Shares in PartyGaming surged yesterday after the online gaming company struck a licensing agreement with the software provider Playtech that could lead to future deals in Asia between the two firms.
Playtech will power gaming websites that PartyGaming agreed to buy last month from Empire Online and InterContinental Online for £36.6m in shares. The four-year deal is conditional on the completion of the sale of the websites that include NoblePoker, MissBingo, FairPoker, Clubdicecasino and MagixBoxCasino.
Under the agreement, PartyGaming will also have access to Playtech's casino, poker and bingo products. Financial details were not disclosed but shares in PartyGaming surged 12 per cent to close the day at 35.5p while Playtech saw its stock increase 6 per cent to 256p. This was a good start to the year for a sector whose shares plummeted last year in the wake of the US crackdown on internet gaming.
PartyGaming derived 73 per cent of its revenue from the US before online gambling was effectively banned in the country and it has since shifted its focus to Europe, the Middle East and Africa. The company has made no secret of the fact it is examining ways to enter the lucrative Chinese market.
The AIM-listed Playtech signed a landmark five-year agreement with China's leading gaming group Sino Strategic International last month and is to provide software for a number of games for the Chinese market including mah-jong, Do Di Zhu and Choi Da Di.
Analysts said that if PartyGaming were to move into China then Playtech would be well placed to provide the software for its sites.
"Everyone has been looking for new markets after the US crackdown and China is the key area of growth," one said.
Avigur Zmora, the chief executive of Playtech, which is based in the Isle of Man, said: "Asia is the big story for Playtech right now. This is the most lucrative and fastest growing market and everyone wants to tap into it."
He added: "This agreement with PartyGaming is a real endorsement from the leading gaming company and we are delighted to have established this important relationship."Reuse content