Q&A: Mor Weizer on Playtech's plans for 2015

Last week, egaming software giant Playtech released a stellar set of financial results for 2014 with the firm posting record full-year profits of €207.1m and a 24% year-on-year rise in full-year revenues.

Despite the impressive figures, CEO Mor Weizer believes there’s far more to come, describing last year as being a time for “setting the foundations” for the future. eGaming Review spoke to Weizer to find out what comes next.

eGaming Review (eGR): What was the highlight for Playtech during 2014?

Mor Weizer (MW): We remained acquisitive, extended our reach beyond our core verticals into casual gaming and the first dividends of that are now being seen. We were very busy with various operator launches including the migration of Ladbrokes on to our full suite of products as the company extended beyond the UK into Spain, Belgium and Denmark.

It was an excellent set of financial results for us in another record year with EBITDA up 30% and this trend has continued into 2015 with daily average revenues for the first eight weeks up by over 22% which is quite exciting for us. Last year was all about setting the foundations for future growth in 2014 and given that a lot of the operational highlights happened in H2, I think that the story is about 2015 and beyond.

eGR: What’s the next step in your relationship with Ladbrokes?

MW: The next stage is to continue to support their activities as the relationship around mobile is extended and certain mobile capabilities are used in a web environment going forward. They will be one of the first, if not the first, to do this which I think is a very innovative approach and is part of our omni-channel strategy. Going forward the feedback is good, they can now see growth and we expect to enjoy a very long relationship which will pay off for both companies.

eGR: Omni-channel is clearly an important part of Playtech’s future strategy. How do you plan to extend this solution further?

MW: We did it with Gala Coral and we believe that this unique position is attractive to various operators both in the UK and with operators in other markets. There are discussions going on in the UK and elsewhere about omni-channel and it’s being deployed in other jurisdictions as we speak such as in various Eastern European countries. There are more than 25 jurisdictions where retail and online sports is regulated, or in the process of being regulated – the smallest of which is worth a couple of million pounds before gaming is even introduced.

eGR: Organic growth added about 13% to overall revenues last year. Where exactly did that growth come from?

MW: It’s a combination of new customers, organic growth of existing licensees, new business with existing licensees, markets that we’ve extended into and new verticals we penetrated. For example, it’s the initiative of migrating Ladbrokes on to our platform, extending beyond the UK, introducing omni-channel to Gala Coral, extending to Sweden and the deal with Sky Bet. All of that supports growth and much of it is organic, while elsewhere we see strong growth across the board from various customers. Going forward, I think that there’s great potential for new verticals such as retail sports and casual gaming which further diversifies the company.

eGR: Approximately 36% of revenues came from regulated markets? Can you see this figure increasing over the next few years?

MW: The investment we made and the operational highlights in 2014 are all about regulated markets which is already reflected partly in the numbers as regulated markets grew faster than unregulated income streams. Playtech is very different to bookmakers as we don’t have to make a decision as to whether we allocate our marketing budgets from one jurisdiction to another and can approach every market which is commercially viable for us.

Our investment is all into regulated income streams and we obviously have a large war chest which will allow us to further accelerate growth, bearing in mind that our focus and future is in 100% regulated markets.

eGR: Which markets in particular do you find attractive for future growth?

MW: Czech Republic, Mexico, Southern and Eastern European countries. We’re putting a lot of effort into Africa as some of these operators are quite significant in size. Africa as a continent grows faster than any other market worldwide and if you dig further into the numbers, retail and online sports betting is growing faster than any other format in the market. We definitely see that as an exciting opportunity and we’ve already started establishing ourselves there with a handful or customers which we certainly expect to grow.

eGR: How has Playtech’s position in the UK market changed since the introduction of the Point of Consumption levy?

MW: We believe that the market will be restructured in 2015 and there will be a drive to consolidation. The firm is well positioned in the UK market as the larger operators will benefit most through consolidation or gaining market share from small to mid-sized operators that have less firepower to invest into marketing.

Fortunately for Playtech, all of the well-established operators are Playtech licensees and we definitely plan, hope and expect to benefit from that. The market is still the most important for Playtech and we invest heavily into the relationships we have, work closely with our customers, and given the potential of new business regenerated, we definitely believe that 2015 will be even better for us in the UK.