CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Gaming sector consolidation: JKO pulls Playtech (PTEC) plans

By Angela Barnes

13:33, 21 January 2022

Gambling app on a smartphone
Playtech (PTEC) shares drop after former F1 boss pulls potential offer – Photo: Shutterstock.

Shares in gaming software company Playtech dropped 20% in London on Friday after JKO Play, led by former Formula One boss Eddie Jordan and Keith O’Loughlin, withdrew a €2.64bn ($3bn) planned takeover bid.

The move comes after the Financial Times reported Thursday that a group of Asian shareholders in Playtech were against any potential new offer for the company.

“The Board of Directors of Playtech notes the announcement by JKO Play Limited confirming that it does not intend to make an offer for the company and the related press coverage,” Playtech confirmed in a statement on Friday.

JKO also confirmed the offer withdrawal in a separate statement on Friday.

“The Eddie Jordan Family office and Keith O’Loughlin announce that JKO Play Limited, a 0.51% shareholder in Playtech plc, does not intend to make an offer for Playtech,” the group said.

Aristocrat Leisure bid

JKO's approach followed a £2.1bn ($2.86bn) bid by Australia's Aristocrat Leisure, whose 680-pence-per-share offer was recommended by Playtech once again today.

“The Board continues to recommend unanimously that Playtech's shareholders vote in favour of the offer from Aristocrat Leisure,” a statement said.

Aristocrat said it is committed to completing the acquisition “as quickly as possible” while noting regulatory approvals remain “well on track”.

Playtech added: “The Board continues to seek engagement with all of its shareholders regarding the Aristocrat Offer. However, a number of material investors have not to date engaged meaningfully about their views on the Aristocrat Offer, including certain investors that have disclosed or taken material positions in the Company following the announcement of the Aristocrat Offer.”

Aristocrat urged all Playtech shareholders to vote for the acquisition at shareholder meetings scheduled for 22 February.

Meanwhile, JKO said it will to continue to evaluate a number of opportunities in the gaming and associated technology sectors, where it sees exciting growth prospects in a number of international markets, the Irish Times reported.

What is your sentiment on PTEC?

4.43
Bullish
or
Bearish
Vote to see Traders sentiment!

Sports betting growth

The interest in Playtech, which was founded in Estonia in 1999, comes as growth in the gaming sector increases – with sports betting expanding in the US and subsequently boosting transatlantic partnerships.

In April last year, New York became the sixteenth US state in three years to allow online gambling.

Growth in the industry has also been driven by enhanced interest in online gambling after online betting boomed during the coronavirus pandemic, with customers playing from home when casinos and betting shops were shuttered.

Industry consolidation

As a result, consolidation takeover proposals have ensued, including DraftKings bid for Entain.

US100

14,537.00 Price
-2.020% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0039%
Overnight fee time 21:00 (UTC)
Spread 1.8

Oil - Crude

88.32 Price
+0.550% 1D Chg, %
Long position overnight fee 0.0506%
Short position overnight fee -0.0725%
Overnight fee time 21:00 (UTC)
Spread 0.030

XRP/USD

0.54 Price
+4.100% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01192

Gold

1,821.89 Price
-0.320% 1D Chg, %
Long position overnight fee -0.0194%
Short position overnight fee 0.0112%
Overnight fee time 21:00 (UTC)
Spread 0.30

The US fantasy sports betting company abandoned its bid for the UK gambling group after it had offered 2,800p per Entain share. The acquisition would have given DraftKiings access to the Ladbrokes Poker and bwin online betting brands, as well as Coral, PartyPoker and Sportingbet.

US-based MGM Resorts also bid for the British company in January 2021 – with an $11bn offer. Entain turned down several acquisition offers, including MGM’s.

MGM and Entain jointly own BetMGM, a sports betting and entertainment company with exclusive access to all of MGM Resorts' US land-based and online sports betting, major tournament poker, and online gaming businesses.

Recent transatlantic deals that did take place included the acquisition of Britain’s William Hill by Caesars Entertainment, in a £2.9bn ($4bn) transaction earlier last year.

Caesars then sold the non-US assets of William Hill to 888 Holdings, a transaction set to complete by the second quarter of this year.

The company said the acquisition would create a “global online betting and gaming leader” and deliver enhanced sports betting opportunities.

“The acquisition represents a transformational opportunity for 888 to significantly increase its scale, further diversify its product mix and accelerate the upward shift of its revenue growth profile,” the company said.

Another recent deal was Flutter Entertainment’s acquisition of online bingo operator Tombola for £402m (€479m).

Flutter, which owns Paddy Power Betfair and Fanduel, said the deal will diversify its products and enhance its operations in the UK market.

Outlook for 2022

The global online gambling market is anticipated to be valued at more than $92.9bn (£68.23bn) in 2023, according to Statista data.

It noted that the current size of the market is almost $59bn, meaning the sector is forecast to double in the upcoming years.

“Due to factors such as the advancement of technology available (for example smartphones and apps), higher trust of gamblers paying online, and the increasing digitisation of the world, the online gambling market is seeing growth in many regions,” it said.

It also highlighted the legalisation of sports betting in the US by the Supreme Court in 2018.

“Online gambling companies are now able to grow their sport betting sectors, thereby further supporting the market’s growth. Some of the companies that look to benefit from this include the likes of Paddy Power Betfair, the largest global online gambling company, Ladbrokes Coral Group, William Hill and 888 Holdings,” Statista said.

Markets in this article

888
888
0.9755 USD
-0.0365 -3.770%
CZR
Caesars
45.16 USD
-1.76 -3.760%
DKNG
DraftKings Inc.
27.94 USD
-1.15 -3.980%
ENT
Entain
9.480 USD
0 0.000%
FWONA
Liberty Media Formula A
59.75 USD
-2.19 -3.540%

Rate this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 555.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading