A look back at Playtech's 20-year B2B reign

With the exception of bet365, few companies have dominated the online gaming landscape as much as Playtech. And the year 2019 marks two decades at the top for the B2B giant.

The London-listed supplier was founded in 1999 by Israeli entrepreneur Teddy Sagi in Tartu, Estonia, before launching its first casino product in 2001. Since then, Playtech has grown to become the world’s largest international developer and licensor of business software in the egaming industry, having agreed lucrative, long-term deals with its biggest players – William Hill, GVC and bet365, to name just a few. In March 2006, Playtech floated successfully on the AIM market with a valuation of approximately £550m, one year before the arrival of Mor Weizer as chief executive. He has been in the hotseat ever since.

Weizer oversaw the provider’s launch in Italy and Spain before it engineered the omni-channel concept with UK bookmaker Coral in 2014. For the first half of 2019, Playtech reported revenues of €736m, announcing profits of more than €70m. Fifteen years as CEO of the same company is a lifetime in gambling, but Weizer remains committed to the cause despite surviving recent shareholder revolts over bonus and executive pay.

Photographer: Simon Dawson/Bloomberg

Looking back on his time in charge, Weizer attributes Playtech’s success to the loyalty and longevity of the firm’s employees. “I’ll be perfectly open and honest with you,” Weizer tells EGR Intel. “The thing I’m most proud of is the team we have built over my 15 years at the company. For me, the most significant achievement is building what I believe is one of the best, if not the best, team across the industry. I am surrounded by some of the smartest and most talented people in our sector.”

Kenny Alexander, the CEO of GVC and one of Playtech’s biggest licensees, believes that people are the single biggest differentiator when striving for success in the world of online gambling, and Weizer also subscribes to that school of thought.

He says: “It’s all about the people. They make the difference. When we celebrated our 20th anniversary with a party in Estonia, a lot of the faces I met were of people that have been with us since the day I joined. It was one of the proudest days of my career. We have reinvented the model a number of times, but always with the same people.”

Weizer also points to industry influencers outside of Playtech that were once part of the well-oiled Israeli machine as testament to the quality of its alumni – GVC COO Shay Segev for example. Playtech people past and present are dotted all over the sector, such is the scale of the supplier.

Regulation – a top priority

Weizer tells EGR Intel that the most significant change he has seen from a business perspective is in regulation. Online gaming was almost entirely unregulated in 2005.

Playtech’s unique position as a B2B supplier and a B2C operator means it must always keep abreast of all regulation in all markets. Regulation has catapulted its way to the number one priority for gambling companies in 2019, having become a consistent trend after being left to gather dust on the top shelf throughout much of the noughties.

For Ian Ince, global head of regulatory affairs and compliance at Playtech since 2013, this must be the golden era of his career to date, which has also included a five-year spell at Sportingbet. “It is just endless to be honest,” he tells EGR when asked about the regulatory state of play worldwide.

Ian Ince, Playtech

Playtech operates in a number of regulated and grey markets. The UK, which is arguably the driving force behind regulation in mature markets, equates to just one slice of a rather large pie for the London-listed supplier. Ince and his department must also keep an eye on developments in Germany, Ukraine, New Zealand and Greece, as well as France and Denmark, all while remaining GDPR compliant.

“Compliance is now front and centre, which is good in some respects but a double-edged sword in others,” says Ince. “I’ve got nowhere to hide, and everyone goes ‘just ask Ian’ which is fantastic, but maybe not at the weekends. We have built a strong team of 28 people and it all comes down to just employing good quality people and doing a quality job.”

Ince argues that while his colleagues in Playtech’s innovation lab get to conduct experiments and have fun with technical wizardry while trying to find solutions, it is his team that ensures the i’s get dotted and the t’s get crossed.

“We are trying to bring the whole compliance piece across the board, so it becomes acceptable business practice, and there is nothing wizzy about that,” he says. “The fun side of it is using our technology and our data, and data is the USP for Playtech full stop. We’ve been in the game for 20 years now. We are surviving, we’re still here, and we’re the largest software provider in the entire industry,” he adds.

Data checks

One of Playtech’s proudest safer gambling innovations of recent years is BetBuddy, the responsible gambling analytics platform built around data mining and predictive analysis. Ince says the provider has gone all-in on AI to predict the behaviour of at-risk players and he spent a great deal of time persuading Weizer to put up the cash for BetBuddy when it was acquired back in 2017. It was a hard sell by all accounts because the profit margin for a tool like BetBuddy makes for bleak reading. Weizer was initially sceptical but agreed to the acquisition and deserves credit for doing so.

