Playtech and William Hill Reach an Agreement

May 18, 2011 | News Category: Casino Software

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The online gambling software providers, Playtech Limited, are partners with the bookmaker, William Hill PLC. After a somewhat heated dispute, the two companies have managed to reach an amicable resolution regarding a dispute over Playtech's shares in William Hill Online.

In mid-February, there were rumors that Playtech was having talks with Ladbrokes, a rival bookmaker of William Hill PLC. William Hill managed to secure an injunction against Playtech in order to prevent the online gambling software provider from selling their stake in William Hill Online. The injunction prevented either party from making any "significant amendments" to their agreement.

Playtech currently holds 29 percent of William Hill Online's shares. The operating profits of William Hill Online rose significantly in the first quarter of 2011, up by 28 percent when compared to the same quarter last year.

When it seemed as if Playtech were hoping to offload these shares to Ladbrokes, even though there were no actual agreements in place, William Hill took immediate action to prevent this possible transaction from going through. It seemed that there was a disagreement about the interpretation of the shareholder agreement between Playtech and William Hill.

There has been an additional agreement drawn up in which both Playtech and William Hill will apply for the injunction to be discharged. There is a court date set up for next week in which both parties will ask that the injunction be discharged. There is also an exit provision to get out of the current shareholders agreement, which also allows William Hill to have call option rights that the company may exercise in 2013 and in 2015. The changes in the agreement give both companies more flexibility to run their own operations as they see fit, and it also gives room for other commercial opportunities for the two companies.

In a statement from the two parties, it has been noted: "These include increased flexibility for William Hill Online to provide betting services to William Hill's Retail business and the cancellation of the sole restriction regarding Playtech's ability to license its software, which restriction related to a UK land-based gambling operator."

In simple terms, William Hill Online can now provide services to the William Hill retail operations, and Playtech will have less restrictions when wishing to license its software to other online gambling companies. This will give both companies greater scope to enter other commercial opportunities.

It is no surprise that the two gambling companies found a way to reach agreement since the most recent financial reports show that their collaboration has benefited both companies financially.