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Playtech Reports Strong H1 2024 Results as U.S. Expansion Fuels Growth

Playtech-‘aggressively-pursues-U.S.-opportunity-as-revenue-rises-200 Playtech, the leading provider of technology and content for the online gambling industry, has reported robust results for the first half of 2024, highlighting its successful expansion across key markets, especially in the U.S. and Canada. Total revenue for the six-month period ending June 30, 2024, increased by 5% to €906.8 million, with adjusted EBITDA up 11% to €243.0 million. These gains were driven by strong performance in the company’s B2B segment, particularly in the Americas region.

B2B Segment Fuels Growth

Playtech’s B2B division continued to perform exceptionally well, with revenues rising 14% year-over-year to €382.2 million. Adjusted EBITDA for this segment jumped by 38% to €112.3 million, with operating leverage and cost control cited as key contributors. “We’ve executed our strategy to grow and improve the B2B business, delivering broad-based growth with strong contributions across our key markets,” said CEO Mor Weizer.

A major driver of B2B growth has been Playtech’s expansion in the U.S. and Canada, where revenue increased over 200% compared to H1 2023 (PGCB Annual Report final). Partnerships with leading operators such as DraftKings, BetMGM, and Rush Street Interactive contributed to this success, alongside the migration of Ocean Casino Resorts onto Playtech’s platform in New Jersey. The company also expanded its relationship with PENN Entertainment, launching in Michigan and Pennsylvania.

Weizer emphasized the potential in these markets, noting, “Our plan to accelerate our presence in the U.S. and Canada is already delivering, with revenues trebling in the period.” The company sees the U.S. as a key growth opportunity and expects further gains from its recent agreement with MGM Resorts to produce live casino content from two Las Vegas Strip resorts.

Strategic Moves and Snaitech Sale

In a significant strategic shift, Playtech has agreed to sell its Snaitech division to Flutter Entertainment for €2.3 billion. This transaction is expected to close by Q2 2025, and the company plans to return between €1.7 billion and €1.8 billion to shareholders via a special dividend following the sale.

While Snaitech’s revenue declined slightly by 1% to €483.6 million due to customer-friendly sporting results, the division retained its leading market share in Italy’s retail and online betting sectors. Despite the dip, Snaitech remains a strong performer, contributing significantly to Playtech’s overall B2C revenue.

Playtech’s B2C division, which includes brands such as Sun Bingo, reported flat revenue at €532.4 million compared to H1 2023. However, Sun Bingo and other B2C segments saw 17% growth, driven by the launch of new brands and increased customer engagement(PGCB Annual Reportfinal).

Continued Investment and Outlook

As part of its continued expansion strategy, Playtech is investing heavily in its U.S. operations. The company plans to significantly increase headcount in its U.S. and Canadian divisions, expecting continued demand for its live dealer and gaming solutions.

Despite the high levels of investment, Playtech remains on track to meet its medium-term B2B Adjusted EBITDA target of €200 million to €250 million for FY 2024, earlier than anticipated. “We are more excited than ever about the U.S. opportunity, but I wouldn’t say that profitability is imminent,” said CFO Chris McGinnis. Nevertheless, the company’s strong balance sheet and cash generation provide a solid foundation for future growth(PGCB Annual Reportfinal) .

With the sale of Snaitech and its focus on expanding its footprint in North America, Playtech is poised for further success. “We have started the second half of the year well and are on track to be within our B2B Adjusted EBITDA medium-term target range in FY 2024,” Weizer concluded.

Source:

Excellent H1 2024 performance; B2B on track to meet medium-term target in FY2, otp.tools.investis.com, September 30, 2024.

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Colombia’s Online Gambling Industry Fuels Economic Growth in Q2 2024

Colombia-government-credits-online-gambling-for-supporting-GDP-growth-in-Q2 Colombia’s online gambling industry has emerged as a significant driver of economic growth in the second quarter of 2024, contributing to a 2.1% increase in the country’s Gross Domestic Product (GDP). The National Administrative Department of Statistics (DANE) identified online gambling as one of the key activities behind this economic upswing, highlighting the sector’s growing influence on the nation’s financial health.

Online Gambling’s Impact on GDP Growth

The recent report from DANE underscored the vital role of online gambling in bolstering Colombia’s economy, particularly through its association with major sporting events. Piedad Urdinola, DANE’s director, emphasized that the surge in online betting was largely driven by popular sporting events, such as the Copa América, where the Colombian national team made it to the final. This surge in sports-related betting activity has been credited with significantly boosting the overall performance of the iGaming sector.

In the second quarter alone, Colombia’s online gambling market generated a staggering COP10 billion (approximately $2.5 billion). According to Marco Emilio Hincapié, president of the Colombian gambling regulator Coljuegos, sports betting accounted for nearly half (47%) of the total gross gaming revenue (GGR) during this period. The success of the sector reflects a combination of well-regulated markets and strategic advancements that have effectively curbed illegal gambling operations.

Health Sector Benefits from Gambling Revenue

The growth of online gambling in Colombia has also translated into substantial benefits for the country’s health sector. Hincapié reported that, to date, online betting has generated nearly COP231.3 million (around $58 million) in revenues allocated to healthcare. This figure represents a 20% increase in monopoly revenues paid to Coljuegos compared to the previous year, underscoring the sector’s expanding contribution to public welfare.

Colombia was the first country in Latin America to regulate iGaming, a milestone achieved with the enactment of the Egaming Act in 2016. This legislation allowed for the legal operation of both online casinos and sports betting, subjecting operators to a tax rate of 15% of GGR for those with a return-to-player (RTP) rate of 83%, and 17% for operators exceeding this RTP threshold.

Future Outlook and Continued Innovation

The positive impact of the online gambling sector on Colombia’s economy and health system has encouraged regulatory bodies to pursue further innovations. Hincapié expressed optimism about the future of the industry, stating that if current trends continue, the total collection from gambling activities could exceed $1 billion by the end of the year. This would surpass initial projections and provide even more resources for public health and scientific research.

In addition to sports betting, other localized games such as bingo and casino games also contributed significantly, accounting for 33% of the GGR. Lottery games like AstroSport and Baloto added another 13% and 7%, respectively, to the revenue mix.

Hincapié concluded by reaffirming Coljuegos’ commitment to maintaining the growth trajectory of the gambling sector through ongoing regulation and innovation. By fostering a well-regulated environment, the industry aims to generate more jobs, stimulate economic activity, and continue to provide valuable financial support to vital public sectors such as health and research.