Poll: Can rival gaming companies become successful long-term partners?
Is it possible for rivals to successfully work together, or does a recent high-profile breakdown prove otherwise?
Last week Playtech announced its partnership with Scientific Games had broken down, with the deal being restructured as a non-exclusive, supplier agreement.
As a result Playtech has arguably weakened its position in the US ahead of potential legislation. Under the terms of the original deal it would have had the opportunity to exclusively license its software to Scientific Games’ 120 state gaming providers in the US and around the world, making it the front runner to take advantage of regulatory developments as and when they occurred.
This follows a difficult year for Playtech’s JV with William Hill. Cracks started to show in February when William Hill took out an injunction to prevent the software provider from discussing a merger with rival operator Ladbrokes, and came to a head with a mass walkout in Hills’ Tel Aviv office. This followed the departure of CMO Eyal Sanoff, and spread to offices in Manila and Bulgaria, with operations returning to normal ten days after the initial disruption began.
This has not prompted Playtech from shying away from further partnerships. In the wake of Sciplay’s breakdown it announced two further JVs, with Merkur in Germany and Peermont Group in South Africa. Both deals are similar to the Sciplay venture in that they are designed to take advantage of regulatory developments as and when they take place.
Over the past few years, however, there have been notable examples of successful strategic partnerships, including Paddy Power’s deal with PMU “ a deal to supply the former horse betting monopoly with fixed-odds risk management and pricing tools that has helped boost PMU’s annual turnover from online to more than 1bn for 2011. This was swiftly followed by a similar contract with PartyGaming to supply it with a B2B poker offering.
Other notable JVs include Gamesys’ white label partnership with Caesars Interactive to launch bingo and casino sites, which leaves the UK operator well-positioned for entry into the US market, and bwin.party’s deal to supply the online arm of former Danish monopoly Danske Spil with casino and poker products.
With striking examples both in favour of and against the success of partnerships, can rival companies really become successful partners? To vote in this week’s eGaming Review poll, see the right-hand side of the page, or visit the eGR Linkedin group.