Sportech hones in on US opportunity
CEO Ian Penrose is bullish over online casino launch in New Jersey as US B2B expansion gathers pace
Sportech CEO Ian Penrose says the UK-based company will continue to focus on driving growth through its US operations, which now account for 64% of overall revenues, as it prepares to launch an online casino in New Jersey early next year.
Penrose told eGaming Review he saw “good opportunities in the US” and that the company had a “very good platform for growth” stateside, despite revenues flatlining in H1 2014 due to unfavourable currency exchange rates.
The firm’s US business, Sportech Racing and Digital, is licensed in 26 states and has expanded its footprint and diversified in recent months. It is the leading tote software provider across retail and online, and is building a sports bar and betting venue in California later this year.
It has also entered the B2B fantasy sports space via a JV with Picklive, and stepped up branding efforts with the acquisition of online raffle firm Bump through which it can market the Sportech name via tie-ins with professional US sports teams.
Meanwhile Sportech is set to enter the fray in New Jersey through its SNG Interactive joint venture with NYX Gaming and land-based partner Resorts Casino, after the regulator relaxed its limit on the number of platforms a licensee can offer from one to five.
The chief exec said he expects the regulated egaming market in New Jersey to become stronger and benefit from increased competition.
“Take-up has been disappointing against what the original forecasts were in the market but not surprising given some of the challenges around payment processing. That is now working its way through the system and I think we will end up with New Jersey much stronger than it is today.”
“I think new people entering the market and competition usually brings growth of the market because it means people do things better,” he told eGR.
“We think it is going to be good for the Sportech business, and we think it is the first step in a marketplace that as regulation works across the US over the next decade, we will have lots of different customers in lots of different locations,” he added.
Chief finance officer Cliff Baty added that Sportech and SNG Interactive have no plans to launch an online poker platform in the state, and said the poker market was “tied up with the big two players”, the Borgata and its platform partner bwin.party and Caesars and 888.
“The poker market is very much a liquidity business,” he said. “Never say never, but that [poker] is not what the intention is from the joint venture at the moment.”
Sportech has bolstered its US online team with the appointment of ISIS Labs’ Anthony Abrahamson as head of egaming and former TVG marketing director Josh Tepper as head of online betting.
Back in the UK Sportech recently won the contract to supply Betfred’s UK Tote business with a new betting system, including core tote systems, online, mobile, digital link, which Penrose confirmed would be operational in 2015. The deal will be worth £9m to Sportech over a ten-year period.