Playtech plc Annual Report and Financial Statements 2023

Sustainability priorities

Our strategic roadmap

Our purpose

To create technology that changes the way

people experience gambling entertainment

Our strategy

B2B: B2C:

Be the partner

of choice for

newly regulating

markets

Capitalise on

Live and SaaS

opportunities

Realign

resources to

reflect B2B

growth areas

Read more about our strategy on pages 10 and 11

Leverage retail

presence to

grow Snaitech’s

online business

Optimise

HAPPYBET

for online

Targeted M&A

to expand

Snaitech

1 2 3 4 5 6

Read more about our sustainability strategy on pages 48 to 87

Pioneering safer

gambling solutions

Promoting integrity and

an inclusive work culture

Partnering on shared

societal challenges

Powering action for positive

environmental impact

You will ﬁnd the icon above throughout this report

to highlight Sustainable Success content

Our critical success factors

Scale and

distribution

Data

Sustainable

Success

Innovation

Read more about our strengths on page 30

HEX: 058e46 - RGB: 5.142.70 - CMYK: 87.19.100.6

Founded in 1999, the Company has a premium listing on the

Main Market of the London Stock Exchange and is focused

on regulated and regulating markets across its B2B and B2C

businesses. Both divisions leverage Playtech’s proprietary

technology to deliver innovative products and services

to ensure a safe, engaging and entertaining betting and

gaming experience.

Strategic Report

2 Financial highlights

3 Operational highlights

4 Company overview

6 Chairman’s statement

8 Our investment case

10 Our strategy

12 Key performance indicators

14 Chief Executive Officer’s review

20 Market trends

28 Business model

32 Product and innovation

44 Stakeholder engagement

48 Responsible business and sustainability

88 Chief Financial Officer’s review

95 Risk management, principal risks

anduncertainties

101 Viability statement

Governance Report

104 Chairman’s introduction to governance

106 Governance at a glance

108 Board of Directors

110 Directors’ governance report

124 Audit Committee report

Remuneration report

129 Statement by the Committee Chair

131 Directors’ RemunerationPolicy

136 Annual report on remuneration

146 Directors’ report

Financial Statements

153 Independent auditor’s report

161 Consolidated statement of

comprehensiveincome

162 Consolidated statement of changes

inequity

163 Consolidated balance sheet

165 Consolidated statement of cash flows

167 Notes to the financial statements

236 Company statement of changes

inequity

237 Company balance sheet

238 Notes to the Company financial

statements

246 Five-year summary

Company Information

247 Company information

Playtech is the leading platform, content

and services provider in the online

gambling industry, with a clear strategy

to benefit our shareholders, customers,

colleagues and the environment.

View the Digital Summary Report at

www.ar23.playtech.com

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Contents

Financial highlights

2023 saw a strong

financial performance

1 From continuing operations.

2 B2B and B2C only.

3 Continuing operations but includes Finalto in FY 2019

and FY 2020. Adjusted for Snaitech’s PREU tax payment

of €90 million relating to 2020, which was paid in 2021

due to circumstances around COVID-19. Definition has

changed from FY 2021 to adjust for changes in jackpot

balances, security deposits and client funds, professional

fees and ADM security deposit.

4 Net debt/Adjusted EBITDA is calculated as gross debt

less Adjusted gross cash including cash held for sale

and excluding cash held on behalf of clients, progressive

jackpots and security deposits divided by Adjusted

EBITDA from continuing and discontinued operations.

5 Adjusted EBITDA for prior years is restated to reflect

Snaitech bank charges being recognised within EBITDA

from FY 2023. Previously, they were recognised within

finance expenses.

Revenue

€’m

2023

2022

2021

2020

2019

1,707

1,602

1,205

1,079

1,441

Revenue from regulatedmarkets

2023

2022

2021

2020

2019

Adjusted EBITDA

1,5

€’m

2023

2022

2021

2020

2019

432

395

308

248

372

Diluted Adjusted EPS

2023

2022

2021

2020

2019

50.2

51.5

40.9

8.8

44.6

Net debt to EBITDA

2023

2022

2021

2020

2019

0.7

0.6

1.9

1.7

1.6

Adjusted operating cash flow

€’m

2023

2022

2021

2020

2019

383

397

318

276

303

A strong performance

in 2023, driven by

both the B2B and B2C

divisions, with a resilient

balance sheet.“

Chris McGinnis

Chief Financial Officer

Group revenue growth

Group Adjusted EBITDA

€432m

B2B Adjusted EBITDA growth

14%

Net debt to EBITDA

0.7x

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Operational highlights

Good progress made

against strategic priorities

B2B – strengthening across key markets

US continues to

gain traction

2023 was a year where significant progress

was made on executing the US strategy.

Wesigned a landmark agreement with

Hard Rock Digital in early 2023, including

an $85million equity investment. We also

launched with several operators in multiple

states, and are now licensed in 11 states with

further applications progressing.

Capitalising

on Live

Live continued to see healthy revenue

growth with regulated markets up 24% in

2023 versus 2022. Investment remains a

priority with the launch of our third US studio

in Pennsylvania, while we have opened a

second studio in Lima. Innovative content

continues to be rolled out, with the launch of

Jumanji™ The Bonus Level Live and Big Bad

Wolf Live.

Structured agreements

drive LatAm growth

During 2023, we witnessed an excellent

performance from Wplay in Colombia and

encouraging progress from Galerabet in

the exciting Brazil market, and continued

to benefit from our highly successful

partnership with Caliplay in Mexico.

B2C – delivering across both retail and online

Preserving brand

leadership

Snai’s brand equity plays a crucial role in

driving growth, particularly in the context of

the advertising ban in the Italian market. In

2023, the Snai brand was ranked number

one in sports betting (retail and online

combined, as measured by gross gaming

revenue (GGR)), which is a testament to its

consistently strong operational performance

and unique brand identity.

Retail betting business

showing strength

Driven by pent-up demand in Italy post

the World Cup, the retail betting division

delivered a record performance, c.20%

above the pre-pandemic levels achieved in

2019. This illustrates the strength of the Snai

brand, and increases the addressable pool of

customers to transition to online.

Bolt-on acquisition;

strong M&A pipeline

In March 2023, Snaitech acquired Giove

Group, a well-established betting operator

in the Puglia region (southern Italy). Giove

holdslicences for both retail betting and

online and directly manages 18 betting

shops. The acquisition, while small,

illustratesthe appetite to grow the Snaitech

business in Italy.

Championing sustainability across the Company

Pioneering

safer gambling

solutions

Playtech has enhanced its leading Player

Account Management+ (PAM+) offerings

through the development of personalised

responsible gambling tools for individual

players. These tools are capable of adapting

to the players’ risk level, which is calculated

by Playtech’s cutting-edge analytics

tool BetBuddy.

Paving

the road to

net zero

As Playtech sets in motion its net zero plan,

the Company has approved a near-term

science-based emissions reduction target

of 50.4% in its Scope 1, 2 and 3 emissions by

2032, and a net-zero science-based target

by 2040 with the Science-based Target

initiative (SBTi).

Providing support

to colleagues facing

hardship

Playtech launched its Global Benevolent

Fund, an initiative to provide financial

support to colleagues and their immediate

families who may encounter unforeseen,

severe, life-changing challenges such as

medical emergencies, severe illness, and

financialhardship.

Strategic Report

3Playtech plc Annual Report and Financial Statements 2023

Company overview

The leading platform,

content and services

gambling technology

company

>40

Regulated jurisdictions

>18 0

Licensees

Countries

with offices

>7,700

Colleagues

Country

A global company

Playtech was established at the inception of

the online gambling industry and possesses

unparalleled knowledge and expertise in

the sector, with over 20 years of experience

and investment in technology. Playtech’s

global scale and distribution capabilities,

with over 180 licensees operating in over

40 regulated markets and with offices in 19

countries, mean we are ideally positioned

to capture opportunities in newly regulating

markets and hmarkets and high-growth markets with low

online penetration.

Core competencies

Scale and distribution

Playtech’s scale and distribution network

in both retail and online allows it to power

its leading suite of platform, content

and services.

Read more on page 29

Snaitech is a fundamentally higher

quality business since acquisition

€684m

Revenue

€182m

Adjusted EBITDA

27%

Adjusted EBITDA margin

An increasingly more

sustainable division

44%

% of regulated B2B

revenues (2017)

80%

% of regulated B2B

revenues (2023)

€1,037m

Revenue

€250m

Adjusted EBITDA

24%

Adjusted EBITDA margin

Regulated B2B revenues Unregulated B2B revenues Snaitech % of online revenues Snaitech % of retail revenues

18%

Snaitech EBITDA

margin(2018)

27%

Snaitech EBITDA

margin(2023)

2023

2018

20232017

80%

44%

27%

91%

20%

56%

73%

Strategic Report

5Playtech plc Annual Report and Financial Statements 2023

Another year of strong strategic

and operational progress

Introduction

I am pleased to be writing to you after another

successful year for Playtech. The Company

has built on the strong strategic and

operational progress of recent years, and

continues to cement its leadership across

both B2B and B2C.

I would like to take this opportunity to thank the

Executive Management team, which continues

to demonstrate its agility and resilience in

navigating a challenging external backdrop,

given the ongoing wars in Ukraine and the

Middle East. I would also like to highlight our

professional and hardworking colleagues

around the world, who remain committed to

supporting all our customers and growing our

business. Finally, I would like to acknowledge

the support of the Non-executive Directors,

who have worked tirelessly in supporting the

Group’s strategy and ambitions.

2023 in review

While there were many challenges in 2023,

the consistent quality at the core of our

business meant that we were able to upgrade

our expectations during the year and deliver

a strong financial performance. This result

was underpinned by good contributions

from both the B2B and B2C businesses, and

ensures we are firmly on track to meet our

medium-term Adjusted EBITDA targets.

B2B

Our B2B performance was powered by

ourcontinued strength in regulated and

soon-to-be-regulated markets:

• We have laid the groundwork for future

growth in the US: we signed a landmark

strategic partnership with Hard Rock

Digital, have three US Live Casino facilities

operational and are now licensed in

11US states.

• In Latin America, we further cemented

our leadership position with Caliplay

in Mexico, as well as our position with

Galerabet in Brazil. We are currently

working to resolve a disagreement with

Caliplay, the online casino and sports

betting arm of Caliente. Caliplay remains

a highly important customer for Playtech

and we are committed to continuing to

maintain an open dialogue with Caliplay to

discuss a path forward.

• Live Casino remains an attractive product

vertical and we are continuing to invest in

both physical infrastructure and content to

capitalise on this exciting opportunity.

We have a clear and proven

strategy across both B2B

and B2C, underpinned

by outstanding products

and extremely talented

colleagues in some

of the most exciting

and fastest growing

markets worldwide.”

Brian Mattingley

Chairman

Chairman’s statement

B2C

Our B2C operations continue to go from

strength to strength, with Snaitech extending

its reputation for excellent performance

across both retail and online:

• The management team at Snaitech

continues to deliver superb results,

underlined by the Snai brand maintaining

its number one market share position

across Italian sports betting brands for

retail and online combined.

• The retail betting division delivered a

record performance, with revenues c.20%

above the pre-pandemic levels achieved

in 2019, illustrating the strength of the

Snai brand. Online continues to perform

well, benefiting from the brand awareness

provided by the retail business.

• We remain very optimistic about the

prospects for B2C, and are actively

looking to accelerate the division’s growth

through targeted M&A and by optimising

HAPPYBET’s online offering.

Corporate activity

Hard Rock Digital

As announced in March 2023, Playtech

signed a landmark strategic agreement with

Hard Rock Digital, the interactive gaming

and sports betting division of Hard Rock

International. Partnering with such an iconic

brand with a proven management team will

significantly strengthen Playtech’s position

in North America and is very much in line

with the Group’s B2B strategy. As part of

the agreement, Playtech has also invested

$85million in exchange for a minority stake

inHard Rock Digital.

The momentum across our business and

the Group’s healthy balance sheet have

meant that we have been able to be active in

reviewing potential acquisition opportunities

during 2023, and submitted offers for assets in

the B2C segment and for bolt-on acquisitions

within B2B. We expect to continue to be open

to any opportunities in the coming year, but

will also remain very disciplined on price and

inassessing the potential for acquisitions to

add value for ourshareholders.

Refinancing

The refinancing at the end of June 2023

strengthened our balance sheet, giving us

the flexibility to invest in our business as well

as pursue inorganic opportunities. The new

€300 million bond enabled us to redeem

all of the outstanding notes due in 2023

and to repay outstanding debt under the

existing revolving credit facility, which is now

wholly undrawn.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

People and culture – Global Benevolent Fund

At Playtech, we strive to achieve shared

values and celebrate success along the

way, by empowering Playtech colleagues

to be a force for good in the world. Our

approach aims to help our people work

together to maximise our collective positive

impact on players, local communities and

the environment.

We continually review ways in which we

can support the health and wellbeing of

our people, in good times and bad. In 2023,

Playtech launched its Global Benevolent

Fund, an initiative to provide financial

support to colleagues and their immediate

families who may encounter unforeseen,

severe, life-changing challenges.

Since its inception in late 2023, the Fund

has already supported colleagues in

need, covering hardships such as losing a

family member, long-term injuries and life-

changing illnesses.

Board changes

At the start of the year, we welcomed Samy

Reeb to the Board as a new independent

Non-executive Director, bringing his

extensive experience of working with

global businesses across wealth and tax

advisory. We are already benefiting from the

additional depth he brings to the Board and

will continue to draw on his expertise in the

years to come.

A big priority of mine has been to improve

the diversity of the Board, and the

appointment of Ruby Yam as an independent

Non-executive Director in June 2023

moved us in the right direction. While it was

unfortunate that she stepped down the

following month for personal reasons, we

continue to be actively focused on achieving

our ambition of having a more diverse Board.

We said goodbye to John Krumins following

our interim results in September 2023. John’s

contribution was invaluable during a period of

significant change for the Company. We wish

him all the best for the future.

Over the year, we have also made changes

to the composition of the Board Committees

to ensure that we are making the most of

the skills available to us. Further information

can be found on page 117 in the Governance

section of this report.

Sustainability

Our performance in 2023 was underpinned

by our sustainability strategy, which is central

to how we operate and serve our customers.

As an organisation, we are committed to

using technology to advance safer gambling.

I am really pleased with the positive steps

we have taken in this area, including bringing

BetBuddy – our player protection tool – to

more brands in more geographies.

2023 also saw Playtech receive recognition

for our efforts to reduce our carbon footprint

against our targets and an improvement

in gender diversity within our leadership

ranks. These are both areas I personally

feel very strongly about, and we will not be

complacent but will continue to invest time

and resources in marching towards the

targets that we have set ourselves.

Israel and Ukraine

As has unfortunately become necessary

in recent years, we have to remain mindful

of geopolitical tensions around the world.

It can be easy for some to forget that the

war in Ukraine rages on, but it remains front

of mind for all of us at Playtech given the

number of employees we have there. As has

been the case since the start of the war, our

colleagues continue to go above and beyond

in providing support to those who remain on

the ground in Ukraine.

We are also deeply saddened by the

devastation and death toll caused by the

ongoing Israel-Hamas war. Following the

initial terrorist attack on 7 October 2023,

our priority was to ensure the safety of our

colleagues in the region and ensure they

had whatever was needed to support them

and their families. It goes without saying that,

as an organisation, we strongly oppose all

forms of hate and we hope for a resolution

in the near future. Until then, we will continue

to offer assistance to the communities we

operate in wherever possible.

Another exciting year ahead

We remain as confident as ever in the

opportunity ahead of us for our business

and the industry we operate in. We have a

clear and proven strategy across both B2B

and B2C, driven by outstanding colleagues

in some of the most exciting and fastest

growing markets worldwide. We are well on

track to meet our medium-term expectations,

and look forward to continuing to deliver

strong returns for all of our stakeholders.

Thank you for your continued support

ofPlaytech.

Brian Mattingley

Chairman

26 March 2024

7Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Our investment case

Structural growth drivers

with margin expansion

With an increasingly diversified global offering, Playtech is

primedto accelerate organic sales growth across both the

B2Band B2C divisions.

Global regulated gambling markets, led by the Americas and

Europe, are expected to grow materially. Playtech is well

positioned to participate given its broad, high-quality product

offering, while structured agreements and SaaS allow Playtech to

serve almost any operator across the globe. In our B2B business,

high operating leverage within the attractive Live and SaaS

segments should provide a further tailwind to margins.

Snaitech, our B2C business in Italy, has become a fundamentally

higher quality business since the acquisition, accelerated by the

pandemic, due to the structural shift towards the underpenetrated,

higher margin online business and this is expected to continue to

deliver strong growth.

Playtech has the potential to deliver a powerful combination of

top-line growth and margin expansion, which is expected to drive

earnings momentum and high cash flow generation for the Group.

As a result, further investments can be made to position ourselves

advantageously in other newly regulating markets as well as

delivering shareholder returns.

Strategic Report

8 Playtech plc Annual Report and Financial Statements 2023

Attractive structural growth drivers in B2B

The gambling market is in the midst of a super-cycle (see page 20),

driven by the expansion of regulated and regulating markets, with

the Americas and Europe leading the way.

At the same time, rapidly shifting consumer and technology trends

have grown the appeal of the Live segment.

Playtech is well placed to capture this considerable opportunity.

Through its investments in innovation, Playtech possesses a strong

technology offering and its sheer scale means it has access to vast

amounts of data, allowing it to generate data network effects (see

page 23) and take advantage of the benefits of AI. In addition, the

variety of its business model offering from structured agreements

to SaaS allows it to serve almost any operator.

Live Casino

Americas

Europe

Innovation

Data network effects

Structured agreements

SaaS

See page 24

See pages

28 and 29

See pages

20 to 22

See pages

32 to 43

Multiple organic

growth drivers...

...and the means

tocapture value

Region

Technology

Product

Business model

Potential for margin

expansion is significant

High operating leverage

in Live and SaaS…

Within the Live Casino business, Playtech has already made

significant investments in studio infrastructure. Within SaaS,

Playtech has also invested heavily in data centres to be able

to serve its customer base, while it has already signed up

over 450 customers with scope to increase wallet share.

Investment to date lays the groundwork for higher operating

leverage going forward.

Underpenetrated

online segment set

to drive B2C growth

Underpenetrated Italian

online market

Italy is one of the top two gambling markets in Europe,

along with the UK. Unlike the UK, the online market is still

underpenetrated at 30% versus 59% in the UK and thus

we see scope for the addressable market to grow in Italy.

With average revenue per online customer acquired from

retail sites more than three times higher than those acquired

directly through online channels, Snaitech’s strong brand,

retail presence and cross-selling approach mean it is ideally

positioned to benefit from this growth opportunity.

2 3

Further upside from

European expansion

Outside of Italy, there is the potential to acquire

retail-focused assets in neighbouring European countries

with low online penetration at attractive multiples, with a

view to growing the online business given the track record

of existing Snaitech management.

1 Source: H2GC (includes betting and gaming

and excludes lotteries).

…coupled with the shift to

the B2C online channel…

The Snaitech online business has a significantly higher

margin than retail. As Snaitech looks to continue to migrate

retail customers to online in addition to acquiring native

online customers, we should continue to see the share

ofthe online segment increase.

…to drive margin expansion

across the Group

With both the B2B and B2C segments exposed to margin

accretive factors, we expect Playtech to be able to deliver

margin expansion in the years ahead. This, combined with

accelerating top-line growth, will deliver earnings growth

forPlaytech’s shareholders.

30%

Italy online

penetration

59%

UK online

penetration

Strategic Report

9Playtech plc Annual Report and Financial Statements 2023

Our strategy

Building a market-leading

global business

B2B: well positioned in markets set for growth

Be the partner

of choice for

newly regulating

markets

Capitalise on

Live and SaaS

opportunities

Growth in the gambling industry is primarily

driven by regulation – growth comes from

markets that are early in the journey of

regulating, which then moderates as markets

progressively mature. We aim to be the

partner of choice for operators in newly

regulating markets, with a particular focus

onthe Americas and Europe.

The US represents a huge revenue

opportunity of $3 billion for Playtech on a per

annum basis across iGaming, online sports

and platform.

The LatAm region has strong structural

drivers (see page 21). Playtech is ideally

positioned to deliver strong growth via its

structured agreements in multiple countries,

including Brazil.

Finally, there continues to be strong

potential in European markets that are

either regulating or underpenetrated online

where Playtech can bring the strength

of its offerings to bear such as Spain

and Germany.

Live represents an enormous opportunity

(see page 24), in which Playtech has invested

heavily. 12 studios are currently operational,

including three in the US with Pennsylvania

opening at the end of 2023. We have more

than doubled the number of tables over

the past five years and invested in both the

latest cutting-edge technology and branded

content, launching Jumanji™ The Bonus

Level Live and Big Bad Wolf Live in the year.

With significant operating leverage in the

business, growth in Live is margin accretive.

The SaaS business model (see page 29)

allows Playtech to serve those operators

looking for Playtech’s content without the

platform, thus increasing the Company’s

total addressable market. With investments

already made in building out infrastructure,

such as data centres, SaaS is a high-margin

segment. Although SaaS revenues have

been growing strongly, revenue from each

operator represents a small proportion

of their wallet. Thus, we see ample scope

to increase wallet share amongst these

existingcustomers.

With exciting areas of growth in regulated

markets and several technology trends (see

technology trends on page 23) maturing at

the same time, there is a need to continue to

invest in the B2B division to ensure Playtech

maintains and grows its market share lead. We

see opportunities across the B2B business

where we can improve efficiencies and

eliminate duplication, the savings of which can

be used to fund any required investments.

Realign resources

to reflect B2B

growth areas

Playtech has a clear plan to continue to drive growth in a responsible and

sustainable way. Here we outline the medium-term strategic priorities for

both the B2B and B2C divisions, which will enable us to deliver revenue

growth, expand margins and generate shareholder and stakeholder value.

1 2 3

See risk section on pages 95 to 100

See KPI section on pages 12 and 13

Link to KPIs

1 2 3 4 5 6 7

Link to risks

1 2 3 4 5 6 7

Link to KPIs

1 2 3 4 5 6 7

Link to risks

1 2 3 4 5 6 7

Link to KPIs

1 2 3 4 5 6 7

Link to risks

1 2 3 4 5 6 7

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

B2C: a digital-led approach to drive growth

Leverage retail

presence to

grow Snaitech’s

online business

Optimise

HAPPYBET

for online

Italy is one of the top two gambling markets in

Europe, along with the UK. Unlike the UK, the

online market in Italy is still underpenetrated

– 30% currently versus 59% in the UK. As a

result, we see significant scope for the higher

margin online business to grow.

Snaitech’s strong retail brand is critical to

its success and a competitive advantage

compared to online-only operators,

particularly in light of the advertising ban

in Italy. With average revenue per online

customer acquired via retail sites more than

three times higher than those acquired directly

through online channels, Snaitech’s cross-

selling approach means it is ideally positioned

to benefit from this growth opportunity.

HAPPYBET sits under the management

of the Snaitech team which continues the

process to optimise HAPPYBET’s online

business. This involves rationalising its retail

footprint with significant investment in the

online business, mirroring the successful

Snaitech strategy.

With Germany now a regulated market,

HAPPYBET is in a strong position, having

been awarded an online sports betting

licence in Germany and beginning to offer

online casino.

The Snaitech management team

transitioned the business to take advantage

of the shift to online. With this high-quality

management team in place, there is scope

to utilise this skill set and experience to

participate in the consolidation of the Italian

market and to expand to neighbouring

European countries. Consolidation of

HAPPYBET’s position in Germany and Austria

through M&A looks attractive, while acquiring

assets in other neighbouring European

countries provides further opportunity.

Targeted

M&A to expand

Snaitech

4 5 6

Link to KPIs

1 2 3 4 5 6 7

Link to risks

1 2 3 4 5 6 7

Link to KPIs

1 2 3 4 5 6 7

Link to risks

1 2 3 4 5 6 7

Link to KPIs

1 2 3 4 5 6 7

Link to risks

1 2 3 4 5 6 7

Embedding sustainability into our culture

At Playtech, we are embedding sustainability in the DNA of our

Company. Our vision is to be the leading technology provider and

partner of choice in regulated markets, delivering a safer, engaging

and entertaining experience and driving a more responsible and

sustainable business and industry.

Sustainability is a Board-level strategic priority, which includes

sustainability-linked remuneration for selected leaders and the

integration of sustainability principles throughout our operations

and supply and value chain.

The most impactful contribution Playtech can make to society is to

advance safer gambling and player protection solutions through

technology. By developing and bringing safer products, data

analytics and player engagement solutions to the market, we are

helping the industry strengthen player protection measures whilst

also helping our licensees succeed in regulated markets.

In addition, we are promoting a culture of integrity and inclusion,

empowering Playtech colleagues to be a force for good in the

world. This includes efforts to ensure operational and day-to-day

decision-making takes into consideration environmental and social

impacts. We are building an equitable workplace, which includes

our efforts to achieve gender equity and equality and support our

people in all dimensions of wellbeing.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Key performance indicators

Financial

Group revenue growth

2023

2022

2021

2020

2019

(25)

Definition

Increase in revenue from continuing operations divided by prior

year revenue.

Why are we focused on it?

Revenue is a key driver of the business and is reported in detail

across geography and business unit. The measure enables us

to track our overall success and our progress in increasing our

market share.

2023 performance

Group revenue grew 7%, driven by regulated markets within the

B2Bdivision as well as Snaitech.

Link to strategy

1 2 3 4 5 6

Adjusted EBITDA margin

25%

2022

2021

2020

2019

2023 25.3

24.7

26.3

23.5

26.1

Definition

Adjusted EBITDA shown as a percentage of revenue from

continuing operations. We use Adjusted EBITDA to aid comparison

year to year.

Why are we focused on it?

Adjusted EBITDA margin is a measure of improving profitability in

our business and helps to evaluate the leveraging of our operating

assets. It also determines the quality of revenue growth.

2023 performance

Adjusted EBITDA margin grew 64 bps, mainly driven by operating

leverage on good revenue growth within B2B.

Link to strategy

1 2 3 4 5 6

Diluted Adjusted EPS

50.2c

2023

2022

2021

2020

2019

50.2

51.5

40.9

8.8

44.6

Definition

Profit before exceptional items attributable to equity shareholders

of the Group from continuing operations, divided by the weighted

average number of ordinary shares outstanding after adjustment for

the effects of all dilutive potential ordinary shares.

Why are we focused on it?

Earnings per share reflects the profitability of the business and how

effectively we finance our balance sheet. It is a key measure for

ourshareholders.

2023 performance

The movement is due to a rise in Adjusted EBITDA and decrease

in financing costs, more than offset by the increase in amortisation

and depreciation and a higher tax charge.

Link to strategy

1 2 3 4 5 6

Adjusted operating cash flow

1,2

€383m

€’m

2023

2022

2021

2020

2019

383

397

318

276

303

Definition

Operating cash flow after adjusting for changes in jackpot balances,

security deposits and client funds, professional fees and ADM

security deposit.

Why are we focused on it?

Delivery of increased cash generated from operations allows us to

invest in further growth opportunities across our business as well

as deliver shareholder returns.

2023 performance

The movement is due to an increase in earnings, more than offset

bythe outstanding Caliplay receivable. See Note 7 for more details.

Link to strategy

1 2 3 4 5 6

1 From continuing operations.

2 Includes Finalto up to and including FY 2020. Adjusted for Snaitech’s PREU tax payment of

€90 million relating to 2020, which was paid in 2021 due to circumstances around COVID-19.

12 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Non-financial

Powering licensees

with safer gambling

solutions

1 6 brands

Integrated with BetBuddy

Scope 1 and 2

greenhouse gas

(GHG) emissions

38.6%

Reduction since baseline year, 2018

Gender diversity

at senior leadership

level

30%/70%

Female/male ratio

2021 23 77

2022

26 74

2023

30 70

Female Male

Definition

Percentage of male and female employees in

senior leadership positions.

Why are we focused on it?

Playtech aims to foster a respectful and

supportive workplace that enables every

colleague to have the same opportunity

regardless of background, gender, ethnicity,

cultures, beliefs and other attributes that

represent our customers and community.

The Company has set out a specific diversity

target to increase the representation of

people who identify as female amongst

its leadership population by 35% by 2025

against the 2021 baseline year, with an

ultimate ambition to achieve equality in

theworkplace.

2023 performance

In 2023, Playtech introduced a new Global

People Framework. This framework sets

out the Company’s people strategy across

all elements of the colleague journey

– fromrecruitment and onboarding to

succession planning and personal and

professional development.

Link to Sustainability Priorities

Promoting integrity and an inclusive culture.

2023

2022

2021

2020

2019

7,086

6,970

7,892

9,316

10,914

Definition

Amount of carbon dioxide equivalent (CO

emitted through the energy used within

all our assets, including office buildings,

racetracks, Live studios and data centres.

More details on the methodology can be

found in the Responsible Business and

Sustainability Addendum to the Annual

Report 2023.

Why are we focused on it?

The environment, and particularly climate

change, is a growing area of concern

for Playtech, its investors and its other

stakeholders. In 2019 Playtech introduced

a GHG emissions target to guide its energy

reduction efforts. The Company’s ambition

is to reduce its absolute Scope 1 and 2 GHG

emissions (location based) by 40% by 2025,

using 2018 as the baseline year. This target

excluded emissions from refrigerants, which

had not yet been considered in 2018.

2023 performance

Playtech’s Scope 1 and 2 (location-based)

emissions, excluding refrigerants, were

7,086 tonnes CO

-equivalent (CO

e) in 2023.

This is a 38.6% reduction compared to the

2018 baseline (11,543 tonnes CO

e). During

2023, Playtech continued to its transition

to renewable electricity in the key markets

where the Company operates. This has

resulted in 57.2% of the Company’s total

energy consumption now coming from

renewable sources, backed up by energy

attribute certificates, up from 56.4% in 2022.

Link to Sustainability Priorities

Powering action for positive

environmental impact.

Definition

Number of brands in jurisdictions that

were integrated and operational as at the

end of the year with the Playtech Protect

solution,BetBuddy.

Why are we focused on it?

As a business, the most impactful

contribution that Playtech can make to

the industry and in society is through the

provision of technology to advance safer

gambling and player protection.

2023 performance

BetBuddy has expanded into three new

jurisdictions, having been adopted by six

additional brands in Sweden, Italy and

Canada excluding Ontario.

Link to Sustainability Priorities

Pioneering safer gambling solutions.

2023

2021

2022

2020

2019

Brands Jurisdictions

13Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Chief Executive Officer’s review

A year of significant progress

across the Company

Overview

2023 was a year of significant progress

across Playtech. We delivered an excellent

financial performance, with strong

contributions from both the B2B and B2C

businesses. We also remain firmly on

track to meet our medium-term Adjusted

EBITDA targets for B2B (€200–€250 million)

and B2C (€300–€350 million), while we

see further long-term upside given the

favourablemarket dynamics and our

competitive advantages.

Playtech’s B2B business remains focused on

regulated or soon-to-be-regulated markets.

The division benefits from its exposure to

high-growth markets across the Americas

and Europe, which helped the B2B segment

to deliver revenue growth of 8% (6% on a

constant currency basis) to €684 million

(FY 2022: €632 million). Strong operating

leverage ensured Adjusted EBITDA margin

expanded 130 bps, helping to deliver a

14% increase in B2B Adjusted EBITDA

to €182 million (FY 2022: €160 million).

Whilst being mindful that revenue has been

recognised in full from Caliplay despite a

large debtor balance at year end (see Note 7

for more detail), this performance reflected

broad-based growth across our portfolio of

leading products and services.

The Group made important

financial, strategic and

operational progress

in 2023. Looking ahead,

we remain very confident

in our ability to execute

our strategy and to deliver

value for our shareholders.”

Mor Weizer

Chief Executive Officer

The opportunity in the US is significant and

we have worked hard to position Playtech

as a leading technology partner of choice

to operators. Playtech now holds licences

in 11 US states, which include recent licence

approvals in Maryland, West Virginia and

Delaware, with applications underway in

further states. Having signed deals with

multiple operators in 2022, 2023 saw a

shift in focus as we looked to execute on

launching with these operators across

multiple states. In 2023, we launched with

Rush Street Interactive and PokerStars, while

also expanding our presence with BetMGM

and BetParx. Playtech also signed a Player

Account Management + (PAM+), Casino

and Live Casino deal with Ocean Resort

and Casino in New Jersey. As our presence

grows, so does our team and our physical

footprint. We now have over 200 colleagues

in the US, and were pleased to open our third

Live facility in the US in Pennsylvania at the

end of 2023, adding to our New Jersey and

Michigan facilities.

We remain optimistic about the potential of

our landmark agreement with Hard Rock

Digital to provide Casino and Live, amongst

other content, in North America. We finished

2023 by completing the first delivery

milestone, launching Casino slots and

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

table and Live dealer games in New Jersey.

2024will see us make further progress in

rolling out Playtech’s high-quality offering

across North America. Under the terms of

the agreement, Playtech has also invested

$85 million (€79.8 million) in exchange for

asmall minority stake in Hard Rock Digital.

Playtech is well positioned in Latin America,

with established strategic agreements in

Mexico and Colombia, which continue to

show strong growth. At the same time, we

have moved quickly to take advantage of

newly regulated markets, such as Brazil. New

legislation for sports betting and iGaming has

now been signed into law by the President,

and we have been encouraged by the early

performance of our strategic agreement

withGalerabet.

Within our medium-term guidance for B2B,

we have set a medium-term SaaS revenue

target of €60 million–€80 million. In 2023,

we added over 100 new brands and grew

revenue by over 50% to €50 million (FY

2022: €32 million), meaning we remain on

track to meet this target. Attracting new

brands through our SaaS business model

is a key component of our strategy, helping

to diversify our customer base and take

advantage of the business model’s inherent

high operating leverage.

Snaitech powered the B2C business to

another excellent performance in 2023.

Revenues across the B2C division rose

5%to €1,037.0 million (2022: €983.1million),

exceeding €1 billion for the first time.

Adjusted EBITDA increased 6% to

€250.3million (2022: €235.2 million). While

Snaitech delivered another strong overall

performance, the dynamics within 2023 were

varied. In the first half of the year, within the

betting segment, sales were up significantly

across both retail and online due to pent-up

demand after the football World Cup (given

Italy was absent from the tournament). This

was partly offset in the second half of the

year due to the impact of customer-friendly

sporting results in September and October,

as has been well flagged by peers across

the industry. The online segment continues

to see good growth, with Snaitech well

placed to benefit given the strength of the

brand, the continuous improvements to

apps and technology and a broadening of

its content offering. The underpenetration

of this segment continues to be a structural

tailwindfor the business.

Underpinning this performance are our

talented colleagues around the world.

Despite the significant disruption from

geopolitical conflict during the year, they

have continued to deliver for our customers

and we are truly grateful to them all.

Israel and Ukraine

Many of our colleagues continue to be

affected by the Israel-Hamas war and war in

Ukraine. Our number one priority has been

the safety and security of our colleagues and

their families, and we are assisting them with

a range of support measures. In Israel, as

was the case in Ukraine, we have extended

support to aid local response efforts with

in-kind donations and volunteering as well

as donations to hospitals and charities.

We are also providing colleagues and their

families with mental health and trauma

services, as well as, where appropriate,

financial assistance. Finally, I want to extend

my appreciation to those who have been

volunteering and supporting our colleagues,

friends and their families affected by these

tragic events.

B2B

Core B2B

Regulated markets

Playtech’s B2B business is one of the

leading platform, content and services

providers in regulated and soon-to-be-

regulated markets. The majority of these are

high-growth markets such as the US, Latin

America and certain European countries.

Revenue from regulated markets grew by

18% (15% on a constant currency basis)

in 2023, primarily driven by a very strong

performance from Caliplay in Mexico, albeit

with a large outstanding debtor balance

(seeNote 7 for more details). There was also

good growth from other regulated markets

such as Poland, Spain and Canada.

The Americas

The Americas saw rapid growth once

again, with 2023 revenue up 46% (35% on

a constant currency basis) compared to

2022. This was largely driven by another

strong performance from Caliplay as well as

growing contributions from other customers,

including NorthStar in Canada and Wplay

inColombia.

We have dedicated significant resources

to establishing and growing the Group’s

presence in the US and we are pleased

with the progress to date. The Group has

taken significant steps to capitalise on the

favourable regulatory environment in the

US, and there remain multiple opportunities

ahead. Having signed deals with multiple

operators in 2022, 2023 was a year where

Playtech shifted its focus to executing on

those agreements.

In 2023, we launched with several operators

across multiple states. Rush Street Interactive

went live in Michigan with its Betrivers brand

and in New Jersey with its Sugarhouse brand,

both for Casino. Furthermore, we expanded

our partnership with BetMGM with the

launch of Casino in Michigan and launched

with PokerStars in Michigan for both Casino

and Live.

In partnership with Aristocrat, Playtech

introduced Class II mobile-on-premise

gaming at WinStar World Casino and Resort

in Oklahoma with the Chickasaw Nation,

while also signing a PAM+ deal with Ocean

Resort and Casino in New Jersey to relaunch

its site as BetOcean.com.

Our relationship with BetParx has gone

from strength to strength. In 2023, we

successfully launched Live in our newest

US studio in Pennsylvania, in addition to

New Jersey, featuring Adventure Beyond

Wonderland Live Casino. We also launched

PAM+in Ohio and Maryland, giving Playtech

a presence with BetParx in five states:

Michigan, Pennsylvania, New Jersey, Ohio

and Maryland. Further product launches in

additional states with BetParx are expected

going forward.

One year on from signing a landmark

strategic agreement with Hard Rock Digital

(HRD), the exclusive Hard Rock International

and Seminole Gaming vehicle for interactive

gaming and sports betting on a global basis,

we remain very optimistic about its potential

to grow our presence in both the US and

other markets. As part of the partnership,

in the US and Canada, HRD’s customers

will enjoy a variety of Playtech’s iGaming

content offering including slots, RNG and live

dealer table games through HRD’s existing

proprietary platform and technology offering.

15Playtech plc Annual Report and Financial Statements 2023

Strategic Report

B2B continued

Core B2B continued

Regulated markets continued

US continued

These products will also be supplied outside

of North America in addition to PAM+ and

services including marketing and operations.

As part of establishing our agreement

with HRD, Playtech invested $85million

(€79.8million) in exchange for a small

minority equity ownership stake in HRD.

InDecember 2023, Playtech completed the

first delivery milestone, after launching online

Casino slots and table and live dealer games

in New Jersey.

During the course of last year, the Company

also made good progress bringing its suite

of innovative content to even more states.

Adventures Beyond Wonderland Live Casino

was launched in the New Jersey facility in

July 2023, delivering the first true gameshow

experience to the American market, and

won the Gaming Product of the Year award

in the 2023 American Gambling Awards.

Mega Fire Blaze™ Roulette Live, a Playtech

Live Casino hit in multiple countries, has

opened in Michigan, while the Buffalo Blitz™

Live slot game has also launched in the US

in Michigan. In addition, at the end of 2023,

we launched a new Casino slot game in

the US called Gold Rush™: Cash Collect™,

based on the popular Discovery Channel

reality TV show. Gold Rush™: Cash Collect™

has already launched in multiple European

jurisdictions, proving successful.

Entry into new markets and high demand

for Live Casino content has led the Group to

expand its physical footprint considerably in

recent years. We were pleased to announce

that our third Live facility in the US was

opened at the end of 2023 in Pennsylvania,

adding to our New Jersey and Michigan

facilities, positioning us well for Live in all

three major iGaming states. Behind the

Company’s growing physical presence

are an increasing number of employees

focused on sales, operations and back-office

functions, taking total headcount in the US to

more than 200 at the end of 2023.

The evolution of the regulatory landscape

in the US continues apace. Since the repeal

of PASPA in 2018, numerous states have

approved legislation to legalise sports

betting. Many of these markets have already

launched in both online and retail channels,

with others expected to launch soon, while

inFlorida, progress is being made in relation

to mobile sports betting.

Online casino, which was not subject to

PASPA, is allowed at the discretion of

individual states. In 2023, Rhode Island was

the only state to authorise online casino,

taking the total number of regulated iGaming

states to eight including Nevada (poker only).

However, there are several states where

iGaming legislation is being considered.

Playtech now holds licences in 11 US states

which include recent licence approvals in

Maryland, West Virginia and Delaware.

Canada

We are delighted with the positive start to our

expanded partnership with NorthStar, which

saw strong revenue growth in 2023, albeit

from a low base. The Company also made an

investment, initially by way of a convertible

debenture in December 2022, which

subsequently was converted into equity in

H1 2023. The agreement also expands the

scope of Playtech’s offering to NorthStar to

include operational and marketing services,

in addition to PAM+, Casino, Live, Poker and

Bingo solutions already launched. NorthStar

has since acquired Slapshot Media Inc.

to open up the Canadian market to the

NorthStar brand beyond Ontario, and raised

additional capital in H2 2023 from Playtech

and other investors to accelerate the growth

of NorthStar’s footprint across Canada.

Aside from NorthStar, Playtech has further

exposure to the Canadian market with more

than ten other operators and launched

with FanDuel, Entain via its SIA brand and

Jumpman, all for Casino and Live in Ontario.

Latin America

Latin America remains a hugely important

market and will be a key driver of growth

for the foreseeable future. Whilst there is a

large outstanding debtor balance, Caliplay

inMexico continues to grow strongly.

As detailed at the interim results, revenue

from Wplay was impacted by certain

activities in the first half of the year. However,

the second half of the year saw very

strong growth in Colombia, and we remain

excited about the opportunity afforded

by the Colombian market, with Wplay

well positioned to grow its presence there

further in the years ahead.

Chief Executive Officer’s review continued

In memoriam: Jonathan Richter

It is with great sadness that we lost our

dear friend, Jonathan Richter, who was

one of Playtech’s very first employees.

Tragically, Jonathan was one of the

many victims of the 7 October terrorist

attack in Israel. He was attending

the music festival supporting ELEM,

a nonprofit committed to improving

the lives of at-risk youth all around

the country.

Jonathan played a pivotal role in

making Playtech become a global

leader in its field, establishing and

managing the casino and content units

for over a decade. Jonathan was a

kind and generous person who cared

deeply about peace, having lived

a life full of community service and

dedicating much of his personal time

tovolunteering.

Jonathan’s legacy is a fundamental

part of our story, and we will always

remember and cherish his contributions.

Despite the significant

disruption from geopolitical

conflict during the year, our

talented colleagues have

continued to deliver for our

customers and we are truly

grateful to them all.”

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Having seen strong demand since opening

our first Live Casino facility in Peru in 2022,

last year we built and opened a second

studio in Lima. This second facility will ensure

we have the capacity to take advantage of

further favourable regulation and strong

growth in the region, such as in Brazil, in

the years to come. Several customers,

such as Wplay and Betano, have launched

tables in the new Live facility with positive

results so far.

We continue to see a shift towards regulation

across Latin America, including in Brazil.

2023 saw the country take a crucial step with

the President signing into law new legislation

for online and retail sports betting and online

casino at the end of 2023, and industry

expectations are for a launch at some

point in 2024.

Brazil is anticipated to be a significant,

high-growth market given its large population

and love of sports. Playtech is well positioned

to benefit given its exciting strategic

agreement with Galerabet, which migrated

its Sports product onto Playtech’s platform

in 2023. In addition to Galerabet, Playtech

also has exposure to Brazil via its other

B2B partners in the country and launched

with DoradoBet for both Casino and Live

in H2 2023.

Peru has recently enacted legislation and

published online gambling regulations for

sports betting and online gambling, which

are expected to come into effect in 2024, and

Playtech is well positioned, launching with

Atlantic City for Casino at the end of 2023.

Europe ex UK

In Europe ex UK, B2B revenue growth of

8% (8% on a constant currency basis) was

driven by strong performances in several

countries including Poland, Spain and the

Czech Republic. This was partly offset by

lower revenue from the Netherlands due to

increased competition and a strict regulatory

environment, and the loss of two retail sports

contracts in the year.

Elsewhere in Europe, there were several

exciting launches in both Spain and Italy. In

Spain, we saw Juegging and DAZNBET both

go live with Casino and Live, KirolBet with

Live, and Luckia and Platin Casino both with

Casino. In Italy, Leo Vegas and StarVegas

launched Casino and Live products and

Betway launched Live in the year. Playtech

also launched with Betway in the UK for

Casino. This demonstrates the versatility

and scalability of Playtech’s business model

and the trend to grow customer relationships

over time.

We were pleased to extend our contract

with the Polish state operator, Totalizator,

following a competitive public tender in 2023.

The contract, which sees PAM+ extended

for multiple years, illustrates the strength

of Playtech’s offering and our successful

strategy of partnering with leading brands

and institutions in newly regulated online

markets. In February 2024, Playtech also

announced that it won the tender via a

rigorous public procurement process to

become the partner for Live Casino for

Veikkaus, the Finnish state-owned and

monopoly operator.

We are also growing our Live Casino

infrastructure in Europe. Extensions to

facilities in Romania and the Netherlands

were completed in 2023, with the Les

Ambassadeurs casino extension in the UK

completed in early 2024, illustrating the

growing demand across the segment.

France saw regulatory developments in

2023, with discussions about the regulation

of the online casino market taking place with

various key French stakeholders. At present,

only poker, sports betting and horse race

betting are regulated within the online sector,

so the regulation of online casino would be

a positive for Playtech, particularly as we

have multiple customers already using our

poker product.

UK revenue in 2023 was flat (1% growth on a

constant currency basis) compared to 2022

despite the impact of increased regulation.

Having called for evidence as part of its

review into existing gambling laws, the

UK Government set out its conclusions

and proposals for reform in a White Paper,

published in April 2023.

Currently, there is still some uncertainty

about the impact of each of the

Government’s proposals on the industry.

Whilst the Government has announced

the introduction of stake limits for online

slot games (£2 maximum stake for 18–24

year olds and £5 for all other customers),

several other proposals are still subject to

consultation or pending the publication of

consultation responses. The introduction of

Financial Risk Assessments (often referred

to as “affordability checks”), which must be

completed once customers have reached

a defined loss level, are subject to the

most uncertainty in terms of impact. Until

the specifics of any measures that will be

implemented and the precise mechanics

required to adhere to them are known, it is

difficult to assess the overall impact.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

B2B continued

Core B2B continued

Regulated markets continued

UK continued

The UK remains an important market for

Playtech and its customers, as well as

being one of the largest and most mature

regulated markets in the world. Playtech

is already working with customers that

took pre-emptive measures in advance of

the publication of the White Paper and is

committed to supporting its remaining clients

as the proposals come into force.

Playtech is uniquely advantaged given its

market-leading technology and data, which

put safety and responsible gambling at the

centre of everything. The Company remains

heavily involved in discussions around safer

game design and will continue to be following

this next wave of regulation. This should

further cement Playtech’s reputation as the

go-to platform for regulated markets.

Unregulated

The Group’s strategy to focus on both

regulated and regulating markets includes

unregulated markets which are likely to

regulate in the future. Revenue from these

unregulated markets was down 19%

(-17%ona constant currency basis) versus

2022, with underlying growth in Brazil more

than offset by a decline in Asia, Canada and

South Africa.

Asia saw revenue declines compared to

2022 due to continued pressures in the

region. In Canada, Ontario transitioned

to being regulated and, as a result, some

revenue has shifted to regulated markets

while other operators have reduced

theirexposure to the Canadian market.

Asregulation progresses across Canada,

itwill continue to add to the size of the North

American market opportunity.

The Company is also excited about the

potential of the South African market as it

takes steps towards regulating. At present, it

is a nascent but fast-growing market, which

permits sports betting and Live Casino and

Playtech launched Casino and Live products

with TsogoSun at the end of 2022.

Chief Executive Officer’s review continued

B2B – driving growth through innovation

SaaS

As part of our strategy to grow B2B revenue

by €200–€250 million in the medium term,

Playtech is also looking to diversify its

revenue base through the SaaS business

model, which targets the long tail of

providers that don’t have access to PAM+.

At the FY2022 results, we announced

a medium-term SaaS revenue target of

€60million–€80 million, and we are pleased

to report that we are making very good

progress towards achieving this target, with

the SaaS business seeing revenue growth of

more than 50% in 2023 versus 2022.

We target growth by looking to increase our

wallet share with existing brands on our SaaS

platform, as well as attracting new customers

in both regulated and regulating markets.

Playtech launched over 100 brands in the

period, with notable progress in the US as

Rush Street Interactive launched in Michigan

and New Jersey. We now have more than

450 brands live since the launch of our SaaS

model in 2019.

As the SaaS model provides a low friction

method of exposing operators to Playtech’s

content, we have the ability to cross and

upsell other Playtech products over time.

Meanwhile, a broad range of customers

from multiple countries across different

product sets means our revenue base is

more diversified, ensuring our B2B revenues

are more resilient to any changes in our

operating environment.

Product developments

Online gaming has undergone significant

change in recent years. The combination

of Playtech’s strong technology, content

offering and market-leading position means

we are well placed to cater to the ever-

increasing demand to deliver new, engaging

and immersive entertainment experiences

for consumers. In August 2023, Playtech

announced the launch of Jumanji™ The

Bonus Level Live, a new game within Live

that combines cutting-edge technology with

the cinematic qualities of the famous movie.

Following a complex development process,

Jumanji™ The Bonus Level Live is the first-

ever Livegameinspired by a Hollywood

blockbuster, marking a key milestone in the

gaming industry.

I am pleased we have

continued to make progress

in all areas relating to

sustainability including safer

gambling, diversity and

climate change.”

Playtech has a long history of launching

branded content, and the continued demand

for themed games inspired the launch of

Breaking Bad™: Cash Collect & Link™ in

December 2023 within Casino. The game

features all the show’s key talent and is part

of Playtech’s award-winning Cash Collect™

suite. Another exclusively licensed branded

game from the Cash Collect™ power suite

is Gold Rush™, which has been particularly

noteworthy as it achieved the fastest return

on investment in the history of Playtech

Casino for branded games, breaking even

just two months after launch.

In July 2023, Playtech also announced the

launch of Big Bad Wolf Live, an innovative

experience that combines a slot game with

elements of a Live experience, released

from Quickspin Live, the RNG arm of our

Live division. The game, which stands apart

due to its artwork and unique features, sets

a new industry standard for Live Casino

gaming. Having signed the exclusive US

rights to Family Feud (

Fremantle), one of

US television’s longest-running and highest

rated gameshows, Playtech expects to

launch a gameshow next year. Within Live,

there were also developments rolled out to

update the in-house video technology.

Finally, we were delighted that Playtech’s

Live product was recognised as a leading

solution in the industry, winning the EGR Live

supplier of the year for 2023, acknowledging

the achievements of its extremely

talented team.

B2C

Playtech’s B2C business spans Snaitech,

HAPPYBET, and Sun Bingo and Other B2C

operations. Overall B2C revenues grew

5%to €1,037.0 million (2022: €983.1million).

Adjusted EBITDA grew 6%, rising to

€250.3million (2022: €235.2 million).

Snaitech

Revenue from Snaitech in Italy increased

by 5% compared to 2022, while Adjusted

EBITDA also grew 5% versus 2022. This

overall performance saw differing dynamics

across the period, with a very strong start

to the year driven by pent-up demand

following the football World Cup, whilst being

partly offset by customer-friendly sporting

results in the second half of the year. The

retail segment saw revenue and Adjusted

EBITDA growth of 4% and 6% versus 2022,

respectively, and the online business saw

revenue and Adjusted EBITDA growth of 8%

and 4% versus 2022, respectively.

18 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Retail betting sales were up 15% versus

2022, driven by a strong performance in the

first half of the year as customers returned

to betting shops after the football World Cup

in the final quarter of 2022 (Italy was absent

from the tournament). This was partly offset

in the second half of the year due to the

impact of customer-friendly sporting results

in September and October, as has been

well flagged by peers across the industry.

Gaming machines revenue was flat versus

2022 as this business normalises post-

pandemic. At the Adjusted EBITDA level,

retail margins expanded 30 bps versus 2022,

with operating leverage on strong revenue

growth in H1 2023 partly offset by the

impact of customer-friendly sporting results

in H2 2023.

The online business followed a similar

pattern, seeing strong growth in the first half

of the year led by good performances across

sports betting and casino. The second half

of the year saw customer-friendly sporting

results impact both revenues and EBITDA

margins. The underlying performance of

the online segment remains healthy. The

underpenetration of this segment continues

to be a structural tailwind for the business,

with Snaitech well placed to benefit given

the strength of the brand, the continuous

improvements to apps and technology and

abroadening of its content offering.

As announced at the time of our interim

results in September 2023, Snaitech last year

acquired Giove Group, a well-established

betting operator in the Puglia region

(southern Italy), the integration of which has

now been completed. Giove holds licences

for both retail betting and online and directly

manages 18 betting shops. The acquisition,

while small, illustrates the appetite to grow

the Snaitech business in Italy.

In 2023, the Snai brand was ranked number

one in sports betting (retail and online

combined, as measured by GGR), which

is a testament to its consistently strong

operational performance and unique

brand identity.

HAPPYBET

HAPPYBET revenues were down 9% in 2023

compared to 2022, driven by a rationalisation

of retail sites in Germany. Adjusted EBITDA

losses narrowed to €9.8million in 2023,

when excluding a €2 million historical

litigation settlement expense. Including the

historical litigation settlement, Adjusted

EBITDA saw a loss of €11.8 million

(2022:€-10.8 million).

The Snaitech management team has taken

on responsibility for HAPPYBET and we are

seeing early signs of improvement across the

retail and the online segments. Within retail,

less profitable stores have been rationalised

in Germany with plans to open new shops

in 2024 underway. In online, work on

optimisation of the player bonus policy and

improvements in the approach to risk and

trading around the sportsbook are ongoing.

Sun Bingo and Other B2C

Sun Bingo and Other B2C saw 12% revenue

growth in 2023 to reach €73.4million

(2022:€65.3 million) while Adjusted

EBITDA grew to €6.0 million, up from

€2.0million in 2022. The primary reasons for

the improvement in performance were the

increased marketing spend at the end of 2022

around the time of the football World Cup,

resulting in higher revenue growth in 2023 at

a high contribution margin, in addition to more

effective marketing spend throughout 2023

and higher retention of customers due to

improved product user experience.

Responsible business

andsustainability

In 2023, we continued to execute against

our five-year sustainability strategy. I am

both proud and pleased to be able to report

progress across all our commitments.

• We strengthened our portfolio of safer

gambling technology and solutions under

Playtech Protect with the development

of personalised responsible gambling

journeys to help operators enhance safer

gambling interactions with their players.

Playtech was also awarded the Advanced

Level Three of the GamCare B2B Safer

Gambling Standard – the highest possible

level of award.

• In 2023, Playtech also made progress

against its global target to reach 35%

female representation in leadership

positions by 2025. At the end of the

year, Playtech reached 30% female

representation amongst leadership

positions as compared to 26% in 2022.

In 2024, Playtech will continue to refine

its understanding of gaps in female talent

across the Group and take action to

increase female retention.

• We initiated our net zero by 2040 plan, and

in early 2024, the Science Based Targets

initiative (SBTi) approved Playtech’s

near-term science-based emissions

target, a 50.4% reduction in its Scope 1,

2 and 3 emissions by 2032. Playtech has

also committed to set long-term emissions

reduction targets withSBTi in line with

reaching net zero by 2040.

• We supported a wide range of charitable

and volunteering activities, exceeding

our community target set for 2025 by the

end of 2023, with over 160,000 people

engaged through community investment

and mental health programmes over the

past three years.

• We are honoured to be included in the S&P

Global Sustainability Yearbook 2024 for

our sustainability efforts. By championing

sustainability and operating responsibly,

we continually strive to make a positive

impact on our customers, colleagues,

communities and the environment.

• In August 2023, we established a Global

Employee Benevolent Fund to provide

support to colleagues and their immediate

families who may encounter unforeseen,

severe, life-changing challenges.

Mor Weizer

Chief Executive Officer

26 March 2024

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Evolution of online gambling market growth rates following online regulation

Online growth rates moderate as regulation matures

Market trends

Regulation, technology and online:

where the market is heading

1) A super-cycle driven by a trend towards regulation

Regulation is the key driver of growth in the gambling industry

Regulation is the key driver of growth in the gambling industry. Those countries that become newly regulated tend to see strong growth early on,

which is why it is crucial for operators and technology partners to build a presence in a country that is about to be regulated or is newly regulated.

However, growth typically slows down after a certain period. This tends to be driven by three main factors. Firstly, there is increased competition

as new players enter the market, causing pricing pressure. Secondly, as markets mature, they become saturated due to limited demographic

growth. Thirdly, regulation typically becomes more stringent over time. For example, in the mature UK market, we have seen a tightening of rules

on age and identity checks and a ban on gambling using credit cards.

Deviations from the broad shape of the curve are mainly attributable to the stringency of regulations in a country. For example, Spain has

implemented strict restrictions on advertising for the gambling sector.

At this point in time, we are in an advantageous position in multiple countries across the world which are moving towards regulating gambling or

have newly regulated the sector. In the next section, we assess each of the major regions in the world and how Playtech has positioned itself.

Playtech operates in a dynamic, fast changing environment and is well

placed to take advantage of marketplace trends. This section examines our

operating environment across four trends around regulation, sustainability,

technology and the shift to online.

Source: H2GC and Playtech estimates.

MARKET

GROWTH

POINT OF ONLINE

LEGISLATION

MATURITY OF REGULATION

UNREGULATED

REGULATED

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

State-by-state legislation in the US

The regulatory landscape in the US is ever progressing. Since the

repeal of PASPA in 2018, numerous states have approved legislation

to legalise sports betting. Many of these markets have already

launched in both online and retail channels, with others expected to

launch soon. In Florida, progress is being made in relation to mobile

sports betting, enhancing the future prospects of the Company in the

medium term given its landmark strategic partnership with Hard Rock

Digital (HRD).

Online casino, which was not subject to PASPA, is allowed at the

discretion of individual states. In 2023, Rhode Island was the only

state to authorise online casino, taking the total number of regulated

iGaming states to eight including Nevada (poker only). However, there

are several states where iGaming legislation is being considered.

Several countries in LatAm with large

populations and GDP

Significant opportunity in LatAm

Country Population GDP ($ million)

Brazil 215,000,000 1,920,000

Mexico 128,000,000 1,466,000

Colombia 52,000,000 344,000

Argentina 46,000,000 631,000

Peru 34,000,000 243,000

Chile 20,000,000 301,000

Guatemala 17,000,000 95,000

Costa Rica 5,000,000 69,000

Panama 4,000,000 77,000

Latin America

A region trending towardsregulation

Latin America has shown significant progress in regulating online

gambling in recent years. The focus in 2023 has been on Brazil, which

has now taken the crucial step towards regulation with the President

signing in law new legislation for online and retail sports betting and

online casino at the end of 2023 and industry expectations are for a

launch at some point in 2024. Peru has recently enacted legislation

and published online gambling regulations for sports betting and

online gambling, which are expected to come into effect in 2024.

Chile is also in the process of approving an online gambling bill, which

was filed in March 2022 and is expected to pass in 2024. Elsewhere,

in Argentina, the Santa Fe province should join already regulated

Buenos Aires, Mendoza and Cordoba, after the Senate approved the

Bill at the end of 2023.

Current US state-by-state regulatory landscape

Regulation is the biggest market driver in the short term

Source: VIXIO. Source: Worldometer, World Bank.

States that offer only sports betting

States that offer both sports betting and iGaming

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

1) A super-cycle driven by a trend towards regulation continued

Europe

Europe – a mix of newly regulating and mature markets

The market in Europe is more nuanced than the Americas region. On

the one hand, there are countries that are moving towards regulating

their online market such as France and Germany, while others are

mature but still have an underpenetrated online market, such as

Italy and Spain. And finally, there is the UK, which is the most mature

market of all with high online penetration rates.

Germany

Germany’s regulated online gambling and sports betting market

continues to expand as the number of licensed operators approaches

100 since the introduction of the regulatory framework in July 2021.

Despite the notable progress, the operating environment remains

challenging for regulated operators due to stringent rules and limited

enforcement that encourages competition from off-shore operators.

In 2023, licensed operators were increasingly vocal about the need

to modernise the rules, that do not include online casino-type games,

especially around the €1 cap per spin in online slot bets and €1,000

per month per player online deposit limit.

France

France saw regulatory developments in 2023, with discussions about

the regulation of the online casino market taking place with various key

French stakeholders. At present, only poker, sports betting and horse

race betting are regulated within the online sector, so the regulation of

online casino would be a positive for Playtech, particularly as we have

multiple customers already taking our poker product.

There continues to be some uncertainty around the impact of

the White Paper on the industry. The proposals have not resulted

in changes to legislation or regulation just yet, and are subject to

consultation with various stakeholders, the timing of which is unclear.

The introduction of Financial Risk Assessments (often referred to

as ‘affordability checks’) which must be completed once customers

have reached a defined loss level, are subject to the most uncertainty

in terms of impact. The Government’s White Paper recommendation

that these checks be frictionless is positive, as is the Gambling

Commission’s commitment to pilot these checks first in order to

ensure that they can be completed without friction. However, until the

specifics of any measures that will be implemented and the precise

mechanics required to adhere to them are known, it is difficult to

assess the overall impact.

Asia

Asia remains broadly unregulated

Gambling is a very popular pastime in Asia, which possesses

structural growth drivers such as a passion for sport, large

populations and above average GDP growth, not dissimilar to the

LatAm region. However, the majority of markets remain unregulated.

Over the long term, we see Asia following a similar path as the

Americas towards regulating the sector, but the visibility of this path

remains unclear at the present time.

Asia is increasingly a smaller part of B2B

While there have been issues in Asia with currency controls and

volatile government attitudes towards the gambling sector, it is

becoming an increasingly smaller part of the business – 44% of B2B

revenues in 2017 compared to less than 10% in 2023 driven by a

combination of declining Asia revenues and accelerated growth in

other regions and regulated markets.

Africa

The proliferation of regulated online gambling in Africa has

been limited in the past due to unreliable and inconsistent digital

infrastructure. However, in recent years, online penetration rate has

increased notably to reach 48.2% in 2023.

South Africa: a large market with an established regulatory

framework

South Africa represents one of the largest online gambling markets

in Africa, valued at $1.1 billion GGR and projected to reach $2.9billion

by 2028 as per H2GC. The online sportsbook market is regulated

with local licensing, whilst iGaming is only permitted in two provinces:

Western Cape and Mpumalanga. Playtech has been actively

exploring the South African market since 2022, establishing a

presence via partnerships with key operators such as TsogoSun and

Hollywood Bets.

2) Growing requirements to use data analytics for player protection

Safer gambling is a material ESG topic for the gambling industry. Both

regulators and the gambling industry recognise the importance of

developing safer gambling solutions, evaluating their effectiveness

and helping support research that leads to the development of

evidence-based regulation.

The development of tools and software, and new technologies,

including the use of generative AI, is increasingly being used

to provide new and innovative ways for the sector to ensure

player safety.

Market trends continued

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

3) Technology – multiple technologies about to hit mainstream adoption

Data and AI

Overview

The digitisation of the world is creating

unimaginable amounts of data from all kinds

of sources. More data is being generated

every two years than in all of time before

that point. However, the key to obtaining a

competitive advantage is getting access

to the right data sets and drawing insights

from them. Those companies that are able to

attract a large number of users gain access

to the most data, which allows them to train

their AI algorithms to give more accurate

results. This in turn attracts more users,

triggering data network effects that become

difficult to compete against.

Impact on the industry/Playtech

The use of data to gain actionable insights

into customers is a cornerstone of the online

gaming industry. It facilitates:

• the delivery of a personalised experience

for each user, thus increasing revenue

percustomer;

• new customers being acquired through

intelligent marketing;

• players being verified and the detection of

fraud; and

• tackling gambling addiction, encouraging

a more responsible industry.

Given Playtech’s sheer scale, it has access

to vast amounts of data. Playtech is investing

heavily in its AI capabilities, analytics,

business intelligence (BI) and safer gambling

tools to ensure that it makes use of this data

to retain its competitive advantage and

ensures a sustainable future for the industry.

Link to strategy

1 2 3 4 5 6

Virtual reality/

augmented reality

Overview

Augmented reality (AR) is focused on

enhancing the real-world experience, with

real-time, virtual information overlaying

physical objects delivered through a device

such as a headset or mobile phone. Virtual

reality (VR) provides a completely immersive,

computer-generated 3D environment that

replaces the real world. With tech titans such

as Apple and Meta releasing next generation

headsets, we can expect to see significant,

as yet unknown, new use cases arise within

the gambling sector.

Impact on the industry/Playtech

• Should AR and VR gain broad adoption,

they could be used to vastly improve the

player experience.

• With VR, players will be able to engage

with other players and experience walking

the halls of a physical casino in the comfort

of their own home.

• With AR, there is the ability to customise a

player’s experience in a physical casino, or

within Live, to overlay real-time information

on the video stream.

• Playtech has begun to incorporate some

of these technologies in its offering. The

Greatest Cards Show within Live has

augmented reality features, while the

Poker vertical has released customisable

digital avatars.

Link to strategy

1 2 3 4 5 6

5G roll-out

Overview

5G is the latest new global wireless standard

and enables a new kind of network that

is designed to connect everyone and

everything together including machines,

objects and devices. It is predicted to deliver

much higher data speeds, ultra-low latency,

more reliability, a big increase in network

capacity and a more uniform experience to

more users. These benefits can usher in new

immersive experiences such as VR and AR.

Impact on the industry/Playtech

• 5G is an enabler of VR and AR

technologies and thus helps to create

games that are richer and more immersive

than before.

• Video streaming of Live dealer games can

be of a much greater quality with higher

speeds and a more reliable network.

• In-game sports betting will benefit,

particularly on mobile. Inside stadiums,

more devices can be connected at once

with reduced latency, thus enabling fans

to place bets as they watch the game.

Outside stadiums, 5G enables fans to

simultaneously make bets and stream

thegame on their mobile phones.

• The low latency of 5G could help to

facilitate more social iCasino games,

asplayers will be able to enjoy real-time

interactions with other players.

Link to strategy

1 2 3 4 5 6

Data network

eects

Better end

consumer

experience

Better brand

for Playtech

customers

More end

consumers

More data

Better

AI algorithms

targeted/

relevant recom-

mendations

23Playtech plc Annual Report and Financial Statements 2023

Strategic Report

4) Shift to online continues, accelerated by the pandemic

Live

Overview

Live is an extremely attractive vertical

that is expected to grow significantly over

the coming years. This is driven by two

major trends:

• Firstly, there is a shift to online from

retail as the world digitises and this has

accelerated due to the pandemic.

• Secondly, within online, there is a growing

trend away from random number

generation (RNG) towards Live, as players

want more of an interactive, immersive

experience. With the imminent launch of

VR by tech companies such as Apple, we

expect this shift to accelerate.

The combination of these drivers means

industry analysts predict the Live market to

reach $15.8 billion based on GGR by 2028,

up from $7.9 billion in 2023, a CAGR of 15%.

Impact on the industry/Playtech

Playtech has already made significant

investments to capitalise on this attractive

product vertical:

• 12 studios are currently operational with

Pennsylvania having opened at the end of

2023. A second studio in Peru was opened

earlier this year and will help us to support

growth within the attractive LatAm region,

particularly Brazil.

• The number of tables has more than

doubled over the past four years.

• Significant investment has been made

to ensure we have the latest cutting-

edge technology and access to great

content such as Jumanji™ and Big Bad

Wolf Live, two flagship games that were

launched in 2023.

These investments have already been

made, and the nature of the Live business

model is such that additional players can be

added to tables at minimal cost. This creates

significant operating leverage and leads to

Live being margin accretive to the overall

B2B division.

Link to strategy

1 2 3 4 5 6

Underpenetrated online

markets in Europe

Overview

The pandemic accelerated the shift towards

online gambling as retail shops were closed

during lockdown and customers, with

plenty of time to pass, played online while at

home. Given online penetration in 2023 has

remained above 2019 levels for all major EU

countries, with the exception of Spain, we

think it is safe to conclude that the migration

to online has remained sticky post pandemic.

There is ample scope for the migration

to online to continue. Looking to the UK

as an example of a mature market, online

penetration in 2023 was 59%, far in excess of

Spain, Italy and Germany.

Impact on the industry/Playtech

Within the B2C division, Playtech is very

well placed to continue to benefit from an

underpenetrated online market in Europe. In

Italy, Snaitech gives Playtech exposure to a

large market where online penetration remains

at 30%, far below the UK at 59%. In addition,

the online business is higher margin and less

capital intensive, meaning it generates higher

return on capital employed. Aside from Italy,

Playtech is also well placed in Germany with

HAPPYBET, which possesses one of the

few available online sports betting licences

in Germany.

Within the B2B division, Playtech has a

strong presence in Spain across Live, Casino

and Sports, and is well positioned to take

advantage of the continued shift to the

online channel.

Several large European countries

have an underpenetrated

online market

Online penetration as % of GGR

Link to strategy

1 2 3 4 5 6

Sports

Overview

As the market shifts to online, the Sports

segment is impacted by multiple trends:

• shift to in-play betting and micro betting

with the types of bets becoming more

granular and over a shorter time frame;

• convergence of sports betting, media

streaming and social;

• emerging markets shifting towards

embedded betting within streaming

services; and

• more and more data sources being used to

come up with sports betting odds such as

fitness of players.

Impact on the industry/Playtech

• Our Sports offering is targeted at those

areas where we see strategic benefits.

One such region is LatAm, where many of

the countries enjoy a rich sporting culture

and we have made good progress in

Mexico, Colombia and Panama.

• Our Betbuilder product, now available for

football with other sports to follow, will be a

focus of our Sports offering given the trend

of shifting towards offering more granular

types of bets.

Link to strategy

1 2 3 4 5 6

Spain

France

Italy

Germany

2019 2023

Source: H2GC (includes betting and

gaming and excludes lotteries).

Market trends continued

24 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

25Playtech plc Annual Report and Financial Statements 2023

With a well-established presence in the US including three Live

studios operational and multiple brands including Hard Rock

Digital, Playtech is well placed to take advantage of the huge

opportunity in the US market.

The opportunity

The United States of America is the

world’s largest online gambling market,

which is projected to reach $41 billion in

GGR by 2030. Regulation is the single

biggest market driver in the short term,

and Playtech continues to see positive

legislative momentum in the US. Since the

repeal of PASPA in 2018 more than 35 states

have legalised online sports betting, whilst

iGaming is currently regulated in eight states.

According to industry forecasts, the online

gambling market in the US will continue to

display a strong growth profile with a CAGR

of more than 20% in both sports betting and

iGaming segments out to 2030.

$41bn

Size of the US market over the long

term based on GGR

Live studios operational in the US

Market trends continued

Americas: the land of opportunity

How we are exposed

Playtech recognises the unmissable growth

opportunity offered by the US market

and continues to proactively invest in the

infrastructure and operational capabilities

to accelerate the Group’s presence. Our

strategy centres around iGaming, where

we have extensive experience and are

recognised for our leading market content.

Having signed agreements with multiple

operators as well as a comprehensive

structured agreement with Hard Rock

Digital, we are well placed in the US. Our

infrastructure includes three Live studios,

and over 200 colleagues based in the US.

Strategic Report

26 Playtech plc Annual Report and Financial Statements 2023

Canada

A growing market with attractive player economics, Canada

is fast proving to be a key market for Playtech. With our

comprehensive structured agreement with NorthStar, Playtech

is well placed to benefit as states regulate in the coming years.

Brazil

As this hugely attractive market continues to move towards

regulating, Playtech is well positioned for success in the rapidly

evolving Brazilian gambling market via its partnership with

Galerabet and other B2B customers.

The opportunity

Canada is home to a rapidly growing online gambling market, which

is projected to nearly double in size to $6 billion by 2028, driven by a

favourable regulatory environment and attractive market economics.

The industry is regulated on a province-by-province basis, with Ontario

leading the way to become the first regulated province in April 2022. Total

player value is showing impressive momentum, while ROI and cost-per-

acquisition metrics are also trending favourably.

How we are exposed

Playtech is well placed to benefit from the on-going expansion of

Canadian market via a comprehensive structured agreement with

a prominent local operator NorthStar as well as more than 10 other

operators and launched with FanDuel for Live in Ontario.

The opportunity

Brazil is a global economic powerhouse, is deeply passionate about

sports and now home to one of the most exciting markets in gambling.

Brazil’s large population of 215 million and promising regulatory

environment make it an exceptionally attractive market opportunity,

with online sports betting and casino expected to reach $5 billion

GGR in the next five years.

How we are exposed

Playtech is well positioned for success in the rapidly evolving Brazilian

market via its partnership with Galerabet and several other B2B

customers. In 2021, Playtech and Galerabet signed a structured

agreement aiming to combine advanced gaming technology and

expert knowledge of the local market in anticipation of the regulation

in the Brazilian market. Galerabet is building a strong brand identity

through sponsorship agreements with the prominent local sporting

brands including the Brazilian Football Confederation and the

Brazilian Basketball Confederation.

$6bn

Size of the Canadian market over the long term based on GGR

$5bn

Size of the Brazilian market over the longterm based on GGR

Strategic Report

27Playtech plc Annual Report and Financial Statements 2023

Business model

Flexibility to capture

every opportunity

B2B

Conventional model

Platform + content

The conventional model involves us providing the operator with

a platform-based solution, underpinned by Playtech’s leading

Player Account Management + (PAM+) offering. The operator

can then choose from a wide range of product verticals and

content, including Live, Casino, Sports, Bingo and Poker.

The operator, which holds the gambling licence, is typically

responsible for building and maintaining its brand in addition

to customer services and marketing. In exchange for providing

the technology, Playtech employs a revenue share model with

the operator.

Structured agreements

Platform + content + services

We also partner with “local heroes” with a strong retail brand and

presence but without the necessary technological expertise

to succeed online. Under a structured agreement, we provide a

platform-based solution as per a conventional model, in addition to

a range of marketing and operational services, some of which are

subcontracted out to a third party.

This model also involves a revenue share framework with

the operator, with Playtech’s share typically higher than in a

conventional model to compensate for the provision of these

additional services. Playtech also typically injects capital into these

operators to help facilitate growth and in return receives an equity

call option which can be exercised should the operator be acquired.

How we work

Conventional Structured agreement SaaS

Services

Content

Platform

Clients

Value accrued

to Playtech

Standard B2B

royalty income

for technology

End customers

Licence held by operator

Marketing Operations

Portal/channels Content BI/analytics

PAM+ platform

Engagement Centre

Payments

Player management Wallet

Risk/KYC/AML Safer gambling

Value accrued

to Playtech

Standard B2B

royalty income

for technology

Additional

revenue to

compensate

for extra

services

Call option on

equity

End customers

Licence held by operator

PAM+ platform

Engagement Centre

Payments

Player management Wallet

Risk/KYC/AML Safer gambling

Playtech provides/subcontracted Operator provides

Marketing Operations

Portal/channels Content BI/analytics

• Entain

• Bet365

• Parx

• Flutter

• 888

• BetMGM

• Caliplay

• Wplay

• Galerabet

• NorthStar

• Hollywoodbet

• LeoVegas

• Betway

• Novibet

• SkillOnNet

• DOXXbet

Strategic Report

28 Playtech plc Annual Report and Financial Statements 2023

SaaS

Content

For those operators that have their own

platform, we also offer customers the

ability to access our content, in a plug-

and-play SaaS model. Operators benefit

from low implementation costs and quick

time to market, while Playtech is able

to expand its addressable market and

generates a recurring, monthly revenue

stream at a higher margin.

How we work

B2C

Snaitech

Our B2C division is comprised primarily of Snaitech in Italy and HAPPYBET, the retail and

online Sports B2C business in Austria and Germany. Both businesses are led and operated by

the Snaitech management team.

Snaitech is a leading operator in the Italian betting and gaming market, and generates

revenues from gaming machines, retail betting and online gambling. The business was

acquired by Playtech in 2018, bringing together Playtech’s leading technology stack with

Snaitech’s powerful brand and local expertise in one of Europe’s largest gambling markets.

Retail

The retail betting business predominantly operates a franchise model with franchisees

responsible for staff costs, rent and facilities, while Snaitech itself provides the licence, content,

technology and brand.

The franchise model generates growth with relatively low capital intensity, generating high

return on capital. Meanwhile, the value sharing agreement with franchisees is at the revenue

level, meaning Snaitech is less affected by rising cost pressures.

The gaming machine segment predominantly consists of video lottery terminals (VLTs) and

amusement with prizes (AWPs). Snaitech has a higher revenue share from VLTs but incurs the

cost for content from operators, while for AWPs, the machine owner takes a higher revenue

share but incurs the cost of hardware and content. Further detail is provided in the table below.

Retail Players in value chain Share of NGR Responsibilities

Sports

betting

Franchisee 50%–55% Sta, rent and facilities

Licence holder 45%–50% Licence, brand, content, technology, trading and risk

Gaming

machines

Platform/

machine owner

20%–25% Machine installation and maintenance;

hardware, software and content

Location owner 50%–55% Security, location costs and sta

Licence holder 20%–30% Licence

Online

The online business operates a direct-to-consumer model, with Snaitech paying a share of

revenue to the retail franchisee owners should they sign up customers at their retail site or to

affiliates which direct customers to Snaitech’s online site. Platform and content costs, part of

which are supplied by Playtech, are incurred by Snaitech.

Online Players in value chain Share of NGR Responsibilities

Sports

betting

and casino

Platform and

content owner

10%–15% Platform and content

Aliates/retail

sites

20%–25% Customer acquisition

Licence holder 60%–70% Licence, tech, trading, risk and customer services

Strategic Report

29Playtech plc Annual Report and Financial Statements 2023

Our strengths

Unparalleled scale

Playtech has a vast reach, with over 180

licensees operating across more than 40

regulated markets and offices in 19 countries.

Given this scale, the data, knowledge and

expertise that Playtech leverages enable it

to improve product design, develop cutting-

edge safer gambling tools and support

regulatory requirements of operators in

various jurisdictions.

Flexibility to cater to

almost any operator

Playtech’s comprehensive B2B technology

offering covers the entire gambling value

chain with all products integrated into the

PAM+ platform. Playtech also boasts one of

the industry’s broadest content portfolios,

available even without having to deploy PAM+,

as well as access to third-party content via

Playtech Open Platform (POP).

Our incredible people

Playtech’s people are truly exceptional.

Theyare talented, dedicated and passionate

about their work. They invest their time and

expertise in the Company. In return, Playtech

provides a fun, creative, rewarding and

inspiring working environment. We constantly

invest in and reward our talent, which has

helped us to become the world’s leading

gaming business, employing over 7,700

people across offices in 19countries.

Business model continued

Leader in highly

attractive Italian market

Playtech’s Italian B2C business, Snaitech, is

a market leader in the lucrative Italian market.

The online segment has seen significant

growth at a CAGR of 20% between 2019 and

2023, yet it remains less developed than

retail, with online penetration at only 30%

(versus 59% in the UK). Snaitech’s leading

brand and retail presence in Italy, combined

with Playtech’s technology expertise, make it

ideally positioned to continue capturing this

market opportunity.

€17bn

Size of Italian retail and online

marketin 2023 (GGR)

Award-winning

technology

Playtech has a strong track record of

innovation and content creation. Thanks to

our scale, we’re able to invest heavily in R&D

and product-related innovations, allocating

significantly more funds towards these efforts

than our competitors. In fact, over the past

five years alone, we’ve dedicated more than

€720 million to support the development of

our cutting-edge technological platform.

€720m

Amount invested in R&D over the

last five years

Focus on sustainability

At Playtech, we are committed to growing our

business in a way that has a positive impact on

our people, our communities, the environment

and our industry. Advancing safer gambling and

player protection technology is a key priority.

Through our safer products, data analytics and

player engagement solutions, we are keeping

players safe and helping our licensees succeed

in regulated and fast-moving markets.

Strategic Report

30 Playtech plc Annual Report and Financial Statements 2023

Supporting our stakeholders

For customers

€163m

Amount invested in cash

R&Dincluding safer

gamblinginitiatives

76m

Number of

pokertournaments

For society and the environment

>110

Number of charities

andcommunity

organisationssupported

38.6%

Reduction in CO

emission since

baseline 2018

For shareholders

€383m

Adjusted operating cashflow

Point improvement in S&P

Global Corporate Sustainability

Assessment since 2020

For employees

>7,700

Colleagues

>250

Number of

wellbeinginitiatives

1 Adjusting for changes in jackpot balances, security deposits and client funds,

professional fees and ADM security deposit.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Product and innovation

Providing market-leading

solutions through Playtech’s

bespoke technology

Through our proprietary technology solution,

Playtech has pioneered omni-channel gambling

technology which provides an integrated and

open platform across retail and online for all

key verticals, delivering a safe and seamless

customer experience.

Playtech Protect

Playtech ONE

Platform and content Services

Analytics

Portal

Desktop and

mobile

Native apps Retail machines Retail till

PAM+ platform

Playtech Open Platform

Marketing Operational

Strategic Report

32 Playtech plc Annual Report and Financial Statements 2023

Agility and

accessibility

Unparalleled

breadth

Data-driven

innovation

Safety and

security

Playtech’s bespoke end-to-end technology platform

is built with four key aims at its heart

Our award-winning

platform, the Player

Account Management

+ (PAM+), showcases

Playtech’s technological

edge by utilising modular

structure to achieve best-

in-class customisation and

scalability. PAM+ allows

operators to have full

visibility and control of the

entire player lifecycle from

one centralised point for all

operational needs.

Example:

In 2023, we launched key

player activity timelines, a

visual display for key player

events to help licensees

quickly identify potential

issues or behaviour

patterns, reducing analysis

and resolution time.

Playtech has been

delivering pioneering online

gaming technology to

operators for over 20 years.

In that time, we have built a

breadth of experience and

expertise alongside the

most diverse technology

and content offering across

gambling verticals.

Example:

BetBuddy is now fully

integrated into our Player

Account Management+

platform providing an

innovative capability

to apply personalised

responsible gambling tools

on an individual player

basis based on dynamically

calculated risk levels.

Data continuous to

play acentral role in our

decisionmaking and

innovation process.

Weactively utilise our

superior data-driven

insights, analytics

capabilities and

artificialintelligence to

driveinnovation.

Example:

Our central cloud data

platform gives operators

access to in-depth analytics

and benchmarked KPIs to

customise, reshape and

refine their data insights to

enable operators to assess

and improve various areas

of their business.

Playtech’s valued

partnerships rely on the

trusted technology and

security infrastructure

that is safeguarded and

protected. As a result,

we are continuously

investing in security and

privacy initiatives. We have

allocated £720 million into

R&D expenditure as part of

our operations since 2019.

Example:

With connectivity lines

stretching from Brazil to

Canada and data centres

covering over 50 locations,

we’re redesigning and

modernising our entire

infrastructure to bring

networks closer to

ourpartners.

Playtech was the original pioneer of the end-to-end technology offering we see across the gaming industries today. Even in the face of

established and emerging competition, and the prolific creation of new content and technologies, Playtech remains a major player due to the

breadth of its offering and the scale of its customer base.

In response to these challenges, Playtech is building the next generation of products to bring new types of experiences to market across its

verticals, including Live and Casino. Through continued investment in technologies and expertise, Playtech gives its licensees a unique and

bespoke end-to-end service, with a scale that is unmatched in the industry. Playtech remains committed to investing in technology across the

entire business, from sports betting to poker, knowing that valued partnerships are based on trusted technology. Our end-to-end technology

offering is underpinned by the four key pillars below.

End-to-end technology

33Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Product and innovation continued

Platform

PAM+

Our offering

Playtech’s Player Account Management + (PAM+) is the

powerbehind Playtech’s products, providing all the tools

necessary to successfully run and manage every aspect

ofalicensee’s business.

PAM+ enables licensees to access all elements of Playtech’s unique

omni-channel capabilities allowing players to seamlessly transition

across content verticals via a single account and single wallet, while

providing operators with simple third-party integration and full visibility

and control of the entire player lifecycle. PAM+ unifies Playtech

products across all channels, including retail, presenting operators

with a single account overview and allowing them to streamline and

optimise marketing spend, maximise cross-sell and conversion

potential, leverage player loyalty and value and increase revenues

by utilising data and automating key aspects of the player journey.

The below graphic describes the key elements that sit within the

PAM+ platform.

239 billion

Wallet transactions processed in PAM+ in 2023

2023 highlights

• Launch of player activity timeline, a visual display for key player

events at a glance, to help licensees quickly identify potential issues

or behaviour patterns, reducing analysis and resolution time.

• Free Spins 2, a new upgrade to our Free Spins bonus system, was

launched. Licensees now have the option to regulate the value of

free spins sent to players, who can then choose one of the possible

combinations of the number of free spins and their value.

• Report Viewer 3 brought a modern intuitive UI with improved

accessibility, report/configuration search, and new functionalities

that make the overall reporting experience smoother.

• Integration with checkin.com was implemented for optimised

player onboarding and verification.

• In response to new reporting, regulatory and responsible gambling

requirements in the Netherlands and Spain, we made several

changes to ensure compliance.

Sitting within the PAM+ platform

Engagement Centre –

acomprehensive marketing

and player engagement

toolset, leveraging the

full personalisation

power of PAM+.

Player management–

asingle account overview

gives licensees full visibility

and control of the entire

playerlifecycle.

Wallet – a single wallet per

player account across all

channels, including retail,

creating an omni-channel

experience for players

and allowing licensees to

centrally manage all financial

transactions and bonuses.

Reporting – the tools

necessary to produce

both pre-set and custom

reports, create dashboards

and monitor KPIs, ensuring

operators can monitor the

performance of their business.

Payments – facilitates

collection, processing,

adjustments and corrections,

plus payment method support

and merchant integrations.

Risk/KYC/fraud –

acomprehensive toolset

covering source of funds

checks, duplicate and multiple

account checks, third-party

integrations, automation rules,

mass adjustments and more.

PAM+

platform

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Engagement Centre

Part of the PAM+ platform, the Engagement Centre brings

together Playtech’s entire CRM toolset, some of the

industry’s most sophisticated player personalisation and

communication products, designed to enable operators to

engage with players as effectively as possible throughout the

entire lifecycle. The Engagement Centre is also integrated

with our Playtech Protect platform, creating opportunities for

bespoke safer gambling messages and interactions.

2023 highlights

• In a major milestone, Sportsbook was integrated with Player

Journey to take full advantage of Playtech’s engagement tools

for Sports customers and increase the value of Playtech’s

PAM+ platform. Licensees can now create cross-sell journeys,

leaderboards and Missions promotions based on a wide variety

of sports-based parameters, including in-play bets and different

bet types and markets, and players can be rewarded with sports

bonuses and free bets.

• Introduction of Missions, a new promotion type that challenges

players to complete various tasks in exchange for rewards. The

tasks can range from playing a specific game to betting a certain

amount, or hitting a big win, while the rewards can be bonuses, free

spins or even real prizes. Missions can be configured to reward

players for actions taken across Playtech products including

Casino, Live Casino and Sports, or external licensee events,

thereby increasing operators’ ability to cross sell.

Safer gambling

Our offering

BetBuddy is our ground-breaking responsible gambling

(RG) analytics platform, built around data mining and

predictive analytics.

