LONDON, March 11 Ladbrokes, Britain's
second-largest bookmaker, is betting on a tie-up with gaming
software developer Playtech to rack up earnings from
growing demand for online gambling.
Playtech has finalised an agreement to advise and assist
Ladbrokes with its digital services for an initial period of
five years, the companies announced on Monday.
Ladbrokes, a familiar sight on Britain's high streets with
2,200 retail outlets, has struggled to keep up with the online
offering of UK market leader William Hill.
Earlier this month, William Hill took full control of the
internet venture it previously ran with Playtech, buying out
Playtech's stake for 424 million pounds, as it looks to expand
The online gambling sector is seeing a wave of consolidation
and deals, amid signs that the U.S. is readying to legalise it.
Online gambling firm 888 announced two U.S. agreements
The first new feature Ladbrokes' website customers will see
is a 'Vegas' tab, giving access to a virtual casino.
The company said the deal with Playtech should help spur
"I'm very confident that over the next five years this is
going to allow us to accelerate our EBITDA (earnings before
interest, tax, depreciation and amortisation)," chief executive
Richard Glynn told Reuters. "What this will allow us to do is
offer a comparable digital service."
Ladbrokes declined to specify how much profit it expects the
deal to generate, but Playtech will receive an early instalment
of its success fee - described by Glynn as a "no win no fee"
arrangement - if base EBITDA uplifts of 35 million pounds ($52
million), 70 million pounds and 100 million pounds are achieved
The deal boosted shares in both companies, among the top
FTSE-350 risers on Monday. Ladbrokes shares were up 5.7 percent
to 239 pence, having risen almost 50 percent in the past six
months, while Playtech shares climbed 3.4 percent to 571 pence.