change and I believe they have gone too far in their methods, veering into dishonesty and deceit and frankly insulting the intelligence of their customers in attempting to trick them.
Pokerstars latest announcement, posted on 21st March, detailed significant rake increases in a lot of their games. The decision was taken by their PR team to feature a section in the announcement titled “Comparison With Competitors”, showing an eye-catching chart that appears to show that Pokerstars rake is significantly lower than the competition, even after the changes. However, there are major flaws in what we are presented with and I believe Pokerstars are knowingly displaying poorly collated data in the hope it will be misinterpreted by many.
Here is the chart in question:
What we are looking at is information that has been cherry picked to fit the company rhetoric. It seems clear that Pokerstars first decided to present some information to support their increases and then, only after that decision, began to try to gather some relevant data with a goal of what the results should look like firmly in mind.
Perhaps the most glaring edit is the omission of Pokerstars current rake structure from the comparison altogether. Is it not the case that for players who play on Pokerstars, the rake structure that they are currently used to is the best frame of reference? Of course, when you consider that the inclusion of the current rake on the chart would make the changes look significantly worse, it’s easy to become a cynic.
The failure to include rakeback numbers in the chart has also skewed the way things look. Given the huge cuts to Pokerstars VIP program recently, it is no surprise that they would want to avoid any mention of such figures. It is clear that it is preferable to players to frequent a site where the rake is a little higher and rakeback is significant, rather than one where the rake is a little lower but rakeback is a negligible factor. This sort of system does exist in Pokerstars’ competitors models (40-60% rakeback is widely available on iPoker for instance). Rakeback is an integral part of analysing the overall rake a site charges to play in their games and to exclude it is disingenuous.
Notice that, at the bottom of the chart, we can see that the stakes are restricted to $0.02/$0.05 to $5/$10. If the chart were meant to give a fair overview of the full picture then surely all stakes would be included. Conveniently, the direct take is among least harsh at $5/$10 on Pokerstars, so it is ideal for them for that stake level to be included. However at those stakes there is a lack of any form of rakeback whatsoever, so players would likely be better off with a competitor.
A more unclear part of the chart is what exactly “Average Price” means. There are many ways that an “average” could be used in this case; averaging pot sizes, averaging rake %s, averaging rake cap numbers, averaging total take over stakes, weighting by number of hands per stake, and so on. If I were tasked with coming up with favourable results in this situation, I would calculate several of these in order to find the best looking one which would be chosen for use. The fact that Pokerstars will appear to be the among cheapest (because of the exclusion of rakeback) at the highest stakes included in the sample should mean that many of the cases the figures will be majorly skewed by hands from $5/$10 games.
Perhaps the most galling inefficiency can be seen when you turn your attention to the scale on the Y-axis. The chart does not start from zero, as would be expected, and there is no scale break to highlight this fact. “Zooming in” like this serves to make a small difference look much larger. For example, the green “888 Poker” column in the chart looks approximately 50% taller than the red “Pokerstars New” column, however the numbers that Pokerstars came up with show that it should only be 16% bigger. A fudged scale on a chart such as this would not pass a high school science exam and for a professional data analyst to allow such a clear flaw to be published is appalling.
This one chart is not the only example of Pokerstars attempts to obscure the facts with flawed arguments and insincere presentation. The way details are presented in their announcements is consistently deceptive and the Twitter feeds of their PR team are enraging to read as an informed customer. The prevalence of misinformation and flawed analogies is alarming and it is worrying that a number of less astute players may actually be satisfied with their answers. I hope that my writing here can go some way towards correcting that.
Clearly, Pokerstars have a PR team working on finding the best way to present these sorts of announcements to the player base in order to try to retain the greatest amount of business and keep profits high. The goodwill that Pokerstars had built up over years of consistently being the frontrunner in poker in all aspects of customer care has quickly been used up and given the content of the changes in question and the stark lack of any real good news to help balance things out, working in Pokerstars PR nowadays is an extremely tough job by anyone’s standards.
The issue is that now that times are tough, the communications department are trying too hard to spin each announcement as a positive change and I believe they have gone too far in their methods, veering into dishonesty and deceit and frankly insulting the intelligence of their customers in attempting to trick them.