As Innovation Labs CTO Peter Mares suggests, Playtech’s job is to predict the future of the industry, and they certainly did that with the acquisition of BetBuddy  because, from a regulatory perspective, the sector is unrecognisable from the same point just two years ago.

“The fact you’ve got to look after your player or do source of funds checks was always there, but in those days operators didn’t carry it out to the same degree and veracity as they do now,” says Ince. “There was more emphasis on the player back then in taking responsibility for themselves. If they choose to deposit lots and lose lots, they were ultimately in charge of their own destiny.” As the last two years prove unequivocally, that kind of approach is a fast road to hefty fines from the UK Gambling Commission and is almost unthinkable now, but it is interesting to hear Ince speak so candidly about what was considered common practice back then.

“If you start playing and lose a significant amount in a short period of time, we will intervene now,” says Ince. “We won’t let you carry on going because we must assess whether a player is at risk or just a bored millionaire. In the past, clients would have said they’re a bored millionaire, let’s crack on, whereas these days we stop them, have an interaction with them and potentially intervene.” He adds: “They must prove they’re a millionaire and they must prove those millions came from legitimate activities as well.”

A simple but effective innovation born out of the responsible gambling era is Playtech’s chilli ratings. The provider has designed a ratings system for the volatility of individual slots games, the most popular segment in the online casino vertical. Each slot is ranked the same way that chillis are ranked on spice. The high-volatility slot means bigger pay outs but less often, while a low volatility slot means more frequent wins but of smaller amounts.

Branding each slot with a chilli emblem provides an RG signifier for players, who in Ince’s view would be unlikely to check the volatility of each slot on their own time. He says: “Ultimately, players don’t pay that much attention to games. They like the colours or the graphics or they won big on it once. I don’t think there’s anything too sophisticated there, but at least awarding a chilli rating gives them a quick visual representation, because no one is going to go into game rules to look at what the average return to player or the win ratio is. That just doesn’t happen.

“People open the game, put their money in and go, but at least with the chilli ratings, you know that three chillies is highly volatile, which means you can win more, but you’re going to lose more,” he adds.

Corporate culture

At a firm as vast and varied as Playtech, it can be difficult to get all employees singing from the same hymn sheet. In London alone, the supplier had three different offices in three separate locations – Hammersmith, London Bridge and Camden. Steps were taken to address that in 2019, with the unveiling of a brand-new state-of-the-art office space in Holborn, bringing all three teams together under one roof. The project was overseen by commercial director and head of account management Lucy Owen, who re-joined Playtech in 2013, having originally come aboard as part of the Virtue Fusion acquisition.

Lucy Owen, Playtech

“Going forward, my role will focus on engaging our employees and improving our culture,” says Owen. “In this office, we’ve got three or four different companies that we’ve acquired over the years, so the challenge now is how we integrate them.” Playtech will host quizzes and conduct breakfast briefings in the new office as it bids to bind its teams together. But is there an appetite for that? “It’s mixed. There are a lot of people who are very socially engaged and who want to understand what other areas of the business do, but as in many organisations a lot of people are siloed, and our challenge is to break down those silos. We have seen increasing response rates to some of the activities that we’ve done here,” says Owen.

One success story was the Holborn office opening party. Owen and Weizer gave keynote speeches while chairman Alan Jackson cut the ribbon at a glamorous get together soundtracked by a jazz band. And Owen is keen to inject some of that razzmatazz into Playtech’s every day activities, including an annual information day for the supplier’s London-based business units.

“Historically this has been death by PowerPoint, but what we’re going to do this year is to really turn it on its head by making it very interactive and engaging,” she says. “The company has evolved and become more complex as we’ve acquired. We’ve always done this information day, which is used to give each business unit an update on their respective areas. It was always effective in doing that, but did it engage people? Possibly not.”

Playtech is also keen to use social media to show off the highlights of its corporate working environment heading into 2020, a ploy embraced by many of gambling’s biggest companies.
So what does the future hold? Playtech is angling to hand Weizer a share scheme which could net him a £30m bonus this year if the 44-year-old can hit price targets running from £6 to £12 a share, with the supplier currently trading at around 375p. It’s a big ask but looks to be a show of faith in the CEO despite revolts from some investors who were upset by big pay-outs last year.
The Israeli is undoubtedly committed to Playtech and if he can stave off disgruntled shareholders, who says he can’t last another 20 years in the top job. Would you bet against it?