Following Playtech’s H1 earnings call, you’d have been forgiven if the analysts dialling in had confused the supplier for Hard Rock Digital (HRD). The number of questions asked about the US sports betting and igaming operator, owned by the Seminole Tribe, was significant. That is mainly because Playtech divulged its original $85m investment in return for a “low-single-digit” stake in the business is now worth more than $280m (£207m). Playtech played a key role as HRD launched Games powered by Past Motor Racing (PMR) this year, effectively a workaround to offer slots-style products but based on motorsports results rather than RNG.
The H1 earnings beat analyst expectations, with revenue, EBITDA and pre-tax profit all on the up. The looming headwinds of UK tax (both for B2B and the Sun Bingo B2C brand) and negative sentiment in Brazil did not detract from the pair’s confidence. Playtech is also moving into the AI virtual hosts space for its live casino product, a sector that has seen smaller suppliers such as Sentient Studios steal a march. CEO Mor Weizer and CFO Chris McGinnis speak to EGR to reflect on the first six months of the year and handling the challenges ahead.
EGR: Looking at Hard Rock Digital, that initial $85m investment is now worth around $280m. What makes the brand such a growth engine?
Chris McGinnis (CMG): It’s an amazing business. If you remember, when we invested the $85m into that business in 2023 Hard Rock Bet was operating just in New Jersey in the US, and they weren’t operating anywhere else. Since then, they’ve launched sports betting in Florida and then, with Playtech, they launched Games powered by PMR in Florida. They’re the leading brand in Florida and have had amazing success both with sports betting and now with the PMR product.
Hard Rock Bet have been able to leverage that and invest into other states, like launching in Michigan, where I think in their first month they took several percentage points of the market. That Hard Rock brand is incredibly strong and, combined with Playtech supporting in certain areas with the product, they’ve just been incredibly successful. And obviously we’re very pleased with that investment.
EGR: Hypothetically, if the stake is 2%, that would give HRD an enterprise value of around $14bn. That’s more than DraftKings’ market cap. This is no small fish.
CMG: Hard Rock are a private company, so we can’t say very much. But I think your assumption sounds reasonable to me.
EGR: On Games powered by PMR, the report noted some normalisation is expected in H2. Is this hype, or is the product sustainable?
CMG: I think it is absolutely a sustainable product, without question. What they are going to do is introduce other providers of the product alongside Playtech [IGT went live at the end of August, for example]. There will be a period of normalisation, so to speak. But once it’s rebased, to be clear, we see that product as a growth vertical for both Playtech and Hard Rock Digital. There just may be a period of a few months where it rebases to a more normalised and sustainable level.
EGR: In the UK, the remote gaming duty increase led to an 8% dip in B2B revenue. Do you expect this to ramp and lap more negatively in H2 and 2027?
CMG: There will be more impact in H2. We had three months from April to June, and in H2 you’ll have a full six months, so there will be more impact. That is temporary, right? We’ll get nine months of it this year, and then 2027 will be the first year where it impacts the full year. But it is temporary.
When you look past those numbers, if you look at gross gaming revenue (GGR), through Playtech in the UK, it is actually showing really solid growth. I still think it remains a healthy market. We have to absorb this headwind, as does the rest of the industry. The underlying trends are still positive, and the UK still remains an attractive market.
EGR: On the earnings call, Chris said any hike in machine games duty would be “immaterial” to Playtech. Despite that, Mor, what does the potential for the increase say about the UK government’s approach to the sector?
Mor Weizer (MW): I think it’s a government that basically wants to collect more taxes. It’s not our role to comment on that. I will tell you, Playtech is a very diverse business. We have a large presence outside the UK, however the UK is extremely important for us. It’s not the first time [tax hikes] have happened. The same happened when the first level of taxes of 15% was introduced [in 2007] and then when the 21% rate was introduced [in 2019].
The UK remains a very important market for us. A lot of the tier-one operators we work with, whether it is Flutter, bet365 or Entain, are long-term partners of ours, both in the UK and elsewhere. We remain committed both to the UK and the tier-one operators we operate together with in the UK. The experience we have is that soon after a new level of tax was introduced, or when a tax is being introduced, the small and mid-sized operators either reduce their marketing to minimal levels or completely leave the market, which leaves their customers to be picked up and acquired by the tier-one operators.
After the numbers were rebased, we started seeing positive change and an increase in GGR, and this only encourages us to continue investing into the UK market. Like I said, it is and will continue to be a key and important market for Playtech.
EGR: Sun Bingo is facing a more direct impact from the tax hike, with the report stating it would a “material deterioration of the long-term profitability outlook” for the brand as a result. Does that mean eventually shutting up shop?
MW: We are looking at mitigation factors. Sun Bingo is a fantastic brand, and we definitely believe it belongs in the UK market. While we have and will implement certain plans and adapt to the changing regulations and the new taxes, it is still one of the most popular bingo brands across the UK. We remain committed to both the partnership and the business in the UK market.
EGR: The regulated Brazilian market went live on 1 January 2025. Did you expect this wave of anti-sector sentiment so soon after regulation?
MW: You wouldn’t expect something like that to happen. But then, when you think about the run up to an election year [Brazil’s general election is on 4 October], you can’t really be surprised. Politicians have a view over gaming and an opinion, and the fact it was made public, given the election year, is maybe not as surprising as you would have thought originally.
If it wasn’t an election year, I would have been more surprised. But in light of the fact the market only just regulated in the beginning of 2025, and sometime in late 2025 people already started their preparations for the 2026 elections, comments have been made. We do expect the regulations to become stricter over time but, all in all, we still see a huge opportunity in Brazil. We have certain conversations underway that are significant for us and we believe will become a significant contributor to our results going forward from 2027. We are fully committed to the Brazilian market.
EGR: There was a 12% growth in live casino, albeit from a lower base. Playtech also rolled out AI virtual hosts. How do you see that product type progressing and what does it deliver?
MW: What it delivers is the ability to use certain very advanced AI tools in order to create a more entertaining and engaging product, but at the same time a very responsible solution for the operators. We believe it will allow us to localise better, to provide bespoke solutions better and provide more innovative and more sophisticated solutions to the operators. And all of that in a very safe and sustainable environment.
EGR: Have you got an estimate for the eventual split between virtual hosts and real-life dealers?
MW: I think it’s too early to suggest what the number could be or what it may look like in the future. However, 15 years ago, if you told someone they would use their credit card on a website they were not familiar with, they would have called you crazy. Some businesses were built based on that. Fifteen years later, basically everyone uses their credit cards to pay online.
I think AI solutions will become part of our day-to-day. People will get used to that, and therefore I see a lot of opportunities for Playtech. Given the level of data Playtech has, we are in a fantastic position to provide very sophisticated, advanced and innovative solutions going forward for the benefit of the end user and operators alike.
The post Q&A: Playtech CEO and CFO on HRD’s “amazing success”, AI hosts and handling UK tax pressures first appeared on EGR Intel.
Mor Weizer and Chris McGinnis sit down with EGR post-H1 earnings to discuss the supplier’s stake in Floridian monopoly operator and why Sun Bingo “belongs” in the UK
The post Q&A: Playtech CEO and CFO on HRD’s “amazing success”, AI hosts and handling UK tax pressures first appeared on EGR Intel.