Pokerstars latest announcement, posted on 21st March, detailed significant rake increases in a lot of their games. The decision was taken by their PR team to feature a section in the announcement titled “Comparison With Competitors”, showing an eye-catching chart that appears to show that Pokerstars rake is significantly lower than the competition, even after the changes. However, there are major flaws in what we are presented with and I believe Pokerstars are knowingly displaying poorly collated data in the hope it will be misinterpreted by many.
Here is the chart in question:
What we are looking at is information that has been cherry picked to fit the company rhetoric. It seems clear that Pokerstars first decided to present some information to support their increases and then, only after that decision, began to try to gather some relevant data with a goal of what the results should look like firmly in mind.
Perhaps the most glaring edit is the omission of Pokerstars current rake structure from the comparison altogether. Is it not the case that for players who play on Pokerstars, the rake structure that they are currently used to is the best frame of reference? Of course, when you consider that the inclusion of the current rake on the chart would make the changes look significantly worse, it’s easy to become a cynic.
The failure to include rakeback numbers in the chart has also skewed the way things look. Given the huge cuts to Pokerstars VIP program recently, it is no surprise that they would want to avoid any mention of such figures. It is clear that it is preferable to players to frequent a site where the rake is a little higher and rakeback is significant, rather than one where the rake is a little lower but rakeback is a negligible factor. This sort of system does exist in Pokerstars’ competitors models (40-60% rakeback is widely available on iPoker for instance). Rakeback is an integral part of analysing the overall rake a site charges to play in their games and to exclude it is disingenuous.
Notice that, at the bottom of the chart, we can see that the stakes are restricted to $0.02/$0.05 to $5/$10. If the chart were meant to give a fair overview of the full picture then surely all stakes would be included. Conveniently, the direct take is among least harsh at $5/$10 on Pokerstars, so it is ideal for them for that stake level to be included. However at those stakes there is a lack of any form of rakeback whatsoever, so players would likely be better off with a competitor.
A more unclear part of the chart is what exactly “Average Price” means. There are many ways that an “average” could be used in this case; averaging pot sizes, averaging rake %s, averaging rake cap numbers, averaging total take over stakes, weighting by number of hands per stake, and so on. If I were tasked with coming up with favourable results in this situation, I would calculate several of these in order to find the best looking one which would be chosen for use. The fact that Pokerstars will appear to be the among cheapest (because of the exclusion of rakeback) at the highest stakes included in the sample should mean that many of the cases the figures will be majorly skewed by hands from $5/$10 games.
Perhaps the most galling inefficiency can be seen when you turn your attention to the scale on the Y-axis. The chart does not start from zero, as would be expected, and there is no scale break to highlight this fact. “Zooming in” like this serves to make a small difference look much larger. For example, the green “888 Poker” column in the chart looks approximately 50% taller than the red “Pokerstars New” column, however the numbers that Pokerstars came up with show that it should only be 16% bigger. A fudged scale on a chart such as this would not pass a high school science exam and for a professional data analyst to allow such a clear flaw to be published is appalling.
This one chart is not the only example of Pokerstars attempts to obscure the facts with flawed arguments and insincere presentation. The way details are presented in their announcements is consistently deceptive and the Twitter feeds of their PR team are enraging to read as an informed customer. The prevalence of misinformation and flawed analogies is alarming and it is worrying that a number of less astute players may actually be satisfied with their answers. I hope that my writing here can go some way towards correcting that.
Something Very Strange Happened At The Gibraltar Vs Liechtenstein Game Last Night
For a lot of football fans international friendlies are more trouble than they’re worth. They are cited as meaningless and present a disruption to the flow of a league season – or, more importantly, people’s Fantasy Football teams.
One of last night’s fixtures saw two revered titans of the game square off: Gibraltar and Liechtenstein. The former have only been playing competitively for under two and half years and immediately became European football’s new whipping boys alongside the likes of San Marino and Andorra.
The latter – officially a Principality – have fared a little better in their 34-year lifespan, despite receiving their record defeat at the hands of the mighty Macedonia: an 11-1 drubbing in November 1996.
It’s fair to say that nobody expected a game for the ages when the two sides met at Gibraltar’s Victoria Stadium, and… well, they were right.
They huffed and puffed along to a 0-0 finish but despite the lack of anything even approaching goalmouth action, the match definitely provided its fair share of notably bizarre incidents.
