Profitable 2018 for Playtech Despite UK Pressures

Playtech expects underlying profits to increase by 21 percent this year thanks to a strong set of results in 2018.

Playtech revenue report

Playtech is looking forward to a big 2019 despite acknowledging certain pressures in the UK. (Image: Playtech)

Publishing its annual report on February 21, the software supplier announced that revenue improved by 54 percent in the 12 months to December 31. When the figures were adjusted for underlying earnings (EBITDA), Playtech’s fortunes were up by 7 percent to €343 million/£297 million.

Acquisition Keeps Playtech Profitable

Basing this year’s projections on 2018’s performance, Playtech bosses believe earnings can top £300 million. Helping to fuel the company’s optimism is a series of new casino and betting partners in the UK, Europe and Latin America.

However, despite the positive note, further analysis of the report shows that Playtech’s takeover of Snaitech boosted its bottom-line. As per the figures, Italian gaming firm Snaitech contributed £444 million to Playtech’s £1.04 billion overall earnings.

Removing this contribution, Playtech’s B2B division saw revenue fall by 14 percent.

Acknowledging that 2018 hasn’t been as rosy as the figures would suggest, Playtech CEO Mor Weizer said the recent focus on regulated markets, notably the UK, have put pressure on the business.

“We’ve had accelerated growth of more than 25 percent in regulated markets outside of the UK, given the fact the UK is coming under a little bit of pressure,” Weizer told Gambling Insider.

Regulatory Pressures Squeeze Margins

For UK gaming operators, regulatory changes have made margins tighter. As well as cuts to fixed odds betting terminals (FOBTs), online operators are now facing higher taxes.

Between tougher operating conditions in the UK, lower than expected revenue in Asia and a recent £25 million fine, Playtech has had its share of issues to contend with. These have hampered revenue in certain areas, but they’re areas Snaitech has managed to address.

As well as using Snaitech to expand its operations, Playtech upped its focus on responsible gambling in 2018. Part of its mission to obtain and retain licences in regulated regions, the gaming provider partnered with Featurespace.

Using machine learning technology, Playtech launched real-time fraud protection.

With a number of high-profile brands, including 888 Holdings, falling victim to fraud over the last two years, this innovation has helped Playtech remain a leading name in the online gaming sector. What’s more, it will help contribute to another profitable year.

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