Genting Deal Could Generate $5 Million for Playtech, Brokerage Says (Update 1)

Playtech Ltd., the London-listed software developer, has signed a licensing agreement with Genting Stanley Alderney Ltd., a deal one brokerage says could generate $2 million to $5 million in revenue for Playtech by the 2009 fiscal year.

Under the agreement, Playtech will provide Genting Stanley, a subsidiary of Genting International, with its software platform.

On Friday, Genting Stanley confirmed it would launch its Circus Casino brand online, a real-money poker and casino offering targeting residents of the United Kingdom. The company also intends to offer a suite of play-for-fun games to customers worldwide.

Genting Stanley was awarded licensure by the Alderney Gambling Control Commission in March 2008, after Genting International in January received approval from Singapore Exchange Ltd. to apply for the license.

In a stock exchange release Friday, Playtech did not offer details regarding how revenue would be split.

"At this stage, we are not changing our forecasts but we think that if successful it could contribute revenue of c$2m-$5m by FY2009 and therefore we believe the risk to forecasts remain on the upside," Wyn Ellis and Richard Carter, analysts with Numis Securities in London, wrote in a research note on Friday.

For reference, Playtech generated $103.6 million in total revenue across fiscal 2007. On $103.6 million, $2 million to $5 million, from Genting Stanley, would represent between 2 percent and 5 percent of total revenue.

Meanwhile, the company did not specify whether Genting Stanley was the unnamed licensee -- an "Asia-facing online gaming operator" -- from a stock exchange release dated Nov. 23, 2007.

Helen Tarbert, a spokeswoman for Playtech with Bell Pottinger Group in London, confirmed Tuesday morning, however, that Genting Stanley was not the licensee named in the November announcement.

Playtech, with a market capitalization of £1.3 billion, was up 5.50 pence, or 1 percent, to 547.50 pence.

Following Playtech's June 17 share placing, which raised £112 million for acquisitions, Mr. Ellis and Mr. Carter raised the company's target price to 640 pence from 561 pence.