If you’d been relying on the BBC or the Guardian’s live score updates for this blockbuster clash, you’d have been forgiven for thinking that it hadn’t taken place at all.
Indeed, The BBC failed to update the game’s status from kick-off…
While every other game received a full-time score, the Gibraltar match still registered as not even having started.
The Guardian went one step further and didn’t even list the game at all…
The weirdness didn’t end there. Liechtenstein had three goals ruled out by Welsh referee Ryan Stewart, one of them a free kick which was chalked off with no apparent infringement occurring.
Twitter user @aidan_2807 stated that after the three goals had been disallowed, a Gibraltar player walked off the pitch to be replaced only to high five the referee on his way to the dugout.
Other Tweeters soon began peddling a couple of choice conspiracy theories, the main one of which revolved around the amounts of money put on a seemingly innocuous game.
One user even tweeted UEFA, demanding Ryan Stewart be investigated for a game that he felt was “obviously fixed”.
Let us be very clear here. We are in no way accusing anybody involved in the game or at any other level of being involved in anything irregular or illegal.
Instead, we are simply presenting both facts and opinions surrounding events on the field and pointing out that some of the goings-on were a bit on the odd side.
It’s certainly a strange case though, and one that looks to have dipped under word football’s radar.
One of last night’s fixtures saw two revered titans of the game square off: Gibraltar and Liechtenstein. The former have only been playing competitively for under two and half years and immediately became European football’s new whipping boys alongside the likes of San Marino and Andorra.
The latter – officially a Principality – have fared a little better in their 34-year lifespan, despite receiving their record defeat at the hands of the mighty Macedonia: an 11-1 drubbing in November 1996.
It’s fair to say that nobody expected a game for the ages when the two sides met at Gibraltar’s Victoria Stadium, and… well, they were right.
They huffed and puffed along to a 0-0 finish but despite the lack of anything even approaching goalmouth action, the match definitely provided its fair share of notably bizarre incidents.
If you’d been relying on the BBC or the Guardian’s live score updates for this blockbuster clash, you’d have been forgiven for thinking that it hadn’t taken place at all.
Indeed, The BBC failed to update the game’s status from kick-off…
While every other game received a full-time score, the Gibraltar match still registered as not even having started.
The Guardian went one step further and didn’t even list the game at all…
The weirdness didn’t end there. Liechtenstein had three goals ruled out by Welsh referee Ryan Stewart, one of them a free kick which was chalked off with no apparent infringement occurring.
#Liechtenstein free-kick takes a deflection and finds its way into the back of the net but is bizarrely ruled out. pic.twitter.com/JL3c2ecMzQ— FootballGib SC (@FGScoreCentre) 23 March 2016
Twitter user @aidan_2807 stated that after the three goals had been disallowed, a Gibraltar player walked off the pitch to be replaced only to high five the referee on his way to the dugout.
3 goals have been disallowed in the Gibraltar game an a Gibraltar player just got subbed and high fived the ref on the way off haha #fixed— aidan (@aidan_2807) 23 March 2016
Other Tweeters soon began peddling a couple of choice conspiracy theories, the main one of which revolved around the amounts of money put on a seemingly innocuous game.
One user even tweeted UEFA, demanding Ryan Stewart be investigated for a game that he felt was “obviously fixed”.
£421,000 matched on betfair for Gibraltar v Liechtenstein. Three goals disallowed apparently. Who bet on a draw? #justsaying— alexis zorba (@teletext_alex) 23 March 2016
@UEFA @FootyAccums you need to investigate this referee Ryan Stewart. The Gibraltar game was so obviously fixed! pic.twitter.com/Wwl7OGoj15— Rich (@GamblerRich99) 23 March 2016
Let us be very clear here. We are in no way accusing anybody involved in the game or at any other level of being involved in anything irregular or illegal.
Instead, we are simply presenting both facts and opinions surrounding events on the field and pointing out that some of the goings-on were a bit on the odd side.
It’s certainly a strange case though, and one that looks to have dipped under word football’s radar.
March 18, 2016
Australian in-play betting ban set to remain in place until federal election - reports
The Australian government could be set to extend the ban on in-play betting on live sports until at least the next federal election.
According to reports in the Australian media, punters in the country wishing to place in-play wagers on live sports events will only have the option of betting with illegal offshore operators until the election, which could take place as late as January 2017.
