Playtech Calls Foul in Danske Spil PartyGaming Deal

Published Thursday, June 10, 2010 -

In January of 2010 an announcement was made to the public that PartyGaming had signed an exclusive five-year agreement with the Danish state lottery Danske Spil. The agreement gave PartyGaming an opportunity to supply the Danske Spil Group, one of the largest betting and gaming organisations in Europe, with online poker and casino games in Denmark.
In 2009 the Danish Government published draft legislation for a partially liberalised gaming market in that has become law. Jim Ryan CEO of PartyGaming said back then "This is a landmark B2B deal for PartyGaming and validates our strategy to become a leading provider of B2B services to both corporations and governments around the world."

Now, just six months later the whole deal has been squashed after industry rival Playtech cried foul to the Danish Complaints Board for Public Procurement.
Back in January analyst Paul Leyland at the brokerage firm Collins Stewart speculated, "We suspect PartyGaming  won this mandate against stiff competition and, with Danske Spil likely to play an important role in the shaping and eventual opening up of the Danish regulated market, PartyGaming should reap significant financial benefits."
It was in late February, when it was revealed that Playtech had lodged a complaint regarding tender procedures with the Danish Complaints Board for Public Procurement and information about the situation disappeared until the Complaints Board issued a decree that appears to favour Playtech in that admits that the contract between Danske Spil and PartyGaming should have been put up for tender by Danske Spil, and will have to be annulled.

The chief executive officer of Danske Spil, H.C. Madsen, commented, "We have not in any way tried to bypass the rules. Since the contract was supposed to be entered by a newly formed subsidiary, which was supposed to compete on a partially liberalised gambling market, we assumed that we were not obliged to perform a tender process as such, but chose a quicker and more flexible tender-like process instead."

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