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Playtech Stock Price Plummets
Playtech, a leading provider of omni-channel solutions across all verticals of the online casino world — including Casino, Sports, e-Sports, and Poker — suffered a major selloff of its stock on the news that 2017 profits would be lower than expected. Overall, the stock shed 20 percent of its value before finally stabilizing at $10.08 per share.
The setback is particularly shocking in light of the fact that it comes at a time when many other companies in the online casino industry are leveraging an expanding global market to enjoy record profits and growth.
Trouble In Asia
Unfortunately for Playtech, one of the areas that is not currently exploding is Malaysia, where Playtech has a strong presence. The country is currently listed as a “grey” market for online casino operators, meaning online gaming is neither explicitly allowed nor prohibited. However, the Malaysian government recently took a series of steps to block its citizens from accessing online gambling sites in the country.
In addition, communications coming out of the government suggest that actual legislation might be coming in the near future that will make it more difficult for online casino companies to operate within its borders.
Trouble At Home
In addition to its overseas worries, Playtech is contending with a confluence of problems at home as well. For starters, Playtech is struggling to see any benefits from a partnership it signed with Sun Bingo. Although the bingo room is one of the largest and most popular in the UK, there have been technical issues holding up the implementation of Playtech’s technology which is hurting earnings.
Beyond that, there has been a huge debate going on in the UK over fixed-odds betting terminals (FOBT). FOBT, which Playtech manufactures, are currently undergoing a governmental review, and there is a possibility that the maximum bet allowed on them could drop as much as 98%.
Between the uncertainty in Asia, the inability to get its key partnership with Sun Bingo running smoothly, and the possibility of a serious decline in earnings potential for one of its key product, investors remain understandably unsure what Playtech’s financial future looks like.