Why did Playtech sell TopOption?

BinaryOptionsNow | Published on August 3, 2017 at 2:45 pm

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Throughout the history, Playtech had little to do with the world of trading and finance. As we know, Playtech is an established casino software company and when Playtech moved into finance, their first purchase was that of TradeFX, which is the parent company of the popular Forex broker Markets.com. It was a shift by a gaming and gambling company, but Playtech needed to diversify following tougher regulations in the gambling industry.

Under TradeFX includes TopOption, which is a binary options broker, adding to Playtech’s diversification into finance. Both TopOption, Markets.com and other financial market brokers operate under Safecap Investments Limited, which is registered and regulated by CySEC. Thus, by extension, both TopOption and Markets.com are also registered and regulated by CySEC.

Then in 2016 on the 7th of August, Playtech sold TopOption to Leadtrade Ltd. which is an Israeli based company although registered and regulated by CySEC. Today, the TopOption website and the company itself are inactive, and the website shows a popup that the company is no longer in operation as of the 1st of May this year. The exact details of the deal are unknown, but it seems there wasn’t a lot of money involved, which showed that Playtech was eager to sell TopOption, and that Leadtrade was happy to take advantage.

There are several reasons why Playtech decided to sell TopOption:

A general restructuring of Playtech’s financial division

For the final quarter of 2015, profits had declined by 21% compared to the third quarter which showed that the companies under its financial division had not performed well. At the same time, there was some internal restructuring going on which saw many employees being fired.

These included employees in the sales, retention and customer service sectors who were earning commissions. Instead, the company wanted to focus on those employees who earned a salary. Externally, Playtech’s financial division was looking to move away from the use of business introducers for selling their products and instead go for direct activity.

All these changes within the company show that the company was undergoing a lot of restructuring so as to streamline their services. In the process, it is evident TopOption may have been seen as a liability because of dwindling profits, and had to go. This is one of the reasons TopOption may have been sold off.

Playtech sells TopOption

Regulatory changes in Europe

2016 was a year when the binary options industry came under fire from many of the region’s financial regulators. These regulators had been receiving numerous complaints about how binary options brokers had swindled people off their money, and the regulators were going to impose tougher laws on the industry.

Some of the regulators have even threatened to put a total ban on binary options, with some countries already prohibiting the practice. In light of this, you can see how a company like Playtech would want to get out of a seemingly dying industry sooner rather than later when things got worse.

Bad publicity

TopOption itself got a lot of bad reviews on various online broker review websites, which I suppose, Playtech saw as a liability. A quick check through some of the most popular online Forex and binary options review websites will show you just how much negative press TopOption was getting. This is, of course, bad for business because it keeps new clients from signing up while pushing away active customers.

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