Playtech Pulling Out Of U.S. Market
Published: Saturday, October 07, 2006 Online-Casinos.com
PLAYTECH PULLING OUT OF U.S. MARKET
Licensees will be required to block American players
Confirming rumours circulating widely last week, the London listed turnkey provider Playtech announced Friday that it would stop licensing its software to U.S.-focused operators after American legislation to ban the funding of online gaming takes effect.
The move by the Israeli owned company immediately boosted its shares, which had earlier been heavily hit by the unexpected US legislative development, by almost 14 percent. Brokers were advising that the company, which has plans to take up the US slack through European and Asian initiatives, was a good buy at its currently low levels.
The Playtech statement said: "The company has requested that its existing licensees block transactions from players residing in the U.S. as soon as practically possible following the act's implementation.
"From the date of the act's implementation, Playtech will waive its right to any license fees with respect to any revenue generated from U.S. players," the group said.
Some analysts calculate that Playtech's 2006 pretax profit could be lower by 16 percent to $65.1 million and the forecast for 2007 lower by 60 percent to $39.3 million.
Playtech Chief Executive Avigur Zmora told the Reuters news service that the ban would set back the group by one year financially (see previous Online-Casinos.com/InfoPowa reports), but that it was swiftly rolling out new software for Asian games such as Mahjong and Pachinko.
