Shuki Barak hands in his chips after steering the AIM-listed online gambling and software provider through the carnage that followed last year’s US ban on online gaming.
The door hasn’t revolved quite as fast as one of his company’s online roulette wheels, but Shuki (Moshe) Barak is stepping down as CFO of gaming company Playtech after only 18 months in the post. He leaves, however, having steered the company away from the reversal of fortunes that might have been expected when the world’s biggest market, the USA, banned online gambling in October 2006. Rushed through Congress by the Republicans just before their mid-term election defeat, the Unlawful Internet Gambling Enforcement Act bans online gambling for money (or points redeemable for cash) across the US because they enable gambling by residents of states that have banned it.
Playtech’s latest results, released last week, show only a mild impact from the ban, with group revenue dropping just 5% to £44m. That dip is, however, a sharp reversal from the 81% casino (and 89% total) turnover growth Playtech achieved in 2006, its first year after going public. The standstill confirms how big a setback the industry suffered from America’s exile from the virtual casino world. Last week 888.com, another big provider of online poker and roulette, announced H1 pre-tax profit down to $19m, from $48m in H1 2006. The islands of Antigua and Barbuda, which were building a niche as the tax haven of choice for online gambling firms, have tried to get the US ban lifted by the World Trade Organisation, but with little expectation of success.
Compared with most rivals, Playtech has escaped relatively lightly from the American blow because it has diversified extensively across games and locations, and supplies underlying software for games played on other sites as well as offering its own. Already a major force in online poker, which comprised one-third of its casino games revenue last year, it is adding bingo in Europe, and developing mobile gaming for people who can’t get to a real or virtual table before indulging their urge to take a punt. Europe accounted for 52% of its revenue in 2006, and Asia-Pacific 34%. Although gamblers still flock to real casinos for 95% of their expenditure, the company hopes ‘server-based gaming’ will induce more of them away from 3D chips.
Having withdrawn from the US, it is now focusing on Asia, rolling out new formats like Pachinko and Mahjong. Last November’s acquisition of the non-US assets of Tribeca Tables gave it a ready-made platform in India and the Philippines, and a pool of online poker players which will become the world’s biggest when integrated with its own platform. In December it established a bridgehead into the Chinese market, where online gambling is formally illegal, by obtaining a licence to deliver peer-to-peer contests at over 500 gambling establishments run by Sino Strategic International, an investment group listed on the Australian Securities Exchange. Next up, the company revealed last week, will be a deal to run poker-like contests with cash prizes at up to 20,000 state-approved internet cafes.
Shuki Barak joined the group in February 2006, from satellite imaging provider ImageSat International, having trained as an accountant with Arthur Andersen. At 37 he was a comparatively senior board member alongside CEO Avigur Zmora (33) and COO Rafael Ashkenazi (32). Although listed on AIM in London and chaired by betting industry veteran Roger Withers, the company is run by Israeli technocrats, another of will soon be announced as his successor. |
World Casino Directory 
Gambling Forums 