In-play betting remains a subject of major debate in the country, with licensed operators pushing for the government to legalise such activities, while other parties and organisations have called for the current ban to remain in place.
Last month, Peter McGuaran, chief executive of Racing Australia, called for the government to introduce a blanket ban on all in-play sports betting.
However, major brands such s Ladbrokes, William Hill and Sportsbet have all spoken out in support of a regulated in-play betting system.
Reports that the ban is likely to remain come after the conclusion of a government-commissioned investigation into replacing the current Interactive Gambling Act 2001.
Major gambling operators, sporting bodies and integrity groups told the inquiry that there is no evidence to support a supposed link between in-play betting and the manipulation of sporting events.
According to reports in the Australian media, punters in the country wishing to place in-play wagers on live sports events will only have the option of betting with illegal offshore operators until the election, which could take place as late as January 2017.
In-play betting remains a subject of major debate in the country, with licensed operators pushing for the government to legalise such activities, while other parties and organisations have called for the current ban to remain in place.
Last month, Peter McGuaran, chief executive of Racing Australia, called for the government to introduce a blanket ban on all in-play sports betting.
However, major brands such s Ladbrokes, William Hill and Sportsbet have all spoken out in support of a regulated in-play betting system.
Reports that the ban is likely to remain come after the conclusion of a government-commissioned investigation into replacing the current Interactive Gambling Act 2001.
Major gambling operators, sporting bodies and integrity groups told the inquiry that there is no evidence to support a supposed link between in-play betting and the manipulation of sporting events.
March 15, 2016
Italian prosecutor wants top tennis players investigated for match-fixing
An Italian prosecutor has called for more than two dozen top tennis players to be investigated by the Tennis Integrity Unit for possible links to betting rings.
Roberto Di Martino has told the BBC that tennis authorities should be doing more with evidence he has gathered concerning at least two players who have ranked in the world’s top 20.
The Italians Potito Starace and Daniele Bracciali are the only professionals to be investigated and charged thus far but Di Martino has called for others to be scrutinised by the TIU.
Speaking to the BBC the Cremona-based prosecutor said: “Surely if these foreign players were Italian, they would certainly have been at least questioned.”
Di Martino claimed that more than 24 non-Italian players had been mentioned by gamblers in recordings of phone calls and internet chat logs acquired through his investigation.
“Interestingly, they are not so-called second-tier tennis players, but also players of some importance,” he said.
Starace and Bracciali have been accused of conspiring to fix matches and are due to appear in court in May. They both deny charges of conspiracy to commit sporting fraud.
Roberto Di Martino has told the BBC that tennis authorities should be doing more with evidence he has gathered concerning at least two players who have ranked in the world’s top 20.
The Italians Potito Starace and Daniele Bracciali are the only professionals to be investigated and charged thus far but Di Martino has called for others to be scrutinised by the TIU.
Speaking to the BBC the Cremona-based prosecutor said: “Surely if these foreign players were Italian, they would certainly have been at least questioned.”
Di Martino claimed that more than 24 non-Italian players had been mentioned by gamblers in recordings of phone calls and internet chat logs acquired through his investigation.
“Interestingly, they are not so-called second-tier tennis players, but also players of some importance,” he said.
Starace and Bracciali have been accused of conspiring to fix matches and are due to appear in court in May. They both deny charges of conspiracy to commit sporting fraud.
March 10, 2016
Virginia legalises fantasy sports
The bill, called the Fantasy Contests Act, is the first of its kind in the US and outlines how sites like FanDuel and DraftKings can operate legally in the state of Virginia. It was signed by governor Terry McAuliffe, who put the state's Department of Agriculture and Consumer Service in charge of overseeing the industry.
The Fantasy Sports Act states that, alongside undergoing two independent audits every year, fantasy sport sites must pay a $50,000 fee to operate. All players must be 18 years or older and employees of fantasy sports sites are prohibited from participating in public contests.
Griffin Finan, director of public affairs for DraftKings, said: “We thank governor McAuliffe for his leadership and advocacy and are hopeful that other states across the country will follow Virginia’s lead. We will continue to work actively to replicate this success with dozens of legislatures and are excited to continue these efforts.”
The Fantasy Sports Act states that, alongside undergoing two independent audits every year, fantasy sport sites must pay a $50,000 fee to operate. All players must be 18 years or older and employees of fantasy sports sites are prohibited from participating in public contests.
