Playtech Prepares to Enter Social Media Market

Playtech has had its proverbial eye on the social media and social gaming scene for a while and has just made public its plans and intentions. The software company has entered into a non-binding memorandum of understanding with Teddy Sagi to pay €95 million for certain social gaming businesses and business-to-business (B2B) real money gaming assets of which Sagi is the controlling shareholder. Playtech believes that this acquisition will allow the company to provide B2B products needed for cross platform solutions for social casinos, bingo and poker.

Sagi is also a major shareholder in many Business-to-Customer (B2C) operations and as part of the deal Playtech will gain 20% of these businesses which would give Playtech a significant stake in the fast-growing market. The other 80% of the businesses connected to Sagi will be given royalty free licenses to use Playtech software and other properties that Playtech acquires in addition to being able to use Playtech games in play money mode.

Playtech has stated that its intentions are to comply with the regulations set forth by the Main Market of the London Stock Exchange even though it has not yet been listed as such but hopes to be in the future. This means that Playtech will strive to get the approval of independent shareholders.

Sagi has also agreed via a non-binding memorandum of understanding to be an advisor to Playtech for only €1 per year. Currently, Sagi is Playtech’s biggest shareholder. This would be a huge step forward for Playtech and quite a profitable one. However, the industry will have to wait and see if the deal goes through.