It combines the latest research into gambling behaviour patterns

with the power of artificial intelligence, delivering a sophisticated

solution to proactively identify and engage with players who might

be at risk. BetBuddy has a strong academic curriculum, with over

60 peer-reviewed papers and conference presentations, focused

on gambling harms, safer product design and AI.

BetBuddy segments players according to customisable criteria and

tags them for clear differentiation. Thanks to these tags, operators

can build Player Journeys, which enable personalised safer

gambling interactions, both via automatic in-play messages and

person-to-person conversations.

Highlights in 2023

• BetBuddy has expanded into three new jurisdictions in 2023,

having been adopted by clients in Sweden, Italy and Rest of

Canada. At present BetBuddy is integrated across 9 jurisdictions

and 16 brands.

• BetBuddy is now fully integrated into our PAM+platform

providing an innovative capability to apply personalised

responsible gambling tools on an individual player basis

based on dynamically calculated risk levels. The information is

displayed in a user-friendly Power BI dashboard format providing

a comprehensive overview of each player’s RG status and a

snapshot of the RG limits usage.

• Work has begun on the third iteration of BetBuddy (v 3.0), which

promises to deliver even more exciting features, including

improved segmentation tools, a dedicated sports betting model,

and a holistic single customer view. The update also includes a

new risk assessment model capable of calculating real-time RG

risk scores. This enhancement is currently operational across

seven brands in two jurisdictions and has received outstanding

feedback from operators.

Playtech Engagement Centre

25%

Increase in new licensees using leaderboards

(including Missions) in 2023 versus 2022

106%

Growth in average daily engagement

campaignsacross the platform

Who to engage with?

Data-driven

segmentation tools

When to engage?

Market automation

How to engage?

Communication tools

What to provide?

Player rewards

Brings together all

the engagement

elements of

PAM+ across all

product verticals

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Product and innovation continued

Our offering

Playtech’s Live technology brings the real-life casino experience

to the online environment. Live casino games, hosted by dealers in

specially designed studios, are streamed online, where players can

place bets on their computers and communicate with the dealer using

the chat function.

We’re dedicated to delivering the most authentic and engaging

omni-channel Live experience for our partners, driven by

acutting-edge platform using the latest business intelligence

data-driven technology.

Our 12 state-of-the-art studio spaces in key markets worldwide

are home to industry-leading audio-visual technology, combining

networked tables and games with bespoke space for several tier

onelicensees.

Our extensive, entertainment-driven Live content offering, hosted by

native-speaking dealers and presenters, ranges from casino classics

such as Blackjack, Baccarat and Roulette, to innovative variants and

gameshow-style content, including Adventures Beyond Wonderland

Live, The Greatest Cards Show, K-Pop Roulette, Everybody’s Jackpot

Live, Quantum Blackjack, Buffalo Blitz™ Live Slot and others.

Content

Playtech has one of the broadest content portfolios in the gambling industry with a huge

array of options across the industry’s most popular product verticals. The next section

outlines Playtech’s offerings across our five main verticals along with highlights in what

has been an exciting year.

2023 highlights

• In 2023, Playtech’s Live vertical exhibited a strong growth

trajectory, driven by diversification of content and significant

expansion of studio space.

• In the year, we expanded our flagship games portfolio to include

popular brands such as Jumanji™, whilst also extending the hugely

popular Mega Fire Blaze™ franchise to include Mega Fire Blaze™

Blackjack Live and Mega Fire Blaze™ Lucky Ball. We also launched

Big Bad Wolf Live, an innovative experience that combines a slot

game with elements of a Live experience, released from Quickspin

Live, the RNG arm of our Live division.

• Continuing to invest in branded content, the Company signed

the exclusive US rights to Family Feud (

Fremantle), one of US

television’s longest-running and highest rated gameshows, and

expects to launch a gameshow next year.

• We’ve also continued to develop our proprietary in-house video

technology and encoders to deploy high quality video features

and work has begun on a third generation video delivery platform.

Playtech’s Live product has been recognised as a leading solution

in the industry, winning the EGR Live supplier of the year for 2023,

acknowledging the achievements of its extremely talented team.

• Expansion of our studio capacity continues to remain a priority.

A new studio was opened in Pennsylvania, US, as well as a second

one in Lima, Peru, thus ensuring we can take advantage of the

strong growth within the Americas region.

Number of Live US studios fully operational

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Our offering

Playtech Casino offers one of the industry’s most extensive range

of “game of chance” based online slot games, delivering over 1,100

innovative in-house and premium branded titles through online or

retail channels.

Major original brands include Cash Collect™, Age of the Gods™, Fire

Blaze™ and the Blitz™ suite, while our range of exclusive film, sport

and entertainment tie-ins includes the Sporting Legends™ series,

plus titles from major Hollywood studios such as MGM, Universal,

Paramount and AMC. With eight distinct global studios developing

content under the Playtech umbrella, we offer an extensive selection

of games to suit a range of demands. In-game engagement tools such

as leaderboards, Mystery Parcels and engagement games empower

licensees to increase player engagement through gamification.

We give customers the tools to build native apps that are iOS

compatible by using a Software Development Kit (SDK) without

the need for any additional software developers. The native SDK

offers fast, straightforward game integration, allowing operators to

incorporate Playtech Casino games directly into their app for delivery

to the App Store, incredibly important for cross-sell activities between

Sports and Casino.

2023 highlights

• In 2023, the Playtech Casino vertical reached new heights of

success, thanks, in part, to our ongoing commitment to the “Power

Suite” strategy. This approach combines the most advanced slot

design and mechanics with a unique narrative, appearance and feel

designed to captivate players and establish a strong brand identity.

• In 2023, we launched 65 new games including Dragon Bonanza,

a highly popular fantasy slot game that combines distinctive

design with attractive prize mechanics. Branded content was also

launched, with a highlight being a new brand partnership with Sony

to release a new Cash Collect™ slot game based on the iconic TV

series Breaking Bad™, as well as Rocky™, a fast-paced feature

action game starring Rocky’s three greatest opponents – Apollo

Creed, Clubber Lang and Ivan Drago.

• Aside from content, Playtech has rolled out several features,

including Missions, a new promotional feature in Casino

strengthening the platform capabilities, and free spins 2, a long-

awaited upgrade to Playtech’s offering allowing licensees to give

players even more flexibility with how they use their free spins.

These high-quality roll-outs have helped to increase the level of our

feature adoption with tier 1 customers, with Holland Casino, Bet365

and Sky all using these features.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Live: Jumanji™

The Bonus Level

Launched in August 2023, Jumanji™ The Bonus Level

combines cutting-edge technology with the cinematic

qualities of the famous movie. Following a complex

development process, Jumanji™ The Bonus Level

is thefirst-ever Live game inspired by a Hollywood

blockbuster, marking a key milestone in the gaming

industry. This game is housed in a studio designed to

immerse players in the world of Jumanji. The studio’s

attention to detail ensures that the game replicates

the authenticity of the original movie, delivering a 24/7

themepark-like experience.

Casino: Rocky™

Playtech’s latest Rocky™ game was launched in

2023, delivering a fast-paced feature action with

an innovative 25-reel main game and six features

to play - one for each Rocky movie. The game stars

Rocky’s three greatest opponents – Apollo Creed,

Clubber Lang and Ivan Drago – and the gameplay

variety packs a punch, providing entertainment

value for players.

Purpose-driven content:

changing the way people experience gambling entertainment

Product and innovation continued

As online gaming evolves, Playtech continues to satisfy the ever-increasing demand to

deliver new, engaging and immersive entertainment experiences for consumers.

A feature bonanza

Casino: Dragon Bonanza: Gold Hit™

Dragon Bonanza, Playtech’s third Gold Hit™ game, utilises our

revamped respins feature and incorporates our latest promotional

tool, Missions, to drive player engagement, both of which have been

extremely well received by operators.

Continued investment in branded content

Strategic Report

38 Playtech plc Annual Report and Financial Statements 2023

Live: Big Bad Wolf

Big Bad Wolf Live is an innovative experience that

combines a slot game with elements of a Live

experience, released in 2023 from Quickspin Live, the

RNG arm of our Live division. The meticulous attention to

detail, pristine art and many exciting gameplay features

will keep players on the edge of their seats, and sets a

new industry standard for Live Casino gaming.

Casino: Gold Rush™:

Cash Collect™

The success of Gold Rush™, an exclusively licensed branded game from

Playtech’s Cash Collect™ power suite, has been particularly noteworthy,

as it achieved the fastest return on investment for a branded game in

the history of Playtech Casino, breaking even just after two months post

launch, compared to the traditional breakeven timeframe of six months.

Casino: Breaking Bad™:

Cash Collect & Link™

Breaking Bad™: Cash Collect & Link™, launched in

December 2023, features all the show’s key talent and

is part of Playtech’s award-winning Cash Collect™ suite,

which already includes successful branded games based

on The Walking Dead™ and the popular reality show Gold

Rush™. Cash Collect & Link™ is a new twist on the original

suite format, with Mega Link symbols creating major win

potential in the Hold & Respin round.

Cash Collect™ reaching new heights

Combining the best elements of Live and RNG

2 months

Breakeven period: fastest ever payback period

forbranded game in Playtech Casino’s history

Strategic Report

39Playtech plc Annual Report and Financial Statements 2023

Product and innovation continued

Content continued

Our offering

Playtech’s Poker product features everything licensees need to

launch their own fully branded, customisable online poker rooms, with

multiple game types, table stakes and tournament buy-ins.

All iPoker networks, for international as well as ringfenced regulated

markets, offer great liquidity pools and attracted an average of

450,000 players a month during 2023. Marketing and engagement

tools such as Missions, leaderboards and integrated player rewards

are central to an evolving “gamified” experience, in line with our

strategy to appeal to a wider demographic with long-term potential.

2023 highlights

• Playtech’s Poker vertical has continued its record-breaking spree in

2023 following the strong performance of the online poker market

post the COVID-19 pandemic. Three new operators joined Playtech

throughout the year resulting in a 32% year-on-year increase in the

average number of players per month.

• To support our growth, we continuously strive for product innovation

across game features, promotions and ancillary activities. In 2023,

we launched Mystery Bounty Tournaments, a highly popular

modification designed to add an extra dose of surprise by offering

generous hidden prizes for elimination of opponents. Additionally,

we introduced Poker Bingo, a fun and engaging side game that

presents players with greater opportunities to win rewards without

making additional bets. To top it off, Playtech now offers embedded

poker tools to track key player statistics, available to all players

freeof charge.

• In 2023, we have taken player experience to the next level by

relaunching our iPoker native mobile app. The revamped app offers

an innovative new look and feel, which introduces more promotional

space, interactive interfaces, and a wide range of customisable

image effects and animations.

Our offering

Playtech Sports delivers a full range of sports betting technology,

managed trading services, self-service betting terminals (SSBTs),

kiosks and over-the-counter systems, catering to online operators

and traditional retail/betting shop businesses of all sizes in major

regulated markets worldwide.

Playtech Sports boasts a wide distribution, with around 620 million

sports bets placed via our technology on more than 580,000 real

events in 2023, which makes us one of the largest B2B Sportsbook

providers in the world. Including Snaitech, Playtech has c. 70,000 bet

entry points live in retail locations worldwide, including kiosks, SSBTs,

traditional over-the-counter (OTC) offerings and space-saving

devices such as compact terminals and tablets, designed especially

for smaller venues. Our shop TV solution also allows operators to

display the latest odds for any sport and promote specific events.

2023 highlights

• Playtech’s Sports vertical made good progress in 2023, building on

the product modernisation initiative carried out in the previous year. We

successfully migrated Galerabet from its previous platform onto our

Sports product, positioning us well in the emerging Brazilian market,

where the sports betting total addressable market is projected to reach

$3 billion in the next five years. Aside from Brazil, we are particularly

strong in Latin America, where we continue to benefit from the success

of our structured agreements with Caliplay in Mexico, Wplay in

Colombia and Betcha in Panama.

• In Canada, we launched with NorthStar outside of Ontario to ensure

it is well placed to benefit as the Canadian market regulates over the

coming years. South Africa remains a priority for 2024 and beyond,

given the sizeable opportunity as this market opens up.

• From a product perspective, we have made good progress in adding

features that are more tailored to the US market such as Bet Builder

and Same Game Parlay for NFL, while also broadening our offering of

US sports to now include even more player props and micro markets.

Our Sports product is now integrated with player journey within the

PAM+, allowing operators to deliver a more personalised experience

totheir players, leading to higher engagement and stronger retention.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Our offering

Playtech’s innovative omni-channel Bingo solution offers players a

consistent and streamlined experience across any device or platform,

including retail, all through a single wallet and a single account.

Our UK bingo network consists of more than 19 brands and manages

57,000 daily players and close to 18,000 daily concurrent players.

2023 highlights

• In 2023, amidst a challenging market, Playtech has focused on

modernising and relaunching its Bingo product. The latest update,

due to launch in early 2024, has greatly improved the client interface

and customisation features. The renewed design, supported by a

modernised tech stack and a new front-end interface, now offers

a more vibrant and engaging user experience, positioning the

product to appeal to a wider audience.

• The new platform not only benefits end users, but also greatly

accelerates product development and enables the rapid launch of

innovative marketing features such as jackpot escalations and chained

promotions. By leveraging these tools, along with the new lobby

banners, operators can attract and engage players more effectively.

As a result of these improvements, we have observed an increase in

the level of interest shown by our existing and prospective clients. We

have renewed our agreement with Buzz Bingo, extended our contract

with Sky Bingo, and secured an agreement with a major Dutch

operator, NLO. Armed with a revamped Bingo product, we are now in

a good position to capitalise on growth opportunities in key regions

such as the US and Latin America.

AI and data

Business intelligence technology (BIT) and artificial

intelligence (AI) provide powerful insights

Playtech’s new cloud data platform allows data analytics and insights

in all domains from product and cross- product KPIs to player

behavioural analytics.

This new data platform embodies a data mesh architecture allowing

all Playtech products and units to unify their data onto a single

platform, bringing efficiency and capability improvements whilst

enabling new cross-product analysis and insights.

Our data democracy vision starts with putting the right data into

the hands of Playtech staff, but then swiftly moves to providing this

same data and analysis to our customers. This provides not just

comprehensive KPI dashboards (81 to date), but also includes more

advanced analytics such as market benchmarking (an exercise that

asingle Playtech customer is unable to carry out).

Playtech’s data-driven business intelligence technology significantly

enhances licensee revenues by increasing insight, improving player

experience and increasing lifetime value. Added AI functionality

gives licensees the tools to analyse big data and leverage real-time

automated insights into players’ behavioural patterns to create

apersonalised gaming experience.

We also offer the ability to segment players and personalise

communication, based on their behaviours, using analytics and AI

toimprove player experience.

2023 highlights

• New single data portal with comprehensive, interactive dashboards

for business KPIs and advanced analytics. Customers can also

construct their own bespoke dashboards based on the same

shared, anonymised datasets that Playtech uses.

• New cloud-based data mesh architecture empowers all Playtech

products to bring their data to the same collaborative platform,

enabling improved internal efficiency, and reduces total BI cost

ofownership through retiring legacy per product analysis tooling.

• New player analytics tooling made available to licensees –

providing analytics on exactly how players are interacting with

gaming products for the first time.

2023 saw a record Bingo game with

c.23,000

users and

c.1,100,000

tickets sold

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Product and innovation continued

Services

Making the most of Playtech’s technology

Through partnering with over 180 licensees globally, Playtech has amassed a huge amount of knowledge on the gambling industry including

customer acquisition and retention, how to manage risk and operational know-how. For those operators that are looking to launch online in newly

regulating markets, this know-how can prove invaluable in ensuring that they make the most of the opportunities of an expanding addressable

market. For those that are already established, our services can offer a way to get the most out of Playtech’s technology to help deliver further

growth. We break down our services offering into three segments: marketing services, operational services and consultancy and training.

Consulting and training:

Our consulting and training services ensure an easily accessible source of industry

and operational knowledge to get the most out of Playtech’s technology.

Marketing services:

Our marketing services are typically targeted at those operators where we have a

deep relationship such as strategic agreements.

Customer acquisition

Executing best practices and strategies in external marketing

to execute and promote marketing campaigns in line with

an agreed marketing plan and budget. We are experienced

across all customer acquisition channels and look to build

relationships with partners to ensure maximum value.

Customer retention

Developing and executing marketing strategies to retain,

grow and maximise player value while achieving high levels

of engagement in line with regulatory and compliance

frameworks and procedures. We have experience across

all communication channels including social media and

gamification and can deliver valuable bonus strategies

across all product verticals.

Operational services:

Our operational services are typically available for those customers which use our

technology under a conventional business model.

Customer onboarding

Assisting the operator

in configuring their

customers’ onboarding

journey/flow. We

configure the technical

set-up for the system

and oversee ongoing

results to ensure

business performance.

Risk

management

Delivering fraud

prevention services

for the operator to

minimise reputational

and financial losses.

We also offer AML

services to ensure

operators adhere to

regulatory requirements.

Customer

experience services

By combining our

expertise in regulatory

frameworks, customer

protection and leading

delivery, we provide

high-quality customer

experience services

using AI-driven

solutions at scale.

Payment processing

Overseeing the

processing of cash

out requests by

customers from the

point of the request

to the moment they

leave our platform as

an “approved” outgoing

transaction in line with

risk management/

fraud prevention/

AMLcontrols.

Technical

delivery services

Delivering the

necessary back-

officeconfigurations

in PAM+ to ensure

operators optimise

Playtech’s technology.

Playtech Academy and training

Playtechacademy.com is the award-winning website that

acts as a portal where operators and Playtech colleagues

alike can access a wide range of content including videos,

presentations, podcasts, thought leadership and live

webinars, to enhance their knowledge of Playtech products.

Consulting

Our experienced consultants, across a wide range of

locations and covering multiple verticals, help support

operators in implementing industry best practice to get the

most out of Playtech’s technology. Activities are linked to

clearly defined and measurable KPIs.

42 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Broad range of available

third-partyintegrations

Playtech provides operators with access

to specialist services and software from

carefully selected third parties. These

partners offer products and services

that complement or enhance Playtech’s

existing systems, giving operators a richer,

more complex set of tools to achieve their

business objectives, while not having to go

through an integration process.

>45

Available third-party solutions

A flexible offering

A plethora of options to fit our licensees’ needs

Playtech Open Platform and

Games Marketplace

Playtech Open Platform (POP) allows

licensees to access more than 10,000

of the industry’s most popular online and

mobile in-house and third-party games

at any time, across any channel and on

any device, ensuring licensees can offer

their players a broad range of content. The

Games Marketplace allows operators to

discover and configure Playtech and third-

party content, and monitor its performance,

regardless of the technology that the game

was built in. This also increases the amount

of data that Playtech can access, improving

our analytics offering and increasing

network effects.

SaaS

For those operators that have their own platform, we also offer the ability to access our content, in a plug-and-play SaaS model. Operators

benefit from the ability to access Playtech content without having to license the PAM+ platform with low implementation costs and quick

time to market, while Playtech expands its addressable market. The SaaS model can also be used to provide a low-friction method of

exposing as many operators as possible to Playtech’s technology. Once operators see the quality of Playtech’s content and technology,

the path to offering additional Playtech products becomes easier. Playtech has been building out the infrastructure for its SaaS business

since 2017 including data centres in local markets. As a result, Playtech is ready to accommodate a large number of operators across its

infrastructure and has added over 450 brands since launching the SaaS offering.

>450

Brands added since launch of the SaaS offering

Playtech’s business

model unleashes powerful

network effects

Network

eects from

third-party

content/Games

Marketplace

Better brand

for Playtech

customers

More end

consumers

Better

customer

experience

More choice

for end

consumers

Attracts more

third-party

content

43Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Stakeholder engagement

Considering all stakeholders

in our decision making

Playtech’s success is reliant on maintaining strong relationships with stakeholders.

As a technology leader and trusted service provider in the gambling industry, Playtech’s success is built upon maintaining strong relationships

and trust with its stakeholders. As an Isle of Man registered company, we are not bound by the UK Companies Act 2006. However, we seek to

adhere to best practices and, as such, the following section outlines how the Directors take into account their obligations under section 172(1)

(a)to(f) of the Companies Act 2006.

44 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Why we value them

We recognise our colleagues are fundamental to our success and, as

such, we put our colleagues at the heart of everything that we do as a

company. We strive to recognise and reward everyone’s contributions

appropriately and give people the opportunity to develop both

personally and professionally. Playtech, therefore, needs to attract

and retain top talent and a strategic and professional approach to

recruitment is essential to achieve this.

Continued access to capital is vital to the long-term success of our

business. Furthermore, Company Directors can better understand

shareholder concerns and the driving forces behind their voting

decisions. Engagement with experienced investors can be valuable

for the Company in providing feedback on key strategic decisions,

whilst also helping to anticipate any issues that may arise in areas

such as governance and sustainability.

Colleagues Shareholders and bondholders

How the Board and management engage and respond

• Implementation of a new Centre of Excellence function within HR,

focusing on talent acquisition, learning and development, and

diversity, equity and inclusion

• Series of town halls and office visits with a structured and informal

format to:

• Understand and listen to the ideas, issues and concerns

• Increase awareness and understanding of the corporate strategy

and priorities

• Establish meaningful, two-way engagement with colleagues

• Foster a culture of listening, openness and consultation

• Ensure colleagues are aware of actions as a result

ofengagement

• Global engagement survey supported by action plans

Read more on pages 60 to 69

Most pertinent issues in 2023

• Flexibility, autonomy and being able to work from home

• Communication about strategy and priorities

• Recognition, continuous feedback, and learning and development

• Employee wellbeing, work-life balance and career progression

• Competitive remuneration and benefits

• Rising cost of living

• Annual Report and AGM

• Structured programme of communication between the Company

and investors and analysts

• Results presentations and post-results engagement with

majorshareholders

• Capital Markets Days and analyst site visits

• Board receives regular updates on investor relations

• Engagement with ESG indices

• Chair of the Remuneration Committee engages with shareholders

on Remuneration Policy and practice

• Capital allocation priorities

• US and Latin America strategy

• Capturing the market opportunity in Italy and within Live

• Ongoing litigation with Caliplay

• Corporate governance

• ESG strategy and progress on safer gambling, climate and diversity

and inclusion

45Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Stakeholder engagement continued

Why we value them

We seek to understand our licensees’ and customers’ needs and

challenges so that we can develop products and services and

enterstrategic partnerships that will add value. Regularly engaging

with licensees and customers also highlights opportunities for

innovation to ensure we can stay ahead of the competition, and

respond to challenges.

Our suppliers and technology partners play a crucial role in

supporting our operational excellence as well as the success

of our commercial teams, our product units and, ultimately, our

licensees. Our customers benefit from high-quality provision of

technical services as well as the suppliers’ and partners’ geographic

reach, industry-specific and functional domain expertise and

implementation support.

Licensees and customers

Suppliers and

technology partners

Most pertinent issues in 2023

• Innovation across content, products and platform

• Data protection

• Service reliability and scalability

• Compliance

• Competitive pricing

• Solutions and support to meet and anticipate regulatory

developments and sustainability topics – including safer gambling

How the Board and management engage and respond

• Face-to-face engagement at trade shows

• Executive Management team regularly meets with our customers

to ascertain how Playtech is delivering as a partner and how we

can improve

• The Board regularly receives updates on licences signed and

progress on implementations

• Management teams use account management structures and

CRM tools across our business to ensure we are delivering to our

licensees’ and customers’ expectations

• Playtech aims to apply best practices, develop skills and

capabilities, and deliver continuous improvement in execution to

enhance the overall customer experience

• Presentations to the Board Sustainability Committee on

sustainable procurement risk assessment and sustainable supply

chain strategy

• The Procurement function undertakes actions to ensure open

communication with vendors and suppliers

• Playtech initiates supplier briefings and brainstorming sessions to

help create new solutions aligned with Playtech requirements

• Ensures supplier compliance with regulatory requirements,

through due diligence checks, GDPR reviews and information

security checks

• Playtech ensures supplier compliance with human rights and

climate requirements

• Playtech actively chooses to work with partners that are leaders in

their own field and share Playtech’s standards and values

• Complexity and speed of onboarding process for new suppliers

• Consistent and regular communication and engagement with

key suppliers

• On-time payments

• Fair terms

• Playtech ensures suppliers (including small suppliers) have access

to new business opportunities

• Ethical behaviour and supplier compliance with sustainability

criteria on climate and human rights

• Innovation partnerships

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Engagement with regulators plays an important role in, and can be

valuable to, facilitating a fairer, safer and more sustainable sector.

TheCompany continues to actively advocate for regulation in existing,

future and evolving markets, which is vital to raise industry standards

and protect customers, whilst also ensuring the industry continues to

provide entertaining products to its customers, and better understand

regulator concerns and decision making.

We are committed to operating and growing our business in a way

that has a positive impact on the communities and environment

where we operate. We also recognise that the challenges facing the

sector and communities cannot be solved by one organisation alone.

Drivingpositive social change requires collaboration and partnership.

Regulators and policymakers Society and communities

• Board member participation in trade body and one-to-one

meetings with regulators and policymakers

• Chief Compliance Officer provides the Board with regular updates

on developments

• The Board is engaged with the licensing processes in several new

jurisdictions to better understand regulatory requirements

• The Board continues to actively promote further regulation in the

US via meetings with state regulators

• The Board receives ongoing updates including the review of the

UK Gambling Act and regulatory developments in the US and

Latin America

• Playtech delivers training to the Board every 12–18 months,

including legal requirements related to anti-money laundering and

anti-corruption, as well as regulatory developments

• Further evolution of safer gambling regulatory requirements

• Expansion in the use of technology and data analytics to

protect players

• Increased emphasis on enhanced protection or stricter regulatory

requirements for potentially more vulnerable groups, e.g. under 25s

• Concerns about the growth of unlicensed operators

• Improving existing regulations and compliance with a greater focus

on safer gambling and AML

• New regulatory and legislative developments to promote player

and consumer protections

• Engagement with the Sustainability and Public Policy

BoardCommittee

• The Board is provided with updates from the Chair of the

Sustainability Committee on:

• The Company’s safer gambling strategy

• Climate change

• Human rights in the workplace and supply chain

• The Board is provided with regular updates on community-related

efforts led by Playtech colleagues

• Endorsement of near-term and 2040 net zero targets and roadmap

for SBTi validation

• Sustainability-linked remuneration to include Executive Committee

and selected leaders

See KPI section on pages 12 and 13

• Societal concerns about the impact of gambling on digital wellbeing

and mental health

• Ethical and responsible use of technology and generative AI

• Action to reduce the risks and impacts on climate change

and nature

• Action to tackle modern slavery and human and labour rights issues

• Equality, diversity and inclusion

• The impacts of the Israel–Hamas war and war in Ukraine

• Partnership, engagement and support for local community

organisations and causes

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Responsible business and sustainability

Sustainability: Shaping our

sustainable future

Our progress in 2023

I am pleased to outline the highlights from our 2023 performance.

During the year, to ensure that we continued to uphold the

highest standards, Playtech undertook a further review of the

business against the GamCare B2B Safer Gambling Standard,

extended the scope of the audit, and was awarded the Advanced

Level Three of the standard – the highest possible level of

award. In 2023, we continued to strengthen our portfolio of safer

gambling technology and solutions under Playtech Protect, with

the development of personalised responsible gambling journeys.

Our people are critical to our business success. In 2023,

weintroduced a new Global People Framework covering all

elements of our people strategy from recruitment and onboarding

tosuccession planning and personal and professional development,

embedding equality and inclusion at the core of our strategy. Weare

proud to have launched a Global Benevolent Fund, to provide

enhanced support to colleagues and their immediate families who

may encounter unforeseen, severe life-changing challenges.

We also set in motion our net zero by 2040 plan. In early 2024,

the Science-Based Targets initiative (SBTi) approved Playtech’s

near-term science-based emissions target, a 50.4% reduction in

its scope 1, 2 and 50.4% in scope 3 emissions by 2032. Playtech

has also committed to set long-term emissions reduction targets

with SBTi in line with reaching net zero by 2040.

Another key highlight in 2023 was the launch of a new

sustainability partnership with Hubbub, to further enhance

colleague awareness and engagement on sustainable action.

We continued and expanded our partnerships with expert

charities and academics to help people live healthier lives online,

as well as supporting a wide range of charitable and volunteering

activities. By the end of 2023, we had exceeded our community

target set for 2025, with over 160,000 people engaged through

community investment and mental health programmes over the

past three years.

I am proud of the progress we have made in 2023. Our focus for

2024 will be to go further and deeper in making sustainability

integral to the way we do business at Playtech – for every

colleague, irrespective of what they do and where they work

intheorganisation.

Linda Marston-Weston

Chair of the Sustainability and

Public PolicyCommittee

26 March 2024

In 2023, we continued

to make good progress

towards meeting our 2025

targets and commitments.

I am proud of the work

we are doing to embed

sustainability into the DNA

of our business, our values

and our culture.”

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Embracing challenge

on sustainability

As a business in a rapidly changing industry, Playtech aims to

play its part in raising standards and embedding sustainability

internally and across the sector. With the continuously evolving

societal and stakeholder expectations, Playtech recognises

the importance of engaging with stakeholders to ensure the

Company’s approach to sustainable business remains robust

and meets expectations. As a result, in 2021, Playtech set

up a Stakeholder Advisory Panel to challenge and guide its

sustainability agenda.

Following the seven successful panel sessions from the last

couple of years, which allowed Playtech to draw on a wide

range of knowledge, insights and experiences, the Company

has continued its engagement with this group in 2023. The

panel reconvened in person in November 2023, sharing ideas,

suggestions, and constructive challenges with members of

Playtech’s senior management team and Board members. The

panel has a crucial role in shaping the sustainability strategy and

improving performance.

The main objectives of the session were to discuss global trends

and strategic questions that will be important in strengthening

and shaping the future of Playtech’s sustainability strategy,

review the Company’s progress and the challenges it faces and

demonstrate how Playtech has considered the panel’s feedback

and comments as part of the evolution of its strategy. Three main

themes emerged from the discussion:

• While Playtech has made considerable progress, there

remains work to do around embedding sustainability into the

Company’s culture and engaging with employees, providing

them with the tools to embed sustainability into their own

sphere ofaccountability.

• The sustainability agenda is changing at a fast pace. With

regulators continuously increasing the minimum requirements

for both disclosures and action-led compliance, Playtech will

have to innovate to keep its leading edge.

• Industry collaboration and multi stakeholder partnerships can

be an important way that Playtech can lead on selected topics

and drive change across the sector. A sectoral collaboration

around safer gambling has been encouraged by the panel, as

well as a potential climate change coalition to accelerate the

transition to net zero.

Our sustainability governance

Our sustainability strategy is overseen by a Board-level Sustainability

and Public Policy Committee, which is responsible for monitoring the

Group sustainability performance as well as setting targets for the

Group. The Committee also actively engages with external subject

matter experts, leading academics and charities to help challenge

and strengthen Playtech’s overall approach.

The day-to-day responsibility for sustainability governance

sits within the Sustainability and Corporate Affairs function. In

practice, this function co-ordinates action, provides subject matter

expertise, delivers support to other relevant functions, business

units and country-level management, tracks performance and leads

engagement and partnerships with external partners. Additionally,

there are topical forums to further support delivery of the agenda

including the Environment Forum and Community Investment Committee.

The Sustainability function also works closely with the Regulatory

Affairs and Compliance function to align and integrate compliance

and regulatory considerations into planning and decision making.

TheRegulatory Affairs and Compliance function is subject to

recurring annual reviews, the scope of which is dynamic and varies

from year to year. This function continued to lead the Compliance

Council and other internal governance forums.

The newly established Risk, Internal Controls and Assurance function

together with Internal Audit play a key role in ensuring that internal

controls, including sustainability-related matters, are integrated into

operational processes across the business.

Read more on the sustainability governance structure on

www.investors.playtech.com/sustainability

Action and accountability

We believe that growing our business in a sustainable and

responsible manner is a key factor in delivering long-term value for all

ourstakeholders.

For this reason, in 2023 the Board strengthened sustainability

governance and accountability beyond Executive Management, by

linking the Company’s sustainability performance and year-on-year

progress to the remuneration of the Management Committee and

selected leaders. The sustainability performance and measures

relate to material elements of our sustainability strategy, which include

safer gambling, diversity and inclusion, and theenvironment.

The Board will continue to review and expand the Company’s

environmental, social and governance performance measures as well

as the scope to build on collective efforts to meet our commitments

and most importantly, embed sustainability into our culture and

business operations.

I have been impressed by the willingness of the

Board and Executive team to actively listen and

engage in constructive conversations with the

panel, covering a broad range of sustainability

topics, with an enduring focus on the unique role

of Playtech within its sector.”

Christian Tøennesen, Group Sustainability Director,

Selfridges Group

Read more on the detailed summary of the latest panel session on the

Playtechwebsite

49Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Sustainability materiality matrix

The diagram below outlines the material and emerging issues of interest to stakeholders, including topics that are related to wider

community investment activities and water usage within the Group’s Italian operations.

Sustainability materiality

Playtech’s sustainability priorities have been based on the most material environmental,

social and governance issues that both internal and external stakeholders consider

important for industry and society. Playtech’s most recent materiality assessment was

refreshed in 2022 and takes into consideration increased political, regulatory and societal

concerns. In 2024, Playtech will refresh its materiality assessment.

Importance to stakeholders High

Impact on Playtech High

Pioneering safer gambling solutions

Promoting integrity and an inclusive culture

Powering action for positive environmental impact

Partnering on shared societal challenges

Circular

economy

Water

security

Waste

management

Biodiversity

Remuneration

equity

Systemic risk

management

Labour

standards

Human rights

Responsible advertising

and marketing

Corporate

governance

Data protection

and cybersecurity

Employee health and safety

Financial crime

Safer gambling

Climate change

DEI

Community

investment

Board and executive

remuneration (linked to

ESG criteria)

Digital wellbeing

and resilience

Charity

partnerships

Ethics of AI

Tax

transparency

Intellectual property

and disputes

Lobbying and

publicpolicy

Human capital

management

Protection of

vulnerable groups

Responsible

supplychain

Emerging Material

Strategic

Responsible business and sustainability continued

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Issues that matter to Playtech and society

The Company recognises that standards, requirements and expectations about the role of

business in tackling environmental, social and governance topics continue to evolve. Regularly

assessing which issues are material to the business and industries it operates in is essential

to successfully test and develop the Group’s responsible business strategy and reporting.

Playtech defines an issue as being material if it is considered important by key stakeholders

and could have a significant financial impact on the business. As such, the business considers

both risks and opportunities as part of the materiality assessments.

The approach to materiality is dynamic and will continue to evolve and adapt, ensuring

assessments help the Company to capture changes in the business and in society, as well as

focusing on reporting and sustainability disclosures.

The issues identified as being the most material are:

Safer gambling

Embraces areas such as games design and product safety,

marketing, investment in research, education and treatment (RET),

customer engagement, regulation, data analytics and the use of

artificial intelligence (AI).

Climate change

Covers policies, existing and impending regulations, initiatives,

and performance relating to climate change prevention, mitigation

and adaption.

Diversity, equity and inclusion

Covers increased representation and inclusivity for various

groups,including gender, culture, identity and disability, directly

linked to talent attraction, retention, employee engagement,

traininganddevelopment.

Responsible advertising and marketing

Refers to adopting a socially responsible approach to advertising

and marketing, ensuring that adverts do not exploit the

susceptibilities of young or vulnerable people.

Employee health and safety

Relates to looking after the mental and physical health of

employees – a concern that became increasingly prominent

following the pandemic.

Data protection and cybersecurity

Refers to policy, governance and resourcing as well as operational

KPIs related to security strategies, data protection and security

controls, vulnerability monitoring and risk assessments, and risk

management and governance.

Corporate governance

Refers to elements of governance that relate to the social and

environmental aspects of sustainability such as Board diversity

andexperience, incentives and remuneration, and the integration

ofsustainability into decision making.

Financial crime

Focuses on anti-money laundering (AML), anti-bribery and

corruption (ABC), tax evasion and professional integrity.

Human rights

Focuses on recognising the rights of all people regardless of

race, sexuality, nationality or any other status. It also covers

modern slavery.

Labour standards

Relates to basic worker rights, working conditions, adequate wages

and job security.

Systemic risk management

Refers to ensuring risks associated with business collapse

are managed, such as ensuring there is clear accountability

andreporting.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Our sustainability priorities

Responsible business and sustainability continued

What we measure:

• Diversity metrics

• Employee engagement

• Employee wellbeing

Why does it matter:

We are empowering Playtech colleagues to be a force for good in the

world. Our sustainability approach helps our people work together

with clear targets to maximise our collective positive impact on players,

local communities and the environment.

In action:

We are building a culture of equality and inclusion. With our new

Global People Framework, we are embedding equality and inclusion

as a key element of our talent succession planning, and learning and

development strategy.

Read more on Playtech People on pages 60 to 69

Promoting integrity and

an inclusive culture

Pioneering safer gambling solutions

What we measure:

• Playtech Protect presence and BetBuddy integrations

• Research papers, practical and theoretical

• Uptake of safer gambling tools

Why does it matter:

One of the most impactful contributions we can make to the industry

and in society is to advance safer gambling and player protection

technology. Through our safer products, data analytics and player

engagement solutions, we are keeping players safe and helping our

licensees succeed in regulated and fast-moving markets.

In action:

At Playtech, we are harnessing our culture of innovation to pioneer

safer gambling solutions for our customers. Through Playtech

Protect, we offer licensees a wide range of responsible gambling

andcompliance technology, tools and solutions.

Read more on Playtech Protect on pages 56 to 59

Strategic Report

52 Playtech plc Annual Report and Financial Statements 2023

Sustainability is about taking responsibility for our Company’s impact on people,

societyand the environment. At Playtech, we have developed a framework for action,

with four priority areas:

What we measure:

• Energy and emissions

• Renewable energy in our offices

• Water and waste consumption

Why does it matter:

Climate change is an urgent concern for everyone, including our

people, investors and local communities. This is why we have made

“Playtech Planet” a stand-alone priority in our sustainability strategy.

In action:

Playtech has committed to near-term and net zero targets to ensure

our journey to decarbonisation is in line with limiting global warming to

1.5°C, as per the Paris Agreement.

Read more on Playtech Planet on pages 70 to 81

Powering action for positive

environmental impact

What we measure:

• Monetary donations and investments

• Employees’ contributions (skills, time and/or money)

• Engagement and reach to assess impact

ofcommunityprogrammes

Why does it matter:

We are committed to making a positive impact on society and in local

communities. By working with expert partners, we are helping people

live healthier lives online and supporting a wide range of charitable and

volunteering activities.

In action:

We are collaborating with subject matter experts, industry stakeholders,

academic partners and charitable organisations to address societal

challenges that are most relevant to our industry and local communities.

Read more on Playtech Partners on pages 82 to 87

Partnering on shared

societal challenges

Strategic Report

53Playtech plc Annual Report and Financial Statements 2023

Our Group Sustainability Scorecard

Priorities Commitments Performance measures 2023 performance

Pioneering

safer gambling

solutions

Expand the portfolio of safer gambling

technology, tools and solutions

Playtech Protect presence (number of jurisdictions) 9

Brands integrated with BetBuddy (number of brands) 16

Harness investment in R&D to

advancethe next generation of

safergambling solutions

Research papers during the year (number of papers) 5

SaaS partnerships (number of safer gambling and

compliance partnerships)

Strengthen operational safer

gamblingstandards and

technologyacross our operations

Achievement of safer gambling independent certiﬁcation or

assurance acrossoperations

GamCare B2B Safer Gambling Standard, Level 3

G4 international certiﬁcation of responsible online gambling

(Snaitech)

Customer interactions (B2C) training during the year (completion rate) 88%

Proportion of customers self-excluding and using safer gambling tools during the year (%) 14 % and 22% respectively

Promoting

integrity and

an inclusive

culture

Promote integrity, uphold human rights

and reduce compliance risk across our

operations and supply chain

Reports raised through Playtech’s Speak Up whistleblowing hotline

during the year (number of incidents)

Compliance training during the year (employee completion rate) 94%

Data protection training during the year (employee completion rate) 93%

Human rights training during the year (employee completion rate) 93%

Information security training during the year (employee completion rate) 92%

Foster equal opportunity and equality

for all employees

Increase gender diversity amongst our leadership population to 35% by 2025

against a 2021 baseline

30%

Reduction in Mean Gender Pay Gap (UK) 19% decrease (from 27.4% in 2022 to 22.1% in 2023)

Reduction in Median Gender Pay Gap (UK) 16% decrease (from 26.5% in 2022 to 22.2% in 2023)

Reduction in Mean Gender Bonus Gap (UK) 6% increase (from 41.1% in 2022 to 43.7% in 2023)

Reduction in Median Gender Bonus Gap (UK) 45% decrease (from 36.5% in 2022 to 20.0% in 2023)

Support employee wellbeing Wellbeing initiatives during the year (number of initiatives) >250 wellbeing initiatives

Employee participation in wellbeing initiatives during the year (numberofemployees) >4,300 employees participated in at least one initiative

Employee Net Promoter Score (eNPS) from employee engagement surveys 41%

Powering

action for

positive

environmental

impact

Reduce Greenhouse Gas (GHG)

emissions within own operations and

supply chain

Reduce Scope 1 and 2 (location-based) carbon footprint by 40% by 2025 against

a 2018 baseline

1.7% increase (excluding refrigerants, see pages 70 to 73 for

more details)

Track Scope 3 reductions with focus on key material categories 106,641 tCO2e

Build capability and climate resilience

through decisive actions in both own

operations and supply chain

Switch all oces, wherever possible, to renewable energy

(% of renewable energy)

57%

Align to global climate eorts to

transition into a low-carbon economy,

in accordance with the latest climate

science and prioritise climateinnovation

Get near-term and net zero targets approved by Science Based Targets initiative (SBTi) SBTi approval received in early 2024

Partnering on

shared societal

challenges

Help people live healthier online lives

and adopt digital resilience and safer

gambling behaviours

Reach 415,000 people with digital wellbeing programmes by 2025

(number of people reached directly and indirectly)

>680,000 people reached

Contribute to and support

research,education and treatment

toprevent, reduce and address

gambling-related harm

Total amount invested during the year (€) >€ 1,500,000 (£ 1,300,000)

Empower local community groups

to deliver a positive impact

Engage 30,000 people in community and mental health programmes to improve

livelihoods by 2025 (number of people engaged)

>160,000 people engaged

5% year-on-year increase in employees’ contributions (skills, time or money), reaching a

global average of 10% by 2025 (%)

10.5% global average (increase by 129.0% since 2022)

Total value of monetary donations during the year (€) >€ 710,000

Responsible business and sustainability continued

ESG ratings:

We actively participate in a range of global ESG ratings, indices

and frameworks to benchmark our approach against best

practice and emerging sustainabilitychallenges:

Playtech scored 55 in the 2023 S&P Global Corporate

Sustainability Assessment reflecting an improvement

of 44points over the last three years (CSA score as

of24November2023).

In 2023, Playtech received

a ratingof“AA” in the MSCI

ESGratings assessment.

1 www.msci.com/notice-and-disclaimer

In November 2023, Playtech received

an ESG rating of 12.5 and was assessed

by Morningstar Sustainalytics to be

at low risk of experiencing material

financial impacts from ESG factors.

In no eventshall this information be

construed as investment advice or

expert opinion as defined by the

applicable legislation.

2 www.sustainalytics.com/legal-disclaimers

In 2023, Playtech was included

in the FTSE4Good Index, with

ascore of 4.3 (out of 5).

Playtech participates annually

in CDP’s Climate Change

Programme. In 2023, CDP

recognised our progress with

a“B” score.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Playtech uses a sustainability scorecard to monitor and assess performance

againstitssustainabilitypriorities,commitmentsand targets.

Priorities Commitments Performance measures 2023 performance

Pioneering

safer gambling

solutions

Expand the portfolio of safer gambling

technology, tools and solutions

Playtech Protect presence (number of jurisdictions) 9

Brands integrated with BetBuddy (number of brands) 16

Harness investment in R&D to

advancethe next generation of

safergambling solutions

Research papers during the year (number of papers) 5

SaaS partnerships (number of safer gambling and

compliance partnerships)

Strengthen operational safer

gamblingstandards and

technologyacross our operations

Achievement of safer gambling independent certiﬁcation or

assurance acrossoperations

GamCare B2B Safer Gambling Standard, Level 3

G4 international certiﬁcation of responsible online gambling

(Snaitech)

Customer interactions (B2C) training during the year (completion rate) 88%

Proportion of customers self-excluding and using safer gambling tools during the year (%) 14 % and 22% respectively

Promoting

integrity and

an inclusive

culture

Promote integrity, uphold human rights

and reduce compliance risk across our

operations and supply chain

Reports raised through Playtech’s Speak Up whistleblowing hotline

during the year (number of incidents)

Compliance training during the year (employee completion rate) 94%

Data protection training during the year (employee completion rate) 93%

Human rights training during the year (employee completion rate) 93%

Information security training during the year (employee completion rate) 92%

Foster equal opportunity and equality

for all employees

Increase gender diversity amongst our leadership population to 35% by 2025

against a 2021 baseline

30%

Reduction in Mean Gender Pay Gap (UK) 19% decrease (from 27.4% in 2022 to 22.1% in 2023)

Reduction in Median Gender Pay Gap (UK) 16% decrease (from 26.5% in 2022 to 22.2% in 2023)

Reduction in Mean Gender Bonus Gap (UK) 6% increase (from 41.1% in 2022 to 43.7% in 2023)

Reduction in Median Gender Bonus Gap (UK) 45% decrease (from 36.5% in 2022 to 20.0% in 2023)

Support employee wellbeing Wellbeing initiatives during the year (number of initiatives) >250 wellbeing initiatives

Employee participation in wellbeing initiatives during the year (numberofemployees) >4,300 employees participated in at least one initiative

Employee Net Promoter Score (eNPS) from employee engagement surveys 41%

Powering

action for

positive

environmental

impact

Reduce Greenhouse Gas (GHG)

emissions within own operations and

supply chain

Reduce Scope 1 and 2 (location-based) carbon footprint by 40% by 2025 against

a 2018 baseline

1.7% increase (excluding refrigerants, see pages 70 to 73 for

more details)

Track Scope 3 reductions with focus on key material categories 106,641 tCO2e

Build capability and climate resilience

through decisive actions in both own

operations and supply chain

Switch all oces, wherever possible, to renewable energy

(% of renewable energy)

57%

Align to global climate eorts to

transition into a low-carbon economy,

in accordance with the latest climate

science and prioritise climateinnovation

Get near-term and net zero targets approved by Science Based Targets initiative (SBTi) SBTi approval received in early 2024

Partnering on

shared societal

challenges

Help people live healthier online lives

and adopt digital resilience and safer

gambling behaviours

Reach 415,000 people with digital wellbeing programmes by 2025

(number of people reached directly and indirectly)

>680,000 people reached

Contribute to and support

research,education and treatment

toprevent, reduce and address

gambling-related harm

Total amount invested during the year (€) >€ 1,500,000 (£ 1,300,000)

Empower local community groups

to deliver a positive impact

Engage 30,000 people in community and mental health programmes to improve

livelihoods by 2025 (number of people engaged)

>160,000 people engaged

5% year-on-year increase in employees’ contributions (skills, time or money), reaching a

global average of 10% by 2025 (%)

10.5% global average (increase by 129.0% since 2022)

Total value of monetary donations during the year (€) >€ 710,000

55Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Pioneering safer

gambling solutions

One of the most significant contributions Playtech can make to the industry and

societyisthe provision of technology to advance safer gambling and player protection.

Through our safer gambling technology solutions, we are helping operators and the

industry strengthen player protection measures and create a safer gambling experience.

Safer gambling – the changing landscape and

our approach

Across all markets, including jurisdictions where online gambling

is in the process of being regulated, the importance of protecting

players, preventing gambling-related harm and ensuring our industry

is sustainable continues to be the most material priority for the gaming

and betting sector. With our unique reach, data capabilities, and

investments in safer gambling technologies, Playtech has taken the

conscious decision to invest in technological solutions to help our

licensees and industry, strengthen safeguards and enhance positive

player gambling experiences.

Collaboration is vital to our approach. Across its operations and

externally, Playtech has partnered with academics, non-profit

organisations, licensees and think tanks, to further develop and

advance the delivery of safer gambling solutions and standards

as well as broaden its safer gambling product portfolio under

Playtech Protect.

Gambling regulation – evolving expectations

As regulated online gambling markets mature and as regulators gain

greater understanding of the impact of online gambling there is a

greater emphasis placed on customer protection. Newly regulating

markets learning from the experiences of other regulators are

launching with increasingly sophisticated, comprehensive player

protection obligations. A crucial aspect of this evolving trend is the

shift of regulatory focus to behavioural analytics for player protection

purposes. Engagement with policymakers and regulators plays a key

role in facilitating a fairer, safer and more sustainable gambling sector.

The Company continues to actively advocate for robust standards

in regulating and regulated markets, which can, more adequately,

safeguard players as well as better align with regulatory efforts

to improve responsible gambling measures and practices. In

jurisdictions such as the Netherlands, Spain, Ontario, New Jersey,

Colorado and more recently Colombia, there is a trend towards

requiring the use of behavioural analytics to identify and address

problematic gambling behaviours, and upcoming markets are looking

closely at this approach.

Playtech continues to contribute its experience, technology,

and research insights to support its licensees and wider

industrystakeholders.

Commitments:

• Expand the portfolio of safer gambling technology, tools

and solutions

• Harness investment in R&D to advance the next generation

ofsafer gambling solutions

• Strengthen operational safer gambling standards and

technology across our operations

Performance measures:

Brands

deployed and

integrated with

BetBuddy

Number of

jurisdictions

Compliance

and safer

gambling SaaS

partnerships

Responsible business and sustainability continued

• Achievement of safer gambling

independent certification or assurance

across operations

• Safer gambling training

• Uptake of safer gambling tools in our

B2C operations

• Research papers and partnerships

• Playtech Protect presence and brands

integrated with BetBuddy

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Playtech Protect – Playtech’s safer gambling offering

Our flagship solution, Playtech Protect, was established to offer

licensees a wide range of responsible gambling and compliance

technology, tools and solutions, as well as leading to the formation

of several research partnerships. These technology solutions are

embedded into Playtech’s PAM+ platform and Engagement Centre.

Using our scale, advocacy, and data-driven approach, we are offering

safer gambling tools, to help our licensees and industry deliver

responsible gambling experiences and effective player protection

measures. Playtech Protect combines our advanced technology,

data analytics and research to promote safer gambling. The offering

includes a range of tools for end-to-end player management, risk and

fraud mitigation, and customer engagement.

Within this offering, Playtech’s flagship technology product is

BetBuddy, an artificial intelligence powered solution that uses

predictive analytics and machine learning to detect problematic play

patterns. BetBuddy enables operators to segment their player base

according to risk level and initiate personalised interventions like

setting deposit limits. By predicting risk at an early stage, BetBuddy

enables operators to engage with players in a personalised way while

problematic behaviours are still developing. This provides a valuable

opportunity to guide users towards safer gambling habits before more

severe harm occurs.

In 2023, we saw further uptake of safer gambling technologies,

tools and solutions by licensees. This was driven by the introduction

of specific requirements on the use of behavioural analytics to

detect players at risk in additional jurisdictions, based on licensing

requirements, and an increased awareness across the industry of

the importance of a proactive approach to safer gambling. In 2023,

16brands across nine jurisdictions have been integrated with and

are using BetBuddy, compared to 13 brands in 2022. Considering

that three brands have ceased operations, Playtech has onboarded

six additional brands during 2023. By the end of 2023, BetBuddy

presence had expanded into three new jurisdictions, having been

adopted by brands in Italy, Sweden and Canada, excluding Ontario.

During the year, Playtech added a supplementary new model that

operates in near real time. This new functionality allows licensees

to assess players’ risk in just a few hours after opening their

gaming account.

Additionally, Playtech took steps to improve the user experience for

BetBuddy as well as explore how best to measure the effectiveness of

interactions with at-risk players. As part of this process, we conducted

extensive interviews with customer agents and client representatives

to inform improvements to the front end of our tools. The goal is to

consolidate all relevant information on each player into a single user

interface. This would enable agents to carry out more personalised

and effective safer gambling interactions and track their impact

over time. The aim of these improvements is to test and analyse the

efficacy of specific interactions and gain quantitative insight into

which approaches are most and least successful.

The Playtech Engagement Centre offering continues to allow

licensees to create bespoke safer gambling journeys, interact with

their players and provide information or encourage them to undertake

a specific action.

Playtech continues to maintain and expand its compliance and safer

gambling Software-as-a-Service (SaaS) partnerships, which play an

important role in supporting more licensees to compete, grow and

thrive in the changing regulatory landscape. These partnerships offer

licensees a multifaceted range of quality technology solutions as well

as making access easier via the Playtech integration.

Progress on the journey to

player personalisation

Playtech’s flagship product BetBuddy, our responsible gambling

analytics platform, combines the latest research into gambling

behaviour with the power of AI, delivering a sophisticated solution

to proactively identify and engage with players who might be at

risk of experiencing harm from their gambling.

In 2023, Playtech took a significant step to further enhance

player protection with the development of new functionality

which allows operators to apply more personalised responsible

gambling rulesets for players according to the player’s risk level

calculated by BetBuddy.

Key features of this development include the ability to establish

additional optional limits or enforce specific parameters that

players must adhere to. These include cooling off periods, a

permissible number of limit increases, a personalised maximum

value the limit can be increased to and more. Different settings

can be applied according to the risk level of a player.

This avoids the need for operators to use generic, blanket rules

across the different player risk levels, and enables the application

of the appropriate and relevant level of protection. For higher

risk players, this functionality allows the operator to apply tools

in a way that offers a greater level of protection, while for lower

risk players, the tools offered meet the regulatory requirements

without being overly restrictive. This means boundaries can

be set that are more personalised and based on previous

playerbehaviour.

Playtech has also developed a Player responsible

gambling dashboard which will provide our licensees with a

comprehensive overview of each player’s responsible gambling

status, including a snapshot of their responsible gambling limit

usage status, as well as a historical overview of time-outs,

self-exclusions, deposits and withdrawals and other activity.

The system is currently being tested, prior to roll-out in 2024.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Responsible business and sustainability continued

Playtech Protect – Playtech’s safer

gamblingoffering continued

One area of focus in mature markets, such as the UK, is the role

that technology solutions can play in assessing player affordability.

Playtech continued to engage with third-party providers to ensure it

is well positioned to support licensees with technology solutions to

assess customer affordability voluntarily as well as when regulatory

regimes mandate affordability checks. In 2023, Playtech increased

its compliance and safer gambling SaaS partnerships to 15, from

11 in 2022.

Safer gambling – research and insights programme

Our research and insights programme focuses on better understanding

how our products and services support safer gambling, shares our

insights and experience and encourages further research and analysis

by others.

In 2023, Playtech published Industry Research Briefings on Product

Risk, Bonus Offers, Risk Identification and Explanation, and AI

Governance and Accountability, as well as the second edition of a

research report on Responsible Gambling Trends in Latin America.

Playtech also presented two papers at the 18th International

Conference on Gambling & Risk Taking (ICGRT), the world’s largest

research conference in the field, organised by the University of

Nevada, Las Vegas International Gaming Institute. All are available on

Playtech's website, www.playtech.com.

Progress has also been made on the four-year research partnership

with Holland Casino, Erasmus University and the University of

Amsterdam that was commenced in 2022. This partnership is

exploring how to measure player risk and behavioural impacts from

safer gambling interactions. It will develop a library of interventions

which will be made publicly available. The initial pilot is due to

commence in 2024.

Safer gambling standards and certification

In 2021, Playtech was the first company to achieve the GamCare B2B

Safer Gambling Standard. GamCare is the UK’s leading provider

of information, advice and support for anyone affected by problem

gambling. The GamCare Safer Gambling Standard is an independent

quality standard which assesses the quality of controls companies

put in place to protect customers from experiencing gambling-

related harm. For more information about the standard, please go

towww.safergamblingstandard.org.uk.

The accreditation process involved an in-depth review of Playtech’s

business, including governance, culture and executive support

for safer gambling, as well as safer game design and product

development. To ensure that Playtech continues to uphold the highest

standards, in 2023, we undertook a further review of the business

against this standard, extended the scope of the audit to all our

product verticals and were awarded the Advanced Level Three of the

standard  the highest possible level of award.

In 2023, the Snaitech Group has also secured certification of its safer

gambling programme by obtaining the renewal of the G4 international

certification of responsible online gambling.

Consumer Insights and Trends

Report in Latin America

In 2021, Playtech conducted a research study to examine how

players in Latin America perceive responsible gambling. The

study aimed to gain insight into how the gambling industry can

promote a safe and fair gambling experience in each region. In

2022, Playtech continued its research and published the second

edition of its report on responsible gambling in Latin America in

September 2023.

The report’s recommendations aim to inform future

collaboration, public policy measures and corporate approaches

to improve the development, distribution and assessment of

digital tools for those at risk of gambling-related harm. It provides

a comprehensive overview of public perceptions in the Latin

American market, including responsible gambling behaviour,

player protection messages, unconventional betting categories,

and the roles of the gambling industry and government in

promoting responsible gambling guidelines.

The study highlighted that despite the increasing trend of

online gambling, 93% of Latin Americans consider themselves

responsible gamblers and 49% prioritise not feeling anxious

while gambling as an important aspect of responsible gambling.

While there have been advancements in providing safer

gambling support and information, there are still challenges

in tailoring and measuring the effectiveness of digital tools for

player protection.

The report also showed that in the previous study, 53% of the

subject interviewees had placed bets in the last six months, a

number that jumped to almost 70% in this survey. Among those

who hadn’t placed bets in the first study, the main reasons given

were not knowing how to do it safely (24%) and being worried

about losing money or becoming addicted (14%). At the same

time, respondents said they would feel safer about gambling

online if they had more information and tools for player protection

(45%), more information about gambling companies (44%), and a

brand/company they recognise (42%).

By publishing this research, we hope that the insights will

help inform improvements in personalised, real-time player

interactions as well as approaches for creating a safe

entertainment environment for all online players across Latin

America. The Responsible Gambling Report is available at,

www.playtech.com.

As the Latin American sports betting

market grows, it is crucial for our

industry to prioritise player safety and

security. By harnessing cutting-edge

technologies, we can create a secure

environment that meets the evolving

needs of our customers. ”

Mor Weizer

Playtech CEO

58 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Responsible gambling escalations to licensees – iPoker

Within the Poker network, iPoker employs its analytical skills to

identify possible money laundering, problem gambling and collusion

issues. Playtech’s dedicated team identifies potential issues and

escalates these to licensees to review and assess whether further

action should be taken. While Playtech is unable to take direct

action on behalf of licensees, as it does not have access to player

accounts, money or personal information, the team assists licensees

by escalating potential concerns about safer gambling, collusion and

anti-money laundering (AML).

In 2023, a new licensee joined the iPoker network, bringing a

significant number of new players with them and so increasing the

average number of players and responsible gambling escalations, by

17% and 35% respectively in comparison to 2022. Playtech identified

an increase in promotional abuse and introduced a new “process

scanning” tool which helped in identifying prohibited software use on

a player’s computer. Additional processes for “Real Time Assistance

(RTA)” detection were also rolled out, following a new partnership

between iPoker and GTO Wizard, a leading poker web app training

provider. Playtech continued to develop improvements based on

further automation of our Bot Detection process, reducing complexity

and enabling quicker detection checks.

Escalations to licensees – iPoker

The table below summarises the percentage of unique cases

escalated to licensees on AML, collusion and responsible gambling

over the past three years.

AML (%)

2023

0.05

2022

0.03

2021

0.02

Collusion (%)

2023

1.30

2022

0.76

2021

1.03

Responsible gambling (%)

2023

0.71

2022

0.53

2021

0.39

Responsible gambling escalations to licensees – Live

Playtech’s Live Casino operations continued to provide licensees with

information about player behaviour that could indicate players at risk

and/or displaying behaviour that could be harmful. Like the iPoker

team, the Live operation does not have access to player accounts,

money or personal information.

The Live team uses a machine learning application, which analyses

chat for words and phrases indicating potential at-risk behaviour.

Thisyear, Playtech is reporting on safer gambling escalations to

include data from its Live Casino operations in Spain, Romania, Latvia,

the US and Peru. In 2023, Playtech at-risk escalations from its Live

operations totalled 55,895 cases, compared to 53,085 in 2022 and

23,802 in 2021. This number has increased due to full-year operation

and expansion of the Live studio in Lima and the closure of the PGS

(Belgium) Live studio.

Strengthening safer gambling in B2C operations

In 2023, Playtech B2C operations continued to build on the initiatives

started in 2022 to improve the quality and accuracy of Playtech’s

models to identify at-risk players as well our customer interaction

procedures. The projects initiated included updates to Playtech’s

technology infrastructure and use of near real-time identification of

at-risk players.

In 2023 Playtech took a significant step to further enhance player

protection with the development of a new internal single customer

view tool to assess player risk and a new segmentation engine

to enhance categorisation of gambling risk categories using a

combination of risk factors. The latter project will enable Playtech to

also strengthen its capability to direct players towards specific player

journeys based on this segmentation.

Customer interactions

In 2023, we reported customer interactions, split by proactive

person-to-person interactions led by our Customer Service agents

at PTMS and reactive interventions triggered by player behavioural

activities and BetBuddy, our responsible gambling analytics platform.

The Playtech B2C Operations team engaged with customers on

safer gambling through several channels; over 24,000 proactive

person-to-person interactions via phone and email and over

760,000 interventions triggered via automated emails and account

inbox messages. Triggers could be the result of source of funds,

deposited amounts or directly from BetBuddy. The total number of

customer interactions has increased significantly from 2022 and

2021 due to the reintroduction of deposit limits. Players reaching the

daily gross deposit threshold receive a safer gambling intervention

email. Players,with additional deposit triggers, prompt a responsible

gambling interaction.

Playtech continued to monitor the number of self-exclusions and

use of responsible gambling tools within the UK B2C operations in

2023 as a proportion of the total unique customers. The proportion

of customers self-excluding slightly increased to 14% in 2023, from

13% in 2022. This was due to the business being more active in self-

excluding customer accounts proactively. The number of customers

using Responsible Gambling Tools has decreased to 22% due to

better use of operator led limits and proactive interactions.

Uptake of safer gambling tools – B2C

2023 2022 2021

Proportion of customers self-excluding (%)

14% 13% 10%

Proportion of customers using RG tools (%)

22% 33% 32%

1 Number of self-exclusions and registrations with GAMSTOP as a percentage of total unique

customers within Playtech’s B2C operations in the UK.

2 RG tools comprise reality checks, time-outs and deposit limits.

Customer interactions

2023 2022 2021

Total number of customer interactions: 525,107 12,730 5,314

Total number of proactive interactions

24,419 12,730 5,314

Total number of reactive interactions 500,688 — —

Total number of

automatedinterventions

763,459 263,762 529,244

1 Previously noted as 'Person-to-person interactions via phone, email or live chat'.

2 Previously noted as 'Emails'.

59Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Promoting

integrity and an

inclusive culture

We are committed to conducting our business with integrity and promoting a culture

of openness, integrity, and accountability. We aim to ensure that this ethos guides our

decision making and creates a supportive and respectful environment where all have

equal access to opportunities and employee wellbeing is paramount.

Reducing compliance risk

Responsible business practices are not just the right thing to do –

theyare critical to Playtech’s licence to operate, and to delivering

long-term commercial success. That is why Playtech continues to put

ethical principles at the heart of its business. In addition to its values,

the Company has set out its ethical business principles as it seeks to

make compliance and ethical behaviour a core part of its culture.

Taking action to reduce compliance and financial crime risk

Playtech conducts regular risk assessments to identify and mitigate

its compliance, ethical and regulatory risks, including money

laundering, bribery and corruption and tax evasion. Playtech has a

zero-tolerance policy for corruption and is committed to keeping

crime out of its operations.

This includes regular licensee and third-party risk assessment and

monitoring, including reviewing compliance risks across the lifecycle

of relationships with third parties – including customers, business

partners and suppliers – and is supported by automated monitoring of

those entities and third parties. The system monitors for historical and

real-time considerations such as Politically Exposed Persons (PEP),

sanctions, legal action, insolvency and disqualifications. In addition,

the Compliance and Regulatory Affairs function provides input to the

Group’s quarterly risk management process. This process document

is supported by a risk register, risk matrix, assessment guide, interview

schedule and Group risk management processes.

Playtech also conducts annual anti-money laundering risk

assessments. These assessments are based on industry standard

documents produced by the industry body, the Gambling Anti-Money

Laundering Group (GAMLG). The GAMLG methodology has been

adapted to reflect the risks associated with each part of Playtech’s

business. Once completed, the risk assessments are subject to

review and challenge by external legal counsel, and summaries

ofthefindings and progress are provided to regulators.

The Global Regulatory Awards, hosted by Vixio Regulatory

Intelligence, provide a platform to recognise the achievements

of individuals, teams and organisations working in compliance,

corporate social responsibility, and safer gambling. In 2023, our

colleague Charmaine Hogan was the winner of the “Head of

Regulatory Affairs/Government Relations of the Year” award,

demonstrating our commitment to set new standards in the industry.

30%

Female

70%

Male

Amongst leadership population

Commitments:

• Promote integrity, uphold human rights and reduce

compliance risk across our operations and supply chain

• Foster equal opportunity and equality for all employees

• Support employee wellbeing

Targets and performance measures:

Responsible business and sustainability continued

• Improve employee engagement

and wellbeing

• Increase gender diversity amongst our

leadership population to 35% by 2025

against a 2021 baseline

• Reduce gender pay and bonus gap

• Engage with supply chain following

risk assessments

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Policies

In 2023, Playtech reviewed and updated its policies to ensure they

are aligned with evolving legislation and industry best practice. This

included updates to its anti-bribery and corruption, business ethics

and Speak Up policies as well as its safer gambling policy, available at

www.playtech.com.

Playtech communicates these policies to all employees through

a number of channels including local communications, Playtech

Home (Playtech’s intranet site), annual training, bespoke training, and

dedicated compliance emails and newsletters.

Training

Each year, Playtech deploys a wide range of training for employees

covering compliance topics including anti-money laundering, anti-

bribery and corruption, safer gambling, data protection and anti-

facilitation of tax evasion. All employees are required to complete

test-based e-learning training and attest to the relevant policies under

each topic. In 2023, the Company continued training on modern

slavery and human rights for all employees. Playtech also deploys

data protection and information security awareness training modules.

For more information on data protection and cybersecurity, please

refer to the relevant sections in this chapter. The modules include a

test to help the Company understand the levels of understanding

and awareness in Playtech’s workforce. Employees who fail to

complete the module will lose their eligibility for bonuses within the

financial year.

Playtech continued to provide annual training to its dedicated B2C

Customer Service team, Playtech Managed Services, around

meaningful responsible gambling interactions. In 2023, the training

aimed to equip the Customer Services agents to help players manage

their habits, encourage self-reflection and ensure players’ wellbeing.

The refresher workshop focused on the distinction between

concerning and serious behaviour, game fairness and key soft skills

for effective interactions handling.

Playtech also delivers regulatory, compliance and sustainability

training to the Board every 12–18 months. During 2023, Board

training included briefings on legal requirements related to corporate

governance, with a focus on Director duties, sustainability, anti-money

laundering and anti-corruption, as well as regulatory developments

and the various nuances across jurisdictions.

Training overview

The chart below outlines the participation and completion rate in core

compliance training offered to Playtech employees.

Risk

assessment

Policies and

procedures

External

engagement

and monitoring

Assurance,

evaluation and

reporting

Training

Reducing

compliance risk

Communications

and

engagement

Governance

and oversight

Application to

products,

services

and operations

Employees

Completion

rate

Total number completing the training

Total number of eligible individuals

Compliance

essentials

1, 2

Compliance

essentials

1, 2

Training type

Customer

interactions (B2C)

Human rights

4,799 93%

1 Snaitech employees also completed training relating to Italian Legislative Decrees

231/01 and 231/07, in light of regulatory changes.

2 Average training hours per employee is 0.83.

7,090 94%6,658

4,479

244 88%215

Contractors

Completion

rate

72 94%68

73 93%

61Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Reducing compliance risk continued

Speaking up

An important aspect of Playtech’s commitment to conducting its

business with integrity and promoting a culture of openness and

accountability is providing a channel for employees to voice concerns

about anything they find unsafe, unethical or unlawful. The Company’s

Speak Up line, introduced in 2017, is instrumental in ensuring

that employees have access to an independent channel to raise

concerns confidentially and anonymously, wherever permitted under

locallegislation.

During 2023, Playtech had 11 incident reports, anonymously

submitted via the Speak Up platform. The Speak Up review process is

led by the Chief Compliance Officer and General Counsel. Incidents

raised during 2023 were reviewed and resolved within the year. In

2024, the Company will continue to promote this as an important

channel for raising ethicalconcerns.

Data protection

Playtech is committed to protecting and respecting the personal data

it holds, in accordance with the laws and regulations of the gaming

markets in which it operates. The Company’s systems, software,

technologies, controls, policies, and processes have been adjusted to

ensure appropriate management of privacy risk.

Personal data processing is crucial to Playtech’s business model, with

customers and clients trusting the Company with their personal data

every day. Ultimately, they only trust Playtech as a business partner

and supplier when they have confidence that their personal data is

safe and understand how and why it is used by the Company.

Playtech’s Group-wide security and privacy policies support the

management of data privacy risk and are accessible to and applied

by all its global businesses units. Playtech provides transparency to

its players, employees and stakeholders on how it collects, uses and

manages their personal data and their associated rights.

Following the implementation of the EU General Data Protection

Regulation (GDPR) in May 2018, and numerous regulatory

requirements for the gambling industry, Playtech has embedded

a tested and verified as well as robust and consistent approach to

data protection and security across all its jurisdictions. Playtech

takes all possible steps to safeguard personal data by adhering

to the principles contained within GDPR and other relevant data

protectionlegislation.

Playtech has a dedicated Data Protection team that reports monthly

to the Board on data privacy risks and issues. The Data Protection

team’s work focuses on driving privacy by design, monitoring

of policies and conducting reviews and data privacy impact

assessments. The Group has procedures that clearly set out the

actions required when dealing with a data privacy incident. These

include notifying regulators, clients, or data subjects as required

under applicable privacy laws and regulations. Playtech continues to

mature the depth and frequency of data protection and cybersecurity

reporting to maintain high visibility for its senior management team

and the Board.

In view of the evolving regulatory and technological landscape

Playtech is proactive in its approach to data privacy and aims to

continually improve its policies and their application. All Playtech

employees and partners are required to comply with confidentiality

requirements, and legal and regulatory obligations, with contractual

terms such as data processing agreements and EU model

clause agreements governing the use, disclosure and protection

of information. Each year, employees and contractors are also

required to complete test-based data protection and security

awareness training.

Training overview

The chart below outlines the participation and completion rate in data protection and security training offered to

employeesandcontractorsinthe organisation.

1 Average training hours per employee is 0.83.

2 Average training hours per employee is 1.24.

Responsible business and sustainability continued

Data privacy and protection

Employees ContractorsTraining type

Completion

rate

Completion

rate

Total number completing the training

Total number of eligible individuals

Information security

4,799 7393% 93%

7,031 9292% 95%

4,479 68

6,478 87

62 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Cyber and physical security

The Playtech Security team’s mission is providing business

enablement for the gaming platform, licensees and players in a

secure, non-intrusive and scalable manner. The global technological

environment is ever evolving, as are cyber and physical security

threats. The gaming and betting industry is a highly lucrative target for

malicious parties, ranging from individuals operating by themselves to

highly sophisticated organised crimes groups, which drives Playtech

Security team to constantly strive for improved technologies,

processes and skills to address these challenges.

The Playtech Security team oversees the operational, technical and

organisational measures taken to protect the organisation from both

cyber and physical security risks. Domains such as infrastructure,

application, compliance and physical facilities are covered by a

comprehensive security programme, which assures the safe and

secure operation of Playtech’s business. The Global Security team has

a strong customer-centric approach with a focus on securing customer

data; performing security tests and audits; monitoring activities around

product applications and infrastructure; and educating licensees on the

security capabilities of Playtech’s platform.

Furthermore, the Playtech Security team provides input into the

corporate risk register as well as provides monthly updates to

the Board about the security programme, which includes annual

audit activities, in-house and by licensees (ISO 27001, ISAE 3402,

PCI-DSS, and global regulations), network security architecture,

automation and governance, state-of-the-art protection of the

Company’s devices from malware, in-depth scanning of application

code across Development teams to find security bugs and a 24x7

Security Operations Centre (SOC) team which monitors security

incidents across the Company.

Compliance and responsible supply

chainmanagement

In 2023, Playtech refreshed its Group procurement policy to

strengthen oversight and mitigate compliance, ethical and climate-

related risks, and to ensure minimum standards are adhered to when

entering joint ventures. The Company also formalised its Supplier

Code of Conduct, approved by the Board, to collate Playtech’s

expectations on supplier conduct and seek suppliers’ adherence

to the Code, in light of evolving regulations and the need to meet

expectations from businesses to work in a responsible ethical

manner. Following the completion of the Compliance Healthcheck

in 2022, Compliance continued to work closely with the Legal and

Procurement functions to ensure appropriate procedures are in

place, including reviewing risks arising from the supply chain and

implementing mitigating actions.

Human rights

Playtech is committed to upholding the principles embodied in the

Universal Declaration of Human Rights, as well as the International

Labour Organisation’s Declaration on Fundamental Principles and

Rights at Work. Playtech’s most salient human and labour rights

issues relate to employment, data protection, procurement of goods

and services, and AML, specifically ensuring that individuals involved

in human trafficking and slavery are not laundering their money

through Playtech’s operations.

In 2023, Playtech published its seventh Modern Slavery Act

statement, outlining the initiatives the Company is undertaking to

understand and assess potential risks of modern slavery and human

trafficking, which is available at www.playtech.com.

Key areas of focus for 2023 included reinforcement of processes and

procedures for managing third parties used in employment practices,

including audit procedures, and strengthening supplier human rights

assessments. In 2023, Playtech continued to enhance its supplier risk

profile to identify sectoral risks as well as risks from their geographical

location. A risk assessment matrix was used, looking at sectoral risk,

country risk and spend data to prioritise next steps. The Company

has reviewed 140 supplier sectoral categories and has given a human

rights and modern slavery risk rating from “low” to “high” to each

category. The Group has identified 71 “high” and “medium” categories

as priority categories. To identify country-specific risks, the Company

took account of a number of external indices in its process, including

the UN Human Development Index, Freedom House’s Freedom in

the World Civil Liberties, the US State Department’s Trafficking in

Persons report, the Global Slavery Vulnerability Index and the World

Bank Worldwide Governance Indicators – Regulatory Quality, with the

addition of the UNICEF Child Rights Atlas – Workplace Index. Using

a combination of sectoral risks, country risks and a spend threshold,

we have been able to identify the most relevant suppliers we wanted

to engage with to mitigate any possible risks. In 2023, this group of

suppliers represented 6.3% of our total spend.

In 2023, using the insights from the human rights risk assessment,

Playtech initiated its engagement with the suppliers having been

flagged in a high-risk sector and located in a high- risk country

through a self-assessment questionnaire to confirm that they

continue to uphold the same standard as Playtech. The Company will

continue its engagement and in-depth review of its internal processes

to ensure any gaps are identified and corrected. In addition, Playtech’s

Compliance team continues to monitor human rights flags as part of

its risk monitoring of third parties, including suppliers, partners and

licensees. The Company reviews any cases involving human rights

flags on a case-by-case basis to assess risk and actions required.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Human capital development

At Playtech, our people are the key to our success and at the heart of

what we do. We aim to nurture a family-oriented, ethical and compliant

culture that is underpinned by our values as well as our commitment to

equal opportunity.

To continue to successfully grow our business, we aim to attract and

retain top talent in our sector. We seek to ensure that our colleagues

feel valued and rewarded as well as support our people to grow and

develop personally and professionally. To support and reinforce

these aims, Playtech introduced a new Global People Framework.

This framework sets out the Company’s people strategy across all

elements of the colleague journey – from recruitment and onboarding

to succession planning and personal and professional development.

Within the Global HR function, a new Centre of Excellence has

been established to oversee the Company’s strategic human

capital management functions and commitments including talent

management, learning and development, diversity, equity, inclusion

and belonging (DEIB) and wellbeing.

Workforce engagement

It is important for the Group that its employees feel fulfilled, are

satisfied with their working environment, and have been given the

right tools and guidance to develop their skills, experience and career.

With the launch of the Global People Framework, several new work

streams have been formed to improve employee engagement and

raise awareness of Playtech’s corporate strategy, support the health

and wellbeing of colleagues, and increase learning and development

opportunities. The strategy is continuously monitored and assessed

by the HR function.

In 2022, Playtech launched its first global employee engagement

survey, and utilises an employee Net Promoter Score (eNPS)

approach, to measure employee satisfaction. In the first baseline

exercise, the Company received a 70% response rate on overall

engagement, with a score at 8.2 out of 10. Playtech had an eNPS of

54% (“I would recommend Playtech as a great place to work”). The

2023 survey results had an overall engagement score of 8.1 out of

10, with an eNPS of 41%. In 2024, we are taking steps to boost and

improve our engagement plan.

During the year, the Board conducted two site visits, to our Live

studios in Michigan and Latvia, to engage with our employees. The

Board and the Executive Management team hosted engagement

sessions with different groups of employees and presented the

Group’s strategic aims.

Learning and Development

In 2023, Playtech has introduced a new leadership development

function and strategy. As part of this strategy, we are embedding

diversity and inclusion as a core part of the development programme

for current and future leaders and managers.

During the year, the Company continued its second year of its global

mentorship programme. This programme matches mentors and

mentees, based on individual professional development needs and

aspirations. The programme has been designed to complement our

performance and talent management strategy, as a long-term form of

training, learning and development. In addition to the main objective

of supporting professional development, the programme will enable

experienced colleagues to pass knowledge on to others, enriching

their role as Playtech’s leaders. The programme is designed to run for

12 months, and the programme will close in mid-2024.

The programme provided me with

not only personal and professional

development but also a better

understanding of the Company’s

structure and operations through

the Colleague feedback on the

mentorship programme.”

Responsible business and sustainability continued

Employee Excellence Awards and Recognition

Playtech has an annual Excellence Awards programme to celebrate

the accomplishments, dedication and contributions of our colleagues

around the world. These awards recognise the extraordinary

achievements across eight categories, including business and

commercial, technology and innovation, individual and team

leadership and community impact.

This year a new category, the “Technical Champion award”, was

added to recognise employees who demonstrate outstanding

commitment to technology skills development and implementation

of technology to drive successful transformation initiatives across

IT modernisation, cloud transformation, data management,

security, employee productivity and customer experience. In

2023, 68 colleagues from 15 countries were recognised for their

tremendousaccomplishments.

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Equality in the workplace

Playtech aims to foster a respectful and supportive workplace that

enables every colleague to have the same opportunity regardless of

backgrounds, cultures, beliefs, genders and ethnicities, or any other

attributes. The Company has set out specific diversity commitments

and a target to increase female representation amongst its

leadership population, including Executive Management and senior

management, to 35% by 2025 against a 2021 baseline, with an

ultimate ambition to achieve equality in the workplace. Diversity,

equity, inclusion and belonging are at the core of Playtech’s strategy

and we committed to:

1. promote an inclusive culture across the organisation;

2. build a more gender diverse workforce, increasing representation

of gender at all levels and across all functions;

3. increase leadership representation of underrepresented

groups; and

4. adopt a data-driven approach to increase workforce diversity

atall levels of the organisation and across all functions.

The Board Sustainability and Public Policy Committee played and

will continue to play a key role in engaging with business leaders

on inclusion, challenging management to deliver against these

commitments as well as monitor progress against the stated targets.

The Board Diversity Policy, established in 2022, sets out its approach

to ensure that diversity and inclusion is a core part of recruitment and

succession planning at the Board.

To support the implementation of the strategy, the Company has

refreshed its global recruitment policy, strengthening Playtech’s

commitment to recruit from a diverse, qualified group of candidates,

thus broadening our talent pool and the Company’s diversity

of thought.

In 2022, the FCA finalised new rules on Board and Executive

Committee diversity disclosures. For more information on Playtech’s

2023 diversity disclosures, see page 113.

Raising awareness on diversity

and wellbeing

As part of our global wellbeing framework, Playtech colleagues

were invited to attend webinars covering a wide variety of topics

from mental health and wellbeing to diversity and inclusion. In

2023, the Company partnered with external experts to deliver

interesting and stimulating content. These are a few examples:

Guest speaker Emily Pattinson, a Senior Inclusion and

DiversityConsultant from Inclusive Employers, hosted

awebinaron “Supporting People with Disabilities” and how to help

disabled colleagues in the workplace. This involved learning

about what types of support a colleague with a disability may

need and understanding the terminology as well as the global

legal requirements.

SIX MHS held a session entitled “Let’s Talk Addiction”. Chair

Tony Adams MBE introduced the speaker, sports journalist and

writer Ian Ridely, who spoke about his own personal journey of

addiction recovery.

On World Mental Health Day, Jenny Okolo, also of SIX MHS,

took colleagues through an interactive session to improve their

knowledge on diversity and inclusion and drive actions that

promote and protect everyone’s mental health as a universal

human right.

To mark International Men’s Day and “Movember”, Dave Walsh

shared his personal story of overcoming fears and challenges

when diagnosed with multiple sclerosis. In a webinar entitled

“Overcoming Adversity”, Dave educated colleagues on how to

better understand and support physical and mental wellbeing

amongst men.

One of the most empowering sessions

to date. Dave demonstrates the power

of positivity.”

Colleague feedback on the “Overcoming Adversity” webinar

65Playtech plc Annual Report and Financial Statements 2023

Strategic Report

0.1

Measuring progress on gender diversity

Playtech’s strategy aims to foster inclusion, improve gender diversity

and reduce the gender pay gap across our workforce. In 2023,

Playtech saw progress against its global target to reach 35% female

representation in leadership positions by 2025, reaching 30%,

compared to 26% in 2022. In 2024, Playtech will continue to refine

its understanding of gaps in female talent across the Group and take

action to increase female retention.

The FTSE Women Leaders Review, launched in 2016 as a follow-up to

the Davies Review, is an independent review body which looks at the

increase in the number of women on FTSE 350 boards. In February

2024, Playtech was recognised as one of the top 10 performers in the

eighth annual FTSE 350 Women Count Report. Playtech ranks ninth

place and is one of the 68 FTSE 350 companies that have already met

or exceeded the target for Women in Leadership ahead of the target

year, with 50.5% of its leadership positions (defined as Executive

Committee and direct reports) held by women.

In 2021, Playtech signed up to the All-In Diversity project, an industry-

led not-for-profit initiative to benchmark diversity, equality and

inclusion for the global betting and gaming sector. In 2023, All-In

Diversity released its fourth report on the sector’s workforce, ranking

Playtech among the top 12 companies. The latest findings continue to

showcase the gambling sector as an effective barometer of emerging

global trends, technology and changes in society and their impact on

the workplace, and we were delighted to be listed alongside many of

our industry peers.

The Women in Gaming (WIG) Diversity and Inclusion Awards are

aimed at recognising and celebrating the achievements of women in

the industry including individuals, teams and organisations that have

demonstrated exceptional commitment to promoting diversity and

inclusion. In 2023, Playtech won the “Company of the Year” award,

the “Excellence in Customer Service (Supplier)” award and the

“Inspiration of the Year (Supplier)” award, which was won by Playtech-

owned company Quickspin.

The Emerging Leaders of Gaming 40 Under 40 is a programme that

recognises professionals under the age of 40 who are making a

remarkable contribution to the casino gaming industry. In September 2023,

the “Class of 2024” was announced in which Anastasia Kokova, Playtech’s

Subsidiary Director in Kyiv, Ukraine, was among the 40 honourees.

We continue to strengthen the rigour in performance management

processes, including efforts to ensure that remuneration and

promotion processes are fair and consistent. The key focus going

into 2024 is to continue to collect and monitor our data in the UK and

beyond and ensure the right behaviours in our leaders which in turn

will promote a more inclusive culture and workforce.

Gender splits: The following charts illustrate the global diversity data

and trends from 2021 to 2023.

Male Female Prefer not to say

Responsible business and sustainability continued

Employees (%)

39.2

2021

62.7 37.3

2022

60.6 39.4

2023

60.0 39.2

Senior managers (%)

2021 80.8 19.2

2022

73.8 26.2

2023

69.3 30.7

Leadership population (%)

2021

2022

2023

77.4 22.6

74.1 25.9

69.6 30.4

Directors (%)

2021

2022

2023

71.4 28.6

66.7 33.3

Junior managers (%)

31.62023 68.3

STEM (%)

2023 79.3 19.9

Revenue generating (%)

2023 38.561.0

Direct reports to the Executive Committee (%)

2021

2022

2023

58.7 41.3

50.6 49.4

47.1 52.9

Executive Committee (%)

2021

2022

2023

70.0 30.0

63.6 36.4

1 Employees are defined as the total number of employees on the payroll on 31 December.

Outof 7,957 employees, 61 preferred not to disclose their gender.

2 From 2021 onwards, senior managers are defined as the leadership population excluding any

Board members (e.g. CEO, CFO).

3 Leadership population is defined as Executive Management and senior management, which

includes managers with multiple departments or departments with complex and more highly

technical responsibilities.

4 Directors are defined as Board Directors on 31 December.

5 Excludes administrative support staff.

0.8

0.5

66 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

UK Gender Pay Gap data

One of the Group’s priorities is to review and reduce the Gender Pay

Gap (GPG) with a focus on reducing the median GPG, which is the

middle pay point for males and females. The Company currently

reports on the GPG in the UK. During 2023, Playtech initiated the

enhancement of system capability to expand the reporting focus in

other markets.

This year is the sixth anniversary of publishing UK GPG data for

Playtech. The data analysis and graphical representations indicate a

significant reduction of both the mean gender pay gap and the median

pay gap. The mean pay gap dropped from 27.4% in 2022 to 22.1% and

the median pay gap reduced to 22.2% in 2023 compared to 27.4% in

2022. This is due to the active work undertaken by our HR business

partners who are responsible for providing support and advise across

Playtech’s business units on pay and fair and equal considerations

across the different teams. However, our mean bonus gender gap

has increased, from 41.1% in 2022 to 43.7% in 2023 as the Company

continues to see higher representation of men in higher salaried roles.

The proportion of males and females receiving a bonus has improved

compared to last couple of years (63.3% males and 67.8% female in

2023 vs 64.9% males and 56.5% females in 2022 vs 80.7% males

and 69.0% females in 2021) following continuous improvements

to our internal processes and policies to reduce any possible bias

and discrimination. Playtech acknowledges the gap remains and is

committed to the necessary focus on the gender pay gap and will

continue to promote a culture of diversity andinclusion.

Human capital metrics

In 2023, Playtech continued to report on its global retention and

turnover rates as well as the total number of new hires, split by

age groups.

The table below shows the global retention and turnover figures by

age groups, in 2023, we also launched the “A Players” initiative to

support our talent retention strategy by identifying top talent in the

organisation. Playtech’s continuing investment in human capital and

attractiveness of our employment proposition is evidenced by the

recruitment of 3,275 new hires during 2023.

