Playtech confident of 2024 outlook but Caliplay conflict remains unsettled

Playtech Plc is confident it will meet its strategic and commercial objectives for 2024, following a ‘solid start’ to year trading.

The LSE tech group shared its AGM trading update, giving investors a snapshot of corporate performance from 1 January 2024 to 30 April 2024.

The B2B unit continues to grow revenue in regulated markets, focusing on key contracts and tighter cost controls.

B2B trading highlights: “Growth in regulated markets was driven by the Americas, with the US and Canada contributing more, though from a small base, while Mexico and Colombia also performed well.”

Demand for live gaming services boosts Playtech’s B2B unit, and the group is launching new SaaS solutions for customers.

Snaitech, which leads Playtech’s B2C unit, “performed well on an underlying basis,” despite tough comparisons with World Cup 2022 trading. Snaitech maintained strong wagering volumes both online and in retail, despite customer-friendly sporting results in Italy.

Playtech updated on its service fee dispute with Mexican joint venture partner, Caliplay, a long-standing legal challenge now in courts in London and Mexico City.

In 2023, Caliplay, the joint venture between Playtech and Grupo Caliente, annulled service fee arrangements with Playtech over contract entitlements.

Playtech previously claimed Caliplay owed about €34m in unpaid service fees for the first half of 2022.

The main conflict saw Playtech’s London appeal state that Caliplay could only request service fee entitlements by mutual consent, with fee terms reviewed by an independent investment bank.

Playtech informed investors that Caliplay remains a key customer. Playtech is in open dialogue with Caliplay to find a way forward, but fees owed remain unpaid.

“While the Company believes it has visibility over almost all revenue generated by Caliplay’s business and confirms Caliplay’s strong performance, Playtech has been unable to get full financial information from Caliplay. As a result, the revenue from additional B2B services is partly estimated, based on prior trends and provided information.”

Playtech concluded: “With the strategic progress across the business, the Board is confident in Playtech’s ability to seize growth opportunities in both B2B and B2C divisions over the medium term.”