Playtech’s new moves are effective counterparts to offset recent criticisms of the company’s perceived lack of preparedness for entry into the new US sports betting market.
The new Playtech appointment at the top has drawn more attention to Playtech’s preparation for entry into the US.
Changes at the Top
Industry veteran and former chief executive of Sportech Ian Penrose set to take the reins as non-executive Director and address Playtech’s two profit warnings. Penrose brings twenty years experience of accounting in the gaming industry to address the FTSE 250’s two profit warning experienced this year.
Recent Criticism
The company took a lot of heat so far in 2018 for what the public perceives as a too slow approach to US market entry, with many feeling that an all too passive approach has led to Playtech watching while other competitors rushed ahead to make deals with US operators and keep pace with the new sports betting permissions in the country.
The main criticism which investors have found with Playtech’s relative passivity is the 47% drop in shares experienced and failure to make substantial moves against the competition in the US. A pie revolt experienced this year did not help.
Turning a New Leaf
The hope in the organisation is that Penrose can be a part of a stronger and more committed foray into the US market, spurred by the price war arising in China which has slashed Playtech revenues there a full 40%.
The Penrose appointment signals a significant change at the top, as he replaces embattled outgoing Playtech chief, the scapegoat for Playtech’s recent struggles.
Penrose previously owned sporting pools, which should diversify Playtech’s approach and confidence heading into the new era of sport betting in America.
Cautionary Tale?
Playtech is a telling example of how prudence and lack of preparedness may be confused or intertwined in the court of public opinion, with investors seemingly more concerned with rapid and bullish-looking expansion entry than a fully developed strategy and management team.
Overview
No one said the gaming industry does not end to posit style over substance; the Playtech example may yet end up teaching the value of the inverse.
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