2023 2022 2021

Global employee retention rate 63% 68% 65%

Under 30 years old 38% 66%

3050 years old 78% 88%

Above 50 years old 84% 93%

Global employee turnover rate 37% 38% 28%

Voluntary rate 35%

Involuntary rate 65%

Under 30 years old 54% 63%

3050 years old 20% 23%

Above 50 years old 13% 15%

Total number of new hires 3,275 3,155 2,400

Under 30 years old 72%

3050 years old 27%

Above 50 years old 1%

Gender Pay Gap

Median Gender Pay Gap (%)

2021 18.9

2022

26.5

2023

22.2

Mean Gender Pay Gap (%)

2021 27.5

2022

27.4

2023

22.1

Median Gender Bonus Gap (%)

2021 11.4

2022

36.5

2023

20.0

Mean Gender Bonus Gap (%)

2021 44.7

2022

41.4

2023

43.7

1 Based on UK employees only. The numbers were calculated in line with the UK Government’s

requirements for reporting gender pay figures and cover payroll and bonuses paid up to

5April2021, 5 April 2022 and 5 April 2023 respectively.

67Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Health, safety and wellbeing

The post-pandemic landscape and hybrid working practices are

redefining the most productive ways for businesses to engage with

their employees.

Playtech recognises the importance of employee wellbeing. In 2023,

Playtech continued to implement and scale its global wellbeing

framework with a focus on physical, mental, financial and social

wellbeing to cultivate a culture of support for its employees. The

framework aims to ensure employees have access to a suite of

support, advice and networking opportunities to help them be

resilient, grow and succeed at work. In 2023, Playtech rolled out

more than 250 wellbeing initiatives with a focus on physical, mental,

financial and social wellbeing. Over 4,300 employees participated in

one or more of these sessions.

Playtech has also partnered with SIX Mental Health Services (MHS)

to offer free access to private and confidential mental health and

wellbeing services for employees. Their services include a network

of counsellors and specialists to support individual needs and

advice, through one-to-one sessions with a network of therapists,

counsellors and specialists. As part of our partnership, SIX MHS has

established dedicated support for our colleagues which offers access

to trained mental health professionals in both local languages and

in English.

Line managers have played an instrumental role in supporting the

Group’s commitments to employee wellbeing, leading efforts to

initiate and support team and individual wellbeing discussions as

well as building awareness and breaking down stigmas about mental

health, including discussions on gambling-related harm.

In August 2023, Playtech announced the official launch of its Global

Benevolent Fund, an initiative to provide crucial financial support

to colleagues and their immediate families who may encounter

unforeseen, severe, life-changing challenges such as medical

emergencies, severe illness and financial hardship. Since its inception

the fund has already supported colleagues in need, covering

hardships such as losing a family member and supporting long-term

injuries and life-changing illnesses.

Snaitech operational health and safety

Snaitech’s business operations are unique within Playtech’s

operations. The Italian operations comprise retail shops and

racetracks, meaning the physical health and safety challenges are

different and more material as compared with an office environment.

Snaitech is committed to developing and promoting a culture of

worker health and safety and is implementing a management system

to ensure full compliance with local Italian legislation.

Occupational health and safety data

2023 2022 2021

Total number of accidents 9 8 10

Accident ratio

Total number of accidents/working hours x

200,000

1.3 1.1 1.6

Number of days lost to accidents 310 224 266

Severity of accident index

Total days lost for accidents/working hours

x 200,000

44.4 31.9 41.3

Number of days of absence

10,077 10,747 6,836

1 Covers Snaitech operations only.

2 200,000 is a fixed coefficient (50 working weeks x 40 hours x 100).

3 Number of days of absence in 2021 is defined as hours lost due to illness, which includes COVID-19.

Responsible business and sustainability continued

Quickspin gets moving to

improve health and wellbeing

For the past six years Quickspin, a Swedish game studio owned

by Playtech and based in Stockholm, has been running a health

and wellbeing challenge for colleagues. The “Health-a-thon” is

a challenge that entails setting and meeting wellbeing targets

such as managing stress, improving focus or sleep, practising

mindfulness, healthy eating or taking part in a physical activity –

among others – and to do this while motivating and supporting

each other to achieve goals. Each year the “missions” are

changed to provide stimulating new targets. Participants took

part in teams and tracked their activity through an app. As a

further incentive, the winning team and those individuals in first

and second place were able to make a donation - funded by

Playtech – to a charitable organisation.

The challenge engaged 71% of office employees with 74 people

spread over 13 teams taking part. Collectively, participants took

approximately 5 million steps, which is equivalent to walking

11,135 kilometres – around the distance from Stockholm to

Phuket. Participants managed to complete 916 missions,

meaning on average each person completed 12 challenges,

improving both their own health and wellbeing, creating team

spirit and positively impacting the wellbeing of others.

The team donation of 15,000 SEK went to the Soborna Ukraine

charity, which provides physical and psychological support for

around 220 families that have been severely impacted by the war.

The top two scoring individuals were both awarded a donation

of 5,000 SEK – one was made to Save the Children Sweden and

the other to the World Food Programme.

68 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Economic footprint

Playtech is headquartered in the UK, where the Parent Company,

Playtech plc, is tax resident. Playtech engages in tax planning that

supports its business and reflects commercial and economic activity.

Playtech selects the location of its operations based on commercial

and operational factors that extend well beyond tax, including: the

prevailing regulatory environment available, a widely available pool

of technical talent, the linguistic capabilities in these jurisdictions,

the location of the Group’s licensees, and labour and operational

cost factors. The Group is committed to complying with all tax

regulations in jurisdictions in which it operates and seeks to minimise

the risk of uncertainty and disputes through proactive dialogue

with the tax authorities and by obtaining third party expert advice,

whereappropriate.

Playtech has offices in 19 countries, with offices and commercial

activities in multiple jurisdictions, with the majority of its development

and technical operations in Ukraine, Estonia, Latvia, Bulgaria and

Gibraltar. These locations are well known as technology hubs with

a large population of highly skilled experts. The Group’s presence

in some markets, such as Austria, Australia and Italy, is a result

ofacquisitions.

Given the dynamic nature of tax rules, guidance and tax authority

practice, the business is exposed to continuously evolving rules and

practices governing the taxation of e-commerce and betting and

gaming activities in countries in which the Group has a presence.

Such taxes may include corporate income tax, withholding taxes

and indirect taxes. The Head of Tax keeps the Board and Executive

Management fully informed of developments in domestic and

international tax laws within jurisdictions where the Group has a

presence. The Group has an appropriately qualified Tax team to

manage its tax affairs.

During the year, the Board reviewed and adopted the Group’s UK Tax

Strategy Statement (available at www.playtech.com). The total adjusted

tax charge for 2023 is €93.7million (2022:taxcredit of €54.9 million) and

the effective taxrate forthecurrent periodis 37.4% (2022: 25.5%).

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Powering action

for positive

environmental impact

Climate change is a pressing concern for everyone, including our people, investors,

governments and local communities. We recognise that urgent action is needed to

substantially reduce the risks and impacts of climate change and that the Company

has an important role to play in the sector and the countries and communities where

it operates.

Policy and commitments

Playtech’s Group Environmental policy outlines its commitment to

reduce its environmental footprint as well as to buying renewable

energy and engaging suppliers to reduce their supply chain

emissions. In 2023, the Company refreshed its policy to reflect

its near-term and net zero commitments and targets, as we set

in motion our decarbonisation plan, following Playtech’s formal

commitment through the Science Based Targets initiative (SBTi).

Playtech continued to focus on switching its operations to renewable

energy, where possible. The Board and members of the executive

management will be participating in refresher climate change training

in early in 2024.

In 2023, Playtech continued its cross-functional Environment Forum

chaired by the Head of Sustainability. The forum met three times during

the year and its remit includes setting, co-ordinating and overseeing

the strategy and response to the challenges posed by climate change.

The forum drives progress against the Company’s commitment to

buying renewable energy and engaging suppliers to reduce Playtech’s

supply chain emissions. Its work on climate change includes reviewing

the current GHG targets and strategy to ensure it aligns with the latest

science on limiting the level of global warming below 1.5°C and evolving

regulatory and reporting framework.

7,0 86 tCO

Scope 1 and 2 (location-based) emissions (excluding

refrigerants, see page 72)

38.6%

Reduction since 2018 (baseline)

Commitments:

• Reduce Greenhouse Gas (GHG) emissions within our own

operations and supply chain

• Build capability and climate resilience through decisive actions

in both our own operations and supply chain

• Align to global climate efforts to transition to a low-carbon

economy, in accordance with the latest climate science, and

prioritise climate innovation

Targets and performance measures:

Responsible business and sustainability continued

• Reduce Scope 1 and 2 (location-based) carbon

footprint by 40% by 2025 against a 2018 baseline

• Track emissions reductions across our value chain

• Switch all offices, wherever possible,

to renewable energy

• Secure approval of near-term and net zero targets by

the Science Based Targets initiative (SBTi)

70 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Our path to net zero

2022

100%

50%

Absolute reductions

2023 2032 2040

• Drove forward

our transition to

renewable electricity

in key markets where

we operate.

• 56% of our total

energy consumption

coming from

renewable sources.

• Publicly committed

to setting a near-term

(emissions reduction)

and long-term (net zero)

the Science Based

Target initiative (SBTi).

• In early 2024, the SBTi approved Playtech’s near-term

science-based emissions target by 2032. Playtech has

also committed to set long-term emissions reduction

targets with SBTi in line with reaching net zero by 2040.

• Set in motion our emissions reduction action plans

for engagement with our franchises and suppliers to

decarbonise, focusing on our growth driving operations.

• Establish clear energy efficiency programmes

in place across our offices and obtain renewable

energycertificates in our site locations, where

greenenergy is available.

• Meet our 50.4% near-

term global emissions

reduction target and

focus on the next phase

to net zero.

• Expand our emissions

reduction action plans

across our operations

by engaging with actors

within our value chain.

• Shift our technology and

infrastructure portfolio,

including the use of AI,

towards the reduction

of carbon emissions as

well as costs.

90%

Emissions reduction

for Scopes 1 & 2

and Scope 3

(2022baseline)

Net zero

achieved

50.4%

Emissions reduction for

Scopes 1 & 2 and Scope 3

(2022 baseline)

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Environment metrics

In line with the UK Streamlined Energy and Carbon Reporting

Regulation (SECR) requirements for 2023, Playtech has reported

its Scope 1, Scope 2 GHG emissions and energy consumption

figures for the UK. During 2023, Playtech worked to strengthen

the completeness of its Scope 1, 2 and 3 footprint as it prepared its

submission to the SBTi. This involved investigating known exclusions

to determine whether they continue to be immaterial to the overall

emissions footprint:

• global exclusions: GHG emissions from the use of refrigerants

(Scope 1); and

• partial exclusions:

• GHG emissions from the treatment of waste generated in

operations (Scope 3, Category 5): previous reporting only

included Snaitech operations due to data availability;

• GHG emissions from employee commuting (Scope 3,

Category7): previous reporting only included Snaitech

operations due to data availability; and

• GHG emissions from HAPPYBET franchises (Scope 3,

Category14): previous reporting only included Snaitech

franchises. These number around 10,000, while there are

around100 HAPPYBETfranchises.

Playtech’s materiality threshold for restating previously reported

data is 5%. Together, the exclusions set out above represented

5.0% of the Company’s total 2022 Scope 1, 2 (location-based) and 3

footprint. However, the difference in disaggregated reported metrics

is material, particularly for Scope 1 GHG emissions as the inclusion of

refrigerants increases Scope 1 emissions by 143% from the reported

metric in 2022.

In addition, Playtech has now also calculated its Well-To-Tank emissions

in Scope 3, Categories 4, 6, 7, and 9 to improve the comprehensiveness

of its Scope 3 footprint as part of its SBTi submission.

In order to aid compatibility, Playtech has restated its Scope 1,

Scope 3 total and breakdown by category GHG emissions for 2022.

Unfortunately, data for 2021 is not available.

In 2019, Playtech introduced a GHG emissions target to guide its

energy-reduction efforts. The Company’s ambition is to reduce its

absolute Scope 1 and 2 (location-based) GHG emissions by 40%

by 2025, using 2018 as the baseline year. This target excluded

emissions from refrigerants, which had not yet been considered in

2018. Playtech’s Scope 1 and 2 (location-based) emissions, excluding

refrigerants, were 7,086 tonnes CO

-equivalent (CO

e) in 2023.

This is a 38.6% reduction compared to the 2018 baseline (11,543

tonnes CO

e).

In 2023, Playtech’s total Scope 1 and 2 (location-based) emissions,

including refrigerants, decreased by 0.9% compared to 2022. While

Scope 1 emissions, both from energy and refrigerants, decreased by

8.9% due to a decrease in energy consumption and refrigerant usage,

Scope 2, Location-based emissions increased by 3.4%. This increase

in emissions is explained mainly by the increasing emission intensity

of the electricity grids in the countries where the Company operates,

which averaged 5.1% (weighted by total electricity consumption per

country) in 2023. While Playtech cannot influence the electricity grid

intensity in the countries where it operates, it can influence its own

energy consumption. Total energy consumption decreased by 3.4%

compared to 2022. This was achieved by a combination of energy

saving measures, supported by environmental specialists and a

central fund for energy reduction projects. Playtech will redouble

these efforts in 2023, in pursuit of its target. Normalised per Full-Time

Equivalent (FTE) employees, total Scope 1 and 2 (location-based)

emissions including refrigerants decreased by 11.3% due to an

increase in headcount by 12.1%.

During 2023, Playtech continued to its transition to renewable

electricity in the key markets where the Company operates. This

has resulted in 57.2% of the Company’s total energy consumption

now coming from renewable sources, backed up by energy attribute

certificates, up from 56.4% in 2022.

Playtech recognises the environmental impact across its global value

chain. The Company therefore conducts an annual Scope 3 footprint.

In the process, the Group has followed the GHG protocol guidance

to calculate those emissions, based on a combination of financial

and actual supplier data. The Company is committed to increasing

engagement with key suppliers on their emissions and gathering

more actual data to continuously improve the accuracy of Scope3

figures in future years. As part of this annual exercise, Playtech

determines which of the 15 categories listed by the GHG Protocol

Corporate Value Chain (Scope 3) Standard are relevant to the

Company and therefore should be included in its Scope 3 footprint.

Thirteen out of the fifteen categories were identified as being relevant

to the Company and two were not relevant for Playtech. All relevant

categories have been calculated.

Playtech’s Scope 3 GHG emissions are over 90% of its total carbon

footprint and out of the 15 Scope 3 categories, the Company’s top

three material categories are “products and services”, “capital goods”

and “franchises”.

The consumption of water across the Playtech Group decreased

by 23.3% in 2023, of which the racetracks saw a 28.8% decrease

in water consumption. Playtech continues to manage and report

on waste produced for Playtech’s Italian operations, Snaitech.

Snaitech runs a retail operation and three racetracks, which means

the environmental impact profile is different from the rest of the

Company’s markets. In 2023, Snaitech’s total non-hazardous waste

production increased by 10.9%. The volume that is reused or recycled

increased by 11.0%, while the volume sent to landfill has decreased to

0.01 tonnes compared to 5.69 tonnes in 2022.

External assurance and benchmarking

We engaged PricewaterhouseCoopers LLP (‘PwC’) to undertake

a limited assurance engagement, reporting to Playtech plc only,

using the International Standard on Assurance Engagements

(‘ISAE’) 3000 (Revised): ‘Assurance Engagements Other Than

Audits or Reviews of Historical Financial Information’ and ISAE

3410: ‘Assurance Engagements on Greenhouse Gas Statements’

over Playtech’s 2023 GHG reporting (Scope 1 emissions, Scope

2 (location-based) emissions, Scope 2 (market-based), Scope 1 &

2 intensity per FTE employee and Scope 3, Categories 1, 2, 3, and

14). The assured data can be found in the Responsible Business

and Sustainability Addendum to the Annual Report 2023. PwC has

provided an unqualified opinion in relation to the relevant KPIs and

data and their full assurance opinion is available on the Playtech

website, www.investors.playtech.com/sustainability. Non-financial

performance information, including greenhouse gas quantification

in particular, is subject to more inherent limitations than financial

information. It is important to read the selected GHG information

contained in the Responsible Business and Sustainability Addendum

to the Annual Report 2023in the context of PwC’s full limited

assurance opinion and the reporting criteria found within the reporting

methodology section of the Responsible Business and Sustainability

Addendum to the Annual Report 2023, which are also available on the

Playtech website, www.investors.playtech.com/sustainability.

Responsible business and sustainability continued

72 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Environment metrics

Global Scope 1 and 2 GHG emissions

(location-based)

Global Scope 1 (tonnes CO

Global Scope 2 (location-based) (tonnes CO

Global Scope 1 and 2 GHG emissions

(market-based)

Global Scope 1 (tonnes CO

Global Scope 2 (market-based) (tonnes CO

Playtech’s total carbon footprint

(in 2023)

Global Scope 1 2,743 tCO

Global Scope 2 (market-based) 1,630 tCO

Global Scope 3 106,641 tCO

UK Scope 1 and 2 GHG emissions

(location-based)

1, 2

UK Scope 1 (tonnes CO

UK Scope 2 (location-based) (tonnes CO

UK Scope 1 and 2 GHG emissions

(market-based)

1, 2

UK Scope 1 (tonnes CO

UK Scope 2 (market-based) (tonnes CO

Global and UK energy consumption

1, 2

Global total energy consumption (kWh)

UK total energy consumption (kWh)

From renewable sources (%)

Intensity

Scope 1 and 2 (market-based) GHG intensity

Scope 1 and 2 (location-based) GHG intensity

1.11

0.56

2023

Global water consumption

Total water consumption (m

)

Water consumption for watering racetracks (m

)

Total waste produced

Hazardous waste (tonnes)

Total waste produced (tonnes)

Waste production by treatment

Sent to landﬁll (tonnes)

Reused or recycled (tonnes)

111,014

tCO

1,171 6,720

3,012

5,733

2,743 5,928

8,671

1, 2,

8,745

4,643

7,891 8,249

4,373

1, 2,

1,171 7,078

20212021

3,012

1,631

20222022

2,743 1,630

20232023

578,150

230,871

2022

443,656

2023

688,707

2021

88,150

2022

2023

2021

5,288.0434.154

5,864.99

40.704

7,055.860.019 7,048.42

2021

7.44

5,282.36

2022

5.69

5,864.98

2023

0.01

Indicates data extracted from the Responsible Business and Sustainability Addendum to the Annual Report 2023 where it has been subject to independent limited assurance by

PricewaterhouseCoopers LLP (PwC). The full assurance statement over 2023 data can be found at www.investors.playtech.com/sustainability. The data for previous years, where assured, is detailed in the

respective Annual Reports.

1 2023 absolute data is an estimate based on 99.0% actual data coverage by headcount. Coverage has been above 99% for all three years.

2 Due to reporting timelines, data for November and December 2023 has been estimated using November and December 2022 actual data, except for sites where actual 2023 data was already

available. This is the same methodology that was applied for all three years.

3 Detailed breakdown on the Scope 3 categories, including calculation methods and scope, can be found in the Responsible Business and Sustainability Addendum to the Annual Report 2023.

4 Restated to include fugitive emissions from refrigerant usage.

1 Estimate based on 75% actual data coverage by headcount.

2 Estimate based on 78% actual data coverage by headcount.

3 Estimate based on 73% actual data coverage by headcount.

4 Data covering Snaitech operations only. Actual data based

on 100% actual data coverage by headcount.

5 This figure is split between racetracks (manure/by-product

of animal origin – 5,300), racetracks (other – 378), and

offices (186).

6 This figure is split between racetracks (manure/by-productof

animal origin – 4,292) racetracks (other–779)and offices (2012).

7 This figure is split between racetracks (manure/by-product of

animal origin – 6,946), racetracks (other – 358) and offices (195).

374 139

341 144

350 281350

2021

2022

69 281

274

66 308

2023

69 212

2021

2022

66 73

2023

2021 2022 2023

26,404,609

27,243,173

26,558,665

1,733,605 1,794,7451,672,350

56%

11%

57%

164,351

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

In 2023, Playtech teamed up with Hubbub, an award-winning

environmental charity designing creative campaigns to inspire

sustainable and practical actions. Playtech is proud to be part

of Hubbub’s growing network of over 2,300 organisations, from

international businesses to community groups. Through these

partnerships, Hubbub has already delivered over 100 campaigns

and inspired over 800,000 people to take action to protect the

environment around them.

Playtech’s one-year partnership with Hubbub includes

four campaigns, each with a different focus, but all geared towards

making colleagues better stewards of the environment at home, at

work and in their communities.

We kicked off the partnership with Playtech’s “Sustainability

Listening Project”, a study of Playtech colleagues’ behaviours and

aspirations around sustainable living. Over 400 colleagues took

part, with eight in ten stating they wanted Playtech to support them

in living more sustainably and to provide tips on energy usage both

at work and at home, and 75% stating they are proud to work for an

employer that is prioritising sustainability.

The second campaign was Playtech’s “Global Tech Check”, a

three-week Company-wide effort to tackle the fastest growing

waste stream in the world, electronic waste. Playtech colleagues

globally committed to reduce electronic waste by recycling their

non-working technical items and donating working devices to

people who need them. Over four weeks 581 items were collected

– 482 for recycling in an effort to keep harmful toxins out of landfill

and 99 working devices for rehoming.

In response to the Playtech community’s wish to know more

about saving energy, Hubbub designed an educational campaign

called “Power Down, Save Up” to help colleagues save energy and

money during the winter. We launched the campaign in November

with an interactive online workshop to provide an overview of what

Playtech is doing as a company to reduce energy usage, as well as

tips and tricks from Hubbub to dial down personal energy use and

save money. The fourth campaign will be rolled out in spring 2024.

“Colleagues are the bedrock of corporate sustainability – showing

how much change is possible when people come together – and it’s

been brilliant to see so many Playtech colleagues getting involved

in environmental action throughout 2023. From speaking up and

sharing ideas to inform the sustainability strategy, to donating tech

to fight e-waste, and dialling down energy to save carbon... we’ve

been amazed by the engagement and involvement.”

Natasha Gammell

Creative Partner at Hubbub

A partnership with Hubbub to empower employees

on taking positive environmental action

Responsible business and sustainability continued

74 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Governance (CFD a)

Current approach

In 2021, Playtech’s Board of Directors officially formed a Sustainability

and Public Policy Board Committee with the first meeting in

November 2021. Since then, this Committee has set the agenda

and monitored the implementation of the responsible business and

sustainability strategy.

The Sustainability and Public Policy Committee of the Board has

responsibility for overseeing sustainability – including climate-related

matters – and reviewing the strategies, policies and performance

of the Playtech Group. In 2023, the Committee held four meetings

and considers the climate change aspects of business plans,

internal resourcing, expansion and disposal of activities, and capital

expenditure. Oversight of climate-related risks, opportunities and

strategy sits with this Committee. This Committee will continue

to meet quarterly and review climate-related issues as part of the

standing agenda. The Chair of the Committee serves as the Board-

level champion on these topics and reports to the Board on climate-

related issues annually.

The Risk and Compliance Board Committee also reports to the Board

on climate-related issues annually.

The frequency with which the full Board considers climate-related

risks and opportunities was agreed in 2022 with these matters now

discussed biannually.

TCFD statement

Playtech has embraced the recommendations of the Task Force on Climate-related

Financial Disclosures (TCFD), a framework that allows it to report consistently on the

opportunities and challenges presented by climate change and provide information on

how these might impact strategy and financial performance. Our approach in this area is

evolving in line with developing best practice.

This section sets out Playtech’s climate-related financial disclosures, current approach and future plans, consistent with all of the Task Force on

Climate-related Financial Disclosures (TCFD) recommended disclosures, in compliance with the Financial Conduct Authority (FCA) Listing Rule

9.8.6R(8) and Companies Act Climate-related Financial Disclosure (CFD) requirements. In the following statement, we outline our compliance

with all the elements of the TCFD, including the four TCFD recommendations and the 11 recommended disclosures.

Our climate risk governance structure

Board of Directors

Sustainability and Public Policy Committee

of the Board

Executive Leadership Team

CSO

Head of Sustainability

Environment Forum

Risk and Compliance Committee of the Board

Oversight, review

and challenge

Delegate

Information

sharing

75Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Governance (CFD a) continued

Current approach continued

Each member of the Sustainability and Public Policy Committee

received training covering ESG and regulatory developments (page61).

In 2022, the Board participated in a detailed climate tutorial covering the

physical science basis and regulatory, investor and corporate trends,

delivered by external advisers specialised in sustainability.

In 2022, Playtech appointed a Chief Sustainability and Corporate

Affairs Officer, who is a member of the Company’s Executive

Management Committee, and attends the Sustainability and Public

Policy Board Committee. The Sustainability function sits within

the Corporate Affairs and Sustainability function and holds the

day-to-day responsibility and oversight of regulatory compliance

and responsible business, along with the Regulatory Affairs and

Compliance function. The Chief Compliance Officer is also a member

of the Executive Management Committee and attends the Risk and

Compliance and Sustainability and Public Policy BoardCommittees.

Playtech has a cross-functional Environment Forum which is chaired

by the Head of Sustainability, who reports into the Chief Sustainability

and Corporate Affairs Officer. This Forum is attended by senior

representatives from Audit; Risk; the Chief Operating Officer’s office;

Infrastructure and Technology; Investor Relations; Procurement; Site

Operations; and other functions. It meets quarterly to:

• develop, review and update Playtech’s climate policies and targets

as necessary;

• identify climate risks and opportunities and develop risk

management strategies;

• review and define actions to comply with evolving regulatory

reporting requirements and voluntary reporting frameworks; and

• allocate the annual environmental budget.

Playtech’s governance structure for climate-related risks and

opportunities is summarised in the graphic opposite. External ESG

consultants support the Environment Forum, Head of Sustainability,

CSO, and are periodically invited to join meetings of the Sustainability

and Public Policy Committee of the Board as well as the full Board.

Future plans

The full Board will continue to receive training on climate change as

part of wider sustainability training that will provide information on the

latest climate science and how the public policy agenda is developing

in this area. Playtech will continue to review and, if necessary, adapt

the Group’s governance process to ensure alignment with emerging

good practice.

Read more on:

Scenario analysis and climate-related risks and opportunities on pages 78 to 81

Risk management, principal risks and uncertainties on pages 95 to 100

Net zero roadmap on page 71

Risk management (CFD c)

Current approach

The Board is responsible for determining the nature and extent of

the significant risks it is willing to accept in achieving its long-term

strategic objectives. Through its role in monitoring the ongoing

risks across the business, the Risk and Compliance Committee

advises the Board on current and future risk strategies. The primary

responsibilities delegated to, and discharged by, the Risk and

Compliance Committee include:

• reviewing management’s identification and mitigation of key risks to

the achievement of the Company’s objectives;

• monitoring incidents and remedial activity;

• agreeing and monitoring the risk assessment programme including,

in particular, changes to the regulation of online gambling and the

assessment of licensees’ suitability;

• reviewing and assessing climate-related risks in the context of

Group-wide risk;

• agreeing on behalf of the Board and continually reviewing the risk

management strategy and relevant policies for the Group;

• satisfying itself and reporting to the Board that the structures,

processes and responsibilities for identifying and managing risks

are adequate; and

• monitoring and procuring ongoing compliance with the conditions

of the regulatory licences held by the Group.

Climate-related risks are identified through various channels including

quarterly Environment Forum meetings and the climate scenario

analysis exercise completed in 2021 and updated in 2022.

Presentations for these meetings include reviews of current national

climate policies in the key markets where Playtech operates.

Theidentified risks are assessed by the Head of Sustainability

with support from external sustainability advisers and the relevant

functions within Playtech. The Head of Sustainability is responsible for

updating the Group Internal Audit and Risk function on climate-related

risks, which includes a description of the risk, risk categorisation,

type, impact and likelihood, mitigation and validity. This information is

approved by the Company’s Director of Internal Audit and Risk.

All types of climate-related risks and opportunities are considered

through the above process, including transition risks (policy and legal,

technology, market and reputation); physical risks (acute and chronic);

and opportunities (resource efficiency, energy source, products/

services, markets and resilience).

The Head of Sustainability is responsible for co-ordinating the

management of climate-related risks across Playtech’s business.

Thisincludes setting the Company’s climate strategy, which

includes its GHG reduction targets, Environment Policy, collecting

and analysing environmental data to identify hotspots, defining and

agreeing reduction plans and engaging country leadership teams

andkey asset managers.

Responsible business and sustainability continued

76 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Playtech began assessing climate-related risks and opportunities

specifically in 2020 and completed its first scenario analysis in 2021.

In 2022, the Company adopted a more systematic approach to

reviewing, updating and monitoring climate risks as governance and

management processes were further embedded and matured.

The Company’s focus was also on shifting sites to renewable

electricity where possible and starting to engage with the Company’s

Procurement function, including through a climate change due

diligence questionnaire for new suppliers. Additionally, the Company

incorporated climate change into its consideration of risk and viability

for the business as a whole.

Climate-related risks are considered as part of the overall risk

process. The Group Internal Audit and Risk function collects

information on risks from stakeholders across the business, which

is then presented to the Group Risk Management Committee

(Executive Management Committee) and Board Risk and

Compliance Committee (Board Committee).

Climate-related risks are monitored as part of the sustainability

strategy and Compliance and Regulatory Affairs risk processes.

TheSustainability and Public Policy Committee of the Board feeds

into the identification, assessment and management of climate-

related risks, which are integrated into the Group risk process by

theHead ofSustainability.

Read more on:

Scenario analysis and climate-related risks and opportunities on pages 78 to 81

Risk management, principal risks and uncertainties on pages 95 to 100

Metrics and targets (CFD g & h)

Current approach

In 2021, Playtech started to quantify the financial impact of climate-

related risks.

In 2022, Playtech strengthened the methodology and approach

around quantification of climate-related risks and broadened the

number of quantified risks and opportunities. This work has continued

in 2023, with further risks and opportunities being quantified. This has

provided the Company with a clearer understanding of the nature and

scale of the challenges it faces.

Playtech has disclosed its Scope 1 and 2 (location-based) emissions

annually in the Environment section of the Annual Report and to CDP.

The Company started disclosing Scope 2 (market-based) and Scope3

emissions in 2021. Playtech continues to disclose this information in

this report.

Playtech has set a target to reduce its absolute Scope 1 and 2

(location-based) GHG emissions by 40% by 2025 from a 2018

baseline. Progress is monitored annually as part of the year-end

Non-Financial Reporting process and captured in the Global

Sustainability Scorecard.

In 2021, Playtech carried out its first Scope 3 footprint and calculated

market-based Scope 2 emissions, which were prerequisites for

setting a science-based target (SBT) – that is, an emissions reduction

target that aligns with the latest climate science.

In 2022, Playtech publicly committed to setting a near-term

(emissions reduction) and long-term (net zero) SBT, to be validated

by the SBTi. The Company submitted its target for validation in 2023

and is currently going through the validation process with SBTi. In

early 2024, the SBTi approved Playtech’s near term science-based

emissions target, a 50.4% reduction in its scope 1 and 2 and scope

3 emissions by 2032. Playtech has also committed to set long-term

emissions reduction targets with SBTi in line with reaching net

zero by 2040.

Future plans

We will continue to refine our approach to quantification of climate

risk. We will also look to develop a suite of indicators beyond tracking

our own Scope 1, 2 and 3 GHG emissions that will provide the Board

and senior management with a view of how those risks impact the

delivery of our strategy over the short, medium and long term.

Read more on:

Scenario analysis and climate-related risks and opportunities on pages 78 to 81

Scope 1, 2 and 3 emissions on pages 72 and 73

Group Sustainability Scorecard on page 54 and 55

77Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Scenario analysis and climate-related risks andopportunities

In 2022, Playtech conducted its second scenario analysis, building on the extensive scenario analysis conducted in 2021. The scenarios used

in 2021 were updated based on the latest information from the Intergovernmental Panel on Climate Change (IPCC) and International Energy

Agency (IEA). Three workshops were held with Subject-Matter Experts from across the different business units and countries where Playtech

operates to consider the outcomes from the 2021 analysis and identify any changes. The Company was again supported by Carnstone, a

management consultancy specialised in sustainability and ESG. The outputs of this work were reviewed in 2023 and are considered to still be

representative for Playtech.

Playtech’s scenarios and the external scenarios that fed into Playtech’s scenarios are summarised in the table below and comply with the TCFD

guidelines to use a range of scenarios that provide a reasonable diversity of potential future climate states, including a 2°C or lower scenario.

Playtech selected a 1.5°C scenario because that is the level of global warming that is considered “safe” by climate scientists and is the level of

warming the global community is aiming to achieve by 2100; a 2°C scenario because this is considered a more likely outcome considering the

scale of the challenge to limit global warming to 1.5°C; and a 3°C scenario as a reasonable worst case scenario, assuming no new policies are

announced to further limit global warming. The scenarios draw on the IPCC’s Representative Concentration Pathways (RCPs) and Shared

Socioeconomic Pathways (SSPs); the IEA’s World Energy Outlook scenarios; and the Principles for Responsible Investment’s (PRI’s) Inevitable

Policy Response (IPR) scenarios. Because scenarios are models of the future and not precise predictions, the scenarios refer to global warming

outcomes and the path towards those outcomes on a decadal level. The scenarios use a mix of qualitative and quantitative information and

were applied through three lenses: Operations (key markets and assets); Supply Chain; and Customers and Consumers. As Playtech is a global

company with assets in 20 markets, the scenarios considered both global climate impacts and specific local impacts in its key markets.

Climate-related risks are regularly monitored by the executive cross-functional Environment Forum, the Sustainability and Public Policy

Committee of the Board, as well as the Risk and Compliance Committee of the Board. They are also considered as part of the Risk and

Compliance Committee’s biannual review of risks across the Group.

1.5°C scenario 2°C scenario 3°C scenario

Playtech’s scenarios

Summary:

physical

aspects

Increase in heatwaves, extreme

weather events (precipitation, droughts,

storms), ﬂoods, species extinctions and

wildﬁres over current conditions, but

slow and broadly manageable across

mostgeographies.

Increase in heatwaves, extreme

weather events and wildﬁres which

reach unmanageable levels in some

geographies by the 2040s. Water

availability for agriculture, hydropower and

human settlements severely diminished

from the 2040s. High ﬂood damages.

Signiﬁcant adaptation necessary and

frequent disruption expected.

Various areas of the world become

uninhabitable due to intense heatwaves,

droughts, or combinations of both. Heavy

precipitation events, and longer and more

intense wildﬁre seasons covering more

areas of the globe lead to a constant

state of disruption. Floods cause

widespread disruption, including to coastal

infrastructure such as ports. Species

extinctions and severe water shortages

prevent the production of key commodities

including foods. By 2100, sea level rise

is becoming a problem for low-lying

coastalareas.

Summary:

transition

aspects

Signiﬁcant, rapid and disruptive policy

change across carbon pricing, energy,

transport, buildings and deforestation.

Rapid phase-out of fossil fuels in the

2030s and 2040s. Every policy decision

has a climate angle. Global GHG

emissions peak by 2025 and reach net

zero by the early 2050s.

New policies are implemented over

current levels, in a slow and inconsistent

manner. Carbon prices and other limits on

emissions are implemented but the cost

of emitting grows in a slow and steady

manner. The electriﬁcation of transport

and buildings does not pick up much pace.

Global GHG emissions peak in the 2020s

and reach net zero in the 2070s.

Climate policies are maintained at current

levels, with major economies reducing

emissions gradually over the next 30 years

and reach net zero around 2050. New

technologies are not deployed as fast as

predicted, and the world remains reliant on

fossil fuels with widespread use of Carbon

Capture & Storage (CCS) by the second

half of the century. Globally, GHG emissions

continue to rise.

External scenarios

IPCC

Scenarios

RCP2.6/SSP1 RCP4.5/SSP2 RCP6.0/SSP5

IEA

Scenarios

Sustainable Development New Policies Current Policies

Other

Scenarios

PRI IPR: 1.5°C Required Policy Scenario PRI IPR: Forecast Policy Scenario

Other data

sources

Climate Analytics, Climate Impact Explorer; Climate Interactive, EN-ROADS Climate Change Solutions Simulator; Network

for Greening the Financial System, Climate Scenarios Phase 2; World Bank, Climate Knowledge Portal and World Resources

Institute, Aqueduct Water Risk Atlas

Playtech routinely monitors the status of climate regulation in its key markets to ensure that its GHG reduction targets keep pace with

regulatorychanges.

Responsible business and sustainability continued

78 Playtech plc Annual Report and Financial Statements 2023

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Physical risks

TCFD category Description

Applicable

scenario(s) Time horizon Materiality Management approach

Acute

Cancellation of sports events due to high

temperatures or extreme weather events.

Likelihood:

Impact:

Loss of revenue and/or higher

operating costs.

1.5°C

Medium-

and long-term

Move to night time events, which

would result in higher operating costs

due to the necessary lighting. Invest

in the most energy-ecient lighting

available and/or on-site renewables.

Renew racetracks with more resilient

all-weather surfaces.

2°C

3°C

Acute

Water stress causing disruption to horse

racetracksand third-party data centres.

Likelihood:

Impact:

Higher operating costs and temporary

disruption tooperations.

2°C

Medium-

and long-term

IT function risk assess and stress test

data centres, based on age, location

and in-person visits.

Invest in water efficient equipment,

rainwater treatment and storage

facilities, and water-saving measures.

Renew racetracks with more resilient

all-weather surfaces.

3°C

Chronic

Higher energy costs to cool buildings,

including third-party data centres,

Live studios and offices due to

highertemperatures.

Likelihood:

Impact:

Higher operating costs.

1.5°C

Short-,

medium-

and long-term

Invest in energy-saving measures

and on-site renewables.

2°C

3°C

Acute

Reduced employee productivity and

ability tocommute during heatwaves.

Likelihood:

Impact:

Disruption to operations and higher

operating costs.

1.5°C

Medium-

and long-term

Playtech already has a strong hybrid

working culture and demonstrated

anability to perform while large

parts of the business were fully

working fromhome during the

COVID-19 pandemic. Emergency

air-conditioned transport could

also be offered to employees where

working from homeis not an option

(for example dealers in Live studios).

Increase budgets to support

employee benefits, if necessary.

2°C

3°C

The risks and opportunities that were identified as part of the climate scenario analysis are summarised in the table below. The Company defines

short term as <one year; medium term as one to five years; and long term as >five years.

Therefore, very high impacts are impacts aligned with the Group materiality as set out in the Independent Auditor’s Report on page 158.

TheCompany attempted to calculate the financial impact of each risk and opportunity. For some, however, this was not yet possible due to a lack

of data. Playtech will aim to increase the number of risks and opportunities for which impacts were quantified year on year as more data becomes

available. For the risks and opportunities where the financial impact was determined and quantified, it was calculated based on a combination of

projections on the physical impacts of climate on specific locations, projections on the societal responses to certain future climate states, both from

reputable data sources described in the Climate scenarios and sources table and information gathered from within the business.

These quantifications were conducted across 2021 and 2022 for the most part, with the exception of the risk related to water stress, the risk

related to disruption to supply chains of IT equipment, and the risk related to employee productivity, which were quantified in 2023. Playtech

remains committed to update its scenario analysis, and quantification of the identified risks and opportunities, at least every three years in line

with the TCFD recommendations.

The outcomes of the climate scenario analysis are reflected in the risk register on pages 97 to 100. The management approaches identified for

likely risks and opportunities are being explored, such as investment in renewable energy generation at key assets. Going forward, Playtech will

continue to update its scenario analysis on an annual basis as more information becomes available on the possible climate futures that humanity

faces and their impacts on business. The results of these exercises will be reported to the Board at least annually through the Sustainability and

Public Policy Committee.

Key

Risk Opportunity

Denotes potential positive financial impact Denotes potential negative financial impact

Low: <€1m

Medium: €1m – €5m

High: €5m – €10m

Very high: >€10m

Not yet quantified

79Playtech plc Annual Report and Financial Statements 2023

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TCFD category Description

Applicable

scenario(s) Time horizon Materiality Management approach

Acute

Disruption to supply chains of key IT

equipment due to extreme weather

events. Force majeure clauses being

used more, making it more difficult to

be nimble.

Likelihood:

Impact:

Disruption to operations.

1.5°C

Medium

and long term

Key business units are already

stocking up on hardware and

components to ensure business

continuity and building price

premiums for priority delivery into

budgets. In addition, investment in the

capacity to quickly relocate stocks

where needed.

2°C

3°C

Chronic

Temporary or permanent closure, or

investment in adaptation, of owned

assets and third-party data centres due

to unsuitability for climate impacts.

Likelihood:

Impact:

Higher capital investment, write-off

of assets and higher operating costs.

2°C

Long term

When expanding into new markets

or planning new assets, the

resilience of those locations to the

impacts of climate change will need

to be taken into account. Feasibility

studies on the adaptability of

current buildings for projected

climate impacts. Maintenance

and periodic update ofbusiness

continuity plans.

Risk assess and stress test data

centres, based on age, location and

in-person visits.

3°C

Chronic

Higher employee-related costs due

to inflationary pressures from climate

change and health impacts.

Likelihood:

Impact:

Higher operating costs.

3°C

Long term

Monitor and adapt employee-

related budgets as necessary.

Chronic

Global economic, political, and

societal instability, for example due to

migration, unavailability of key life goods,

culture change.

Likelihood:

Impact:

Disruption of operations and

higher taxation.

2°C

Long term

Monitor the business and political

climate in key markets on an

ongoing basis.

3°C

Chronic

Extreme weather events and sea level rise

would lead to high investment required

to keep vulnerable assets operational,

including the Italian retail network and

Live studios in North and South America,

including in New Jersey.

Likelihood:

Impact:

Higher capital investment, write-off of

assets and disruption to operations.

3°C

Long term

Factor future investment into

financial planning. Consider

future suitability of locations when

expanding. Invest in flood defences

where possible or absorb costs of

relocation where not.

Responsible business and sustainability continued

Physical risks continued

80 Playtech plc Annual Report and Financial Statements 2023

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Transitional risks and opportunities

TCFD category Description

Applicable

scenario(s) Time horizon Materiality Management approach

Policy and Legal

Carbon taxes could pose an additional

cost to the business and limit high-

emissions activities such as flying,

which would lead to a need to recruit

expertise locally.

Likelihood:

Impact:

Higher operating costs.

1.5°C

Medium term

Set and review emissions

reduction targets.

Expand local recruitment networks

and invest in local talent pools.

Relocate employees.

2°C

Market

As the impacts of climate change

disrupt key commodity supply chains

and agricultural production, the cost of

living is expected to rise. This would lead

to consumers having less disposable

income and would lead to lower revenue

for the consumer-facing business.

Likelihood:

Impact:

Loss of revenue.

2°C

Long term

Monitor the situation and maintain

capacity to supply increases

in demand.

3°C

Market*

As heatwaves, extreme weather events

and wildfires force consumers to stay

home for periods of the year, there may be

growth in online gambling. This presents

a risk to business units that depend on

physical gambling activities, and an

opportunity to business units that focus

on online gambling activities.

Likelihood:

Impact:

Decrease or increase in revenue,

depending on the business unit.

2°C

Long term

Monitor the situation and maintain

capacity to supply increases in

demand. Shift business units which

mainly rely on physical gambling

activities to offer online products.

3°C

Products

and Services

If casinos are forced to relocate due to

the physical effects of climate change,

this could lead to increased demand for

products used by casinos produced by

Intelligent Gaming Solutions.

Likelihood:

Impact:

Increase in revenue.

3°C

Long term

Monitor the situation and maintain

capacity to supply increases

in demand.

Markets

If large parts of the tropics and Southern

Europe become less desirable to live in

due to the effects of climate change in

these regions, it could lead to increased

attractiveness of key cities in the Northern

hemisphere where Playtech has large

operational footprints, such as Riga

and London.

Likelihood:

Impact:

Increase in attractiveness to

prospectiveemployees.

3°C

Long term

Monitor the situation and maintain

and expand, if necessary, operations

in more attractive locations.

* Depending on the business unit: it’s a risk for business units dependent on physical gambling activities and an opportunity for business units dependent on online gambling activities.

81Playtech plc Annual Report and Financial Statements 2023

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Partnering on shared

societal challenges

Playtech is committed to making a positive impact on society and in local communities,

where it operates. By working with subject matter experts, academic partners and charity

organisations, we aim to help people live healthier lives online and support a wide range

of charitable and volunteering activities. We recognise that the challenges facing the

sector and our communities cannot be solved by one organisation alone, and that driving

positive social change requires collaboration and partnership.

Our approach

A guiding principle for Playtech’s philanthropic and volunteering

activities is collaboration through partnerships. Playtech’s social

impact efforts focus on a wide range of themes, including mental

health, digital wellbeing and safer gambling, as well as humanitarian

causes, and supporting colleagues and communities in crisis.

At Playtech, we recognise the significance of addressing the

concerns that matter most to our stakeholders and industry. One

of the most material areas of focus is how best to reduce gambling-

related harm and promote positive digital wellbeing. The delivery of

our healthy online lives and digital wellbeing programme displays our

commitment to finding solutions and making a meaningful impact

within the industry.

Our Global Community Investment Programme is designed to

support causes that are pertinent in the local markets where we

operate. Around the world, Playtech supports and encourages

employees to contribute their time, skills, money and, most

importantly, passion to make a positive social impact in their

communities. By building a strong and enduring network with local

charities and social enterprises, Playtech explores how to positively

contribute to societal challenges.

Playtech’s Global Community Investment Committee is comprised

of senior management, who oversee and monitor the strategy and

governance of the philanthropic and volunteering activities across

the Group. Local offices have established and formalised charity

committees to oversee and drive community investment activity.

Responsible business and sustainability continued

>680,000

People reached, directly and indirectly, with digital

wellbeing programmes

>£1,300,000

Total amount invested during the year in research,

education and treatment programmes designed to

reduce gambling-related harm

Commitments:

• Help people live healthier online lives and adopt digital

resilience and safer gambling behaviours

• Contribute to and support research, education and treatment

to prevent, reduce and address gambling-related harm

• Empower local community groups to deliver a positive impact

Targets and performance measures:

• Reach 415,000 people with digital wellbeing

programmes by 2025

• Engage 30,000 people in community and mental

health programmes to improve livelihoods by 2025

• Strive for 5% year-on-year increase in employees’

contributions (skills, time or money), reaching a

global average of 10% by 2025

Playtech plc Annual Report and Financial Statements 2023

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>115

Number of

charities

supported

Number of countries

involved in the Community

Investment programme

Number of ‘Tech for

Good’ initiatives, within

theprogramme

>47,000

Number of people engaged through

the community investment programme

in 2023

Charitable giving and volunteering in our communities

In 2023, Playtech worked with more than 115 local charities in 12 markets, an increase from over 100 charities and ten markets in 2022. Through

the programmes supported, Playtech engaged with more than 47,000 people* in 2023, an increase from over 45,000 people engaged in 2022.

Community investment includes gifts in kind, monetary donations and employee volunteering. The total value of monetary donations totalled

over €730,000. Employees are encouraged to volunteer for a day each year, as well as support charitable fundraising through our matched

giving programme. Of the 12 countries that took part in the community investment programme, an average of 11% of employees contributed their

time, money or skills in their community.

* Engaged is defined as an individual that has directly benefited and/or has interacted with the programme by receiving financial and/or in-kind support. Community programmes include all remaining

causes excluding mental health and digital wellbeing, e.g. health, hardship andenvironment.

“Tech for Good” initiative to

combat clothing poverty

Playtech funds a number of community-based initiatives

aimed at harnessing technology to deliver positive social

and environmental outcomes. In the UK, Playtech supported

“Give Your Best”, an award-winning “Tech for Good” social

enterprise that is making it possible for women and children

from the refugee and asylum-seeking community in the

UK to shop clothing for free, with the dignity and choice

they deserve.

In late 2021, Playtech donated the seed funding to support

creation of a comprehensive online store. This innovative

platform empowers people and brands alike to donate

clothing effortlessly online, while also creating a space where

the community supported by “Give Your Best” can shop

online entirely free of charge.

The launch in 2022 transformed the business from being

solely reliant on an Instagram account, to a new e-commerce

platform able to process 65% more clothing every month.

“Give Your Best’ has been able to upscale its activities,

supporting more people in clothing poverty, while offering a

sustainable and ethical donation solution.

To mark International Volunteering Day on 5 December, an in-

office clothing collection and volunteering day was organised

with “Give Your Best”. Employees donated 122 items and

used their Company volunteering day to sort, steam and

upload donated clothing items on the website, where people

shopped them for free.

Volunteering in Estonia:

Playtech’s community impact

Playtech is committed to providing opportunities for its

employees to become involved in charitable and volunteering

initiatives. Our Community Investment Programme is available

to Playtech employees and aims to support colleagues in

collectively making a difference in their local communities,

through their contributions of time, skills and/or money.

Playtech provides every employee in the organisation

with the opportunity to volunteer and support their local

communities for one day a year, and in Estonia, colleagues

arecollaborating with an organisation called Let’s Donate

Time, which facilitates a range of volunteering opportunities

for employees.

For the second consecutive year, Playtech Estonia organised

charity weeks at our offices in Tartu and Tallinn. Different

time donation options over a two-week period were offered,

providing the flexibility needed for as many as possible to

take part. More than 100 employees were involved in a week

of volunteering including working with Tartu and Tallinn

foodbank, a day care centre for the elderly, a church soup

kitchen and two animal shelters. Colleagues also volunteered

at the Sooma National Park to restore alvars - a task that

involves thinning out dense juniper thickets in order to

establish paddocks so animals can graze there again.

By participating in Time Donation Weeks, Playtech Estonia

is fostering a culture that focuses on giving back and

building good relationships between employees and local

communityorganisations.

Playtech plc Annual Report and Financial Statements 2023

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Responsible business and sustainability continued

Snaitech’s partnership with Special Olympics Italia

Special Olympics Italia provides year-round sports training and athletic competitions in a variety of Olympic-type sports for children and adults

with intellectual disabilities, giving them ongoing opportunities to develop physical fitness, demonstrate courage, experience joy, and share

their skills and friendship with their families, other Special Olympic athletes and the community.

Snaitech has collaborated with Special Olympics Italia since 2017 through its iZilove Foundation, which promotes the company’s charitable

and community goals. Snaitech and Special Olympics Italia have two key sustainability objectives – to raise public awareness about the

issue of intellectual disability through promotional campaigns, and to share the same core values of integration, participation and enthusiasm.

Snaitech is using all the communication tools at its disposal and dedicating its passion and commitment to this cause. Here are a few examples

of thecollaboration.

In 2017, Snaitech held a fund raising campaign for Italian athletes during the National Winter Games of Bormio, and the following year

hosted the opening ceremony of the 34th National Summer Games at the Snai Sesana Racetrack of Montecatini Terme, where over 130

colleagues acted as volunteers.

In 2020, in collaboration with Special Olympics Italia, Snaitech supported the Sappada 31st National Winter Games, and the Smart Games,

the first remote sporting event organised during the COVID-19 pandemic. In 2022, the iZilove Foundation supported the 37th National

Summer Games in Turin, involving 3,000 athletes, 1,500 volunteers and over 20 different sports disciplines. In April 2023, Snaitech employees

supported Special Olympics Italia by taking part in a relay race in the Milan Marathon to contribute to fund raising efforts to take Italian athletes

to the Special Olympics World Summer Games in Berlin. The iZilove Foundation also supported Special Olympics Italia at “Play the Games”,

the programme of sports events scheduled in several Italian regions involving around 5,879 athletes in 19 sports.

Through the iZilove Foundation, Snaitech also supported the “Adopt a Champion” fundraising campaign, to enable three Italian athletes to

participate in the games and initiated an internal campaign to invite employees to participate as volunteers in Berlin for three days to support the

athletes. Six volunteers from Snaitech in Italy and four from HAPPYBET in Germany participated, as Berlin welcomed 6,500 athletes and Unified

Partners from around 190 countries to compete in 26 sports. The athletes were supported by more than 3,000 coaches and 20,000 volunteers.

Playtech plc Annual Report and Financial Statements 2023

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Supporting communities in crisis

The ongoing wars in Israel and Ukraine have had an unprecedented

impact on the lives of many of our colleagues and their communities.

Our first priority was to validate the safety of our colleagues in both

countries, and ensure the Company was doing everything possible to

support them, as well as their families and local communities. Support

included aiding local response efforts and offering mental health and

trauma services, as well as, where appropriate, financial assistance

through our newly established Employee Benevolent Fund. We have

extended support to aid local response efforts with in-kind donations

and volunteering as well as donations to hospitals and charities.

We continue to closely monitor the developments in both Israel and

Ukraine, as well as the needs of our colleagues and their families and

the communities affected.

85Playtech plc Annual Report and Financial Statements 2023

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Playtech’s support in Ukraine –

the “Cold Winter Project”

Since the outbreak of the war in Ukraine, Playtech has been

committed to supporting both our own colleagues living

and working in the country, as well as the people of Ukraine

affected by the ongoing conflict. We have partnered with

humanitarian organisations to provide essential aid, as

well as support to a wide range of non-profit organisations,

enabling them to deliver vital medical equipment, supplies and

psychological assistance to those in need.

Towards the end of 2022, Playtech helped to fund an initiative

called the Cold Winter Project, aimed at supporting as many

people as possible during the winter months. The Project was

run in partnership with two charities, the charity foundation

Relief Ship and charity fund Favor and covered three

focus areas.

The first entailed providing help to nearly 1,000 people left

homeless by the war and living in unheated shelters in Dnipro

and in the community of Bezliudivka in the Kharkiv area.

Unable to keep warm or prepare hot food, they were affected

by many issues related to the electricity blackout. Depending

on the differing needs of the refugee groups, firewood and

blankets were provided, as well as generators, gas burners

and gas bottles, which, on delivery by charity volunteers, were

carefully unpacked and instructions on safe use provided.

During December 2022, Playtech colleagues donated

Christmas gifts that were then wrapped and distributed to

over 250 children situated in shelters across Ukraine.

The second initiative was funding the delivery of warm

meals to around 161,700 people living in eight cities from

December 2022 to mid-March 2023. The cities were then

under constant fire and recipients of the meals included

city residents and migrants as well as sick, elderly, disabled

and low-income people in need. Meals were delivered to

15 different lunch hotspots and involved the purchase and

preparation of over 25,000 kilogrammes of food.

The third Cold Winter Project initiative was the purchasing of

eight ambulances, installing professional medical equipment

in each and then delivering them to war zones in dire need of

medical transport and equipment.

In December 2023, Playtech demonstrated its ongoing

commitment to the Ukrainian communities by funding the

“Elderly People’s Home” project. This project aims to assist

605 elderly residents of Dnipro Geriatric House, Ukraine’s

largest facility for senior citizens. Many of these residents

are homeless due to displacement and mental health issues.

The project involves upgrading the bathrooms and replacing

all the windows in the building that accommodates 605

elderly people.

Responsible business and sustainability continued

Evidence-based research to

advance player protection

Playtech aims to contribute to building a more responsible,

sustainable gambling industry. A key element of Playtech’s

approach is to support evidence-based research to develop

and test best practices to advance player protection measures

as well as to address gambling-related harm. Since 2021,

Playtech has supported a number of US focused research

projects carried out by the Kindbridge Research Institute.

The Kindbridge Research Institute commissioned the Center

for Gambling Studies at Rutgers University in New Jersey, a

leading public research university in the United States, to set

up an evidence-based telehealth model which will be used to

evaluate the effectiveness of digital gambling-related harm

support and treatments. Treatment for gambling disorder

in the US faces severalbarriers, including the fact that most

options involve in-persondelivery.

The Kindbridge Research Institute’s Treatment Disparity

Project is being conducted with Rutgers University to identify

the availability of treatment for gambling disorder in the US.

The project will result in the creation of an innovative dataset

that will pinpoint areas where there are shortages in gambling

disorder treatment and indicate the communities of greatest

need to guide Kindbridge’s telehealth service roll-out plan.

The Kindbridge Research Institute has also supported the

50x4Vets Project, an initiative aimed at improving treatment

options for US military veterans. The US is home to roughly

19 million veterans and gambling disorder is three times

more prevalent amongst this community than in the wider

population. The project’s goal is to conduct research on

patient characteristics, clinical interventions, and patient

outcomes, and identify the most effective interventions,

withthe aim of implementing this approach in Veterans Health

Administration clinics both nationally and internationally.

Investing in safer gambling:

research, education and treatment

Healthy online lives and digital wellbeing

The impacts of gambling-related harm, particularly on mental

health, have been rising up the sector’s agenda and coming under

increasing scrutiny. This is taking place against a backdrop of societal

change; with both availability of gambling, and people spending time

online increasing – not just to gamble or bet, but to play games and

engage with a broad range of social media. Alongside their role as

entertainment, all these activities have the potential to encourage

unhealthy behaviour and blur the boundaries of what constitutes

gambling and healthy online behaviour.

It is now more urgent than ever that academics, policymakers and

the gambling industry collaborate with treatment providers and

those with lived experience of addiction to make gambling safer.

The conversation around gambling has too often been politicised

and divided, making it difficult to share insights between all interested

parties. This is detrimental to reducing gambling-related harm, which

should be everyone’s shared goal.

As one of the largest suppliers of gambling products around the world,

Playtech is at the forefront of bringing together the gambling industry

with academics, policymakers and charity experts. There is strong

consensus on many fronts: the need to share data more effectively

on gambling, to trial theory in practice before implementing it and to

recognise gambling as a health issue.

In 2020, Playtech announced its Healthy Online Living Programme,

acommitment to support programmes and partnerships designed to

reduce gambling-related harm and promote positive digital wellbeing

and health outcomes. In doing so, Playtech formally announced and

committed £5 million over five years in five areas of focus, to support

partnerships and initiatives that can make a positive difference at the

intersection of gambling, online life and mental health. The focus areas

include offering preventative education; supporting capability building

of frontline staff and support organisations; building the skills of

frontline workers in the gambling sector and in healthcare; catalysing

innovative digital solutions; and leveraging research, data and AI to

deliver insights and solutions.

86 Playtech plc Annual Report and Financial Statements 2023

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Supporting the development

of Suicide First Aid Training

for the gambling sector

Playtech is collaborating with a wide range of non-profit partners

to tackle shared societal challenges, such as gambling-related

harm. Betknowmore UK identified a need to address inconsistent

training programmes, policies and procedures designed

for suicide prevention in the gambling sector. Betknowmore

partnered with the National Centre for Suicide Prevention,

Education and Training to develop, test and pilot training that

provides gambling operator customer service and support teams

with the knowledge, skills and confidence building needed to help

and support those at risk and/or experiencing suicidal thoughts.

This collaboration led to the creation of the Phase Red Suicide

First Aid Training course, a bespoke City and Guilds certified

programme specifically designed for responsible gambling

and customer facing teams.

Participants in compliance and customer care roles in the

gambling industry have found the training particularly helpful,

reporting that it helped remove myths and taboos surrounding

suicide and left them feeling more confident in supporting

customers who may be exhibiting signs of suicide risk. They

also found the course helpful when it came to considering

their own mental health and wellbeing.

The beneficiaries include direct participants and indirect

beneficiaries with 365 direct participants and 21,560 indirect

beneficiaries to date. With the development and piloting of the

training successfully complete, the next phase of the project is

underway to further roll out the training with the aim of it ultimately

becoming a leading programme for the sector.

In November 2023, the course received recognition, winning

the “Responsible Gambling Solution or Service Provider of

the Year” award at the Global Regulatory Awards hosted by

Vixio RegulatoryIntelligence.

Safer gambling Mental health

Healthy lives and

digital wellbeing

Since then, Playtech has established strategic partnerships with a

growing number of organisations. These include Betknowmore and

the Epic Restart Foundation (UK charities that help rebuild lives after

gambling problems); Kindbridge, a US organisation that provides an

online network of resources for those seeking support and advice

about gaming and gambling-related harm; RG Plus, a strategic

consultation service developed by the Responsible Gambling Council

that offers customised solutions to help operators develop innovative

responsible gambling programming; the National Centre for Suicide

Prevention; YGAM, an award-winning charity providing evidence-

based education to help prevent problem gaming and gambling; and

more. To-date, over 680,000 beneficiaries have been reached, both

directly and indirectly.

Investing in research to reduce gambling-related harm

Playtech has continued to increase its investment in research,

education and treatment programmes designed to reduce gambling-

related harm. In 2023, Playtech invested over £1,300,000 in such

programmes and initiatives.

87Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Strong performance

across both B2B and B2C

Growth in Group

Adjusted EBITDA

Overview

Group performance

Overall, Playtech delivered strong financial

results in 2023, with Adjusted EBITDA

of€432.3 million (2022:€395.4million),

growing 9% compared to 2022.

Totalreported revenue from continuing

operations was €1,706.7 million

(2022:€1,601.8 million), representing a

7%increase compared to 2022.

The strong performance was driven by

both the B2C and B2B divisions. In B2C,

Snaitech had a solid 2023 performance

driven by growth across both the online and

retail divisions. This drove B2C Adjusted

EBITDA of €250.3million, an increase of 6%

compared to 2022. The overall growth was

a combination of a very strong start to the

year, partly driven by pent-up demand post

the 2022 football World Cup and partly offset

by customer-friendly sporting results in the

second half of the year.

In B2B, the results were driven by strong

growth in regulated markets, with revenues

growing by 8% from €632.4 million in 2022 to

€684.1 million in 2023 and Adjusted EBITDA

increasing by 14% from €160.2 million in 2022

to €182.0 million in 2023. With strong growth

seen in the Americas and Europe ex UK,

the good performance reflects the Group’s

strategy of focusing on opportunities in

regulated and soon-to-be-regulated markets

and is further analysed in this report.

In March 2023, the Group invested

$85.0million (€79.8 million) in Hard Rock

Digital in exchange for a small minority

interest in a combination of equity shares

and warrants. This investment forms part of

the Group’s strategy to expand its presence

in the US, inaddition to providing growth

opportunities globally.

The Group has been dealing with the

ongoing Caliplay disputes, in particular

in relation to the unpaid B2B licence fees

and additional B2B services fee in respect

of FY 2023 (€32.3 million outstanding

for the period August 2023 to December

2023 and €54.2 million outstanding for

the periodJuly2023 to December 2023

respectively). The Group has recognised

the full outstanding amount within its total

revenue for the year and in line with its

revenue accounting policies.

In recognising the entire amount,

Playtech has assessed that it is highly

probable thatthere will not be a significant

reversal ofthis revenue in a subsequent

period andthe receivable is fully

recoverableasfurther explained in Note 7

ofthe financial statements.

Reported and Adjusted Profit

Adjusted Profit before tax from continuing

operations grew by 16% to €250.5 million

(2022: €215.4 million), driven mainly by the

rise in Adjusted EBITDA and decrease in

financing costs, partly offset by the increase

in amortisation and depreciation.

Reported profit before tax from continuing

operations increased to €235.8 million

(2022: €95.6 million) which, in addition

to the above, also includes the increase

in the unrealised fair value of derivative

financial assets, which was partly offset by

higher goodwill and intangible impairments

compared to 2022. Total post-tax reported

profit from continuing operations was

€105.1 million (2022: €40.6million), with

the movement in tax explained further in

this report.

Balance sheet, liquidity and financing

The Group continues to maintain a strong

balance sheet with Adjusted gross cash,

which excludes the cash held on behalf

of clients, progressive jackpots and

security deposits, of €363.3 million as at

31December2023 (2022: €272.4 million). The

increase is a result of the new €300.0million

bond issue which took place in June 2023

and the continued strong performance

of the Group throughout the year, partly

offset by the €200.0 million repayment

of the 2018 Bond and the uncollected

€86.5million Caliplay debt. Netdebt

increased slightly to €282.8million as at

31December2023 (2022: €275.2million),

while net debt/Adjusted EBITDA remained

flat at 0.7x(2022: 0.7x).

Chief Financial Officer’s review

Chris McGinnis

Chief Financial Officer

2023 saw a strong financial

performance across both

B2B and B2C, with Adjusted

EBITDA ahead of previously

raised expectations.”

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Playtech has taken a proactive approach to managing its balance

sheet. In June 2023, the Company acted quickly to take advantage

of a window of relative market calm and secure favourable interest

rates, issuing €300.0 million of senior secured notes due 2028 at an

interest rate of 5.875%. Part of the proceeds were used to redeem all

of the outstanding €200.0 million 3.75% senior secured notes due

in October 2023. The Company also used the proceeds to repay

the outstanding debt under its existing revolving credit facility in July

2023, which remains available and undrawn today.

Group summary (continuing operations)

2023

€’m

2022

€’m

B2B 684.1 632.4

B2C 1,037.0 983.1

B2B licence fee – intercompany* (14.4) (13.7)

Total Group revenue from

continuingoperations 1,706.7 1,601.8

Adjusted costs

(1,274.4) (1,206.4)

Adjusted EBITDA from

continuingoperations 432.3 395.4

Reconciliation from EBITDA

toAdjusted EBITDA:

EBITDA 406.5 362.3

Employee stock option expenses 6.3 8.0

Professional fees 14.4 15.7

Ukraine employee support costs — 3.3

Onerous contract — 10.4

Fair value change of redemption liability — (4.3)

Impairment of investment and

receivables 5.1 —

Adjusted EBITDA 432.3 395.4

Adjusted EBITDA margin 25% 25%

* These are the B2B licence fees paid from the B2C divisions to B2B.

The Group’s total reported EBITDA increased by 12% to

€406.5million (2022:€362.3 million). The adjusted items between

reported and Adjusted EBITDA are explained in Note 11 of the

financialstatements.

Q&A with Chris McGinnis

1. What is it that sets Playtech apart?

Playtech is known for its market-leading technology, first-in-class

content and commitment to ensuring a safe betting and gaming

experience, so it could be any of these. The common thread

running through it all is our people. Everywhere you look, we have

fantastic colleagues working hard to help us lead the way and

deliver an excellent experience for our customers. They never

cease to amaze me!

2. What has surprised you the most about

the CFO role?

One of the biggest differences has been moving from an

externally focused role in investor relations to a more internally

focused one as CFO. I still engage with analysts and investors

regularly, but a much larger proportion of my time is now spent

working with our colleagues around the business. That different

perspective has shown me more clearly than ever just how much

talent we have within the business and leaves me feeling very

optimistic about the future.

3. Can you share some insights into your

experience and the challenges you’ve faced?

Unfortunately, a number of our colleagues in Ukraine and more

recently Israel continue to be affected by wars in their respective

regions. As we have done for the past few years, our priority is

to ensure that we are doing all that we can to support them and

theirfamilies.

From a financial perspective, there’s been a lot of

macroeconomic uncertainty and all businesses have had to

manage pressures from inflation and a higher interest rate

environment. Navigating that has been a challenge, but one that

we’ve risen to.

4. Can you share some of the key accomplishments

that you’re particularly proud of?

Back in March 2023, I set out several priorities and I’m pleased

withthe progress we’re making across all of them. In particular,

we’ve strengthened our cash generation over the past year,

whichreflects the excellent performance across both our B2B

andB2C operations.

The refinancing we completed was a key moment that highlighted

the strength of our business and our balance sheet, as well as giving

us the flexibility to pursue organic and inorganic opportunities.

5. Looking ahead, what are your priorities for the

upcoming year?

I think there are a lot of exciting growth opportunities for Playtech

in 2024 and beyond. As CFO, I see the finance team's and

my role as enabling the business to take advantage of these

opportunities, while keeping expenditure well controlled and

continuing to execute against our strategic priorities.

89Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Divisional performance

B2B

B2B revenue

2023

€’m

2022

€’m

Change

Constant

currency

Americas 211.9 144.7 46% 35%

– USA and Canada 13.2 7.6 74% 82%

– Latin America 198.7 137.1 45% 32%

Europe excluding UK 200.1 184.6 8% 8%

UK 126.1 126.7 0% 1%

Rest of the World 7.0 5.6 25% 25%

Total regulated B2B

revenue 545.1 461.6 18% 15%

Unregulated 139.0 170.8 -19% -17%

Total B2B revenue 684.1 632.4 8% 6%

Overall, B2B revenues increased by 8% (6% on a constant currency

basis), largely due to an increase in the regulated B2Bbusiness.

Regulated B2B revenues

increased by 18%, driven by an increase

inregulated markets in the Americas and Europe (excluding the UK)

of 46% and 8% respectively (35% and 8% respectively on a constant

currency basis), partly offset by a decline in unregulated revenues.

The increase in the Americas was primarily driven by Mexico,

due to revenue growth from Caliplay (albeit it there remains a

large outstanding receivable balance – see Note 7 of the financial

statements), with increasing contributions from other countries such

as the US through Parx, Canada via NorthStar and other licensees,

and Colombia via Wplay. In Europe (excluding the UK) growth was

driven by several countries including Poland, the Czech Republic and

Spain, although this growth was partly offset by the loss of two retail

sports contracts. The increase in Poland was driven by Playtech’s

partnership with Polish state operator, Totalizator, which is going

from strength to strength, whereas in Spain, there were several new

launches during 2023.

The small decline seen across the UK market was due to the

continued impact of the uncertain regulatory climate. The majority

of the decline in unregulated markets is due to revenue moving to

theregulated category, as areas such as Ontario in Canada regulate,

as well as further declines in revenue in Asia.

B2B costs

2023

€’m

2022

€’m

Change

Research and development 100.2 87.5 15%

General and administrative 85.5 82.6 4%

Sales and marketing 19.5 16.8 16%

Operations 296.9 285.3 4%

Total B2B costs 502.1 472.2 6%

Total B2B revenue and costs

B2B revenue 684.1 632.4 8%

B2B costs (502.1) (472.2) 6%

Total B2B Adjusted EBITDA 182.0 160.2 14%

Margin 27% 25%

Research and development (R&D) costs include, among others,

employee-related costs and proportional office expenses. Expensed

R&D costs grew by 15% to €100.2 million (2022: €87.5 million), driven

by the increase in employee-related costs, including inflationary

salary rises from higher investment in the core gaming development

team (Casino, Live and IMS). Capitalised development costs were

35.3% of total B2B R&D costs in 2023 (2022: 38.7%).

General and administrative costs include employee-related costs,

proportional office expenses, consulting and legal fees, and corporate

costs such as audit and tax fees and listing expenses. These costs

increased by 4% to €85.5 million (2022: €82.6 million), mainly due to

increases in professional fees and other administration costs.

Sales and marketing costs increased by 16% to €19.5 million

(2022:€16.8 million), mainly due to the full return of marketing

andexhibition activities to pre-COVID-19 levels.

Operations include costs relating to infrastructure and other

operational projects, IT and security and general day-to-day

operational costs, including employee and office-apportioned

costsand branded content fees. These costs increased by 4% to

€296.9 million (2022: €285.3 million), driven mainly by Playtech’s

expanding Live operations in Peru, US and Romania, as well as an

increase in costs to support Playtech’s structured agreements.

B2B Adjusted EBITDA

Total B2B Adjusted EBITDA increased by 14% to €182.0 million

(2022: €160.2 million), while EBITDA margin increased to 27% from

25% in 2022, driven by the movement in revenue and costs, as

described above.

B2C

2023

€’m

2022

€’m

Change

Snaitech

Revenue* 946.6 899.8 5%

Costs (690.5) (655.8) 5%

Adjusted EBITDA 256.1 244.0 5%

Margin 27% 27%

Sun Bingo and Other B2C

Revenue 73.4 65.3 12%

Costs (67.4) (63.3) 6%

Adjusted EBITDA 6.0 2.0 200%

Margin 8% 3%

HAPPYBET

Revenue 18.2 20.1 -9%

Costs** (30.0) (30.9) -3%

Adjusted EBITDA (11.8) (10.8)

Margin N/A N/A

B2C Adjusted EBITDA 250.3 235.2 6%

Margin 24% 24%

* Includes intercompany revenue from HAPPYBET of €1.2 million (2022: €2.1 million).

** Includes intercompany costs from Snaitech of €1.2 million (2022: €2.1 million).

Chief Financial Officer’s review continued

90 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Snaitech

Snaitech revenues increased 5% from the prior year to €946.6million

(2022: €899.8 million), with operating costs seeing the same 5%

increase to €690.5 million (2022: €655.8 million). These results were

driven by good growth across both the retail and online segments,

although there were differing dynamics across the period. Thefirst

half saw a very strong start driven by pent-up demand post the

football World Cup. This was partly offset by customer-friendly

sporting results in the second half of the year.

As a result of Snaitech’s movement in revenue and costs, Adjusted

EBITDA increased by 5%, while the respective margin remained

stable at 27% (2022: 27%).

Sun Bingo and Other B2C

Revenue from the Sun Bingo business increased by 12% to

€73.4million (2022: €65.3 million). Operating costs within Sun Bingo

increased by 6% to €67.4 million (2022: €63.3 million), leading to an

Adjusted EBITDA of €6.0 million (2022: €2.0 million). The increase

in Adjusted EBITDA was due to the increase in marketing spend

towards the end of 2022 during the football World Cup, resulting

in higher revenue growth in 2023 at a high contribution margin.

Furthermore, during 2023, the division saw improvements in its

return on investment from more effective marketing and stronger

retention rates. AdjustedEBITDA still includes the unwinding of the

minimum guarantee prepayment of €5.2 million in the current year

(2022:€5.4million), recognised as an expense over the new period

ofthe contract which was renegotiated in 2019.

On a reported basis, Playtech incurred a one-off cost of €10.4 million

in 2022 to terminate an onerous contract with a service provider.

HAPPYBET

Revenue from HAPPYBET decreased by 9% to €18.2 million

(2022:€20.1 million), with costs decreasing by 3%. The business

remains loss making, with Adjusted EBITDA loss in the current year

of€11.8 million (2022: loss of €10.8 million), albeit 2023 includes

a€2.0million expense relating to a litigation settlement.

Below EBITDA items

Depreciation and amortisation

Reported and adjusted depreciation increased by 12% to

€46.5million (2022: €41.5 million). After deducting amortisation of

acquired intangibles of €42.6 million (2022: €42.0 million), adjusted

amortisation increased by 24% to €84.1 million (2022: €67.8 million)

after the renewal of certain licences in Snaitech during H2 2022,

which were previously extended for free until June 2022, meaning

there was no corresponding amortisation in H1 2022. The remainder

of the balance under depreciation and amortisation of €21.2 million

(2022: €18.9 million) relates to IFRS 16 Leases and the recognition of

the right-of-use assetamortisation.

Impairment of intangible assets

The reported impairment of intangible assets of €89.8 million

(2022:€38.5 million) mainly relates to:

• the impairment of the Eyecon cash-generating unit (CGU) of

€7.8million (2022: €13.6 million), driven by underperformance

dueto the increasingly competitive UK online market;

• the impairment of the Quickspin CGU of €9.6 million

(2022:€7.0million), as the business goes through a transitional

period, resulting in a decline in revenue, but shows signs of

recovering following an internal realignment whereby it is now

under management of the Live business unit; and

• the impairment of the Sports B2B CGU of €72.2 million (2022: €Nil)

due to the loss of two significant retail contracts in the year.

The prior year impairment of €38.7 million related to the impairments

of the Eyecon CGU of €13.6million, Quickspin CGU of €7.0 million,

Bingo VF CGU of €12.5 million and IGS CGU of €5.6 million.

Finance income and finance costs

The reported and adjusted finance income of €12.3 million

(2022:€11.6 million) mainly relates to net foreign exchange gain of

€2.2 million (2022: €9.2 million) and interest received of €10.0million

(2022: €2.4 million).

Reported finance costs include interest payable on bonds and

other borrowings, bank facility fees, bank charges, interest expense

on lease liabilities and expected credit losses on loan receivables.

Reported finance costs decreased by 26% to €46.2 million

(2022:€62.8 million), mainly due to the repayment of the 2018 Bond

in H2 2023. The difference between adjusted and reported finance

costs is the movement in contingent consideration of €3.3 million

(2022: €0.1 million) relating to the acquisition of AUS GMTC PTY Ltd.

Unrealised fair value changes in derivative financial assets

The unrealised fair value increase in derivative financial assets of

€153.4million (2022: €6.0 million) is due to the movement of the fair

value of the various call options held by the Group which fall under

the definition of derivatives within IFRS 9 Financial Instruments,

with the most significant increase being as a result of the uplift in

the fair value of the Playtech M&A Call Option. Further details on

the fair valueofthevarious call options are disclosed in Note 21C

ofthefinancial statements.

Taxation

A reported tax expense from continuing operations of €130.7million

(2022: €55.0 million) arises on a reported profit before tax of

€235.8million (2022: €95.6 million) compared to an expected

charge of €55.4 million based on the UK headline rate of tax for the

period of 23.5%. The key item for which the reported tax charge has

been adjusted are UK tax losses on which a deferred tax asset of

€37.2million was derecognised as expected utilisation would fall

outside the forecasting period and therefore there is not sufficient

certainty they will be recovered.

The total adjusted tax expense is €93.7 million (2022: €54.9million)

which arises on an Adjusted Profit before tax of €250.5million

(2022:€215.4 million). The total adjusted tax expense of

€93.7million consists of an income tax expense of €35.3 million

(2022:€20.4million) and a deferred tax expense of €58.4 million

(2022: €34.5 million). The total adjusted deferred tax expense mainly

consists of a deferred tax expense of €42.2 million relating to the

Snaitech group including the use of Snaitech tax losses and excess

interest expense.

The Group’s effective adjusted tax rate for the current period is 37.4%.

This rate is higher than the UK headline rate for the period of 23.5%.

The key reasons for the differences are a mix of profits including

subsidiaries located in territories where the tax rate is higher than

the UK statutory tax rate (which predominately relates to Snaitech

based in Italy), current year tax losses not recognised for deferred

tax purposes and expenses not deductible for tax purposes which

include impairment of intangibles.

91Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Discontinued operations

Finalto (formerly TradeTech Group)

Finalto was disposed of in July 2022 with cash proceeds of

$228.1million (€223.9 million) and transaction costs of €1.6 million

resulting in a profit on disposal of €15.1 million.

Adjusted Profit

2023

€’m

2022

€’m

Reported proﬁt from continuing operations 105.1 40.6

Employee stock option expenses 6.3 8.0

Professional fees 14.4 15.7

Fair value change and ﬁnance costs on

contingent consideration and redemption liability 3.3 (4.2)

Ukraine employee support costs — 3.3

Onerous contract — 10.4

Impairment of investment and receivables 5.1 —

Fair value changes of equity instruments 6.6 0.3

Fair value changes of derivative ﬁnancial assets (153.4) (6.0)

Fair value loss on convertible loans — 3.0

Loss on disposal of subsidiary — 8.8

Amortisation of intangible assets on acquisitions 42.6 42.0

Impairment of property, plant and equipment

andintangible assets 89.8 38.5

Deferred tax on acquisitions (8.2) (8.3)

Derecognition of brought forward deferred

taxasset 37.2 —

Tax related to uncertain provision 8.0 8.4

Adjusted Proﬁt from continuing operations 156.8 160.5

The reconciling items in the table above are further explained in

Note11 of the financial statements. Reported profit post tax from

continuing operations was €105.1 million (2022: €40.6 million),

mainly due to the increase in the fair value of the derivative financial

assets, partly offset by an increase in CGU impairments and the

derecognition of brought forward deferred tax assets.

Adjusted EPS (in Euro cents)

2023 2022

Adjusted basic EPS from continuing operations 51.7 53.5

Adjusted diluted EPS from continuing operations 50.2 51.5

Basic EPS from proﬁt attributable to the owners

oftheCompany 34.7 29.2

Diluted EPS from proﬁt attributable to theowners

oftheCompany 33.7 28.1

Basic EPS from proﬁt attributable to the owners

oftheCompany from continuing operations 34.7 13.5

Diluted EPS from proﬁt attributable to the owners

ofthe Company from continuing operations 33.7 13.0

Basic EPS is calculated using the weighted average number of equity

shares in issue during 2023 of 303.3 million (2022: 300.1 million).

Diluted EPS also includes the dilutive impact of share options and

is calculated using the weighted average number of shares in issue

during 2023 of 311.9 million (2022: 311.9 million).

Cash flow

Cash conversion

Playtech continues to be cash generative and delivered operating

cash flows of €366.9 million (2022: €410.9 million) including cash from

discontinued operations which only impacts H1 2022.

2023

€’m

2022

€’m

Adjusted EBITDA 432.3 429.2

Net cash provided by operating activities 366.9 410.9

Cash conversion 85% 96%

Change in jackpot balances 3.3 (3.6)

Change in client funds and security deposits (2.1) 15.3

Professional fees 14.4 24.4

ADM security deposit (Italian regulator) 0.7 11.5

Adjusted net cash provided by

operatingactivities 383.2 458.5

Adjusted cash conversion 89% 107%

Excluding the impact of discontinued operations, operating cash

flows decreased from €382.7 million in the prior year to €366.9 million

in 2023, with the decline driven by the outstanding Caliplay receivable

as further explained in Note 7 of the financial statements.

2023

€’m

2022

€’m

Adjusted EBITDA 432.3 395.4

Net cash provided by operating activities 366.9 382.7

Cash conversion 85% 97%

Change in jackpot balances 3.3 (3.6)

Change in client funds (2.1) (9.4)

Professional fees 14.4 15.7

ADM security deposit (Italian regulator) 0.7 11.5

Adjusted net cash provided

byoperatingactivities 383.2 396.9

Adjusted cash conversion 89% 100%

Adjusted cash conversion of 89% (2022: 100%) is shown after

adjusting for jackpot balances, client funds, professional fees and

ADM security deposit.

Adjusting for the above cash fluctuations is essential in order to truly

reflect the quality of revenue and cash collection. This is because the

timing of cash inflows and outflows for jackpots, security deposits

and client funds only impact the reported operating cash flow and not

Adjusted EBITDA, while professional fees are excluded from Adjusted

EBITDA but impact operating cash flow.

Cash flow statement analysis

Net cash outflows used in investing activities totalled €317.6 million

(2022: €358.3 million), key items of which include:

• €79.8 million for the acquisition of a small minority interest in Hard

Rock Digital (refer to Note 21B);

• a €41.3 million cash payment in relation to a subcontractor option

redemption (refer to Note 21C); and

• €150.0 million (2022: €125.4 million) used in the acquisition

of property, plant and equipment, intangibles and capitalised

development costs.

Chief Financial Officer’s review continued

92 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Net cash inflows from financing activities totalled €39.9 million

(2022:outflow of €566.9 million), key movements of which include:

• redemption of the outstanding €200.0 million bond due 2023; and

• net proceeds of €297.2 million received from the new bond

issued in 2023.

Balance sheet, liquidity and financing

2023

€’m

2022

€’m

Cash and cash equivalents (net of ECL) 516.2 426.5

Cash held on behalf of clients, progressive

jackpots and security deposits (152.9) (154.1)

Adjusted gross cash and cash equivalents 363.3 272.4

Bonds 646.1 547.6

Gross debt 646.1 547.6

Net debt 282.8 275.2

Adjusted EBITDA 432.3 395.4

Net debt/Adjusted EBITDA ratio 0.7 0.7

Cash

The Group continues to maintain a strong balance sheet with total

cash and cash equivalents of €516.2million at 31 December 2023

(2022: €426.5 million). Adjusted gross cash, which excludes the

cash held on behalf of clients, progressive jackpots and security

deposits, increased to €363.3million as at 31 December 2023

(2022:€272.4million), a result of the new €300.0 million bond issue

and the continued strong performance of the Group throughout the

year, offset by the repayment of the outstanding €200.0 million bond

due 2023 (the “2018 Bond”) and the Caliplay outstanding debt of

€86.5 million.

Financing and net debt

As at 31 December 2023, the Group had the following borrowing facilities:

• €350.0 million 2019 Bond (2022: €350.0 million) (4.25% coupon,

maturity 2026) which was raised in March 2019;

• undrawn €277.0 million revolving credit facility (2022: undrawn); this

facility is available until October 2025, with an option to extend by 12

months; and

• €300.0 million 2023 Bond issued in June 2023, as further

discussed below.

Playtech has taken a proactive approach to managing its balance

sheet. In June 2023, the Company acted quickly to take advantage

of a window of relative market calm and secure favourable interest

rates. Playtech issued €300.0 million of senior secured notes due

2028 at an interest rate of 5.875% (2023 Bond). The 2023 Bond has

been assigned a rating of BB by S&P Global Ratings UK Limited and

Ba2 by Moody’s Investors Service Ltd upon issue. In July 2023, part of

the proceeds of the bond were used to redeem all of the outstanding

2018 Bond of €200.0 million 3.75% due in H2 2023 and to repay the

outstanding debt under its existing revolving credit facility, which

remains available and undrawn today. The remaining amount, after

payment of transaction-related expenses, will be used for general

corporate purposes.

Net debt, after deducting Adjusted gross cash, increased slightly to

€282.8 million (2022:€275.2 million), while net debt/Adjusted EBITDA

remained stable at 0.7x (2022: 0.7x).

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Balance sheet, liquidity and financing continued

Contingent consideration

Contingent consideration increased to €6.2 million (2022:€2.9million), mostly due to the fair value movement in the contingent consideration

related to the AUS GMTC PTY Ltd acquisition. The existing liability as at 31December 2023 comprised the following:

Acquisition

Maximum payable earnout

(per terms of acquisition) Contingent consideration as at 31 December 2023

Payment date (based on

maximum payableearnout)

Aus GMTC PTY Ltd €45.3 million €5.4 million Q4 2025

Other €0.8 million €0.8 million Various

Going concern and viability assessment

In adopting the going concern basis in the preparation of the

financial statements, the Group has considered the current trading

performance, financial position and liquidity of the Group, the principal

risks and uncertainties, together with scenario planning and reverse

stress tests completed for a period of no less than 15 months from the

approval of these financial statements.

At 31 December 2023, the Group held total cash of €516.2 million

(2022: €426.5 million) and Adjusted gross cash, which excludes the

cash held on behalf of clients, progressive jackpots and security

deposits, of €363.3 million (2022: €272.4 million). Net debt, which is

gross debt after deducting Adjusted gross cash, increased slightly to

€282.8 million (2022:€275.2 million).

The financing and net debt position has been reported and analysed

in the relevant section above. As at the date of this report (26 March 2024)

the Group’s facilities include the 2019 Bond of €350.0 million and the

2023 Bond of €300.0 million, both of which are long-term borrowings

due in 2026 and 2028 respectively, as well as the fully undrawn RCF

of €277.0 million.

As per the going concern assessment under Note 2, under its

base case scenario management, the Directors have a reasonable

expectation that the Group will have adequate financial resources

to continue in operational existence over the relevant going concern

period and have therefore considered it appropriate to adopt the

going concern basis of preparation in the financial statements.

Whilethe base case cash flow forecasts have assumed full recovery

of the Caliplay outstanding amounts within the going concern period

of assessment, there is a remote risk that no cash will be received

depending on the progress of the legal dispute, and hence this was

modelled in the stress test scenario. Even under this scenario the

Group still has sufficient headroom on its covenants and liquidity and

hence the Directors still have a reasonable expectation that the Group

will continue as a going concern over the relevant going concern

period. This remote scenario was also modelled in the viability

assessment which covers a period of three years and concludes

that there is a reasonable expectation that the Group will be able to

continue in operation and meet its liabilities as they fall due over the

three-year period to 31 December 2026.

