Hard times for Bodog?

Online media unsubstantiated reports such as Poker News Daily and 911 indicate that this week the Bodog gambling group has let go “hundreds of employees” in what is being interpreted as a precursor to departing the North American market, though this has been denied by company spokesmen.

There are allegations that Bodog has been slow-paying customers in recent months, though this may well be a not uncommon problem associated with processing US payments occasioned by the UIGEA.

The company is known to have been making a determined push into Europe and Asia since at the beginning of 2008, though as far as online poker operations are concerned this isn’t yet reflected in their latest PokerScout rankings that have shown a fall in the average amount of real cash players per week, repositioning the operation at number fourteen below networks like Absolute, Cake and Microgaming.

In 2007, following a bruising legal encounter over patents with First Technology LLC, Bodog lost control of its original domain names in a $48 million default judgement by United States courts. Calvin Ayre, founder and at that time President signed a deal with Morris Mohawk Gaming Group of Kahnawake, Quebec, giving it the rights to use the Bodog brand to serve consumers throughout North America, while international operations remained in Antigua.

Evidently the company then moved most of its operations from Vancouver to Montreal, a short distance from the Kahnawake First Nation enclave where Morris Mohawk is located. According to Poker News Daily’s source inside Bodog, the new regime lost a lot of quality employees who didn’t wish to make the move from Vancouver.

Now it is claimed again on the basis of allegations by an unnamed insider that in the past week, Bodog had laid off close to 250 employees in Canada, from customer service to management, and staffing levels are down to nearly 200 employees, split equally between Vancouver and Montreal. Advertising management has departed following a suspension in the activities of that division.

Playtech received a publicity boost

This week online gambling software and games provider Playtech received a publicity boost from MoneyObserver, which described the London-listed company as a world market leader that has recently graduated from the Alternative Investment Market to the FTSE Mid 250 index.

“The company’s elevation means it will attract attention from the wider investment community, rather than just funds dedicated to a sub-sector of the market. Playtech is a fast-growing, serious business with a big future. Its share price, which has almost doubled from the 2006 flotation price of 257p, reflects this,” the report notes.

MoneyObserver points to an increase over 9 years culminating in a current market capitalisation of GBP 1.2 billion, with profit margins of some 70%.

“Its software supports some of the world’s leading gaming sites, many of which operate from the shade of tax-efficient jurisdictions in minor countries,” the report continues, noting that the company is incorporated in the British Virgin Islands, its head office is in Douglas on the Isle of Man and it has a board of mostly foreign nationals.

MoneyObserves reports that Playtech’s technical centre is in Tallinn, Estonia, where it is the country’s second biggest information technology firm. Despite establishing an IT academy there, Playtech has been hampered by recruitment difficulties from Estonia’s population of just 1.2 million, so the company has just opened development outposts in India, the Philippines and Bulgaria, which, Weizer says, has a similar culture to Estonia and is cost-effective.

Playtech’s list of customers (59 and growing) includes Party Gaming, Paddy Power, BetFred and Victor Chandler, with 33 of the company’s licensees converting to the Playtech platform from other providers.

According to Weizer, Playtech is pleased with the growth and popularity of its poker offering, where he claims that the iPoker network has been growing player liquidity that translates to 25 000 players at peak times, playing with stakes from $0.10 to $100.

Playtech’s CEO discloses that they have a pipeline of many new games, including mahjong. “We expect to have it in operation by the end of this year. The software has taken time to develop to eliminate the possibility of player collusion. The cost to licensees of adding additional games is marginal, and many of our licensees are still underdeveloped in terms of the number of games they offer.”

Also the company is developing person-to-person games, mainly for the Asian market where people play cafe games for prizes and small amounts of cash. It is also expanding its land-based video betting game.

JPMorgan predicts Playtech revenues will grow from last year’s $104 million to $271 million by 2010.