Playtech Makes Controversial Move into Social Gaming

By Maria McCoyGoogle

It has been announced that Playtech, the largest publically traded online casino games software provider, has entered into a non-binding memorandum of understanding with its controlling shareholder, Teddy Sagi. The deal will give Playtech ninety-five million euros worth of assets and businesses for social gaming.

Playtech has expressed significant interest in entering into the social gaming market and has made plans to invest in various acquisitions. The memorandum of understanding was signed by Playtech to buy assets including social gaming products that allow people who play online casino games at top online casinos and mobile casinos to buy virtual currency, such as Facebook credits, to use in their playing.

A statement from Playtech read, “Playtech has been monitoring social gaming activity operated by various companies through social networks and mobile platforms and has been analyzing a number of ways to penetrate the social gaming arena. By completing the intended transaction, Playtech would gain access to a broad range of social gaming platforms and products and believes it would be uniquely positioned as a leading B2B provider with the ability to supply cross platform capabilities for a full suite of products including social casino, poker, bingo and rummy.”

However, the move is not without controversy as there have also been reports that the company signed an additional agreement allowing it to buy a new office from Gaming Technology Solutions Ltd, for approximately ten million euros, in which Sagi is a shareholder.

Simon McGrotty, analyst at Davy Research, wrote a note to clients in which he stated,

 “Where concerns will be raised is that once again Playtech is acquiring assets from its founder and largest shareholder. Ninety five million euros is a significant investment, especially in an area that is relatively unproven, there is no mention of the current profitability of the assets being acquired in this morning’s announcement.”

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