iPoker changes prove winning hand for Playtech SP

iPoker changes prove winning hand for Playtech SP

Thursday, August 13, 2015 Totally Gaming
iPoker will now be merged to a single liquidity pool

Playtech shares were up almost five per cent today (Thursday) after its iPoker online poker network announced it would be merged to a single liquidity pool.

The network said that the move will increase licensee revenue, player experience and boost the overall performance of B2B poker, reversing the two-tier system that was introduced three years ago. The news came as Morgan Stanley analysts reiterated a 'buy' recommendation, saying "the share price will rise relative to the industry over the next 60 days".

Joerg Nottebaum, head of iPoker at Playtech, said the network's change was being made due to changes delivered since the introduction of the Source-Based Rake (SBR) formula introduced earlier this year.

“Since its introduction in February we’ve been very pleased with the new player valuation formula,” said Nottebaum. “It successfully addresses previous network concerns, opens the door for licensees to grow their poker revenues and invest in poker once again.”

The iPoker network includes card rooms operated by William Hill, Ladbrokes, Paddy Power, Genting and Everest.

The SBR formula changes the way individual player value is calculated, basing it on a player’s net contribution to overall network liquidity rather than looking at how much gross rake and fee a player generates. 

iPoker said this helps ensure losing players are worth more to licensees, while also addressing the drain of players’ balances from a licensee with mostly losing players to another with mainly winning players. This in turn means a portion of revenue generated by winning players is traced back to the losing player and attributed to them, rather than the winning player.

“The network today is far healthier with licensees focusing on generating genuine revenues with their own recreational player base instead of fighting each other on small margins for the biggest winning players,” said Nottebaum.

“This is good news for our licensees and their players who will enjoy the benefits of a larger poker liquidity pool and, as a result, a wider variety and richer choice of poker variants.”

In a promising period for Playtech, which has seen the purchase of Plus500 and a majority stake in TradeFX, the company’s share price is around 18 per cent up on six months ago.
 

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