The London-listed mobile gambling firm Probability plc furthered its plans for an Italian presence when restrictions are lifted on mobile cash games Thursday with its announcement that it is to buy Playyoo for GBP 1.8 million.
The agreement comes just weeks after the Italian regulator AAMS confirmed that it is to lift its restrictions on mobile cash games in December 2012.
Probability CEO Charles Cohen said: “This acquisition gives us immediate access to the Italian gambling market, early revenues, and the opportunity to grow rapidly as the market opens up to slots later this year.”
Lugano, Switzerland-based Playyoo has developed a business-to-business mobile gambling and sports betting platform that it already supplies to several of the largest companies in the Italian mobile gaming market including SNAI, Cogetech and NeoMobile.
Cohen believes Italy is one of the most attractive markets in Europe outside of the UK, with market research suggesting it will rapidly become a multi-billion euro industry. The country has a very high penetration of smartphones with 21 million users compared to 25 million in the UK.
Cohen says that Italian gamblers appear to prefer slots and gaming products to sports betting. “Slot machines, for example, collected Euro 44.8 billion in Italy in 2011, 56 percent of the entire Italian gambling market,” he observed.
Playyoo’s games are available on both Android and iOS devices, while several of their games, including Blackjack, have been accepted into the Apple App Store in Italy with a number more still in the approval process, Cohen revealed.
“Buying Playyoo fast-tracks us into this market with a proven technology which already meets the stringent requirements of the Italian regulatory system, a great team of people and established customer relationships with major operators.” Cohen added.
Playyoo’s founder Rocco Pellegrinelli will join Probability’s board as a non-executive director.
The acquisition consideration of GBP 1.8 million will be met through the issue of about 2.4 million new Probability shares. A further 1.7 million shares could be issued depending on performance.
Playyoo reported an underlying loss of SFr 184,000 (GBP 127,000) in 2011, but Probability said it has just started to generate meaningful revenues with its first game only launched in January.
“Based upon the strength of contracts already signed, the pipeline of new products and the potential of additional revenues from slots games after December 2012, the company expects the acquisition to be earnings accretive in the next full financial year,” he said.
Independent analysts said that the deal represented a “relatively low-risk” and is transformational for Probability, which is positioning itself to be a leader in the Italian mobile casino market.