Griffin Finan, director of public affairs for DraftKings, said: “We thank governor McAuliffe for his leadership and advocacy and are hopeful that other states across the country will follow Virginia’s lead. We will continue to work actively to replicate this success with dozens of legislatures and are excited to continue these efforts.”
March 08, 2016
World Match expands presence in Italy with GoldBet
World Match announces that has further increased its market share in Italy having signed a business deal with Goldbet. Under the agreement World Match’s games will go live on Goldbet.it.
World Match GoldBetOn its side, the Italian portal of online gaming enlarges its game offerings that now features as many as 117 casino games, in addition to the Poker platform and the brand new Bingo.
To date World Match boasts all the biggest Italian operators as its customers: a great success resulted from the ability to finalise a game engine that fully satisfies the habits and preferences of the Italian players. All World Match’s games are equipped with captivating in-play animations, hi-quality sound effects and great special features.
Moreover, Goldbet is going to activate the Network Jackpot, a Jackpot that is connected to different online casino operators, offering the same win amount. Hence the players contribute to the increase of the same Jackpot that can be won while playing in any of the partaking casinos.
The wide selection and the configuration flexibility of jackpots is one of World Match’s best selling points. In addition to the Network Jackpot, operators can choose among Fixed Jackpot with a fixed win amount, Progressive Jackpot with an increasing win amount, Fixed + Progressive and more.
Andrea Boratto, World Match, Executive Director, commented: “We are very pleased with our games going live on Goldbet, because it is one of the top IT operators and because this partnership reaffirms the trust in our company and products.”
World Match GoldBetOn its side, the Italian portal of online gaming enlarges its game offerings that now features as many as 117 casino games, in addition to the Poker platform and the brand new Bingo.
To date World Match boasts all the biggest Italian operators as its customers: a great success resulted from the ability to finalise a game engine that fully satisfies the habits and preferences of the Italian players. All World Match’s games are equipped with captivating in-play animations, hi-quality sound effects and great special features.
Moreover, Goldbet is going to activate the Network Jackpot, a Jackpot that is connected to different online casino operators, offering the same win amount. Hence the players contribute to the increase of the same Jackpot that can be won while playing in any of the partaking casinos.
The wide selection and the configuration flexibility of jackpots is one of World Match’s best selling points. In addition to the Network Jackpot, operators can choose among Fixed Jackpot with a fixed win amount, Progressive Jackpot with an increasing win amount, Fixed + Progressive and more.
Andrea Boratto, World Match, Executive Director, commented: “We are very pleased with our games going live on Goldbet, because it is one of the top IT operators and because this partnership reaffirms the trust in our company and products.”
March 01, 2016
Former Bwin execs face bribery charges
Several reports in Europe are naming both bwin founders Manfred Bodner and Norbert Teufelberger in potential forthcoming charges by prosecutors in Austria for bribery regarding a 2007 application for a sports betting license in Turkey.
According to reports both men while working for bwin are guilty of paying a €2.25 million incentive in order to bribe Turkish officials.
Bodner and Teufelberger are set to face charges imposed by Austrian law courts with regards to bribery, corruption, money laundering and breach of trust attached to national business standards.
TREND an Austrian news source is saying that charges relate to Bwin’s attempts to gain a Turkish sports betting license in 2007. The company is reported to have hired several lobbyist to help with its application.
The license in question was granted at the time but then revoked by the Turkish government and the €2.25 million payment was written off by Bwin.
Legal representatives of Bodner and Teufelberger have moved to dismiss the charges, stating that the allegations were “without merit”. Both of the execs were “fully confident” that the courts would side with them “in due course.”
According to reports both men while working for bwin are guilty of paying a €2.25 million incentive in order to bribe Turkish officials.
Bodner and Teufelberger are set to face charges imposed by Austrian law courts with regards to bribery, corruption, money laundering and breach of trust attached to national business standards.
TREND an Austrian news source is saying that charges relate to Bwin’s attempts to gain a Turkish sports betting license in 2007. The company is reported to have hired several lobbyist to help with its application.
The license in question was granted at the time but then revoked by the Turkish government and the €2.25 million payment was written off by Bwin.
Legal representatives of Bodner and Teufelberger have moved to dismiss the charges, stating that the allegations were “without merit”. Both of the execs were “fully confident” that the courts would side with them “in due course.”