1 Adjusted numbers throughout relate to certain non-cash and one-off items. The Board of

Directors believes that the adjusted results represent more closely the consistent trading

performance of the business. A full reconciliation between the actual and adjusted results is

provided in Note 11 of the financialstatements.

2 Core B2B refers to the Company’s B2B business excluding unregulatedAsia.

3 Totals in tables throughout this statement may not exactly equal the components of the total

due to rounding.

4 Comparative information throughout has been restated due to a change in accounting policy.

Further details are provided in Note 4C of the financial statements.

Chris McGinnis

Chief Financial Officer

26 March 2024

Chief Financial Officer’s review continued

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Risk management, principal risks and uncertainties

Risk as a key priority

A message from the Chair of the

Risk&Compliance Committee

Understanding the risks that impact our strategy

Risk management is fundamental to both robust corporate governance

and the successful delivery of our mission and objectives. The trends

outlined in our strategy present both opportunities andthreats to our

business. Identifying and managing theserisks is critical to delivering

our strategic goals. Regular discussion of our key priorities and the

changing landscape of challenges is the lens through which we

assessthese.

Strengthening our risk management and internal control

Whilst 2020 through to 2022 presented well-known global challenges,

2023 exacerbated this, not least due to the tragic events in Israel on

7October compounding upon that in Ukraine.

2023 saw us strengthen our risk management approach through

the on-going development of a bottom-up process whereby risk is

reviewed across our business to identify the main threats to delivery

of our strategy. A robust risk management process continues to be a

high priority for our business.

In recognition of the critical relationship between risk management

and internal control, reinforced by the UK Corporate Governance

Code guidance, we also appointed an experienced Director of Risk,

Internal Control and Assurance, to lead a new, dedicated team to

design and deliver a new Enterprise Risk Management Framework.

In 2024, we shall further enhance our approach to risk management

and internal controls, in line with Corporate Governance guidance,

through the embedment of an inter-related assurance process with

focused metrics and robust key control management for each of our

principal risks to support our operations and as a management tool

for business decisions. We shall also implement a testing schedule

forkey controls emanating from our significant and principal risks.

This will form a crucial objective throughout 2024 as the new

Enterprise Risk Management programme matures.

Samy Reeb

Chair of the Risk & Compliance Committee

26 March 2024

2023 saw us strengthen our risk

management approach through

the on-going development of a

bottom-up process whereby risk

is reviewed across our business, to

identify the main threats to delivery

of our strategy.”

Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Risk management, principal risks and uncertainties continued

Risk management in Playtech

Our Board is responsible for risk

management and promotes a transparent

and accountable culture through good

stewardship that does not inhibit sensible

risk taking critical to growth.

The Board supports good risk management across the Group

by implementing and overseeing a framework of appropriate and

effective controls that enable risk to be assessed and managed.

While sound risk management cannot eliminate all risks, the role of

our Board, its committees and the Executive Leadership Team is to

ensure that our risk management processes are robust, effective and

take account of appropriate exposures.

We continue to strengthen our approach to risk and controls

management to develop a process that complies with the

requirements of the UK Corporate Governance Code.

1. Identify

Strategic-focused risk assessment continues

to be a core component of the identify step.

Linking risks back to operational, business and

Group objectives allows risks to be validated and

enables better insight into understanding the

uncertainties faced. A detailed analysis of both

the causes (drivers) of the risk and the potential

consequences (outcomes) aids in understanding

the conditions surrounding the risk, which can be

mapped to the existing control environment to

identify any gaps or weaknesses. Documenting

the current control environment and its

effectiveness forms part of the identify step.

2. Assess

Risks and opportunities are assessed on

the likelihood and impact of a risk event

occurring, allowing risks and opportunities to be

prioritised. This assessment is with reference

to the effectiveness of the current control

environment – controls that are in place at the

time of assessment. This provides a real-time

picture of the current risk exposure driving the

required response.

4. Monitor

Regularly reviewing risks ensures the

information captured remains relevant, accurate

and up to date, and the status of outstanding

actions is tracked. The risk environment may

change from time to time, with the emergence

of additional causes or impacts requiring further

management of a previously ‘accepted’ risk.

Monitoring core themes across the business

as they link to the Group profile is essential for

effective risk management. Further detail on the

process and accountability for risk management

is contained on page 95 to 100.

3. Respond

A response is determined for each risk

and opportunity dependent on its current

assessment: accept or manage further. Actions

are developed for those risks requiring further

management, and are assigned clear ownership

and implementation timeframes in relation to the

current risk assessment.

A robust and dynamic risk management

framework ensures that risks are mitigated

and that the Group adheres to both regulatory

requirements and industry good practice when

identifying, assessing and managing risk.

96 Playtech plc Annual Report and Financial Statements 2023

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Outlining our principal risks

Risk Trend

1. Remaining competitive Stable

2. Security Stable

3. Geopolitical considerations Rising

4. Legal, compliance and tax Stable

5. Sustainable business Stable

6. Talent retention Rising

7. Recessionary risk Stable

Key: Matrix – Risk rating

classifications (Likelihood x Impact)

Likelihood

Low Medium High Critical

Critical

High

Medium

Low

Impact

1) Failure to maintain a

competitive position

Risk category Strategic

Likelihood High

Impact High

Trend

Stable

Link to strategy

Principal risk

We find ourselves with stronger, more robust competition which

can reduce our market share and limit our potential for growth.

Our market thrives on the presence of active participants in the

market to keep us innovative and relevant and help us advance

as an industry.

Mitigation

With technology rapidly advancing, industry consolidations

and new and emerging markets on the table, this gives us

further opportunity to build on our strategies of:

• placing innovation at the core of the Company, evolving

our products and delivering exciting offerings, from both

atechnology and product perspective;

• exploring new and emerging markets to accelerate B2B

and B2C growth;

• dedicating time to retaining and acquiring core talent; and

• harnessing the power of AI technology in our business

operations to drive innovation and new ways of working

andoptimise our products and services to keep us ahead

ofthe competition.

Strategic considerations

If we do not respond to the market dynamics, it will be more

challenging to achieve our objectives as well as meet and

exceed stakeholder expectations.

Principal risks heatmap 2023

Low risk

Medium risk

High risk

Critical risk

97Playtech plc Annual Report and Financial Statements 2023

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2) Data breach, technical

systematic failure or

security incident

Risk category Operational

Likelihood Medium

Impact High

Trend

Stable

Link to strategy

Principal risk

Our operational activities depend on our technology and

operational processes to ensure the availability, integrity

and confidentiality of our services, assets and personally

identifiable data that we hold. A compromise of services

or data through a technical system failure, cyber-attack or

breach of security would adversely impact our Company,

including disruptions to customers, regulatory penalties and

reputational damage.

Mitigation

Our current focus to assure the protection of our data and

systems, mitigating the risks of compromised Playtech

systems, is led by the following security strategies as aligned

with our business objectives:

• protecting service operations and delivery, on premise

and on cloud, through advanced technological security

capabilities and skilled staff;

• establishing a robust security governance framework

which operates under global and regulatory security

standards, such as ISO/IEC 27001 and GLI-19/33

Information Security Management standard, and oversees

Playtech offices and data centres, including Snaitech;

• working with Playtech customers to provide guidance on

security configuration and procedures combined with

overall assurance that both players and customers receive

modern security capabilities by default; and

• assuring business continuity by testing contingency plans

as a response to potential technical failures or incidents

such as DDoS attacks.

Strategic considerations

The strategic priorities are security risks that may cause

service disruption or regulatory non-compliance. While those

risks may result in reputational and operational damage,

Playtech is well placed to respond and avoid any impact to its

growth potential.

Risk management, principal risks and uncertainties continued

Outlining our principal risks continued

3) Geopolitical challenges

Risk category Macroeconomic

Likelihood Medium

Impact High

Trend

Rising

Link to strategy N/A

Principal risk

We are entering 2024 with the war in Ukraine still active but the

situation at present is stable, and the Israel-Hamas war which

brings instability around the region, including Houthi attacks

in the Red Sea that disrupt global supply chains. In addition to

the safety of our staff, there is the risk that regional conflicts

will constrain energy supply and disrupt major transportation

routes, raising prices across the board and affecting business

operations. Over the next year, the attention and resources

of global powers are likely to be focused on three hotspots in

particular: the war in Ukraine, the Israel-Hamas conflict and

tensions over Taiwan. Escalation in any one of these hotspots

would radically disrupt global supply chains, financial markets,

security dynamics and political stability, viscerally threatening

the sense of security and safety of individuals worldwide. All

three areas stand at a geopolitical crossroads, potentially

leading to broader regional destabilisation.

Mitigation

The past year has highlighted how resilient our organisation

can be when we have to prioritise and respond to a crisis. We

developed an effective response to the risks posed to us by

the war in Ukraine and the Israel-Hamas war by:

• protecting our people and their families which has included

financial support as well as flexible working arrangements;

• ensuring capacity and continuity by managing and

relocating key infrastructure and sharing knowledge and

teams inside and outside of Ukraine and Israel; and

• reviewing reliance on critical supply chains through

effective business continuity planning which has included

implementing backup generators and evacuation plans.

Strategic considerations

Key staff that are critical to delivering our strategic objectives

are still based in Ukraine and Israel. We have contingency

plans on standby in case we have to react with immediate

notice and are actively monitoring the situation.

98 Playtech plc Annual Report and Financial Statements 2023

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4) Non-compliance with a

changing landscape in legal,

regulatory, licensing and

tax requirements

Risk category Strategic

Likelihood Medium

Impact High

Trend

Stable

Link to strategy

Principal risk

The regulatory and legislative landscape continues to evolve,

with more uncertain politics and greater pressure globally on the

industry and tax regimes; therefore, it is vital that we keep abreast

of these changes in a timely manner, ensuring Playtech is either first

to market for its licensees or retains its dominant position in already

regulated markets. We need to be flexible and dynamic when we

enter new jurisdictions, and work closely alongside the regulatory

bodies, as it can be extremely challenging both operationally

and commercially to be ahead of all the legislative requirements.

We are also seeing greater focus across environmental, social

and governance regulatory and disclosure requirements, with

application for both direct operations and supply chain.

Mitigation

It is vital we are at the forefront of regulation and in order to do

so we are committed to:

• promoting a safer gambling environment at the forefront

ofour operations;

• operating a Playtech Regulatory Intelligence team who

monitors all regions, and ensures our processes and controls

are up to date and relevant;

• having dedicated internal legal, regulatory and tax teams

with responsibility for working with and advising the Board of

upcoming regulatory changes to ensure compliance;

• utilising external advice and engaging with partners who are

familiar with the landscape where possible, to reduce any

unknown exposure;

• communicating to the Board fully on all regulatory matters

which provides visibility and consultation from the top;

• ongoing assessment and review of our climate-related risks

and opportunities; and

• strong engagement with our value chain tomitigate and

manage the effects.

Strategic considerations

Increasing regulation puts pressure on new and existing

jurisdictions and therefore the marketplace itself. These

regulations are wide ranging and relate to gambling, listing rules,

tax regimes, financial regulation and requirements under relevant

environmental, social and governance-related regulations. This

can lead to higher consolidation in the marketplace; therefore,

keeping informed helps us to remain competitive and supports

our growth.

5) Inability to maintain a

sustainable business

Risk category Strategic

Likelihood Medium

Impact High

Trend

Stable

Link to strategy

Principal risk

Insufficient awareness and visibility on sustainability-related

considerations such as long-term viability of the operations,

safer gambling and social impacts, and the concentration

of our customer base (see Note 7 for more detail about the

Caliplay situation).

Mitigation

The sustainability of our business is a priority and, while we

have several means to ensure we deliver on this, some of the

key measures we have taken include:

• leveraging technology to promote a safer gambling

experience, reinforce player protection measures and

strengthen operational and industry standards;

• increased focus on the diversification of our business

activities and customer base, including growing new

revenue streams through the SaaS business and

expanding our customer relationships in the LatAm region;

• setting commitments and targets to align and embed

sustainability into our strategy, including setting science-

based targets to tackle climate change for SBTi validation

and a gender diversity target for our leadership;

• complying with evolving and relevant ESG regulatory

requirements, including but not limited to TCFD; and

• establishment of a Sustainability and Public Policy Board

Committee, which oversees and monitors the delivery

and evolution of ESG risks and opportunities, alongside

topic specific governance forums, in which Snaitech also

actively participates with the perspective to align with the

regulations and continuous improvement.

Strategic considerations

The above elements and our mitigation responses enforce

our commitment to ensure the long-term sustainable success

of our business and comply with evolving requirements as

well as meet evolving stakeholder expectations.

99Playtech plc Annual Report and Financial Statements 2023

Strategic Report

6) Failure to attract and retain

key talent

Risk category Operational

Likelihood Medium

Impact High

Trend

Rising

Link to strategy

Principal risk

Failure to retain and attract the correct people, the pressures

of global inflation affecting the cost of living, and not

adequately planning for unanticipated departures of key

people will result in operational deficiencies and hinder our

ability to deliver Company objectives.

Mitigation

Ensuring correct acquisition, retention and management

of key talent across Playtech is a priority to help us achieve

our vision. To help us deliver on this, we ensure we dedicate

ourselves to:

• embedding a strong Centre of Excellence (CoE) team

which directs focus to key talent pools to attract and retain

the right talent for Playtech;

• building customised strategies to identify internal talent

allowing us to secure the future of Playtech;

• creating a strong learning and development strategy to

retain and grow existing employees;

• promoting a diverse and inclusive culture through our

Company values to promote sustainability; and

• establishing effective business and workforce planning to

ensure effective succession.

Strategic considerations

Our business thrives on the innovation of our colleagues,

and it would be impossible for us to achieve our vision

without the support of our employees. Our robust mitigation

strategies ensure we remain a core employer of choice across

the industry.

7) Adverse impact of recession

and financial markets

Risk category Macroeconomic

Likelihood Medium

Impact Medium

Trend

Stable

Link to strategy

Principal risk

Several factors pose a risk in the current macroeconomic

environment including rising inflation and interest rates,

recession and foreign exchange fluctuations. End customers

face financial pressure, leaving less disposable income with

which to gamble. Aside from the impact on players, elevated

interest rates also increase the financial burden onour

colleagues and licensees, and influence our investment

decisions. From a cost perspective, our B2B business is

directly impacted by rising wage pressure and theeconomic

climate. However, our B2C business, Snaitech, is less affected

due to a different retail structure which is mainly franchising.

Fluctuations in foreign exchange rates also pose a risk as we

expand into jurisdictions with volatile exchange rates, such

as the Americas. However, this is not as significant across

most of the business as our revenue and cost bases are

evenly matched.

Mitigation

We have implemented some monitoring tactics to keep

abreast of the ongoing situation and the impact on our

operations by:

• actively monitoring the economic environment as it evolves;

• preparing appropriate responses for action plans that we

can implement that mitigate the risks to an acceptable level;

• creating internal remuneration and training schemes to

retain and support existing employees; and

• creating a Global Benevolent Fund to provide financial

assistance to colleagues for unforeseen challenges.

Strategic considerations

Protecting the long-term future of the Group and delivering

on our vision is our priority as the uncertain economic climate

can adversely impact this.

Risk management, principal risks and uncertainties continued

Outlining our principal risks continued

100 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Viability statement

The UK Corporate Governance Code requires the Board to explain

how it has assessed the prospects of the Group and state whether it

has a reasonable expectation that the Group can continue to operate

and meet its liabilities, taking into account its current position and

principal risks.

The Group’s principal markets and strategy are described in detail in

the Strategic Report (pages 1 to 102).

The key factors affecting the Group’s prospects are:

• Playtech is a global business and a leading technology provider in

the gambling industry;

• Playtech is well positioned to meet the growing demand in

technology in regulated and regulating markets;

• Playtech has a clear vision for its technology-centric growth

strategy, driven by new licensee and partnership agreements

in the newly regulated markets in the US and Latin America

and expanding with existing customers with more products

and markets;

• Playtech, through its B2B division, has a diverse portfolio

of licensees across retail and online, in over 40 regulated

jurisdictions; and

• Playtech, through its B2C division, is also a leader in the second

largest European market with Snaitech in Italy; with this leading

brand and Playtech’s technology it is ideally positioned to continue

its success in this market whilst also being the fastest growing

player in Italy in the online sector when measured by GGR.

The Directors believe that a three-year period is appropriate for

their viability assessment as it is supported by a three-year plan

adopted by the Board, which covers Playtech’s strategy to continue

to penetrate the newly regulated markets in the US and LATAM.

Thistimeframe is reduced from five to three years as it is the period

over which the Directors believe they can reasonably forecast the

Group’s performance. The previous five-year period was adopted in

part at the request of the potential acquirers of the Group during the

takeover talks in 2021 and 2022 for purposes of valuing Playtech.

Thisthree-year plan relies on certain key milestones being met in the

initial years (including continued execution of the Group’s US strategy

and further expansion in certain LATAM countries), which would then

drivefurther growth in the latter years. This plan is revised as required

to take into account known facts that will have an impact onthe

existing forecasts.

In making this statement, the Directors have carried out a robust

assessment of the emerging and principal risks facing the Group,

including those that would threaten its business model, future

performance, solvency or liquidity. This includes the availability and

effectiveness of mitigating actions that could realistically be taken

toavoid or reduce the impact or occurrence of the underlying risks.

Inconsidering the likely effectiveness of such actions, the conclusions

of the Board’s regular monitoring and review of risk management

and internal control systems, as described on pages 95 to 100,

areconsidered.

Base case three-year projections

As set out in the Chief Financial Officer’s Review (pages 88 to 94), the

Group had excellent overall results which were driven by Snaitech’s

solid performance in both its online and retail divisions and continued

strong growth in B2B regulated markets. The newly acquired Hard

Rock Digital investment made in March 2023 also forms part of the

Group’s strategy to further expand its presence in the US, along with

providing growth opportunities globally.

Base case projections for viability purposes have been made using

the Directors’ best estimate including the following key assumptions:

• modest Adjusted EBITDA growth beyond FY 2024 on existing business;

• constant growth in new markets in LATAM and the US;

• no major changes in working capital;

• Snaitech gaming and betting license extensions;

• Caliplay dispute settled and outstanding balances received;

• repayment of the 2019 Bond; and

• no changes to Group structure.

The resulting financial model assesses the ability of the Group to

remain within the financial covenants and liquidity headroom of

its existing borrowing facilities. Within the three-year assessment

period, the revolving credit facility (RCF) expires (in October 2025

orOctober2026 if the extension is taken) and the 2019 Bond of

€350million is due for repayment in March 2026. The 2023 Bond

of €300 million which was issued in 2023 falls outside the viability

statement period as it is due in 2028. Within the base case projections,

it was assumed that the RCF, which is undrawn as at 31 December 2023,

will not be utilised and the Group will be in a position to repay its 2019

Bond in full. Under its base case projections, the Group is able to

meet its financial covenants under its RCF until the point it expires.

Finally, the Directors are confident that, if required, refinancing can

be achieved at acceptable terms, a point which is further discussed

under Scenario 1 below.

Climate change impact

Included within our TCFD statement on pages 75 to 81 is the Group’s

second scenario analysis building on the extensive scenario analysis

conducted in 2021 to identify the resilience of the Group’s strategy

under three different possible climate change scenarios (global

warming of 1.5°C/2°C/3°C above pre-industrial levels by 2100). Where

possible, we quantified the impact as material or immaterial. The

outputs of this work were reviewed in 2023 and are considered to still

be representative for Playtech. In the instances where it was assessed

as material, the impact was for the long term, which is defined as more

than three years, and is therefore currently not considered to impact

the conclusions made in our viability statement period.

External advisers were appointed to assist with the analysis, and key

management across the business is engaged in the assessments

made to date and going forward. The key findings are summarised

in the TCFD statement. Playtech has expanded the number of

risks and opportunities that were quantified in 2023 and plans to

undertake a further scenario exercise in 2024. The Group has also

developed a net zero roadmap in support of its commitment to

near-term science-based targets and long-term net zero targets.

Byimplementing this roadmap, the Group aims to reduce its exposure

to climate-related transition risks and strengthen its ability to capture

opportunities while investing in renewable energy generation at

key assets.

While environmental risk was added to our emerging risks register

for the first time in 2021, this has been mitigated through the

establishment of the Sustainability and Public Policy Committee

of the Board and also through regular monitoring by the executive

cross-functional Environment Forum, as well as the Risk and

Compliance Committee of the Board. It is also considered as part

of the Risk and Compliance Committee’s biannual review of risks

across the Group. The Board is committed to continuing to assess

the situation and the financial and other implications as quantification

becomes possible over the viability statement period and beyond.

101Playtech plc Annual Report and Financial Statements 2023

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Climate change impact continued

From a viability perspective, in the instances where we cannot yet

quantify the impact under each of the scenarios because of the lack

of data, this is considered in the overall reverse stress test analysis

(see below). Furthermore, we are closely monitoring how the risks

will progress over the next few years, meaning that we are already

trying to mitigate our potential exposure, and at this point in time are

comfortable that any climate change over the viability assessment

period will not impact the conclusions being made in our scenario

analysis below.

Scenario analysis

Two scenarios were applied to the base case as follows:

1. the stress-test scenario: encompasses the principal risks which

were applied to the base case; and

2. the reverse stress-test scenario: used to identify the reduction

in Adjusted EBITDA required that could result in either a liquidity

event or breach of the RCF and bond covenants.

Under Scenario 1, the following risks were factored in:

• remaining competitive (risk number 1): in considering the ongoing

legal dispute with Caliplay (Note 7), a significant and valued

customer of the Group, we considered the remote probability

that no further cash is received from Caliplay over the viability

statement period;

• building a sustainable business (risk number 5), being the risk

of delays in launching and expanding in US and certain LATAM

countries due to regulation or competition; this was specifically

considered because the impact could be high; and

• complying with a changing landscape in legal, regulatory, licensing

and tax requirements (risk number 4), by considering the impact of

potential changes in taxes across some of our key markets (such

as Italy).

The impacts applied to this scenario were offset by potential

savings such as reducing capital expenditure. Under this scenario,

which showed a monthly average decrease in Adjusted EBITDA of

46% overthe three-year period, the Group would need to extend

(pastOctober 2026) its RCF facility to be able to utilise it until the end

of 2026 or take out a new bond as the 2019 Bond is due for repayment

in March 2026. Either way and as mentioned above, the Directors

are confident that refinancing can be achieved at acceptable terms,

and, even though currently no formal proposal has been put forward

to the Board as it is too soon, the Group is in regular dialogue with its

existing banks and is continuously reviewing its options. Finally, under

this scenario, the Group was still able to meet its financial covenants

under its RCF and bonds, further noting that the probability of all risks

applied happening simultaneously is considered remote.

Scenario 2 was specifically looked at because should we breach the

covenants under the RCF, the Group would have sufficient funds to

repay the outstanding balance (if any). However, if we were to breach

the interest cover covenant under the bonds, which would mean

the bonds might subsequently be called for repayment, the Group

would not be able to repay. This scenario indicated that Adjusted

EBITDA would need to decrease on average by 86% over the three-

year period at each bank reporting date for the Group to breach

the covenant, noting that it did not consider any mitigating actions

the Board can take. The probability of this scenario materialising is

therefore considered remote, given the excellent overall results in

2023 as discussed in the Chief Financial Officer’s Review.

Based on this assessment, the Directors have concluded that there

is a reasonable expectation that the Group will be able to continue in

operation and meet its liabilities as they fall due over the three-year

period to 31 December 2026.

The Strategic Report on pages 1 to 102 was approved by the Board

and signed on its behalf by Mor Weizer and Chris McGinnis.

Mor Weizer Chris McGinnis

Chief Executive Officer Chief Financial Officer

26 March 2024

Viability statement continued

102 Playtech plc Annual Report and Financial Statements 2023

Strategic Report

Governance Report

104 Chairman’s introduction to governance

106 Governance at a glance

108 Board of Directors

110 Directors’ governance report

124 Audit Committee report

Remuneration Report

129 Statement by the Committee Chair

131 Directors’ Remuneration Policy

136 Annual report on remuneration

146 Directors’ report

Governance Report

103Playtech plc Annual Report and Financial Statements 2023

Chairman’s introduction to governance

Progress driven by responsibility

and sustainability

Board composition, changes

and diversity

During the year, there have been changes

tothe composition of the Board.

In January 2023, we welcomed SamyReeb

to the Board as a new independent Non-

executive Director, bringing his extensive

experience of working with global

businesses across wealth and tax advisory.

On17May2023, we announced John

Krumins’ intention to step down from the

Board and his position as Chair of the Audit

Committee on 29September 2023, following

the interim results to enable a smooth

transition. On behalf of all the Directors,

Iwould like to thank John for his commitment

and dedication during a period of significant

change for the Company. We wish John all

the best in his future endeavours.

Ruby Yam was appointed in June 2023

and stepped down in July 2023 for

personal reasons.

As a Board, we bring a diverse range of

experience, skills and perspectives and

continue to evolve to ensure that we have the

necessary skills and strategic leadership to

continue to successfully guide the Company.

Promoting integrity and inclusive culture is a

crucial pillar of our sustainability strategy and a

priority of the Board. We have made progress

towards developing the diversity of our

workforce and the Board, including introducing

our Board Diversity Policy and continuing

engagement with our external Stakeholder

Advisory Panel, but recognise there is more to

be done to make meaningful progress.

While we took steps to address the gender

balance of the Board this year, we have yet to

meet our targets and have more work to do.

The Board, together with the Nominations

Committee, is prioritising addressing the

Board’s diversity.

The Board supports the management team

to drive a culture of integrity and inclusion.

The Board and the Chair of the Sustainability

Committee, Linda Marston-Weston, have

been working closely with our Global Head of

HR to assess our employee engagement, and

our values and culture. Talent development

and succession planning are also ongoing

topics in the work of the Board and its Committees.

Dear Shareholder

As Chairman of the Board, I am pleased to

present the Corporate Governance Report

for 2023.

We began 2023 looking forward with

cautious optimism as we continued to

navigate the many challenges Playtech and

our industries have encountered in recent

years: from the war in Ukraine, the rising

cost of living and the economic downturn,

to the continued impacts of climate change,

political polarisation and the lasting effects

of the pandemic. However, it was a year of

further challenges with October 7th terrorist

attack in Israel, Hamas-Israel war, litigation

with Caliplay, economic headwinds and

inflationary environment.

Against this challenging backdrop, on

behalf of the Board, I would like to thank

the Executive Management and the

broader team for their hard work, resilience

and commitment throughout 2023 to

achieve excellent strategic, financial

andoperational results.

Brian Mattingley

Chairman

Strategy and performance

The Governance Report describes how the

Board and its Committees operated during

2023. Following our progress in 2022 to

define our strategic aims clearly, the Board

has remained focused on ensuring the

Company continues to deliver its strategy

and operational performance and makes

progress towards its sustainability strategy

for the benefit of all its stakeholders.

During the year, the Board considered and

approved strategic investments that will

support the business’ long-term growth,

including investment in Hard Rock Digital

and targeted acquisitions for Snaitech. The

Board continued to pay close attention to

maintaining a strong financial position to

ensure we remain well placed to pursue

strategic opportunities.

The Board was heavily engaged with

the Executive Management team in

overseeing the delivery of our strategy, with

a particular focus on the B2B business on

structured agreements to deliver growth

in newly regulating markets, as well as the

opportunities to capitalise on Live and our

SaaS model and deliver efficiencies in B2B.

The Board’s progress was underpinned

by the excellent work of its Committees,

including strategic deep dives on People and

Talent and Safer Gambling, both of which are

central to our sustainability strategy.

In our Strategic Report, we have set out how

we seek to manage the principal risks and

uncertainties facing the business.

The Board recognises the challenging times

many of our colleagues face and has been

very cognisant of supporting our colleagues

and their wellbeing. The Board has responded

to these challenges by approving continuous

support for colleagues affected by the war in

Ukraine and Hamas-Israel war. To address

the cost-of-living crisis, the Board supported

management in approving a one-off payment

for our most affected colleagues and creating

a Benevolent Fund to support our colleagues

who may be affected by particularly

challenging and unforeseen life events. The

Board will continue to monitor developments

and support our colleagues and local

communities. We continue to support many

local charities through our Global Community

Investment Programme.

104 Playtech plc

Annual Report and Financial Statements 2023

Governance Report

Workforce

engagement

Sustainability and

stakeholderengagement

Central to Playtech’s progress and growth

has been a track record of open and constructive

dialogue with its stakeholders. In 2023,

the Board has continued its high levels of

engagement with shareholders to ensure

significant progress on corporate governance

and that the Company’s interests are aligned

with the interests of all shareholders in the

next period of our evolution.

The Board recognises the need to strike a

careful balance to ensure that shareholders

and other stakeholders are appropriately

protected by robust processes and

procedures while providing an environment

that fosters an entrepreneurial spirit, thereby

allowing our senior management team and

our workforce to continue to deliver the

strategic and operational progress that we

have achieved in recent years. This balance

lets us clearly focus on the key risks the

Group faces. Still, it requires us to be flexible

enough to accommodate changes resulting

from developments in our strategy or

changes in the regulatory environment.

Playtech has grown rapidly since its

inception and is now a company with

c.7,700 colleagues in 19 countries. To meet

the changing demands of the Company,

the Board has also evolved significantly

in that time and has played an important

role in guiding the Company through its

rapid change.

This year, we have made significant progress

against the sustainable priorities to power

action for positive environmental impact. The

Board approved a new Environment Policy

and endorsed our Net Zero 2040 plan.

You can read more on our sustainability strategy on

pages 48 to 87

Conclusion

The Board has confidence in the future

of the Group and sees significant growth

opportunities ahead. The operational

progress reported in 2023 in new and

existing regulated markets, including the

US, is evidence of Playtech’s leadership in

regulation and compliance in the gambling

industry, and our commercial capabilities.

TheBoard plays an essential role in upholding

the highest levels of regulation, compliance

and responsibility. We continue to work

closely with regulators in various markets

toensure our compliance with local laws

andregulations.

The Board strives to ensure that the

Group’s governance structure protects

the sustainability of its businesses and the

communities in which it operates while

maximising shareholder value and treating

all shareholders fairly. The Board also sets

the tone for the Company, how it conducts

itself, its attitude towards sustainability, safer

gambling and diversity and inclusion, its

definitions of success and its assessment

of appropriate risk, all of which define the

atmosphere within which the Executive

Team works .

The following report provides further details

on our governance framework, thereby

explaining how our corporate governance

practices support our strategy.

AGM

The AGM is an important opportunity

for the Board to meet with shareholders,

particularly those who may be yet to have the

chance to engage with the Board and senior

management. Our AGM is scheduled to be

held on 22 May 2024. Further meeting details

are included in the Notice of Annual General

Meeting. Shareholders are always welcome

to ask us questions or feedback via our

website or at our AGM.

Brian Mattingley

Chairman

26 March 2024

A highlight of 2023 was the opportunity

for the Board members to visit two of our

sites, the US and Latvia, to engage with

our colleagues. Our team in the US has

grown rapidly, and we have established

three Live studios. Chris McGinnis,

Chief Financial Officer, and I were able

to spend time with our US team and visit

our Michigan studio.

Latvia is home to our largest Live facility

with over 1,800 colleagues and the latest

Live innovations. The Board and the

Executive Management team travelled

to Latvia to host engagement sessions

with different groups of colleagues and

present the Group’s strategic aims.

The Board also attended ICE and G2E,

where we engaged with many of our

stakeholders and colleagues from

around the world.

You can read more about our stakeholder

engagement on pages 44 to 47

105

Playtech plc Annual Report and Financial Statements 2023

Governance Report

Governance at a glance

Site visits

Tradeshows

Deep-dive sessions

Key highlights

Board changes

• John Krumins stepped down from the Board on

29September2023, and his position as Chair of the

AuditCommittee and member of the Risk and Compliance

Committee and Sustainability Committee.

• Ruby Yam was appointed to the Board on 1 June 2023 and

stepped down on 11 July 2023 for personal reasons.

• Samy Reeb was appointed to the Board on 4 January 2023.

Read more on Board Committee changes on page 117

Governance improvements

• Increased workforce engagement through site visits

and deep-dive sessions.

• Designated Linda Marston-Weston as workforce

engagementrepresentative.

Read more on our workforce engagement on page 105

• Focused on improving internal controls and risk management.

Read more on pages 108 to 113

Nationality

American 1

British 3

French 1

Canadian and British 1

Israeli 1

Tenure

Independence

Independent NED 4

Board composition

Chairman 1

Executive Directors 2

Non-executive

Directors 4

0-2 years 2

2-6 years 4

7-9 years 0

9+ years 1

Governance Report

107Playtech plc Annual Report and Financial Statements 2023

Board of Directors

Brian Mattingley

Non-executive Chairman –

Independent on appointment

Appointment to the Board

Brian was appointed to the Board

in June 2021.

Career

Brian joined 888 Holdings in 2005

as a Non-executive Director, before

being appointed CEO in March

2012, and was Non-executive

Chairman from March 2016 until he

stepped down in 2021. Prior to

888, Brian was CEO of the Gala

Group of companies and

eventually becoming a CEO of

Gala Regional Developments, a

joint venture enterprise between

Gala and Caesars of the US. Brian

had also held senior management

positions in Kingfisher plc and Dee

Corporation plc.

Skills, competences

andexperience

Brian brings considerable plc

board experience to the role, as

well as his extensive experience

inthe gambling and leisure industries.

Current external commitments:

None.

Mor Weizer

Chief Executive Officer

Appointment to the Board

Mor was appointed as

Playtech’sChief Executive

Officerin May 2007.

Career

Prior to being appointed CEO, Mor

was the Chief Executive Officer of

one of the Group’s subsidiaries,

Techplay Marketing Ltd., which

required him to oversee the

Group’s licensee relationship

management, product

management for new licensees

and the Group’s marketing

activities. Before joining Playtech,

Mor worked for Oracle for over four

years, initially as a development

consultant and then as a product

manager, which involved creating

sales and consulting channels on

behalf of Oracle Israel and Oracle

Europe, the Middle East and Africa.

Earlier in his career, he worked in a

variety of roles, including as an

auditor and financial consultant for

PricewaterhouseCoopers and a

system analyst for Tadiran

Electronic Systems Limited, an

Israeli company that designs

electronic warfare systems.

Skills, competences

andexperience

Mor is a qualified accountant and

brings a strong set of financial

skills together with considerable

international sales and management

experience in a high-tech

environment and extensive

knowledge of the online

gamblingindustry.

Current external commitments:

None.

Chris McGinnis

Chief Financial Officer

Appointment to the Board

Chris was appointed as Playtech’s

Chief Financial Officer and an

Executive Director of the

Company on 28 November 2022,

having joined the Group in 2017.

Chris is also a member of the

Disclosure Committee.

Career

Chris started his career at Deloitte

in Canada where he qualified as a

Chartered Professional Accountant

(CPA). Chris then worked in Equity

Research for UBS in Canada and

Bank of America Merrill Lynch in

the UK. Prior to being appointed

CFO in 2022, Chris was Director of

Investor Relations. Prior to joining

Playtech, Chris was Head of

Corporate Strategy at software

company Temenos. Chris is also

aChartered Financial Analyst

(CFA) charter-holder.

Skills, competences

andexperience

Chris is a strategic finance

executive with over twenty years’

experience across finance,

accounting, investor relations,

corporate strategy, M&A and

equity research.

Current external commitments:

None.

Ian Penrose

Senior Independent

Non-executive Director

Appointment to the Board

Ian was appointed to the Board in

September 2018.

Career

Prior to his appointment, Ian was

CEO of Sportech plc from 2005 to

2017 and served as CEO of Arena

Leisure plc from 2001 to 2005.

Last year, Ian retired as Chairman

of the National Football Museum,

having been a trustee for over

adecade.

Skills, competences

andexperience

Ian brings 25 years of leadership

experience in the global gaming,

technology and sporting sectors.

In particular, he has significant

knowledge of the US, Canadian,

Australian and European markets,

having led strategic initiatives in

the regions during this time. Ian

has been licensed by regulators

inseveral countries and is also a

Chartered Accountant.

Current external commitments:

Non-executive Director

IXUPLimited.

Non-executive Director Phenix

Real Time Solutions Inc.

Vice Chairman of Weatherbys

Limited and Non-executive

Director of its technology joint

venture with the British

Horseracing Authority, Racing

Digital Limited.

Board Advisor to KYC Global

Technologies Limited.

108 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Key to committees

Audit Committee

Sustainability and Public

Policy Committee

Nominations Committee

Remuneration Committee

Risk and Compliance

Committee

Committee Chair

Anna Massion

Independent Non-executive

Director

Appointment to the Board

Anna was appointed to the Board

in April 2019.

Career

Anna worked in investment

banking and asset management

for over 15 years and is widely

respected as a global gambling

industry expert. During her time at

PAR Capital Management, Anna

was responsible for idea generation

and portfolio maintenance. Prior to

joining PAR, Anna held positions at

leading financial institutions

including JP Morgan, Marathon

Asset Management and Hedgeye

Risk Management.

Skills, competences

andexperience

With Anna’s sector knowledge and

business network, she brings a

strong fiscal and analytical skill set

to the Board.

Current external commitments:

Non-executive Director of

AGSLLC.

Non-executive Director of

Betmakers Technology Group Ltd.

Non-executive Director of Gaming

Realms plc.

Linda Marston-Weston

Independent Non-executive

Director

Appointment to the Board

Linda was appointed to the Board

in October 2021.

Career

Formerly a senior tax partner at

EY, Linda was a member of the EY

Midlands Board and Head of Tax

EY Midlands. Linda is passionate

about Diversity & Inclusion and

spent five years as EY’s Midlands

People partner, leading the

agenda across people matters.

She established a cross business

female mentoring network for the

Midlands region and set up and

continues to lead a female

entrepreneur’s network. Until

recently Linda was a Transaction

Tax partner and Head of Tax for

the Midlands at Cooper Parry.

Skills, competences

andexperience

Linda is a Fellow of the Institute of

Chartered Accountants and brings

more than 30 years’ experience of

working with UK and Global

businesses and across corporate

finance, strategy, tax, culture

andleadership.

Current external commitments:

None.

Samy Reeb

Independent Non-executive

Director

Appointment to the Board

Samy was appointed to the Board

in January 2023.

Career

Samy brings extensive experience

of working with global businesses

largely across wealth and tax

advisory. He began his career in

tax advisory at Ernst & Young and

tax management at Credit Suisse,

before focusing on wealth

advisory as an Executive Director

at Julius Baer, and subsequently

joining 1291 Group as Managing

Partner. Over the years, Samy

developed a leading franchise

advising on the financial affairs of

many Asia-based ultra-high net

worth clients. Samy is currently

Group CEO of PFIS Group.

Skills, competences

andexperience

Samy’s broad skill set and

extensive knowledge of Asia

provides additional depth and

experience to the Board.

Current external commitments:

None.

109Playtech plc Annual Report and Financial Statements 2023

Governance Report

Notes

John Krumins stepped down from his role as

Non -executive Director on 29 September 2023.

Ruby Yam stepped down from her role as

Non-executive Director on 11 July 2023.

Introduction

Responsibility for corporate governance lies with the Board, which is committed to maintaining high standards of corporate governance, which it

considers to be central to the delivery of long-term sustainable growth, effective stewardship of the business and maintaining the confidence of

stakeholders. The following report explains the role of the Board, how it functions, and our most important governance processes and how they

support the Group’s business and the Board’s stakeholder engagement.

UK Corporate Governance Code

As a premium listed company, Playtech’s governance framework is based on the UK Corporate Governance Code 2018 (the “Code”). A copy of

the Code is available at www.frc.org.uk. This report and the Board Committee reports set out how we have applied the principles and complied

with the provisions of the Code during 2023. The table below shows where disclosures to evidence this can be read. Where elaboration is

required, further details are set out in our Compliance Statement.

Directors’ governance report

AGM results

Following the results of our AGM held in May 2023, the Board noted

in its announcement dated 24 May 2023 that certain resolutions were

not passed with the necessary majority. These resolutions concerned

the Directors’ power to allot shares, disapplication of pre-emption

rights, further disapplication of pre-emption rights, and power to make

market purchases of own shares.

We explained at that time that we aspire to high levels of shareholder and

stakeholder engagement and would consult with those shareholders

who voted against these resolutions to understand their specific

concerns. Since the AGM, we have held regular discussions with our

shareholders to hear their views and better understand their concerns.

Astatement setting out our response to the voting figures from last year’s

AGM was uploaded to the Investment Association portal.

Conflicts of interest

During the year under review, the Directors declared no conflicts

ofinterests.

External auditor statement

The Company’s auditor, BDO LLP, is required to review whether the

above statement reflects the Company’s compliance with the Code by

the Listing Rules of the Financial Conduct Authority and report if it does

not reflect such compliance. No such negative report has been made.

The Board is accountable to the Company’s shareholders for good

governance and the statements in this report describe how the Group

applies the principles identified in the Code.

Board leadership and purpose Compliant Read more on pages

Long-term value and

sustainable success



1 to 102

Purpose, values and strategy



1 to 102

Integrity and culture



48 to 87

Resources and effective controls



110 to 151

Stakeholder engagement



44 to 47

Policies and practices



110 to 123

Division of responsibilities

Structure and effectiveness



110 to 123

Independence



111

Division of responsibilities



112

Time commitments



111

Company secretary support



111

Composition, succession and evaluation

Appointments and succession planning



121 to 122

Skills, experience and knowledge



108 to 109

Length of service



108 to 109

Evaluation



122

Diversity



113

Audit, risk and internal control

Internal and external audit



124 to 128

Integrity of financial and narrative

statements



123

Fair, balanced and understandable

assessment



146

Risk and internal controls framework



96 and 128

Principal risks



95 to 100

Remuneration

Policies and practices



131 to 135

Alignment with purpose, values

and long-term strategy



129 to 135

Formal and transparent procedure



129 to 135

Independent judgement and discretion



135 and 143

Compliance statement

I am pleased to be able to report that it is the view of the Board

that the Company is fully compliant with the principles of the

Code throughout the year under review.

As we reported in our last Annual Report, in accordance with

provision 38 of the Code, and in keeping with our Remuneration

Policy as approved by shareholders at our Annual General

Meeting held in May 2021, we reached a position in January

2023 whereby pension contributions to our Executive Directors

are aligned with pension contributions to our wider workforce.

Workforce engagement

In accordance with the principles of the Code, provision 5

explains that for engagement with the workforce, one or

a combination of the following methods should be used: a

director appointed from the workforce, a formal workforce

advisory panel, or a designated non-executive director. In

2022, we reported that we were considering arrangements

for workforce engagement. The Board has designated

Non-executive Director, and Chair of the Sustainability and

Public Policy Committee, Linda Marston-Weston to oversee

workforce engagement.

110 Playtech plc Annual Report and Financial Statements 2023

Governance Report

How we are governed

Board composition

As at 31 December 2023, the Board comprised the Non-executive

Chairman, the Chief Executive Officer, the Chief Financial Officer

and four independent Non-executive Directors. The list of Directors

holding office during the year to 31 December 2023 and their

responsibilities are set out on pages 108 and 109.

Except for John Krumins, who stepped down in September 2023,

and Ruby Yam, who was appointed in June 2023 and stepped down

in July 2023, the Directors served throughout the financial year.

Director’s name Title

Brian Mattingley Non-executive Chairman

Mor Weizer Executive Director, Chief Executive Ocer

Chris McGinnis Executive Director, Chief Financial Ocer

Ian Penrose Senior Independent Director, Non-

executive Director

Anna Massion Non-executive Director

John Krumins Non-executive Director

(from 2 April 2019 to 29 September 2023)

Linda Marston-Weston Non-executive Director

Samy Reeb Non-executive Director

(from 4 January 2023)

Ruby Yam Non-executive Director

(from 1 June 2023 to 11 July 2023)

Balance of the Board

The Board comprises individuals with wide business experience

gained in various industry sectors related to the Group’s current

business. It is the intention of the Board to ensure that the balance

of the Directors reflects the changing needs of the business and

itsstakeholders.

The Board considers that it is of a size and has the balance of

skills, knowledge, experience, diversity and independence that is

appropriate for the Group’s current business. While not having a

specific policy regarding the constitution and balance of the Board,

potential new Directors are considered on their own merits with

regard to their skills, knowledge, experience and credentials.

The Non-executive Directors continue to contribute their

considerable collective experience and wide-ranging skills to the

Board and provide a valuable independent perspective, where

necessary constructively challenging proposals, policy and practices

of Executive Management.

Board tenure

In accordance with the Company’s articles of association, every new

Director appointed in the year is required to stand for re-election by

shareholders at the Annual General Meeting (AGM) following their

appointment. Also, under the articles of association, at each AGM

one-third of the Directors (excluding any Director whom the Board

has appointed since the previous AGM), or, if their number is not an

integral multiple of three, the number nearest to one-third but not

exceeding one-third, shall retire from office (but so that if there are

fewer than three Directors who are subject to retirement by rotation

under the articles one shall retire).

Notwithstanding the provisions of the articles of association, the

Board has decided to comply with the Code requirements that

Directors submit themselves for re-election annually. Therefore,

allDirectors are seeking their reappointment at this year’s AGM.

The Board has collectively agreed that the Directors proposed for

re-election at this year’s AGM have made significant contributions

to the business since their last re-election, and each has a key role to

play in the formulation of the Group’s future strategy and its long-term

sustainable success.

Independence

The Board, together with the Nominations Committee, reviews the

independence of each Non-executive Director annually, considering

their individual circumstances and external appointments, and any

conflicts of interest or relationships that are likely to, or could appear

to, affect the Director’s independent judgement. Each Non-executive

Director is asked to provide confirmation of their independence annually.

Following the annual assessment, the Board considers that all the

Non-executive Directors are independent of management and free

of any relationship that could materially interfere with the exercise

of their independent judgement, or ability to provide constructive

challenge and hold management to account.

In accordance with the Code, the Chairman, Brian Mattingley, was

independent upon his appointment in 2021. The Board considers the

Chairman retains objective judgement.

Time commitments

The Board considers that all Directors have demonstrated sufficient

availability and time commitment throughout the year for the proper

functioning of the Board.

In addition to the scheduled and ad hoc Board and Committee

meetings, Directors also attend the Annual General Meeting. Non-

executive Directors are encouraged to attend tradeshows, including

ICE and G2E, and undertake company site visits, both of which our

Executive Directors attend.

The Board must approve all significant external appointments before

any Director accepts the position, having regard to the combined

time commitments. In addition, for Executive Directors additional

appointments should be beneficial to the Group, not present a conflict

of interest or require a significant time commitment which could

interfere with the performance of their duties.

Company Secretary

The Company Secretary acts as secretary to the Board and its

Committees. Appointment and removal of the Company Secretary

is a matter for the Board. The Company Secretary is a member of

the Group’s Executive Management team and all the Directors have

access to his advice and services.

111Playtech plc Annual Report and Financial Statements 2023

Governance Report

Service contracts and exit payments

Executive Directors

Set out in the table below are the key terms of the Executive Directors’

terms and conditions of employment.

A bonus is not ordinarily payable unless the individual is employed and

not under notice on the payment date. However, the Remuneration

Committee may exercise its discretion to award a bonus payment

pro-rata for the notice period served in active employment (and not on

gardening leave).

The LTIP rules provide that other than in certain “good leaver”

circumstances, awards lapse on cessation of employment. Where

an individual is a “good leaver” the award would vest on the normal

vesting date (or cessation of employment in the event of death)

following the application of performance targets and a pro-rata

reduction to take account of the proportion of the vesting period that

has elapsed. The Committee has discretion to partly or completely

disapply pro-rating or to permit awards to vest on cessation of employment.

How we are governed continued

Provision Detail

Remuneration Salary, bonus, LTIP, benefits and

pension entitlements in line with

the above Directors’ Remuneration

Policy table

Change of control No special contractual provisions apply

in the event of a change of control

Notice period 12 months’ notice from the Company or

employee for the CEO and the CFO

• CEO contract signed on

1January 2013

• CFO contract signed on

28November 2022

Termination payment The Company may make a payment

in lieu of notice equal to basic salary

plus benefits for the period of notice

served subject to mitigation and phase

payments where appropriate

Restrictive covenants During employment and for

12monthsthereafter

Non-executive Directors

The Non-executive Directors each have specific letters of appointment, rather than service contracts. Their remuneration is determined by the

Board within limits set by the articles of association and is set taking into account market data as obtained from independent Non-executive

Director fee surveys and their responsibilities. Non-executive Directors are appointed for an initial term of three years and, under normal

circumstances, would be expected to serve for additional three-year terms, up to a maximum of nine years, subject to satisfactory performance

and re-election at the Annual General Meeting as required.

The table below is a summary of the key terms of the letters of appointment for the Non-executive Directors.

The letters of appointment of the Non-executive Directors are available for inspection at the Company’s registered office and will be available

before and after the forthcoming AGM.

Name Date Term Termination

Brian Mattingley 1 June 2021 Until third AGM after appointment 180 days’ notice on either side or if not

re-elected or commits gross misconduct

Linda Marston-Weston 1 October 2021 Until third AGM after appointment unless not re-elected 90 days’ notice on either side or if not

re-elected, disqualiﬁed or commits

grossmisconduct

Ian Penrose 1 September 2018 Until third AGM after appointment unless not re-elected

Anna Massion 2 April 2019 Until third AGM after appointment unless not re-elected

Samy Reeb 4 January 2023 Until third AGM after appointment unless not re-elected

Division of responsibility

The Group has clear divisions of responsibility between the Chairman (Brian Mattingley) and the Chief Executive Officer (Mor Weizer) and sets

out what is expected of the Non-executive Directors to support the development of the Group’s strategy and the integrity of its operations.

• Overall effectiveness of the running of the Board

• Ensuring the Board is an integral part of the development and

determination of the Group’s strategic objectives

• Keeping the other Directors informed of shareholders’ attitudes

towards the Company

• Safeguarding the good reputation of the Company and representing it

both externally and internally

• Acting as the guardian of the Board’s decision-making processes

• Promoting the highest standards of integrity, probity and corporate

governance throughout the Company and particularly at the

Board level

• Executive leadership of the Company’s business on a

day-to-day basis

• Developing the overall commercial objectives of the Group and

proposing and developing the strategy of the Group in conjunction

with the Board as a whole

• Responsibility, together with his senior management team, for the

execution of the Group’s strategy and implementation of Board decisions

• Recommendations on senior appointments and development of the

management team

• Ensuring that the affairs of the Group are conducted with the highest

standards of integrity, probity and corporate governance

Chairman Chief Executive Officer

112 Playtech plc Annual Report and Financial Statements 2023

Governance Report

As stated in last year’s report, in 2022, we refreshed our approach

to promoting diversity, equity and inclusion across our leadership

and workforce. The Company continues to operate in numerous

countries, each with a distinct culture. Our aim continues to focus on

each individual and celebrate our workforce’s differences and cultural

diversity. Diversity and inclusion are part of our corporate culture and

we have set about improving the gender balance at Board, executive

and senior management levels. We recognise that it will take time to

make meaningful progress, but with increasing commitment in this

area, we will pursue diversity and inclusion objectives as set out in our

Strategic Report on pages 1 to 102.

In 2022, the Board also approved a new Board Diversity Policy, which

codifies the Board’s commitment to make diversity a key factor as

we review the recruitment and succession at the Board. The Policy

is available to view at www.playtech.com. In summary, the Board

Diversity Policy sets out a commitment to:

• build a culture of inclusion and diversity and promoting this with the

Executive Committee and workforce;

• make diversity and inclusion a guiding principle when reviewing the

composition and structure of the Board and Executive Committee;

• increase the diversity of the Board, including, but not limited to,

an increase of Directors who identify as female to at least 40% by

2025 and at least one Director who identifies as a member of an

underrepresented group;

• engage with the workforce to enhance and strengthen its approach

to bring diverse perspectives to Board level decision making; and

• review and monitor the application of equality, diversity and

inclusion as part of recruitment and succession planning for

executive and management leadership roles.

The Board continued to make progress towards becoming more

diverse in 2023. Due to changes in the Board composition, the Board

has not yet achieved the target balance and has further work to meet

its targets and make meaningful progress. The Board, together with

the Nominations Committee, will continue to make diversity a key

factor in the recruitment and succession of the Board. Read more on

our approach to succession planning on pages 121 to 122.

As a premium listed company, Playtech is required to comply with

the Listing Rules and Disclosure Guidance and Transparency Rules.

In accordance with the Listing Rules, the Company is required to

comply with or explain why it has not met the diversity requirements in

LR9.8.6R(9) and LR 14.3.33R(1), including the following elements:

At least 40% of the Board are women

As at 31 December 2023, the percentage of women on the Board of

Playtech is 29%, below the target of 40%.

Last year’s report stated that the Board was taking steps to increase

its diversity. During the year, Playtech appointed an additional female

to the Board, Ruby Yam. However, as reported on page 111, Ruby

stepped down from the Board after a short tenure. In its succession

planning, the Board, together with the Nominations Committee, is

considering the gender diversity of the Board and seeks to meet the

targets for female representation by 2025.

At least one of the senior Board positions is a woman

None of the senior Board positions (Chair, CEO, CFO or SID) are held

by a woman as of 31 December 2023. The Board considers that the

Directors holding senior Board positions, as detailed on pages 108

to 109, are the most appropriate to fulfil these clearly defined and

specific roles for Playtech, having regard to their experience, skills and

competencies, and the composition of the Board as a whole.

At least one member of the Board is from a minority ethnic background

As at 31 December 2023, one of the Directors is from a minority

ethnicbackground.

The Nominations Committee believes that appointments should be

based on merit, compared against objective criteria, to ensure the

Board has the right skills, knowledge and experience that enable it

to discharge its responsibilities properly. Considering the Group’s

stakeholders, the Board considers the Directors bring a diverse range

of perspectives which are complementary to and appropriate for the

Group’s current business.

Methodology for diversity data collection

The Board and Executive Management Committee gender diversity

data is set out on page 113. This data is correct as at 31 December 2023.

Theindividual Directors and management were asked by the

Company Secretary and Global Head of HR, respectively, to provide

the data for the purpose of the reporting requirement in LR 9.8.6R(9)

and LR 14.3.33R(1). There has been no change to the diversity data

between the date on which this data was collected and this report’s

publication date.

Diversity

The tables below illustrate the diversity of the Board as at 31 December 2023.

Gender identity

Number of

Board members

Percentage

of the Board

Number of senior

positions on the

Board (CEO, CFO,

SID and Chair)

Number in

Executive

Management

Percentage

of Executive

Management

Men 5 71% 4 7 64%

Women 2 29% — 4 36%

Not speciﬁed/prefer not to say — — — — —

Tot al 7 100% 4 11 100%

Ethnic background

Number of

Board members

Percentage

of the Board

Number of senior

positions on the

Board (CEO, CFO,

SID and Chair)

Number in

Executive

Management

Percentage

of Executive

Management

White British or White other

(including minority White groups)

6 86% 3 7 64%

Mixed/multiple ethnic groups — — — — —

Asian/Asian British — — — 1 9%

Black/African/Caribbean/Black British — — — — —

Other ethnic group, including Arab 1 14% 1 1 9%

Not speciﬁed/prefer not to say — — — 2 18%

Tot al 7 100% 4 11 100%

113Playtech plc Annual Report and Financial Statements 2023

Governance Report

Attendance of members

Director’s name Board Audit Remuneration Nominations Risk ESG

Brian Mattingley 8 of 8 — — 1 of 1 — —

Mor Weizer 8 of 8 — — — — —

Chris McGinnis 8 of 8 — — — — —

Ian Penrose 8 of 8 8 of 8 4 of 4 —

2 of 2 * 3 of 3

Anna Massion 8 of 8 — 4 of 4 1 of 1 2 of 2

1 of 1 *

John Krumins 6 of 6

7 of 7

— 1 of 1 2 of 2 3 of 3

Linda Marston-Weston 8 of 8 8 of 8 4 o f 4 — — 4 of 4

Samy Reeb 8 of 8

1 of 1 * — — — 1 of 1 *

Ruby Yam 1 of 1

— — — — —

1 John Krumins stepped down from the Board and his position as Chair of the Audit Committee on

29September 2023.

2 Ruby Yam was appointed to the Board on 1 June 2023 and stepped down on 11 July 2023.

* Please see the section on Committee changes on page 117 for further details.

Board meetings

The Board meets regularly with eight meetings scheduled and held

in2023. In addition, the Board held several presentations and informal

calls throughout the year to maintain coverage of key business

developments, emerging issues and opportunities. The Board held

one of its scheduled meetings in Latvia as part of its commitment to

workforceengagement.

The minutes of each of these Committees are circulated to and

reviewed by their members. Matters arising are circulated to

accountable individuals.

Details of the Directors’ attendance at Board meetings and Committee

meetings are set out in the table on page 114. The Nominations

Committee and Disclosure Committee do not have scheduled

meetings and meet as needed.

Arrangements are facilitated should a Board decision or approval

be required outside these times. In 2023, the Board held two ad hoc

meetings remotely to consider significant transactions.

Where a Director or attendee cannot attend a meeting, feedback is

sought in advance by the relevant Board or Committee Chair and

Company Secretary, and a debrief is offered thereafter.

During the year, the Chairman met the other Non-executive Directors

in person and remotely, in the absence of the Executive Directors, to

re-confirm and take account of their views.

Timely flow of information

All Directors receive an agenda and comprehensive papers in the

week prior to the Board meeting. Papers are delivered via a secure

electronic portal.

In addition to receiving reports from the Board’s Committees,

reviewing the financial and operational performance of the Group

and receiving regular reports on M&A, legal, regulatory and investor

relations matters at the Board meetings, the other key matters

considered by the Board during 2023 are set out on page 115.

Directors are provided with comprehensive background information

for each meeting, and all Directors were available to participate fully

and on an informed basis in Board decisions. In addition, certain

members of the senior management team, including the Chief

Operating Officer, the General Counsel, the Chief Compliance Officer,

the Head of Investor Relations and the Chief Sustainability and Public

Policy Officer, are invited to attend the whole or parts of the meetings

to deliver their reports on the business. Any specific actions arising

during meetings are agreed upon by the Board and a follow-up

procedure ensures their completion.

Independent professional advice

In certain circumstances, Directors are entitled to seek independent

professional advice under an agreed Board procedure, which would

then be organised by the Company Secretary, and in this regard, the

Company would meet their reasonable legal expenses.

Delegation of authority

The Board has adopted a formal delegation of authorities

memorandum which sets out levels of authority for employees in

thebusiness.

The Chairman is primarily responsible for the efficient functioning

ofthe Board. He ensures that all Directors receive sufficient relevant

information on financial, operational and corporate issues prior to

meetings. The Chief Executive Officer’s responsibilities focus on

co-ordinating the Group’s business and implementing Group strategy.

Regular interaction between the Chairman and Chief Executive

Officer between meetings ensures the Board remains fully informed

ofdevelopments in the business at all times.

There remains in place a formal schedule of matters specifically

reserved for Board consideration and approval.

Summary of matters reserved for

Boardconsideration:

• approval of the Group’s long-term objectives and

commercialstrategy;

• approval of the annual operating and capital expenditure

budgets and any changes to them;

• consideration of major investments or capital projects;

• the extension of the Group’s activities into any new business or

geographic areas, or to cease any material operations;

• changes in the Company’s capital structure or management

and control structure;

• approval of the Annual Report and Accounts, preliminary

and half-yearly financial statements and announcements

regardingdividends;

• approval of treasury policies, including foreign currency

exposures and use of financial derivatives;

• ensuring the maintenance of a sound system of internal control

and risk management;

• entering into agreements that are not in the ordinary course of

business or material strategically or by reason of their size;

• changes to the size, composition or structure of the Board and

its Committees;

• corporate governance matters; and

• sustainability, people and talent.

How the Board functions

114 Playtech plc Annual Report and Financial Statements 2023

Governance Report

April

• Review of LatAm business

• Review of Tax Strategy

• Ukraine

July

• B2B business transformation

project update

• M&A update

October

• Caliplay update

• Snaitech bid for acquisition of SKS365

June

• Live vertical strategy

• Bond offering update

• M&A update

• People and Talent

• LatAm regulation update

• Holland Casino review

• Net Zero plan

September

• Report from the Audit Committee

• Interim results and presentation

December

• Budget 2024

May

• Annual General Meeting

• Trading update

• Review of shareholder voting

• M&A update

• Structured agreements

August

• Review of structured agreements

• Operations update

• Snaitech trading update

• Ta x update

• Legal update

• Caliplay update

• Safer Gambling

November

• Board evaluation

• Budget 2024

• Board training

• Caliplay update

January

• Review of financing options

• Update on Caliplay

• Investment in Brazil

• Investment in Hard Rock Digital

• Snaitech trading update

March

• Report from the Audit Committee

• Approval of preliminary announcement

and financial statements for

31December 2022

• Shareholder voting considerations

• Review of Asia business

• Update on US business

• New market opportunities

• SaaS Platform

February

• Investment in Hardrock Digital

Matters considered by the Board in 2023

115Playtech plc Annual Report and Financial Statements 2023

Governance Report

Our governance framework

Disclosure

The Disclosure Committee ensures the accuracy and timeliness of the Company’s public announcements and monitors the Company’s obligations

under the Listing Rules and Disclosure Guidance and Transparency Rules of the FCA. Meetings are held as required. Standing members of the

Committee are set out on page 117.

Executive Management

As the key management committee for the Group, the Executive Management Committee considers and discusses plans and recommendations coming

from the operational side of the business and from the various product verticals, in light of the Group’s strategy and capital expenditure and investment

budgets, including the implications of those plans (in areas such as resources, budget, legal and compliance). The Committee either approves the plans

or, as necessary, refers the proposal for formal Board review and approval in accordance with the Company’s formal matters reserved for the Board.

Details of the standing members of the Committee are set out on page 117.

• Provides effective governance over the integrity of the Group’s financial

reporting, including the adequacy of related disclosures;

• monitors the performance and effectiveness of the Internal

Audit function;

• reviews external audit independence and performance;

• ensures the Annual Report and Accounts is fair, balanced and

understandable; and

• reviews the management of the Group’s systems of internal control,

business risks and related compliance activities.

Read more in the Audit Committee’s Report on pages 124 to 128

Audit

• Makes recommendations to the Board on the Remuneration Policy

for the Chairman, Executive Directors and senior management; and

• reviews workforce remuneration-related policies and oversees

alignment of incentives and rewards with culture.

Read more in the Remuneration Report on pages 129 to 145

Remuneration

The Board

The Board is collectively responsible for the long-term success of the Company. The Board provides entrepreneurial leadership for the Group and sets its

strategic aims, purpose, values and standards. The Board oversees the Group’s prudent and effective internal controls and risk management framework.

The Board ensures the necessary resources are in place for the Company to meet its objectives and reviews management performance.

ˆRead more on the Board’s governance on pages 111 and 112 and read the Directors’ biographies on pages 108 and 109

Committees

The Board has established five formal Committees, which focus on their areas of expertise, enabling the Board to focus on strategy,

performance, leadership and stakeholder engagement. The terms of reference for the Committees are available on the website

www.investors.playtech.com/corporate-governance/our-committees. The Committees make recommendations to the Board following their meetings.

• Determines the risk management strategy and reviews management’s

identification and mitigation of key risks and uncertainties;

• monitors the risk assessment programme;

• ensures structures, processes and responsibilities for identifying and

managing risks are adequate;

• provides oversight and approval of relevant policies for the Group;

• monitors changes to the regulation of online gambling and the

assessment of licensees’ suitability;

• monitors ongoing compliance with the conditions of the regulatory

licences held by the Group and any incidents and remedial

activity; and

• works closely with the Audit Committee in carrying out its

responsibilities (the Chairman of the Audit Committee is also a

member of the Committee).

Read more on the activities of the Risk and Compliance Committee

on pages 95 to 100

Risk and Compliance

• Reviews the structure, size, composition and diversity of the Board

and its Committees;

• makes recommendations for any changes considered necessary in

the appointment, reappointment and removal of Directors to/from

the Board and its Committees and ensures rigorous and transparent

processes are in place;

• reviews the senior leadership needs of the Group to enable it to

compete effectively in the marketplace;

• advises the Board on succession planning for Executive Director

appointments, although the Board itself is responsible for succession

generally; and

• supports development of a diverse succession pipeline and oversees

policy on diversity and inclusion.

Nominations

• Provides governance over the environmental, social and governance

(ESG) considerations, continued effectiveness of the ESG strategy,

and its implementation;

• reviews and makes recommendations to the Board on targets,

policies and disclosures of ESG matters;

• monitors stakeholder engagement and sentiment towards ESG

matters and liaises with other Committees as appropriate; and

• works closely with the Audit Committee regarding oversight and

assurance of environmental disclosures (the Chair of the Committee

is also a member of the Audit Committee).

Read more in our Sustainability Report on pages 48 to 87

Sustainability and Public Policy

116 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Committee composition

The Board has established five formal Committees, each focusing

on its own area of expertise. The Committees’ responsibilities are

set out in our governance structure on page 116. These Committees

enable the Board to focus on strategy, performance, leadership and

stakeholder engagement. After their meetings, the Committees make

recommendations to the Board.

The remit, authority and composition of each Committee are laid out

and reviewed regularly to ensure that the support provided to the Board

is effective. The Board considers the composition of the Committees

reflects the Directors’ experience, skills and competencies.

When necessary, the Board may delegate particular matters to

adhoc sub-Committees with clearly defined responsibilities and for

alimited time.

Board Committee changes during the year

During 2023, the following changes to the Committees were implemented with effect from 29 September 2023:

• Ian Penrose assumed the Chair of the Audit Committee and was appointed to the Nominations Committee while stepping down from the

Sustainability and Public PolicyCommittee.

• Samy Reeb was appointed to the Audit and Sustainability and Public Policy Committees and assumed the Chair of the Risk and Compliance

Committee, replacing Anna Massion.

• Anna Massion became the Chair of the Remuneration Committee, replacing Ian Penrose, and was also appointed to the Sustainability and

Public Policy Committee.

Between 1 January 2023 and 29 September 2023, the Committee composition was as follows:

• The Audit Committee was chaired by John Krumins and Ian Penrose, and Linda Marston-Weston were members of the Committee.

• The Nominations Committee was chaired by Brian Mattingley and Anna Massion and Ian Penrose were members of the Committee.

• The Remuneration Committee was chaired by Ian Penrose and Anna Massion and Linda Marston-Weston were members of the Committee.

• The Sustainability and Public Policy Committee was chaired by Linda Marston-Weston and Ian Penrose and John Krumins were members of

the Committee.

• The Risk and Compliance Committee was chaired by Anna Massion and Ian Penrose and John Krumins were members of the Committee.

Board Committee membership

The table below details the membership of the Committees as of 31December 2023.

Committee membership Audit Remuneration Nominations Risk and Compliance Sustainability and Public Policy

Brian Mattingley

Ian Penrose

Linda Marston-Weston

Anna Massion

Samy Reeb

Executive Committee membership

The members of the Committee are Mor Weizer (Chief Executive

Officer), Chris McGinnis (Chief Financial Officer), Shimon Akad (Chief

Operating Officer), Uri Levy (VP Business Development), Alex Latner

(General Counsel), Ian Ince (Chief Compliance Officer), Sharon

Kafman Raz (VP Finance), Kam Sanghera (Head of Tax), Karen

Zammit (Head of Global HR), Lauren Iannarone (Chief Sustainability

and Corporate Affairs Officer) and Brian Moore (Company Secretary).

Other members of senior management are invited to the Committee

as and when required.

Disclosure Committee membership

The Disclosure Committee meets as needed. At the date of this report

the Disclosure Committee comprises Ian Penrose (Chair of the Audit

Committee), Chris McGinnis (Chief Financial Officer), Alex Latner

(General Counsel) and Brian Moore (Company Secretary).

Internal Audit

PwC LLP, in its capacity as provider of co-sourced internal audit services,

may be invited to attend meetings of the Audit Committee to present

matters or for the Committee to have the benefit of its experience.

Our Committees

Chair Member

Standing attendees Company Secretary

Director of Internal

Audit

Director of Internal

Controls and Risk

Company Secretary Company Secretary Company Secretary

General Counsel

Director of Internal

Audit

Chief Data Privacy

Ocer

Company Secretary

Chief Sustainability

and Public Policy

Ocer

117Playtech plc Annual Report and Financial Statements 2023

Governance Report

Considering stakeholders from the Board’s perspective

Colleagues Shareholders and bondholders Customers

The Board regularly engages, directly and indirectly, with a wide range of stakeholders throughout the year to understand current and evolving

issues of interest, engaging constructively, responding and ensuring that the Company takes stakeholder perspectives into account when

making short and long-term decisions. Our stakeholder engagement is set out on pages 44 to 47 of the Strategic Report.

The table below specifies the Board’s engagement activities and how it is kept informed.

Investor relations and communications

The Company has well-established investor relations (IR) processes, which support a structured programme of communications with

existing and potential investors and analysts. Board members, Executive Directors and members of the IR team participate in a number

of investor events, attend industry tradeshows, and regularly meet or are in contact with existing and potential institutional investors from

around the world, ensuring that Group performance and strategy are effectively communicated, within regulatory constraints. Other

representatives of the Board and senior management meet with investors from time to time.

How the Board seeks to engage

• Direct engagement through site visits to the

US and Latvia, providing the opportunity to

see the culture in operation and host strategy

alignment sessions.

Read more on our site visits on page 105

• Attendance at tradeshows providing opportunity

to meet with colleagues from around the globe.

• Indirect engagement through feedback

fromemployee engagement surveys and

HRbriefings.

• Direct informal engagement attending site

lunches, town halls and local events.

• The Board approved the creation of the

Benevolent Fund for colleagues in need and

one-off cost-of-living payments to eligible

employee groups.

How the Board is kept informed

• Regular Board updates from the COO and HR

on employee issues and engagement with them

on strategic and operational issues affecting

and of interest to the workforce, including

remuneration, talent pipeline and diversity

andinclusion.

• The COO is a standing attendee at the

Board meetings.

• Feedback from employee engagement surveys

and updates particularly considering the current

geopolitical events.

• Briefings on issues raised through the Speak

Up/whistleblowing hotline.

• The Board held a People and Talent deep-dive

session led by the Global Head of HR.

• Regular updates and reports from the Head of

Investor Relations on related matters, issues

of concern to investors, and analysts’ views

and opinions.

• Regular updates and reports on engagement

activities over the year with investors.

• Chair, CEO, CFO and SID met with several

shareholders to discuss the Company’s

business and remuneration strategies

throughout the year.

• Whenever required, the Executive Directors and

the Chairman communicate with the Company’s

brokers, Goodbody and Jefferies, to confirm

shareholder sentiment and to consult on

governance issues.

• The Board reviewed and considered significant

acquisition and investment opportunities

throughout the year, resulting in the successful

completion of the investment in Hardrock Digital.

• Regular operations updates and reports

from the COO.

• Regular trading updates from Snaitech on

performance including HAPPYBET and

provided strategic guidance.

• COO is a standing attendee at Board meetings

and regularly updates the Board.

• Presentations from product verticals on strategy

and technology innovations.

• Briefings with functional leaders about emerging

and live stakeholder issues.

• Direct engagement by meeting with

shareholders throughout the year, though

primary responsibility for effective

communication with shareholders lies with

the Chairman.

• The Executive Directors prepare a general

presentation for analysts and institutional

shareholders following the interim and

full-year announcements and following

significantacquisitions.

• Attendance at the AGM and responding

toquestions.

• Answering all queries raised by

shareholders promptly.

• Direct engagement by face-to-face engagement

attradeshows.

• Indirect engagement through regular

review of business development

opportunities, operational performance

andincidentmanagement.

• The Board held deep-dive sessions on

structured agreements, Live and SaaS Platform.

• Indirect engagement by monitoring industry

trends and developments.

118

Playtech plc Annual Report and Financial Statements 2023

Governance Report

Regulatory announcements inform the market of corporate actions, important customer

contracts, financial results, the results of the Annual General Meeting, and General Meetings

and Board changes. Copies of these announcements, together with other IR information and

documents, are available on the Group website, www.playtech.com.

regulatory announcements in 2023

Suppliers and

technology partners

Regulators and policy makers Society and communities

• Indirect engagement through review of

operational updates, performance and

incidentmanagement.

• Indirect engagement through review

and approval of material supply and

procurementcontracts.

• Indirect engagement through review

and approval of the Modern Slavery

Statement, Supplier Code of Conduct and

Environment Policy.

• Audit Committee reviewed the IT

security strategy.

• The Board initiated a business transformation

project for the B2B business, considering the

realignment of resources to improve efficiencies

and eliminate duplication.

• Direct participation with regulators at

tradeshows, regulatory meetings and regulator

roundtable events.

• Direct engagement in the licensing and

suitability process in several jurisdictions.

• Participating in training and update briefings

including on proposed governance and

audit reforms.

• Indirect engagement considering developments

on wider social responsibility issues and

expectations and evolving macroeconomic,

industry, political, regulatory and

compliancedevelopments.

• Direct engagement by participating in the

Stakeholder Advisory Panel to inform and

challenge our thinking on sustainability matters.

• Engagement and endorsement of

management’s recommendation and

setting targets for SBTi and net zero and

near-termtargets.

• Regular operations updates from the COO.

• Periodic updates regarding the development of

the procurement function, responsible supply

chain practices and commercial developments

with B2B licensees and third parties.

• Updates on cybersecurity and data protection.

• Briefings on any major incidents and remedial

actions from functional heads.

• Updates on risk review from Internal Audit and

Internal Controls functions.

• Receives regular updates from the Board on

licensing, regulation, policy and compliance

matters and data protection.

• The Chief Compliance Officer is a standing

attendee at Board meetings.

• The Risk and Compliance Committee is kept

informed of any changes to the regulatory

position in any significant jurisdiction where the

Group, through its licensees, may be exposed

and updated on progress in relation to agreed

action items on a regular basis.

• Updates from the Director of Internal Controls

and Company Secretary on proposed reforms to

the Code and audit requirements.

• The Board reviewed and approved policies and

updates to them, for the Environment, Modern

Slavery Statement, Human Rights, Safer

Gambling, Responsible Marketing, Anti- facilitation

of Tax Evasion; Anti-Money Laundering, Anti-bribery

and Corruption, and Supplier Code of Conduct.

• The Board received a presentation on safer

gambling, progress and use of AI technology.

• Regular updates on progress against the ESG

strategy, policy and implementation.

• Chief Sustainability and Public Policy Officer is

astanding attendee at Board meetings.

• Deep-dive sessions on Safer Gambling and

People and Talent.

119

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Governance Report

Latvia site visit

During my visit to Latvia, I was inspired

to see how our colleagues in Live are

helping us to deliver on the Group’s

strategic priorities, create inspiring and

innovative experiences, and embed

sustainability as a core part of the

operations and ethos of the business.

Linda Marston-Weston

Chair of the Sustainability and Public Policy Committee

In June 2023, our Board travelled to Riga, Latvia, which

is home to our largest Live facility. The Board spent

two days in the Latvia facility, where it met with local

management and employees to gain insight into the day-

to-day operations and culture of the business.

Hosted by the Live management team, the Board

received presentations from the Live management

team on strategy, operational updates, innovations

and the latest developments in technology for the Live

vertical. The Board also presented the Group strategy for

Playtech, its priorities, the importance of the Live vertical

and future expectations.

The Board facilitated engagement sessions with groups

of employees from Latvia, as well as representatives from

other Live facilities. The employees provided background

to their roles at Playtech and discussed various matters,

from technology advancements and environmental factors

for new studios to emerging risks and growth opportunities.

The Board toured the Live facility and learnt about the

cutting-edge technology and development of the latest

game show releases. Joining in the Live Academy

training, the Board had an opportunity to participate in the

training for local dealers and learn about the development

of employees and the local operations.

Engaging with our colleagues

Governance Report

120 Playtech plc Annual Report and Financial Statements 2023

Induction, training and succession planning

Induction

Newly appointed Directors receive a detailed and systematic

induction on joining the Board, which is guided by the Chairman

and supported by the Company Secretary.

The induction process is tailored to meet the skills and experience of

the Director, as well as their interests in specific topics and Committee

roles. Background information on the Company is provided, including

discussions on the strategy, purpose, values and culture, and recent

operational performance. Board policies and procedures are

covered, and training is provided on Directors’ duties, governance

and regulatory requirements, as well as their responsibilities under

the Market Abuse Regulation. Any specific training which is tailored

to meet the Director’s needs or fulfil Committee responsibilities is

arranged as necessary.

Directors meet various members of Executive Management and

senior management, as well as the other Non-executive Directors.

New Directors receive briefing sessions to familiarise themselves with

all core aspects of the Group’s business, including operations, investor

relations, regulation and compliance and sustainability. On request,

meetings can be arranged with major shareholders, external advisers

or other stakeholders.

Upon joining Committees, Directors are provided with sufficient

background materials and sessions to understand the Committee’s

objectives and its recent activities.

Non-executive Director induction

Samy Reeb was appointed to the Board in January 2023. As part of

the appointment process, Samy had the opportunity to meet some

other Directors and Executive Management before joining the

Board to get to know them.

Samy’s induction started with the Company Secretary, who

covered Board procedures, historical and Company information

and regulatory requirements and facilitated induction training.

Samy had sessions with the Chairman and fellow Non-executive

Directors on strategy, values and purpose, as well as recent

activities and strategic and operational developments, in addition to

several in-depth sessions with management team members.

Samy was invited to attend the ICE exhibition in his second

month, where he met many of the colleagues of Playtech and

some of the Company’s stakeholders. Samy joined the Board on

a tour of Playtech’s exhibition where Playtech’s product teams

demonstrated the latest innovations.

Ongoing training

The Board receives annual training on core compliance topics and

developments in governance, internal controls and sustainability,

which independent advisers facilitate. Directors can receive tailored

additional training, based on their specific experience and needs, to

help them fulfil their roles on the Board and its Committees. During

the year, members of senior management are invited to attend

Board meetings occasionally to present on specific areas of the

Group’s business.

Succession planning

The Board is responsible for succession planning; however, the

Nominations Committee advises the Board on its succession planning

and leads the process for Director appointments in accordance

with appropriate succession plans. Board composition, succession

planning and talent development are considered annually.

The Nominations Committee meets on an as-needed basis. One

formal meeting was held in 2023. One topic discussed was the

consideration of candidates for appointment as a Non-executive

Director. This led to the appointment of Ruby Yam, effective

June 2023.

In November 2022, we reported the appointment of Chris McGinnis as

CFO. The CFO Report on pages 88 to 94 details the progress of this

transition during 2023.

The Nominations Committee monitors the composition and balance

of the Board and its Committees, identifying and recommending to the

Board the appointment of new Directors and/or Committee members.

The Nominations Committee believes that appointments should be

based on merit, compared against objective criteria, to ensure the

Board has the right skills, knowledge and experience to properly

discharge its current and future responsibilities. As set out in our Board

Diversity Policy, the Nominations Committee has committed to:

• reviewing Board composition, succession planning, talent

development and the broader aspects of diversity on an

annual basis;

• engaging with executive search firms committed to Playtech’s

approach to diversity, ensuring in every engagement that diversity

is a core part of the engagement process with these firms and

that the advisers share our values and approach in identifying and

proposing a diverse slate of suitable candidates for appointment to

the Board; and

• identifying suitable candidates for appointment to the Board based

on merit against an objective criterion regarding the benefits of

diversity in promoting success for the benefit of all stakeholders

as well as the skills, experience, background, independence and

expertise of current members of the Board.

Joining Playtech, I welcomed the

opportunity to meet the management

team and appreciated the time taken

walking me through the Company’s

vision and strategy. The induction

gave me valuable insights into

the Company’s opportunities

and challenges and how the

Board addresses them,

making it easier for me to

utilise my experience and

to contribute effectively.”

Samy Reeb

Non-executive Director

121

Playtech plc Annual Report and Financial Statements 2023

Governance Report

Induction, training and succession planning continued

Evaluation

The Board is committed to an ongoing formal and rigorous evaluation

process for itself and its Committees to assess their performance

and identify areas in which their effectiveness, policies and processes

might be enhanced. The Board operates a three-year evaluation

cycle, in line with the Code provisions.

External evaluation – progress

Starting in 2022 and continuing throughout 2023, Independent Audit

Limited carried out the external evaluation. The approach included

detailed questionnaires, individual interviews with Directors and

members of senior management and attendance at Board and

Committee meetings. The review noted the improvement in Board

governance following a period of transformation under the leadership

of the Chairman, Brian Mattingley. The Board had made good

progress in achieving its primary objective of ensuring the long-term

health of the business in the interests of all shareholders, ensuring that

Playtech has a clear strategic direction. The evaluation highlighted the

active participation in Board discussions and positive attitude towards

governance from the Executive Team. Certain areas for improvement

were identified, which are set out in the table below with details of the

actions taken and progress made during 2023. In Q4 2023 a further

review facilitated by Independent Audit commenced and findings will

be presented to the Board in H1 2024.

Opportunities or focus area Actions and progress made

Improvement in internal governance,

processes and controls

• Financial controls improvement programme has continued into its second year. Read more in

the Audit Committee Report on page 124.

• A new Director of Internal Controls and Risk Management was appointed in 2023, and a wider

internal controls programme was scoped and established in 2023.

• An Internal Governance and Controls Steering Committee was introduced.

Enhancing visibility of the assessment and

evaluation of investment opportunities

• Comprehensive reports with defined, consistent criteria are presented for all

investmentopportunities.

• Expert advisers were invited to present to the Board on various aspects of certain investment

opportunities.

• A deep-dive session was held on structured agreements.

• An Internal Controls and Risk function was established and risk and internal controls

assurance map has been developed and presented to the Board.

Refinement of focus of Internal

Audit and Risk Management

• The focus of the Internal Audit function was refined in 2023 and an Internal Audit Effectiveness

review was carried out.

• Internal Audit has separated from Risk Management, with Risk Management being

transferred to the Internal Controls function.

• Implementation of a new risk management framework driven by the Risk Committee.

• Format of the evaluation was agreed by the Chairman

and SeniorIndependent Director with the guidance of the

Company Secretary.

• The Chairman, SID or Company Secretary, as appropriate,

interviewed each of the Directors.

• Progress on the findings of the evaluation will be monitored

by the Company Secretary.

Frequency and review type

Year 1:

External

Year 2:

Internal

Year 3:

Internal

Internal evaluation

In late 2023, an internal evaluation was carried out. The diagram below

denotes the process of evaluation.

Individual evaluation

Executive Directors are evaluated each year on individual

performance against their performance criteria set by the Board,

which are linked to the strategic and financial performance of

the Company.

Non-executive Directors’ contributions are assessed by the

Chairman, Brian Mattingley, with the support of the Senior

Independent Director, Ian Penrose. The Chairman confirms that

each Director continues to make a significant contribution to the

Board and the Group’s business and is able to allocate sufficient

timecommitment.

There were no material areas of concern highlighted and the main

outcome of the evaluation this year was to shape and define the

Board’s objectives for the coming year, continuing the focus on Group

strategy, purpose and values and ensuring the structures, capabilities

and reporting are in place to achieve the Board’s goals.

The Senior Independent Director, Ian Penrose, conducts a review

of the Chairman’s performance, taking into account the views of the

Non-executiveDirectors.

122 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Summary

An internal team consisting of members drawn from Investor Relations, Group Secretariat and Group Finance have led the process on this

Annual Report, including the Strategic Report, Governance Report and financial statements contained therein. When considering the contents

of the report, the Board considered if the information by business unit in the Strategic Report is consistent with that used for reporting in the

financial statements and if there is an appropriate level of consistency between the front and back sections of the report. In addition, the Board

considered if the report is presented in a user-friendly and easy to understand manner. Following its review, the Board is of the opinion that the

Annual Report and Financial Statements for 31 December 2023 is representative of the year and is confident that taken as a whole it is fair,

balanced and understandable and provides the information necessary for shareholders to assess the Group’s position, performance, business

model and strategy.

Brian Mattingley

Chairman

26 March 2024

Governance Report

123Playtech plc Annual Report and Financial Statements 2023

Audit Committee Report

Maintaining oversight

and accountability

Ian Penrose

Chair of the

AuditCommittee

The Committee has spent

a considerable amount of

time focusing on the Group’s

financial controls and risks,

as well as the impending

requirements due to the

changes to the Corporate

Governance Code.”

Dear Shareholder

Introduction

As Chair of the Audit Committee, I am pleased

to introduce my first report for the year ended

31 December 2023, setting out how the

responsibilities delegated to us by the Board

were discharged over the course of the year,

the key topics we considered and some of the

additional factors which influenced our work.

I was appointed as Chair of the Audit

Committee in September 2023, having

been a member of the Committee since

September 2018. I would like to thank

JohnKrumins as the previous Committee

Chair for his diligent leadership since

September 2021. In advance of taking over

as Chair, I completed a thorough handover

which included meetings with John and other

key stakeholders, including the Group CEO,

the Group CFO, members of the Executive

Management team, the finance, tax and

internal control management teams and the

internal and external audit teams. In addition,

Imet with Committee members to discuss the

areas of improvement and where additional

focus was required.

The Committee has spent a considerable

amount of time focused on the Group’s

financial controls and risks, as well as

the impending requirements due to the

changes to the Corporate Governance

Code. Furthermore, as a result of the legal

dispute with Caliplay, since autumn 2023,

the Committee has increased the number of

times it has met (at least monthly) to assess,

with the executive, legal and internal audit

teams, together with BDO, the external

auditor, Bryan Cave Leighton Paisner

LLP (BCLP), the Group’s legal advisers,

and our co-sourced internal auditor, PwC,

the continued accounting treatment and

governance of the numerous accounting

matters affected by the dispute. I would

like to thank the Committee members, the

Board and the executive team, together with

the audit, legal and financial/governance

advisers, who have worked diligently

throughout this process.

Responsibilities

The Board is required by the UK Corporate

Governance Code 2018 (the “Code”), which can

be found on the Financial Reporting Council’s

website, www.frc.org.uk, to establish formal

and transparent arrangements for considering

how it should apply required financial reporting

standards and internal control principles and

also for maintaining appropriate relationships

with the Company’s external auditor, BDOLLP.

The Committee’s terms of reference can

beviewed on the Company’s website,

www.playtech.com.

The Audit Committee’s key objectives are:

the provision of effective governance over

the appropriateness of the Group’s financial

reporting, including the adequacy of related

disclosures; monitoring the performance of

both the Internal and External Audit function

and reporting, and acting on their associated

findings; and monitoring and challenging

the effectiveness of the Group’s systems of

internal control, risk management and related

compliance activities.

The specific responsibilities delegated to,

anddischarged by, theCommittee include:

• approving and amending Group

accounting policies;

• reviewing, monitoring and ensuring

the integrity of interim and annual

financial statements, and any formal

announcements relating to the Company’s

financial performance, in particular the

actions and judgements of management

in relation thereto before submission to

the Board;

• providing advice (where requested

by the Board) on whether the Annual

Report and Accounts, taken as a whole,

is fair, balanced and understandable, and

provides the information necessary for

shareholders to assess the Company’s

position and performance business model

and strategy;

• reviewing the Company’s arrangements

for its employees to raise concerns,

anonymously or in confidence and

without fear ofretaliation, about possible

wrongdoing in financial reporting or

other matters arising under the Group’s

whistleblowing policy;

124 Playtech plc Annual Report and Financial Statements 2023

Governance Report

• reviewing and approving the Internal Audit Charter and the

AuditCommittee terms of reference on an annual basis;

• reviewing and monitoring the external auditor’s independence

andobjectivity, including the effectiveness of the audit services;

• monitoring and approving the scope and costs of audit;

• ensuring audit independence, implementing policy on the

engagement of the external auditor to supply non-audit services,

pre-approving any non-audit services to be provided by the auditor,

considering the impact this may have on independence, taking into

account the relevant regulations and ethical guidance in this regard,

and reporting to the Board on any improvement or action required;

• reporting to the Board on how it has discharged its responsibilities; and

• working closely with the Sustainability and Public Policy Committee

to oversee governance over environmental, social and governance

(ESG) considerations, and continued effectiveness of the ESG

strategy and its implementation.

