Major U.S. deal for Playtech

Major U.S. deal for Playtech

January 22, 2010.

Online gambling software developer Playtech Casinos plc saw its shares soar 11 percent as news broke today (Wednesday) of a series of important strategic partnerships with New York-based and Nasdaq-listed Scientific Games Corporation to jointly develop and market next-generation Internet and land-based gaming products and services to regulated gaming operators in the US and other countries.

These partnerships combine Playtech's B2B gaming software and portfolio of products with Scientific Games' proven ability to provide added value, turnkey solutions to government-sponsored (B2G) gaming operators in regulated and soon-to-be-regulated jurisdictions.

The agreements comprise:

1. An exclusive Joint Venture focused on the B2G online gaming market on a global basis, called 'Sciplay' that will combine Playtech's technology capabilities with Scientific Games' global infrastructure and experience which includes:

Decades of experience and strong relationships with US state lotteries
Longstanding presence in many different international countries worldwide
Global infrastructure and pre-eminent reputation for delivery of services in complex regulated jurisdictions

2. Exclusive agreements for Playtech's Videobet to develop gaming terminal software for Scientific Games and its subsidiary The Global Draw, including:

Upgrading of existing 13 500 FOBT terminals in the UK to the Videobet platform
Joint marketing opportunities in UK and overseas for VLT and FOBT terminals
Development of next generation regulatory reporting and management systems for gaming terminals

Through these agreements Videobet will become the leading technology supplier to the UK sector and achieve critical mass.

Mor Weizer, CEO of Playtech and Mike Chambrello, CEO of Scientific Games issued a joint statement saying:

"This is an important step for both companies. We have highly complementary skill-sets allied with a global reach and this partnership provides the opportunity to leverage off this combined know-how to maximum effect. This is an ideal partnership in many ways. Customers will benefit from best of breed content, sophisticated player management systems, and long-standing industry experience in providing highly secure, regulated, compliance-oriented services.

"The related gaming terminal partnership brings the potential for operators to enjoy a technology platform that is seamless, integrated and adaptable both to multiple delivery channels and cross-promotional opportunities."

Further details on the partnerships were set out by Playtech spokesmen:

Sciplay Joint Venture

Scientific Games and Playtech have entered into a 50:50 joint venture to deliver the latest state-of the art online technology to government-sponsored and government-regulated lottery operators, including US state lotteries consistent with applicable regulations, under the brand name, Sciplay.

The joint venture will combine Playtech's B2B internet gaming software and content with Scientific Games' nearly 40 years of B2G expertise in creating fully compliant, revenue-generating, responsible gaming solutions for government gaming entities. The combination will enable Sciplay to offer customers a comprehensive range of gaming content and gaming solutions, consistent with the various regulatory regimes that may apply.

Sciplay will have globally exclusive rights to Playtech's internet technology for these customers.

The alliance will deliver to customers:

* A complete suite of internet games including instant games, casino, poker, bingo, sports and skill games on a single platform with a leading player management system;

* Proven marketing, advertising, promotional, operational and customer support services;

* A range of support services including hosting, payment processing, content management, customer relationship marketing and affiliate management; and

* Comprehensive compliance and responsible gaming safeguards.

Playtech and Scientific Games have agreed to appoint Richard M. Weil as managing director of Sciplay. He formerly served as president of Fun Technologies (a leader in the internet games business), prior to which he served as VP of International Sales for Scientific Games.

Gaming Terminals and Systems Partnership

Scientific Games and Playtech have also agreed to a strategic partnership relating to both fixed odds betting (FOBT) and video lottery (VLT) gaming terminals and systems development.

Scientific Games is a world leader in gaming terminals and systems for wide area, government-regulated and government-sponsored gaming environments. The Company, through its wholly owned subsidiaries, The Global Draw and Games Media, currently operates approximately 18 000 server-based gaming machines throughout the world. Moreover, Scientific Games has deep expertise in developing gaming terminals and systems for ensuring compliance with government requirements.

Through its Videobet subsidiary, Playtech has successfully pioneered the adoption of internet based technology to land-based venues and provides operators with access to Playtech's market-leading products and content. The technology also provides operators with a highly cost effective way of delivering gaming content to land-based venues, while providing proven venue management capabilities. This strategic partnership provides Scientific Games with exclusive access to the Videobet technology for its gaming terminal business in North America, the United Kingdom and other key jurisdictions, and non-exclusive access in the rest of the world.

As part of the new partnership, Playtech will also lead the development of Scientific Games' next generation terminal management systems technology, delivering a strong competitive advantage. These will offer comprehensive gaming systems that provide governments and commercial operators significantly greater functionality at lower cost, while meeting emerging industry standards and protocols. Capabilities that were once confined to standalone systems will be merged into a single platform, both enhancing functionality and reducing cost for the operator.

Gaming operators and their players will enjoy a new level of flexibility and convenience by providing them with a technology platform that is seamless, integrated and adaptable to multiple delivery channels. Where permitted by law, operators will have the ability to integrate their instant ticket, traditional lottery, internet, and bricks-and-mortar systems, which allows for better player tracking and cross-promotional opportunities across all platforms.

The strategic partnerships should generate significant long term shareholder value and enhanced growth prospects for Scientific Games and Playtech. This partnership is expected to be relatively neutral to Scientific Games' 2010 earnings and modestly accretive to Playtech's 2010 earnings. Both companies are expecting the partnerships to be accretive thereafter.

Mor Weizer, CEO of Playtech Casinos, commented:

"This is a strategically significant alliance for Playtech which enables us to focus on what we do best: developing cutting edge technology platforms and exciting games content. Scientific Games is the ideal partner for us with nearly 40 years of experience in over 60 countries from the US to Europe and China, working with state lotteries and regulators."

"This partnership is another example of our focus on regulated markets, where governments will play major roles as both regulators and operators. Playtech and Scientific Games bring unrivalled expertise and experience to benefit both customers and shareholders."

"This is also a transformational development for Videobet, which brings critical mass to the business; and validates our belief in server-based gaming offering the full product suite. We now have a unique cross-platform capability which no other B2B provider can offer; and a partnership committed to taking the game to the next level."

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