Ladbrokes link-up to boost its digital operation

BOOKMAKER Ladbrokes has struck a deal with Playtech to boost its online gambling business, as the software firm moves on from its break-up with William Hill.

One of the deal’s first stages will see Ladbrokes roll out another 200 casino-style games for its online and mobile customers.

The partnership with Playtech, which played a big role in the digital growth of William Hill, will see the launch of a new ‘Vegas’ tab on Ladbrokes.com later this year.

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The bookmaker said the tie-up with the gaming software firm represents the “next phase in the re-invigoration” of its digital business.

Playtech and William Hill are going their separate ways after the bookmaker revealed a £424m deal to take full control of its online business. It is buying the remaining 29 per cent of William Hill Online it does not own from Playtech.

William Hill triggered an option to buy the stake held by Playtech since the venture was set up in 2008.
The new deal will see Playtech provide Ladbrokes with marketing and advice including customer relationship management (CRM) to grow the “lifetime values” of the bookmaker’s online customers.

Ladbrokes chief executive Richard Glynn said: “Ladbrokes has made significant progress over the past two years by investing in our core technology, revitalising our brand and making our customer offer more competitive. The next phase of this reinvigoration will see us work closely with Playtech to increase customer lifetime values through enhanced CRM, an area in which Playtech has a proven track record.

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“The formation of a new, Ladbrokes-owned, e-commerce and digital marketing services function, in addition to an expansion of our existing product relationship is a material development.

“This relationship will accelerate our progress in a sustainable way over the next five years and beyond.”

The agreement builds on Playtech’s existing relationship with Ladbrokes, through which it provides bingo and Videobet technology for its betting shop gaming machines.

As part of the deal, Ladbrokes is creating a new e-commerce and digital marketing services operation, to be based in Israel.

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Isle of Man-based Playtech was founded in 1999 and has more than 2,500 staff working on gaming applications in casino, bingo, poker and sports betting. Playtech chief executive Mor Weizer said: “This is an exciting opportunity to play a key role in delivering material growth to Ladbrokes’ digital business in the coming years. 

“The combination of Ladbrokes’ brand strength, its newly invested core technology and Playtech’s proven track record in growing digital revenues through advanced e-commerce and digital marketing has significant potential.”

Playtech will receive payments based on the pace of growth in Ladbrokes’ digital business.

Online and mobile is the fastest-growing gambling segment.

Ladbrokes generated operating profits of £31m from its digital arm last year, having fallen behind rivals such as William Hill. It has focused on growing its online sportsbook, which helped revenues rise nine per cent to £178.1m in 2012.

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William Hill’s online operating profits surged 36 per cent to £145.3m in 2012 on net revenues up 27 per cent at £406.7m.

William Hill employs more than 15,000 people, including around 3,000 staff in Yorkshire, of which more than 1,100 are based in Leeds, where the company has two offices.

Sky’s fast-growing online betting operation, which is headquartered in Leeds, generated revenues of £113m in the UK in 2011.

The wholly-owned Sky division has four brands; Sky Bet, Sky Vegas, Sky Poker and Sky Bingo and an online comparison site, Oddschecker.

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It employs 440 people who work in technology, a contact centre, odd setting, products and marketing and finance.

James Hollins, at Investec, said: “A strong digital marketing/customer relationship management function was, in our view, the key factor missing from the Ladbrokes online channel and we welcome the deal.”

Greg Johnson at Shore Capital added: “With the ink not yet dry on the William Hill Online transaction, Playtech has wasted little time in finding a new bedfellow, with a partnership agreement announced this morning with Ladbrokes.

“We have a ‘hold’ stance and see greater momentum at William Hill, where online accounts for around half of underlying profits.”

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