In particular, the Code calls for the description of the work of the

AuditCommittee to include its activities during the year, the significant

issues considered in relation to the financial statements and how they

were addressed, how the Committee assessed the effectiveness

of the external audit process, the approach of the Committee in

relation to the appointment or reappointment of the auditor and

howobjectivity and independence are safeguarded relative to

non-audit services.

Composition and Audit Committee meetings

As at 31 December 2023, the Audit Committee comprises three

independent Non-executive Directors. Ian Penrose was appointed

as the Chair of the Audit Committee on 29 September 2023 having

been a member of the Committee since 1 September 2018. Ian has

considerable experience as a CEO, CFO and Non-executive Director

across the gaming, leisure and technology sectors. TheBoard

considers he has recent and relevant financial experience (he is also

a Chartered Accountant, having qualified with Ernst & Young – now

EY) in order to chair the Audit Committee. In addition to Ian Penrose,

the other members are: Linda Marston-Weston, who was formerly

a senior tax partner at Ernst & Young working with UK and global

businesses across corporate finance, strategy, tax and leadership

matters; and Samy Reeb, who commenced his career in tax advisory

at Ernst & Young and tax management at Credit Suisse, before

focusing on wealth advisory as an Executive Director at Julius Baer,

and subsequently joining 1291 Group as Managing Partner. Therange

and depth of their financial and commercial experience enable them

to deal effectively with matters they are required to address and to

challenge management when necessary. The Committee is also

authorised to obtain independent advice if considered necessary.

John Krumins was the Chair of the Audit Committee in the year until

29 September 2023, when he stepped down from the Board and his

position as Chair of the Audit Committee following a smooth transition

to Ian Penrose.

The Chair of the Audit Committee, Ian Penrose, was a member

of the Committee prior to his appointment as Chair. Prior to this

appointment, and in order to ensure a smooth transition into the role,

Ian held a number of meetings with the Board, Committee members,

the executive team and the external auditor to reassess matters

relating to financial reporting, risk management and internal control,

internal audit process and external audit process.

The Company Chairman, CEO, CFO, Director of Internal Audit,

Director of Risk, Internal Control and Assurance, BDO and the

Group’s legal advisers, BCLP, attended meetings of the Audit

Committee by invitation. The Vice President of Finance and the

Corporate Finance Director were also invited to attend the meetings

of the Committee that considered the year-end and interim financial

statements. Finally,specific senior executives were invited to meet

with the Committee to address particular areas of focus during

the year, including tax, legal and structural considerations and

compliance matters.

The members of the Committee meet the external auditor twice a

year without any Executive Directors being present in order to receive

feedback from them on matters such as the quality of interaction with

management. The Chair also met or interacted with BDO on at least a

monthly basis to discuss matters either involving the audit process or

of general relevance tothe Group.

Meetings of the Committee

The Committee met eight times during 2023 and, as noted earlier,

have met a further five times in 2024 ahead of the conclusion of

the 2023 Annual Report and Accounts. Furthermore, the three

Committee members have held several meetings/Zoom calls to

informally discuss the issues affecting the financial statements.

Thematters that were broadly considered by the Committee during

the year included:

• review of the ongoing Caliplay dispute and impact on the financial

statements of the Group for the year ended 31 December 2023;

• review of current and anticipated requirements for the Group’s

financial control systems;

• maturity assessment of the Group’s control environment,

including the review of third-party assessments and associated

enhancement projects;

• the scope and effectiveness of the Group’s system of internal

controls and risk management;

• review of cybersecurity strategy, risks and system resilience;

• review of the structure and governance systems for investment

inassociates;

• review of Group treasury;

• the Group’s strategy for managing tax risk;

• review of disclosure requirements, with specific focus on both

Group revenue streams and related party considerations across

the Group;

125Playtech plc Annual Report and Financial Statements 2023

Governance Report

Audit Committee Report continued

Key estimates, judgements and financial

reporting standards

Impact of Caliplay dispute

The Committee directed work this year to ensure that robust

evidence was gathered to enable the Directors to make their

significant judgement over revenue recognition and recoverability of

outstanding debt, following the ongoing Caliplay dispute. Thedispute

and the significant judgements made are further explained in Note 7

of the financial statements, and involved additional Audit Committee

meetings in late 2023 and early 2024 to understand the progress

of the dispute and obtain advice from external legal and accounting

experts in relation to the significant judgement made and the

conclusions reached. The Committee also ensured that sufficient

disclosures were included in Note 7 and the rest of the Annual Report,

capturing all other financial statement areas which the dispute has

had an impact on as at 31 December 2023 (for example the valuation

of the Playtech M&A Call Option) or could potentially be impacted

going forward depending on the outcome of the dispute (for example

the CGU impairment review and assessment of recoverability of the

Group’s deferred tax asset).

Revenue recognition

The Audit Committee reviewed the judgements made in respect

ofrevenue recognition, in particular in assessing whether it is acting

as a principal or an agent. In making these judgements, the Group

considers, by examining each contract with its business partners,

which party has the primary responsibility for providing the services

and is exposed to the majority of the risks and rewards associated

with providing the services, as well as if it has latitude in establishing

prices, either directly or indirectly. The business model of this division

is predominantly a revenue share model which is based on software

fees earned from B2C business partners’ revenue. The Committee

concluded that the Group’s revenue recognition policy relating to

these types of contracts is in line with IFRS requirements.

Goodwill and intangible assets

During the year, the Audit Committee also considered the

judgements made in relation to the valuation methodology adopted

by management to support the carrying value of goodwill and other

intangible assets, to determine whether there was a risk of material

misstatement in the carrying value of these assets and whether an

impairment should be recognised.

The Committee considered the assumptions, estimates and

judgements made by management to support the models that

underpin the valuation of goodwill and other intangible assets in

thebalance sheet. Business plans and cash flow forecasts prepared

by management supporting the future performance expectations

used in the calculations were reviewed, as were the valuation

methodologies applied. The Committee noted that analyses and

conclusions considered factors such as higher inflation and the

ongoing Caliplay dispute.

The Committee particularly considered the outcome of the

impairment reviews performed by management. The impairment

reviews were also an area of focus for the external auditor, which

reported its findings to the Committee. The Committee satisfied

itself that the conclusions made on the impairments of the Sports

B2B, Eyecon and Quickspin cash-generating units were reasonable,

and,aside from that, there were no other material impairments to

thecarrying value of goodwill or other intangible assets.

Meetings of the Committee continued

• valuation of derivative financial assets held in LATAM operations;

• provisioning requirements and policies;

• data management and billing resilience;

• Board delegated authorities; and

• non-financial information updates:

• synergies with Sustainability and Public Policy and Risk and

Compliance Committees; and

• review of ESG assurance metrics.

And in the normal course of Committee business:

• review and approve the Internal Audit Charter and the Internal

Audit Plan;

• review Committee terms of reference;

• consider results of internal audit reviews, management action plans

to resolve any issues arising and the tracking of their resolution; and

• Group refinancing, and going concern and long-term viability.

External audit

The Audit Committee advises the Board on the appointment,

reappointment or removal of the Group’s external auditor.

BDOwasthe auditor when the Group moved to a premium listing and

have remained as auditor since. This is Oliver Chinneck’s fourth year

as lead audit partner. BDO’s appointment was formally reviewed in

2019 when a competitive tender process was run in respect of the

audit for the year ended 31 December 2020.

The Committee considered the approach, scope and requirements

ofthe external audit as well as the efficacy and independence of BDO.

The Audit Committee met with BDO to discuss the external auditor’s

report to the Committee and review the letter of representation.

Following the publication by the FRC of the Audit Committees and

the External Audit: Minimum Standard, the Audit Committee will

be ready to demonstrate compliance with what will be mandatory

requirements, noting that currently best practice guidance is

being applied.

126 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Classification and valuation of investment in associates and

derivative financial assets

The Audit Committee has considered the judgements made

in determining the classification of each structured agreement

arrangement, as further explained in Note 7 of the financial

statements, and in particular using the appropriate guidance under

the accounting standards to determine the existence of control or

significant influence.

In reviewing each assessment, the Committee is satisfied that each

classification, which is further explained and disclosed in Note 21

of the financial statements, is correct and in accordance with the

accounting standards.

The Group engaged external valuation specialists to perform the

valuations of the Playtech M&A Call Option, who were guided by

management in terms of judgements made, with the rest of the

valuations being completed in house by the Playtech finance team.

The Audit Committee reviewed and challenged the resulting values

of each arrangement and is comfortable with the assumptions,

estimates and judgements in each of the valuations, including the

valuation methodology applied. The Audit Committee is also satisfied

with thejudgement made in relation to the Caliplay dispute and the

impact this judgement has on the valuation of the Playtech M&A Call

Option as further explained in Notes 7, 21A and 21C.

Other financial statement areas

The Audit Committee also reviewed the level of judgement and

estimation required in the following areas of the financial statements,

documented in management papers, and it is satisfied that the

judgement made and disclosures included in the financial statements

are reasonable and in line with each applicable IFRS:

• reasonableness of discounts and concessions applied in

recognising revenue from various licensees (in the form of

marketing contributions or discounts to revenues earned);

• accounting and fair value assessment of the Group’s investment

inHard Rock Digital as at 31 December 2023;

• recoverability assessment of trade and other receivables as at

31December 2023;

• impairment review of investments held by Playtech plc in other

Group companies, and in particular the investment in Playtech

Software Limited; and

• recoverability assessment of the Group’s deferred tax assets in

relation to UK tax losses.

Finally, the Audit Committee assessed the adjusted performance

measures as further explained in Note 6U and adjusting items in

Note 11 with reference to European Securities and Markets Authority

(ESMA) guidelines and is satisfied that these are reasonable and

appropriately disclosed.

Viability and going concern statements

The Committee reviewed management’s work on assessing risks

and potential risks to the Company’s business for both the going

concern and viability statement periods, which included challenging

the approach taken by management to support the going concern

statement on page 147 and viability statement set out on pages 101

and 102 by considering the Group’s principal and emerging risks.

Thisincluded the assumptions made on the repayment of the Group’s

borrowings when they fall due and the payment for the renewal of the

Italian gaming licences. Furthermore, the Committee reviewed the

assumptions made in both the base case and stress test scenarios

in relation to the Caliplay dispute and in particular the outcome of

the statements made in the stress test scenario which included the

remote scenario that no further cash is received by the Group from

Caliplay. Following this review, the Committee was satisfied that

management had conducted a strong and thorough assessment

and recommended to the Board that it could approve the viability

andgoing concern statements.

Financial Reporting Council (FRC) review

As noted in the 2022 Audit Committee Report the FRC commenced

a review into the 2021 audit completed by BDO. The review was

ongoing at the conclusion of the 2022 Annual Report but was

concluded in the current year.

BDO kept the Committee updated with the progress of the review

findings and addressed certain initial matters arising during the 2022

year-end audit. The Committee was satisfied with the final outcome of

the review which concluded the audit required limited improvements.

The FRC identified certain areas of limited significance that required

improvement and the Committee received an update from BDO as to

how these were addressed in the 2023 audit. As part of the process

the Chair met with the FRC team both at the start and conclusion of

the review.

Independence and non-audit services

The Audit Committee, on behalf of the Board, undertakes a formal

assessment of the auditor’s independence each year, whichincludes:

• a discussion with the auditor of a written report detailing all

relationships with the Group and any other parties which could

affect independence or the perception of independence;

• a review of the auditor’s own procedures for ensuring

independence of the audit firm and partners and staff involved

inthe audit, including the periodic rotation of the audit partner;

• obtaining written confirmation from the auditor that it is

independent; and

• a review of fees paid to the auditor in respect of audit and

non-audit services.

The FRC’s Revised Ethical Standard introduced certain specific

criteria for non-audit work. This included the introduction of a

non-audit services fee cap and white list of permitted services.

Abreakdown of audit and non-audit fees is included in Note 12

tothefinancial statements on page 193.

The Committee remains satisfied with the manner, robustness and

level of challenge of BDO’s audit processes and believe BDO should

remain as auditor for 2024. The reappointment will be formally

considered atthe Annual General Meeting.

127Playtech plc Annual Report and Financial Statements 2023

Governance Report

Audit Committee Report continued

Internal control

A particular focus of the Audit Committee in 2023 was to continue

its oversight of the high-profile enhancement of the Group financial

controls through the Financial Control Improvement Programme.

Thisfollows the detailed review and re-set of the Group’s internal

control regime in light of good business practice and impending

change to UK Corporate Governance legislation. This has been

complemented by the establishment of a new Risk, Internal Control

and Assurance function headed by an experienced Director.

Thisfunction supports the Audit Committee’s development of the

Group’s broader risk and internal control strategy, given the evolving

nature of our strategic priorities, regulatory environments within

whichthe Group operates and stakeholder interests.

In parallel to the review of the financial control improvement regime,

the Audit Committee considered the Group’s broader control

framework and how best to assess overall governance given the

evolving nature of the Group’s strategic priorities, the regulatory

environments in which the Group operates and stakeholder interests.

In order to monitor and challenge key dimensions of the Group’s

governance model the Audit Committee formalised a review process

with each of the senior management responsible for compliance,

sustainability, tax, IT and data security.

Looking ahead, the Committee acknowledges that Playtech will

be subject to further regulatory and compliance requirements as

it continues to expand geographically and the complexity of its

business model increases, while at the same time regulators increase

the levels of scrutiny across the sector. Accordingly, the Committee

has taken steps to both broaden and deepen the control environment

across the Group with particular focus on enhanced financial and

non-financial controls, including establishing oversight of ESG,

CSR, fraud management and broader security and audit regimes.

To this end, during 2024, the Committee shall undertake a regular

rhythm of review of the wider Internal Control Programme, along with

associated roadmaps and actions relating to our readiness position

for UK Corporate Governance changes. Following a consultation on

the UK Corporate Governance Code (the “Code”), the FRC published

a revised Code which will apply to financial years beginning on or

after 1 January 2025 save for new Provision 29 (board declaration

on effectiveness of its material internal controls), which will apply

to financial years beginning on or after 1 January 2026. The 2024

changes to the Code are aimed at enhancing transparency and

accountability of UK companies, taking a targeted, proportionate

approach which focuses on a small number of changes to ensure

the right balance is struck between UK competitiveness and positive

outcomes for companies, investors and the wider public.

During the latter half of 2022 and throughout 2023 a review of the

Committee’s effectiveness was carried out as part of an external

evaluation. The evaluation was carried out by Independent Audit

Limited. A further facilitated review commenced towards the end

of2023 and it is intended that this review will be discussed by the

fullBoard in H1 2024.

I believe the skills and experience of the Committee members remain

strong and relevant, enabling the Audit Committee to continue to

perform effectively.

Ian Penrose

Chair of the Audit Committee

26 March 2024

Internal Audit

The Company has an Internal Audit function where the Director of

Internal Audit reports directly to the Chair of the Audit Committee

andhas direct access to all executives.

The key objective of the Internal Audit function is to provide the Board,

the Audit Committee and management independent and objective

assurance on risks and mitigating controls, and to assist the Board

inmeeting its corporate governance and regulatory responsibilities.

The scope of work of the Internal Audit function includes all

processes, systems and activities of the Group. During the year, the

Internal Audit team performed a number of audits over both individual

entities and central functions across the Group which aimed to

provide assurance across key risks and processes in the business.

The results of Internal Audit activities are reported to the Audit

Committee on a regular basis, with recommendations made by

theInternal Audit function and corresponding management actions

being reviewed and challenged, where appropriate. In addition to

regular feedback of audit results, the Internal Audit function monitors

completion of management actions and provides updates of these

tothe Audit Committee.

An internal audit plan detailing activities for 2024 was developed by

the Internal Audit function and was challenged and approved by the

Audit Committee at the November 2023 Audit Committee meeting.

The Internal Audit function will carry out engagements in accordance

with this plan using a risk-based approach and continue to maintain

effective lines of communication with the Audit Committee and key

management. The Internal Audit function continually assesses the

plan and the Audit Committee believes this assessment will ensure

the internal audit plan remains fit for purpose and relevant in light of

any new or emerging risks. The Internal Audit function is also utilised

to provide assurance over corporate governance matters and for ad

hoc projects, wherenecessary.

The Audit Committee confirms that any necessary action will be taken

to remedy any significant failings or weaknesses identified from any

Internal Audit reviews.

The Audit Committee reviews the quality and effectiveness of the

Internal Audit function annually which also includes an assessment

ofthe independence and objectivity of the team.

128 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Statement by the Committee Chair

Restructured remuneration aligns

with performance

Dear Shareholder

On behalf of the Board, I welcome the

opportunity to present the Remuneration

Committee’s report on Directors’ remuneration

for theyear to 31 December 2023. This is my

first Directors’ Remuneration Report (the

“Report”) as Chair of the Remuneration

Committee (the “Committee”), and I would

like to thank my colleague Ian Penrose for

his stewardship of the Committee since

November 2018.

This report describes how the Board

has applied the principles of the 2018 UK

Corporate Governance Code (the “Code”) to

Directors’ remuneration. Although Playtech

is an Isle of Man incorporated entity and, as

such, is not required to comply with the UK

regulations on Directors’ remuneration, we

recognise the importance of shareholder

transparency. Accordingly, we can confirm

that the Company adheres to the UK

regulations as they relate to Directors’

remuneration and the report below is

divided into: (i) this Annual Statement; (ii)

the new Directors’ Remuneration Policy

(the “Policy”), subject to approval by

shareholders at the 2024 AGM; and (iii) the

Annual Report on Remuneration that reports

on the implementation of the Company’s

stated Remuneration Policy for the year to

31 December 2023. The Annual Report on

Remuneration and this Statement will be the

subject of an advisory shareholder resolution

at the forthcoming AGM.

Business context

Playtech performed very strongly over the

year and delivered Adjusted EBITDA up

9% to €432 million, ahead of previously

raised expectations and Company budget.

As well as delivering excellent financial

results, the Group made important strategic

and operational progress, including our

expansion across the US, opening a third

Live Casino facility in Pennsylvania and

taking the number of licences granted to

11 with further applications pending. Our

B2C division delivered revenues exceeding

€1 billion for the first time, and Snaitech

remains well positioned to benefit from the

underpenetration of the online segment

in Italy, given the strength of the brand,

the continuous improvements to apps

and technology, and a broadening of its

content offering.

The Committee continues

to work hard to improve

corporate governance and

strengthen the pay-for-

performance culture in

the business.”

Anna Massion

Chair of the Remuneration Committee

Performance and pay

outcome for 2023

Annual bonus

The 2023 annual bonus outcome for

the CEO and CFO is 95% and 100% of

maximum, corresponding to 190% and 150%

of salary, which results in a total payment

of £1,603,600 and £600,000. 50% of

these amounts (£801,800 and £300,000)

will be paid once the 2023 Annual Report

and Accounts has been signed off, a third

of which (£267,267 and £100,000) will be

used to purchase shares in the market at

this time, which will be subject to recovery

for two years. Despite excellent financial

performance, the Remuneration Committee

recognises that the ongoing dispute with

our largest customer, Caliplay, has weighed

on shareholder sentiment and Playtech’s

stock price performance. The Board and

management are in ongoing discussions

with Caliplay but there can be no certainty

on what any outcome might be. The Board

is confident that the outstanding funds will

be recovered. In light of the dispute, the

Remuneration Committee has decided to

exercise its discretion to defer settlement

of the remaining 50% of the annual bonus

amounts pending resolution on the ongoing

litigation with Caliplay.

LTI Ps

As disclosed in last year’s report, the

estimated vesting outcome of the 2020

LTIP as at 31 December 2022 was 60.85%

based on the final EPS outcome (93.4%

of maximum) and estimated relative TSR

outcomes (50% of maximum). Following

the end of the TSR performance period on

25 October 2023, the final vesting outcome

under the 2020 LTIP award was 74.21%.

The awards are also subject to a two-year

retention period post vesting. No discretion

was exercised in determining the LTIP

outcome for 2022.

No LTIP award was granted in 2021 due

to the Company being in a closed period

for most of 2021 so there was no vesting in

respect of any LTIP awards this year.

129

Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Statement by the Committee Chair continued

New Directors’ Remuneration Policy and how we will

operate it in 2024

Review of Directors’ Remuneration Policy

In line with corporate governance requirements, our Remuneration

Policy is reviewed every three years and approved by shareholders.

As such, during 2023 the Committee undertook a review of the

Remuneration Policy to ensure it aligns to Playtech’s purpose and

strategic priorities, and supports our continued success. The review

took into account UK listed market practice, corporate governance

developments since the approval of our current Remuneration Policy

in 2021 and remuneration benchmarking of the senior team including

the Executive Directors.

The findings of the review were that the Remuneration Policy

remained fit for purpose and has maintained a strong alignment

between pay and performance over recent years. Therefore the

Committee is proposing to put forward an unchanged Remuneration

Policy for approval by shareholders at the 2024 AGM, save for a

change to the normal LTIP grant for the CFO.

The Committee is proposing to increase the normal LTIP grant for

the CFO to 200% of salary, aligned with the normal maximum grant

awarded to the CEO and below the maximum award under the current

Remuneration Policy of 250% of salary. Recognising his recent

performance in role following his appointment as CFO and to the

Board on 28 November 2022, the Committee feels it is appropriate to

increase his LTIP opportunity to 200% in order to provide equal equity

upside for both Executive Directors. The proposals also support a

rebalancing of performance-based pay to ensure that the CFO’s

remuneration package is more heavily weighted to drive performance

and alignment with shareholders over the longer term.

Base salary

The average salary increase for 2024 awarded to those employees

across the UK workforce who were eligible to receive a salary

increase was 1.4%. As set out in last year’s report, the CFO’s salary

increased to £400,000 on 1 July 2023, and will not be increased

until the next review on 1 January 2025. The Committee reviewed

the CEO’s salary and determined that there would be no increase

effective 1 January 2024.

Annual bonus

The annual bonus opportunity for 2024 will remain unchanged at

200% and 150% of salary for the CEO and CFO respectively. Financial

performance will continue to drive 70% of the bonus and will be split

50% EBITDA and 20% cash flow. As in previous years, the Adjusted

EBITDA and cash flow targets have been set above City consensus

in line with the Company’s internal business plan. The remaining 30%

of the bonus will be based on key strategic targets which will again

include ESG measures. The CEO’s strategic targets for 2024 will be

based on the Company’s strategy and to build on the progress made

in 2023. The CFO’s strategic targets for 2024, as they were in 2023,

will be focused on continuing to build a leading finance organisation

and supporting structure as well as ensuring the Group continues to

operate in as efficient a manner as possible.

In line with the Directors’ Remuneration Policy, 33.3% of any annual

bonus payment will be deferred into shares for two years.

LTI P award

It is the intention of the Company to grant LTIP awards to the

Executive Directors, senior management and staff in respect of

2024 as soon as practicable following the publication of the 2023

annual Results.

Pension

Executive Director pension contributions are now aligned with the

wider workforce contribution of 7.5% of salary from 1 January 2023.

Review of wider workforce remuneration

The Committee (along with the support of the Executive Directors)

commissioned a review of long-term incentive plan participation

for Playtech employees during the year in order to ensure that the

existing scheme remained appropriate. The review identified that for

less senior employees the LTIP scheme was too complex and was not

driving retention due to a lack of direct line of sight and influence over

the performance conditions.

As such, it was determined that for a significant majority of below-

Board participants the existing LTIP scheme would be replaced with

aRestricted Share Plan (RSP) to ensure that the long-term incentive

is easier to understand and therefore highly valued by participants.

The existing LTIP scheme would remain in place for those key

strategic leaders below-Board level to maintain a performance-based

culture, with a clear link between the delivery of shareholder value

andemployee incentives.

Concluding remarks

The Committee continues to work hard to improve corporate

governance and strengthen the pay for performance culture in

the business, whilst materially reducing the fixed pay and pension

contributions for the executives. We believe that this is having

a significant positive impact on the financial performance of

the business, and on delivering initiatives to materially improve

shareholder returns.

The Committee and I hope that you find the information in this report

helpful and informative, and we welcome any comments or questions

ahead of the 2024 AGM.

Anna Massion

Chair of the Remuneration Committee

26 March 2024

130 Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

As set out in the Chair’s statement, the Committee reviewed the

current Directors’ Remuneration Policy during the year to ensure

it remained fit for purpose. The Committee determined that the

Remuneration Policy continues to be appropriate for Playtech

and therefore is proposing to put forward a largely unchanged

Remuneration Policy which is intended to apply for three years from

the date of the 2024 AGM, subject to shareholder approval.

Remuneration philosophy

Our Remuneration Policy is designed to reward the contributions

of senior management as well as incentivise it to drive shareholder

returns, and to maintain and enhance Playtech’s position as the

software and services provider of choice to the gambling sector.

Remuneration is delivered via fixed remuneration and simple and

transparent incentive-based plans enabling the Executive Directors

to be rewarded for delivering strong financial performance and

sustainable returns to shareholders. In a fast-moving sector such as

ours we need to apply the Policy flexibly in order to deliver the right

level of overall pay to Directors.

Proposed changes to the Directors’ Remuneration

Policy and associated rationale

The Committee is proposing to increase the normal LTIP grant for

the CFO to 200% of salary, aligned with the normal maximum grant

awarded to the CEO and below the maximum award under the current

Remuneration Policy of 250% of salary. Recognising his recent

performance in role following his appointment as CFO and to the

Board on 28 November 2022, the Committee feel it is appropriate to

increase his LTIP opportunity to 200% in order to provide equal equity

upside for both Executive Directors. The proposals also support a

rebalancing of performance-based pay to ensure that the CFO’s

remuneration package is more heavily weighted to drive performance

and alignment with shareholders over the longer term.

Considerations when forming the Remuneration Policy

This Policy has been formed in accordance with the principles and

provisions in the Code. The table below sets out how the Committee

has addressed various aspects in the Code:

• Clarity – The Committee’s policy has been clearly set out in this report

including the individual elements of remuneration and their operation.

• Simplicity – This proposed Policy is well understood by

both management and shareholders and aligns to typical

market practice.

• Risk – The Committee believes that the incentive structure does not

encourage undue risk taking. There are a number of mechanisms

available to the Committee, including discretions and malus and

clawback provisions within incentive plans, that allow adjustment in

the case that the Committee believes the outcomes are excessive.

• Predictability – The Policy table and the illustrations of

remuneration provide an illustration of potential levels of

remuneration that may result from the application of the Policy

under different performance scenarios. The Committee believes

that the range of remuneration scenarios is appropriate for the

roles and responsibilities of the Executive Directors, based on the

performance required for incentive awards to pay out.

• Proportionality – The Policy has been designed to give appropriate

flexibility in operation, particularly in relation to incentive plan

metrics, which allows the Committee to implement the Policy from

year to year using the metrics that align with the Group’s strategy.

Furthermore, the Policy contains discretion to allow the Committee

to adjust remuneration outcomes to ensure that they are reflective

of overall performance in the short and long term.

• Alignment to culture – As well as aligning with the strategy of the

business, the Policy has been formed to allow focus on broader

stakeholders. In particular, there is an increased focus on employee

and shareholder engagement through incentive metrics and

Committee discretion.

Directors’ Remuneration Policy

For approval at 2024 AGM

Remuneration Policy for Executive Directors

The following table summarises each element of remuneration and how it supports the Company’s short and long-term strategic objectives.

Element of

remuneration

Short-term and long-term

strategic objectives Operation Opportunity

Framework to assess

performance

Base salary To attract, retain and

motivate high calibre

individuals for the role

and duties required.

To provide a market

competitive salary

relative to the

external market.

To reflect appropriate

skills, development and

experience over time.

Normally reviewed annually by the

Remuneration Committee, with any

increases typically effective in January.

Takes account of the external market

and other relevant factors including

internal relativities and individual

performance. In reviewing salary levels,

the Remuneration Committee may

also take into account the effect of any

exceptional exchange rate fluctuations

in the previous year.

Executive Directors decide the

currency of payment once every three

years (which can be in Pound Sterling,

US Dollars or Euros) with the exchange

rate being fixed at that time.

Other than when an

executive changes roles

or responsibilities, or when

there are changes to the

size and complexity of the

business, annual increases

will not exceed the general

level of increases for the

Group’s employees, taking

into account the country

where the executive

ordinarily works.

If a significant adjustment is

required, this may be spread

over a period of time.

N/A

131Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Directors’ Remuneration Policy continued

For approval at 2024 AGM

Element of

remuneration

Short-term and long-term

strategic objectives Operation Opportunity

Framework to assess

performance

Beneﬁts To help attract and retain

high calibre individuals.

Benefits may include private medical

insurance, permanent health

insurance, life insurance, rental

and accommodation expenses on

relocation and other benefits such

aslong service awards.

Other additional benefits may be

offered that the Remuneration

Committee considers appropriate

based on the Executive Director’s

circumstances.

Non-pensionable.

N/A N/A

Annual bonus Clear and direct

incentive linked to annual

performance targets.

Incentivise annual

delivery of financial

measures and personal

performance.

Corporate measures

selected consistent

with and complement

the budget and

strategic plan.

Paid in cash and shares.

Clawback and malus provisions apply

whereby bonus payments may be

required to be repaid for financial

misstatement, misconduct, error,

serious reputational damage and

corporate failure.

200% of salary for the CEO

and 150% of salary for other

Executive Directors.

33.3% of any payment

is normally deferred into

shares for two years which

are subject to recovery

provisions.

Performance

measured over

one year.

Based on a

mixture of financial

performance

and performance

against strategic

objectives.

Normally, at least

70% of the bonus

will be dependent

on financial

performance.

Bonus is paid on

a sliding scale of

0% for threshold,

increasing to 100%

for maximum

performance.

Long Term

Incentive

Plan (LTIP)

Aligned to key strategic

objective of delivering

strong returns to

shareholders and

earnings performance.

Grant of performance shares, restricted

shares or options.

Two-year holding period will be applied

to vested shares (from 2019 awards),

subject to any sales required to satisfy

tax obligations on vesting.

Clawback and malus provisions apply

whereby awards may be required to

be repaid for instances of financial

misstatement, misconduct, error,

serious reputational damage and

corporate failure.

Maximum opportunity of

250% of salary with normal

grants of 200% of salary in

performance shares for the

CEO and other Executive

Directors.

Performance

measured over

three years.

Performance

targets aligned with

the Group’s strategy

of delivering

strong returns

to shareholders

and earnings

performance.

25% of the awards

vest for threshold

performance.

Pension Provide

retirement benefits.

Provision of cash allowance. Pension for Executive

Directors will be in line with

the pension plan operated for

the majority of the workforce

in the jurisdiction where the

Director is based.

N/A

Remuneration Policy for Executive Directors continued

132 Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Element of

remuneration

Short-term and long-term

strategic objectives Operation Opportunity

Framework to assess

performance

ownership

guidelines

The Company has a

policy of encouraging

Directors to build

a shareholding in

the Company.

Executive Directors are expected

to accumulate a shareholding in the

Company’s shares to the value of at

least 200% of their base salary.

Executive Directors are required to

retain at least 50% of the net of tax out-

turn from the vesting of awards under

the deferred bonus plan and LTIP until

the minimum shareholding guideline

has been achieved.

Shares must be held for two years after

cessation of employment (at lower of

the 200% of salary guideline level, or

the actual shareholding on departure).

N/A N/A

Non-

executive

Directors

To provide a competitive

fee for the performance

of NED duties, sufficient

to attract high calibre

individuals to the role.

Fees are set in conjunction with the

duties undertaken.

Additional fees may be paid on a pro-

rata basis if there is a material increase

in time commitment and the Board

wishes to recognise this additional

workload.

Any reasonable business-related

expenses (including tax thereon) which

are determined to be a taxable benefit

can be reimbursed.

Other than when an individual

changes roles or where

benchmarking indicates fees

require realignment, annual

increases will not exceed the

general level of increases for

the Group’s employees.

N/A

Explanation of chosen performance measures and target setting

Performance measures will be selected to reflect the key performance indicators which are critical to the realisation of our business strategy and

delivery of shareholder returns. The performance targets are reviewed each year to ensure that they are sufficiently challenging. When setting

these targets the Committee will take into account a number of different reference points including, for financial targets, the Company’s business

plan and consensus analyst forecasts of the Company’s performance. Full vesting will only occur for what the Remuneration Committee

considers to be excellent performance.

Remuneration scenarios for Executive Directors at different levels of performance

The graphs below illustrate how the total pay opportunities for the Executive Directors for 2024 vary under three performance scenarios:

minimum, on target and maximum.

Chief Executive Officer Chief Financial Officer

34%

35%

39%

16% 16%

33% 33%

31%

39% 39%

33% 33%

100%

£944 £433

£2,716

£1,273

£4,320 £2,033

£5,164 £2,433

35%

34%

22%

18% 18%

Threshold Threshold On target On targetMaximum MaximumMaximum

with 50% SP

appreciation

Maximum

with 50% SP

appreciation

Fixed pay Annual bonus LTI P LTIP with 50% share price appreciation

1 The value of benefits are in line with the values paid during 2023 as stated in the single figure table.

2 Assumptions when compiling the charts are: threshold = fixed pay only (base salary, benefits and pension), target = fixed pay plus 50% of annual bonus payable and 55% of LTIP vesting and

maximum=fixed pay plus 100% of annual bonus payable and 100% of LTIP vesting.

3 Share price appreciation has been taken into account for the maximum column on the basis of a 50% increase in the share price across the performance period.

133Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Directors’ Remuneration Policy continued

For approval at 2024 AGM

Policy on recruitment or promotion of

Executive Directors

Base salary levels will be set to reflect the experience of the individual,

appropriate market data and internal relativities. The Remuneration

Committee may feel it is appropriate to appoint a new Director on

a below market salary with a view to making above market and

workforce annual increases on a phased basis to reach the desired

salary positioning, subject to individual and Company performance.

Normal policy will be for the new Director to participate in the

remuneration structure detailed above, including the maximum

incentive levels for the Chief Executive Officer and Chief Financial

Officer. The pension contribution will be aligned to the contribution

received by the majority of the workforce in the jurisdiction in which

the Director is based. Depending on the timing of the appointment, the

Remuneration Committee may decide to set different annual bonus

performance conditions for the first performance year of appointment

from those stated in the Policy above. The Committee may also

provide relocation expenses/arrangements, legal fees and costs.

The variable pay elements that may be offered will be subject to

the maximum limits stated in the Policy table. The Remuneration

Committee may consider it necessary and in the best interests of the

Company and its shareholders to offer additional cash and/or make a

grant of shares in order to compensate the individual for remuneration

that would be forfeited from the current employer. Such awards would

be structured to mirror the value, form and structure of the forfeited

awards or to provide alignment with existing shareholders.

In the case of an internal promotion, any commitments entered

into prior to the promotion shall continue to apply. Any variable pay

elements shall be entitled to pay out according to its original terms

on grant. For the appointment of a new Chairman or Non-executive

Director, the fee arrangement would be set in accordance with the

approved Remuneration Policy in force at that time.

Service contracts and exit payments

Executive Directors

Set out in the table below are the key terms of the Executive Directors’

terms and conditions of employment. A bonus is not ordinarily

payable unless the individual is employed and not under notice on the

payment date. However, the Remuneration Committee may exercise

its discretion to award a bonus payment pro-rata for the notice period

served in active employment (and not on garden leave).

The LTIP rules provide that other than in certain “good leaver”

circumstances awards lapse on cessation of employment. Where

an individual is a “good leaver” the award would vest on the normal

vesting date (or cessation of employment in the event of death)

following the application of performance targets and a pro-rata

reduction to take account of the proportion of the vesting period that

has elapsed. The Committee has discretion to partly or completely

disapply pro-rating or to permit awards to vest on cessation

ofemployment.

Provision Detail

Remuneration Salary, bonus, LTIP, beneﬁts and pension

entitlements in line with the with the Directors’

Remuneration Policy table on page 131

Change of control No special contractual provisions apply in the

event of a change of control

Notice period 12 months’ notice from Company or employee

for the CEO and 12 months’ notice for the CFO

• CEO contract signed on 1 January 2013

• CFO contract signed on 28 November 2022

Termination payment The Company may make a payment in lieu of

notice equal to basic salary plus beneﬁts for the

period of notice served subject to mitigation and

phase payments where appropriate

Restrictive covenants During employment and for 12 months thereafter

Non-executive Directors

The Non-executive Directors each have specific letters of

appointment, rather than service contracts. Their remuneration

is determined by the Board within limits set by the articles of

association and is set taking into account market data as obtained

from independent Non-executive Director fee surveys and their

responsibilities. Non-executive Directors are appointed for an initial

term of three years and, under normal circumstances, would be

expected to serve for additional three-year terms, up to a maximum of

nine years, subject to satisfactory performance and re-election at the

Annual General Meeting as required.

The table below is a summary of the key terms of the letters of

appointment for the Non-executive Directors.

The letters of appointment of the Non-executive Directors are

available for inspection at the Company’s registered office and will be

available before and after the forthcoming AGM.

Consideration of employment conditions elsewhere

inthe Company when setting Directors’ pay

The Remuneration Committee, when setting the Policy for Executive

Directors, takes into consideration the pay and employment

conditions through the Company as a whole.

In determining salary increases for Executive Directors, the

Committee considers the general level of salary increase across

the Company. Typically, salary increases will be aligned with those

received elsewhere in the Company unless the Remuneration

Committee considers that specific circumstances exist (as mentioned

in the Policy table) which require a different level of salaryincrease for

Executive Directors.

Name Date Term Termination

Brian Mattingley 1 June 2021 Until third AGM after appointment

unless not re-elected

Six months’ notice on either side or if not re-elected,

disqualiﬁcation or commits gross misconduct

Ian Penrose 1 September 2018 Until third AGM after appointment

unless not re-elected

90 days’ notice on either side or if not re-elected,

disqualiﬁcation or commits gross misconduct

Anna Massion 2 April 2019 Until third AGM after appointment

unless not re-elected

Linda Marston-Weston 1 October 2021 Until third AGM after appointment

unless not re-elected

Samy Reeb 4 January 2023 Until third AGM after appointment

unless not re-elected

134 Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Consideration of employment conditions elsewhere

inthe Company when setting Directors’ pay continued

As part of the Committee’s wider remit under the Code, the

Committee will continue to monitor pay policies and practices within

the wider Group and to provide input and challenge in respect of

current policies and practices as well as any proposed future review

and changes to ensure that they are appropriate, fair and aligned to

the Company’s remuneration principles and support the culture and

growth of the business.

With respect to employee engagement, the Chairman of the

Remuneration Committee (and the wider Board) engages with the

CEO of Snaitech, the COO of our B2B activities and the Global Head

of Human Resources on strategic and operational issues affecting and

of interest to the workforce, including remuneration, talent pipeline and

diversity and inclusion.

The Committee’s policy is that annual salary increases for Executive

Directors will not generally exceed the average annual salary increase

for the wider employee population determined with reference to the

country in which the Executive ordinarily works, unless there is a

particular reason for any increase, such as a change in the Executive’s

roles and responsibilities or a change in the size and complexity of

the business.

The Committee also considers external market benchmarking to

inform the Executive’s remuneration. External market benchmarking

is also considered in relation to remuneration decisions of the

widerworkforce.

Consideration of shareholders’ views

The Company is committed to engagement with shareholders and

has engaged extensively on remuneration and other issues since

the 2023 AGM, particularly as a consequence of the corporate

activity. Shareholders provided valuable input into the Company’s

Remuneration Policy.

Legacy arrangements

In approving the Remuneration Policy, authority is given to the

Company to honour any commitments previously entered into

withcurrent or former Directors that have been disclosed previously

toshareholders.

Discretion vested in the Remuneration Committee

The Remuneration Committee will operate the annual bonus and

LTIP according to their respective rules (or relevant documents) and

in accordance with the Listing Rules where relevant. The Committee

retains discretion, consistent with market practice, in a number of

regards to the operation and administration of these plans. These

include, but are not limited to, the following in relation to the LTIP:

• the participants;

• the timing of grant of an award;

• the size of an award;

• the determination of vesting;

• discretion required when dealing with a change of control or

restructuring of the Group;

• determination of the treatment of leavers based on the rules of the

plan and the appropriate treatment chosen;

• adjustments required in certain circumstances (e.g. rights issues,

corporate restructuring events and special dividends); and

• the annual review of performance measures and weighting, and

targets for the LTIP from year to year.

In relation to the annual bonus plan, the Remuneration Committee

retains discretion over:

• the participants;

• the timing of a payment;

• the determination of the amount of a bonus payment;

• the determination of the treatment of leavers; and

• the annual review of performance measures and weighting,

andtargets for the annual bonus plan from year to year.

In relation to both the Company’s LTIP and annual bonus plan, the

Committee retains the ability to adjust the targets and/or set different

measures if events occur (e.g. material acquisition and/or divestment

of a Group business) which cause it to determine that the conditions

are no longer appropriate and the amendment is required so that the

conditions achieve their original purpose and are not materially less

difficult to satisfy. Given the unique, fast-changing and challenging

environment in which the Group operates, the Remuneration

Committee considers that it needs some discretion if, acting fairly and

reasonably, it feels that the payout is inconsistent with the Company’s

overall performance taking account of any factors it considers relevant.

Any use of the above discretions would, where relevant, be explained

in the Annual Report on Remuneration and may, as appropriate, be the

subject of consultation with the Company’s major shareholders.

External directorships

The Group allows Executive Directors to hold a non-executive position

with one other company, for which they can retain the fees earned.

135Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Annual report on remuneration

The sections of this report subject to audit have been highlighted. The figures are shown both in Pounds and Euros, for ease of reference.

Directors’ emoluments (in £) (audited)

Mor Weizer Chris McGinnis

Executive Director 2023 2022 2023 2022

Salary

844,000 816,000 375,000 33,205

Bonus

1,603,600 1,632,000 600,000 —

Annual long-term incentive

3,4

— 1,519,451 — 227,918

Beneﬁts

36,698 38,271 3,125 260

Pension 63,300 107,100 28,625 2,490

Total emoluments

2,547,598 4,112,813 1,006,750 263,873

Total ﬁxed pay

943,998 961,371 406,750 35,956

Total variable pay

1,603,600 3,151,451 600,000 227,918

Directors’ emoluments (restated in €) (audited)

Mor Weizer Chris McGinnis

Executive Director 2023 2022 2023 2022

Salary

965,300 957,443 432,626 37,703

Bonus

1,850,024 1,914,886 692,201 —

Annual long-term incentive

3,4

— 1,746,356 — 261,953

Beneﬁts

42,195 44,798 3,606 294

Pension 72,796 125,895 33,024 2,816

Total emoluments

2,930,314 4,789,379 1,161,457 302,767

Total ﬁxed pay

1,080,290 1,128,137 469,255 40,814

Total variable pay

1,850,024 3,661,242 692,201 261,953

1 Basic salary of the Executive Directors is determined in Pounds Sterling and then converted into Euros at the average exchange rate applicable during the relevant financial year for the purpose of

this report. Chris McGinnis was appointed to the Board on 28 November 2022 on a base salary of £350,000 and therefore the amounts disclosed for 2022 are in respect of the period he served as

a Director. The Committee reviewed the Executive Directors’ salaries with effect from 1 January 2023. It was decided that Mor Weizer’s salary would be increased by 3.5%. As set out in last year’s

report, Chris McGinnis base salary was increased to £400,000 effective from 1 July 2023.

2 The figures for bonuses represent payments as determined by the Remuneration Committee for the Executive Directors based on the Company’s performance during each financial year and

by reference to their actual salary earned during the respective period. The bonuses were determined in Pounds Sterling and then converted into Euros at the exchange rates applicable as at

31December 2022 and 31 December 2023 respectively. Details of: (a) how the annual performance bonus for the Executive Directors was determined; and (b) the timing of bonus payments

are setout below. Chris McGinnis was appointed to the Board on 28 November 2022 but did not receive a bonus in respect of the period he served as a Director during 2022. At the time of

Chris McGinnis’ appointment as CFO in November 2022, and recognising that he was not to be entitled to a bonus for the period he served as a Director in 2022, it was agreed that, provided his

performance was to the level expected by the Board during his first year, the bonus for 2023 would be based on his salary for the second half of the year of £400,000.

3 The LTIP awards granted in October 2020 and vested in October 2023 were subject to an EPS performance condition (measured over a three-year period from 1 January 2020 to 31 December 2022)

and relative TSR performance conditions (measured over a three-year period from 26 October 2020 to 25 October 2023). As set out in last year’s report, the final vesting outcome under the EPS

condition was 93.4%. The final vesting outcome of the TSR conditions was 50.9%, and therefore the overall vesting outcome was 74.2%. This performance outcome corresponds to a total of 405,187

and 60,778 nil cost options vesting for Mor Weizer and Chris McGinnis respectively. The value included in the table for Mor and Chris is therefore £1,519,451 (€1,746,356) and £227,918 (€261,953),

based on the share price on 26 October 2023 of £3.75 (€4.31), of which £35,251 (€109,400) and £5,288 (€16,410) relate to share price appreciation respectively. Further details on the LTIP outcomes

for the 2020 awards are set out on page 138.

4 No LTIP award was granted in 2021 due to the Company being in a closed period for most of 2021.

5 Benefits include private medical insurance, permanent health insurance, car and life assurance.

6 The “Total fixed pay” and “Total variable pay” rows set out in the table may not appear to add up to the “Total emoluments” row due to rounding.

136 Playtech plc Annual Report and Financial Statements 2023

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Non-executive Directors’ emoluments (in £) (audited)

3,4

Fees Annual bonus

Beneﬁts Pension Total emoluments

Director 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022

Brian Mattingley 350,000 470,000 — — — — — — 350,000 470,000

Ian Penrose 175,000 262,000 — — — — — — 175,000 262,000

Anna Massion 155,000 252,000 — — — — — — 155,000 252,000

John Krumins

116,250 252,000 — — — — — — 116,250 252,000

Linda Marston-Weston 155,000 252,000 — — — — — — 155,000 252,000

Samy Reeb

143,750 — — — — — — — 143,750 —

Ruby Yam

58,333 — — — — — — — 58,333 —

Non-executive Directors’ emoluments (in €) (audited)

2,3,4

Fees are paid in Sterling and are translated into Euros in the table below:

Fees Total emoluments

Director 2023 2022 2023 2022

Brian Mattingley 402,603 545,963 402,603 545,963

Ian Penrose 201,275 301,726 201,275 301,726

Anna Massion 178,288 290,041 178,288 290,041

John Krumins

133,664 290,041 133,664 290,041

Linda Marston-Weston 178,276 290,041 178,276 290,041

Samy Reeb

165,482 — 165,482 —

Ruby Yam

68,116 — 68,116 —

1 Samy Reeb joined the Board on 4 January 2023 and Ruby Yam joined on 1 June 2023. Ruby Yam then stepped down on 11 July 2023 due to personal family reasons. John Krumins also stepped down

from the Board following publication of the Group’s interim results on 7 September 2023.

2 Non-executive Directors are not eligible to receive any variable pay under the Remuneration Policy, nor do they receive any remuneration in respect of benefits or pension.

3 The Chairman and Non-executive Directors received an increase effective from 1 January 2023. Further details of the fee levels are provided on page 139.

4 The Chairman and Non-executive Directors received additional fees in respect of the significant additional work performed in the year 2022, arising from the intense and lengthy corporate activity

and global regulatory work. It is estimated that each of the Chairman and Non-executive Directors spent at least an additional 32 days working in 2022 over and above their contracted days. As such,

it was determined that an additional fee equating to £132,000 (2021: £120,000) would be payable. This amount was based on the annual fee level for the Senior Independent Director, and then scaled

back so that the amount was no more than 10% above the additional fees paid in respect of 2021, despite the more than 50% increase in additional days’ work/commitment.

Determination of 2023 bonus

In accordance with the Company’s Remuneration Policy, the CEO and CFO had the opportunity to earn a bonus in respect of 2023 of 200%

and 150% of salary respectively. 2023 performance was assessed against a mixture of financial and non-financial targets as set out below.

Thebonus was payable on a sliding scale of 0% for threshold to 100% for maximum performance.

Performance metric Weighting Threshold Maximum Actual

CEO payout level

(% of maximum)

CFO payout level

(% of maximum)

Financial (70%):

Adjusted EBITDA (€’m) 50% €396m €420m €432m 50% 50%

Cash ﬂow (€’m) 20% €325m €350m €365m 20% 20%

Strategic and non-ﬁnancial (30%) 30% See below 25% 30%

Tot al 100% 95% 100%

As set out in the 2022 Directors’ Remuneration Report, the financial performance targets were divided this year between Adjusted EBITDA

and cash flow, with 50% and 20% weightings respectively. Adjusted EBITDA and cash generation are the key financial performance metrics of

the Company most closely representing the underlying trading performance of the business. When setting the EBITDA targets for 2023, the

Committee and Board took into consideration both consensus estimates and internal forecasts. The Adjusted EBITDA and cash flow targets were

set above City consensus in line with the business plan. Maximum payout for achieving the financial targets has been set for achieving 110% of the

stretching target level. During the year the targets were adjusted to reflect the reclassification of Snaitech online bank charges into EBITDA from

financing costs, consistent with the definition of Adjusted EBITDA that the Company uses in its external reporting. The Committee was satisfied that

the targets remained as stretching as originally intended. The cash flow target was achieved despite the year-end outstanding debtor balance from

Caliplay as the Company exceeded its EBITDA target, kept a tight control on costs and practised prudent working capital management.

The non-financial performance targets (representing 30% of the total bonus potential) were selected to underpin key strategic objectives of the

Group aligned with the business strategy. ESG targets set for 2023 were:

• Safer gambling – continued uptake and development of Playtech Protect solutions and safer gambling features.

• Environment – continued progress towards our stated emissions reduction target of 40% for Scope 1 and 2 emissions by 2025 (on a 2018

baseline) and supply chain emissions reduction as compared to a 2020 baseline.

• DEI targets – annual progress towards increasing female leadership to 35% from a 2021 baseline.

• Reputation, ethics and compliance – no new material ESG, ethical or compliance breaches resulting in significant reputational damage for the Group.

137

Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Annual report on remuneration continued

Determination of 2023 bonus continued

The Group made good progress against many of the key strategic

and operational objectives set at the beginning of the year.

• Developing relationships with the Company’s shareholder base

(CEO: 5%) – met based on the relationships developed over the

year with many of the Company’s newer shareholders.

• Establishing partnership agreements in the US (CEO: 5%) – met

based on the progress the Company continued to make in the US

including the agreement signed with Hard Rock Digital.

• Leading the negotiation of the Caliente agreement (CEO:

5%) – not met given the ongoing litigation with Caliplay as at

31December 2023.

• Delivering financial gains from driving efficiencies (CEO: 7.5%;

CFO:10%) – met based on the significant cost efficiencies delivered

as part of the Company’s multi-year transformation programme

which helped drive the Company’s strong performance in the year.

• ESG (CEO: 7.5%; CFO: 10%) – met based on the significant

progress on the ESG objectives in the year (please see the

Sustainability Report for further details).

• Expansion of the treasury function and review of forecasting and

internal controls functions (CFO: 10%) – met on the basis of the strong

progress in the year including establishment of a Treasury function

(appointing a Group Treasurer, significantly reducing number of

bank accounts and deploying idle cash to generate finance income),

reorganising the financial control function, establishing a three-year

planning process, and appointing a Director of Internal Controls.

The financial performance of Playtech was strong in 2023 with

performance exceeding the maximum target for both Adjusted

EBITDA and cash flow. In combination with the performance against

the strategic and non-financial metrics, this resulted in a 2023

annual bonus outcome for the CEO and CFO of 95% and 100% of

maximum respectively, corresponding to 190% and 150% of salary.

At the time of Chris McGinnis’ appointment as CFO in November

2022, and recognising that he was not to be entitled to a bonus

for the period he served as a Director in 2022, it was agreed that,

provided his performance was to the level expected by the Board

during his first year, the bonus for 2023 would be based on his salary

for the second half of the year of £400,000. The outcomes result

in a total payment of £1,603,600 and £600,000 for the CEO and

CFO respectively. 50% of these amounts (£801,800 and £300,000)

will be paid once the 2023 Annual Report and Accounts has been

signed off, a third of which (£267,267 and £100,000) will be used to

purchase shares in the market at this time, which will be subject to

recovery for two years. Despite the excellent financial performance,

the Remuneration Committee recognises that the ongoing dispute

with our largest customer, Caliplay, has weighed on shareholder

sentiment and Playtech’s stock price performance. The Board and

management are in ongoing discussions with Caliplay but there can

be no certainty on what any outcome might be. The Board is confident

that the outstanding funds will be recovered. In light of the dispute, the

Remuneration Committee has decided to exercise its discretion to

defer settlement of the remaining 50% of the annual bonus amounts

pending resolution on the ongoing litigation with Caliplay.

The Committee is satisfied that the annual bonus payments to

Executive Directors are a fair reflection of corporate and individual

performance during the year.

LTIP vesting in the year

The LTIP awards granted in October 2020 will vest subject to an EPS performance condition (measured over a three-year period from

1January2020 to 31 December 2022) and relative TSR performance conditions (measured over a three-year period from 26 October 2020

to25 October 2023). Based on performance to 31 December 2022, the outcome is expected to be as follows:

Weighting

% of award vesting for

threshold performance Threshold performance Maximum performance Actual performance

Outcome

(% of maximum)

Relative TSR – FTSE 250 index

(excluding investment trusts)

37.5% 25% 6.44% (median) 32.73%

(upper quartile)

36.76% 100%

Relative TSR – bespoke

37.5% 25% 31.63% (median) 67.77%

(upper quartile)

35.65%

Adjusted Diluted EPS 25% 25% 36 Euro cents 53 Euro cents 51.5 Euro cents 93.38%

Tot al 100% 74.21%

1 The bespoke peer group for the 2020 LTIP awards consisted of 888 Holdings plc, Betsson AB (B shares), Entain plc, International Game Technology plc, Gamesys Group plc, Kindred Group plc, Greek

Organization of Football Prognostics S.A. (OPAP S.A.),Flutter Entertainment plc, Rank Group plc, Sportech plc and William Hill plc.

Awards for Mor Weizer and Chris McGinnis vested on 26 October 2023 as follows:

Director Original number of awards granted Number of awards vested Total value

Total value due to share price

appreciation

Mor Weizer 546,000 405,187 £1,519,451 £35,251

Chris McGinnis 81,900 60,778 £227,918 £5,288

1 Based on the share price of £3.75 as at 26 October 2023.

2 Calculated as the share price on 26 October 2023 of £3.75 less the share price on the date of grant of £3.663.

The awards are also subject to a two-year retention period post vesting.

No award was granted in 2021, due to the Company being in a closed period for 2021, and as such there was no other LTIP vesting in the year.

138 Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

LTIP awards (audited)

On 5 May 2023 the following awards were made to the Executive Directors under the LTIP:

Director Type of award Total number of awards Aggregate market value (£)

Mor Weizer Nil cost option 292,548 1,688,002

Chris McGinnis Nil cost option 90,988 525,000

Awards represented 200% of salary for Mor Weizer and 150% of salary for Chris McGinnis based on a share price on grant of 577 pence.

Therehas been no change in the exercise price or date since the awards were granted.

The 2023 LTIP awards are subject to the following performance conditions:

Measure Weighting

% of award vesting

for threshold

performance Threshold Maximum Performance period

EPS growth 25% 25% 8% p.a. compounded 12% p.a. compounded 01.01.2023–31.12.2025

Relative TSR – FTSE 250

(excludinginvestment trusts)

37.5% 25% Median of the

comparator group

Upper quartile of the

comparator group

05.05.2023–04.05.2026

Relative TSR – bespoke peer group

37.5% 25% Median of the

comparator group

Upper quartile of the

comparator group

05.05.2023–04.05.2026

1 The bespoke peer group for the 2023 LTIP awards consisted of 888 Holdings plc, Aristocrat Leisure Limited, Betsson AB (B shares), DraftKings A, Entain plc, Evolution AB, Flutter Entertainment plc,

International Game Technology plc, Kindred Group plc, Light & Wonder inc, Greek Organization of Football Prognostics S.A. (OPAP S.A.), and Rank Group plc.

For performance between threshold and maximum, vesting will be determined on a straight-line basis. Any vesting will further be dependent

on the Committee ensuring that the level of TSR performance achieved is consistent with the underlying performance of Playtech over the

performance period.

Leaving arrangements for former CFO

The Remuneration Committee determined the following treatment

tohis variable remuneration.

2020 LTIP

As disclosed in last year’s report, recognising that Andrew Smith was

available to the business in the first half of 2023 (during his six-month

notice period) to assist in an orderly transition at this important time for

year-end financial reporting and controls, the Board determined that

Andrew Smith would be entitled to his 2020 LTIP award. As set out

above, the final vesting outcome of the 2020 LTIP award was 74.2%,

resulting in 130,825 awards vesting for Andrew Smith. The value of

these awards on the vesting date was £490,594.

Other payments

As part of Andrew Smith’s settlement agreement, it was determined

that he would be entitled to retain his company car following his

departure from the business. Prior to transferring ownership to

Andrew Smith, the company car was stolen during the year. As such,

the sums recovered from the Company’s insurance claim of £64,000

were paid to Andrew Smith.

2023 annual bonus

As disclosed in last year’s report, recognising that Andrew Smith was

available to the business in the first half of 2023 (during his six-month

notice period) to assist in an orderly transition at this important time for

year-end financial reporting and controls, the Board determined that

Andrew Smith would be eligible for pro-rata bonus payment for the

period until the end of his notice period during the 2023 financial year

and in relation to the financial proportion of the 2023 annual bonus

only. The amount paid to Andrew Smith was £233,923.

No payments other than those set out above were made to past

Directors in 2023.

Implementation of Policy for 2024

This section sets out the proposed implementation of the Directors’

Remuneration Policy in 2024. The proposed implementation does

not contain any deviations from the Directors’ Remuneration Policy

approved by shareholders at the 2021 AGM.

Salary and fee review

As stated last year, salary reviews for the Executive Directors take

place at the beginning of the calendar year as this will result in the

alignment of salary reviews with the Company’s financial year.

Accordingly, the Committee reviewed the salary for Mor Weizer, and

it was decided that Mor Weizer would not receive a salary increase.

Theaverage salary increase for 2024 awarded to those employees

across the UK workforce who were eligible for a salary increase was

1.4%. As stated previously, Chris McGinnis will not receive an increase

until 1 January 2025.

The Committee has commissioned a market benchmarking exercise

for all of the roles within its remit, including those in the wider senior

management team, and will reflect on the results of this as well as pay

and conditions across the wider workforce when considering any

further amendments to salary levels next year.

The Committee reviewed the fees paid to the Chairman and the

Non-executive Directors, and it was decided that these remain

appropriate following the increase awarded on 1 January 2023.

Therewill therefore be no increases to the fees for this population

effective from 1 January 2024.

As such, the current basic salary levels of the Executive and

Non-executive Directors from 1 January 2024 (together with the

Euro equivalent at 31 December 2023 based on the exchange rate

between Sterling and Euro used in the accounts) are:

• Mor Weizer: £844,000 (€973,697);

• Chris McGinnis: £400,000 (€461,468).

• Chairman: £350,000 (€403,784);

• Non-executive Director base fee: £140,000 (€161,514);

• additional Committee Chair fee: £15,000 (€17,305); and

• Senior Independent Director fee: £160,000 (€184,587).

139Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Annual report on remuneration continued

Implementation of Policy for 2024 continued

Benefits

Benefits will continue to be in line with the approved Policy.

Pension

The pension contributions to Executive Directors will be 7.5% of

salary, which is in line with the wider workforce.

Annual bonus

The annual bonus opportunity will remain unchanged at 200% of

salary for the CEO and 150% of salary for the CFO.

For 2024, bonuses for the Executive Directors will be based on

thefollowing:

Weighting Performance target

Adjusted EBITDA 50% Commercially conﬁdential

Cash ﬂow 20% Commercially conﬁdential

Non-ﬁnancial and

strategicobjectives

30% Commercially conﬁdential

The Adjusted EBITDA and cash flow targets have been set above

City consensus in line with the Company’s internal business plan.

The Committee considers the precise targets to be commercially

confidential at this time, but these will be disclosed retrospectively in

next year’s Annual Report on Remuneration.

The non-financial and strategic objectives will include ESG measures,

consistent with the approach taken in 2023.

The level of bonus payable by reference to the financial performance

of the Company will be determined on a sliding scale. There will be

retrospective disclosure of the targets and performance in next

year’s report.

The annual bonus will be subject to recovery and withholding

provisions in relation to material misstatement, gross misconduct or

material error in calculation, for a serious reputational event and in the

event of corporate failure. These provisions will apply for a period of

three years after payment.

In line with the proposed Policy, 33.3% of any bonus earned will be

payable in deferred shares.

Long Term Incentive Plan (LTIP)

In line with the normal schedule, the Committee intends to grant LTIP

awards this year at 200% of salary for the CEO and CFO.

Awards made to Executive Directors will vest on the third anniversary

of grant subject to: (i) participants remaining in employment (other

than in certain “good leaver” circumstances); and (ii) achievement

of challenging performance targets. The awards will be subject

to relative TSR and Adjusted EPS performance. Full details of the

performance targets will be disclosed at the time the awards are

made and will be in line with the current Remuneration Policy.

Any vesting will also be dependent on the Committee ensuring that

the level of performance achieved is consistent with the underlying

financial performance of Playtech over the performance period.

LTIP awards will be subject to a two-year retention period post vesting.

LTIP awards will be subject to recovery and withholding provisions

in relation to material misstatement, gross misconduct or material

error in calculation, for a serious reputational event and in the event

of corporate failure. These provisions will apply for a period of three

years post vesting.

Dilution limits

All of the Company’s equity-based incentive plans incorporate the

current Investment Association Guidelines on headroom which provide

that overall dilution under all plans should not exceed 10% over a

ten-year period in relation to the Company’s issued share capital (or

reissue of treasury shares), with a further limitation of 5% in any ten-

year period for executive plans. The Committee monitors the position

and prior to the making of any award considers the effect of potential

vesting of options or share awards to ensure that the Company remains

within these limits. Any awards which are required to be satisfied

by market purchased shares are excluded from such calculations.

Asat31December 2023 we hold nil Treasury Shares following the

transfer of Treasury Shares to the Employee Benefit Trust during

theyear. As at 1January 2023, we held 2,937,550 shares in Treasury.

Review of performance

The following graph shows the Company’s total shareholder return

(TSR) performance over the past ten years; the Company’s TSR

is compared with a broad equity market index. The index chosen

here is the FTSE 250, which is considered the most appropriate

published index.

200

180

160

140

120

100

Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22 Dec 23

Playtech FTSE 250

140 Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

The Remuneration Committee believes that the Remuneration Policy and the supporting reward structure provide a clear alignment with

thestrategic objectives and performance of the Company. To maintain this relationship, the Remuneration Committee constantly reviews

thebusiness priorities and the environment in which the Company operates. The table below shows the total remuneration of Mor Weizer over

thelast ten years and annual variable and long-term incentive pay awards as a percentage of the plan maxima.

Remuneration of the CEO

(Mor Weizer) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Total remuneration

(€’000) 1,740 2,449 2,346 4,192 2,055 2,931 1,905 10,802 4,950 2,930

Annual bonus (% of

maximum) 100% 87.5% 100% 93% 25% 65% 24% 100% 100% 95%

LTIP vesting (% of

maximum)

— — — 70% 22% — — 46.16% 74.21% N/A

1 As disclosed above, the LTIP award granted in 2020 is based on relative TSR performance until 25 October 2023, and therefore this figure represents the known EPS vesting and an estimate of the

relative TSR vesting as at 31 December 2022.

Percentage change in remuneration of Directors compared with employees

The following table sets out the percentage change in the salary/fees, benefits and bonus for each Director from 2020 to 2023 compared with

the average percentage change for employees. All percentages are calculated based on the GBP value of pay, as this reflects how pay is set,

ignoring the impact of exchange rate fluctuations. The increases, as detailed in this report, reflect the additional time spent on the business

during the intense period of activity during the last two years.

Salary/fees Beneﬁts Bonus

2019 to

2020

2020 to

2021

2021 to

2022

2022 to

2023

2019 to

2020

2020 to

2021

2021 to

2022

2022 to

2023

2019 to

2020

2020 to

2021

2021 to

2022

2022 to

2023

Executive Directors

Mor Weizer 0% -20.0% +2.0% +3.4%

+31.6%

-1.6% +10.5% -4.1% -63.1% +233.3% +2.0% -1.7%

Chris McGinnis N/A N/A N/A +1,029.3%

N/A N/A N/A +1,101.7%

N/A N/A N/A N/A

Non-executive

Directors

2,5

Brian Mattingley N/A N/A +69.6%

-25.5% N/A N/A N/A N/A N/A N/A N/A N/A

Ian Penrose +2.5% +116.7% +12.3% -33.2% N/A N/A N/A N/A N/A N/A N/A N/A

Anna Massion +2.5% +114.4% +9.2% -38.5% N/A N/A N/A N/A N/A N/A N/A N/A

John Krumins +2.5% +114.4% +9.2% -53.9% N/A N/A N/A N/A N/A N/A N/A N/A

Linda Marston-

Weston N/A N/A +260.0%

-38.5% N/A N/A N/A N/A N/A N/A N/A N/A

Samy Reeb

N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Ruby Yam

N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Wider workforce

Average employee –

UK based +2.7% +4.5% +11% +8% +6% +0.8% +9.4% +6.8% +22% -15.6% +83% -10%

1 Playtech plc has no employees. The UK workforce was chosen as a comparator group as the Remuneration Committee looks to benchmark the remuneration of the Chief Executive Officer with

reference mainly to the UK market (albeit that he has a global role and responsibilities, and remuneration packages across the Group vary widely depending on local market practices and conditions).

2 The percentage change figures shown above between 2020 and 2021 for the Non-executive Directors have been updated to reflect additional fees paid during 2022 in respect of additional time

commitment during 2021.

3 The increase in the value of Mor Weizer’s benefits was due to the provision of a fully expensed company car.

4 The increase in the value of Chris McGinnis’ salary and benefits in 2023 was due to his appointment to the Board part way through 2022. No change in the bonus amount can be provided for 2023 as

he did not receive a bonus in respect of service as an Executive Director in 2022.

5 The increase for the Non-executive Directors in 2022 reflects additional fees paid in respect of the significant additional work performed in the year.

6 The increase in the value of Brian Mattingley and Linda Marston-Weston’s fees in 2022 was due to their appointment to the Board part way through 2021.

7 Samy Reeb and Ruby Yam joined the Board in the year; therefore we are unable to compare changes in remuneration from prior years.

141Playtech plc Annual Report and Financial Statements 2023

Governance ReportRemuneration Report

Annual report on remuneration continued

Pay ratio information in relation to the total remuneration of the Director undertaking the role of Chief

Executive Officer

The table below compares the single total figure of remuneration for the Chief Executive Officer with that of the Group employees who are paid

at the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile) of its UK employee population between

2019 and 2023:

Year Methodology 25th percentile pay ratio Median pay ratio 75th percentile pay ratio

2023 Method A 59:1 41:1 28:1

2022 Method A 114:1 75:1 51:1

2021 Method A 229:1 160:1 107:1

2020 Method A 43:1 31:1 21:1

2019 Method A 73:1 52:1 35:1

The employees included are those employed on 31 December 2023 and remuneration figures are determined with reference to the financial

year to 31 December 2023. The CEO is paid in GBP Sterling and the ratios have been calculated using the CEO’s 2023 total single figure of

remuneration expressed in GBP Sterling (£2.5 million).

Option A, as set out under the reporting regulations, was used to calculate remuneration for 2023, in line with the approach taken in 2022,

aswebelieve that that is the most robust methodology for calculating these figures.

The value of each employee’s total pay and benefits was calculated using the single figure methodology consistent with the CEO, with the

exception of annual bonuses, where the amount paid during the year was used (i.e. in respect of the 2022 financial year) as 2023 employee

annual bonuses had not yet been determined at the time this report was produced. No elements of pay have been omitted. Where required,

remuneration was approximately adjusted to be on a full-time and full-year equivalent basis based on the employee’s contracted hours and

theproportion of the year they were employed.

The table below sets out the salary and total pay and benefits for the three quartile point employees:

25th percentile 50th percentile 75th percentile

Salary

Total pay

and beneﬁts Salary

Total pay

and beneﬁts Salary

Total pay

and beneﬁts

2023 £42,032 £43,443 £53,138 £62,068 £80,837 £92,117

The Committee considers that the median CEO pay ratio is consistent with the relative roles and responsibilities of the CEO and the identified

employee. Base salaries of all employees, including our Executive Directors, are set with reference to a range of factors including market

practice, experience and performance in role. The CEO’s remuneration package is weighted towards variable pay (including the annual

bonus and LTIP) due to the nature of the role, and this means the ratio is likely to fluctuate depending on the outcomes of incentive plans in

each year. The lower ratio this year reflects the fact that there was no LTIP vesting for the CEO in respect of the performance period ended

31December 2023.

The Committee also recognises that, due to the flexibility permitted within the regulations for identifying and calculating the total pay and

benefits for employees, as well as differences in employment and remuneration models between companies, the ratios reported above may not

be comparable to those reported by other companies.

Relative importance of spend on pay

The following table sets out the amounts paid in share buybacks and dividends, and total remuneration paid to all employees:

Payouts

2023

€’m

2022

€’m

Change

Dividends — — 0%

Share buybacks — — 0%

Total employee remuneration

444.7 435.0 +2.2%

1 Total employee remuneration for continuing and discontinued operations includes wages and salaries, social security costs, share-based payments and pension costs for all employees, including

the Directors.

142

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Directors’ interests in ordinary shares (audited)

Director

Ordinary shares

Share awards and share options

31 December

Total interests at

December 20232023 2022 2023 2022

Executive Directors

2,3,6

Mor Weizer

1,4

376,475 332,050 2,761,662 2,863,949 3,138,137

Chris McGinnis 5,000 5,000 151,766 81,900 156,766

Non-executive Directors

Brian Mattingley — — — — —

Ian Penrose 20,000 17,500 — — 20,000

Anna Massion 32,000 32,000 — — 32,000

John Krumins

18,000 18,000 — — 18,000

Linda Marston-Weston — — — — —

Samy Reeb — — — — —

Ruby Yam

— — — — —

1 The CEO’s and CFO’s share ownership is 200% and 6% of salary respectively based on the closing share price of 448.6 pence on 31 December 2023.

2 Share options are granted for nil consideration.

3 These options were granted in accordance with the rules of the Playtech Long Term Incentive Plan 2012 or the Playtech Long Term Incentive Plan 2022 (the “Option Plans”). Options under the Option

Plans are granted as nil cost options and, in the case of Executive Directors exclusively, the options vest and become exercisable on the third anniversary of the notional grant date. Unexercised

options expire ten years after the date of grant, unless the relevant employee leaves the Group’s employment, in which case the unvested options lapse and any vested options lapse three months

after the date that the employment ends.

4 Mr Weizer and Mr Smith were each granted an award in 2022 over 351,724 and 144,041 shares respectively. The Adjusted EPS performance condition is based over the financial year ending

31December 2024, whilst the relative TSR performance conditions are based over the period of 19 August 2022 to 18 August 2025 with normal vesting scheduled for 18 August 2025. The awards

granted to Mr Smith lapsed on cessation as part of the settlement agreement. Mr Weizer and Mr McGinnis were each also granted an award in 2023 over 292,548 and 90,988 shares respectively.

The Adjusted EPS performance condition is based over the financial year ending 31December 2025, whilst the relative TSR performance conditions are based over the period of 5 May 2023 to

4May 2026 with normal vesting scheduled for 4 May 2026.

5 The shareholdings for John Krumins and Ruby Yam have been disclosed at the date at which they stepped down from the Board.

6 There was no movement in share interests between 31 December 2023 and the date of publication.

Role and membership

The Remuneration Committee is currently comprised entirely of three independent Non-executive Directors as defined in the Code. Anna

Massion chairs the Committee, and the other members are Ian Penrose and Linda Marston-Weston.

Details of attendance at the Remuneration Committee meetings are set out on page 114 and their biographies and experience on pages

108 and 109.

The Committee operates within agreed terms of reference detailing its authority and responsibilities. The Committee’s terms of reference are

available for inspection on the Company’s website, www.playtech.com, and include:

• determining and agreeing the Policy for the remuneration of the CEO, the CFO, the Chairman and other members of the senior

management team;

• reviewing the broad Policy framework for remuneration to ensure it remains appropriate and relevant;

• reviewing the design of and determining targets for any performance-related pay and the annual level of payments under such plans;

• reviewing the design of and approving any changes to long-term incentive or option plans; and

• ensuring that contractual terms on termination and payments made are fair to the individual and the Company and that failure is not rewarded.

The Remuneration Committee also considers the terms and conditions of employment and overall remuneration of Executive Directors, the

Company Secretary and members of the senior management team and has regard to the Company’s overall approach to the remuneration of all

employees. Within this context the Committee determines the overall level of salaries, incentive payments and performance-related pay due to

Executive Directors and senior management. The Committee also determines the performance targets and the extent of their achievement for

both annual and long-term incentive awards operated by the Company and affecting the senior management. In order to manage any potential

conflicts of interest, no Director is involved in any decisions as to his/her own remuneration.

The Remuneration Committee takes advice from both inside and outside the Group on a range of matters, including the scale and composition

of the total remuneration package payable to people with similar responsibilities, skills and experience in comparable companies, sectors and

geographies that have extensive operations inside and outside the UK. A benchmarking exercise of the highest paid 20 individuals has recently

been undertaken, to provide assurance that the remuneration levels and structures remain appropriate.

During the year the Remuneration Committee received assistance and advice from the Company Secretary, Brian Moore (who is also secretary

to the Committee).

143Playtech plc Annual Report and Financial Statements 2023

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Role and membership continued

The Remuneration Committee has a planned schedule of at least three meetings throughout the year, with additional meetings and Zoom calls

held when necessary. During 2023, the Committee met four times, addressing a wide variety of issues, including:

Month Principal activity

January

• Review of bonus and other incentivisation arrangements in relation to Executive Directors and

members of senior management

• Review of pay increases for 2023

March

• Consideration of LTIP grant proposals for 2023

• Consideration of incentivisation arrangements in relation to members of senior management

at Snaitech

• Consideration of fees for Non-executive Directors

• Consideration of benchmarking proposals

May

• Finalising LTIP grants for 2023

November

• Bonus proposals for 2023

• Review of LTIP allocation bands

• New Remuneration Policy for 2024 AGM

External advisers

PwC served as the independent adviser to the Committee during 2023. PwC is a member of the Remuneration Consultants Group and, as such,

voluntarily operates under the code of conduct in relation to executive remuneration consulting in the UK. Total fees for advice provided to the

Committee were £80,040 on a time and materials basis.

Engagement with shareholders and shareholder voting

At the 2023 AGM the total votes received in favour of resolution for the Remuneration Report were 81.65%. Following the AGM and throughout

the year, the Group has continued to engage with shareholders. The Committee consulted with major shareholders following the AGM to

understand their views regarding the level of dissent shown in respect of the Remuneration Report. The principal reason given by those

shareholders who were unable to support the resolutions related to the leaving arrangements in respect of the former CFO. Shareholders were

more supportive of the changes to remuneration implemented since 2021 and therefore the Committee has not made any changes to how it

operates the ongoing Remuneration Policy during 2023.

The Directors’ Remuneration Policy and the Directors’ Annual Report on Remuneration were each subject to a shareholder vote at the AGM held

on 26 May 2021 and 24 May 2023 respectively, the results of which were as follows:

For Against Withheld

Approval of Remuneration Report (24 May 2023) 206,807,047

(81.65%)

46,468,278

(18.35%)

16,701,536

Approval of Remuneration Policy (26 May 2021) 177,453,581

(75.47%)

57,668,932

(24.53%)

155,838

Annual report on remuneration continued

144 Playtech plc Annual Report and Financial Statements 2023

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Engagement with the wider workforce

With respect to employee engagement, the Board and Chair of the

Remuneration Committee engages with the COO of B2B, the CEO

of Snaitech and Global Head of Human Resources on strategic and

operational issues affecting and of interest to the workforce, including

remuneration, talent pipeline and diversity and inclusion. The COO

and CEO are standing attendees at the Board meetings. In addition,

the Company has established a Speak Up hotline, which enables

employees to raise concerns confidentially and independently of

management. Any concerns raised are reported into the Head of

Legal and Head of Compliance for discussion and consideration

by the Risk and Compliance Committee. The Board considers the

current mechanisms appropriate for understanding and factoring in

stakeholder concerns into plc level decision making. However, the

Board will assess whether additional mechanisms can strengthen

its understanding and engagement of stakeholder concerns in

the future.

Specifically, wide-ranging discussions were held around

remuneration, reviewing benchmarking data about the

competitiveness of Playtech’s basic pay levels compared to peer

groups and geographies. Bonus targets and quanta were reviewed to

continue to improve the alignment of individual and Group operating

and strategic performance. The Committee also took the opportunity

to consider the list of team members who historically have been

eligible for an LTIP grant, to ensure that this element of aligning

employee and shareholder interests remains appropriate.

Furthermore, and working in conjunction with the Sustainability and

Public Policy Committee, several discussions were held reviewing the

Company’s approach to diversity and inclusion, followed by setting

the Company goals and targets in this area.

During 2023, the Board discussed, reviewed and engaged on a

number of stakeholder issues. The material stakeholder topics

discussed by the Board in 2023 included:

• executive compensation and pay;

• environmental, social and governance matters;

• developing the business in markets;

• corporate governance;

• diversity;

• inclusion and gender pay gap and regulatory and

compliancedevelopments;

• safer gambling;

• data protection;

• environment;

• anti-money laundering and anti-bribery and corruption;

• human rights and modern slavery;

• responsible supply chain and procurement; and

• commercial developments with B2B licensees and third parties.

By order of the Board

Anna Massion

Chair of the Remuneration Committee

26 March 2024

145Playtech plc Annual Report and Financial Statements 2023

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Directors’ report

The Directors are pleased to present to shareholders their

report and the audited financial statements for the year ended

31December 2023.

The Directors’ Report should be read in conjunction with the other

sections of this Annual Report: the Strategic Report, including

the Responsible Business and Sustainability Report and the

Remuneration Report, all of which are incorporated into this Directors’

Report by reference.

The following also form part of this report:

• the reports on corporate governance set out on pages 104 to 151;

• information relating to financial instruments, as provided in the

notesto the financial statements; and

• related party transactions as set out in Note 37 to the

financialstatements.

Annual Report and Accounts

The Directors are aware of their responsibilities in respect of the

Annual Report. The Directors consider that the Annual Report,

taken as a whole, is fair, balanced and understandable and provides

the information necessary for shareholders to assess the Group’s

performance, business model and strategy. The Statement of

Directors’ Responsibilities appears on page 151.

Principal activities and business review

The Group is the gambling industry’s leading technology company,

delivering business intelligence-driven gambling software, services,

content and platform technology across the industry’s most popular

product verticals, including casino, live casino, sports betting, virtual

sports, bingo and poker. It is the pioneer of omni-channel gambling

technology through its integrated platform technology. As of June

2018, through the acquisition of Snaitech, the Group directly owns

andoperates a leading sports betting and gaming brand in online

andretail in Italy.

Playtech plc is a public listed company, with a premium listing on the

Main Market of the London Stock Exchange. It is incorporated in the

Isle of Man and domiciled in the UK.

The information that fulfils the requirement for a management report

as required by Rule 4.1.5 of the Disclosure Guidance and Transparency

Rules applicable to the Group can be found in the Strategic Report

on pages 1 to 102 which also includes an analysis of the development,

performance and position of the Group’s business. A statement of

the key risks and uncertainties facing the business of the Group at the

end of the year is found on pages 95 to 100 of this Annual Report and

details of the policies and the use of financial instruments are set out in

Note 6 to the financial statements.

Directors and Directors’ indemnity

The Directors of the Company who held office during 2023 and to

date are:

Appointed Resigned

Brian Mattingley 01.06.2021 —

Mor Weizer 02.05.2007 —

Ian Penrose 01.09.2018 —

Anna Massion 02.04.2019 —

John Krumins 02.04.2019 29.09.2023

Linda Marston-Weston 01.10.2021 —

Chris McGinnis 28.11.2022 —

Samy Reeb 04.01.2023 —

Ruby Yam 01.06.2023 11.07.2023

All of the current Directors will stand for election and/or re-election at

the forthcoming Annual General Meeting to be held on 22 May 2024.

Save as set out in Note 37 to the financial statements, no Director

had a material interest in any significant contract, other than a service

contract or contract for services, with the Company or any of its

operating companies at any time during the year.

The Company also purchased and maintained throughout 2023

Directors’ and Officers’ liability insurance in respect of itself and

itsDirectors.

Corporate governance statement

The Disclosure Guidance and Transparency Rules require certain

information to be included in a corporate governance statement in the

Directors’ Report. Information that fulfils the requirements of the corporate

governance statement can be found in the Governance Report on pages

104 to 151 and is incorporated into this report by reference.

Disclaimer

The purpose of these financial statements (including this report) is to

provide information to the members of the Company. The financial

statements have been prepared for, and only for, the members of

the Company, as a body, and no other persons. The Company, its

Directors and employees, agents and advisers do not accept or

assume responsibility to any other person to whom this document is

shown or into whose hands it may come and any such responsibility

orliability is expressly disclaimed.

The financial statements contain certain forward-looking statements

with respect to the operations, performance and financial condition of

the Group. By their nature, these statements involve uncertainty since

future events and circumstances can cause results and developments

to differ materially from those anticipated. The forward-looking

statements reflect knowledge and information available at the date

of preparation of these financial statements and the Company

undertakes no obligation to update these forward-looking statements.

Nothing in this document should be construed as a profit forecast.

146 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Results and dividend

The results of the Group for the year ended 31 December 2023 are

set out on pages 161 to 235. The Company is not recommending the

payment of a final dividend for the year ended 31 December 2023.

Thissituation will be reviewed throughout 2024.

Going concern, viability, responsibilities and disclosure

The current activities of the Group and those factors likely to affect

its future development, together with a description of its financial

position, are described in the Strategic Report. Critical accounting

estimates affecting the carrying values of assets and liabilities of the

Group are discussed in Note 7 to the financial statements.

The principal and emerging risks are set out in detail in the Strategic

Report on pages 97 to 100 together with a description of the ongoing

mitigating actions being taken across the Group. The Board carries

out a robust assessment of these risks on an annual basis, with

regular updates being presented at Board and Board Committee

meetings. These meetings receive updates from Finance, Legal,

Tax, Operations, Internal Audit, Regulatory and Compliance, Data

Protection, Human Resources, IT Security and Group Secretariat.

TheGroup maintains a risk register which is monitored and reviewed

on a continuous basis.

During 2023, the Board carried out an assessment of these principal

risks facing the Group, including those factors that would threaten its

future performance, solvency or liquidity. This ongoing assessment

forms part of the Group’s strategic plan.

After making appropriate enquiries and having regard to the

Group’s cash balances and normal business planning and control

procedures, to include a detailed analysis of various scenarios,

the Directors have a reasonable expectation that the Company

and the Group have adequate resources to continue in operational

existence and meet their liabilities for a period of at least 15 months

from the date of approval of the financial statements. In respect of the

viability assessment, the Directors reviewed a three-year forecast

considering the viability status for the period to December 2026 in

accordance with the Group’s three-year plan, which is considered

to be an appropriate period over which the Group can predict its

revenue, cost base and cash flows with a higher degree of certainty,

as opposed to more arbitrary forms of forecasts based solely on

percentage increases. Notwithstanding projected profitability over

the forecast period, the Directors have no reason to believe that the

Group’s viability will be threatened over a period longer than that

covered by the positive confirmation of long-term viability as per

the Viability Statement on pages 101 and 102. Given the above, the

Directors continue to adopt the going concern basis in preparing

the accounts.

Significant shareholdings

As of 22 March 2024, the Company had been advised of the following

significant shareholders each holding more than 3% of the Company’s

issued share capital, based on 309,294,243 ordinary shares in issue.

Shareholder %

No. of ordinary

Interactive Brokers (EO) 7.82 24,185,203

Albula Investment Fund 5.37 16,594,432

TT Bond Partners 4.93 15,237,921

Future Capital Group 4.85 15,000,000

Setanta Asset Management 4.58 14,170,732

Mr Paul Suen Cho Hung 4.56 14,115,010

Vanguard Group 4.54 14,031,959

Blackrock 3.75 11,600,111

Dr Choi Chiu Fai Stanley 3.72 11,517,241

Dimensional Fund Advisors 3.36 10,385,793

The persons set out in the table above have notified the Company

pursuant to Rule 5 of the Disclosure Guidance and Transparency

Rules of their interests in the ordinary share capital of the Company.

The Company has not been notified of any changes to the above

shareholders between 22 March 2024 and the date of this report.

Capital structure

As at 28 February 2024, the Company had 309,294,243 issued

shares of no-par value. The Company has one class of ordinary share

and each share carries the right to one vote at general meetings of the

Company and to participate in any dividends declared in accordance

with the articles of association. No person has any special rights of

control over the Company’s share capital.

The resolutions covering the authorities under the Company’s articles

of association for the Directors to issue new shares for cash and

purchase its own shares were not passed at the Company’s Annual

General Meeting held in May 2023. Consideration is being given as to

whether resolutions will be put forward to shareholders at this year’s

Annual General Meeting to consider and approve the authority for the

Company to issue shares for cash and purchase its own shares.

Articles of association

The articles of association contain provisions similar to those which

are contained within the articles of association of other companies in

the gambling industry, namely to permit the Company to: (i) restrict the

voting or distribution rights attaching to ordinary shares; or (ii) compel

the sale of ordinary shares if a “Shareholder Regulatory Event”

(as defined in the articles of association) occurs. A Shareholder

Regulatory Event would occur if a holder of legal and/or beneficial

interests in ordinary shares does not satisfactorily comply with a

regulator’s request(s) and/or the Company’s request(s) in response

to regulatory action and/or the regulator considers that such

shareholder may not be suitable (a determination which in all practical

effects is at the sole discretion of such regulator) to be the holder

of legal and/or beneficial interests in ordinary shares. Accordingly,

to the extent a relevant threshold of ownership is passed, or to the

extent any shareholder may be found by any such regulator to be able

to exercise significant and/or relevant financial influence over the

Company and is indicated by a regulator to be unsuitable, a holder of

an interest in ordinary shares may be subject to such restrictions or

compelled to sell its ordinary shares (or have such ordinary shares

sold on its behalf).

147Playtech plc Annual Report and Financial Statements 2023

Governance Report

Voting rights

Subject to any special rights or restrictions as to voting attached to

any shares by or in accordance with the articles of association, on a

show of hands every member who is present in person or by proxy

and entitled to vote has one vote and on a poll every member who

is present in person or by proxy and entitled to vote has one vote for

every share of which he is the holder.

