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The I-gaming industry has changed significantly in the last few years--a fact
Elad Cohen hopes casino software developer Playtech can capitalize on.
Now in its sophomore year, Playtech is on the verge of doubling its number of
licensees from three to six. Cohen, CEO of the company's marketing division,
said a new software provider such as Playtech is in a good position to take
market share from the industry's major software firms--companies like World
Gaming and Boss Media--because the industry just isn't the same as it was three
to five years ago when those companies made their names.
"The way we see it," Cohen said, "today's industry is very vibrant, and many
things are happening. It's really changing, and we think that a new company has
a very good opportunity if it can provide the current operators with a better
product.
"If you have many more features and basically, at the end of the line, better
financial performance, that will make the difference in today's industry, which
is not what it was five, four or three years ago."
For one thing, Cohen said, there are copiously more online gaming sites than
there were in the industry's infancy. Margins are lower, he said, and the
jackpots of revenue available to anyone with a gaming URL have disappeared.
"If you look at two years ago, if you had an online casino Web site, most of
what you needed to do is just send traffic to the Web site. As long as you hit
it with enough traffic, there would be a lot of money coming out the other
side," he said. "Today it's not really that way anymore."
After spending a year developing its games, Playtech has been working with
licensees for about 10 months, Cohen said. The company itself is truly
international, with a Dutch mother company, management in Cyprus, operations in
Antigua and marketing and R & D in Israel. Playtech is backed by an Israeli
company called New Age Ventures.
Its corporate Web site boasts founders with experience in land-based casinos,
although Cohen can't specify which land-based casinos, since they invested in
the company through New Age Ventures to avoid regulation issues in Israel.
Online gambling remains "absolutely forbidden" in the country, Cohen said, and
as a result Playtech doesn't accept real-money bets from Israel.
"Having the ownership of the company be the majority Israeli shareholders--even
though we are operating from Antigua--we cannot really accept bets from Israelis
because that would make for Israelis making money from losses from Israelis,
almost like operating a casino in Israel," Cohen said.
Playtech's licensees are Club Dice Casino, Brandy Casino and City Club Casino.
The company's latest licensee, Swiss Casino, features the latest version of
Playtech's software.
The company's business is really starting to take off, Cohen said. By the end of
January, he expects three more Playtech-powered sites to debut, and by the end
of the first quarter of 2002, he predicts the number of clients will increase to
15.
"These are all contracts that have been closed and people that we know that we're
going to work with, and it looks very promising," he said. "2002 is going to be
the year for Playtech."
Exactly what makes the firm's games attractive has partly to do with the
platforms and back-office features available, he said. Playtech has signed
contracts with both land-based operators looking to start an online venture as
well as current operators who are switching software makers.
"It's not the same industry, and you cannot keep on making money with the same
old platforms--you need more tools to work with," Cohen said.
The software's back end includes multi-level marketing tools that handle
thematic player bonuses, player evaluations, promotions and tracking for both
the games and the performance of the system. Right now the games are available
in English, but next year more languages will be added. The platforms include
download, Java and Shockwave, and the technology enables users to play using any
of the platforms on the same account. If the client wants to make changes to the
software, Cohen said, Playtech is quick to work with licensees to adapt the
games to their site.
"We believe in working together with our licensees to create changes in the
software, new features, whatever. They know better than us, we look at it like
that," he said. "They are out there in the industry trying to make what they
have to make, and if they need something that if they have it they can make more
money, we can make more money."
Aside from the games, Playtech offers a useful tie-in for land-based casinos
that desire to make a splash in the Internet gambling market. A division of
Playtech serves land-based operators with casino software that supports magnetic
card readers, prepaid cards and support for cashiers. When dealing with a
bricks-and-mortar client, Cohen said, Playtech pitches the online package and
the land-based package together, so that if the casino wants to develop an
Internet version, its gaming floor games will look the same as its online
software.
"People will be able to come into your casino, play on computers, play on some
hardware-software integrated machine, get used to it within the casino walls,"
he said. "Then when they leave, why don't you give them the CD of the Internet
version so they can continue playing what they just played at home?
