Ladbrokes joins with Playtech to boost online

As punters grab their wallets for the Cheltenham Festival, Ladbrokes today struck a deal with software and services group Playtech to boost its online gambling business.

Richard Glynn, who joined Ladbrokes three years ago with the brief to bring its online business up to speed against rivals like William Hill, once toyed with taking over Playtech.

Now he has struck a deal which will see 40 of Playtech’s Israeli marketing staff transfer to Ladbroke Digital to use their skills to encourage its online gamblers to spend more.

At the same time Playtech will also supply a full range of casino-type games under the “Vegas” tag and the back-office support services to Ladbrokes.

Playtech will earn normal royalties on its games but will also be rewarded handsomely if it manages to grow Ladbrokes’ profits from online gambling over the next five years. Based on various targets Playtech will receive 27.5% of any uplift in the profits and value of Ladbroke Digital.

Glynn said: “Ladbrokes has made significant progress over the past two years by investing in our core technology, revitalising our brand and making our customer offer more competitive. The formation of a new, Ladbrokes-owned, ecommerce and digital marketing services function, in addition to an expansion of our existing product relationship is a material development.”   

This month Playtech sold its 29% stake in William Hill Online back to the parent company for  £424 million.

Analysts said today’s deal looked good news for both companies.

James Hollins at Investec said: “A strong digital marketing/customer relationship management function was, in our view, the key factor missing from the Ladbrokes online channel and we welcome the deal.”

Ladbrokes’ shares jumped 7%, or 15.5p, to 240.75p while Playtech was up 19.25p to 570.75p.