Restrictions on voting

No member shall, unless the Board otherwise determines, be entitled

to vote at a general meeting or at any separate meeting of the holders

of any class of shares, either in person or by proxy, in respect of any

share held by him or to exercise any right as a member unless all calls

or other sums presently payable by him in respect of that share have

been paid to the Company. In addition, any member who, having

been served with a notice by the Company requiring such member to

disclose to the Board in writing, within such reasonable period as may

be specified in such notice, details of any past or present beneficial

interest of any third party in the shares or any other interest of any

kind whatsoever which a third party may have in the shares, and the

identity of the third party having or having had any such interest, fails

to do so may be disenfranchised by service of a notice by the Board.

Transfer

Subject to the articles of association, any member may transfer all or

any of his or her certificated shares by an instrument of transfer in any

usual form or in any other form which the Board may approve. The

Board may, in its absolute discretion, decline to register any instrument

of transfer of a certificated share which is not a fully paid share or

on which the Company has a lien. The Board may also decline to

transfer is: (i) delivered for registration to the registered agent, or at

such other place as the Board may decide; and (ii) accompanied by

the certificate for the shares to be transferred except in the case of

a transfer where a certificate has not been required to be issued by

the certificate for the shares to which it relates and/or such other

evidence as the Board may reasonably require to prove the title of the

transferor and the due execution by him of the transferor, if the transfer

is executed by some other person on his behalf, the authority of that

person to do so, provided that where any such shares are admitted to

AIM, the Official List maintained by the UK Listing Authority or another

recognised investment exchange.

Amendment of the Company’s articles of association

Any amendments to the Company’s articles of association may be

made in accordance with the provisions of the Isle of Man Companies

Act 2006 by way of special resolution.

Appointment and removal of Directors

Unless and until otherwise determined by the Company by ordinary

resolution, the number of Directors (other than any alternate

Directors) shall not be less than two and there shall be no maximum

number ofDirectors.

Powers of Directors

Subject to the provisions of the Isle of Man Companies Act 2006,

the memorandum and the articles of association of the Company

and to any directions given by special resolution, the business of the

Company shall be managed by the Board, which may exercise all the

powers of the Company.

Appointment of Directors

Subject to the articles of association, the Company may, by ordinary

resolution, appoint a person who is willing to act to be a Director, either

to fill a vacancy, or as an addition to the existing Board, and may also

determine the rotation in which any Directors are to retire. Without

prejudice to the power of the Company to appoint any person to be a

Director pursuant to the articles of association, the Board shall have

power at any time to appoint any person who is willing to act as a

Director, either to fill a vacancy or as an addition to the existing Board,

but the total number of Directors shall not exceed any maximum

number fixed in accordance with the articles of association. Any

Director so appointed shall hold office only until the next Annual

General Meeting of the Company following such appointment and

shall then be eligible for re-election but shall not be taken into account

in determining the number of Directors who are to retire by rotation at

that meeting.

Retirement of Directors

At each Annual General Meeting, one-third of the Directors (excluding

any Director who has been appointed by the Board since the previous

Annual General Meeting) or, if their number is not an integral multiple

of three, the number nearest to one-third but not exceeding one-

third shall retire from office (but so that if there are fewer than three

Directors who are subject to retirement by rotation under this article

one shall retire).

Removal of Directors

The Company may by ordinary resolution passed at a meeting called

for such purpose, or by written resolution consented to by members

holding at least 75% of the voting rights in relation thereto, remove any

Director before the expiration of his period of office notwithstanding

anything in the articles of association or in any agreement between

the Company and such Director and, without prejudice to any claim

for damages which he may have for breach of any contract of service

between him and the Company, may (subject to the articles) by

ordinary resolution, appoint another person who is willing to act as

a Director in his place. A Director may also be removed from office

by the service on him of a notice to that effect signed by all the

otherDirectors.

Significant agreements

There are no agreements or arrangements to which the Company

is a party that are affected by a change in control of the Company

following a takeover bid, and which are considered individually

significant in terms of their impact on the business of the Group

as a whole.

The rules of certain of the Company’s incentive plans include

provisions which apply in the event of a takeover or reconstruction.

Related party transactions

Details of all related party transactions are set out in Note 37 to the

financial statements. Internal controls are in place to ensure that any

related party transactions involving Directors, or their connected

persons are carried out on an arm’s length basis and are disclosed in

the financial statements.

Directors’ report continued

148 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Political and charitable donations

During the year ended 31 December 2023 the Group made charitable

donations of €2.5 million (2022: €2.7 million), primarily to charities that

fund research into, and for the treatment of, problem gambling but also

to a variety of charities operating in countries in which the Company’s

subsidiaries are based.

The Group made no political donations during this period (2022: Nil).

Sustainability and employees

Information with respect to the Group’s impact on the environment and

other matters concerning sustainability can be found on pages 48 to 87.

Employee engagement continues to be a top priority across the Group

and, in accordance with principle D of the Code, we are looking at ways

to increase engagement with our workforce and a further update will

be included in next year’s Annual Report. Various initiatives involving

our employees are set out in the Strategic Report on pages 1 to 102

and in the statement dealing with our relationship with stakeholders on

pages 44 to 47.

Applications for employment by disabled persons are always fully

and fairly considered, bearing in mind the aptitude and ability of

the applicant concerned. The Group places considerable value

on the involvement of its employees and has continued to keep

them informed of matters affecting them as employees and on the

performance of the Group and has run information days for employees

in different locations across the Group during the year. Details of our

engagement with stakeholders are set out on pages 44 to 47. Some

employees are stakeholders in the Company through participation in

share option plans. Information provided by the Company pursuant to

the Disclosure Guidance and Transparency Rules is publicly available

via the regulatory information services and the Company’s website,

www.playtech.com.

Branches

Playtech plc has established a branch in England and Wales.

The Company’s subsidiary, Playtech Holdings Limited, has

established branches in Argentina, England and Wales. Playtech

Software Limited (UK) has established a branch in Gibraltar.

Intelligent Gaming Systems Limited has established a branch in

Argentina. Quickspin AB has established a branch in Malta. V.B.

Video (Cyprus) Limited has established a branch in Italy. VF 2011

Limited has established a branch in Gibraltar and Playtech Software

Bulgaria Limited has established a branch in Spain. Playtech Retail

Limited has established a branch in The Philippines. S-Tech Limited

has established a branch in The Philippines. Paragon Customer

Care Limited has established a branch in The Philippines. All three

branches in The Philippines are in the process of being closed.

Regulatory disclosures

The information in the following tables is provided in compliance with

the Listing Rules and the Disclosure Guidance and Transparency

Rules (DTRs).

The DTRs also require certain information to be included in a

corporate governance statement in the Directors’ Report. Information

that fulfils the requirements of the corporate governance statement

can be found in the Governance Report on page 110 and is

incorporated into this Directors’ Report by reference.

Disclosure table pursuant to Listing Rule 9.8.4C

Listing Rule Information included Disclosure

9.8.4(1) Interest capitalised by the Group None

9.8.4(2) Unaudited ﬁnancial information None

9.8.4(4) Long-term incentive scheme only involving a Director None

9.8.4(5) Directors’ waivers of emoluments None

9.8.4(6) Directors’ waivers of future emoluments None

9.8.4(7) Non-pro-rata allotments for cash None

9.8.4(8) Non-pro-rata allotments for cash by major subsidiaries None

9.8.4(9) Listed company is a subsidiary of another N/A

9.8.4(10) Contracts of signiﬁcance None

9.8.4(11) Contracts of signiﬁcance involving a controlling shareholder None

9.8.4(12) Waivers of dividends None

9.8.4(12) Waivers of future dividends None

9.8.4(14) Agreement with a controlling shareholder None

149Playtech plc Annual Report and Financial Statements 2023

Governance Report

Additional information provided pursuant to Listing Rule 9.8.6

Listing Rule Information included Disclosure

9.8.6(1) Interests of Directors (and their connected persons) in the shares of

the Company at the year end and not more than one month prior to

the date of the notice of AGM

See page 143

9.8.6(2) Interests in Playtech shares disclosed under DTR5 at the year end

and not more than one month prior to the date of thenotice of AGM

See page 147

9.8.6(3) The going concern statement See page 94

9.8.6(4)(a) Amount of the authority to purchase own shares available

atthe year end

Nil

9.8.6(4)(b) Off-market purchases of own shares during the year None

9.8.6(4)(c) Off-market purchases of own shares after the year end None

9.8.6(4)(d) Non-pro-rata sales of treasury shares during the year None

9.8.6(5) Compliance with the principles of the UK Corporate

Governance Code

See the statement on page 110

9.8.6(6) Details of non-compliance with the UK Corporate Governance Code See the statement on page 110

9.8.6(7) Re Directors proposed for re-election, the unexpired term oftheir

service contract and a statement about Directors without a

service contract

The CEO and CFO serve under service contracts described

on page 112. The Chairman and the Non-executive Directors

serve under letters of appointment described on page 112

9.8.6(8) TCFD Recommendations and Recommended Disclosures See pages 75 to 81

9.8.6(9) Statement on board diversity See page 113

9.8.6(10) Numerical data on ethnic background See page 113

9.8.6(11) Explanation of approach to collecting data for LR9.8.6 R (9) and (10) See page 113

Directors’ report continued

150 Playtech plc Annual Report and Financial Statements 2023

Governance Report

Statement of Directors’ Responsibilities

The Directors have elected to prepare the consolidated financial

statements for the Group in accordance with UK-adopted

International Accounting Standards and have elected to prepare the

Company financial statements in accordance with FRS 101 Reduced

Disclosure Framework.

The Directors are responsible under applicable law and regulation

for keeping proper accounting records which disclose with

reasonable accuracy at any time the financial position of the Group,

for safeguarding the assets and for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

In preparing each of the Group and Parent Company financial

statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable

and prudent;

• for the Group financial statements state whether they have been

prepared in accordance with International Accounting Standards as

adopted by the UK subject to any material departures disclosed and

explained in the financial statements;

• for the Parent Company financial statements state whether they have

been prepared in accordance with UK accounting standards (FRS

101), subject to any material departures disclosed and explained in

the parent Company financial statements;

• assess the Group and Parent Company’s ability to continue as

a going concern, disclosing, as applicable, matters related to

going concern;

• use the going concern basis of accounting unless they either intend

to liquidate the Group or the Parent Company or to cease operations,

or have no realistic alternative but to do so; and

• prepare financial statements which give a true and fair view of the

state of affairs of the Group and the Parent Company and of the profit

or loss of the Group and the Parent Company for that period.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Parent Company’s

transactions and disclose with reasonable accuracy at any time

the financial position of the Parent Company and enable them to

ensure that its financial statements comply with the Isle of Man

Companies Act 2006. They are responsible for such internal control

as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to

fraud or error, and have general responsibility for taking such steps

as are reasonably open to them to safeguard the assets of the Group

and to prevent and detect fraud and other irregularities. The Directors

are responsible for the maintenance and integrity of the corporate and

financial information included on the Company’s website. Legislation

in the Isle of Man governing the preparation and dissemination of

financial statements may differ from legislation inother jurisdictions.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Group’s

transactions and disclose with reasonable accuracy at any time

the financial position of the Group. They are also responsible for

safeguarding the assets of the Group and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

In addition, the Directors at the date of this report consider that

the financial statements, taken as a whole, are fair, balanced

and understandable and provide the information necessary for

shareholders to assess the Group’s performance, business model

and strategy.

Website publication

Financial statements are published on the Company’s website.

The maintenance and integrity of the Company’s website is

the responsibility of the Directors. The Directors’ responsibility

also extends to the ongoing integrity of the financial statements

contained therein.

Directors’ responsibilities pursuant to DTR4

Each of the Directors, whose names and functions are listed within

theGovernance section on pages 108 and 109, confirm that, to the

best oftheir knowledge:

• the Group financial statements, which have been prepared in

accordance with International Accounting Standards adopted by

the UK, give a true and fair view of the assets, liabilities, financial

position and profit of the Group; and

• the Annual Report includes a fair review of the development and

performance of the business and the financial position of the Group

and the Company, together with a description of the principal risks

and uncertainties that they face.

Annual General Meeting

The Annual General Meeting provides an opportunity for the

Directors to communicate personally the performance and future

strategy to non-institutional shareholders and for those shareholders

to meet with and question the Board. All results of proxy votes are

read out, made available for review at the meeting, recorded in the

minutes of the meeting and communicated to the market and via the

Group website.

The Annual General Meeting for 2024 is scheduled for 22 May 2024.

The notice convening the Annual General Meeting for this year, and

an explanation of the items of non-routine business, are set out in the

circular that accompanies the Annual Report.

Auditor

So far as each Director is aware, at the date of the approval of the

financial statements there is no relevant audit information of which

the Company’s auditor is unaware. Each Director has taken all the

steps that they ought to have taken as a Director in order to make

themselves aware of any information needed by the Group’s auditor

for the purposes of its audit and to establish that the auditor is aware

of that information.

A resolution to reappoint BDO LLP as the Company’s auditor will

besubmitted to the shareholders at this year’s AGM.

Approved by the Board and signed on behalf of the Board.

Chris McGinnis

Chief Financial Officer

26 March 2024

151Playtech plc Annual Report and Financial Statements 2023

Governance Report

Financial

Statements

Financial Statements

153 Independent auditor’s report

161 Consolidated statement of comprehensiveincome

162 Consolidated statement of changes in equity

163 Consolidated balance sheet

165 Consolidated statement of cash flows

167 Notes to the financial statements

236 Company statement of changes in equity

237 Company balance sheet

238 Notes to the Company financial statements

246 Five-year summary

Company information

247 Company information

Financial Statements

152 Playtech plc Annual Report and Financial Statements 2023

Independent auditor’s report

To the members of Playtech plc

Opinion on the financial statements

In our opinion:

• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 December 2023 and of

the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted International Accounting Standards; and

• the Parent Company financial statements have been properly prepared in accordance with UK Generally Accepted Accounting Practice.

We have audited the financial statements of Playtech plc (the “Parent Company”) and its subsidiaries (the “Group”) for the year ended

31December 2023 which comprise the consolidated statement of comprehensive income, the consolidated and Company statements of

changes in equity, the consolidated and Company balance sheets, the consolidated statement of cash flows, notes to the financial statements

and notes to the Company financial statements, including a summary of material accounting policies.

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK adopted

International Accounting Standards. The financial reporting framework that has been applied in the preparation of the Parent Company financial

statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure

Framework (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under

those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We believe

that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the

additional report to the Audit Committee.

Independence

We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other

ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the

Group or the Parent Company.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the

financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue to

adopt the going concern basis of accounting included:

• evaluating the Directors’ process in determining the going concern assessment of the period to 30 June 2025;

• confirming the assessment and underlying projections were approved by the Board as well as being prepared by appropriate individuals with

sufficient knowledge of the Group’s markets, strategies and risks;

• understanding and assessing the key assumptions in the cash flow forecasts and challenging these against prior performance and our

knowledge of the business and industry;

• confirming, through enquiry with the Directors, review of Board minutes and review of external resources for any key future events that may

have been omitted from cash flow forecasts and assessing the impact these could have on future cash flows;

• assessing the Directors’ stress test scenarios and challenging whether other reasonably possible scenarios could occur;

• specifically assessing through a stress test the risk of the Caliplay outstanding receivables (see additional details below) not being recovered

and no further cash being received in the going concern period as result of the ongoing dispute;

• assessing the Directors’ reverse stress test to analyse the level of reduction in EBITDA that could be sustained before a covenant breach or

liquidity event would be indicated;

• confirming the financing facilities, repayment terms and financial covenants to supporting documentation and evaluating the Directors’

assessment of covenant compliance throughout the going concern assessment period to 30 June 2025;

• considering the impact of inflation including energy costs, other macroeconomic matters and climate change;

• reviewing post-year-end cash position to assess any potential deterioration in cash balances;

• challenging the Directors as to matters outside of the going concern assessment period, including the potential long-term impact of the

dispute with Caliplay; and

• considering the adequacy of the disclosures relating to going concern included within the Annual Report against the requirements of

the accounting standards, the impact of the dispute with Caliplay and the consistency of the disclosure against the forecasts and going

concernassessment.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or

collectively, may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern for a period of at least

12months from when the financial statements are authorised for issue.

153Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Conclusions relating to going concern continued

In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or

draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt

the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Overview

Coverage The coverage achieved from the full scope audits which included significant and non-significant components was 92%

(2022:94%) of Group revenue and 90% (2022: 84%) of Group total assets. Further specific audit procedures were undertaken

onnon-significant components to ensure sufficient audit coverage.

Key audit matters

2023 2022

Revenue recognition  

Caliplay legal dispute  

Valuation and disclosure of the Playtech M&A Call Option relating to Caliplay  

Group Materiality €13.0 million (2022: €12.0 million) based on 3% (2022: 3%) of adjusted EBITDA.

An overview of the scope of our audit

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control,

and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal

controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

In determining the scope of our audit we considered the level of work to be performed at each component in order to ensure sufficient assurance

was gained to allow us to express an opinion on the financial statements of the Group as a whole. We tailored the extent of the work to be

performed at each component, either by us, as the Group audit team, or component auditors within the BDO network based on our assessment

of the risk of material misstatement at each component.

Full scope audit procedures were performed on eight components; five of these were considered significant with the other three being

undertaken to ensure appropriate audit coverage. Four of the significant components were audited by the Group audit team with the remaining

significant component being audited by BDO Italy. The three other full scope audits were undertaken by the Group audit team, BDO Sweden and

BDO Austria.

In respect of the remaining non-significant components, component auditors within the BDO network or the Group audit team performed review

procedures or specific audit procedures on certain balances based on their relative size, risks in the business and our knowledge of those entities.

Our involvement with component auditors

For the work performed by component auditors, we determined the level of involvement needed in order to be able to conclude whether

sufficient appropriate audit evidence had been obtained as a basis for our opinion on the Group financial statements as a whole.

Our involvement with the component auditor of the significant component included attending key meetings as appropriate, directing the scope

and approach of the audit and performing a detailed review of the audit files. The review of the audit files was undertaken with the support of our

IT specialists. For the component auditors of the non-significant components we provided group instructions, directed the scope of their work

and reviewed reporting returned to us.

Climate change

Our work on the assessment of potential impacts of climate-related risks on the Group’s operations and financial statements included:

• enquiries and challenge of management to understand the actions it has taken to identify climate-related risks and their potential impacts on

the financial statements and adequately disclose climate-related risks within the Annual Report;

• our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change affects this

particular sector; and

• review of the minutes of Board and Sustainability Committee meetings and other papers related to climate change and performing a risk

assessment as to how the impact of the Group’s commitments may affect the financial statements and our audit.

We also assessed the consistency of management’s disclosures included as other information on page 150 with the financial statements and

with our knowledge obtained from the audit.

Based on our risk assessment procedures, we did not identify there to be any key audit matters materially impacted by climate-related risks and

related commitments.

Independent auditor’s report continued

To the members of Playtech plc

154 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

An overview of the scope of our audit continued

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of

the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,

including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the

engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on these matters.

Key audit matter (KAM) How the scope of our audit addressed the key audit matter

Revenue

recognition

The Group’s

revenue streams

and the related

accounting

policies applied

during the period

are detailed in Note

6 to the financial

statements.

Revenue recognition was

considered a KAM due to the

complexity of the IT systems

and the significant level of audit

focus required.

Our KAMs in respect of

revenue consist of the following:

Playtech B2B gaming revenue

There is a risk over accuracy

and existence of revenue due

to the nature of the contracts

in place, the complexity of

the IT systems and the risk of

manipulation or error in the

underlying source data.

Snaitech B2C streams

There is a risk in respect of

accuracy and existence of

revenue due to the complexity

of the IT systems and

manipulation or error in the

underlying source data.

We developed an understanding of the key revenue processes from inception to

recognition in the financial statements and assessed the design and implementation

of the controls over the Group’s revenue cycles. This included undertaking test bets

as part of our risk assessment procedures and tracing the underlying transactions to

source data.

In completing this work, we utilised our own IT specialists to assess the IT controls in

respect of the key operating systems supporting the above transaction flows. Our IT

specialists also reviewed the work completed by the IT specialists from the BDO Italy

component team.

Our testing approach for revenue was tailored for the different revenue streams and

entities across the Group.

B2B gaming revenue

We tested B2B revenue recognised with the support of IT specialists by completing

thefollowing:

• carried out end-to-end walkthroughs to understand the IT system, processes and

controls in place;

• tested the operating effectiveness of certain controls within the Group’s main B2B

operating system (IMS);

• performed a full reconciliation of IMS to the billing database (used by management to

calculate revenue for invoicing);

• for a sample of customers and invoices, independently recalculated revenue based

on the underlying source data to the contractual terms in place and agreed the

invoices issued to cash receipt;

• tested the adjustments to revenue made in respect of variable consideration

where either customer incentives or other contractual variations or potential

variations existed;

• tested a sample of credit notes both during the year and post year end; and

• for a sample of customers, analysed revenue for the year on a monthly basis to

identify exceptions and, where considered necessary, undertook further testing

including assessing the underlying source data.

B2C revenue in respect of Snaitech

We tested B2C revenue recognised with the support of IT specialists by completing

thefollowing:

• carried out end-to-end walkthroughs to understand the IT system, processes and

controls in place for each of the significant revenue sub-streams, being gaming

machines, online gaming, online betting and retail betting;

• tested the operating effectiveness of IT general controls, including user access

controls, change management and data processing management;

• tested the operating effectiveness of key revenue controls, including controls around

data transfers between systems, controls ensuring the pre-approval of all bets by the

government ADM system, the monthly reconciliation between SAP and ADM, and the

accurate addition of all new revenue contracts onto SAP;

• for online and retail betting, performed a reconciliation of total bets in the year from the

operating platform to the government ADM reports; and

• for a sample of transactions for all revenue streams, agreed the transactions to the

underlying transactional system and through to cash receipts.

Key observation

Based on the work performed we did not identify any evidence of material manipulation

or misstatements in the data and consider that revenue has been appropriately recognised.

155Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Key audit matter (KAM) How the scope of our audit addressed the key audit matter

Caliplay

legal dispute

The Directors’

disclosure of

the judgements

and estimates

surrounding the risks

are detailed in Note

7 to the financial

statements with

accounting policies

in respect of the

revenue streams

detailed in Note 6.

The legal dispute gives rise to a number of risks

principally in respect of revenue recognition and

recovery of associated receivables from Caliplay as

well as the associated disclosures.

There are also risks that may arise dependent on

the outcome of the dispute such as impairment of

goodwill, impairment of Parent Company investments

and carrying value of deferred tax assets.

Our KAM relating to the additional risks in revenue

recognition arising from the Caliplay legal dispute is

in respect of the following revenue streams:

B2B licence fee (“software fees”)

Due to the dispute with Caliplay (as detailed in Note 7

to the financial statements), €32.3 million of invoices

issued in the period from August to December 2023 in

respect of the above services remained unpaid at the

date of approval of the financial statements.

Based on the claims made by Caliplay as to the

reason for non-payment of invoices, there is a risk

over whether performance obligations have been

met and hence the existence and accuracy of

revenue recognised.

Additional B2B services fee

The dispute with Caliplay has also resulted in the

non-payment of the additional B2B services fee

invoices issued to Caliplay for the period July to

December 2023, which totalled €54.2 million.

The non-payment has occurred simultaneously with

the invoice dispute described above. It is related to

Caliplay notifying the Group on 5 January 2024 of a

significant provision that Caliplay alleges was made in

its own financial statements on 3 January 2024, which

reduces the Caliplay profit for the year. Due to the size

of the provision notified to Playtech, Caliplay claims

that the additional B2B services fee in the period July

to September 2023 is €Nil and it is anticipated that

it will further claim that the additional B2B services

fee in the period October to December 2023 is also

less than the amounts Playtech has invoiced. There

is therefore a risk over the existence and accuracy of

revenue recognised.

Recovery of receivable

With the support of its legal experts, the Group

has reviewed Caliplay’s response to Playtech’s

legal claim for payment in relation to all the invoices

referred to above. Based on the information

received, the Group does not consider Caliplay’s

claim or provision to have merit and as such

recognised the receivable of €86.5 million and

associated revenue in full in the year ended and as

of 31 December 2023. There is therefore a risk in

respect of the carrying value of the receivable.

The Directors have also made a judgement that

trading will continue with Caliplay until the contract

expires in 2034. However, should this change such

that future cash flows generated from Caliplay

are materially impacted this gives rise to potential

risks in respect of impairment of goodwill (Sports

B2B and Services CGUs), impairment of Parent

Company investments and reduction in carrying

value of deferred tax assets.

In respect of the overall legal dispute with Caliplay,

there is a further risk that the disclosures (including

any potential financial statement impact) in respect of

the estimates and judgements are not complete and/

or accurate.

Our testing approach consisted of the following:

Software fees

• In respect of the invoices issued in the period August to December 2023, we

worked with our IT specialists to independently recalculate the invoice value.

This was based on the underlying source data extracted from IMS and we

assessed this against the revenue recognised.

• With the support of external legal experts directly engaged by us, we reviewed

the legal and contractual merits of the defence filed by Caliplay in respect of

non-delivery of the performance obligations.

• In addition we reviewed the privileged legal advice received by Playtech from its

own legal experts (which was released to us confidentially on a limited waiver

basis) to assess the claims made by Caliplay.

• We assessed whether any contradictory evidence or legal position, including

alternative case law, was apparent which was sufficiently compelling that it

could impact the judgement reached by the Group.

• We scrutinised management’s accounting assessment under IFRS 15 in respect

of recognition of revenue and challenged if the claims made by Caliplay meant

that performance obligations had not been met and that Playtech was not

entitled to the revenue.

Additional B2B services fee

• We agreed the invoices issued in the period July to December 2023 to profit

information and monthly statements provided to Playtech by Caliplay. In respect

of the month of December 2023 we agreed the adjustment made by the Group

to remove the impact of the provision recorded by Caliplay.

• With the support of our external legal experts, we reviewed the contractual

matters in respect of the defence filed by Caliplay to Playtech’s legal claim, as

well as Playtech’s own legal advice on this matter, to assess Playtech’s position

that the claim made by Caliplay as the basis for non-payment had no merit.

• With the support of our relevant expert from BDO Mexico, we reviewed

management’s and management’s expert’s assessment of the merits of the

significant provision recorded by Caliplay.

Recovery of receivable

In consideration of the recognition of the receivable, with the support of our

experts we also considered the recoverability of the receivable by reference

to the contractual terms, the ability of Caliplay to make the payment and the

enforceability of judgements made in the UK against a Mexican business.

In reaching its judgement that the receivable will be recovered in full, management was

supported by a number of third-party experts. We assessed the objectivity, expertise

and qualifications of the experts as well as reading their report and advice.

Disclosures

With the support of our technical specialists and based on our knowledge of the

facts and circumstances, we reviewed the disclosures made in Note 7 to ensure

they were sufficiently complete and accurate.

Key observations

Based on the contracts and legal arguments as at the date of approval of these

financial statements, and having taken legal advice, Playtech believes the

receivable and associated revenue should be recognised in full as it considers

Caliplay’s position to be without merit.

Our assessment is that management’s position is supportable having considered

all the evidence presented to us, having considered alternative arguments, having

challenged management on the basis for its judgements and having been assisted

by experts from BDO Mexico and by external legal advice engaged specifically for

the purposes of our audit and who reported directly to us.

We draw your attention to Note 7 in the financial statements which sets out the key

judgements and estimates and, where appropriate, their financial impact. As well

as impacts on judgements in the current period, the disclosures set out further

risks in respect of future periods if Playtech is not successful in its legal claim and

future trading is impacted. This includes areas such as goodwill impairment, Parent

Company investment impairment and carrying value of deferred tax assets.

We assessed the disclosures given in Note 7 and consider that these sufficiently

reflect the current position with respect to the Caliplay legal dispute and the impact

on the financial statements and business.

An overview of the scope of our audit continued

Key audit matters continued

Independent auditor’s report continued

To the members of Playtech plc

156 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Key audit matter (KAM) How the scope of our audit addressed the key audit matter

Valuation and

disclosure of

the Playtech

M&A Call Option

over Caliplay

Disclosure of

the judgements

and estimates

surrounding the

risks are detailed in

Notes 7 and 21 to the

financial statements

with accounting

policies detailed

in Note 6.

This was considered a KAM due to the level of audit team effort, and the degree

of complexity, judgement and estimation required in the valuation as well as

associated disclosures. The risk was compounded in the current year by the

existence of the ongoing dispute between the Group and Caliplay.

The valuation requires judgement in terms of the inputs and the methodology

applied to calculate the fair value of €730.2 million (2022: €524.0 million).

With the support of management’s expert, the Group determined the fair value

based on a discounted cash flow (DCF) approach. This approach is consistent

with the approach used as of 31 December 2022.

The DCF approach includes risk due to the estimates and judgements required,

with these further compounded in the current year due to the ongoing litigation

between the Group and Caliplay.

Part of the ongoing dispute relates to whether Caliplay still holds an option

which permits it to redeem the additional B2B services fee element of

the agreement, upon which the Group has sought a declaration from the

English Court.

The redemption option is stated as being exercisable for a period of 45 days

following the approval of the audited accounts of Caliplay for the year ended

31December 2021 (the “2021 Option”). The Group believes the option has

expired and whilst Caliplay has not sought to exercise the option to date,

Caliplay has made it clear that it considers the option has not yet expired.

Should it be declared by the English Court that Caliplay still has its redemption

option and Caliplay then exercises said option, this would cancel the Playtech

M&A Call Option held by the Group.

In arriving at the fair value of the equity Call Option derivative, the Group

has made a judgement that the option has expired. The English Court may

determine that the option is exercisable and Caliplay may then choose to

exercise it. In this situation, the amount payable by Caliplay to the Group upon

exercise would either be agreed between the parties or, failing that, would be

determined by an independent investment bank valuing the Group’s current

entitlement to receive the additional B2B services fee until 31 December 2034.

There is a risk therefore that should the option be exercisable this may

materially affect the fair value of the equity Call Option held by the Group.

The legal dispute with Caliplay has developed through 2023 with the additional

dispute concerning the software fees and the additional B2B services fee

detailed above. This additional dispute gives rise to further risks in respect of

the cash flows used to determine the fair value of the Playtech M&A Call Option

together with the assumptions applied to those cash flows, principally those in

respect of discount rate, exit date and method of exit.

Due to the ongoing dispute, the Group has also changed its assessment of the

probability of exercise in respect of a further redemption option held by Caliplay

having previously considered the probability of this being exercised as nil.

This redemption option states that from 1 January 2025 (the “2025 Option”),

if there is a change of control of Caliplay or any member of the Caliente group

which holds a regulatory permit under which Caliplay operates, then each of

the Group and Caliente shall be entitled (but not obligated), within 60 days of

the time of such change of control, to require that the Caliente group redeems

the Group’s additional B2B services fee or (if the Playtech Call Option had been

exercised at that time) acquires Playtech’s 49% stake in Caliplay.

If such change of control were to take place and the right to redeem or acquire

were to occur, then this would extinguish the Playtech Call Option (to the extent

not exercised prior thereto) and the Playtech M&A Call Option. The exercise

of this option would require a payment by Caliplay to the Group, calculated by

reference to the services fee to the period to 31 December 2034 as per the

2021 redemption option detailed above.

Finally, during the year there was a reduction of the percentage right to

Caliplay shares that a service provider of the Group which provided services

to Caliplay on behalf of the Group held under its services agreement. This was

partly redeemed through a €41.3 million redemption payment being made

by the Group. As the value of this right was previously deducted from the fair

value of the Playtech M&A Call Option, as the right has reduced, this therefore

forms part of the uplift in the period. There is a risk that the accounting for the

redemption payment is not appropriate.

With the support of our valuation, IT and financial

modelling experts, we challenged the key assumptions

used by the Group in the discounted cash flow model.

To do this we:

• challenged the cash flows used and key

assumptions underlying the cash flows, assessing

them by reference to historical performance and

where possible by reference to future growth rates

compared to third-party market data;

• recalculated the discount rates and challenged as to

whether appropriate risk premiums had been applied

both in respect of the growth forecasts and also the

ongoing dispute;

• challenged the probabilities applied to the both the

option exit route and the timing of exercise, including

a scenario in which the exit date extended beyond

the scenarios modelled by management;

• assessed the discounts applied to the valuation

for potential restrictions on the sale of the shares

post exercise;

• assessed the accounting approach to the reduction

of the rights that a service provider to the Group held

under its service agreement to the Caliplay shares;

• assessed the sensitivity analysis performed to

changes in key assumptions (such as discount rate,

EBITDA margin, exit multiple and exit date);

• considered any additional sensitivities required

based on the audit team’s assessment of the key

inputs and judgements;

• in respect of the dispute with Caliplay relating to

the 2021 Option, assessed the Group’s judgement

and associated disclosures over the impact of the

dispute in respect of the valuation of the Playtech

M&A Call Option. This included reviewing third-party

legal advice received by the Group as well as our

own review of the contractual terms;

• challenged the impact and probability of exercise of

the 2025 Option;

• confirmed to contractual terms the expected share

holdings of the Group on exercise of the options; and

• checked the underlying models for

mathematical accuracy.

In respect of the valuation of the options, management

was supported by a third-party expert. We assessed

the objectivity, expertise and qualifications of

the expert.

Key observations

Based on the work performed we consider that the fair

value is reasonable, the sensitivities demonstrate the

susceptibility of the fair value to change in assumptions

and the disclosures meet with the requirements of the

accounting framework.

An overview of the scope of our audit continued

Key audit matters continued

157Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider

materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that

are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,

performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be

evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence,

when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

Group financial statements Parent Company financial statements

2023 2022 2023 2022

Materiality €13.0 million €12.0 million €6.5 million €6.0 million

Basis for

determiningmateriality

3% of adjusted EBITDA 3% of adjusted EBITDA 50% of Group materiality 50% of Group materiality

Rationale for the

benchmarkapplied

Adjusted EBITDA is the key

metric used by analysts

and the Directors in

assessing the performance

of the business and in

banking covenants and

is the metric expected

to influence economic

decisions of users of the

financial statements.

Adjusted EBITDA is the key

metric used by analysts and

the Directors in assessing the

performance of the business

and in banking covenants

and is the metric expected

to influence economic

decisionsof users of the

financial statements.

2% of total assets

capped at 50% of Group

materiality. This was

calculated as a percentage

of Group materiality for

Group reporting purposes

given the assessment of

aggregation risk.

2% of total assets capped

at 50% of Group materiality.

This was calculated as

a percentage of Group

materiality for Group

reporting purposes

given the assessment of

aggregationrisk.

Performance materiality €8.5 million €7.8 million €4.2 million €3.9 million

Basis for determining

performance materiality

65% of Group materiality 65% of Group materiality 65% of Parent

Companymateriality

65% of Parent

Companymateriality

Rationale for the

percentage applied for

performance materiality

This was set by the audit

team in reference to the

level of adjustments

identified in the prior year,

the level of sampling work

required and the number

ofcomponents.

This was set by the audit

team in reference to the level

of adjustments identified

in the prior year, the level of

sampling work required and

the number of components.

This was set by the audit

team in reference to the

level of adjustments

identified in the prior year.

This was set by the audit

team in reference to the level

of adjustments identified in

the prior year.

Component materiality

For the purposes of our Group audit opinion, we set materiality for each significant component of the Group, based on a percentage of between

19% and 51% (2022: 25% and 60%) of Group materiality dependent on the size and our assessment of the risk of material misstatement of that

component. Component materiality ranged from €2.5 million to €6.6 million (2022: €3 million to €7 million). In the audit of each component, we

further applied performance materiality levels of 65% (2022: 65%) of the component materiality to our testing to ensure that the risk of errors

exceeding component materiality was appropriately mitigated.

Reporting threshold

We agreed with the Audit Committee that we would report to it all individual audit differences in excess of €260k (2022: €240k). We also agreed

to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

Independent auditor’s report continued

To the members of Playtech plc

158 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Other information

The Directors are responsible for the other information. The other information comprises the information included in the Annual Report other

than the financial statements and our Auditor’s Report thereon. Our opinion on the financial statements does not cover the other information and,

except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is

to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or

our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies

or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements

themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are

required to report that fact.

We have nothing to report in this regard.

Directors’ Remuneration Report

The Parent Company voluntarily prepares a Directors’ Remuneration Report in accordance with the provisions of the UK Companies Act 2006.

The Directors have requested that we audit the part of the Directors’ Remuneration Report specified by the Companies Act 2006 to be audited

as if the Company were a UK registered listed company. In our opinion, the part of the Directors’ Remuneration Report to be audited has been

properly prepared in accordance with the UK Companies Act 2006.

Corporate governance statement

The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate

Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate Governance Code specified for

our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance

Statement is materially consistent with the financial statements, or our knowledge obtained during the audit.

Going concern and

longer-term viability

• The Directors’ statement with regard to the appropriateness of adopting the going concern basis of accounting and

any material uncertainties identified set out on page 147.

• The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and

why the period is appropriate set out on page 101.

Other

Codeprovisions

• The Directors’ statement on fair, balanced and understandable set out on page 146.

• The Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on

page 101.

• The section of the Annual Report that describes the review of effectiveness of risk management and internal control

systems set out on pages 95 to 100.

• The section describing the work of the Audit Committee set out on pages 124 to 128.

Responsibilities of Directors

As explained more fully in the Director’s report, the Directors are responsible for the preparation of the financial statements and for being

satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors

either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is

not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.

159Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Auditor’s responsibilities for the audit of the financial

statements continued

Extent to which the audit was capable of detecting non-

compliance with laws and regulations

We design procedures in line with our responsibilities, outlined above,

to detect non-compliance with laws and regulations. We gained an

understanding of the legal and regulatory framework applicable to the

Group and the industry in which it operates, through discussion with

management and our knowledge of the industry.

We focused on significant laws and regulations that could give rise

to a material misstatement in the financial statements, including, but

not limited to, the Isle of Man Companies Act 2006, the UK Listing

Rules, certain gaming licence requirements, UK adopted International

Accounting Standards and tax legislation.

Our procedures in respect of the above included:

• enquiries with the finance team, in-house legal counsel, the Head of

Compliance and the Group Tax Director;

• review of minutes of meetings of those charged with governance for

any instances of non-compliance with laws and regulations;

• review of internal audit reports;

• review of correspondence with regulatory and tax authorities for

any instances of non-compliance with laws and regulations;

• review of financial statement disclosures;

• use of own knowledge in respect of regulatory changes in

the industry;

• involvement of tax and financial crime specialists in the audit; and

• review of legal expenditure accounts to understand the nature of

expenditure incurred.

Extent to which the audit was capable of detecting irregularities,

including fraud

We design procedures in line with our responsibilities, outlined above,

to detect material misstatements in respect of irregularities, including

fraud. The extent to which our procedures are capable of detecting

irregularities, including fraud, is detailed below:

We assessed the susceptibility of the financial statements to

material misstatement, including fraud. Our risk assessment

procedures included:

• enquiry with management, the Audit Committee and those

charged with governance regarding any known or suspected

instances of fraud;

• obtaining an understanding of the Group’s policies and procedures

relating to:

• detecting and responding to the risks of fraud; and

• internal controls established to mitigate risks related to fraud;

• review of minutes of meetings of those charged with governance for

any known or suspected instances of fraud;

• discussion amongst the engagement team including involvement

of our forensic specialists as to how and where fraud might occur in

the financial statements;

• review of internal audit and whistleblowing reports;

• performing analytical procedures to identify any unusual or

unexpected relationships that may indicate risks of material

misstatement due to fraud; and

• considering remuneration incentive schemes and performance

targets and the related financial statement areas impacted by these.

Based on our risk assessment, we considered the areas most

susceptible to fraud to be management override of controls and

revenue recognition. Our procedures in respect of assessing fraud

risk included:

• testing a sample of journal entries throughout the year split between

a random sample of journals and those meeting defined fraud risk

criteria, by agreeing to supporting documentation;

• testing a sample of journal entries posted to revenue, including

those with unusual account combinations;

• identifying and assessing any journals posted by unexpected users

or users with privileged IT access rights;

• reviewing any unusual or related party transactions that do not

appear to be within the ordinary course of business;

• detailed substantive testing on revenue (refer to the KAMs section

for more detail);

• challenging assumptions and judgements made by management in

its significant accounting estimates and judgements, including the

impact of the Caliplay matter described in the KAMs section above,

impairment testing, the measurement of provisions, valuation of

derivative instruments, assessment of expected credit losses and

recognition of deferred tax assets; and

• communicating relevant identified laws and regulations and

potential fraud risks to all engagement team members including

component engagement teams which were deemed to have

appropriate competence and capabilities and remained alert to any

indications of fraud or non-compliance with laws and regulations

throughout the audit.

Our audit procedures were designed to respond to risks of material

misstatement in the financial statements, recognising that the risk

of not detecting a material misstatement due to fraud is higher than

the risk of not detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery or misrepresentations

or through collusion. There are inherent limitations in the audit

procedures performed and the further removed non-compliance with

laws and regulations is from the events and transactions reflected in

the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available

on the Financial Reporting Council’s website at:

www.frc.org.uk/auditorsresponsibilities. This description forms part of

our Auditor’s Report.

Use of our report

This report is made solely to the Parent Company’s members, as a

body, in accordance with our engagement letter dated 9 October 2023 and

section 80C of the Isle of Man Companies Act 2006. Our audit work

has been undertaken so that we might state to the Parent Company’s

members those matters we are required to state to them in an auditor’s

report and for no other purpose. To the fullest extent permitted by law,

we do not accept or assume responsibility to anyone other than the

Parent Company and the Parent Company’s members as a body, for

our audit work, for this report, or for the opinions we have formed.

Oliver Chinneck (Recognised Auditor)

For and on behalf of BDO LLP, Statutory Auditor

London, UK

26 March 2024

BDO LLP is a limited liability partnership registered in England and

Wales (with registered number OC305127).

Independent auditor’s report continued

To the members of Playtech plc

160 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Consolidated statement of comprehensive income

For the year ended 31 December 2023

Note

		2023		2022
		Actual	Adjusted	Actual	Adjusted
		€’m	€’m 1	€’m	€’m
Continuing operations
Revenue	10	1,7 06 .7	1,70 6.7	1, 601.8	1, 601.8
Distribution costs before depreciation and amortisation		(1, 147 . 1)	(1, 145. 1)	(1, 077 .5)	(1, 0 73.5)
Administrative expenses before depreciation and amortisation		(146 .7)	(124.3)	(147 .3)	(118.2)
Impairment of financial assets		(6.4)	(5.0)	(14 .7)	(1 4.7)
EBITDA	11	406.5	432.3	362.3	395.4
Depreciation and amortisation		(194. 4)	(15 1.8)	(1 7 0 .1 )	(128. 1)
Impairment of property, plant and equipment and intangible assets	13	(89.8)	—	(38.5)	—
Profit on disposal of property, plant and equipment and intangibleassets		1.4	1 .4	—	—
Finance income	14A	12.3	12.3	11 .6	11 .6
Finance costs	14B	(46.2)	(42.9)	(62.8)	(5 9.7)
Share of loss from associates	21A	(0.8)	(0. 8)	(3.8)	(3.8)
Unrealised fair value changes of equity investments	21B	(6. 6)	—	(0.3)	—
Unrealised fair value changes of derivative financial assets	21C	153. 4	—	6.0	—
Loss on disposal of subsidiary	21A	—	—	(8.8)	—
Profit before taxation	11	235.8	250.5	95.6	215.4
Income tax expense	11, 15	(130. 7)	(93.7)	(55. 0)	(54. 9)
Profit from continuing operations	11	105. 1	156.8	4 0.6	160.5
Profit from discontinued operations, net of tax	9	—	—	4 7. 0	41 . 2
Profit for the year – total		105. 1	156.8	87 .6	201.7
Other comprehensive loss:
Items that are or may be classified subsequently to profit or loss:
Exchange loss arising on translation of foreign operations		(7 .7)	(7 . 7)	(0. 2)	(0. 2)
Recycling of foreign exchange loss on disposal of foreign
discontinuedoperations		—	—	23.2	23.2
Items that will not be classified to profit or loss:
Gain on remeasurement of employee termination indemnities		—	—	0.9	0. 9
Other comprehensive (loss)/income for the year		(7 .7)	(7 . 7)	23.9	23.9
Total comprehensive income for the year		97 .4	149. 1	111.5	225.6
Profit for the year attributable to the owners of the Company		105. 1	156.8	87 .6	201. 7
Total comprehensive income attributable to the owners of the Company		97 .4	149. 1	111.5	225.6
Earnings per share attributable to the ordinary equity holders of the Company
Profit or loss – total
Basic (cents)	16	34.7	51. 7	29. 2	67. 2
Diluted (cents)	16	33.7	50. 2	2 8 .1	64.7
Profit or loss from continuing operations
Basic (cents)	16	34.7	51. 7	13.5	53.5
Diluted (cents)	16	33.7	50. 2	13. 0	5 1.5

1, 2

1 Adjusted numbers relate to certain non-cash and one-off items. The Board of Directors believes that the adjusted results more closely represent the consistent trading performance of the business.

A full reconciliation between the actual and adjusted results is provided in Note 11.

2 Comparative information has been re-stated due to change in accounting policy. Further details are provided in Note 4C.

161Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Consolidated statement of changes in equity

For the year ended 31 December 2023

							Total
							attributable
	Additional	Employee		Employee	Put/call	Foreign	to equity	Non-
	paid in	termination	Retained	Benefit	options	exchange	holders of	controlling	Total
	capital	indemnities	earnings	Trust	reserve	reserve	Company	interests	equity
	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m
Balance at 1 January 2022	606.0	(0.5)	1,025. 0	(23.2)	(3.7)	(22.7)	1,580 .9	0.3	1,581.2
Adjustment on initial recognition of IAS 12
amendment (Note 4A)	—	—	1.5	—	—	—	1.5	—	1.5
Adjusted balance at 1 January 2022	606.0	(0.5)	1,026.5	(23.2)	(3.7)	(22.7)	1,582.4	0.3	1,582. 7
Total comprehensive income for the year
Profit for the year	—	—	87 .6	—	—	—	87 .6	—	87 .6
Other comprehensive income for the year	—	0.9	—	—	—	23.0	23.9	—	23. 9
Total comprehensive income for the year	—	0.9	8 7. 6	—	—	23.0	111.5	—	111.5
Transactions with the owners of the Company
Contributions and distributions
Exercise of options	—	—	(6.0)	6.0	—	—	—	—	—
Equity-settled share-based payment charge	—	—	8.3	—	—	—	8.3	—	8.3
Total contributions and distributions	—	—	2.3	6.0	—	—	8.3	—	8.3
Change in ownership interests
Acquisition of non-controlling interest without change
in control	—	—	(3. 4)	—	3.7	—	0. 3	(0 .3)	—
Total changes in ownership interests	—	—	(3.4)	—	3 .7	—	0. 3	(0 .3)	—
Total transactions with owners of the Company	—	—	(1. 1)	6 .0	3 .7	—	8 .6	(0.3)	8.3
Balance at 31 December 2022/1 January 2023	606.0	0.4	1, 113. 0	(17 .2)	—	0.3	1, 702.5	—	1,7 02.5
Total comprehensive income for the year
Profit for the year	—	—	105. 1	—	—	—	105. 1	—	105. 1
Other comprehensive loss for the year	—	—	—	—	—	(7 . 7)	(7 . 7)	—	(7 .7)
Total comprehensive income for the year	—	—	10 5. 1	—	—	(7 .7)	97 .4	—	97 .4
Transactions with the owners of the Company
Contributions and distributions
Exercise of options	—	—	(11.9)	11.9	—	—	—	—	—
Equity-settled share-based payment charge	—	—	6. 3	—	—	—	6. 3	—	6.3
Transfer from treasury shares to EmployeeBenefitTrust	5.8	—	6.7	(12.5)	—	—	—	—	—
Total contributions and distributions	5.8	—	1 .1	(0.6)	—	—	6. 3	—	6.3
Total transactions with owners of the Company	5.8	—	1 .1	(0.6)	—	—	6. 3	—	6.3
Balance at 31 December 2023	611.8	0.4	1,219.2	(17 .8)	—	(7 . 4)	1,806.2	—	1,806.2

162 Playtech plc

Annual Report and Financial Statements 2023

Financial Statements

Consolidated balance sheet

As at 31 December 2023

Note

		2023	2022	2021
		€’m	€’m	€’m
ASSETS
Property, plant and equipment	18	350 .2	3 41 .4	32 9.7
Right of use assets	19	71.0	71. 6	73.8
Intangible assets	20	881.2	98 0.9	1,046. 1
Investments in associates	21A	51.5	36 .6	5.2
Other investments	21B	92.8	9.2	8 .1
Derivative financial assets	21C	827 .8	636.4	622.2
Trade receivables	23	1 .9	1 .1	6.6
Deferred tax asset	33	62.5	1 14 .0	104.4
Other non-current assets	22	1 3 7. 0	10 9.6	104.4
Non-current assets		2,475.9	2,300.8	2,300.5
Trade receivables	23	2 0 7 .1	163.9	178.5
Other receivables	24	100.5	1 07.6	8 7 .1
Inventories		6.8	5.5	4 .9
Cash and cash equivalents	25	516.2	426.5	575 .4
		830. 6	703.5	845.9
Assets classified as held for sale	26	19.3	1 9.6	507.4
Current assets		84 9.9	723. 1	1,353.3
TOTAL ASSETS		3,325.8	3,0 23.9	3,653.8
EQUITY
Additional paid in capital		611.8	606.0	606.0
Employee termination indemnities		0.4	0.4	(0.5)
Employee Benefit Trust		(17 .8)	(17 .2)	(23.2)
Put/call options reserve		—	—	(3.7)
Foreign exchange reserve		(7 .4)	0.3	(22.7)
Retained earnings		1,219.2	1, 113. 0	1,026 .5
Equity attributable to equity holders of the Company		1,806.2	1 ,702 .5	1,582. 4
Non-controlling interests		—	—	0. 3
TOTAL EQUITY	27	1,806.2	1 ,702 .5	1,582.7
LIABILITIES
Loans and borrowings	28	—	—	1 6 7 .1
Bonds	29	646. 1	348.0	875 .0
Lease liability	19	61.9	54. 0	6 9.8
Deferred revenues		1.8	1.0	2.9
Deferred tax liability	33	161.6	124.8	88.9
Contingent consideration	31	5.8	2.3	6.0
Provisions for risks and charges	30	8.9	10.0	13.5
Other non-current liabilities	34	34.8	24 .9	12.8
Non-current liabilities		920. 9	565.0	1,236. 0

163Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note

		2023	2022	2021
		€’m	€’m	€’m
LIABILITIES continued
Bonds	29	—	199. 6	—
Trade payables	32	66 .9	61. 2	41.3
Lease liability	19	24 .9	31.8	20 .3
Progressive operators’ jackpots and security deposits	25	111.0	114.3	1 10. 7
Client funds	25	41 .9	39 .8	3 0.4
Income tax payable		14.0	17 .3	2 .6
Gaming and other taxes payable	35	116. 1	112.8	105.4
Deferred revenues		4.4	5 .0	5. 2
Contingent consideration	31	0.4	0.6	5 .0
Provisions for risks and charges	30	0.6	3 .9	3.2
Other payables	34	217 .5	1 6 9 .1	166.2
		5 9 7. 7	755. 4	490.3
Liabilities directly associated with assets classified as held for sale	26	1.0	1.0	344.8
Current liabilities		598. 7	75 6.4	835. 1
TOTAL LIABILITIES		1,519 .6	1,321. 4	2,0 71. 1
TOTAL EQUITY AND LIABILITIES		3,325.8	3, 023.9	3,653.8

The consolidated financial statements were approved by the Board and authorised for issue on 26 March 2024.

Mor Weizer Chris McGinnis

Chief Executive Officer Chief Financial Officer

1 Comparative information has been re-stated due to change in accounting policy. Further details are provided in Note 4A.

Consolidated balance sheet continued

As at 31 December 2023

164 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Consolidated statement of cash flows

For the year ended 31 December 2023

Note

		2023	2022
		€’m	€’m
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year		105. 1	87.6
Adjustments to reconcile net income to net cash provided by operating activities (see below)		307.7	3 3 7 .1
Net taxes paid		(45. 9)	(13.8)
Net cash from operating activities		366. 9	410 .9
CASH FLOWS FROM INVESTING ACTIVITIES
Net loans granted/repaid	22	(23.4)	(30.4)
Dividend income		1.5	—
Acquisition of subsidiaries/assets under business combinations, net of cash acquired		(3.6)	(2.9)
Acquisition of property, plant and equipment		(57 . 6)	(54.0)
Acquisition of intangible assets		(35.7)	(1 0 .1)
Capitalised development costs		(56. 7)	(61.3)
Acquisition of investment in associates	21A	(9.2)	(30.2)
Acquisition of investments at fair value through profit or loss	21B	(94. 1)	—
Subcontractor option redemption	21C	(4 1.3)	—
Proceeds from the sale of property, plant and equipment and intangible assets		2.5	0. 8
Disposal of Financial segment, net of cash disposed		—	(169.8)
Disposal of subsidiary, net of cash disposed		—	(0.4)
Net cash used in investing activities		(317 .6)	(358.3)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid on bonds and loans and borrowings		(31.3)	(36.7)
Repayment of loans and borrowings		(77 .4)	(166. 1)
Proceeds from loans and borrowings		79 .9	—
Proceeds from the issuance of 2023 Bond, net of issue costs	29	2 9 7. 2	—
Repayment of 2018 Bonds	29	(200. 0)	(330 .0)
Payment of contingent consideration and redemption liability (see below)		(0.2)	(5.9)
Principal paid on lease liability		(23. 1)	(22.5)
Interest paid on lease liability		(5.2)	(5.7)
Net cash from/(used in) financing activities		39.9	(566.9)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		89.2	(514.3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		426.9	942. 1
Exchange gain/(loss) on cash and cash equivalents		0.5	(0.9)
CASH AND CASH EQUIVALENTS AT END OF YEAR	25	51 6.6	426.9

165Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Consolidated statement of cash flows continued

For the year ended 31 December 2023

Note

		2023	2022
		€’m	€’m
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED FROM OPERATING ACTIVITIES
Income and expenses not affecting operating cash flows:
Depreciation on property, plant and equipment	18	46.5	4 1.5
Amortisation of intangible assets	20	126.7	109.8
Amortisation of right of use assets	19	23.3	21.5
Capitalisation of amortisation of right of use assets		(1.7)	(1.9)
Impact on early termination of lease contracts	19	(0.4)	(0.7)
Share of loss from associates	21A	0. 8	3.8
Impairment and expected credit losses on loans receivable	22	2 .4	1 .6
Impairment of investment	21B	1.3	—
Impairment of other receivables		2.2	—
Reversal of impairment of property, plant and equipment	18	—	(0. 2)
Impairment of intangible assets	20	89.8	38.7
Profit on disposal of Financial segment	9	—	(15. 1)
Loss on disposal of subsidiary	21A	—	8.8
Changes in fair value of equity investments	21B	6.6	0. 3
Changes in fair value of derivative financial assets	21C	(153. 4)	(6.0)
Fair value loss on convertible loans		—	3 .0
Interest on bonds and loans and borrowings		30.9	36. 2
Interest on lease liability		5.2	5 .7
Interest income on loans receivable	22	(1.9)	(1.3)
Income tax expense		130. 7	58.5
Changes in equity-settled share-based payment		6.3	8.3
Movement in contingent consideration and redemption liability		3.3	(4.3)
Expected credit loss on cash and cash equivalents		—	(0. 2)
Unrealised exchange gain		(2.9)	(4 .4)
(Profit)/loss on disposal of property, plant and equipment and intangible assets		(1. 4)	0. 2
Changes in operating assets and liabilities:
Change in trade receivables		(47 .9)	13.0
Change in other receivables		(0.4)	3.5
Change in inventories		(1.3)	(0.6)
Change in trade payables		4.5	2 0.4
Change in progressive operators, jackpots and security deposits		(3.3)	3 .6
Change in client funds		2.0	(15.3)
Change in other payables		4 4 .1	13.6
Change in provisions for risks and charges		(4. 6)	(2 .8)
Change in deferred revenues		0.3	(2 .1)
		307.7	3 3 7 .1
Payment of contingent consideration and redemption liabilities on previous acquisitions		2023	2022
		€’m	€’m
A. Acquisition of Eyecon Limited		—	3 .6
B. Acquisition of non-controlling interest of Statscore SP Z.O.O.		—	1.6
C. Other acquisitions		0.2	0.7
		0.2	5.9

166 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements

Note 1 – General

Playtech plc (the “Company”) is an Isle of Man company. The registered office is located at St George’s Court, Upper Church Street, Douglas,

Isle of Man IM1 1EE. Playtech plc is managed and controlled in the UK and, as a result, is UK tax resident.

These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the “Group”).

Note 2 – Basis of preparation

These consolidated financial statements have been prepared in accordance with the UK adopted International Accounting Standards (IAS).

They were authorised for issue by the Company’s Board of Directors on 26 March 2024.

Details of the Group’s accounting policies are included in Notes 5 and 6.

Going concern basis

In adopting the going concern basis in the preparation of the financial statements, the Directors have considered the current trading

performance, financial position and liquidity of the Group, the principal and emerging risks and uncertainties together with scenario planning

and reverse stress tests. The Directors have assessed going concern over a 15-month period to 30 June 2025 which aligns with the six-monthly

covenant measurement period.

	31 December	31 December
	2023	2022
	€’m	€’m
Cash and cash equivalents	516.2	426.5
Cash held on behalf of clients, progressive jackpots and security deposits	(152.9)	(154.1)
Adjusted gross cash and cash equivalents	363.3	272.4

The increase in adjusted gross cash and cash equivalents from €272.4 million at 31 December 2022 to €363.3 million at 31 December 2023 is

mainly the result of the new €300.0 million bond issued and continued strong performance of the Group throughout the year, partially offset

by the repayment of the €200.0 million 2018 Bond, the acquisition of a small minority interest in Hard Rock (Note 21B) in March 2023 and the

amounts currently in dispute due from Caliplay (Note 7).

The Directors have reviewed liquidity and covenant forecasts for the Group and have also considered sensitivities in respect of potential

downside scenarios, reverse stress tests and the mitigating actions available to management.

The modelling of downside stress test scenarios assessed if there was a significant risk to the Group’s liquidity and covenant compliance

position. This includes risks such as not realising budget/forecasts across certain markets and any potential implications of changes in tax

and other regulations, as well as the remote probability that no further cash is received from Caliplay in respect of the dispute.

In June 2023, the Group successfully issued new €300.0 million senior secured notes at a rate of 5.875% repayable in June 2028 which were

partially used to repay in full the balance of the €200.0 million bond (initial €530.0 million of senior secured notes bond) issued in October 2018.

The Group’s principal financing arrangements as at 31 December 2023 include a revolving credit facility (RCF) up to €277.0 million (which as at

31 December 2023 remains fully undrawn), the 2019 Bond amounting to €350.0 million and the new 2023 Bond amounting to €300.0 million,

which are repayable March 2026 and June 2028 respectively. The RCF, which was restructured in October 2022, has been reduced from

€317.0 million to €277.0 million and is available until October 2025, with the Group having the option to extend by 12 months.

The RCF is subject to certain financial covenants which are tested every six months on a rolling 12-month basis, as set out in Notes 28 and 29.

As at 31 December 2023, the Group comfortably met its covenants, which were as follows:

• Leverage: Net Debt/Adjusted EBITDA to be less than 3.5:1 for the 12 months ended 31 December 2023 (2022: less than 3.5:1).

• Interest cover: Adjusted EBITDA/Interest to be over 4:1 for the 12 months ended 31 December 2023 (2022: over 4:1).

The Bonds only have one financial covenant, being the Fixed Charge Coverage Ratio (same as the Interest cover ratio for the RCF), which should

equal or be greater than 2:1.

If the Group’s results and cash flows are in line with its base case projections as approved by the Board, it would not be in breach of the financial

covenants for a period of no less than 15 months from approval of these financial statements (the “relevant going concern period”). This period

covers the bank reporting requirements for June 2024, December 2024 and June 2025 and is the main reason why the Directors selected a

15-month period of assessment. Under the base case scenario, the Group would not need to utilise its RCF facility over the going concern period.

Stress test

The stress test assumes a worst-case scenario for the entire Group which includes additional sensitivities around Italy, the Americas and

Asia, but with mitigations available (including salary and capital expenditure reductions) if needed. It also includes the remote probability

that no further cash is received from Caliplay in the going concern period to 30 June 2025. The outstanding amount at 31 December 2023 is

€86.5 million (Note 7), with further invoices totalling €35.8 million in relation to B2B licence fees and additional B2B services fee for January

and February 2024 issued and which remain unpaid (Note 41). Under this scenario, Adjusted EBITDA would fall on average by 31% per month

compared to the base case over the relevant going concern period, but the Group would still comfortably meet its covenants. From a liquidity

perspective the Group still would not need to utilise the RCF.

The Group has also considered any matters outside of the going concern period such as the renewal of the Italian licences which will result in

a material cash outflow. This is currently expected to fall outside of the going concern period; however, should payment be required in the going

concern period or shortly after, this does not give rise to any concerns over liquidity or covenant compliance.

167Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 2 – Basis of preparation continued

Going concern basis continued

Reverse stress test

The reverse stress test was used to identify the reduction in Adjusted EBITDA required that could result in either a liquidity event or breach of the

RCF and bond covenants.

As a result of completing this assessment, without considering further mitigating actions, management considered the likelihood of the reverse

stress test scenario arising to be remote. In reaching this conclusion, management considered the following:

• current trading is performing above the base case;

• Adjusted EBITDA would have to fall by 85% in the year ending 31 December 2024 and 85% in the 12 months to June 2025, compared to the

base case, to cause a breach of covenants; and

• in the event that revenues decline to this point to drive the decrease in Adjusted EBITDA, additional mitigating actions are available to

management which have not been factored into the reverse stress test scenario.

As such, the Directors have a reasonable expectation that the Group will have adequate financial resources to continue in operational existence

over the relevant going concern period and have therefore considered it appropriate to adopt the going concern basis of preparation in the

financial statements.

Note 3 – Functional and presentation currency

These consolidated financial statements are presented in Euro, which is the Company’s functional currency. The main functional currencies

for subsidiaries includes Euro, United States Dollar and British Pound. All amounts have been rounded to the nearest million, unless

otherwise indicated.

Note 4 – Changes in material accounting policies

A. Deferred tax related to assets and liabilities arising from a single transaction

The Group has adopted Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 effective from

1 January 2023. The amendments narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and

offsetting temporary differences, e.g. leases and decommissioning liabilities. For leases and decommissioning liabilities, an entity is required to

recognise the associated deferred tax assets and liabilities from the beginning of the earliest comparative period presented, with any cumulative

effect recognised as an adjustment to retained earnings or other components of equity at that date.

Following the change to the initial recognition exemption, the Group has recognised a separate deferred tax asset in relation to its lease liabilities

and a deferred tax liability in relation to its right of use assets.

The table below presents the cumulative effects of the items affected by the initial application on the consolidated balance sheet as at

1 January 2022 and 31 December 2022:

	€’m
Assets
Deferred tax asset	1.5
Equity
Retained earnings	1.5

B. Material accounting policy information

The Group also adopted the Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) from 1 January 2023.

Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information

disclosed in the financial statements.

The amendments require the disclosure of “material”, rather than “significant”, accounting policies. The amendments also provide guidance

on the application of materiality to disclosure of accounting policies, assisting entities to provide useful, entity-specific accounting policy

information that users need to understand other information in the financial statements.

Management reviewed the accounting policies and made updates to the information disclosed in Note 6 Material accounting policies

(2022: Significant accounting policies) in certain instances in line with the new amendments.

168 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 4 – Changes in material accounting policies continued

C. Reclassification of bank charges in the profit or loss

Effective 1 January 2023, the Group changed its accounting policy to recognise certain costs within distribution costs, previously recognised

within finance costs. Management believes that the classification as distribution costs is more in line with the nature of the cost, being banking

charges relating to players’ transaction processing within the B2C business segment.

Below is a summary of the impact of the change in accounting policy for the previous period:

	As previously
	reported	Adjustments	As restated
Year ended 31 December 2022	€’m	€’m	€’m
Distribution costs before depreciation and amortisation	1,067.3	10.2	1,077.5
Finance costs	73.0	(10.2)	62.8

Adjusted EBITDA and reported EBITDA for the year ended 31 December 2022 decreased by €10.2 million to €395.4 million and €362.3 million

respectively. There was no impact to the profit before tax.

Note 5 – Accounting standards issued but not yet effective

A number of new standards are effective for annual periods beginning after 1 January 2023 and earlier application is permitted. However, the

Group has not early adopted the following new or amended accounting standards in preparing these consolidated financial statements.

• Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current – deferral of effective date.

The amendments affect only the presentation of liabilities as current or non-current in the statement of financial position and not the amount of

timing of recognition of any asset, income or expenses, or the information disclosed about those items.

The amendments clarify that the classification of liabilities as current or non-current is based on the rights that are in existence at the end of the

reporting period, specify that the classification is unaffected by expectations about whether an entity will exercise its right to defer settlement

of a liability, explain the rights that are in existence if covenants are complied with at the end of the reporting period, and introduce a definition of

“settlement” to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

• Supplier Finance Arrangements – Amendments to IAS 7 and IFRS 7

In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to clarify the

characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the

amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s

liabilities, cash flows and exposure to liquidity risk.

Note 6 – Material accounting policies

The Group has consistently applied the following accounting policies to all periods presented in the consolidated financial statements, except if

mentioned otherwise.

A. Basis of consolidation

(i) Business combinations

The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition

of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group

assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired

set has the ability to produce outputs.

The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill

arising is tested semi-annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are

expensed as incurred, except if related to the issue of debt or equity securities.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the

definition of a financial instrument is classified as equity, then it is not remeasured, and settlement is accounted for within equity. Otherwise,

other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent

consideration are recognised in profit or loss. A contingent consideration in which the contingent payments are forfeited if employment is

terminated is compensation for the post-combination services and is not included in the calculation of the consideration and recognised as

employee-related costs.

Cash payments arising from settlement of contingent consideration and redemption liability are disclosed in financing activities in the

consolidated statement of cash flows.

When a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to its

acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior

to the acquisition date that have previously been recognised in other comprehensive income are reclassified to the profit or loss, where such

treatment would be appropriate if that interest were disposed of.

169Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 6 – Material accounting policies continued

A. Basis of consolidation continued

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. Control is achieved when the Group:

• has the power over the entity;

• is exposed, or has rights, to variable return from its involvement with the entity; and

• has the ability to use its power over the entity to affect its returns.

The Group reassesses whether or not it controls an entity if facts and circumstances indicate that there are changes to one or more of the

three elements of control listed above.

When the Group has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights

are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and

circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

• the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• potential voting rights held by the Company, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at

the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Where the Group holds a currently exercisable call option, the rights arising as a result of the exercise of the call option are included in the

assessment above of whether the Group has control.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until

the date on which control ceases.

(iii) Investments in associates and equity call options

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.

Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control

over those policies.

The considerations made in determining significant influence or joint control are similar to those necessary to determine control over

subsidiaries. In the consolidated financial statements, the Group’s investments in associates are accounted for using the equity method

of accounting.

Under the equity method, the investment in an associate or a joint venture is carried in the consolidated balance sheet at cost plus

post-acquisition changes in the Group’s share of the net assets of the associate. The Group’s share of the results of the associate is included in

the profit or loss. Losses of the associate or joint venture in excess of the Group’s cost of the investment are recognised as a liability only when

the Group has incurred obligations on behalf of the associate.

On acquisition of the investment, any difference between the cost of the investment and share of the associate’s identifiable assets and liabilities

is accounted for as follows:

• Any premium paid is capitalised and included in the carrying amount of the associate.

• Any excess of the share of the net fair value of the associate’s identifiable assets and liabilities over the cost of the investment is included as

income in the determination of the share of the associate’s profit or loss in the period in which the investment is acquired.

Any intangibles identified and included as part of the investment are amortised over their assumed useful economic life. Where there is objective

evidence that the investment in an associate may be impaired, the carrying amount of the investment is tested for impairment in the same way as

other non-financial assets.

The aggregate of the Group’s share of profit or loss of an associate is shown on the face of profit or loss outside operating profit and represents

profit or loss before tax. The associated tax charge is disclosed in income tax.

The Group recognises its share of any changes in the equity of the associate through the consolidated statement of changes in equity.

Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s interest in

the associate.

The Group applies equity accounting only up to the date an investment in associate meets the criteria for classification as held for sale.

From then onwards, the investment is measured at the lower of its carrying amount and fair value less costs to sell.

When potential voting rights or other derivatives containing potential voting rights exist, the Group’s interest in an associate is determined solely

on the basis of existing ownership interests and does not reflect the possible exercise or conversion of potential voting rights and other derivative

instruments unless there is an existing ownership interest as a result of a transaction that currently gives it access to the returns associated with

an ownership interest. In such circumstances, the proportion allocated to the entity is determined by taking into account the eventual exercise

of those potential voting rights and other derivative instruments that currently give the entity access to the returns. When instruments containing

potential voting rights in substance currently give access to the returns associated with an ownership interest in an associate or a joint venture,

the instruments are not subject to IFRS 9 and equity accounting is applied. In all other cases, instruments containing potential voting rights in an

associate or a joint venture are accounted for in accordance with IFRS 9.

170 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 6 – Material accounting policies continued

A. Basis of consolidation continued

(iii) Investments in associates and equity call options continued

A derivative financial asset is measured under fair value per IFRS 9. In the case where there is significant influence over the investment under

which Playtech holds the derivative financial asset, it should be accounted for under IAS 28 Investment in Associate. However, if the option is

not currently exercisable and there is no current access to profits, the option is fair valued without applying equity accounting to the investment

in associate.

Derivatives are recorded at fair value and classified as assets when their fair value is positive and as liabilities when their fair value is negative.

Subsequently, derivatives are measured at fair value.

(iv) Equity investments held at fair value

All equity investments in scope of IFRS 9 are measured at fair value in the balance sheet. Fair value changes are recognised in profit or loss.

Fair value is based on quoted market prices (Level 1). Where this is not possible, fair value is assessed based on alternative methods (Level 3).

(v) Transactions eliminated on consolidation

Intra-group balances and transactions are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated

against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains,

but only to the extent that there is no evidence of impairment.

B. Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the

dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting

date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at

the exchange rate when fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency

are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss and

presented within finance costs.

(ii) Foreign operations

On consolidation, the assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are

translated into Euro using the exchange rates at the reporting date and profit or loss items are translated into Euro at the end of each month at the

average exchange rate for the month which approximates the exchange rates at the date of the transactions.

The exchange differences arising on the translation for consolidation are recognised in other comprehensive income (OCI) and accumulated in

the foreign exchange reserve.

When a foreign operation is disposed of in its entirety, or partially such that control, significant influence or joint control is lost, the cumulative

amount in the foreign exchange reserve relating to the foreign operation is reclassified to the profit or loss as part of the gain or loss on disposal.

C. Discontinued operation

A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the

rest of the Group and which:

• represents a separate major line of business or geographical area of operations;

• is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or

• is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as

held for sale.

When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the

operation had been discontinued from the start of the comparative year .

171Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

The majority of the Group’s revenue is derived from selling services with revenue recognised when services have been delivered to the

customer. Revenue comprises the fair value of the consideration received or receivable for the supply of services in the ordinary course of

the Group’s activities. Revenue is recognised when economic benefits are expected to flow to the Group. Specific criteria and performance

obligations are described below for each of the Group’s material revenue streams.

Type of income	Nature, timing of satisfaction of performance obligations and significant payment terms
B2B licensee fee	Licensee fee is the standard operator income of the Group which relates to licensed technology and the provision of
	certain services provided via various distribution channels (online, mobile or land-based interfaces).
	Licensee fee is based on the underlying gaming revenue earned by our licensees calculated using the contractual
	terms in place. Revenue is recognised when performance obligation is met which is when the gaming transaction
	occurs and is net of refunds, concessions and discounts provided to certain licensees. The payment terms of the
	B2B licensee fee are on average 30 days from the invoice date.
B2B fixed-fee income	Fixed-fee income is the standard operator income of the Group which includes revenue derived from the provision
	of certain services and licensed technology for which charges are based on a fixed fee and/or stepped according to
	the monthly usage of the service/technology. The usage measurement is typically reset on a monthly basis.
	The performance obligation is met and revenue is recognised once the obligations under the contracts have been
	met which is when the services have been provided.
	Services provided and fees for:
	a.	minimum revenue guarantee: the additional revenue recognised by the Group for the difference in the minimum
	guarantee per licensee contract and actual performance; and
	b.	other: hosting, live, set-up, content delivery network and maintenance fees. The fees charged to licensees for
	these services are fixed per month.
	The amounts for the above are recognised over the life of the contracts and are typically charged on a fixed
	percentage and stepped according to the monthly usage of the service depending on the type of service. Set-up
	fees are recognised over the whole period of the contract, with an average period of 36 months. The revenue is
	recognised monthly over the period of the contract and the payment terms of the B2B fixed fee income are on
	average 30 days from the invoice date.
B2B cost-based revenue	Cost-based revenue is the standard operator income of the Group which is made of the total revenue charged to
	the licensee based on the development costs needed to satisfy the contract with the licensee.
	The largest type of service included in cost-based revenue is the dedicated team costs. Dedicated team employees
	are charged back to the client based on time spent on each product.
	Cost-based revenues are recognised on a monthly basis based on the contract in place between each licensee
	and Playtech, and any additional services needed on development are charged to the licensee upon delivery of the
	service. The payment terms of the B2B cost-based revenue are on average 30 days from the invoice date.
B2B revenue received from	Revenue received from the sale of hardware is the total revenue charged to customers upon the sale of each
the sale of hardware	hardware product. The performance obligation is met and revenue is recognised on delivery of the hardware and
	acceptance by the customer.
	Revenue received from future sale of hardware is recognised as deferred revenue. Once the obligation for the future
	sale is met, revenue is then recognised in profit or loss. The payment terms of the B2B revenue received from the
	sale of hardware are on average 30 days from the invoice date.
Additional B2B services fee	This income is calculated based on the profit and/or net revenues generated by the customer in return for the
	additional services provided to them by the Group. This is typically charged on a monthly basis and is measured
	using a predetermined percentage set in each licensee arrangement. The revenue is only recognised when the
	customer’s activities go live and the revenue from the additional B2B services is recognised only once the Group
	is unconditionally contractually entitled to it. The Directors have determined that this is when the customer starts
	generating profits, which is later than when the customer goes live with its B2C operations. The Directors’ rationale
	is that there is uncertainty that the Group will collect the consideration to which it is entitled before the customer
	starts generating profits and, therefore, the revenue is wholly variable. The payment terms of the additional B2B
	services fees are on average 30 days from the invoice date.

Note 6 – Material accounting policies continued

D. Revenue recognition

172 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Type of income	Nature, timing of satisfaction of performance obligations and significant payment terms
B2C revenue	In respect of B2C Snaitech revenues, the Group acts as principal with the end customer, with specific revenue
	policies as follows:
	•	The revenues from land-based gaming machines are recognised net of the winnings, jackpots and certain
	flat-rate gaming tax; revenues are recognised at the time of the bet.
	•	The revenues from online gaming (games of skill/casino/bingo) are recognised net of the winnings, jackpots,
	bonuses and certain flat-rate gaming tax at the conclusion of the bet.
	•	The revenues related to the acceptance of fixed odds bets are considered financial instruments under IFRS 9
	and are recognised net of certain flat-rate gaming tax, winnings, bonuses and the fair value of open bets at the
		conclusion of the event.
	•	Poker revenues in the form of commission (i.e. rake) are recognised at the conclusion of each poker hand.
	The performance obligation is the provision of the poker games to the players.
	•	All the revenues from gaming machines are recorded net of players’ winnings and certain gaming taxes while the
	concession fees payable to the regulator and the compensation of operators, franchisees and platform providers
	are accounted as expenses. Revenue is recognised at the time of the bet.
	Where the gaming tax incurred is directly measured by reference to the individual customer transaction and related
	to the stake (described as “flat-rate tax” above), this is deducted from revenue.
	Where the tax incurred is measured by reference to the Group’s net result from betting and gaming activity, this is
	not deducted from revenue and is recognised as an expense.
	In respect of Sun Bingo and B2C Sport revenue, the Group acts as principal with the end customer, with revenue
	being recognised at the conclusion of the event, net of winnings, jackpots and bonuses.
Financial trading income	Financial trading income represents gains (including commission) and losses arising on client trading activity,
(discontinued operations)	primarily in contracts for difference on shares, indexes, commodities and foreign exchange.
	Open client positions are carried at fair market value and gains and losses arising on this valuation are recognised
	in revenue as well as gains and losses realised on positions that have closed.
	The performance obligation is met in the accounting periods in which the trading transaction occurs and
	is concluded.

E. Share-based payments

Certain employees participate in the Group’s share option plans. Following the 2012 LTIP employees are granted cash-settled options and

equity-settled options. The Remuneration Committee has the option to determine if the option will be settled in cash or equity, a decision that is

made at grant date. The fair value of the equity-settled options granted is charged to profit or loss on a straight-line basis over the vesting period

and the credit is taken to equity, based on the Group’s estimate of shares that will eventually vest. Fair value is determined by the Black-Scholes,

Monte Carlo or binomial valuation model, as appropriate. The cash-settled options are presented as a liability. The liability is remeasured at each

reporting date and settlement date so that the ultimate liability equals the cash payment on settlement date. Remeasurements of the fair value of

the liability are recognised in profit or loss.

The Group has also granted awards to be distributed from the Group’s Employee Benefit Trust. The fair value of these awards is based on

the market price at the date of the grant; some of the grants have performance conditions. The performance conditions are for the Executive

Management and include targets based on growth in earnings per share and total shareholder return over a specific period compared to other

competitors. The fair value of the awards with market performance conditions is factored into the overall fair value and determined using a

Monte Carlo method. Where these options lapse due to not meeting market performance conditions the share option charge is not reversed.

F. Income tax

The income tax expense represents the sum of the tax currently payable and deferred tax.

(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in profit or loss because

it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or

deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the

reporting period.

A provision is recognised for those matters for which the tax determination is uncertain, but it is considered probable that there will be a

future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable.

The assessment is based on the judgement of tax professionals within the Company supported by previous experience in respect of such

activities and in certain cases based on specialist tax advice.

Note 6 – Material accounting policies continued

D. Revenue recognition continued

173Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 6 – Material accounting policies continued

F. Income tax continued

(ii) Deferred tax

The Group adopted the amendments to IAS 12 issued in May 2023, which provide a temporary mandatory exception from the requirement

to recognise and disclose deferred taxes arising from enacted tax law that implements the Pillar Two model rules, including tax law that

implements qualified domestic minimum top-up taxes described in those rules. Under these amendments, any Pillar Two taxes incurred by

the Group will be accounted for as current taxes from 1 January 2024.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying

amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business

combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss, and does not give rise to equal

taxable and deductible temporary differences; and

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the

timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the

foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax

losses. Deferred tax assets are recognised in the period in which the deductible temporary differences arise when there are sufficient taxable

temporary differences relating to the same taxation authority and the same taxable entity which are expected to reverse, or where it is probable

that taxable profit will be available against which a deductible temporary difference can be utilised.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary

differences, and the carry forward of unused tax credits and unused tax losses, can be utilised, except:

• when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a

transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss,

and does not give rise to equal taxable and deductible temporary differences; and

• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred

tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable

profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that

sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are

reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred

tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is

settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside the profit or loss is recognised outside profit or loss. Deferred tax items are recognised in

correlation to the underlying transaction either in OCI or directly in equity.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised

subsequently, if new information about facts and circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it

does not exceed goodwill) if it was recognised during the measurement period or is otherwise recognised in profit or loss.

The Group offsets deferred tax assets and deferred tax liabilities, if and only if, it has a legally enforceable right to set off current tax assets and

current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either

the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the

assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected

to be settled or recovered.

The tax base of assets and liabilities is assessed at each reporting date, and changes in the tax base that result from internal reorganisations,

changes in the expected manner of recovery or changes in tax law are reflected in the calculation of deductible and taxable temporary differences.

G. Finance expense

Finance expense arising on interest-bearing financial instruments carried at amortised cost is recognised in the profit or loss using the effective

interest rate method. Finance expense includes the amortisation of fees that are an integral part of the effective finance cost of a financial

instrument, including issue costs, and the amortisation of any other differences between the amount initially recognised and the redemption

price. All finance expenses are recognised over the availability period.

Interest expense arising on the above during the period is disclosed under the financing activities in the consolidated statement of cash flows.

H. Inventories

Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. Cost comprises all costs of purchase,

costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

174 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 6 – Material accounting policies continued

I. Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items

(major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to

the Group.

(iii) Depreciation

Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the

straight-line method over their estimated useful lives and is generally recognised in profit or loss. Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

	%
Computers and gaming machines	20–33
Office furniture and equipment	7–33
Freehold and leasehold buildings and improvements	3–20, or over the length of the lease

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

J. Intangible assets and goodwill

(i) Recognition and measurement

Goodwill

Goodwill represents the excess of the cost of a business combination over the Group’s interest in the fair value of identifiable assets, liabilities

and contingent liabilities acquired. Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the

amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity

interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration

classified as a financial liability, remeasured subsequently through profit or loss. Direct costs of acquisition are recognised immediately as an

expense. Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to profit or loss. Where the fair value

of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the profit or

loss on the acquisition date as a gain on bargain purchase.

Externally acquired intangible assets

Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and any

accumulated impairment losses.

Business combinations

Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal

rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques.

Internally generated intangible assets (development costs)

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group

are recognised as intangible assets where the following criteria are met:

• it is technically feasible to complete the software so that it will be available for use;

• management intends to complete the software and use or sell it;

• there is an ability to use or sell the software;

• it can be demonstrated how the software will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use or sell the software are available; and

• the expenditure attributable to the software during its development can be reliably measured.

The amount initially recognised for internally generated intangible assets is the sum of the expenditure incurred from the date when the

intangible asset first meets the recognition criteria listed above. Expenditure includes salaries, wages and other employee-related costs

directly engaged in generating the assets and any other expenditure that is directly attributable to generating the assets (i.e. certifications and

amortisation of right of use assets). Where no internally generated intangible asset can be recognised, development expenditure is recognised

in profit or loss in the period in which it is incurred.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates.

All other expenditures, including expenditures on internally generated goodwill and brands, are recognised in the profit or loss as incurred.

(iii) Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their

estimated useful lives and is generally recognised in the profit or loss. Goodwill is not amortised.

175Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 6 – Material accounting policies continued

J. Intangible assets and goodwill continued

(iii) Amortisation continued

The estimated useful lives for current and comparative periods are as follows:

	%
Domain names	Nil
Internally generated capitalised development costs	20–33
Technology IP	13–33
Customer lists	In line with projected cash flows or 7–20
Affiliate contracts	5–12.5
Patents and licences	10–33 or over the period of the licence

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate .

K. Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale if it is highly probable that they will be

recovered primarily through sale rather than through continuing use.

The criteria for held for sale classification are regarded as met only when the sale is highly probable, and the asset or disposal group is available

for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to

the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the plan to sell the asset and the sale

expected to be completed within one year from the date of the classification.

Such assets, or disposal groups, are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a

disposal group is allocated first to goodwill, and then to the remaining assets on a pro rata basis, except that no loss is allocated to inventories,

financial assets or deferred tax assets, which continue to be measured in accordance with the Group’s other accounting policies. Impairment

losses on initial classification as held for sale or held for distribution and subsequent gains and losses on remeasurement are recognised in the

profit or loss.

Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortised or depreciated.

L. Financial instruments

Initial recognition and subsequent measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive

income and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s

business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which

the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset

not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which

the Group has applied the practical expedient are measured at the transaction price. In order for a financial asset to be classified and measured

at amortised cost or fair value through OCI, it needs to give rise to cash flows that are solely payments of principal and interest (SPPI) on the

principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash

flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

• financial assets at amortised cost (debt instruments);

• financial assets at fair value through other comprehensive income with recycling of cumulative gains and losses (debt instruments);

• financial assets designated at fair value through other comprehensive income with no recycling of cumulative gains and losses upon

derecognition (equity instruments); and

• financial assets at fair value through profit or loss.

Financial assets at amortised cost (debt instruments)

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and

losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost

include trade receivables, loans receivable and cash and cash equivalents.

At every reporting date, the Group evaluates whether the debt instrument is considered to have low credit risk using all reasonable and

supportable information that is available without undue cost or effort. In making that evaluation, the Group reassesses the internal credit

rating of the debt instrument. In addition, the Group considers whether there has been a significant increase in credit risk depending on the

characteristics of each debt instrument.

Cash and cash equivalents consist of cash at bank and in hand, short-term deposits with an original maturity of less than three months and

customer balances.

176 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 6 – Material accounting policies continued

L. Financial instruments continued

(i) Financial assets continued

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognised in profit

or loss. This category includes listed equity investments which the Group had not irrevocably elected to classify at fair value through OCI.

The Group recognises a debt financial instrument with an embedded conversion option, such as a loan convertible into ordinary shares of an

entity, as a financial asset in the balance sheet. On initial recognition, the convertible loan is measured at fair value with any gain or loss arising on

subsequent measurement until conversion recognised in profit or loss. On conversion of a convertible instrument, the Group derecognises the

financial asset component and recognises it as an investment (equity interest, associate, joint venture or subsidiary) depending on the results of

the assessment performed under the relevant standards.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised

(i.e. removed from the Group’s consolidated balance sheet) when:

• the rights to receive cash flows from the asset have expired; or

• the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full

without material delay to a third party under a “pass-through” arrangement, and either (a) the Group has transferred substantially all the risks

and rewards of the asset; or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has

transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset, it evaluates if, and to what extent, it has retained the risks and

rewards of ownership. When it has neither: transferred nor retained substantially all of the risks and rewards of the asset, nor transferred

control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group

also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and

obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of

the asset and the maximum amount of consideration that the Group could be required to repay.

Impairment

The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss.

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group

expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from

the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition,

ECLs are provided for credit losses that result from default events that are possible within the next 12 months (a 12-month ECL). For those credit

exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses

expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk,

but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is

based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

(ii) Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables,

or derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value

and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade

and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified in two categories:

• financial liabilities at fair value through profit or loss; and

• financial liabilities at amortised cost (loans and borrowings and bonds).

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial

recognition as at fair value through profit or loss.

Financial liabilities at amortised cost

This is the category most relevant to the Group. After initial recognition, interest-bearing loans and borrowings are subsequently measured

at amortised cost using the effective interest rate (EIR) method. Gains and losses are recognised in the profit or loss when the liabilities are

derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on

acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in profit or loss.

177Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 6 – Material accounting policies continued

L. Financial instruments continued

(ii) Financial liabilities continued

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability

is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such

an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the

respective carrying amounts is recognised in profit or loss.

(iii) Offsetting

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right

to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

M. Share capital

Ordinary shares are classified as equity and are stated at the proceeds received net of direct issue costs.

