Over four years ago, when the US market was closed to online gaming companies, Congress decided that poker was a game of chance rather than a game of skill and experience. Many people disagreed.
Poker, like it not, combines skill with chance, possibly in equal shares. If you extrapolate poker to Playtech Cyprus Ltd. (AIM:PTEC), it is possible to conclude that success in poker is, in fact, mostly based on skill: the skill to spot future trends before they play out, the talent to successfully combine organic growth with mergers and acquisitions, and the ability to integrate online and offline businesses - all of which the company displays.
This skill belongs to Playtech controlling shareholder Teddy Sagi, the spirit behind the company. He has no management role in the company, and is not even a director, but he is the man who pulls the strings, and without his consent, nothing happens there.
Sagi turned Playtech into a global gaming software platform giant. Even during the industry's hard times, it retreated less than its rivals. It's current share price of ₤4.09, gives a 60% return on the IPO price Most of its competitors are currently traded at below their IPO prices, and below their values when the US market was closed to them.
Playtech's success is based on its acknowledgement that collaboration with bookmaker William Hill plc (LSE: WMH) was essential to its future. Playtech realized that it lacked the wherewithal to develop everything by itself, and that it needed to acquire other companies.
In both cases, Playtech did not hesitate, did not wait for better times, did not mull, and acted in a way that so far has been shown to be correct.
Published by Globes [online], Israel business news - www.globes-online.com - on January 25, 2011
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