Playtech eyes more acquisitions in “restructuring” Italian market

Playtech CEO Mor Weizer has pledged to take advantage of Italy’s blanket ban on gambling advertising by grabbing market share with Snaitech from online-only operators in the country.

Snaitech has a strong retail presence in Italy as the most well-established bricks and mortar sports betting business in the market and will be free to advertise across its retail estate which includes more than 17,000 points of sale.

The new advertising restrictions will likely have a more adverse effect on online-only operators, including UK-based giants bet365, which regularly dominates Italy’s online sports betting market.

Speaking exclusively to EGR Intel following Playtech’s H1 results, Weizer said: “The marketing ban is mainly around online marketing and the digital space is dominated by online-only operators like bet365, William Hill and SKS365.

Playtech CEO Mor Weizer

“The market is very fragmented and we believe the advertising ban will position Snaitech to take market share.

“It will also allow us to accelerate growth because we believe small to mid-sized operators and some well-established online-only operators will eventually have to move out of the market or try and retain their existing player base.

“Due to the brand recognition of Snaitech, we are well positioned to take market share from others and accelerate the growth of the business,” he added.

Playtech’s €846m acquisition of Snaitech was announced on 12 April with the supplier gaining 100% control of the operator on 3 August.

Weizer admitted the political situation in Italy took him by surprise, but may in fact end up working in Playtech’s favour with the supplier refusing to rule out further M&A as the market shifts.

“[The dignity decree] was a bonus after the acquisition,” said Weizer.

“I cannot say that we expected it to happen, especially in the time frame as it happened immediately after the government was formed.

“We knew that regulatory changes would occur and we catered for that in the price of the acquisition, but I believe the advertising ban will eventually result in the market restructuring.

“That will give us an opportunity to consolidate further small and mid-sized businesses as well as gaining market share from online-only operators,” he added.

According to chairman Alan Jackson, Playtech purchased Snaitech to diversify group revenues geographically and cement a presence in one of the fastest growing gambling markets in Europe.

Snaitech performed strongly at the start of H218, driven by the closing weeks of the World Cup, but some analysts are concerned about the long-term success of the acquisition with further regulatory headwinds expected in Italy.

Regulus Partners analyst Paul Leyland said: “H1 was also the last period without Snai being a significant shaper of performance: 80% regulated revenue estimates from next year might be positive relative to what has happened in Asia, but when Italy is the main regulated exposure and slots the main product, this may add visibility without any more security.”