N. Share buyback

Consideration paid for the share buyback is recognised against the additional paid in capital. Any excess of the consideration paid over the

weighted average price of shares in issue is debited to the retained earnings.

O. Employee Benefit Trust

Consideration paid/received for the purchase/sale of shares subsequently put in the Employee Benefit Trust, which is controlled by the

Company, is recognised directly in equity. The cost of shares held is presented as a separate reserve (the “Employee Benefit Trust reserve”).

Any excess of the consideration received on the sale of treasury shares over the weighted average cost of the shares sold is credited to

retained earnings.

P. Dividends

Dividends are recognised when they become legally due. In the case of interim dividends to equity shareholders, this is when paid by the

Directors. In the case of final dividends, this is when they are declared and approved by the shareholders at the AGM.

Q. Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to

determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For

goodwill in particular, the Group is required to test annually and also when impairment indicators arise, whether goodwill and indefinite life assets

have suffered any impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are

largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs that are

expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the

estimated future cash flows, discounted to their present value using a post-tax discount rate that reflects current market assessments of the time

value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognised in the profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the

CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s

carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment

loss had been recognised.

R. Provisions

Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable

that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognised for

future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the

class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same

class of obligations may be minimum.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the

end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of

the time value of money and the risks specific to the liability.

178 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 6 – Material accounting policies continued

S. Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract

conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Group as a lessee

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets.

The Group recognises lease liabilities to make lease payments and right of use assets representing the right to use the underlying assets.

(i) Right of use assets

The Group recognises right of use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right

of use assets are measured at cost, less any accumulated amortisation and impairment losses, and adjusted for any remeasurement of lease

liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments

made at or before the commencement date less any lease incentives received. Right of use assets are amortised on a straight-line basis over the

shorter of the lease term and the estimated useful lives of the assets.

(ii) Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made

over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable,

variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease

payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for

terminating the lease, if the lease term reflects the Group exercising the option to terminate.

Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that

triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the

interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect

the accretion of interest and reduced for the lease payments made.

In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease

payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in

the assessment of an option to purchase the underlying asset. When the lease liability is remeasured in this way, a corresponding adjustment is

made to the carrying amount of the right of use asset or is recorded in the profit or loss if the carrying amount of the right of use asset has been

reduced to zero.

The cash payments made in relation to long-term leases are split between principal and interest paid on lease liability and disclosed within

financing activities in the consolidated statement of cash flows.

(iii) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of 12 months or

less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to

leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as an expense

on a straight-line basis over the lease term and included within financing activities in the consolidated statement of cash flows.

T. Fair value measurement

“Fair value” is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability

takes place either: (a) in the principal market for the asset or liability; or (b) in the absence of a principal market, in the most advantageous market

for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,

assuming that market participants act in their economic best interest.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value,

maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy,

described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 – quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2 – valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or

indirectly observable.

• Level 3 – valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

179Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 6 – Material accounting policies continued

U. Adjusted performance measures (APMs)

In the reporting of financial information, the Directors use various APMs. The Directors use the APMs to understand, manage and evaluate

the business and make operating decisions. These APMs are among the primary factors management uses in planning for and forecasting

future periods.

As these are non-GAAP measures, they should not be considered as replacements for IFRS measures. The Group’s definition of these

non-GAAP measures may not be comparable to other similarly titled measures reported by other companies.

The following are the definitions and purposes of the APMs used:

	Closest equivalent	Reconciling items to
APM	IFRS measure	statutory measure	Definition and purpose
Adjusted	Operating profit and	Note 11	Adjusted results exclude the following items:
EBITDA and Adjusted Profit	Profit before tax		•	Material non-cash items: these items are excluded to better analyse the
			underlying cash transactions of the business as management regularly
			monitors the operating cash conversion to Adjusted EBITDA.
			•	Material one-off items: these items are excluded to get normalised results
			that are distorted by unusual or infrequent items. Unusual items include
			highly abnormal, one-off and only incidentally relating to the ordinary
			activities of the Group. Infrequent items are those which are not reasonably
			expected to recur in the foreseeable future given the environment in which
				the Group operates.
			•	Investment/acquisition-related items: these items are excluded as they are
			not related to the ordinary activities of the business and therefore are not
			considered to be ongoing costs of the operations of the business.
			These APMs provide a consistent measure of the performance of the Group
			from period to period by removing items that are considered to be either
			non-cash, one-off or investment/acquisition related items. This is a key
			management incentive metric.
Adjusted gross	Cash and cash	Chief Financial	Adjusted gross cash and cash equivalents is defined as the cash and cash
cash and cash	equivalents	Officer’s statement	equivalents after deducting the cash balances held on behalf of operators in
equivalents			respect of operators’ jackpot games and poker and casino operations as well
			as client funds with respect to B2C.
Net debt	None	Chief Financial	Net debt is defined as the Adjusted gross cash and cash equivalents after
		Officer’s statement	deducting loans and borrowings and bonds. Used to show level of net debt in
			the Group and movement from period to period.
Adjusted net	Net cash provided by	Chief Financial	Net cash provided by operating activities after adjusting for jackpots and
cash provided	operating activities	Officer’s statement	client funds, professional fees and ADM (Italian regulator) security deposit.
by operating			Adjusting for the above cash fluctuations is essential in order to truly reflect
activities			the quality of revenue and cash collection. This is because the timing of cash
			inflows and outflows for jackpots, security deposits and client funds only
			impact the reported operating cash flow and not Adjusted EBITDA, while
			professional fees are excluded from Adjusted EBITDA but impact operating
			cash flow.
Cash	None	Chief Financial	Cash conversion is defined as cash generated from operations as a
conversion		Officer’s statement	percentage of Adjusted EBITDA.
Adjusted cash	None	Chief Financial	Adjusted cash conversion is defined as Adjusted net cash provided by
conversion		Officer’s statement	operating activities as a percentage of Adjusted EBITDA.
Adjusted EPS	EPS	Note 16	The calculation of Adjusted EPS is based on the Adjusted Profit and weighted
			average number of ordinary shares outstanding.
Adjusted	Diluted EPS	Note 16	The calculation of Adjusted diluted EPS is based on the Adjusted Profit and
diluted EPS			weighted average number of ordinary shares outstanding after adjusting for
			the effects of all dilutive potential ordinary shares.
Adjusted tax	Tax expense	Note 11	Adjusted tax is defined as the tax charge for the period after deducting tax
			charges related to uncertain tax positions relating to prior years, deferred
			tax on acquisition and the write down of deferred tax assets in respect of tax
			losses arising in prior years. As these items either do not relate to the current
			year or are adjusted in arriving at the Adjusted Profit, they distort the effective
			tax rate for the period.

180 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 6 – Material accounting policies continued

V. Onerous contracts

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist

where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits

expected to be received under it.

Note 7 – Significant accounting judgements, estimates and assumptions

In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the

Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual events may differ from these estimates.

Judgements

In the process of applying the Group’s accounting policies management has made the following judgements, which have the most significant

effect on the amounts recognised in the consolidated financial statements.

Impact of Caliplay dispute

Background

As per the public announcement released by Playtech on 6 February 2023, the Group, through its subsidiary, PT Services Malta Limited

(“PT Malta”), is seeking a declaration from the English Courts to obtain clarification on a point of disagreement between Tecnologia en

Entretenimiento Caliplay, S.A.P.I. (“Caliplay”) and PT Malta in relation to the Caliente Call Option. The Caliente Call Option is an option held by

Caliplay where, for 45 days after the finalisation of Caliplay’s 2021 accounts, Caliplay could redeem PT Malta’s additional B2B services fee

or (if the Playtech Call Option had been exercised at that time) Caliente would have the option to acquire PT Malta’s 49% stake in Caliplay.

The Group believes the Caliente Call Option has expired and first referred to its expiry having taken place in its interim report for the six-month

period ended 30 June 2022, which was published on 22 September 2022. The Group has not changed its position with regards expiry at both

31 December 2022 and 2023. The matter is still unresolved and it is currently due to be heard in English Court in October 2024.

If the Caliente Call Option was declared as being exercisable and was exercised, this would extinguish the Playtech Call Option and the Playtech

M&A Call Option (refer to Note 21A for details on these option arrangements).

The dispute with Caliplay now also includes a litigation in relation to the B2B licensee fees and additional B2B services fees owed by Caliplay to

Playtech under the terms of the Group’s licence agreement. The dispute relates to amounts that date back to July 2023.

The Group became aware in early October 2023 that, in August 2023, without prior notice, Caliplay commenced proceedings in Mexico against

the Group seeking (amongst other things) to invalidate the licence agreement between Caliplay and PT Malta (and the associated framework

agreement which also includes the Playtech Call Option and the Playtech M&A Call Option). From that point, Caliplay has declined to pay nearly

all monthly sums due under the licence agreement (for B2B licensee fee amounts due from August 2023 and additional B2B services fee

amounts due from July 2023). Those Mexican proceedings have since been withdrawn by Caliplay, having been ordered to do so by the English

Courts, but the amounts due to PT Malta remain unpaid.

PT Malta has therefore amended its case in the English Courts to include a debt claim for monies owed by Caliplay under the licence agreement

for sums due as B2B licensee fees and additional B2B services fees. Caliplay has denied in its defence that these fees are outstanding or

otherwise payable.

As regards the B2B licensee fees, Caliplay has made a counterclaim relating to alleged complaints about the quality of certain software licensed

to it by PT Malta. Caliplay alleges that the difference in value provided to it by the software, as compared with the B2B licensee fees invoiced by

PT Malta, entitles Caliplay to reduce the B2B licensee fees. Caliplay has also claimed that amounts invoiced by PT Malta in respect of the B2B

licensee fees are in excess of those allowed by the contractual terms.

As regards the monthly additional B2B services fees, Caliplay has alleged that on 3 January 2024 it recorded a significant provision for the

months of July to November 2023 and argues that, because of this provision, Caliplay’s profits for Q3 2023 stand to be retrospectively adjusted

downwards to zero, with the effect that all of the additional B2B services fees (which are calculated based on predefined percentage of

revenue generated by Caliplay with a profit-linked cap (as provided for in the agreement)) for Q3 2023 also stand to be retrospectively adjusted

downwards to zero. Caliplay also alleges, as a result of the significant provision, that it does not have sufficient working capital (after taking

account of this provision) to pay these additional B2B services fees.

The monthly additional B2B services fees in respect of Q4 2023 have also not been paid. PT Malta is still to formally amend its claim to include

these amounts and Caliplay has therefore not yet pleaded any defence as to the basis of its non-payment. However, the Group anticipates that

Caliplay will seek to rely on substantially the same bases for non-payment of these fees as are relied upon in respect of Q3 2023.

Impact on revenue recognition and recovery of receivable

At 31 December 2023, the outstanding amount of the B2B licensee fee was €32.3 million and the outstanding amount of the additional B2B

services fee was €54.2 million.

The Group has recognised the full outstanding amount above of €86.5 million within its total revenue for the year and in line with its revenue

accounting policies as per Note 6D. In recognising the entire amount, the Group has assessed that it is highly probable that there will not be a

significant reversal of this revenue in a subsequent period. This was principally supported by the following:

In relation to the monthly B2B licensee fees, the Group believes that Caliplay’s counterclaim is unlikely to succeed and that Caliplay will also not

be entitled to set it off against the B2B licensee fees owed. PT Malta’s legal position is that Caliplay’s interpretation of the licence agreement is

not correct and that Caliplay will not be legally entitled, even if it did have a valid counterclaim, to set it off against the B2B licensee fees owed or

to claim an alleged difference in value between the software provided and the B2B licensee fees invoiced.

181Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 7 – Significant accounting judgements, estimates and assumptions continued

Judgements continued

Impact of Caliplay dispute continued

Impact on revenue recognition and recovery of receivable continued

The Group also does not accept the factual allegations which Caliplay has made about its software, considers that Caliplay’s case does not

accurately reflect the contractual obligations which relate to the Group’s software, and in any event firmly believes that it has met its performance

obligations under the agreement and therefore is entitled to the full revenue. The Group’s software has helped to deliver considerable

year-on-year revenue growth for Caliplay; the Group believes that growth is inconsistent with the allegations which Caliplay is now making about

the quality of software and services delivered.

In relation to the monthly additional B2B services fees, the Group believes that Caliplay is unlikely to convince the English Courts on its

current case that the provision is valid and has any effect on the amounts due to the Group (through PT Malta). This is principally for the

following reasons:

• Caliplay has provided very little information about the basis and nature of the provision, despite requests, and the Group believes that

Caliplay’s pleading is defective.

• There is no contractual mechanism under the licence agreement to retrospectively adjust the additional B2B services fees.

• Caliplay’s case on working capital does not make any reference to the timeframe in which the alleged provision would theoretically be paid,

and therefore based on the information provided this provision has no bearing on any working capital requirements.

The Adjusted EBITDA recorded for the year ended 31 December 2023 is therefore exposed to the outstanding invoices of €86.5 million should

the Group not recover the debt. This is reduced by certain subcontractor payments linked to the revenue recognised which per the agreement

would only be made when the debt is received by the Group.

In addition, there is potentially a risk that if the English Court orders the immediate payment of all outstanding fees, Caliplay may still refuse to

pay under the relevant settlement agreement and/or court order. However, the Group considers that this probability is unlikely based on current

information. Not complying with an English Court order carries significant reputational risks for Caliplay and the potentially adverse impact upon

its external relationships. Furthermore, we are not aware of any current risk of non-compliance. Instead, so far Caliplay has complied with the

two court orders in PT Malta’s favour in relation to the order to withdraw the proceedings in Mexico and not to litigate there further (granted by

Mr Justice Foxton in October 2023 and Mr Justice Bright in December 2023 respectively). In the unlikely event that Caliplay refuses to pay the

Group in circumstances where Playtech has the benefit of an English Court judgement ordering Caliplay to do so, Playtech will take all steps

available to seek immediate enforcement of the order in Mexico by way of recognition of the English judgement under the appropriate bi-lateral

enforcement treaty, and continue to demand the outstanding fees from Caliplay.

Impact on Playtech M&A Call Option valuation

The Playtech M&A Option is further described in Note 21A of the financial statements, with the valuation methodology and assumptions covered

in Note 21C.

The Group’s view of a reasonable market participant base discount rate for the 31 December 2023 valuation is unchanged since last year.

However, due to the ongoing legal proceedings and the disputes with Caliplay, the Group has adjusted the fair value of the Playtech M&A

Call Option to reflect this risk, by including an additional company-specific risk premium in the discount rate, which overall increased it

to 20% (31 December 2022: 16%). The impact of the increase in discount rate is to reduce the fair value of the option from €846.0 million

to €730.2 million.

Furthermore, although we do not believe the significant provision made by Caliplay is valid, were this to be included in the valuation of the

Playtech M&A Call Option as an adjustment to net debt, this would have a material impact on the value of the Playtech M&A Call Option.

Impact on CGU impairment reviews and recoverability of deferred tax assets

Whilst our current contract with Caliplay under which we are entitled to receive our fees (including the B2B licensee fees and the additional

B2B services fees) is expiring in 2034, and this was our base assumption in the CGU impairment reviews and deferred tax asset recoverability

assessment, should there be material changes to the cash flows arising from the contract this could potentially lead to impairments in certain

CGUs of the Group including Casino, Sports B2B, Services, Quickspin and Eyecon (Note 20).

Similarly, this could also affect the recoverability assessment of the deferred tax asset, due to the reduction in profits against which the deferred

tax asset is able to be utilised, as well as impacting the carrying value of the Parent Company investment in subsidiary.

Given the current uncertainty, the Group is not able to materially estimate the effect of this and in any event considers it highly unlikely that there

will be material changes to the cash flows such that the assets referred to above are materially impacted.

Impact on going concern and viability statement assessment

As per the going concern assessment under Note 2, while in the base case cash flow forecasts the Group has assumed full recovery of the

outstanding amounts within the going concern period of assessment, there is a remote risk depending on the progress of the legal dispute that

no cash will be received in the going concern period to 30 June 2025 and hence this was modelled in the stress test scenario.

Even under this scenario the Group still has sufficient headroom on its covenants and liquidity and hence the Directors still have a reasonable

expectation that the Group will continue as a going concern over the relevant going concern period.

This remote scenario was also modelled in the viability assessment which covers a period of three years, with the conclusion being that there is

a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the three-year period to

31 December 2026.

182 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 7 – Significant accounting judgements, estimates and assumptions continued

Judgements continued

Revenue from contracts with customers

The Group applies judgement in determining whether it is acting as a principal or an agent specifically on the revenue earned under the B2B

licensee fee stream. This income falls within the scope of IFRS 15 Revenue from Contracts with Customers. In making these judgements, the

Group considers, by examining each contract with its customers, which party has the primary responsibility for providing the services and is

exposed to the majority of the risks and rewards associated with providing the services, as well as if it has latitude in establishing prices, either

directly or indirectly. The business model of this division is predominantly a revenue share model which is based on software fees earned from

B2C business partners’ revenue.

IFRS 15, paragraph B37 describes indicators that an entity controls the specified good or service before it is transferred to a customer and

therefore acts as the principal. Based on this assessment it was concluded that Playtech is acting as an agent under the B2B licensee fee stream

due to the three indicators under B37 which are not satisfied as follows:

• Playtech is responsible in fulfilling the contract to the operator, principally in respect of the software solutions, and not to the end customer

which is the responsibility of the operator;

• there is no inventory risk as Playtech does not have the ability to direct the use of, and obtain substantially all of the remaining benefits from, the

good or service before it is transferred to the end customer; and

• Playtech does not have any discretion in establishing prices set by the operator to third parties.

Based on the above it was determined that the Group was acting as agent and revenue is recognised as the net amount of B2B licensee fees

received. The majority of this B2B revenue is recognised when the gaming or betting activity used as the basis for the revenue share calculation

takes place, and furthermore is only recognised when collection is virtually certain with a legally enforceable right to collect.

The Group applied judgement in determining whether price concessions in respect of ongoing negotiations and contract modifications should

be accounted for as variable consideration in revenue. Once there is a valid expectation that the concession of the variable consideration is

highly probable, the Group accounts for it under IFRS 15 paragraph 52.

IFRS 15, paragraph 52 describes that in addition to the terms of the contract, the promised consideration is variable if either of the following

circumstances exists:

• The operator has a valid expectation arising from Playtech’s customary business practices, published policies or specific statements that

Playtech will accept an amount of consideration that is less than the price stated in the contract, that is, it is expected that Playtech will offer a

price concession. Depending on the jurisdiction, industry or customer this offer may be referred to as a discount, rebate, refund or credit.

• Other facts and circumstances indicate that Playtech’s intention, when entering into the contract with the operator, is to offer a price

concession to the operator.

The Group has estimated the variable consideration based on the best estimates of future outcomes to determine the most likely amount of

consideration to be received.

Internally generated intangible assets

The Group capitalises costs for product development projects. Expenditure on internally developed products is capitalised when it meets the

following criteria:

• adequate resources are available to complete and sell the product;

• the Group is able to sell the product;

• sale of the product will generate future economic benefits; and

• expenditure on the project can be measured reliably.

Initial capitalisation of cost is based on management’s judgement that the technological and economic feasibility is confirmed, usually when

product development has reached a defined milestone and future economic benefits are expected to be realised according to an established

project management model. Following capitalisation, an assessment is performed in regard to project recoverability which is based on the

actual return of the project. During the year, the Group capitalised €56.7 million (2022: €57.5 million) and the carrying amount of capitalised

development costs as at 31 December 2023 was €133.5 million (2022 restated: €128.1 million).

Adjusted performance measures

As noted in Note 6, paragraph U, the Group presents adjusted performance measures which differ from statutory measures due to exclusion of

certain non-cash and one-off items from the actual results. The determination of whether these items should form part of the adjusted results is a

matter of judgement as management assess whether these items meet the definition disclosed in Note 6, paragraph U. The items excluded from

the adjusted measures are described in further detail in Note 11.

Provision for risks and charges and potential liabilities

The Group operates in a number of regulated markets and is subject to lawsuits and potential lawsuits regarding complex legal matters, which

are subject to a different degree of uncertainty in different jurisdictions and under different laws. For all material ongoing and potential legal

and regulatory claims against the Group, an assessment is performed to consider whether an obligation or possible obligation exists and

to determine the probability of any potential outflow to determine whether a claim results in the recognition of a provision or disclosure of a

contingent liability. The timing of payment of provisions is subject to uncertainty and may have an effect on the presentation of the provisions as

current and non-current liabilities in the balance sheet. Expected timing of payment and classification of provision is determined by management

based on the latest information available at the reporting date. See Note 30 for further details.

183Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 7 – Significant accounting judgements, estimates and assumptions continued

Judgements continued

Classification of equity call options

Background

In addition to the provision of software-related solutions as a B2B product, the Group also offers certain customers a form of offering

(which includes software and related services) which is termed a “structured agreement”. Structured agreements are customarily with

customers that have a gaming licence and are retail/land-based operators that are looking to establish their online B2C businesses – these

customers require initial support beyond the provision of the Group’s standard B2B software technology. With this product offering, Playtech

offers additional services to support the customer’s B2C activities over and above the B2B software solution products.

Playtech generates revenues from the structured agreements as follows:

• B2B licensee fee income (as per Note 6D); and

• revenue based on predefined revenue generated by each customer under each structured agreement which is typically capped at a

percentage of the profit (also defined in each agreement) generated by the customer, which compensates Playtech for the additional services

provided (additional B2B services fee as per Note 6D).

Under these agreements, Playtech typically has a call option to acquire equity in the operating entities. If the call option is exercised by Playtech,

the Group would no longer provide certain services (which generally include technical and general strategic support services) and would no

longer receive the related additional B2B services fee. This mechanism is not designed as a control feature but mainly to protect Playtech’s

position should the customer be subject to an exit transaction. Playtech is therefore able to benefit from any value appreciation in the operation

and could also potentially cease to provide the additional B2B services should it choose to do so dependent on the nature of the exit transaction.

Judgement applied

In respect of each of the structured agreements where the Group holds equity call options, management applies judgement to assess whether

the Group has control or significant influence. For each of the Group’s structured agreements an assessment was completed in Note 21 using

the below guidance.

The existence of control by an entity is evidenced if all of the below are met in accordance with IFRS 10 Consolidated Financial Statements,

paragraph 7:

• power over the investee;

• exposure, or rights, to variable returns from its involvement with the investee; and

• the ability to use its power over the investee to affect the amount of the investor’s returns.

In the cases where the Group assessed that it exercises control over these arrangements, then the company is consolidated in the Group’s

annual results in accordance with IFRS 10.

The existence of significant influence by an entity is usually evidenced in one or more of the following ways in accordance with IAS 28 Investment

in Associates and Joint Ventures, paragraph 6:

• representation on the board of directors or equivalent governing body of the investee;

• participation in policy-making processes, including participation in decisions about dividends or other distributions;

• material transactions between the entity and its investee;

• interchange of managerial personnel; or

• provision of essential technical information.

If the conclusion is that the Group has significant influence, the next consideration made is whether there is current access to net profits and

losses of the underlying associate. This is determined by the exercise conditions of each relevant equity call option and in particular whether the

options are exercisable at the end of each reporting period.

If the option is exercisable then the investment is accounted for using the equity accounting method. However, in the cases where the company

over which the Group has a current exercisable option generates profits, management made a judgement and concluded that Playtech’s share

of profits (were the option to be exercised) should not be recognised as it is unlikely that the profits will be realised as the existing shareholder

has the right, and is entitled, to extract distributable profits. As such, management did not consider it appropriate to recognise any share of these

profits. However, in the cases where the associate has generated losses, the Group’s percentage share is recognised and deducted from the

carrying value of the investment in associate.

Management has made a further judgement that if the equity call option is not exercisable at the end of the reporting period, then the option is

recorded at fair value as per IAS 28, paragraph 14 and recognised as a derivative financial asset as per IFRS 9 Financial Instruments.

Furthermore, under some of these arrangements the Group has provided loan advances. In such instances a judgement was made as to

whether these amounts form part of the Group’s investment in the associate as per IAS 28, paragraph 38, with a key consideration being

whether the Group expects settlement to occur in the foreseeable future. In the case where this is not expected and there is no set repayment

term, then it is concluded that in substance these loans are extensions of the entity’s investment in the associate and therefore would form part

of the cost of the investment.

Finally, the Group has certain agreements in relation to the provision of services by service providers in connection with certain of the Group’s

obligations under their various structured agreements. Under these arrangements, the service providers have certain rights to equity. In order for

these rights to crystallise, the Group must first exercise the relevant option. A judgement was therefore made that no current liability exists under

IAS 32, until the point when Playtech exercises the option.

184 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 7 – Significant accounting judgements, estimates and assumptions continued

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, which have a significant

risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared.

Existing circumstances and assumptions about future developments may change due to market changes or circumstances arising that are

beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial assets

Cash-generating units

Impairment exists when the carrying value of an asset or cash-generating unit (CGU) exceeds its recoverable amount, which is the higher of its

fair value less costs to sell and its value in use. The value in use calculation is based on a discounted cash flow model (DCF). The cash flows are

derived from the three-year budget, with CGU-specific assumptions for the subsequent two years. They do not include restructuring activities

that the Group is not yet committed to or significant future investments that may enhance the performance of the assets of the CGU being

tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash inflows and the

growth rates used in years four and five and for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles

with indefinite useful lives recognised by the Group. The key assumptions used to determine the recoverable amount of the different CGUs are

disclosed and further explained in Note 20, including a sensitivity analysis for the CGUs that have lower headroom.

Investment in associates

In assessing impairment of investments in associates, management utilises various assumptions and estimates that include projections of

future cash flows generated by the associate, determination of appropriate discount rates reflecting the risks associated with the investment,

and consideration of market conditions relevant to the investee’s industry. The Group exercises judgement in evaluating impairment indicators

and determining the amount of impairment loss, if any. This involves assessing the recoverable amount of the investment based on available

information and making decisions regarding the appropriateness of key assumptions used in impairment testing.

Income taxes

The Group is subject to income tax in several jurisdictions and significant judgement is required in determining the provision for income taxes.

During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. As a result,

the Group recognises tax liabilities based on estimates of whether additional taxes and interest will be due. These tax liabilities are recognised

when, despite the Group’s belief that its tax return positions are supportable, the Group believes it is more likely than not that a taxation authority

would not accept its filing position. In these cases, the Group records its tax balances based on either the most likely amount or the expected

value, which weights multiple potential scenarios. The Group believes that its accruals for tax liabilities are adequate for all open audit years

based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and

assumptions and may involve a series of complex judgements about future events. To the extent that the final tax outcome of these matters

is different than the amounts recorded, such differences will impact income tax expense in the period in which such determination is made.

Where management conclude that it is not probable that the taxation authority will accept an uncertain tax treatment, they calculate the effect

of uncertainty in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates. The effect of

uncertainty for each uncertain tax treatment is reflected by using the expected value – the sum of the probabilities and the weighted amounts

in a range of possible outcomes. More details are included in Note 15.

Deferred tax asset

In evaluating the Group’s ability to recover our deferred tax assets in the jurisdiction from which they arise, management considers all available

positive and negative evidence, projected future taxable income, tax-planning strategies and results of recent operations. Deferred tax asset

is recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Judgement is required in determining the initial recognition and the subsequent carrying value of the deferred tax asset. Deferred tax asset is

only able to be recognised to the extent that utilisation is considered probable. It is possible that a change in profit forecasts or risk factors could

result in a material change to the income tax expense and deferred tax asset in future periods.

Deferred tax asset in the UK

As a result of the Group’s internal restructuring in January 2021, the Group is entitled to UK tax deductions in respect of certain goodwill and

intangible assets. A deferred tax asset was recognised as the tax base of the goodwill and intangible assets is in excess of the book value

base of those assets. At the beginning of the period, the net recognised deferred tax asset amounted to €56.8 million. As at 31 December 2023,

an additional deferred tax asset of €5.2 million was recognised. This additional deferred tax asset has been recognised as the Group’s

management has concluded that it is probable for the UK entities to continue to generate taxable profits in the future against which the Group

can utilise the tax deductions for goodwill and intangible assets. During the year, €14.8 million has been utilised and the net recognised deferred

tax asset as at 31 December 2023 amounts to €47.2 million. In addition, a total of €31.8 million of deferred tax asset has not been recognised in

respect of the benefit of future tax deductions related to the goodwill and intangible assets which will arise more than five years after the balance

sheet date.

Deferred tax assets are reviewed at each reporting date. In considering their recoverability, the Group assesses the likelihood of their being

recovered within a reasonably foreseeable timeframe, which is broadly in line with our viability assessment and the cash flow forecasts period

used in our CGU impairment assessment. The Group updated its forecasts, following changes in assumptions made to the forecasts during

2023, due to certain changes in the current period to the expected profit profile within its UK business unit that carries significant losses.

This forms a change in accounting estimate and resulted in a reversal of €37.2 million in the current year of previously recognised deferred tax

assets in respect of UK tax losses and tax attributes relating to excess interest expense brought forward.

185Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 7 – Significant accounting judgements, estimates and assumptions continued

Estimates and assumptions continued

Deferred tax asset continued

Deferred tax asset in the UK continued

As at 31 December 2023, a deferred tax asset of €27.2 million has been recognised in respect of UK tax losses (2022: €64.4 million). Based on

the current forecasts, these losses will be fully utilised over the forecast period. Remaining UK tax losses and excess interest expense of

€268.3 million (2022: €Nil) have not been recognised as at 31 December 2023 as expected utilisation would fall outside the forecasting period

and therefore there is not sufficient certainty they will be recovered.

Any future changes in the tax law or the structure of the Group could have a significant effect on the use of the tax deductions, including the

period over which the deductions can be utilised.

Deferred tax assets in Italy

The Group has recognised a deferred tax asset of €2.1 million (2022: €23.1 million) in respect of tax losses in Italy which are available to offset

against the future profits of the Italian Group companies. Based on the current forecasts, these losses will be fully utilised within the next year.

The Group reviewed the latest forecasts for the Italian companies for the next five years, including their ability to continue to generate income

beyond the forecast period under the tax laws substantively enacted at the reporting date. Based on this, the Group management concludes

that it is probable that the Italian Group companies will continue to generate taxable income in the future against which the losses can be utilised.

Any future changes in the tax law or the structure of the Group could have a significant effect on the use of the tax deductions, including the

period over which the deductions can be utilised.

Impairment of financial assets

The Group undertook a review of trade receivables and other financial assets, as applicable, and their expected credit losses (ECLs). The review

considered the macroeconomic outlook, customer credit quality, exposure at default, and effect of payment deferral options as at the reporting

date. The ECL methodology and definition of default remained consistent with prior periods. The model inputs, including forward-looking

information, scenarios and associated weightings, together with the determination of the staging of exposures, were revised. The Group’s

financial assets consist of trade and loans receivables and cash and cash equivalents. ECL on cash balances was considered and calculated by

reference to Moody’s credit ratings for each financial institution, while ECL on trade and loans receivables was based on past default experience

and an assessment of the future economic environment. More details are included in Note 39.

In respect of the Group’s Asian licensees’ business model an additional ECL risk was identified due to increase in collection days and uncertainty

over timing of receipt of funds. An additional provision was made in the year ended 31 December 2023 of €3.4 million (2022: €15.4 million).

Sun Bingo agreement

Background

The News UK contract commenced in 2016 and was originally set for a five-year period to June 2021. Both parties have obligations under

the contract, which includes News UK providing access to brand and related materials as well as other services. Playtech has the primary

responsibility for the operation of the arrangement, but both parties have contractual responsibilities.

The related brands are used in Playtech’s B2C service, where the Group acts as the principal, meaning that in the Group’s consolidated

statement of comprehensive income:

• revenue from B2C customers is recognised as income; and

• the fees paid to News UK for use of the brands are an expense as they are effectively a supplier.

In the original contract, the fees payable were subject to a predetermined annual minimum guarantee (MG) which Playtech had to pay

to News UK.

During the period from 2016 to 2018, performance was not in line with expectations, and as such, the MG made this operation significantly

loss-making for the Group. This opened the negotiations with News UK for certain amendments to the contract, which were agreed and signed

in February 2019 as follows:

• the MG was still payable up until the end of the original contract period, being June 2021, with no MG payable after that; and

• the contract term was extended to permit Playtech access to News UK’s brands and other related materials and other services, for a longer

period, to allow Playtech to recover its MG payments and to make a commercial return as was always envisaged. The term of the contract was

extended to end at the earlier of: a) five years from the date when Playtech had fully recovered all MG payments made; or b) 15 years from the

renegotiation (i.e. June 2036).

Judgements made on recognition and measurement

The annual MG paid to News UK was recognised in Playtech’s profit or loss up until February 2019, essentially being expensed over the original

term of the contract. However, from the point at which the amended contract became effective, the timing of the MG paid (being based on the

original terms) no longer reflected the period over which Playtech was consuming the use of the News UK brands and other related services

from them. As such, a prepayment was recorded to reflect the amount that had been paid, as at each period end, which related to the future use

of the brands and services. IFRS do not have a specific standard that deals with accounting for prepayments; however, the asset recognised as a

prepayment is in accordance with IAS 1 Presentation of Financial Statements.

At the commencement of the agreement and on renegotiation of the contract, the Directors considered whether the nature of the arrangement

gave rise to any intangible assets. At contract inception the Directors concluded that there were no such assets to recognise as both parties

had contractual obligations under the agreement to deliver services, as explained above. Post the contract renegotiation, the amounts to be

paid in the remainder of the initial period were considered to be advanced payments in respect of amounts to be earned by News UK over the

remainder of the extended contract period. Consequently, the Directors did not believe that there was a fundamental change in the nature of the

arrangements and it was considered most appropriate to categorise the amounts paid as operating expense prepayments.

186 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 7 – Significant accounting judgements, estimates and assumptions continued

Estimates and assumptions continued

Sun Bingo agreement continued

Judgements made on recognition and measurement continued

As noted above, the term of this renegotiated contract is dependent on the future profitability of the contract, and it was expected that the future

profitability would mean the contract would finish before the end of the fixed term period. For this reason, it was considered appropriate that the

prepayment recognised should be released to the profit or loss in line with this expected profitability, rather than on a straight-line basis.

The amounts held in non-current and current assets of €58.7 million (2022: €63.4 million) and €4.4 million (2022: €3.6 million) in Notes 22 and 24,

respectively, are the differences between the MG actually paid to News UK from February 2019 to June 2021 and the amounts recognised in the

Group’s profit or loss from February 2019 to December 2022.

As with any budgeting process, there is always a risk that the plan may not be realised. This risk increases the longer the period for which the

budget covers and in this instance the period is potentially up to 13 years from 31 December 2023. When producing the budget, management

applies reasonable assumptions based on known factors, but sometimes and outside of management’s control, these factors may vary.

However, management also reviews these forecasts at each reporting period and more regularly internally and adjusts the expense released

accordingly. Based on the most recent forecasts and current profitability and the fact that the Group had been running the operation since 2016

and therefore has significant experience of the level of profitability that can be derived from the operation, it is confident that the performance of

the business will allow the full recovery of this asset, before the contract ends.

Calculation of legal provisions

The Group ascertains a liability in the presence of legal disputes or ongoing lawsuits when it believes it is probable that a financial outlay will take

place and when the amount of the losses can be reasonably estimated. The Group is subject to lawsuits regarding complex legal problems,

which are subject to a differing degree of uncertainty (also due to a complex legislative framework), including the facts and the circumstances

inherent to each case, the jurisdiction and the different laws applicable. Given the uncertainties inherent to these problems, it is difficult to predict

with certainty the outlay which will derive from these disputes and it is therefore possible that the value of the provisions for legal proceedings

and disputes may vary depending on future developments in the proceedings underway. The Group monitors the status of the disputes

underway and consults with its legal advisers and experts on legal and tax-related matters. More details are included in Note 30.

Measurement of fair values of equity investments and equity call options

The Group’s equity investments and, where applicable (based on the judgements applied above), equity call options held by the Group, are

measured at fair value for financial reporting purposes. The Group has an established control framework with respect to the measurement of

fair value.

In estimating the fair value of an asset and liability, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are

not available, the Group engages third-party qualified valuers to assist in performing the valuation. The Group works closely with the qualified

valuers to establish the appropriate valuation techniques and inputs to the model.

As mentioned in Note 21, the Group has:

• investments in listed securities where the fair values of these equity shares are determined by reference to published price quotations in an

active market;

• equity investments in entities that are not listed, accounted at fair value through profit or loss under IFRS 9; and

• derivative financial assets (call options in instruments containing potential voting rights), which are accounted at fair value through profit or loss

under IFRS 9.

The fair values of the equity investments that are not listed, and of the derivative financial assets, rely on non-observable inputs that require

a higher level of management judgement to calculate a fair value than those based wholly on observable inputs. Valuation techniques used to

calculate fair values include comparisons with similar financial instruments for which market observable prices exist, DCF analysis and other

valuation techniques commonly used by market participants. Upon the use of DCF method, the Group assumes that the expected cash flows

are based on the EBITDA.

The Group only uses models with unobservable inputs for the valuation of certain unquoted equity investments. In these cases, estimates are

made to reflect uncertainties in fair values resulting from a lack of market data inputs; for example, as a result of illiquidity in the market. Inputs

into valuations based on unobservable data are inherently uncertain because there is little or no current market data available from which to

determine the level at which an arm’s length transaction would occur under normal business conditions. Unobservable inputs are determined

based on the best information available. Further details on the fair value of assets are disclosed in Note 21.

187Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 7 – Significant accounting judgements, estimates and assumptions continued

Estimates and assumptions continued

Measurement of fair values of equity investments and equity call options continued

The following table shows the carrying amount and fair value of non-current assets, as disclosed in Note 21, including their levels in the fair

value hierarchy.

	Carrying amount		Fair value
	2023	Level 1	Level 2	Level 3
	€’m	€’m	€’m	€’m
Non-current assets
Other investments (Note 21B)	92.8	15.8	—	77.0
Derivative financial assets (Note 21C)	827.8	—	—	827.8
	920.6	15.8	—	904.8
	Carrying amount		Fair value
	2022	Level 1	Level 2	Level 3
	€’m	€’m	€’m	€’m
Non-current assets
Other investments (Note 21B)	9.2	1.4	—	7.8
Derivative financial assets (Note 21C)	636.4	—	—	636.4
	645.6	1.4	—	644.2

Note 8 – Segment information

The Group’s reportable segments are strategic business units that offer different products and services.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief

operating decision maker has been identified as the Board including the Chief Executive Officer and the Chief Financial Officer.

The operating segments identified are:

• B2B: Providing technology to gambling operators globally through a revenue share model and, in certain agreements, taking a higher share in

exchange for additional services;

• B2C – Snaitech: Acting directly as an operator in Italy and generating revenues from online gambling, gaming machines and retail betting;

• B2C – Sun Bingo and Other B2C: Acting directly as an operator in the UK market and generating revenues from online gambling;

• B2C – HAPPYBET: Acting directly as an operator in Germany and Austria and generating revenues from online gambling and retail

betting; and

• Financial – including B2C and B2B CFD (discontinued operations): Online CFDs, broker and trading platform provider, operating a number of

brands across numerous countries. This division was disposed in the year ended 31 December 2022.

The Group-wide profit measure is Adjusted EBITDA (see Note 11).

					Sun Bingo
					and Other		Intercompany	Total
Year ended			B2B	Snaitech	B2C	HAPPYBET	B2C	B2C	Intercompany	Tot al
31 December 2023			€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m
Revenue			684.1	946.6	73.4	18.2	(1.2)	1,037.0	(14.4)	1,706.7
Adjusted EBITDA			182.0	256.1	6.0	(11.8)	—	250.3	—	432.3
Total assets			2,102.4	1,115.5	90.6	17.3	—	1,223.4	—	3,325.8
Total liabilities			1,018.6	469.4	26.0	5.6	—	501.0	—	1,519.6
								Total
			Sun Bingo					Gaming –	Financial –
			and Other		Intercompany			continuing	discontinued
Year ended	B2B	Snaitech	B2C	HAPPYBET	B2C	Total B2C	Intercompany	operations	operations	Tot al
31 December 2022	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m
Revenue	632.4	899.8	65.3	20.1	(2.1)	983.1	(13.7)	1,601.8	74.5	1,676.3
Adjusted EBITDA	160.2	244.0	2.0	(10.8)	—	235.2	—	395.4	33.8	429.2
Total assets	1,854.1	1,070.8	89.7	9.3	—	1,169.8	—	3,023.9	—	3,023.9
Total liabilities	697.2	603.2	14.6	6.4	—	624.2	—	1,321.4	—	1,321.4

188 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 8 – Segment information continued

Geographical analysis of non-current assets

The Group’s information about its non-current assets by location is detailed below:

	2023	2022
	€’m	€’m
Italy	750.3	746.1
UK	332.9	328.4
Austria	54.8	131.5
Alderney	63.9	75.9
Sweden	48.7	59.9
Gibraltar	27.8	27.9
Cyprus	19.4	22.0
Latvia	17.5	15.5
Australia	17.3	18.8
Ukraine	4.0	8.8
Estonia	8.6	7.8
British Virgin Islands	7.5	8.2
Rest of World	76.6	59.7
	1,429.3	1,510.5

The segment assets and liabilities are not provided to the chief operating decision maker.

Note 9 – Discontinued operations

The results of the discontinued operations for the year are presented below:

		2023	2022
	Actual	Adjusted	Actual	Adjusted
	€’m	€’m	€’m	€’m
Revenue	—	—	74.5	74.5
Distribution costs before depreciation and amortisation	—	—	(34.9)	(34.8)
Administrative expenses before depreciation and amortisation	—	—	(13.3)	(4.0)
Impairment of financial assets	—	—	(1.9)	(1.9)
EBITDA	—	—	24.4	33.8
Finance income	—	—	11.6	11.6
Finance costs	—	—	(0.5)	(0.5)
Profit on disposal of discontinued operations	—	—	15.1	—
Profit before taxation	—	—	50.6	44.9
Tax expense	—	—	(3.6)	(3.7)
Profit from discontinued operations, net of tax	—	—	47.0	41.2

All of the profit from discontinued operations, net of tax, in the year ended 31 December 2022 relates to the Financial segment, which was

disposed in July 2022 for a cash consideration of $228.1 million (€223.9 million).

The following table provides a full reconciliation between adjusted and actual results from discontinued operations:

			Profit from
			discontinued
			operations
			attributable to
			the owners of
	Revenue	EBITDA	the Company
For the year ended 31 December 2022	€’m	€’m	€’m
Reported as actual	74.5	24.4	47.0
Employee stock option expenses	—	0.3	0.2
Professional fees	—	9.1	9.1
Profit on disposal of discontinued operations	—	—	(15.1)
Adjusted measure	74.5	33.8	41.2

1 On the completion of the disposal, the break fee of US$8.8 million to the Consortium that had previously agreed to acquire the Financial segment, as announced in May 2021, was triggered and

therefore paid. This is included in professional fees.

189Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 9 – Discontinued operations continued

Earnings per share from discontinued operations

		2023		2022
	Actual	Adjusted	Actual	Adjusted
Basic (cents)	—	—	15.7	13.7
Diluted (cents)	—	—	15.1	13.2

The net cash flows incurred by the Financial segment in the period are as follows:

	2023	2022
	€’m	€’m
Operating	—	28.2
Investing	—	(3.8)
Financing	—	(1.1 )
Net cash inflow	—	23.3

The above net cash inflow does not include the disposal proceeds.

Note 10 – Revenue from contracts with customers

The Group has disaggregated revenue into various categories in the following tables which is intended to:

• depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by recognition date; and

• enable users to understand the relationship with revenue segment information provided in the segmental information note.

Revenue analysis by geographical location of licensee, product type and regulated vs unregulated by geographical major markets

The revenues from B2B (consisting of licensee fee, fixed-fee income, revenue received from the sale of hardware, cost-based revenue and

additional B2B services fee) and B2C are described in Note 6D.

Upon signing a software licence agreement with a new licensee, the Group verifies its gambling licence (jurisdiction) and registers it accordingly

to the Group’s database. The table below shows the revenues generated from the jurisdictions of the licensee.

Playtech has disclosed jurisdictions with revenue greater than 10% of the total Group revenue separately and categorised the remaining revenue

by wider jurisdictions, being Rest of Europe, Latin America (LATAM) and Rest of World.

For the year ended 31 December 2023

			Sun Bingo
			and Other		Intercompany	Total
Primary geographic	B2B	Snaitech	B2C	HAPPYBET	B2C	B2C	Intercompany	Tot al
markets	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m
Italy	36.9	945.4	—	—	—	945.4	(10.6)	971.7
UK	127.0	—	73.4	—	—	73.4	(3.8)	196.6
Mexico	183.0	—	—	—	—	—	—	183.0
Rest of Europe	232.4	1.2	—	18.2	(1.2)	18.2	—	250.6
LATAM	44.8	—	—	—	—	—	—	44.8
Rest of World	60.0	—	—	—	—	—	—	60.0
	684.1	946.6	73.4	18.2	(1.2)	1,037.0	(14.4)	1,706.7

	B2B	B2C	Intercompany	Tot al
Product type	€’m	€’m	€’m	€’m
B2B licensee fee	467.2	—	(12.6)	454.6
B2B fixed-fee income	32.8	—	(0.8)	32.0
B2B cost-based revenue	57.4	—	(1.0)	56.4
B2B revenue received from the sale of hardware	13.8	—	—	13.8
Additional B2B services fee	112.9	—	—	112.9
Total B2B	684.1	—	(14.4)	669.7
Snaitech	—	946.6	—	946.6
Sun Bingo and Other B2C	—	73.4	—	73.4
HAPPYBET	—	18.2	—	18.2
Intercompany	—	(1.2)	—	(1.2)
Total B2C	—	1,037.0	—	1,037.0
Tot a l	684.1	1,037.0	(14.4)	1,706.7

190 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 10 – Revenue from contracts with customers continued

Revenue analysis by geographical location of licensee, product type and regulated vs unregulated by geographical major

markets continued

	2023
	€’m
Regulated – Americas
– US and Canada	13.2
– Latin America	198.7
Regulated – Europe (excluding UK)	200.1
Regulated – UK	126.1
Regulated – Rest of World	7.0
Total regulated B2B revenue	545.1
Unregulated	139.0
Total B2B revenue	684.1

For the year ended 31 December 2022

			Sun Bingo					Total Gaming	Financial
			and Other		Intercompany			– continuing	– discontinued
	B2B	Snaitech	B2C	HAPPYBET	B2C	Total B2C	Intercompany	operations	operations	Tot al
Primary geographic markets	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m	€’m
Italy	35.1	897.7	—	—	—	897.7	(10.0)	922.8	1.3	924 .1
UK	127.0	—	65.2	—	—	65.2	(3.7)	188.5	34.1	222.6
Rest of Europe	233.3	2.1	0.1	20.1	(2.1)	20.2	—	253.5	10.4	263.9
LATAM	160.7	—	—	—	—	—	—	160.7	18.6	179.3
Rest of World	76.3	—	—	—	—	—	—	76.3	10.1	86.4
	632.4	899.8	65.3	20.1	(2.1)	983.1	(13.7)	1,601.8	74.5	1,676.3

				Total Gaming	Financial
				– continuing	– discontinued
	B2B	B2C	Intercompany	operations	operations	Tot al
Product type	€’m	€’m	€’m	€’m	€’m	€’m
B2B licensee fee	451.7	—	(12.4)	439.3	—	439.3
B2B fixed-fee income	42.1	—	(0.6)	41.5	—	41.5
B2B cost-based revenue	59.9	—	(0.7)	59.2	—	59.2
B2B revenue received from the sale of hardware	13.2	—	—	13.2	—	13.2
Additional B2B services fee	65.5	—	—	65.5	—	65.5
Total B2B	632.4	—	(13.7)	618.7	—	618.7
Snaitech	—	899.8	—	899.8	—	899.8
Sun Bingo and Other B2C	—	65.3	—	65.3	—	65.3
HAPPYBET	—	20.1	—	20.1	—	20.1
Intercompany	—	(2.1)	—	(2.1 )	—	(2.1)
Total B2C	—	983.1	—	983.1	—	983.1
Financial	—	—	—	—	74.5	74.5
Tota l	632.4	983.1	(13.7)	1,601.8	74.5	1,676.3

	2022
	€’m
Regulated – Americas
– US and Canada	7.6
– Latin America	137.1
Regulated – Europe (excluding UK)	184.6
Regulated – UK	126.7
Regulated – Rest of World	5.6
Total regulated B2B revenue	461.6
Unregulated	170.8
Total B2B revenue	632.4

191Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 10 – Revenue from contracts with customers continued

Revenue analysis by geographical location of licensee, product type and regulated vs unregulated by geographical major

markets continued

There were no changes in the Group’s revenue measurement policies and procedures in 2023 and 2022. The vast majority of the Group’s B2B

contracts are for the delivery of services within the next 12 months. For the year ended 31 December 2023, Playtech recognised revenue from

a single customer totalling approximately 10.3% of the Group’s total revenue (2022: no single customer accounted for over 10%).

The Group’s contract liabilities, in other words deferred income, primarily include advance payment for hardware and services and also

include certain fixed fees paid by the licensee in the beginning of the contract. Deferred income as at 31 December 2023 was €6.2 million

(2022: €6.0 million).

The movement in contract liabilities during the year was as follows:

	2023	2022
	€’m	€’m
Balance at 1 January	6.0	8.1
Recognised during the year	8.0	8.4
Realised in profit or loss	(7.8)	(10.5)
Balance at 31 December	6.2	6.0

Note 11 – Adjusted items

Management regularly uses adjusted financial measures internally to understand, manage and evaluate the business and make operating

decisions. These adjusted measures are among the primary factors management uses in planning for and forecasting future periods.

The primary adjusted financial measures are Adjusted EBITDA and Adjusted Profit, which management considers are relevant in understanding

the Group’s financial performance. The definitions of adjusted items and underlying adjusted results are disclosed in Note 6 paragraph U.

As these are not a defined performance measure under IFRS, the Group’s definition of adjusted items may not be comparable with similarly titled

performance measures or disclosures by other entities.

The following tables provide a full reconciliation between adjusted and actual results from continuing operations:

						Profit
						from
						continuing
						operations
					Profit	attributable
					before	to the
					tax from	owners
		EBITDA –	EBITDA –		continuing	of the
	Revenue	B2B	B2C	EBITDA	operations	Company
For the year ended 31 December 2023	€’m	€’m	€’m	€’m	€’m	€’m
Reported as actual	1,706.7	157.9	248.6	406.5	235.8	105.1
Employee stock option expenses	—	5.6	0.7	6.3	6.3	6.3
Professional fees	—	13.4	1.0	14.4	14.4	14.4
Impairment of investment and receivables	—	5.1	—	5.1	5.1	5.1
Fair value changes and finance costs on contingent consideration	—	—	—	—	3.3	3.3
Fair value changes of equity instruments	—	—	—	—	6.6	6.6
Fair value change of derivative financial assets	—	—	—	—	(153.4)	(153.4)
Amortisation of intangible assets on acquisitions	—	—	—	—	42.6	42.6
Impairment of intangible assets	—	—	—	—	89.8	89.8
Deferred tax on acquisitions	—	—	—	—	—	(8.2)
Derecognition of brought forward deferred
tax asset	—	—	—	—	—	37.2
Tax related to uncertain positions	—	—	—	—	—	8.0
Adjusted measure	1,706.7	182.0	250.3	432.3	250.5	156.8

1 Employee stock option expenses relate to non-cash expenses of the Group and differ from year to year based on share price and the number of options granted.

2 The vast majority of the professional fees relate to the acquisition of Hard Rock Digital (Note 21B) and the Caliplay disputes (Note 7). These expenses are not considered ongoing costs of operations

and therefore are excluded.

3 Provision against investments and other receivables that do not relate to the ordinary operations of the Group.

4 Fair value change and finance costs on contingent consideration mostly related to the acquisition of AUS GMTC. These expenses are not considered ongoing costs of operations and therefore

are excluded.

5 Fair value changes of equity instruments and derivative financial assets. These are excluded from the results as they relate to unrealised profit/loss.

6 Amortisation and deferred tax on intangible assets acquired through business combinations. Costs directly related to acquisitions are not considered ongoing costs of operations and therefore

are excluded.

7 Impairment of intangible assets mainly relates to the impairment of Eyecon €7.8 million, Quickspin €9.6 million and Sports B2B €72.2 million. Refer to Note 20.

8 The reported tax expense has been adjusted for the derecognition of a deferred tax asset of €37.2 million relating to UK tax losses. This was adjusted because the losses in relation to the

derecognised amount were generated over a number of years and therefore distorts the effective tax rate for the year. Refer to Notes 7, 15 and 33.

9 Change in estimates related to uncertain overseas tax positions in respect of prior years which have now been settled with the relevant tax authority .

192 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 11 – Adjusted items continued

						Profit
						from
						continuing
						operations
					Profit	attributable
					before	to the
					tax from	owners
		EBITDA –	EBITDA –		continuing	of the
	Revenue	B2B	B2C	EBITDA	operations	Company
For the year ended 31 December 2022	€’m	€’m	€’m	€’m	€’m	€’m
Reported as actual	1,601.8	138.4	223.9	362.3	95.6	40.6
Employee stock option expenses	—	7.1	0.9	8.0	8.0	8.0
Professional fees	—	15.7	—	15.7	15.7	15.7
Fair value change and finance cost on contingent
consideration and redemption liability	—	(4.3)	—	(4.3)	(4.2)	(4.2)
Ukraine employee support costs	—	3.3	—	3.3	3.3	3.3
Onerous contract	—	—	10.4	10.4	10.4	10.4
Fair value changes of equity instruments	—	—	—	—	0.3	0.3
Fair value changes of derivative financial assets	—	—	—	—	(6.0)	(6.0)
Fair value loss on convertible loans	—	—	—	—	3.0	3.0
Amortisation of intangible assets on acquisitions	—	—	—	—	42.0	42.0
Impairment of property, plant and equipment and intangible assets	—	—	—	—	38.5	38.5
Loss on disposal of subsidiary	—	—	—	—	8.8	8.8
Deferred tax on acquisitions	—	—	—	—	—	(8.3)
Tax related to uncertain positions	—	—	—	—	—	8.4
Adjusted measure	1,601.8	160.2	235.2	395.4	215.4	160.5

1 Employee stock option expenses relate to non-cash expenses of the Group and differ from year to year based on share price and the number of options granted.

2 The vast majority of the professional fees relate to the potential sale of the Group. These expenses are not considered ongoing costs of operations and therefore are excluded.

3 Fair value change and finance costs on redemption liability related to the acquisition of Statscore. These expenses are not considered ongoing costs of operations and therefore are excluded.

4 Financial support provided to the employees based in Ukraine. These expenses are not considered ongoing costs of operations and therefore are excluded.

5 One-off payment to terminate an onerous contract with a former service provider made in H1 2022. This expense is not considered an ongoing cost of operations and therefore is excluded.

6 Fair value changes of equity instruments and derivative financial assets. These are excluded from the results as they relate to unrealised profit/loss.

7 Fair value loss on convertible loans relates to Gameco. This write off is not considered an ongoing cost of operations and is excluded. Refer to Note 21B.

8 Amortisation and deferred tax on intangible assets acquired through business combinations. Costs directly related to acquisitions are not considered ongoing costs of operations and therefore

are excluded.

9 Impairment of property, plant and equipment and intangible assets mainly relates to the impairment of Eyecon €13.6 million, Quickspin €7.0 million, Bingo VF €12.5 million and IGS €5.6 million.

10 Loss arising on the disposal of Statscore, previously a subsidiary of the Group. Even though Statscore was a separate CGU which was tested for impairment biannually up to the date of disposal,

it didn’t meet the criteria of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations of being a separate major line of business for the Group. As such, it was not presented separately as

discontinued operations as at 31 December 2022. This loss is not considered an ongoing cost of operations and therefore is excluded. Refer to Note 21A.

11 Change in estimates related to uncertain overseas tax positions in respect of prior years.

The following table provides a full reconciliation between adjusted and actual tax from continuing operations:

2023

€’m

2022

€’m

Tax on profit or loss for the year 130.7 55.0

Adjusted for:

Deferred tax on intangible assets on acquisitions 8.2 8.3

Derecognition of brought forward deferred tax asset (37.2) —

Tax related to uncertain positions (8.0) (8.4)

Adjusted tax 93.7 54.9

Note 12 – Auditor’s remuneration

2023

€’m

2022

€’m

Group audit and Parent Company (BDO) 3.0 2.3

Audit of subsidiaries (BDO) 1.4 1.4

Audit of subsidiaries (non-BDO) 0.2 0.3

Total audit fees 4.6 4.0

Non-audit services provided by Parent Company auditor and its international member firms

Other non-audit services 0.9 0.9

Total non-audit fees 0.9 0.9

193Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 13 – Impairment of property, plant and equipment and intangible assets

	2023	2022
	€’m	€’m
Reversal of impairment of property, plant and equipment (Note 18)	—	(0.2)
Impairment of intangible assets (Note 20)	89.8	38.7
	89.8	38.5

Impairment of intangible assets for 2023 mainly relates to the impairment of Eyecon €7.8 million, Quickspin €9.6 million and Sports B2B

€72.2 million. Refer to Note 20.

Impairment of intangible assets for 2022 relates to the impairment of Eyecon €13.6 million, Quickspin €7.0 million, Bingo VF €12.5 million

and IGS €5.6 million.

Note 14 – Finance income and costs

A. Finance income

	2023	2022
	€’m	€’m
Interest income	10.0	2.4
Dividend income	0.1	—
Net foreign exchange gain	2.2	9.2
	12.3	11.6

B. Finance costs

	2023	2022
	€’m	€’m
Interest on bonds	(29.5)	(35.7)
Interest on lease liability	(5.2)	(5.5)
Interest on loans and borrowings and other	(2.2)	(6.0)
Bank facility fees	(2.3)	(7.0)
Bank charges	(2.8)	(3.9)
Movement in contingent consideration	(3.3)	(0.1 )
Fair value loss on convertible loans	—	(3.0)
Expected credit loss on loans receivable	(0.9)	(1.6)
	(46.2)	(62.8)
Net finance costs	(33.9)	(51.2)

Note 15 – Tax expense

	2023	2022
	€’m	€’m
Current tax expense
Income tax expense for the current year	26.4	19.3
Income tax relating to prior years	16.1	9.1
Withholding tax	0.8	0.3
Total current tax expense	43.3	28.7
Deferred tax
Origination and reversal of temporary differences	85.4	23.5
Deferred tax movements relating to prior years	1.8	8.1
Impact of changes in tax rates	0.2	(5.3)
Total deferred tax expense	87.4	26.3
Total tax expense from continuing operations	130.7	55.0

1 The majority of this relates to charges arising from the change in estimate of income tax in relation to prior years.

194 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 15 – Tax expense continued

A reconciliation of the reported income tax charge of €130.7 million (2022: €55.0 million) applicable to profit before tax of €235.8 million

(2022: €95.6 million) at the UK statutory income tax rate of 23.5% is as follows:

	2023	2022
	€’m	€’m
Profit for the year	105.1	40.6
Income tax expense	130.7	55.0
Profit before income tax	235.8	95.6
Tax using the Company’s domestic tax rate (23.5% in 2023 and 19% in 2022)	55.4	18.2
Tax effect of:
Non-taxable fair value movements on call options	(36.1)	(1.1 )
Tax exempt income	—	(4.3)
Non-deductible expenses	35.6	19.8
Deferred tax asset in respect of Group restructuring	(5.2)	(5.4)
Difference in tax rates applied in overseas jurisdictions	1.2	13.8
Impact of changes in tax rates	0.2	(5.3)
Increase in unrecognised tax losses	24.5	2.1
Write-down of previously recognised deferred tax assets	37.2	—
Adjustment in respect of previous years:
– Deferred tax	1.8	8.0
– Income tax	16.1	9.2
Total tax expense	130.7	55.0

Reported tax charge

A reported tax charge of €130.7 million from continuing operations arises on a profit before income tax of €235.8 million compared to an

expected charge of €55.4 million (2022: a tax charge of €55.0 million on profit before income tax of €95.6 million). The reported tax expense

includes adjustments in respect of prior years relating to current tax and deferred tax of €17.9 million. The prior year adjustment in respect of

current tax of €16.1 million includes an additional provision of €5.6 million relating to uncertain overseas tax positions in respect of prior years

which have now been settled with the tax authorities.

The Group’s effective tax rate for the current period is 55.4%. The key reasons for the differences are:

• Profits of subsidiaries located in territories where the tax rate is higher than the UK statutory tax rate, this includes Snaitech profits in Italy.

• The write-down of a deferred tax asset of €37.2 million in respect of UK tax attributes. Further details of this write-down are included in Note 7.

• Current year tax losses and excess interest not recognised for deferred tax purposes. The tax losses and excess interest mainly relate to the

UK Group companies and amount to €108.3 million.

• Expenses not deductible for tax purposes including professional fees and impairment of intangible assets.

Changes in tax rates and factors affecting the future tax charge

The most significant elements of the Group’s income arise in the UK where the tax rate for the current period is 23.5%. Legislation was enacted in

the UK which increased the standard rate of UK corporation tax from 19% to 25% from 1 April 2023. Deferred tax balances have been calculated

using the tax rates upon which the balance is expected to unwind.

The Group adopted the amendments to IAS 12 issued in May 2023, which provide a temporary mandatory exception from the requirement

to recognise and disclose deferred taxes arising from enacted tax law that implements the Pillar Two model rules, including tax law that

implements qualified domestic minimum top-up taxes described in those rules. Under these amendments, any Pillar Two taxes incurred by the

Group will be accounted for as current taxes from 1 January 2024. Based on an initial analysis of the current year financial data, most territories

in which the Group operates are expected to qualify for one of the safe harbour exemptions such that top-up taxes should not apply. In territories

where this is not the case, there is the potential for Pillar Two taxes to apply; however, based on an initial assessment these are not expected

to be significant. The Group continues to refine this assessment and analyse the future consequences of these rules and, in particular, in relation

to the fair value movements as to how future fair value movements, should these arise, may impact the tax charge.

Deferred tax

The deferred tax asset and liability are measured at the enacted or substantively enacted tax rates of the respective territories which are

expected to apply to the year in which the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or

substantively enacted at the balance sheet date. The deferred tax balances within the financial statements reflect the increase in the UK’s main

corporation tax rate from 19% to 25% from 1 April 2023.

195Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 16 – Earnings per share

The calculation of basic earnings per share (EPS) has been based on the following profit attributable to ordinary shareholders and weighted

average number of ordinary shares outstanding.

	2023			2022
	Actual	Adjusted	Actual		Adjusted
	€’m	€’m	€’m		€’m
Profit attributable to the owners of the Company	105.1	156.8	87.6		201.7
Basic (cents)	34.7	51.7	29.2		67.2
Diluted (cents)	33.7	50.2	28.1		64.7
	2023			2022
	Actual	Adjusted	Actual		Adjusted
	€’m	€’m	€’m		€’m
Profit attributable to the owners of the Company from continuing operations	105.1	156.8	40.6		160.5
Basic (cents)	34.7	51.7	13.5		53.5
Diluted (cents)	33.7	50.2	13.0		51.5
	2023			2022
	Actual	Adjusted	Actual		Adjusted
	Number	Number	Number		Number
Denominator – basic
Weighted average number of equity shares	303,279,998	303,279,998	300,059,994		300,059,994
Denominator – diluted
Weighted average number of equity shares	303,279,998	303,279,998	300,059,994		300,059,994
Weighted average number of option shares	8,647,771	8,647,771	11,792,385		11,792,385
Weighted average number of shares	311,927,769	311,927,769	311,852,379		311,852,379

The calculation of diluted EPS has been based on the above profit attributable to ordinary shareholders and weighted average number of

ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares. The effects of the anti-dilutive potential

ordinary shares are ignored in calculating diluted EPS.

EPS for discontinued operations is disclosed in Note 9.

Note 17 – Employee benefits

Total staff costs comprise the following:

	2023	2022
	€’m	€’m
Salaries and personnel-related costs	438.2	427.0
Cash-settled share-based payments	0.2	(0.3)
Equity-settled share-based payments	6.3	8.3
	444.7	435.0
Average number of personnel:
Distribution	6,868	6,269
General and administration	582	538
	7,450	6,807

The Group has the following employee share option plans (ESOP) for the granting of non-transferable options to certain employees:

• the Long Term Incentive Plan 2012 (LTIP). Awards (options, conditional share awards, cash-settled awards, or a forfeitable share award)

granted under this plan vest on the first day on which they become exercisable, which is typically between 18 and 36 months after

grant date; and

• the Long Term Incentive Plan 2022 (LTIP22). Awards (options, conditional share awards, restricted shares, cash-settled awards) granted

under this plan vest on the first day on which they become exercisable, which is typically after 36 months.

The overall term of the ESOP is ten years. These options are settled in equity or cash once exercised. Option prices are denominated in GBP .

196 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 17 – Employee benefits continued

During 2023 the Group granted 3,023,945 nil cost options under its LTIP22 which are subject to EPS growth, relative total shareholder return

(TSR) against constituents of the FTSE 250 but excluding the investment trusts index, and relative TSR against a sector comparator group

of peer companies. The fair value per share according to the Monte Carlo simulation model is between £3.84 and £5.85. Inputs used were

as follows:

				Projection
	Share price at	Dividend		period
Expected life (years)	grant date	yield	Risk-free rate	(years)	Volatility
3	£5.85	Nil	3.78%	3	36%-46%

During 2022 the Group granted 492,765 nil cost options under its LTIP22 which are subject to EPS growth, relative total shareholder return

(TSR) against constituents of the FTSE 250 but excluding the investment trusts index, and relative TSR against a sector comparator group

of peer companies. The fair value per share according to the Monte Carlo simulation model is between £2.71 and £4.58. Inputs used were

as follows:

				Projection
	Share price at	Dividend		period
Expected life (years)	grant date	yield	Risk-free rate	(years)	Volatility
3	£4.58	Nil	2.34%	3	41%-49%

At 31 December 2023 and 2022 the following options were outstanding:

	2023	2022
	Number	Number
Shares vested on 1 March 2018 at nil cost	72,596	72,596
Shares vested between 1 September 2016 and 1 March 2018 at nil cost	12,411	20,890
Shares vested on 1 March 2019 at nil cost	21,820	21,820
Shares vested between 1 September 2017 and 1 March 2019 at nil cost	23,344	39,021
Shares vested on 21 December 2019 at nil cost	9,779	9,779
Shares vested on 1 March 2020 at nil cost	77,326	98,444
Shares vested on 1 March 2021 at nil cost	612,618	1,047,782
Shares vested between 1 March 2022 and 1 August 2022 at nil cost	1,260,489	2,218,735
Shares will vest by 19 December 2024 at nil cost	1,400,000	1,900,000
Shares vested between 1 March 2023 and 26 October 2023 at nil cost	3,323,693	6,392,073
Shares will vest by 18 August 2025 at nil cost	351,724	351,724
Shares will vest by 5 May 2026 at nil cost	3,012,659	—
	10,178,459	12,172,864

The total number of shares exercisable as of 31 December 2023 is 6,114,076 (2022: 4,729,067).

The total number of outstanding shares that will be cash settled is 570,545 (2022: 561,385). The total liability outstanding for the cash-settled

options is €2.2 million (2022: €3.1 million).

The following table illustrates the number and weighted average exercise prices of share options for the ESOP.

	2023	2022	2023	2022
	Number	Number	Weighted average	Weighted average
	of options	of options	exercise price	exercise price
Outstanding at the beginning of the year	12,172,864	13,882,774	—	—
Granted	3,023,945	492,765	—	—
Forfeited	(1,137,717)	(408,237)	—	—
Exercised	(3,880,633)	(1,794,438)	—	—
Outstanding at the end of the year	10,178,459	12,172,864	—	—

Included in the number of options exercised during the year are 176,142 options (2022: 50,448) which were cash settled.

The weighted average share price at the date of exercise of options was £5.39 (2022: £5.30).

197Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 17 – Employee benefits continued

Share options outstanding at the end of the year have the following exercise prices:

		2023	2022
Expiry date	Exercise price	Number	Number
21 December 2025	Nil	85,007	93,486
Between 21 December 2026 and 31 December 2026	Nil	54,943	70,620
Between 1 March 2027 and 28 June 2027	Nil	77,326	98,444
23 July 2028	Nil	609,607	1,044,771
Between 27 February 2029 and 19 December 2029	Nil	2,663,500	4,121,746
Between 17 July 2030 and 26 October 2030	Nil	3,323,693	6,392,073
18 August 2032	Nil	351,724	351,724
5 May 2033	Nil	3,012,659	—
		10,178,459	12,172,864

Note 18 – Property, plant and equipment

				Buildings,
	Computer			leasehold
	software	Gaming	Office furniture	buildings and
	and hardware	machines	and equipment	improvements	Tot al
	€’m	€’m	€’m	€’m	€’m
Cost
At 1 January 2023	142.5	115.2	49.0	274.4	581.1
Additions	19.5	23.1	6.2	8.8	57.6
Acquisitions through business combinations	—	0.1	0.1	—	0.2
Disposals	(6.2)	(2.8)	(1.1)	(3.8)	(13.9)
Reclassifications	—	1.9	(1.9)	—	—
Foreign exchange movement	(2.4)	—	(0.9)	(0.7)	(4.0)
At 31 December 2023	153.4	137.5	51.4	278.7	621.0
Accumulated depreciation and impairment losses
At 1 January 2023	104.1	78.0	28.2	29.4	239.7
Charge	17.5	16.1	6.1	6.8	46.5
Disposals	(6.1)	(2.6)	(0.7)	(3.6)	(13.0)
Reclassifications	—	1.9	(1.9)	—	—
Foreign exchange movement	(1.4)	—	(0.4)	(0.6)	(2.4)
At 31 December 2023	114.1	93.4	31.3	32.0	270.8
Net book value
At 31 December 2023	39.3	44.1	20.1	246.7	350.2
At 1 January 2023	38.4	37.2	20.8	245.0	341.4

198 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 18 – Property, plant and equipment continued

				Buildings,
	Computer			leasehold
	software	Gaming	Office furniture	buildings and
	and hardware	machines	and equipment	improvements	Tot al
	€’m	€’m	€’m	€’m	€’m
Cost
At 1 January 2022	132.1	96.2	41 .1	270.1	539.5
Prior year adjustment	(2.8)	5.5	1.1	(1.4)	2.4
Adjusted balance at 1 January 2022	129.3	101.7	42.2	268.7	541.9
Additions	19.8	15.8	8.8	9.2	53.6
Disposals	(6.3)	(2.3)	(2.0)	(3.8)	(14.4)
Reclassifications	(0.3)	—	—	0.3	—
At 31 December 2022	142.5	115.2	49.0	274.4	581.1
Accumulated depreciation and impairment losses
At 1 January 2022	95.3	61.4	24.5	28.6	209.8
Prior year adjustment	(1.1)	4.1	0.4	(1.0)	2.4
Adjusted balance at 1 January 2022	94.2	65.5	24.9	27.6	212.2
Charge	16.0	14.5	5.4	5.6	41.5
Impairment loss	—	—	(0.2)	—	(0.2)
Disposals	(6.1)	(2.0)	(1.9)	(3.8)	(13.8)
At 31 December 2022	104.1	78.0	28.2	29.4	239.7
Net book value
At 31 December 2022	38.4	37.2	20.8	245.0	341.4
At 1 January 2022	35.1	36.2	17.3	241.1	329.7

1 The comparative opening cost and accumulated depreciation at 1 January 2022 on each class of property, plant and equipment were restated to correct legacy classification errors. The overall

correction resulted in a total increase in the opening cost of property, plant and equipment of €2.4 million, with the same increase in total accumulated depreciation on 1 January 2022. There was

no impact to the total net book value of the property, plant and equipment both at 1 January 2022 and 31 December 2022.

199Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 19 – Leases

Set out below are the carrying amounts of right of use assets recognised and the movements during the year:

	Office leases	Hosting	Machinery rentals	Tot al
	€’m	€’m	€’m	€’m
At 1 January 2023	60.5	11.1	—	71.6
Additions/modifications	14.2	6.8	1.4	22.4
On business combinations	1.9	—	—	1.9
Amortisation charge	(15.1)	(7.8)	(0.4)	(23.3)
Foreign exchange movement	(1.6)	—	—	(1.6)
At 31 December 2023	59.9	10.1	1.0	71.0
		Office leases	Hosting	Tot al
		€’m	€’m	€’m
At 1 January 2022		67.8	6.0	73.8
Additions/modifications		7.4	12.1	19.5
Disposal of subsidiary		(0.2)	—	(0.2)
Amortisation charge		(14.5)	(7.0)	(21.5)
At 31 December 2022		60.5	11.1	71.6

Set out below are the carrying amounts of lease liabilities and the movements during the year:

	2023	2022
	€’m	€’m
At 1 January	85.8	90.1
Additions/modifications	22.0	18.8
On business combinations	1.9	—
Disposal of subsidiary	—	(0.2)
Accretion of interest	5.2	5.5
Payments	(28.3)	(27.1)
Foreign exchange movement	0.2	(1.3)
At 31 December	86.8	85.8
Current	24.9	31.8
Non-current	61.9	54.0
	86.8	85.8

The maturity analysis of lease liabilities is disclosed in Note 39B.

The following are the amounts recognised in profit or loss:

	2023	2022
	€’m	€’m
Amortisation expense of right of use assets	23.3	21.5
Interest expense on lease liabilities	5.2	5.5
Impact of early termination of lease contracts	(0.4)	(0.7)
Variable lease payments (included in distribution costs)	—	0.1
	28.1	26.4

200Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 20 – Intangible assets

	Patents, domain		Development	Customer
	names and licence	Technology IP	costs	list and affiliates	Goodwill	Tot al
	€’m	€’m	€’m	€’m	€’m	€’m
Cost
At 1 January 2023	222.4	79.7	428.4	523.5	676.6	1,930.6
Additions	51.0	—	58.4	—	—	109.4
Assets acquired through business combinations 1	0.4	—	—	3.0	4.2	7.6
Disposal	(0.2)	—	(3.4)	—	(0.4)	(4.0)
Foreign exchange movement	(0.4)	—	—	—	—	(0.4)
At 31 December 2023	273.2	79.7	483.4	526.5	680.4	2,043.2
Accumulated amortisation and impairment losses
At 1 January 2023	133.8	72.4	300.3	376.4	66.8	949.7
Charge	43.5	3.0	49.4	30.8	—	126.7
Impairment loss	0.4	—	3.6	0.8	85.0	89.8
Disposals	—	—	(3.4)	—	(0.4)	(3.8)
Foreign exchange movement	(0.4)	—	—	—	—	(0.4)
At 31 December 2023	177.3	75.4	349.9	408.0	151.4	1,162.0
Net book value
At 31 December 2023	95.9	4.3	133.5	118.5	529.0	881.2
At 1 January 2023	88.6	7.3	128.1	147.1	609.8	980.9
	Patents, domain		Development	Customer
	names and licence	Technology IP	costs	list and affiliates	Goodwill	Tot al
	€’m	€’m	€’m	€’m	€’m	€’m
Cost
At 1 January 2022	191.4	86.5	363.6	526.9	773.6	1,942.0
Prior year adjustment	(1.2)	(4.9)	11 .1	(2.9)	(90.0)	(87.9)
Adjusted balance at 1 January 2022	190.2	81.6	374.7	524.0	683.6	1,854.1
Additions	32.2	—	59.4	—	—	91.6
Assets acquired through business combinations	—	2.9	—	—	5.4	8.3
Disposal of subsidiary	—	(3.0)	(1.4)	(0.5)	(12.4)	(17.3)
Write offs	—	(1.8)	(4.3)	—	—	(6.1 )
At 31 December 2022	222.4	79.7	428.4	523.5	676.6	1,930.6
Accumulated amortisation and impairment losses
At 1 January 2022	110.6	72.7	241.3	346.2	125.1	895.9
Prior year adjustment	(1.1)	(0.5)	6.2	(2.5)	(90.0)	(87.9)
Adjusted balance at 1 January 2022	109.5	72.2	247.5	343.7	35.1	808.0
Charge	24.3	2.9	49.7	32.9	—	109.8
Impairment loss	—	—	7.0	—	31.7	38.7
Disposal of subsidiary	—	(0.9)	—	(0.2)	—	(1.1)
Write offs	—	(1.8)	(3.9)	—	—	(5.7)
At 31 December 2022	133.8	72.4	300.3	376.4	66.8	949.7
Net book value
At 31 December 2022	88.6	7.3	128.1	147.1	609.8	980.9
At 1 January 2022	80.7	9.4	127.2	180.3	648.5	1,046.1

1 During the year, the Group acquired the Giove group for a total consideration of €6.0 million. As a result of this transaction, the Group recognised €7.3 million as the fair value of the intangible assets,

of which €3.9 million is goodwill.

2 The comparative opening cost and accumulated amortisation at 1 January 2022 on each class of intangible assets were restated to correct legacy errors principally arising on disposal of the

Financials CGU, when it was reclassified as held for sale in the year ended 31 December 2020. There was no impact to the net book value of the intangible assets both at 1 January 2022 and

31 December 2022.

201Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 20 – Intangible assets continued

During the year, the research and development costs net of capitalised development costs were €101.2 million (2022: €88.3 million). The internal

capitalisation for the year was €56.7 million (2022: €57.5 million).

Out of the total amortisation charge of €126.7 million (2022: €109.8 million), an amount of €42.6 million (2022: €42.0 million) relates to the

intangible assets acquired through business combinations.

In accordance with IAS 36, the Group regularly monitors the carrying value of its intangible assets, including goodwill. Goodwill is allocated to

13 cash-generating units (CGUs) (2022: 13).

The allocation of the goodwill to CGUs is as follows:

	2023	2022
	€’m	€’m
Snai	263.4	259.7
AUS GMTC	4.4	4.4
Bingo retail	9.5	9.5
Casino	50.8	50.8
Poker	15.6	15.6
Eyecon	—	3.0
Quickspin	10.2	19.8
Sports B2B	60.3	132.5
VB retail	4.6	4.6
Services	109.9	109.9
Sports B2C	0.3	—
	529.0	609.8

Management reviews CGUs for impairment bi-annually with a detailed assessment of each CGU carried out annually and whenever there is

an indication that a unit may be impaired. During the annual detailed review, the recoverable amount of each CGU is determined from value in

use calculations based on cash flow projections covering five years (using the Board approved three year plan along with a remaining two-year

forecasted period) plus a terminal value which have been adjusted to take into account each CGU’s major events as expected in future periods.

A potential risk for future impairment exists should there be a significant change in the economic outlook versus those trends management

anticipates in its forecasts due to the occurrence of these events.

With the exception of CGUs which have been fully impaired to date and CGUs deemed sensitive to impairment from a reasonably possible

change in key assumptions as reviewed in further detail below, management has used the Group’s three-year plan, however extended

it to five years and calculated the growth estimates for years one to five by applying an average annual growth rate for revenue based on

the underlying economic environment in which the CGU operates and the expected performance over that period. Beyond this period,

management has applied an annual growth rate of 2.0%. Management has included appropriate capital expenditure requirements to support

the forecast growth and assumed the maintenance of the current level of licences. Management has also applied post-tax discount rates to

the cash flow projections as summarised below.

2023 CGUs not sensitive to changes in assumptions:

	Average revenue
	growth rate	Discount
	2024-2028	rate applied
Snai	3.1%	15.2%
AUS GMTC	15.8%	13.1%
Bingo retail	4.9%	13.8%
Casino	4.7%	13.1%
Poker	4.0%	14.9%

2022 CGUs not sensitive to changes in assumptions:

	Average revenue
	growth rate	Discount
	2023-2027	rate applied
Snai	9.4%	17.3%
Services	22.2%	16.2%
Casino	5.5%	13.9%
Poker	6.2%	17.4%
VB retail	10.0%	12.4%

In relation to the Eyecon, Quickspin and Sports B2B CGUs, following impairment tests completed as at 31 December 2023, impairments have

been recognised as disclosed below. Certain other CGUs, which are specifically referred to below but not impaired, are considered sensitive

to changes in assumptions used for the calculation of value in use.

202 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 20 – Intangible assets continued

Eyecon CGU

The Eyecon CGU underperformed in 2022, mainly due to the fact that its operations are highly concentrated in the UK online market which has

seen a slowdown due to the uncertain regulatory climate, with an impairment loss of €13.6 million recognised in the year ended 31 December 2022.

Even though the unit is making considerable efforts to expand to new markets, this has yet to take effect. As a result, it continues to see declining

revenues and has been unable to meet budgets set, which led to a further impairment of €7.8 million recognised in the current year, which

impairs the assets down to the recoverable amount. The impairment is writing down €3.0 million of goodwill, €0.4 million of brands, €0.8 million

of customer lists and €3.6 million of development costs. The recoverable amount of this CGU of €9.7 million, with a carrying value equal to

€17.5 million (pre-impairment) at 31 December 2023, was determined using a cash flow forecast that includes annual revenue growth rates

between 2.0% and 11.0% over the one to five-year forecast period (2022: annual revenue growth rates between 0% and 10.0%), 2.0% long-term

growth rate (2022: 2.0% long-term growth rate) and a post-tax discount rate of 15.1% (2022: post-tax discount rate of 15.6%). Following the

impairment posted, all assets have been impaired down to the recoverable amount.

Quickspin CGU

The recoverable amount of the Quickspin CGU was impaired in 2022 by €7.0 million, given the risk the CGU bore from the proportion of

revenues being generated from the Group’s B2B customers choosing to operate in areas with geopolitical tension and the overall decrease in

the CGU performance which went through organisational updates. The unit is still going through a transitional period and has seen a decline in

revenue in the last three years, which led to an additional €9.6 million impairment being recognised in the current year. The recoverable amount

of this CGU of €32.1 million, with a carrying value of €41.7 million (pre-impairment) at 31 December 2023, has been determined using a cash flow

forecast that includes annual revenue growth rates between 5.0% and 7.2% over the one to five-year forecast period (2022: annual revenue

growth rates between 5.0% and 15.1%), 2.0% long-term growth rate (2022: 2.0% long-term growth rate) and a post-tax discount rate of 12.4%

(2022: post-tax discount rate of 12.1%).

If the revenue growth rate per annum is lower by 1%, then an additional impairment of €6.2 million would be recognised. Similarly, if the discount

rate increases by 1.0% to a post-tax discount rate of 13.4%, this would result in a further impairment of €2.9 million.

Sports B2B CGU

The recoverable amount of the Sports B2B CGU, with a carrying value of €236.2 million, has been determined using a cash flow forecast

that includes annual revenue growth rates ranging from a decline of 20.0% to an increase of 15.0%, over the one to five-year forecast period

(2022: annual revenue growth rates between negative 6.1% and 20.0% positive), a 2.0% long-term growth rate (2022: 2.0% long-term growth

rate) and a post-tax discount rate of 13.7% (2022: post-tax discount rate of 14.9%). As a result of two major retail licensees terminating their

contracts during the current year, the recoverable amount of €164.0 million does not exceed the carrying value as stated above (pre-impairment)

and therefore an impairment loss of €72.2 million was recognised in the year ended 31 December 2023.

If the revenue growth rate per annum is lower by 1.0%, then an additional impairment of €20.2 million would be recognised. Similarly, if the

discount rate increases by 1.0% to a post-tax discount rate of 14.7%, this would result in a further impairment of €16.4 million.

Bingo VF CGU

The recoverable amount of the Bingo VF CGU was impaired by €12.5 million during the year ended 31 December 2022 as a result of a contract

termination with a significant licensee and also the decrease in the CGU’s performance. Since last year the CGU has started to generate organic

growth by expanding into new geographies. No further impairment has been recognised in the current year. The recoverable amount of the

CGU of €12.9 million, with a carrying value of €12.6 million, has been determined using a cash flow forecast that includes annual revenue growth

rates between 9.0% and 10.0% over the one to five-year forecast period (2022: annual revenue growth rates between negative 1.0% and positive

10.0%), a 2.0% long-term growth rate (2022: 2.0% long-term growth rate) and a post-tax discount rate of 15.1% (2022: post-tax discount rate of

15.8%). The recoverable amount would equal the carrying value of the CGU if:

• the discount rate applied reached a post-tax discount rate of 15.4%. If the discount rate increases by 1.0% to a post-tax discount rate of 16.1%,

this would result in an impairment of €0.9 million; or

• the revenue growth was lower by 0.1% when compared to the forecasted average five-year growth. If the revenue growth was lower by 1.0%

when compared to the forecasted average five-year growth, this would cause an impairment of €4.1 million.

VB Retail CGU

The recoverable amount of the VB Retail CGU showed signs of underperformance during H1 2023, mainly due to the cancellation of an

important licensee deal that had been expected to launch in early 2023. Given that new opportunities are arising through the US business,

no impairment has been recognised as at 31 December 2023. The recoverable amount of this CGU of €31.9 million, with a carrying value of

€25.2 million at 31 December 2023, has been determined using a cash flow forecast that includes annual revenue growth rates between 8.0%

and 13.0% over the one to five-year forecast period (2022: annual revenue growth rates between 8.0% and 18.0%), 2.0% long-term growth rate

(2022: 2.0% long-term growth rate) and a post-tax discount rate of 12.7% (2022: post-tax discount rate of 12.4%). The recoverable amount would

equal the carrying value of the CGU if:

• the discount rate applied was higher by 20.7%, i.e. reaching a post-tax discount rate of 15.3%; or

• the revenue growth was lower by 2.2% when compared to the forecasted average five-year growth.

203Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 20 – Intangible assets continued

Services CGU

The recoverable amount of the Services CGU, with a carrying value of €283.9 million, which has not been impaired, has been determined using

a cash flow forecast that includes annual revenue growth rates ranging from negative 7.0% and positive 6.2% over the one to five-year forecast

period (2022: annual revenue growth rates between 5.0% and 38.0%), a 2.0% long-term growth rate (2022: 2.0% long-term growth rate) and

a post-tax discount rate of 18.3% (2022: post-tax discount rate of 16.2%).

The recoverable amount would equal the carrying value of the CGU if:

• the discount rate applied was higher by 41.4%, i.e. reaching a post-tax discount rate of 25.9%; or

• the revenue growth was lower by 4.5% when compared to the forecasted average five-year growth.

General

Whilst our current contract with Caliplay under which we are entitled to receive our fees (including the B2B licensee fees and the additional

B2B services fees) is expiring in 2034, and this was our base assumption in our CGU impairment reviews, should there be material changes to

the cash flows arising from the contract this could potentially lead to impairments in certain CGUs of the Group including Casino, Sports B2B,

Services, Quickspin and Eyecon. However, given the headroom in the Casino CGU and relatively low levels of goodwill, there would need to

be a number of other factors impacting the CGU before an impairment is apparent, and hence it is not considered sensitive and the additional

disclosures given for the other more sensitive CGUs are not required for this CGU.

