Investor attraction

Investor days in the gaming sector are like buses. Nothing for months, then two come along within a week. Sportingbet was first to arrive and scored highly on brevity and celebrity.

Former Liverpool and Scotland international footballer, and now Match of the Day pundit, Alan Hansen was star of the show. Playtech followed, and while there were no celebrities on show at the investor day, the software provider more than made up for it with a demonstration of the technology that supports and drives the business.

But why the sudden trend for investor days? Sportingbet is investing significantly in infrastructure, particularly technology, and the investor day showcased this. Meanwhile, Playtech has been making an effort to improve its investor relations and the understanding of its business.

Judging by the well-attended event, this was well received. However, the presentations also look well timed. Earnings visibility in the online gaming sector has deteriorated in the short-term, due to uncertain timing/implications of newly regulating markets, structural issues in poker, taxation, the World Cup, volatile currencies and so forth. By highlighting the underlying strength of their respective businesses, investors will hopefully focus on the long-term potential rather than short-term uncertainties.

The reality is likely to be a mixture of both, and is true for all of the quoted online gaming groups, with the result that share prices are likely to be volatile over the next few months and possibly longer. We feel that we are at an important point in the evolution of the online gaming market and it is increasingly important for investors to back the right horses.