Playtech Sets its Sights on Social Gaming Amid Some Controversy

Playtech, the largest publically traded online casino games software company, has announced that it has entered into a non-binding memorandum of understanding with its controlling shareholder and founder, Teddy Sagi. As a result, Playtech will acquire ninety-five million euros worth of assets and businesses for social gaming.

In recent months, the company has made it known that it is interested in making its mark on the social gaming market and has mapped out plan for investment in various opportunities. The memorandum of understanding was signed by the top online casino games provider Playtech to buy assets including social gaming products that allow people who play online casino games at the best online casinos and mobile casinos to buy virtual currency, such as Facebook credits, to use in their playing.

Playtech issued a statement, “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.”

The decision to move ahead comes with some controversy as it has also been said that Playtech signed an additional agreement that would allow it to purchase a ten million euro office space from Gaming Technology Solutions Ltd. Sagi is a shareholder in that company as well.  

Simon McGrotty, analyst at Davy Research, wrote a note to clients in which he shared his concerns, “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.”