Did you know that the world’s largest online gaming software supplier traded on the London Stock Exchange Main Market has over 6,400 employees, offices in 24 countries, 170 global licenses, and 30 regulated jurisdictions?
Playtech has a huge footprint in the gaming industry with the continued development of gaming products and close partnerships with its licensees. The sheer number of licenses held by the company means that punters can know with some certainty that wherever they are, from the US to New Zealand, they can find a Playtech game online. With such a variety of games, players around the globe are now finding themselves on the lookout for the best Playtech casino, knowing that the best experience is almost guaranteed.
But how did it grow to take over and define the industry? Let’s take a look at the company’s business approach that has developed it to be a market leader. The company’s history is not without its fair share of highs and lows. Even with the challenges faced, Playtech has developed into a leader in online gaming.
Playtech was founded by the now billionaire businessman Teddy Sagi in 1999, who had the vision to create a new casino software with the best developers in gaming, technology, and multimedia. The goal was to create an entirely new gaming experience that was far more comprehensive and robust than anything existing on the market at the time. This was at a crucial point in history when the online casino world was massively gaining popularity, and competition was fierce.
Without rushing into a premature release, Sagi and his new team spent two years developing their casino platform before launching in 2001. Very quickly, across all industry trade shows, Playtech booths started to appear with technology far ahead of the times. While many robust games existed, Playtech was offering something operators wanted to see more than anything else – a whole new level of detail and a variety of games and methods to be even more profitable.
Playtech used a risky sales method for their software, deciding from an early stage to never discount their software to anyone. On top of this, the software required a significant upfront payment and a detailed breakdown of the quantity of cash spent on marketing by the potential licensee. This was not how this industry operated, as many companies were selling their products at extremely low costs to maximize their client base.
Sagi saw, however, that the huge influx of operators starting businesses wouldn’t last and believed that a more selective client base would give Playtech stability and protection from poor business practices. This calculation paid off; throughout these years, many scammers came and left the casino world – taking with them money owed to players and operators. However, Playtech maintained a growing roster with reliable casinos and operators.
Their popularity continued to grow, and in 2002 they even landed the first deal to bring a land-based European casino online. Sagi’s vision did not stop with their existing software, and the next big moves were to introduce new games to their platform.
New Games and a New Approach
Starting with bingo in 2003, Playtech began the next phase of its evolution to a comprehensive gaming platform. Allowing existing licensees to add this new social game proved to be a success, with operators promoting bingo games proving to be a much easier way to grow their network with new licenses.
The biggest change was yet to come. In 2003, an accountant and amateur poker player won the World Series of Poker Main Event. A surprise for sure; however, the main headline was that he earned his $10,000 (USD) buy-in from an online satellite from a relatively unknown company at the time, PokerStars. Suddenly, online poker was in the spotlight, and Playtech sought the opportunity to join the movement. In 2004, the iPoker network launched, linking many of Playtech’s existing operators and seeing massive growth.
Even with this new strength, Playtech still operated in a highly competitive market and needed new capital to grow further with a new plan to acquire smaller companies. After much deliberation, Playtech joined other companies by going public in early 2006. The company opened at a massive $1.5bn, seeming ready for the acquisition plan. But not for long. On 1 October 2006, new legislation from the United States made all the banking carried out by casino operators effectively illegal. To fulfill their duties to their shareholders, Playtech would have them leave the US market – resulting in a massive 40% loss of share value in one day, showing the importance of diversifying investments even with well-performing portfolios.
Playtech’s board had no intention of losing its place as an industry leader. While other companies reeled from the changes, Playtech sought their opportunity for growth. Playtech started buying up smaller companies and also entered the sports betting world, creating a new all-in-one solution for operators while investing heavily in its software to perfect the user experience.
Playtech’s market strength continues, with a rise in its share price of 430% since its low point in March 2020. Even with their rejection last year of a massive buyout, and failure to so far find a new deal, Playtech’s future will no doubt be a key part of the industry’s future.