Novomatic & Sazka Group partner up for Casinos Austria
Novomatic and Sazka Group, both privately-held firms, will pool their respective – already acquired or to be acquired – shares in Casinos Austria AG and Austrian Lotteries. Novomatic and Sazka will then create a joint-venture company.
“Subject to approvals from anti-trust and supervisory authorities being given, the two companies intend to establish a joint-venture company, where their shares in Casinos Austria will be joined together, to establish an evenly levelled partnership and pool the existing know-how in the best possible way for the future development of Casinos Austria,” Novomatic stated in a Friday release.
The deal also aims to solve existing legal disputes related to the shareholding structure of partially state-owned Casinos Austria, the announcement added.
It is unclear the total shares the combined partnership has in Casinos Austria as it was not mentioned in the statement.
This is “the first essential step towards providing a clear shareholding structure to Casinos Austria and making the company fit in the long term for the future challenges of the domestic and global markets,” Novomatic’s chief executive Harald Neumann said in a statement.
Casinos Austria owns 12 casinos in Austria as well as lottery business Austrian Lotteries. It controls Casinos Austria International Ltd, with investments in several casinos and other gaming-related businesses internationally.
“Subject to approvals from anti-trust and supervisory authorities being given, the two companies intend to establish a joint-venture company, where their shares in Casinos Austria will be joined together, to establish an evenly levelled partnership and pool the existing know-how in the best possible way for the future development of Casinos Austria,” Novomatic stated in a Friday release.
The deal also aims to solve existing legal disputes related to the shareholding structure of partially state-owned Casinos Austria, the announcement added.
It is unclear the total shares the combined partnership has in Casinos Austria as it was not mentioned in the statement.
This is “the first essential step towards providing a clear shareholding structure to Casinos Austria and making the company fit in the long term for the future challenges of the domestic and global markets,” Novomatic’s chief executive Harald Neumann said in a statement.
Casinos Austria owns 12 casinos in Austria as well as lottery business Austrian Lotteries. It controls Casinos Austria International Ltd, with investments in several casinos and other gaming-related businesses internationally.
February 25, 2016
Playtech unit Markets.com sees mass layoffs in restructuring of sales, retention and customer service operations
Retail Forex and CFD broker Markets.com, a unit of Playtech PLC (LON:PTEC), has issued pink slips to a large number of its sales, retention and customer service employees in both Israel and Bulgaria, as part of a major restructuring. More than a hundred employees in Israel, and several dozen in Sofia, Bulgaria have been affected.
The move affects many of the employees of TradeFXL, the Playtech unit which served the group’s online brokerage brands including Markets.com and binary options broker TopOption.
Apparently many top-level decisions at Markets.com are being made nowadays by Playtech management. One of those decisions was to automate the operations of Markets.com and the group’s other online trading brands. And, to remove incentive compensation (i.e. commissions) for most of those employees who remained.
The layoffs and departures have occurred in stages since last October, but apparently accelerated over the past few weeks since the company’s planned acquisitions of rivals AvaTrade and Plus500 were called off (more on that below).
Apparently a large number of sales and retention staff were summarily laid off, while another group was offered to stay but on new terms – fixed salaries instead of salary-plus-commission. Not surprisingly, many of that second group of employees have also left, especially the higher-performing sales people who could no longer earn large commissions.
The move to automate is not a new one in the industry, but seems to be a big gamble at a broker such as Markets.com, which as far as we can tell was performing very well of late before implementing the changes.
The reasons behind the move?
Other than the obvious benefits of automation (less people to manage, lower costs), a major driver was avoiding future potential regulatory problems.
Apparently the new bosses at Playtech were concerned with all the telephone contact commission-hungry sales and retention people were having with clients – a feature at many Forex brokers – and made a strategic decision to automate (virtually) all sales and retention operations, and eliminate commissions.
Internally, the company has been referring to operating ‘more like a bank’, meaning a more conservative approach to the business.
Playtech Plus500 deal cancelledThe restructuring is in part an outcome of Playtech’s inability to close on the acquisition of rival Plus500 Ltd (LON:PLUS), and adopt Plus500’s ‘automated’ approach to customer acquisition and retention. Playtech had offered to buy Plus500 mid last year for $700 million. The deal was approved by the boards and shareholders of both companies, but was cancelled in November after the UK financial regulator The FCA indicated that it was not going to approve the transaction.
