Can GTECH finally challenge Playtech?
23rd September 2013 7:11 am GMT
Fair play to GTECH. It finally seems to be getting its house in order. We have given the company a fair bit of stick over recent years as it has struggled to integrate all its moving parts into one unified whole. But credit where credit’s due, you cannot fault the logic behind its latest rebrand and strategy overhaul.It has been baffling at times to follow the progress of the company formerly known as Lottomatica. It is difficult to know what is being announced by whom when you receive press releases name-checking SPIELO G2, Boss Media and Lottomatica in the opening sentence.
Furthermore, it was equally baffling receiving press releases from somewhere deep inside Lottomatica about social products for lotteries without a mention of the company’s interactive division. These surely should have been developed by, or at least in conjunction with, G2.
If it was confusing for us, it must have been equally difficult for customers. An operator could in theory be buying an “integrated” gaming package from GTECH G2 or SPIELO G2, the iGaming division of Lottomatica Group, and it would have a poker contract with Boss Media, a bingo contract with St Minver and a sportsbook contract from Finsoft. Yikes, just think how long it would take your lawyer to plough through that lot!
And finally, after several years of wrestling with this nightmare, GTECH will become GTECH wherever it is based. (Unless you’re buying gaming machines from SPIELO or lottery tickets from Lottomatica in Italy...but those are strong local brands and hence understandable.) However, the contract situation will probably take a while to sort out. Depending on what jurisdiction you operate in, there are certain legal entities still in place, such as Boss Media, for example. (As an aside, it’s interesting to note the Swedish office of Boss Media, which arguably invented online poker, is now being outsourced to Indian company HCL.)
“We’re still in the migration phase,” admits senior VP for iGaming Matteo Monteverdi. “Down the line, we are expecting to have one single entity that will manage all contractual aspects.”
This jumbled mess of brands has partially accounted for the rise and fall of three G2 CEOs but now the ill-fitting iGaming brand is no more. Monteverdi will be thankful he did not inherit this poisoned chalice. As the boss of a central iGaming unit, which will service all parts of the GTECH empire, he has a much better chance of success than his predecessors - all of whom, it should be noted, are very capable businessmen and continue in various important roles for the company and at its competitors.
I was talking to a senior executive at Playtech the other day, who was saying that GTECH really should be his company’s strongest competitor. It has all the assets, acquired from St Minver, Boss Media, Dynamite Idea and Finsoft, but it has never managed to bring them together - or even to maintain the companies’ pre-acquisition standings in the marketplace.
At least GTECH won’t have to compete against Playtech in North America, after the European software powerhouse vowed to wait and watch until the state-by-state model pans out into a market with more immediately obvious return on investment.
“We are a company that is heavily focussed on North America,” Monteverdi says. “We are based in North America. We are the market leader for gaming machines in Canada. We run the only interstate poker network in Canada, where we are the dominant player in the iGaming space. SPIELO has an established presence in casinos. We have thousands of people on the ground in North America. I would hesitate to call it low-hanging fruit but the North American market is much more accessible for us from a logistical perspective than it is for Playtech.”
That sounds like fighting talk. And there’s more: “I think we have all the credentials and the assets to be the market leader. The company is extremely committed to playing a protagonist’s role in the iGaming industry. That is very exciting and at the same time very challenging because it is a difficult market.”
This acknowledgement of a “difficult market” is significant because it is not only GTECH that has attacked and failed at iGaming. IGT’s efforts (Entraction) have been largely shambolic. Intralot’s I2 has failed to inspire - and is concentrating solely on lotteries anyway. We shall see how SciGames and WMS come together. Both are only really starting to dabble in iGaming. And then there’s Bally and SHFL… All might yet become significant iGaming suppliers but none are yet.
And while the multinational suppliers have struggled to get their heads round iGaming, the existing players have watched their lovely unregulated dot.com world decimated into high-taxing regulated markets. The prevailing theory is that this will play into the hands of the Big Suppliers, hence all this merger activity, but there is also a theory that smaller, nimbler companies will be able to focus on local markets more effectively.
That is a conversation for another day. The new structure has given GTECH every chance of success but the company’s far-flung teams will still have to communicate with each other - not something they have excelled at in the past. The structure is there now, let’s see if GTECH can execute.sah@gamingintelligence.com
This jumbled mess of brands has partially accounted for the rise and fall of three G2 CEOs but now the ill-fitting iGaming brand is no more. Monteverdi will be thankful he did not inherit this poisoned chalice. As the boss of a central iGaming unit, which will service all parts of the GTECH empire, he has a much better chance of success than his predecessors - all of whom, it should be noted, are very capable businessmen and continue in various important roles for the company and at its competitors.
I was talking to a senior executive at Playtech the other day, who was saying that GTECH really should be his company’s strongest competitor. It has all the assets, acquired from St Minver, Boss Media, Dynamite Idea and Finsoft, but it has never managed to bring them together - or even to maintain the companies’ pre-acquisition standings in the marketplace.
At least GTECH won’t have to compete against Playtech in North America, after the European software powerhouse vowed to wait and watch until the state-by-state model pans out into a market with more immediately obvious return on investment.
“We are a company that is heavily focussed on North America,” Monteverdi says. “We are based in North America. We are the market leader for gaming machines in Canada. We run the only interstate poker network in Canada, where we are the dominant player in the iGaming space. SPIELO has an established presence in casinos. We have thousands of people on the ground in North America. I would hesitate to call it low-hanging fruit but the North American market is much more accessible for us from a logistical perspective than it is for Playtech.”
That sounds like fighting talk. And there’s more: “I think we have all the credentials and the assets to be the market leader. The company is extremely committed to playing a protagonist’s role in the iGaming industry. That is very exciting and at the same time very challenging because it is a difficult market.”
This acknowledgement of a “difficult market” is significant because it is not only GTECH that has attacked and failed at iGaming. IGT’s efforts (Entraction) have been largely shambolic. Intralot’s I2 has failed to inspire - and is concentrating solely on lotteries anyway. We shall see how SciGames and WMS come together. Both are only really starting to dabble in iGaming. And then there’s Bally and SHFL… All might yet become significant iGaming suppliers but none are yet.
And while the multinational suppliers have struggled to get their heads round iGaming, the existing players have watched their lovely unregulated dot.com world decimated into high-taxing regulated markets. The prevailing theory is that this will play into the hands of the Big Suppliers, hence all this merger activity, but there is also a theory that smaller, nimbler companies will be able to focus on local markets more effectively.
That is a conversation for another day. The new structure has given GTECH every chance of success but the company’s far-flung teams will still have to communicate with each other - not something they have excelled at in the past. The structure is there now, let’s see if GTECH can execute.sah@gamingintelligence.com 