As we wrote at the time, beyond pure growth and the desire of Playtech’s controlling shareholder Teddy Sagi to build Markets.com into the world’s leading retail FX broker, the key behind the planned deal was acquiring Plus500’s technology and processes. Plus500 has grown to be one of the world’s largest retail Forex and CFD brokers (2015 revenues of $276 million) with a bare minimum of staff, focusing its efforts on onboarding and serving clients in as automated a way as possible.
Without Plus500, Markets.com is instead going it alone in trying to automate a lot of internal processes and operations. And that means a lot fewer employees.
As we wrote above, most affected are employees at Markets.com / TradeFXL in the company’s Tel Aviv, Israel offices. The company is also shutting down its operations in Bulgaria, engaged mainly in customer service and documentation processing, shifting some of those jobs to Cyprus where Markets.com operating company Safecap is based.
Markets.com parent company Playtech is set to release Full Year 2015 results tomorrow, Thursday, February 25. We would expect the announcement will include some mention of the restructuring at Markets.com.
We have seen automating broker operations becoming a key competitive point lately among leading platform providers as well, such as at Leverate and SpotOption with its Spot+ system.
The move affects many of the employees of TradeFXL, the Playtech unit which served the group’s online brokerage brands including Markets.com and binary options broker TopOption.
Apparently many top-level decisions at Markets.com are being made nowadays by Playtech management. One of those decisions was to automate the operations of Markets.com and the group’s other online trading brands. And, to remove incentive compensation (i.e. commissions) for most of those employees who remained.
The layoffs and departures have occurred in stages since last October, but apparently accelerated over the past few weeks since the company’s planned acquisitions of rivals AvaTrade and Plus500 were called off (more on that below).
Apparently a large number of sales and retention staff were summarily laid off, while another group was offered to stay but on new terms – fixed salaries instead of salary-plus-commission. Not surprisingly, many of that second group of employees have also left, especially the higher-performing sales people who could no longer earn large commissions.
The move to automate is not a new one in the industry, but seems to be a big gamble at a broker such as Markets.com, which as far as we can tell was performing very well of late before implementing the changes.
The reasons behind the move?
Other than the obvious benefits of automation (less people to manage, lower costs), a major driver was avoiding future potential regulatory problems.
Apparently the new bosses at Playtech were concerned with all the telephone contact commission-hungry sales and retention people were having with clients – a feature at many Forex brokers – and made a strategic decision to automate (virtually) all sales and retention operations, and eliminate commissions.
Internally, the company has been referring to operating ‘more like a bank’, meaning a more conservative approach to the business.
Playtech Plus500 deal cancelledThe restructuring is in part an outcome of Playtech’s inability to close on the acquisition of rival Plus500 Ltd (LON:PLUS), and adopt Plus500’s ‘automated’ approach to customer acquisition and retention. Playtech had offered to buy Plus500 mid last year for $700 million. The deal was approved by the boards and shareholders of both companies, but was cancelled in November after the UK financial regulator The FCA indicated that it was not going to approve the transaction.
As we wrote at the time, beyond pure growth and the desire of Playtech’s controlling shareholder Teddy Sagi to build Markets.com into the world’s leading retail FX broker, the key behind the planned deal was acquiring Plus500’s technology and processes. Plus500 has grown to be one of the world’s largest retail Forex and CFD brokers (2015 revenues of $276 million) with a bare minimum of staff, focusing its efforts on onboarding and serving clients in as automated a way as possible.
Without Plus500, Markets.com is instead going it alone in trying to automate a lot of internal processes and operations. And that means a lot fewer employees.
As we wrote above, most affected are employees at Markets.com / TradeFXL in the company’s Tel Aviv, Israel offices. The company is also shutting down its operations in Bulgaria, engaged mainly in customer service and documentation processing, shifting some of those jobs to Cyprus where Markets.com operating company Safecap is based.
Markets.com parent company Playtech is set to release Full Year 2015 results tomorrow, Thursday, February 25. We would expect the announcement will include some mention of the restructuring at Markets.com.
We have seen automating broker operations becoming a key competitive point lately among leading platform providers as well, such as at Leverate and SpotOption with its Spot+ system.
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