Note 21 – Investments and derivative financial assets

Introduction

Below is a breakdown of the relevant assets at 31 December 2023 and 2022 per the consolidated balance sheet:

	2023	2022
	€’m	€’m
A. Investments in associates	51.5	36.6
B. Other investments	92.8	9.2
C. Derivative financial assets	827.8	636.4
	972.1	682.2

The following are the amounts recognised in the statement of comprehensive income:

	2023	2022
	€’m	€’m
Profit or loss
A. Share of loss from associates	(0.8)	(3.8)
B. Unrealised fair value changes of equity investments	(6.6)	(0.3)
C. Unrealised fair value changes of derivative financial assets	153.4	6.0
Other comprehensive income
Foreign exchange movement from the derivative call options and equity investments held in non-Euro functional
currency subsidiaries	(5.9)	6.8
	140.1	8.7

Where the underlying derivative call option and equity investments are held in a non-Euro functional currency entity, the foreign exchange

movement is recorded through other comprehensive income. As at 31 December 2023, the foreign exchange movement of the derivative call

options held in Caliplay, LSports and NorthStar (Note 21C) is recorded in profit or loss as these options are held in Euro functional currency

entities. The foreign exchange movement of the derivative call options held in Wplay, Onjoc and Tenbet and the small minority equity investment

in Hard Rock Digital are recorded through other comprehensive income as these are held in USD functional currency entities.

The recognition and valuation methodologies for each category are explained in each of the relevant sections below, including key judgements

made under each arrangement as described in Note 7 .

204 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

A. Investments in associates

Balance sheet

	2023	2022
	€’m	€’m
Caliplay	—	—
ALFEA SPA	1.7	1.7
Galera	—	—
LSports	35.2	34.9
Stats International	—	—
NorthStar	9.0	—
Sporting News Holdings Limited	5.6	—
Total investment in equity accounted associates	51.5	36.6

Profit and loss impact

	2023	2022
	€’m	€’m
Share of profit in ALFEA SPA	0.1	0.1
Share of loss in Galera	—	(3.6)
Share of profit/(loss) in LSports	2.1	(0.3)
Share of loss in NorthStar	(2.8)	—
Share of loss in Sporting News Holdings Limited	(0.2)	—
Total profit and loss impact	(0.8)	(3.8)

Movement on the balance sheet

				Sporting
				News
				Holdings
	ALFEA SPA	LSports	NorthStar	Limited	Tot al
	€’m	€’m	€’m	€’m	€’m
Balance as at 31 December 2022/1 January 2023	1.7	34.9	—	—	36.6
Additions	—	—	3.4	5.8	9.2
Conversion of convertible loan to shares	—	—	8.4	—	8.4
Share of profit/(loss)	0.1	2.1	(2.8)	(0.2)	(0.8)
Dividend income	(0.1)	(1.8)	—	—	(1.9)
Balance as at 31 December 2023	1.7	35.2	9.0	5.6	51.5

Caliplay

Background

During 2014, the Group entered into an agreement with Turística Akalli, S. A. de C.V, which has since changed its name to Corporacion Caliente

S.A. de C.V. (“Caliente”), the majority owner of Tecnologia en Entretenimiento Caliplay, S.A.P.I. de C.V (“Caliplay”), which is a leading online betting

and gaming operator in Mexico which operates the “Caliente” brand in Mexico.

The Group made a €16.8 million loan to September Holdings B.V. (previously the 49% shareholder of Caliplay), a company which is 100% owned

by Caliente, in return for a call option that would grant the Group the right to acquire 49% of the economic interest of Caliplay for a nominal

amount (the “Playtech Call Option”).

During 2021, Caliplay redeemed its share at par from September Holdings, which resulted in Caliente owning substantially all of the shares in

Caliplay. The terms of the existing structured agreement were varied, with the following key changes:

• A new additional option (in addition to the Playtech Call Option) was granted to the Group which allowed the Group to take up to a 49%

equity interest in a new acquisition vehicle should Caliplay be subject to a corporate transaction – this additional option is only exercisable in

connection with a corporate transaction and therefore was not exercisable at 31 December 2023 or 31 December 2022 (the “Playtech M&A

Call Option”).

• Caliente received a put option which would require Playtech to acquire September Holding Company B.V. for a nominal amount (the

“September Put Option”). This option has been exercised and the parties are in the process of transferring legal ownership of September

Holding Company B.V. to the Group.

The Group has no equity holding in Caliplay and is currently providing services to Caliplay including technical and general strategic support

services for which it receives income (including an additional B2B services fee as described in Note 10). If either the Playtech Call Option

or the Playtech M&A Call Option is exercised, the Group would no longer be entitled to receive the additional B2B services fee (and will

cease to provide certain related services) which for the year ended 31 December 2023 was €111.7 million (2022: €66.3 million). In addition,

for 45 days after the finalisation of Caliplay’s 2021 accounts, Caliplay also had an option to redeem the Group’s additional B2B services fee

or (if the Playtech Call Option had been exercised at that time) Caliente would have the option to acquire Playtech’s 49% stake in Caliplay

(together the “Caliente Call Option”).

205Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 21 – Investments and derivative financial assets continued

A. Investments in associates continued

Caliplay continued

Background continued

As per the public announcement made by the Group on 6 February 2023, the Group is seeking a declaration from the English Courts to obtain

clarification on a point of disagreement between the parties in relation to the Caliente Call Option. The Group believes the Caliente Call Option

has expired and referred to its expiry having taken place in its interim report for the six-month period ended 30 June 2022, which was published

on 22 September 2022. If the Caliente Call Option was declared as being exercisable and was exercised, this would extinguish the Playtech

Call Option and the Playtech M&A Call Option. The Group has not changed its position with regard to this assumption and the matter is still

unresolved with the English litigation still ongoing.

In addition to the above, from 1 January 2025, if there is a change of control of Caliplay or any member of the Caliente group which holds a

regulatory permit under which Caliplay operates, each of the Group and Caliente shall be entitled (but not obligated), within 60 days of the time

of such change of control, to require that the Caliente group redeems the Group’s additional B2B services fee or (if the Playtech Call Option had

been exercised at that time) acquires Playtech’s 49% stake in Caliplay (together the “COC Option”). If such change of control were to take place

and the right to redeem/acquire were to occur, this would extinguish the Playtech Call Option (to the extent not exercised prior thereto) and the

Playtech M&A Call Option. As regards the COC Option, the Group made a judgement that as at 31 December 2022 this had no impact on the fair

value calculation of the Playtech M&A Call Option (i.e. allocated a 0% probability that Playtech would realise any value from the exercise of the

COC Option). As at 31 December 2023, the Group allocated a low probability that it would realise value from this option, instead of the Playtech

M&A Call Option. This is discussed further in part C of this Note.

Assessment of control and significant influence

As at 31 December 2023 and 2022 it was assessed that the Group did not have control over Caliplay, because it does not meet the criteria of

IFRS 10 Consolidated Financial Statements, paragraph 7 due to the following:

• Despite the Group previously having a nominated director on the Caliplay board in 2020 and having consent rights on certain decisions (in

each case, removed in 2021), there was no ability to control the relevant activities.

• The Playtech Call Option or the Playtech M&A Call Option, if exercised, would result in Playtech having up to 49% of the voting rights and

would not result in Playtech having control.

• Whilst the Group does receive variable returns from its structured agreement, it does not have the power to direct relevant activities so any

variation cannot arise from such a power.

As at 31 December 2023 and 2022, the Group has significant influence over Caliplay because it meets one or more of the criteria under IAS 28,

paragraph 6 as follows:

• The standard operator revenue by itself is not considered to give rise to significant influence; however, when combined with the additional B2B

services fee, this is an indicator of significant influence.

• The material transaction of the historical loan funding is also an indicator of significant influence.

Accounting for each of the options

The Playtech Call Option was exercisable at 31 December 2023 and 2022, although it still has not been exercised. As the Group has significant

influence and the option is exercisable, the investment is recognised as an investment in associate using the equity accounting method which

includes having current access to profits and losses. The cost of the investment was previously deemed to be the loan given through September

Holdings of €16.8 million, which at the time was assessed under IAS 28, paragraph 38 as not recoverable for the foreseeable future and part of

the overall investment in the entity.

In 2021, with the introduction of the September Put Option, the investment in associate relating to the original Playtech Call Option was reduced

to zero and the €16.8 million original loan amount was determined by management to be the cost of the new Playtech M&A Call option and

therefore fully offset the balance of €16.8 million against the overall fair value movement of the Playtech M&A Call Option (refer to part C of

this Note).

The Playtech M&A Call Option is not currently exercisable and therefore in accordance with IAS 28, paragraph 14 has been recognised as

derivative financial asset, and disclosed separately under part C of this Note.

As per the judgement in Note 7, the Group did not consider it appropriate to equity account for the share of profits as the current 100%

shareholder is entitled to any undistributed profits.

206 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

A. Investments in associates continued

Caliplay continued

Accounting for each of the options continued

Below is the financial information of Caliplay:

	31 December
	2022
	€’m
Current assets	96.7
Non-current assets	30.3
Current liabilities	(78.1)
Non-current liabilities	—
Equity	48.9
Revenue	532.1
Profit from continuing operations	30.4
Other comprehensive income, net of tax	2.5
Total comprehensive income	32.9

1,2

1 The 2022 balances above have been extracted from Caliplay’s draft 2022 financial statements.

2 The Group has been unable to obtain the full 2023 financial information from Caliplay. However, based on information provided by Caliplay, the estimated revenue is €700.4 million and estimated

profit from continuing operations before tax (which takes account of the deduction of the Group’s unpaid B2B licensee fees and additional B2B services fees) is €80.0 million.

Investment in ALFEA SPA

The Group has held 30.7% equity shares in ALFEA SPA since June 2018. At 31 December 2023, the Group’s value of the investment in ALFEA

SPA was €1.7 million (2022: €1.7 million). A share of profit of €0.1 million was recognised in profit or loss for the year ended 31 December 2023

(2022: a share of profit of €0.1 million was recognised in profit or loss).

Investment in Galera

In June 2021, the Group entered into an agreement with Ocean 88 Holdings Ltd (Ocean 88) which is the sole holder of Galera Gaming Group

(together “Galera”), a company registered in Brazil. Galera offers and operates online and mobile sports betting and gaming (poker, casino,

etc.) in Brazil. They will continue to do so under the local regulatory licence, when this becomes available, and will expand to other gaming and

gambling products based on the local licence conditions.

The Group’s total consideration paid for the investment in Galera was $5.0 million (€4.2 million) in the year ended 31 December 2021, which was

the consideration for the option to subscribe and purchase from Galera an amount of shares equal to 40% in Galera at nominal price.

In addition to the investment amount paid, Playtech made available to Galera a line of credit up to $20.0 million. In 2022, an amendment was

signed to the original framework agreement to increase the credit line to $45.0 million. As at 31 December 2023, an amount of €39.2 million,

which is included in loans receivable under other non-current assets (refer to Note 22), has been drawn down (2022: €26.9 million). An amount of

€12.3 million has been loaned in the year ended 31 December 2023. The loan is required to be repaid to Playtech prior to any dividend distribution

to the current shareholders of Galera. The Group recognised an allowance for expected credit losses for the loan to Galera of €1.6 million at

31 December 2023 (2022: €1.1 million).

In respect of the loan receivable from Galera, even though the framework agreement does not state a set repayment term, management has

assessed that this should still be recognised as a loan as opposed to part of the overall investment in associate in line with IAS 28. The Directors

have made a judgement that the loan will be settled from operational cash flows as opposed to being settled as part of an overall transaction.

If the Group had determined that the loan was part of the overall investment in associate, an additional cumulative €17.3 million share of loss of

associate would have been recorded in retained earnings since the investment was made, of which €3.6 million would have been recognised in

2023 in the profit or loss (2022: if the Group had determined that the loan was part of the overall investment in associate, an additional cumulative

€13.7 million share of loss of associate would have been recorded in retained earnings since the investment was made, of which €11.6 million

would have been recognised in 2022 in profit or loss).

On 31 October 2023, Ocean 88 acquired 60% of F12.bet. Playtech has loaned Ocean 88 the amount of $10.1 million (€9.5 million) for the

acquisition of F12.bet which is included in loans receivable from related parties (refer to Note 22). The loan is repayable within five years from

the disbursement date. The Group recognised an allowance for expected credit losses for the additional loan to Galera of €0.4 million as at

31 December 2023 (2022: €Nil).

Playtech has assessed whether it holds power to control Galera and it was concluded that this is not the case. Even if the option is exercised,

it would only result in a 40% voting right over the operating entity and therefore no control.

Under the agreement in place:

• the standard operator income to be generated from services provided to Galera when combined with the additional B2B services fee, the loan

and certain other contractual rights, are all indicators of significant influence; and

• the Group provides standard B2B services (similar to services provided to other B2B customers) as well as additional services to Galera that

Galera requires to assist it in successfully running its operations, which could be considered essential technical information.

Considering the above factors, the Group has significant influence under IAS 28, paragraph 6 over Galera.

207Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 21 – Investments and derivative financial assets continued

A. Investments in associates continued

Investment in Galera continued

As the option is currently exercisable and gives Playtech access to the returns associated with the ownership interest, the investment is treated

as an investment in associate. Playtech’s interest in Galera is accounted for using the equity method in the consolidated financial statements.

Galera is currently loss-making. If the call option is exercised by Playtech, the Group will no longer provide certain services and as such will no

longer be entitled to the additional B2B services fee. The additional B2B services fee was €Nil in the year ended 31 December 2023 (2022: €Nil).

The cost of the investment was deemed to be the price paid for the option of $5.0 million (€4.2 million), which was reduced to €Nil through the

recognition of the Group’s share of losses.

Investment in LSports

Background

In November 2022, the Group entered into the following transactions:

• acquisition of 15% of Statscore for a total consideration of €1.8 million. As a result of this transaction Statscore became a 100% subsidiary of

the Group;

• disposal of 100% of Statscore to LSports Data Ltd (“LSports”) for a total consideration of €7.5 million (settled through the acquisition of

LSports in shares) less a novated inter-company loan of €1.6 million, therefore a non-cash net consideration of €5.9 million; and

• acquisition of 31% of LSports for a total consideration of €36.7 million, which also included an option to acquire further shares (up to 18.11%) in

LSports. Of the total consideration, €29.2 million was paid in cash with the balance offset against the disposal proceeds of Statscore as per

the above.

As a result of the disposal of 100% of Statscore, the Group realised a loss of €8.8 million which has been recognised in profit or loss for the year

ended 31 December 2022 and is made up as follows:

	2022
	€’m
Net asset position as at the date of the disposal (including goodwill of €12.4 million)	14.7
Net consideration	(5.9)
Loss on disposal	8.8

Furthermore, the Group has an option to acquire up to 49% (so an additional 18%) of the equity of LSports (“LSports Option”). The LSports

Option is exercisable under the following conditions:

• within 90 days from the date of receipt of the LSports audited financial statements for each of the years ending 31 December 2024, 2025

and 2026; or

• at any time until 31 December 2026 subject and immediately prior to the consummation of an Initial Public Offering or Merger & Acquisition

event of LSports.

The exercise price of the option will be equal to the product of:

i. the % of the aggregate shares purchased upon exercise of the PT option out of all shares of the company multiplied by

ii. the greater of either:

a. LSports EBITDA preceding the time of exercise as reflected in the company’s annual audited financial statements for that year,

multiplied by a factor of 7; or

b. €115 million.

The fair value of the option acquired was €1.4 million, which was part of the total consideration of €36.7 million. As at 31 December 2023, the fair

value of the LSports derivative financial asset increased to €4.8 million. The difference of €3.4 million between the fair value at 31 December 2023

and the fair value at 31 December 2022 has been recognised in profit or loss for the year ended 31 December 2023 (refer to part of Note 21C).

LSports is a company whose principal activity is to empower sportsbooks and media companies with the highest quality sports data on a

wide range of events, so they can build the best product possible for their business. The company is based in Israel. The principal reason of

the acquisition is the attractive opportunity considered by Playtech to increase its footprint in the growing sports data market segment.

208 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

A. Investments in associates continued

Investment in LSports continued

Assessment of control and significant influence

As at the date of acquisition, 31 December 2023 and 2022, it was assessed that the Group did not have control over LSports, because it does not

meet the criteria of IFRS 10 Consolidated Financial Statements, paragraph 7 due to the following:

• despite the appointment and representation on the board of directors by a Playtech employee as at 31 December 2023, there is still no ability

to control the relevant activities, as the total number of directors including the Playtech appointed director is five;

• Playtech has neither the ability to change any members of the board nor of the management of LSports; and

• as at 31 December 2023 and 31 December 2022 the option is not exercisable and therefore can be disregarded in the assessment of power.

Per the above assessment, Playtech does not hold power over the investee and as such does not have control.

As at 31 December 2023 and 2022, the Group has significant influence over LSports because it meets one or more of the criteria under IAS 28,

paragraph 6, the main one being the Playtech employee appointed on the board of LSports, enabling it to therefore participate in policy-making

processes, including decisions about dividends and/or other distributions. As a result of this assessment, LSports has been recognised as an

investment in associate.

The LSports option, which is not currently exercisable, is fair valued as per paragraph 14 of IAS 28 and shown as a derivative financial asset in

accordance with IFRS 9 and disclosed separately under part C of this Note.

Purchase Price Allocation (PPA)

The Group has prepared a PPA following the acquisition of the investment, where any difference between the cost of the investment and

Playtech’s share of the net fair value of the LSports identifiable assets and liabilities results in goodwill.

Details of the fair value of identifiable assets and liabilities acquired, investment consideration and goodwill are as follows:

	Playtech’s share
	of net fair value
	of the identifiable
	assets and
	liabilities acquired
	2022
	€’m
Net book value of liabilities acquired	(1.3)
Fair value of customer contracts and relationships	7.8
Fair value of technology – internally developed	11.5
Fair value of brand	1.6
Deferred tax arising on acquisition	(2.3)
Total net assets	17.3
Total consideration	35.3
Goodwill	18.0

Goodwill is not recognised separately but is included as part of the carrying amount of the investment in associate. The total share of profit

recognised in profit or loss in the year ended 31 December 2023 from the investment is LSports was €2.1 million (2022: €0.3 million). This

includes the amortisation of intangibles and the release of the deferred tax liability, arising on acquisition, and the share of the LSports profits,

with a corresponding entry against the investment in associate.

During 2023, the Group received a dividend of €1.8 million from LSports (2022: €Nil), which reduced the investment in associate value in the

consolidated balance sheet.

Investment in Stats International

Background

In January 2022, the Group provided a $2.3 million loan to Stats International Limited (“Stats”), at an interest rate of 3.5% and a repayment date of

30 June 2024. As at 31 December 2023 and 2022, the carrying value of the loan was €2.2 million (Note 22). The Stats group’s business activities

are focused on securing rights in connection with sporting competitions and the exploitation of the same, typically in exchange for the payment

of certain fees and provision of analytical and statistical services by the Stats group to the relevant rightsholder. The initial focus of the Stats

group is on Brazilian sports competitions.

In May 2023, the Group and Stats signed an amended loan agreement which, amongst other things, changed the repayment obligations such

that the final repayment date will be 31 December 2026 and the loan agreement will be novated from Stats to Jewelrock (Stats’ sole shareholder)

in consideration of $1. Moreover, a framework agreement was signed between Stats and Playtech whereby Playtech, for a €1 consideration, has

been granted the option to acquire from Jewelrock 36% of the issued share capital of Stats.

Finally, Playtech entered into a service agreement whereby Playtech provides Stats its business development and knowledge-sharing services

in connection with the operational and industry standard procedures of Stats in exchange for additional B2B services fee as per Note 10. As the

business is still a start-up, the additional B2B services fee as at 31 December 2023 was €Nil (2022: €Nil). Once the option is exercised, the Group

would no longer provide certain services and, as such, would no longer be entitled to the additional B2B services fee.

209Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 21 – Investments and derivative financial assets continued

A. Investments in associates continued

Investment in Stats International continued

Background continued

The option may be exercised at any time but prior to the termination of all sporting rights agreements. It shall also lapse on the expiry or

termination of the Playtech service agreement in accordance with its terms or at the written election of Playtech.

Playtech has assessed whether it holds power to control the investee and it was concluded that this is not the case. Even if the option is

exercised, it would only result in a 36% voting right over the operating entity and therefore no control.

However, Playtech has assessed whether the Group has significant influence over Stats and due to the existence of the service agreement

whereby Playtech would be assisting a start-up business by providing knowledge-sharing services, these could be considered essential

technical information. Considering this, it was concluded that the Group has significant influence under IAS 28, paragraph 6, over Stats.

The cost of the option, which was considered to be the inherent value of Playtech allowing the loan repayment date to be extended, is

considered negligible. No share of profits/losses have been recognised as at 31 December 2023 in profit or loss as these were immaterial.

Investment in NorthStar

Background

NorthStar Gaming Inc. is a Canadian gaming brand which was incorporated under the laws of Ontario in Q4 2021. In Q2 2022, NorthStar Gaming

Inc. received its licence from the Alcohol and Gaming Commission of Ontario (AGCO) and launched its online gaming site www.northstarbets.ca

which offers access to regulated sports betting markets, and a robust and curated casino offering, including the most popular slot offerings

and live dealer games. The principal reason of the acquisition is the attractive opportunity considered by Playtech to increase its footprint in the

growing Canadian betting data market segment.

In December 2022, the Group issued NorthStar Gaming Inc. a convertible loan of CAD 12.25 million with conditions being that upon the

completion of a reverse takeover (RTO) transaction the loan could be converted into common shares, A warrants and B warrants of the post-

RTO consolidated entity. Baden Resources, a company which was listed on the TSX, entered into a conditional agreement to acquire NorthStar

Gaming Inc. for shares (i.e. complete an RTO of NorthStar Gaming Inc.). The fair value of the loan as at 31 December 2022 was €8.4 million.

In March 2023, the RTO was completed and Baden Resources changed its name to NorthStar Gaming Holdings (“NorthStar”). These events

triggered the automatic conversion of the Group’s convertible loan into common shares in NorthStar Gaming Inc. (effective immediately prior to

closing) and then immediately thereafter on closing those shares were exchanged for NorthStar common shares.

When the loan was converted into NorthStar common shares the Group also became the holder of NorthStar Warrants (half of which are

exercisable at CAD 0.85 per share and the other half at CAD 0.90 per share) which, if exercised, would result in the Group further increasing its

shareholding in NorthStar. These warrants expire on the fifth anniversary of their issue.

In September 2023, the Group entered into a subscription agreement with NorthStar whereby additional shares and warrants (half of which

are exercisable at CAD 0.36 per share and the other half at CAD 0.40 per share, in each case expiring on the fifth anniversary of their issue)

were acquired for CAD 5.0 million. At the time of this investment, which closed in October 2023, Playtech also loaned NorthStar an 8% senior

convertible debenture for CAD 5.0 million.

After the additional investment in October 2023, Playtech owns approximately 27.5% of the issued and outstanding common shares of

NorthStar. If the convertible debenture were to be converted into common shares and all of the Group’s warrants were to be exercised, the

Group could potentially further increase its stake beyond 40% of the issued and outstanding common shares.

The Group’s convertible debenture has been classified at fair value through profit or loss based on IFRS 9 criteria. As at 31 December 2023,

an amount of CAD 5.0 million (€3.5 million), which is included in loans receivable from related parties (refer to Note 22), has been drawn

down (2022: €Nil). The loan is required to be repaid to Playtech by October 2026 or upon conversion (to the extent not fully converted) once

conversion criteria are met.

The fair value of all of Playtech’s warrants is €Nil as at 31 December 2023 (refer Note 21C).

Assessment of control and significant influence

As at the date of acquisition and 31 December 2023, it was assessed that the Group did not have control over NorthStar, because it does not

meet the criteria of IFRS 10 Consolidated Financial Statements, paragraph 7 due to the following:

• despite representation on the NorthStar board of directors by Playtech’s CFO from the initial investment and later on, with the additional

investment made, a further Playtech employee also being appointed, there is still no ability to control the relevant activities, as the total number

of directors is eight; and

• Playtech has neither the ability to change any other members of the NorthStar board nor the management of NorthStar.

Per the above assessment, Playtech does not hold power over the investee and as such does not have control.

As at 31 December 2023, the Group has significant influence over NorthStar because it meets one or more of the criteria under IAS 28,

paragraph 6, the main one being that it has two appointed members sitting on the board of NorthStar, enabling it to therefore participate in

policy-making processes, including decisions about dividends and/or other distributions. As a result of this assessment NorthStar has been

recognised as an investment in associate.

The NorthStar warrants are fair valued as per paragraph 14 of IAS 28 and shown as a derivative financial asset in accordance with IFRS 9

(refer to Note 21C).

210 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

A. Investments in associates continued

Investment in NorthStar continued

Purchase Price Allocation (PPA)

The Group has prepared a PPA following the acquisition of the investment, where any difference between the cost of the investment and

Playtech’s share of the net fair value of NorthStar’s identifiable assets and liabilities results in goodwill.

Details of the provisional fair value of identifiable assets and liabilities acquired, investment consideration and goodwill are as follows:

	Playtech’s share
	of net fair value
	of the identifiable
	assets and
	liabilities acquired
	2023
	€’m
Net book value of assets acquired	0.4
Fair value of customer contracts and relationships	1.0
Fair value of brand	0.9
Total net assets	2.3
Total consideration	8.4
Goodwill	6.1

Goodwill is not recognised separately but is included as part of the carrying amount of the investment in associate. Up until October 2023,

Playtech’s shareholding was diluted to 15% due to NorthStar issuing more shares as part of an acquisition they completed in May 2023.

Playtech’s shareholding for November and December 2023 was 27.5%. The total share of loss recognised in profit or loss in the year ended

31 December 2023 from the investment in NorthStar was €2.8 million (2022: €Nil). This includes the amortisation of intangibles, arising on

acquisition, and the share of NorthStar’s losses, with a corresponding entry against the investment in associate.

Investment in Sporting News Holdings Limited

Background

In August 2023, the Group acquired 12.6% of Sporting News Holdings Limited (“TSN”), for a total consideration of $6.3 million (€5.8 million).

TSN’s principal activities are the sale of digital advertising and the offering of media services, the provision of multimedia sports content across

internet-enabled digital platforms and the distribution directly to customers and business clients around the world. The company is incorporated

in the Isle of Man. The principal reason of the acquisition is the attractive opportunity considered by Playtech to increase its footprint in the

growing sports and media market segment.

Assessment of control and significant influence

As at the date of acquisition and at 31 December 2023 it was assessed that the Group did not have control over TSN, because it does not meet

the criteria of IFRS 10 Consolidated Financial Statements, paragraph 7 due to the following:

• despite Playtech having the right to appoint a director on the TSN board, as at 31 December 2023, one had not yet been appointed.

Playtech has preferred to only appoint an observer to the board. Moreover, once Playtech appoints a director, there is still no ability to

control the relevant activities, as the total number of directors including potentially one Playtech appointed director will be five; and

• Playtech has neither the ability to change any members of the board nor of the management of TSN.

Per the above assessment, Playtech does not hold power over the investee and as such does not have control.

As at 31 December 2023, the Group has significant influence over TSN because it meets one or more of the criteria under IAS 28, paragraph 6,

the main one being Playtech having the ability to appoint a member on the board of TSN, enabling it to therefore participate in policy-making

processes, including decisions about dividends and/or other distributions. As a result of this assessment TSN has been recognised as an

investment in associate.

The cost of the investment was deemed to be the consideration paid for the shares of $6.3 million (€5.8 million), which was reduced by

€0.2 million on 31 December 2023 through the recognition of the Group’s share of losses.

Other investments in associates that are fair valued under IFRS9 per IAS 28, paragraph 14

The following are also investments in associates where the Group has significant influence but where the option is not currently exercisable.

As there is no current access to profits, the relevant option is fair valued under IFRS 9, and disclosed as derivative financial assets under part C

of this Note:

• Wplay;

• Tenbet (Costa Rica); and

• Onjoc (Panama).

The financial information required for investments in associates, other than Caliplay, has not been included here as from a Group perspective the

Directors do not consider them to have a material impact jointly or separately.

211Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 21 – Investments and derivative financial assets continued

B. Other investments

Balance sheet

	2023	2022
	€’m	€’m
Listed investments	15.8	1.4
Investment in Tenlot Guatemala	—	4.4
Investment in Tentech Costa Rica	—	2.1
Investment in Gameco	—	1.3
Investment in Hard Rock Digital	77.0	—
Total other investments	92.8	9.2

Statement of comprehensive income

	2023	2022
	€’m	€’m
Profit and loss
Change in fair value of equity investments	(6.6)	(0.3)
Impairment of investment in Gameco (included in the impairment of financial assets)	(1.3)	—
	(7.9)	(0.3)

Other comprehensive income

Foreign exchange movement from equity investments held in a non-Euro functional subsidiary

(2.6)

—

Listed investments

The Group has shares in listed securities, noting that new shares in listed securities were purchased during the year for €14.3 million. The fair

values of these equity shares are determined by reference to published price quotations in an active market. For the year ended 31 December 2023,

the fair values of these listed securities have increased by €0.1 million (2022: decrease of €0.3 million).

Investment in Tenlot Guatemala

In 2020, the Group entered into an agreement with Tenlot Guatemala, a member of the Tenlot Group. Tenlot Guatemala, which is in the lottery

business in Guatemala, commenced its activity in 2018.

The Group acquired a 10% equity holding in Tenlot Guatemala for a total consideration of $5.0 million (€4.4 million) in 2020, which has been

accounted at fair value through profit or loss under IFRS 9.

The fair value of the equity holding as at 31 December 2023 was reduced to €Nil because of changes to market conditions which led to

changes in its original business plans (2022: €4.4 million). The fair value of the equity holding has decreased by €4.4 million in the year ended

31 December 2023.

In addition, the Group was granted a 10% equity holding in Super Sports S.A. at no additional cost. The Group also has an option to acquire an

additional 80% equity holding in Super Sports S.A. If the option is exercised, the Group would no longer provide certain services and, as such,

would no longer be entitled to the additional B2B services fee. The additional B2B services fee was €Nil for the year ended 31 December 2023

(2022: €Nil). There are no conditions attached to the exercise of the option.

The right of exercising the call option at any time and the acquisition of the additional 80% in Super Sports S.A. give Playtech:

• power over the investee;

• exposure, or rights, to variable returns from its involvement with the investee; and

• the ability to use its power over the investee to affect the amount of the investor’s returns.

It therefore satisfies all the criteria of control under IFRS 10, paragraph 7 and, as such, at 31 December 2023 Super Sports S.A. has been

consolidated in the consolidated financial statements of the Group, noting that this is not material from a Group perspective.

Investment in Tentech Costa Rica

In 2020, the Group entered into an agreement in Costa Rica with the Tenlot Group. The Group acquired a 6% equity holding in Tentech CR S.A.,

a member of the Tenlot Group, for a total consideration of $2.5 million (€2.1 million). Tentech CR S.A. sells printed bingo cards in accordance with

article 29 of the Law of Raffles and Lotteries of Costa Rica (CRC – Costa Rican Red Cross Association).

The 6% equity holding in Tentech CR S.A. is accounted at fair value through profit or loss under IFRS 9.

The fair value of the equity holding as at 31 December 2023 was reduced to €Nil (2022: €2.1 million) because of changes to market conditions

which led to changes in its original business plans. The fair value of the equity holding has decreased by €2.3 million in the year ended

31 December 2023.

212 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

B. Other investments continued

Investment in Gameco

In 2021, the Group entered into a convertible loan agreement with GameCo LLC (“Gameco”), where it provided $4.0 million (€3.8 million) in the

form of a debt security with 8% interest. In December 2022, Gameco acquired Green Jade Games and, subsequently, the Playtech debt was

converted into equity shares, representing a 7.1% interest in the newly formed group. Immediately prior to the conversion, the loan was impaired

by €3.0 million, and this has been recognised in profit or loss in the prior year.

The 7.1% equity holding in the newly formed group was accounted at fair value through profit or loss under IFRS 9 at 31 December 2022.

As at 31 December 2023, the fair value of the equity holding has been impaired down to €Nil (2022: €1.3 million).

Investment in Hard Rock Digital

On 14 March 2023, the Group invested $85.0 million (€79.8 million) in Hard Rock Digital (HRD) in exchange for a small minority interest in a

combination of equity shares and warrants. HRD is the exclusive Hard Rock International and Seminole Gaming vehicle for interactive gaming

and sports betting on a global basis.

The Group assessed whether the warrants meet the definition of a separate derivative as per IFRS 9. A financial instrument or other contract

should have all three of the following characteristics:

• its value changes in response to the change in a specified interest rate, financial instrument price, commodity price, foreign exchange rate,

index of prices or rates, credit rating or credit index, or other variable, provided, in the case of a non-financial variable, that the variable is not

specific to a party to the contract (sometimes called the “underlying”);

• it requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be

expected to have a similar response to changes in market factors; and

• it is settled at a future date.

Management made a judgement that the warrants do not meet the definition of a separate derivative asset as: (i) the value of the warrants is

part of the total investment and cannot be distinguished between the two and therefore the value of the warrants was deemed to be equal to the

equity shares value; and (ii) the consideration was paid at the time of the transaction.

The equity investment in HRD does not meet the definition of held for trading, as the investment was acquired for long-term investment purposes

and with no current intention for sale. In this respect, the investment will be classified as an investment at fair value through profit or loss with initial

and subsequent recognition at fair value. Any subsequent gain/loss will be recognised in profit or loss.

Since the date the investment was made until 31 December 2023, there have been no changes in the operations of HRD that would indicate

that the fair value of the investment would be different to the original arm’s length price paid of $85.0 million (€79.8 million). This continues to be

the case, despite the positive outcome of the federal appeals court overturning a ruling that prevented HRD from relaunching its operations in

support of The Seminole Tribe of Florida’s mobile and retail sports books in Florida, a decision that is currently being appealed.

The foreign exchange movement of the investment held in HRD is recorded through other comprehensive income as the investment is held in a

USD functional currency entity. The impact of the foreign exchange movement of the investment is a loss of €2.8 million in other comprehensive

income for the year ended 31 December 2023.

C. Derivative financial assets

Balance sheet

	2023	2022
	€’m	€’m
Playtech M&A Call Option (Caliplay)	730.2	524.0
Wplay	88.0	93.5
Onjoc	3.1	8.6
Tenbet	1.7	8.9
NorthStar warrants (Note 21A)	—	—
LSports (Note 21A)	4.8	1.4
Total derivative financial assets	827.8	636.4

213Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 21 – Investments and derivative financial assets continued

C. Derivative financial assets continued

Statement of comprehensive income impact

	2023	2022
	€’m	€’m
Caliplay
Fair value change of Playtech M&A Call Option	180.9	(13.3)
Playtech Call Option	—	—
Foreign exchange movement to profit or loss	(16.0)	30.6
Wplay
Fair value change in Wplay	(2.7)	(9.4)
Foreign exchange movement recognised in other comprehensive income	(2.8)	5.7
Onjoc
Fair value change in Onjoc	(5.3)	1.3
Foreign exchange movement recognised in other comprehensive income	(0.2)	0.4
Tenbet
Fair value change in Tenbet	(6.9)	(3.2)
Foreign exchange movement recognised in other comprehensive income	(0.3)	0.7
LSports
Fair value change of call option (Note 21A)	3.4	—
Total comprehensive income impact	150.1	12.8

Caliplay

As already disclosed in section A of this note, the Playtech M&A Call Option is not currently exercisable and therefore in accordance with IAS 28,

paragraph 14 has been recognised as a derivative financial asset and fair valued under IFRS 9.

As at 31 December 2023 and 2022, the valuation methodology used for the Playtech M&A Call Option was that of a discounted cash flow (DCF)

approach with a market exit multiple assumption.

As already mentioned in part A of Note 21, the Group is seeking a declaration from the English Courts to obtain clarification on a point of

disagreement between the parties in relation to the Caliente Call Option and, in particular, whether Caliplay still holds this option which permits

it to redeem the additional B2B services fee element. Should it be declared that Caliplay still has the Caliente Call Option and Caliplay then

exercises said option, this would cancel both the Playtech M&A Call Option and the Playtech Call Option. The Group believes the Caliente Call

Option has expired and whilst Caliplay has not sought to exercise the option to date, Caliplay has made it clear that it considers the option has

not yet expired.

In arriving at the fair value of the Playtech M&A Call Option, the Group has made a judgement that the Caliente Call Option has expired and

therefore no probability weighted scenarios have been modelled that include an assumption that the Caliente Call Option is exercisable. Should

the English Courts determine that the option is exercisable and Caliplay chooses to exercise the option, the amount payable by Caliplay to the

Group upon exercise would either be agreed between the parties or, failing which, determined by an independent investment bank valuing the

Group’s remaining entitlement to receive the additional B2B services fee until 31 December 2034. There is therefore the potential that, should the

Caliente Call Option be exercisable and then subsequently exercised, the proceeds received by the Group may be materially different (positive

or adverse) to the fair value of the Playtech M&A Call Option recorded as at 31 December 2023 and 2022.

Furthermore, and as disclosed in further detail under Note 7, the disputes with Caliplay now also include a dispute in relation to the additional B2B

services fees and B2B licensee fees. The dispute relates to amounts that date back to the summer of 2023 and remain outstanding from Caliplay

today. The impact of this dispute has been considered below by including a higher specific risk premium in the discount rate used for the DCF, to

reflect what a willing third-party buyer would pay for the rights to this option, as things stand with the ongoing dispute.

214 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

C. Derivative financial assets continued

Caliplay continued

Valuation

The Group has assessed the fair value of the Playtech M&A Option as at 31 December 2023 using a DCF approach with a market exit

multiple assumption.

The Group’s view of a reasonable market participant base discount rate for the 31 December 2023 valuation is unchanged since last year.

However, due to the ongoing legal proceedings and the dispute with Caliplay as described above, the Group has adjusted the fair value of

the Playtech M&A Call Option to reflect this risk, by including an additional company-specific risk premium in the discount rate, which overall

increased it to 20% (2022: 16%).

The Group also made assumptions on the probability of a possible transaction that may be completed on a number of exit date scenarios

over a five-year period, until December 2028. Management did not model a scenario of no exit as this is considered highly remote. The Group

used a compound annual growth rate of 17.0% (2022: 17.2%) on revenue over the forecasted cash flow period, an average Adjusted EBITDA

margin of 31.3% (2022: 26.3%) and an exit multiple of 7.7x (2022: 9.6x). The decrease in the exit EBITDA multiple is supported by the observed

median EV/EBITDA multiple of the publicly listed peers as at 31 December 2023 and share price declines. Due to the uncertainty as to how the

exercise of the Playtech M&A Call Option may occur and the potential for the shares held to not be immediately realisable, the Group included an

additional discount for lack of marketability (DLOM) for two years of 10.0% (2022: 13.8%). Furthermore, Playtech’s share in Caliplay was adjusted

to reflect the rights to Caliplay shares that a service provider has under its services agreement with the Group. Finally, taking account of matters

arising in the period, Playtech has included some probability weighted scenarios to consider the impact of the COC Option as explained in

part A of this Note, noting that the probabilities assigned to this scenario are above zero but low, as compared to the 31 December 2022 valuation

where it was assumed that there was no impact (i.e. 0% probability scenarios).

As at 31 December 2023, the fair value of the Playtech M&A Call Option was $805.8 million (2022: $560.6 million) which converted to

€730.2 million (2022: €524.0 million). The period-on-period change in the fair value of the Playtech M&A call option is a combination of an uplift:

• in the forecasts which consider Caliplay’s strong 2023 performance which exceeded previous expectations; and

• following the reduction of the right to Caliplay shares that a service provider of Playtech had under its services agreement which was partly

redeemed during the period through a €41.3 million redemption payment (the value of such right being previously deducted from the fair value

of the Playtech M&A Call Option).

These were partially offset by:

• the reduction in the exit multiple as explained above;

• the increase in the discount rate to reflect the ongoing litigation risk;

• unfavourable movement in the USD to EUR foreign exchange rate; and

• the impact of including scenarios whereby there is a small probability that the COC Option will be exercised.

Sensitivity analysis

The assumptions and judgements made in the valuation of the derivative financial asset as at 31 December 2023 include the following

sensitivities, noting that factors and circumstances may arise that are outside the Group’s control which could impact the option value:

• A different discount rate within the range of 18% to 22% will result in a fair value of the derivative financial asset in the range of €679.6 million –

€785.6 million.

• A 5% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €691.3 million –

€769.3 million.

• A 10% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €652.4 million –

€808.2 million.

• A 5% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €598.9 million –

€885.3 million.

• A 10% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €487.5 million –

€1,066.5 million.

• A 1.0 fluctuation on the market exit multiple will result in a fair value of the derivative financial asset within the range of €666.9 million –

€793.7 million.

• If the 10% DLOM applied for the two-year period post exercise of the Playtech M&A Option fluctuates by 5% (i.e. in the event that an M&A

transaction included the acquisition of Playtech’s shares immediately post exercise) the fair value of the derivative financial asset would be

within the range of €694.1 million – €766.6 million.

• If the incremental annual DLOM on option fluctuates by 2.5% (to 2.5% and 7.5% instead of 5%) this will result in a fair value of the derivative

financial asset within the range of €690.4 million – €769.3 million.

• If the M&A call option weighted at 100% probability of exercise relative to the standalone COC option payment, regardless of the exit date

scenario, the fair value of the derivative financial asset would be €811.0 million.

• If the M&A call option weighted at even 50% between the probability of exercise of the standalone Playtech M&A Call Option and the

standalone COC option payment, the fair value of the derivative financial asset would be €621.6 million.

215Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 21 – Investments and derivative financial assets continued

C. Derivative financial assets continued

Wplay

In August 2019, Playtech entered into a structured agreement with Aquila Global Group SAS (“Wplay”), which has a licence to operate online

gaming products and services in Colombia. Under the agreement, the Group provides Wplay its technology products, where it receives

standard operator revenue and additional B2B services fee as per Note 10. The Group has no shareholding in Wplay.

Playtech has a call option to acquire a 49.9% equity holding in the Wplay business. As at 31 December 2022 this option was exercisable in

August 2023. In 2023, the option exercise date was deferred to February 2024, however management was in active discussions with Wplay to

further extend the option exercise date pre-year end. The extension was signed in February 2024, and the option exercise date was deferred

to February 2025, or earlier if an M&A event takes place. For the call option valuation as at 31 December 2023, Playtech assumed that the call

option cannot be exercised any date before February 2025. If the call option is exercised by Playtech, the Group would no longer provide certain

services and as such will no longer be entitled to the additional B2B services fee. The additional B2B services fee was €1.2 million for the year

ended 31 December 2023 (2022: €Nil).

The payment of €22.4 million made to Wplay in 2019 and 2020 was considered to be the payment made for the option in Wplay.

Assessment of control and significant influence

The Group assessed whether it holds power over the investee (in accordance with IFRS 10, paragraph 7) with the following considerations:

• Playtech does not have the ability to direct Wplay’s activities as it has no voting representation on the executive committee or members of the

executive committee.

• Whilst they are not members on the executive committee, Playtech has the ability to appoint and change both the COO and CMO who form

part of the management team (albeit this right has never been exercised). The COO and the CMO are part of the wider management team but

would not be able to control the relevant activities of Wplay.

• If the option is exercised it would result in Playtech acquiring 49.9% of the voting rights of the operating entity and therefore would not

result in having control. Furthermore, as at 31 December 2023, the option is not exercisable and therefore can be disregarded in the

assessment of power.

Per the above assessment Playtech does not hold power over the investee and as such does not have control.

With regard to the assessment of significant influence, the following facts were considered:

• Playtech has the right to appoint and remove the COO and CMO, which is a potential indicator of significant influence given their relative

positions and involvement in the day-to-day operations of Wplay.

• The standard operator revenue is not considered to give rise to significant influence. However, when combined with the additional B2B

services fee, this is an indicator of significant influence.

• The Group provides additional services to Wplay which Wplay requires to assist it in successfully running its operations, which could be

considered essential technical information.

The Group therefore has significant influence under IAS 28, paragraph 6 over Wplay. However, as the option is not currently exercisable, the

Group has an investment in associate but with no access to profits. As such, the option is fair valued as per paragraph 14 of IAS 28 and shown as

a derivative financial asset in accordance with IFRS 9.

The Group has given two loans to Wplay, an interest-bearing and a non-interest-bearing one, of $1.7 million (€1.6 million) and $0.5 million

(€0.5 million) respectively. The combined outstanding balance as at 31 December 2023 is $1.3 million (€1.3 million) and is due for repayment

within the next 12 months. The loans are included in loans receivable from related parties (refer to Note 24).

Valuation

The fair value of the option at 31 December 2023 has been estimated using a DCF approach with a market exit multiple assumption. The Group

used a discount rate of 22% (2022: 25%), the decrease reflecting the maturity stage of the Wplay business, as well as a discount for illiquidity

and control until the expected Playtech exit date of February 2025 (2022: expected exit date of December 2026). The Group used a compound

annual growth rate of 8.2% (2022: 24.7%) over the forecasted cash flow period, an average Adjusted EBITDA margin of 28.5% (2022: 20.6%)

and an exit multiple of 10.2x (2022: 9.6x). As part of the agreement, there is a lock-in mechanism that contractually might prevent Playtech from

selling the resulting shares, however an assumption was made that if the exit date assumed in the model is earlier, then both parties would be in

agreement to this earlier exit point, therefore no further discounts were applied post transaction. Furthermore, Playtech’s share in Wplay was

adjusted to reflect the rights to shares that a service provider has under its services agreement with the Group.

As at 31 December 2023, the fair value of the Wplay derivative financial asset is €88.0 million. The difference of €5.5 million between the fair

value at 31 December 2022 of €93.5 million and the fair value at 31 December 2023 has been recognised as follows:

a. €2.7 million derived from the fair value decrease of the derivative call option calculated using the DCF model in profit or loss for the year

ended 31 December 2023. The decrease was due to downgrading the forecasts because of the new marketing regulations becoming

effective in Colombia from January 2024, which restrict the amounts that can be spent on marketing each year by operators, and offset by

the decrease in the discount rate and the increase in the exit multiple.

b. €2.8 million derived from the fair value decrease due to the exchange rate fluctuation of USD to EUR (as the derivative call option is under a

foreign subsidiary of the Group whose functional currency is USD) in other comprehensive income for the year ended 31 December 2023.

216 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

C. Derivative financial assets continued

Wplay continued

Sensitivity analysis

The assumptions and judgements made in the valuation of the derivative financial asset as at 31 December 2023 include the following

sensitivities, noting that factors and circumstances may arise that are outside the Group’s control which could impact the option value:

• A different discount rate within the range of 17% to 27% will result in a fair value of the derivative financial asset in the range of €74.3 million –

€105.1 million.

• A 5% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €83.6 million –

€92.4 million.

• A 10% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €79.2 million –

€96.8 million.

• A 5% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €83.1 million –

€93.0 million.

• A 10% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €78.3 million –

€98.0 million.

• A 1.0 fluctuation on the market exit multiple will result in a fair value of the derivative financial asset within the range of €81.2 million –

€94.9 million.

• If the expected Playtech exit date is extended by one year, the fair value of the derivative financial asset will decrease to €82.9 million.

Onjoc

In June 2020, Playtech entered into a framework agreement with ONJOC CORP. (“Onjoc”), which holds a licence to operate online sports

betting, gaming and gambling activities in Panama. The Group has no equity holding in Onjoc but has an option to acquire 50%. Under the

agreement the Group provides Onjoc its technology products, where it receives standard operator revenue and additional B2B services fee

as per Note 10. If the option is exercised, the Group would no longer provide certain services and, as such, would no longer be entitled to the

additional B2B services fee. The additional B2B services fee was €Nil in the year ended 31 December 2023 (2022: €Nil). The option can be

exercised any time subject to Onjoc having $15.0 million of Gross Gaming Revenue (GGR) over a consecutive 12-month period.

Assessment of control and significant influence

The Group performed an analysis for Onjoc to assess whether it holds power over Onjoc (in accordance with IFRS 10, paragraph 7) with the

following considerations:

• Playtech can propose an independent member to the board of directors, who has to be independent to both Playtech and Onjoc, and as such

does not have the ability to direct Onjoc’s activities as it has no voting representation on the board;

• Playtech has the right to propose the COO, CTO and CMO, which although would form part of the wider management team, would not be able

to control the relevant activities of Onjoc by themselves; and

• if the option is exercised it would result in Playtech acquiring 50% of the voting rights of the operating entity and therefore would not

result in having control. Furthermore, as at 31 December 2023, the option is not exercisable and therefore can be disregarded in the

assessment of power.

Per the above assessment Playtech does not hold power over the investee and as such does not have control.

With regard to the assessment of significant influence, the following facts were considered:

• Playtech can propose an independent member to the board of directors and has the right to propose the COO, CTO and CMO, which are

potential indicators of significant influence given their relative positions and the involvement in day-to-day operations of Onjoc;

• the standard operator revenue is not considered to give rise to significant influence. However, when combined with the additional B2B

services fee, this is an indicator of significant influence; and

• the Group provides additional services to Onjoc which Onjoc requires to assist it in successfully running its operations which could be

considered essential technical information.

The Group therefore has significant influence under IAS 28, paragraph 6 over Onjoc. However, as the option is not currently exercisable, the

Group has an investment in associate but with no access to profits. As such, the option is fair valued as per paragraph 14 of IAS 28 and shown

as a derivative financial asset in accordance with IFRS 9.

The Group has given an interest-bearing loan to Onjoc of €2.3 million (2022: €1.8 million) which is due for repayment in October 2025 and is

included in loans receivable from related parties (refer to Note 22).

217Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 21 – Investments and derivative financial assets continued

C. Derivative financial assets continued

Onjoc continued

Valuation

The fair value of the option at 31 December 2023 has been estimated using a DCF approach with a market exit multiple assumption. The Group

used a discount rate of 32% (2022: 33%) reflecting the cash flow risk given the high growth rates in place and the early stages of the business,

as well as a discount for illiquidity and control until the expected Playtech exit date of December 2027 (2022: expected exit date of December

2027). The Group used a compound annual growth rate of 49.2% (2022: 60.1%) over the forecasted cash flow period and an average Adjusted

EBITDA margin of 24.2% (2022: 20.4%). As part of the agreement, there is a lock-in mechanism that contractually might prevent Playtech from

selling the resulting shares, however an assumption was made that if the exit date assumed in the model is earlier, then both parties would be in

agreement to this earlier exit point, therefore no further discounts applied post transaction. Furthermore, Playtech’s share in Onjoc was adjusted

to reflect the rights to shares that a service provider has under its services agreement with the Group.

As at 31 December 2023, the fair value of the Onjoc derivative financial asset is €3.1 million. The difference of €5.5 million between the fair value

at 31 December 2022 of €8.6 million and the fair value at 31 December 2023 has been recognised as follows:

a. €5.3 million derived from the fair value decrease of the derivative call option calculated using the DCF model in profit or loss in the

year ended 31 December 2023. This decrease is mostly due to the revised cash flow forecasts used in the valuation which have been

downgraded based on Onjoc’s current performance.

b. €0.2 million derived from the fair value decrease from the exchange rate fluctuation of USD to EUR (as the derivative call option is under a

foreign subsidiary of the Group whose functional currency is USD) in other comprehensive income in the year ended 31 December 2023.

Sensitivity analysis

The assumptions and judgements made in the valuation of the derivative financial asset as at 31 December 2023 include the following

sensitivities, noting that factors and circumstances may arise that are outside the Group’s control which could impact the option value:

• A different discount rate within the range of 27% to 37% will result in a fair value of the derivative financial asset in the range of €2.4 million –

€4.0 million.

• A 5% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €2.9 million –

€3.3 million.

• A 10% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €2.7 million –

€3.6 million.

• A 5% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €2.2 million – €4.1 million.

• A 10% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €1.3 million – €5.1 million.

• A 1.0 fluctuation on the market exit multiple will result in a fair value of the derivative financial asset within the range of €2.5 million – €3.7 million.

Tenbet Costa Rica

In addition to the 6% equity holding in Tentech CR S.A as per section B of this Note, the Group has an option to acquire 81% equity holding in

Tenbet. Tenbet, which is another member of the Tenlot Group, operates online bingo games and casino side games. Playtech provides certain

services to Tenbet in return for its additional B2B services fee. The Group has no equity holding in Tenbet but has an option to acquire 81% equity.

If the option is exercised, the Group would no longer provide certain services to Tenbet and, as such, would no longer be entitled to the additional

B2B services fee. The additional B2B services fee was €Nil in the year ended 31 December 2023 (2022: €Nil). In H1 2023, the Group signed an

amendment to the Tenbet agreement in which the option can be exercised at any time from July 2024 (previously 35 months of Tenbet going

live). In H2 2023, the Group signed an amendment to the Tenbet agreement in which the option can be exercised at any time from 1 January 2025

based on the condition that Tenbet has generated at least once, prior to the exercise, accumulative GGR (as defined in the agreement) of at least

$10.0 million, in a consecutive 12-month period.

Under the existing agreements, the Group has provided Tenbet with a credit facility of €4.5 million, out of which €4.2 million (Note 22) had been

drawn down as at 31 December 2023 (2022: €2.1 million).

Assessment of control and significant influence

The Group assessed whether it holds power over Tenbet (in accordance with IFRS 10, paragraph 7) with the following considerations:

• Playtech does not have the ability to direct Tenbet’s activities as it has no voting representation on the board of directors (or equivalent) or

people in managerial positions;

• Playtech has neither the ability to appoint, nor change, any members of the board of Tenbet; and

• as at 31 December 2023, the option is not exercisable and therefore can be disregarded in the assessment of power.

Per the above assessment, Playtech does not hold power over the investee and as such does not have control.

With regard to the assessment of significant influence, the standard operator revenue alone is not considered to give rise to significant influence.

However, when combined with the additional B2B services fee, this is an indicator of significant influence. Furthermore, the Group provides

additional services to Tenbet which Tenbet requires to assist it in successfully running its operations that could be considered essential

technical information. Playtech therefore has significant influence under IAS 28, paragraph 6 over Tenbet. However, as the option is not currently

exercisable, the Group has an investment in associate but with no access to profits. As such, the option is fair valued as per paragraph 14 of

IAS 28 and shown as a derivative financial asset in accordance with IFRS 9.

218 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 21 – Investments and derivative financial assets continued

C. Derivative financial assets continued

Tenbet Costa Rica continued

Valuation

The fair value of the option at 31 December 2023 has been estimated using a DCF approach with a market exit multiple assumption. The Group

used a discount rate of 33% (2022: 35%) reflecting the cash flow risk given the high growth rates in place and the early stages of the business,

as well as a discount for illiquidity and control until the expected Playtech exit date of December 2028 (2022: expected exit date of December

2027). The Group used a compound annual growth rate of 96.2% (2022: 135%) over the forecasted cash flow period and an average Adjusted

EBITDA margin of 0.9% (2022: average of -59.8%). As part of the agreement, there is a lock-in mechanism that contractually might prevent

Playtech from selling the resulting shares, however an assumption was made that if the exit date assumed in the model is earlier, then both

parties would be in agreement to this earlier exit point. Furthermore, Playtech’s share in Tenbet was adjusted to reflect the rights to shares that

a service provider has under its services agreement with the Group.

As at 31 December 2023, the fair value of the Tenbet derivative financial asset is €1.7 million. The difference of €7.2 million between the fair value

at 31 December 2022 of €8.9 million and the fair value at 31 December 2023 has been recognised as follows:

a. €6.9 million derived from the fair value decrease of the derivative call option calculated using the DCF model in profit or loss in the

year ended 31 December 2023. This decrease is mostly due to the revised cash flow forecasts used in the valuation which have been

downgraded based on Tenbet’s current performance.

b. €0.3 million derived from the fair value decrease from the exchange rate fluctuation of USD to EUR (as the derivative call option is under a

foreign subsidiary of the Group whose functional currency is USD) in other comprehensive income in the year ended 31 December 2023.

Sensitivity analysis

The assumptions and judgements made in the valuation of the derivative financial asset as at 31 December 2023 include the following

sensitivities, noting that factors and circumstances may arise that are outside the Group’s control which could impact the option value:

• A different discount rate within the range of 28% to 38% will result in a fair value of the derivative financial asset in the range of €1.0 million –

€2.6 million.

• A 5% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €1.4 million –

€2.0 million.

• A 10% fluctuation in the Adjusted EBITDA margin will result in a fair value of the derivative financial asset within the range of €1.2 million –

€2.2 million.

• A 5% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €Nil – €3.9 million.

• A 10% fluctuation in the revenue growth rate will result in a fair value of the derivative financial asset within the range of €Nil – €6.3 million.

• A 1.0 fluctuation on the market exit multiple will result in a fair value of the derivative financial asset within the range of €1.1 million – €2.3 million.

219Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 22 – Other non-current assets

	2023	2022
	€’m	€’m
Security deposits	4.3	3.3
Guarantee for gaming licences	2.2	2.2
Prepaid costs relating to Sun Bingo contract	58.7	63.4
Loans receivable (net of ECL)	3.1	1.7
Loans receivable from related parties (net of ECL) (Note 37)	58.5	27.9
Other receivables	10.2	11.1
	137.0	109.6

The movement of loans and interest receivable is as follows:

	€’m
Balance as at 1 January 2023	45.9
Net loans granted/repaid	23.4
Non-cash loans granted (transfer from trade receivables)	4.5
Non-cash loans repayment (transfer from trade payables)	(0.3)
Conversion of loan to equity investment (Note 21A)	(8.4)
Interest charge for the year	1.9
ECL	(0.9)
Impairment of loans receivable	(1.5)
Foreign exchange movements	(1.3)
Balance as at 31 December 2023	63.3
Split to:
Non-current assets	61.6
Current assets (Note 24)	1.7
	63.3

Note 23 – Trade receivables

	2023	2022
	€’m	€’m
Trade receivables	109.9	144.5
Related parties (Note 37)	99.1	20.5
Trade receivables – net	209.0	165.0
Split to:
Non-current assets	1.9	1.1
Current assets	207.1	163.9
	209.0	165.0

Note 24 – Other receivables

	2023	2022
	€’m	€’m
Prepaid expenses	23.3	23.4
VAT and other taxes	14.8	13.6
Security deposits for regulators	24.4	24.2
Prepaid costs relating to Sun Bingo contract	4.4	3.6
Receivable for legal proceedings and disputes	16.4	16.4
Loans receivable (net of ECL)	0.5	13.0
Loans receivable from related parties (net of ECL) (Note 37)	1.2	3.3
Other receivables from related parties (Note 37)	0.3	—
Other receivables	15.2	10.1
	100.5	107.6

1 Receivable for legal proceedings and disputes relates to funds held in escrow, in relation to a historical and ongoing legal matter. The corresponding liability is included under gaming and other taxes.

The funds will be released when the case is finally settled, in accordance with the escrow agreement.

220 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 25 – Cash and cash equivalents

Cash and cash equivalents for the purposes of the statement of cash flows comprises:

	2023	2022
	€’m	€’m
Cash at bank	516.6	426.8
Deposits	—	0.1
Cash and cash equivalents in the statement of cash flows	516.6	426.9
Less: expected credit loss (Note 39A)	(0.4)	(0.4)
	516.2	426.5

Out of the total cash at bank, an amount of €9.4 million was held by payment processors as at 31 December 2023 (2022: €6.8 million).

The Group holds cash balances on behalf of operators in respect of their jackpot games and poker and casino operations, as well as client funds

with respect to B2C.

	2023	2022
	€’m	€’m
Funds attributed to jackpots	81.1	84.7
Security deposits	29.9	29.6
Players’ balances	41.9	39.8
	152.9	154.1

Note 26 – Assets held for sale

	2023	2022
	€’m	€’m
Assets
Property, plant and equipment	19.3	19.6

During 2021, the Group entered into a binding agreement for the disposal of a real estate area in Milan for a total consideration of €20.0

million. Accordingly, the real estate was classified as held for sale. Of the total consideration, €1.0 million was received during the year ended

31 December 2021. The advance received was classified as part of the liabilities directly associated with assets classified as held for sale.

The sale has been finalised but the disposal is expected to complete in H1 2025 with the movement of the trot track from La Maura area to

San Siro (previously it was expected that the sale would be completed during 2024).

221Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 27 – Shareholders’ equity

A. Share capital

Share capital is comprised of no par value shares as follows:

	2023	2022
	Number	Number
	of shares	of shares
Authorised	N/A	N/A
Issued and paid up	309,294,243	309,294,243

1 The Company has no authorised share capital, but the Directors are authorised to issue up to 1,000,000,000 shares of no par value.

The table below shows the movement of the shares:

	Shares in issue/
	circulation		Shares held by
	Number of shares	Treasury shares	EBT	To ta l
At 1 January 2022	299,244,326	2,937,550	7,112,367	309,294,243
Exercise of options	1,743,990	—	(1,743,990)	—
At 31 December 2022/1 January 2023	300,988,316	2,937,550	5,368,377	309,294,243
Transfer from treasury shares to EBT	—	(2,937,550)	2,937,550	—
Exercise of options	3,704,491	—	(3,704,491)	—
At 31 December 2023	304,692,807	—	4,601,436	309,294,243

B. Employee Benefit Trust

In 2014, the Group established an Employee Benefit Trust by acquiring 5,517,241 shares for a total of €48.5 million.

In 2021, the Company transferred 7,028,339 shares held by the Company in treasury to the Employee Benefit Trust for a total of €22.6 million.

In 2023, the Company transferred 2,937,550 shares held by the Company in treasury to the Employee Benefit Trust for a total of €12.5 million.

During the year ended 31 December 2023, 3,704,491 shares (2022: 1,743,990) were issued at a cost of €11.9 million (2022: €6.0 million). As at

31 December 2023, a balance of 4,601,436 shares (2022: 5,368,377 shares) remains in the EBT with a cost of €17.8 million (2022: €17.2 million).

C. Share options exercised

During the year 3,880,633 (2022: 1,794,438) share options were exercised, of which 176,142 were cash settled (2022: 50,448).

D. Distribution of dividends

During 2023 the Group did not pay any dividends.

E. Reserves

The following describes the nature and purpose of each reserve within owners’ equity:

Reserve	Description and purpose
Additional paid in capital	Share premium (i.e. amount subscribed for share capital in excess of nominal value)
Employee Benefit Trust	Cost of own shares held in treasury by the trust
Foreign exchange reserve	Gains/losses arising on retranslating the net assets of overseas operations
Employee termination indemnities	Gains/losses arising from the actuarial remeasurement of the employee termination indemnities
Non-controlling interest	The portion of equity ownership in a subsidiary not attributable to the owners of the Company
Retained earnings	Cumulative net gains and losses recognised in the consolidated statement of comprehensive income

Note 28 – Loans and borrowings

The main credit facility of the Group is a revolving credit facility (RCF) up to €277.0 million and is available until October 2025, with an option to

extend by 12 months. Interest payable on the loan is based on SONIA depending on the currency of each withdrawal. As at the reporting date the

credit facility drawn amounted to €Nil (2022: €Nil).

Under the RCF, the covenants are monitored on a regular basis by the finance department, including modelling future projected cash flows

under a number of scenarios to stress-test any risk of covenant breaches, the results of which are reported to management and the Board of

Directors. The covenants are as follows:

• Leverage: Net Debt/Adjusted EBITDA to be less than 3.5:1 for the year ended 31 December 2023 (2022: less than 3.5:1).

• Interest cover: Adjusted EBITDA/Interest to be over 4:1 for the year ended 31 December 2023 (2022: over 4:1).

As at 31 December 2023 and 2022 the Group met these financial covenants.

222 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 29 – Bonds

	2018	Bond	2019	Bond	2023	Bond	Tot al
		€’m		€’m		€’m	€’m
At 1 January 2022		527.6		347.4		—	875.0
Repayment of bonds		(330.0)		—		—	(330.0)
Release of capitalised expenses		2.0		0.6		—	2.6
At 31 December 2022/1 January 2023		199.6		348.0		—	547.6
Repayment of bonds		(200.0)		—		—	(200.0)
Issue of new bond		—		—		297.2	297.2
Release of capitalised expenses		0.4		0.6		0.3	1.3
At 31 December 2023		—		348.6		297.5	646.1

	2023	2022
	€’m	€’m
Split to:
Non-current	646.1	348.0
Current	—	199.6
	646.1	547.6

Bonds

(a) 2018 Bond

On 12 October 2018, the Group issued €530.0 million of senior secured notes (the “2018 Bond”) maturing in October 2023. The net proceeds of

issuing the 2018 Bond after deducting commissions and other direct costs of issue totalled €523.4 million.

Commissions and other direct costs of issue have been offset against the principal balance and are amortised over the period of the 2018 Bond.

The issue price was 100% of its principal amount and bears interest from 12 October 2018 at the rate of 3.75% per annum payable semi-annually,

in arrears, on 12 April and 12 October commencing on 12 April 2019.

During the year ended 31 December 2022, the Group made a partial repayment towards the 2018 Bond of €330.0 million. It was then fully

repaid in 2023.

(b) 2019 Bond

On 7 March 2019, the Group issued €350 million of senior secured notes (the “2019 Bond”) maturing in March 2026. The net proceeds of issuing

the 2019 Bond after deducting commissions and other direct costs of issue totalled €345.7 million.

Commissions and other direct costs of issue have been offset against the principal balance and are amortised over the period of the 2019 Bond.

The issue price is 100% of its principal amount and bears interest from 7 March 2019 at a rate of 4.25% per annum payable semi-annually,

in arrears, on 7 September and 7 March commencing on 7 September 2019.

On 28 June 2023, the Group issued €300.0 million of senior secured notes (the “2023 Bond”) maturing in June 2028. The net proceeds of

issuing the 2023 Bond after deducting commissions and other direct costs of issue totalled €297.2 million.

Commissions and other direct costs of issue have been offset against the principal balance and are amortised over the period of the 2023 Bond.

The issue price is 100% of its principal amount and bears interest from 28 June 2023 at a rate of 5.875% per annum payable semi-annually,

in arrears, on 28 December and 28 June commencing on 28 December 2023.

As at 31 December 2023 and 2022, the Group met the required interest cover financial covenant of 2:1 Adjusted EBITDA/Interest ratio, for the

combined 2018, 2019 and 2023 Bonds.

223Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 30 – Provisions for risks and charges, litigation and contingent liabilities

The Group is involved in proceedings before civil and administrative courts, and other legal or potential legal actions related to its business,

including certain matters related to previous acquisitions. Based on the information currently available, and taking into consideration the existing

provisions for risks, the Group currently considers that such proceedings and potential actions will not result in an adverse effect upon the

financial statements; however, where this is not considered to be remote, they have been disclosed as contingent liabilities.

All the matters were subject to a review and estimate by the Board of Directors based on the information available at the date of preparation of

these financial statements and, where appropriate, supported by updated legal opinions from independent professionals. These provisions are

classified based on the Directors’ assessment of the progress and probabilities of success of each case at each reporting date.

Movements of the provisions outstanding as at 31 December 2023 are shown below:

	Legal and
	regulatory	Contractual	Other	Total
	€’m	€’m	€’m	€’m
Balance at 1 January 2023	7.3	4.2	2.4	13.9
Provisions made during the year	0.6	1.9	0.9	3.4
Provisions used during the year	(1.1 )	(3.7)	(0.2)	(5.0)
Provisions reversed during the year	(1.1)	(1.6)	(0.1 )	(2.8)
Balance at 31 December 2023	5.7	0.8	3.0	9.5

	Legal and
	regulatory	Contractual	Other	Total
	€’m	€’m	€’m	€’m
2022
Non-current	7.3	0.3	2.4	10.0
Current	—	3.9	—	3.9
	7.3	4.2	2.4	13.9
2023
Non-current	5.7	0.3	2.9	8.9
Current	—	0.5	0.1	0.6
	5.7	0.8	3.0	9.5

Provision for legal and regulatory issues

The Group is subject to proceedings and potential claims regarding complex legal matters which are subject to a different degree of uncertainty.

Provisions are held for various legal and regulatory issues that relate to matters arising in the normal course of business including, in particular,

various disputes that arose in relation to the operation of the various licences held by the Group’s subsidiary Snaitech. The uncertainty is due

to complex legislative and licensing frameworks in the various territories in which the Group operates. The Group also operates in certain

jurisdictions where legal and regulatory matters can take considerable time for the required local processes to be completed and the matters

to be resolved.

Contractual claims

The Group is subject to historic claims relating to contractual matters that arise with customers in the normal course of business. The Group

believes they have a robust defence to the claims raised and has provided for the likely settlement where an outflow of funds is probable.

The uncertainty relates to complex contractual dealings with a wide range of customers in various jurisdictions, and because, as noted above,

the Group operates in certain jurisdictions where contractual disputes can take considerable time to be resolved in the local legal system.

Given the uncertainties inherent, it is difficult to predict with certainty the outlay (or the timing thereof) which will derive from these matters.

It is therefore possible that the value of the provisions may vary further based on future developments. The Group monitors the status of these

matters and consults with its advisers and experts on legal and tax-related matters in arriving at the provisions recorded. The provisions

included represent the Directors’ best estimate of the potential outlay and none of the matters provided for are individually material to the

financial statements.

Accounting for uncertain tax positions

The Group is subject to various forms of tax in a number of jurisdictions. Given the nature of the industry and the jurisdictions within which the

Group operates, the tax, legal and regulatory regimes are continuously changing and subject to differing interpretations. As such, the Group

is exposed to a small number of uncertain tax positions and open audits/enquiries. Judgement is applied in order to adequately provide for

uncertain tax positions where it is believed that it is more likely than not that an economic outflow will arise. The Group has provided for uncertain

tax positions which meet the recognition threshold and these positions are included within tax liabilities. There is a risk that additional liabilities

could arise. Given the uncertainty and the complexity of application of international tax in the sector, it is not feasible to accurately quantify any

possible range of liability or exposure, and this has therefore not been disclosed.

224 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 31 – Contingent consideration

	2023	2022
	€’m	€’m
Non-current contingent consideration
Acquisition of Aus GMTC PTY Ltd	5.4	2.1
Others	0.4	0.2
Total non-current contingent consideration	5.8	2.3
Current contingent consideration consists of:
Other acquisitions	0.4	0.6
Total current contingent consideration	0.4	0.6
Total contingent consideration	6.2	2.9

The maximum contingent consideration payable is as follows:

	2023	2022
	€’m	€’m
Acquisition of Aus GMTC PTY Ltd	45.3	46.7
Other acquisitions	0.8	0.8
	46.1	47.5

Note 32 – Trade payables

	2023	2022
	€’m	€’m
Suppliers	46.0	47.0
Customer liabilities	20.9	14.2
	66.9	61.2

Note 33 – Deferred tax

The movement on the deferred tax is as shown below:

	2023	2022
	€’m	€’m
Balance at 1 January	(10.8)	14.0
Adjustment on initial recognition of IAS 12 amendment (restated Note 4A)	—	1.5
Balance at 1 January (restated)	(10.8)	15.5
Charge to profit or loss (Note 15)	(87.4)	(26.3)
On business combinations	(0.9)	—
At 31 December	(99.1)	(10.8)

	2023	2022
	€’m	€’m
Split as:
Deferred tax liability	(161.6)	(124.8)
Deferred tax asset	62.5	114.0
	(99.1)	(10.8)

Deferred tax assets and liabilities are offset only when there is a legally enforceable right of offset, in accordance with IAS 12.

As at 31 December 2023, the Directors continued to recognise deferred tax assets arising from temporary differences and tax losses carried

forward, with the latter only to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be

utilised. Please refer to Notes 7 and 15 for the assessment performed on the recognition of deferred tax in the period.

225Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 33 – Deferred tax continued

Details of the deferred tax outstanding as at 31 December 2023 and 2022 are as follows:

	2023	2022
	€’m	€’m
Deferred tax recognised on Group restructuring	47.2	56.8
Tax losses	29.7	75.9
Other temporary and deductible differences	(6.4)	30.3
Deferred tax on acquisitions	(81.2)	(88.4)
Intangible assets	(88.4)	(85.4)
	(99.1)	(10.8)

Details of the deferred tax, amounts recognised in profit or loss are as follows:

	2023	2022
	€’m	€’m
Accelerated capital allowances	(2.0)	(1.3)
Employee pension liabilities	—	(0.3)
Other temporary and deductible differences	(39.4)	(26.6)
Leases	0.1	(0.1)
Tax losses	(46.1)	2.0
	(87.4)	(26.3)

Note 34 – Other payables

	2023	2022
	€’m	€’m
Non-current liabilities
Payroll and related expenses	30.6	23.9
Other	4.2	1.0
	34.8	24.9
Current liabilities
Payroll and related expenses	99.8	99.7
Accrued expenses	76.0	48.2
VAT payable	2.7	3.0
Interest payable	5.9	7.4
Other payables	33.1	10.8
	217.5	169.1

Note 35 – Gaming and other taxes payable

	2023	2022
	€’m	€’m
Gaming tax	116.1	112.5
Other	—	0.3
	116.1	112.8

Note 36 – Acquisitions during prior year

On 30 August 2022, the Group acquired 100% of the share capital of Aus GMTC PTY Ltd (“Aus GMTC”) which creates content and

online games.

The Group paid a total cash consideration of €2.9 million ($3.0 million), with an additional consideration (capped at $50.0 million) in cash payable

in 2025 based on a pre-defined EBITDA calculation resulting from the performance of the developed games active during the year ending

30 September 2025. The consideration is calculated based on four times the pre-defined EBITDA for that year, less the cash consideration

already paid, plus the €1.8 million loan provided to the acquired company pre-acquisition.

226 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 37 – Related parties

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party’s

making of financial or operational decisions, or if both parties are controlled by the same third party. Also, a party is considered to be related

if a member of the key management personnel has the ability to control the other party.

During the year, Group companies entered into the following transactions with related parties which are not members of the Group:

	2023	2022
	€’m	€’m
Revenue
Investments in associates	193.4	132.7
Interest income
Investments in associates	1.7	0.8
Operating expenses
Investments in associates	0.7	—
Dividend income
Investments in associates	2.0	—

The revenue from investments in associates includes income from Caliplay, Galera, Wplay, Onjoc, Tenbet and NorthStar. The interest income

relates to the same companies except Caliplay and including Stats.

The following amounts were outstanding at the reporting date:

	2023	2022
	€’m	€’m
Trade receivables (Note 23)
Investments in associates	99.1	20.5
Other receivables (Note 24)
Investments in associates	0.3	—
Loans and interest receivable – current (Note 24)
Investments in associates	1.3	3.4
Loans and interest receivable – non-current (Note 22)
Investments in associates	60.9	29.0

The loans and interest receivables above do not include the expected credit losses. For the year ended 31 December 2023, the Group

recognised a provision for expected credit losses of €0.1 million relating to amounts owed by related parties in less than one year

(2022: €0.1 million) and €2.4 million for more than one year (2022: €1.2 million).

The loans due from related parties are further disclosed in Note 21.

Key management personnel compensation, which includes the Board members (Executive and Non-executive Directors) and senior

management personnel, comprised the following:

	2023	2022
	€’m	€’m
Short-term employee benefits	16.5	13.6
Post-employment benefits	0.1	0.1
Termination benefits	0.1	1.2
Share-based payments	2.8	2.2
	19.5	17.1

The Group is aware that a partnership in which a member of key management personnel (who is not a Board member) has a non-controlling

interest provides certain advisory and consulting services to third-party service providers of the Group in connection with certain of the Group’s

structured and other commercial agreements. The partnership contracts with and is compensated by the third-party service providers, and the

Group has no direct arrangement with the partnership. The total paid to this partnership by the third-party service providers was €12.5 million

(2022: €5.9 million).

227Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 38 – Subsidiaries

Details of the Group’s principal subsidiaries as at the end of the year are set out below:

			Proportion of voting
			rights and ordinary
Name		Country of incorporation	share capital held	Nature of business
Playtech Holdings Limited		Isle of Man	100%	Main trading company of the Group up to December 2020, which
				owned the intellectual property rights and licensed the software to
				customers. From January 2021 onwards, following the transfer of
				intellectual property rights to Playtech Software Limited, the principal
				activity of this company is the holding of investment in subsidiaries
Playtech Software Limited		United Kingdom	100%	Main trading company from 2021 onwards, owns the intellectual
				property rights and licenses the software to customers
Video B Holding Limited		British Virgin Islands	100%	Trading company for the Videobet software, owns the intellectual property
				rights of Videobet and licenses it to customers. From January 2021
				onwards, the principal activity is the holding of investment in subsidiaries
Playtech Services (Cyprus) Limited		Cyprus	100%	Manages the iPoker Network in regulated markets and is a main holding
				company of the Group
VB (Video) Cyprus Limited		Cyprus	100%	Trading company for the Videobet product to Romanian companies
Virtue Fusion (Alderney) Limited		Alderney	100%	Online bingo and casino software provider
Intelligent Gaming Systems Limited		United Kingdom	100%	Casino management systems to land-based businesses
VF 2011	Limited	Alderney	100%	Holds licence in Alderney for online gaming and Bingo B2C operations
PT Turnkey Services Limited		Isle of Man	100%	Holding company of the Turnkey Services group
PT Entretenimiento Online EAD		Bulgaria	100%	Poker and bingo network for Spain
PT Marketing Services Limited		British Virgin Islands	100%	Holding company
PT Operational Services Limited		British Virgin Islands	100%	Holding company
PT Network Management Limited		British Virgin Islands	100%	Holding company
Videobet Interactive Sweden AB		Sweden	100%	Trading company for the Aristocrat Lotteries VLTs
Quickspin AB		Sweden	100%	Owns video slots intellectual property
Best Gaming Technology GmbH		Austria	100%	Trading company for sports betting
Playtech BGT Sports Limited		Cyprus	100%	Trading company for sports betting and provider of development services
ECM Systems Ltd		United Kingdom	100%	Owns bingo software intellectual property and bingo hardware
Eyecon Limited		Alderney	100%	Develops and provides online gaming slots
Rarestone Gaming PTY Ltd		Australia	100%	Development company
HPYBET Austria GmbH		Austria	100%	Operating shops in Austria
Snaitech SPA		Italy	100%	Italian retail betting market and gaming machine market
OU Playtech (Estonia)		Estonia	100%	Designs, develops and manufactures online software
Techplay Marketing Limited		Israel	100%	Provider of marketing support services, software development and
				support services
OU Videobet		Estonia	100%	Develops software for fixed odds betting terminals and casino machines
				(as opposed to online software)
Playtech Bulgaria EOOD		Bulgaria	100%	Designs, develops and manufactures online software
PTVB Management Limited		Isle of Man	100%	Management services company
Techplay S.A. Software Limited		Israel	100%	Software development and operational support services
CSMS Limited		Bulgaria	100%	Consulting and online technical support, data mining processing and
				advertising services to Group companies
Mobenga AB Limited		Sweden	100%	Mobile sportsbook betting platform developer
PokerStrategy Ltd		Gibraltar	100%	Operates poker community business
Snai Rete Italia S.r.l.		Italy	100%	Italian retail betting market
PT Services UA LTD		Ukraine	100%	Designs, develops and manufactures software
Trinity Bet Operations Ltd		Malta	100%	Retail and digital sports betting
Euro live Technologies SIA		Latvia	100%	Provider of live services to Group companies

228 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 39 – Financial instruments and risk management

The Group has exposure to the following risks arising from financial instruments:

• credit risk;

• liquidity risk; and

• market risk.

There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for

managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

The principal financial instruments of the Group, from which financial instrument risks arises, are as follows:

• trade receivables;

• loans receivable;

• convertible loans;

• cash and cash equivalents;

• investments in equity securities;

• derivative financial assets;

• trade payables;

• bonds;

• loans and borrowings; and

• contingent consideration.

Financial instrument by category

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair

value hierarchy.

			Carrying
			amount		Fair value
		Measurement	2023	Level 1	Level 2	Level 3
	Note	category	€’m	€’m	€’m	€’m
31 December 2023
Non-current assets
Equity investments	21B	FVTPL	92.8	15.8	—	77.0
Derivative financial assets	21C	FVTPL	827.8	—	—	827.8
Convertible loans	22	FVTPL	3.5	—	—	3.5
Trade receivables	23	Amortised cost	1.9	—	—	—
Loans receivable	22	Amortised cost	58.1	—	—	—
Current assets
Trade receivables	23	Amortised cost	207.1	—	—	—
Loans receivables	24	Amortised cost	1.7	—	—	—
Cash and cash equivalents	25	Amortised cost	516.2	—	—	—
Non-current liabilities
Bonds	29	Amortised cost	646.1	—	—	—
Lease liability	19	Amortised cost	61.9	—	—	—
Contingent consideration	31	FVTPL	5.8	—	—	5.8
Current liabilities
Trade payables	32	Amortised cost	66.9	—	—	—
Lease liability	19	Amortised cost	24.9	—	—	—
Progressive operators’ jackpots and security
deposits	25	Amortised cost	111.0	—	—	—
Client funds	25	Amortised cost	41.9	—	—	—
Contingent consideration	31	FVTPL	0.4	—	—	0.4
Interest payable	34	Amortised cost	5.9	—	—	—

229Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 39 – Financial instruments and risk management continued

Financial instrument by category continued

			Carrying amount		Fair value
		Measurement	2022	Level 1	Level 2	Level 3
	Note	category	€’m	€’m	€’m	€’m
31 December 2022
Non-current assets
Equity investments	21B	FVTPL	9.2	1.4	—	7.8
Derivative financial assets	21C	FVTPL	636.4	—	—	636.4
Trade receivables	23	Amortised cost	1.1	—	—	—
Loans receivable	22	Amortised cost	29.6	—	—	—
Current assets
Trade receivables	23	Amortised cost	163.9	—	—	—
Convertible loans	24	FVTPL	8.3	—	—	8.3
Loans receivables	24	Amortised cost	8.0	—	—	—
Cash and cash equivalents	25	Amortised cost	426.5	—	—	—
Non-current liabilities
Bonds	29	Amortised cost	348.0	—	—	—
Lease liability	19	Amortised cost	54.0	—	—	—
Contingent consideration	31	FVTPL	2.3	—	—	2.3
Current liabilities
Bonds	29	Amortised cost	199.6	—	—	—
Trade payables	32	Amortised cost	61.2	—	—	—
Lease liability	19	Amortised cost	31.8	—	—	—
Progressive operators’ jackpots and security
deposits	25	Amortised cost	114.3	—	—	—
Client funds	25	Amortised cost	39.8	—	—	—
Contingent consideration	31	FVTPL	0.6	—	—	0.6
Interest payable	34	Amortised cost	7.4	—	—	—

The fair value of the contingent consideration is calculated by discounting the estimated cash flows. The valuation model considers the present

value of the expected future payments, discounted using a risk adjusted discount rate.

For details of the fair value hierarchy, valuation techniques and significant unobservable inputs relating to determining the fair value of derivative

financial assets, which are classified as Level 3 of the fair value hierarchy, refer to Note 21C.

The carrying amount does not materially differ from the fair value of the financial assets and liabilities.

The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate

responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the

objectives and policies to the Group’s Finance function. The overall objective of the Board is to set policies that seek to reduce risk as far as

possible without unduly affecting the Group’s competitiveness and flexibility.

Further details regarding these policies are set out below:

230 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 39 – Financial instruments and risk management continued

A. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial

loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables), its investing activities through loans made

and from its financing activities, including deposits with banks and financial institutions. After the impairment analysis performed at the reporting

date, the expected credit losses (ECLs) are €9.7 million (2022: €6.5 million). As at 31 December 2023, two customers had combined loans

and receivables outstanding of €139.7 million.

Cash and cash equivalents

The Group held cash and cash equivalents (before ECL) of €516.6 million as at 31 December 2023 (2022: €426.9 million). The cash and cash

equivalents are held with bank and financial institution counterparties, which are rated from Caa- to AA+, based on Moody’s ratings.

Impairment on cash and cash equivalents has been measured on a 12-month expected credit loss basis and reflects the short maturities

of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the

counterparties. The Group uses a similar approach for assessment of ECLs for cash and cash equivalents to those used for trade receivables.

The ECL on cash balances as at 31 December 2023 is €0.4 million (2022: €0.4 million).

A reasonable movement in the inputs of the ECL calculation of cash and cash equivalents does not materially change the ECL to be recognised.

		Financial institutions	Financial institutions
		with A- and	with below A- rating
	Tot al	above rating	and no rating
	€’m	€’m	€’m
At 31 December 2023	516.6	337.0	179.6
At 31 December 2022	426.9	214.2	212.7

Trade receivables

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also

considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country

in which customers operate.

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all

trade receivables. To measure the ECL, trade receivables have been grouped based on shared credit risk characteristics and the days past due.

The trade balances from related parties have also been included in the ECL assessment. The expected loss rates are calculated based on past

default experience and an assessment of the future economic environment. The ECL is calculated with reference to the ageing and risk profile

of the balances.

As at 31 December 2023, the Group has trade receivables of €209.0 million (2022: €165.0 million) which is net of an allowance for ECL of

€6.8 million (2022: €4.5 million).

The carrying amounts of financial assets represent the maximum credit exposure.

Set out below is the movement in the allowance for expected credit losses of trade receivables:

				More than
			1–2 months	2 months
	Tot al	Not past due	overdue	past due
31 December 2023	€’m	€’m	€’m	€’m
Expected credit loss rate	3.2%	4.8%	1.0%	2.1%
Gross carrying amount	215.8	109.3	62.9	43.6
Expected credit loss	(6.8)	(5.3)	(0.6)	(0.9)
Trade receivables – net	209.0	104.0	62.3	42.7

				More than
			1–2 months	2 months
	Tot al	Not past due	overdue	past due
31 December 2022	€’m	€’m	€’m	€’m
Expected credit loss rate	2.7%	3.0%	1.1%	2.9%
Gross carrying amount	169.5	124.8	27.2	17.5
Expected credit loss	(4.5)	(3.7)	(0.3)	(0.5)
Trade receivables – net	165.0	121.1	26.9	17.0

231Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 39 – Financial instruments and risk management continued

A. Credit risk continued

Trade receivables continued

A reasonable movement in the inputs of the ECL calculation of trade receivables does not materially change the ECL to be recognised.

Impairment losses on trade receivables and contract assets are presented as net impairment losses within the impairment of financial assets.

Subsequent recoveries of amounts previously written off are credited against the same line item.

The movement in the ECL in respect of trade receivables during the year was as follows:

	2023	2022
	€’m	€’m
Balance at 1 January	4.5	6.8
Charged to profit or loss	2.3	(2.3)
Balance at 31 December	6.8	4.5

As of 31 December 2023, the Group has a significant concentration of trade receivables from a related party. The balance outstanding from

this related party represents 41% of the net trade receivable balance. This concentration of receivables from a related party exposes the Group

to concentration risk, as any adverse financial performance or inability of the related party to fulfil its obligations could have a material adverse

impact on the Group’s financial position, results of operations and cash flows. The Group believes that this amount is recoverable and expects

timely payment (refer to Note 7 for significant judgement made).

Loans receivable

The Group recognised an allowance for expected credit losses for all debt instruments given to third parties based on past default experience

and assessment of the future economic environment. For the year ended 31 December 2023, the Group recognised provision for expected

credit losses of €2.5 million in profit or loss relating to loans receivable (2022: €1.6 million).

	2023	2022
	€’m	€’m
Balance at 1 January	1.6	—
Charged to profit or loss	0.9	1.6
Balance at 31 December	2.5	1.6

Furthermore, €3.0 million of an existing loan to Gameco was impaired during the year ended 31 December 2022 (refer to Note 21B).

B. Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by

delivering cash or another financial asset. The Group’s objective when managing liquidity is to ensure, as far as possible, that it will have sufficient

liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking

damage to the Group’s reputation.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted and

include contractual interest payments. Balances due within one year equal their carrying balances as the impact of discounting is not significant.

			Contractual cash flows
	Carrying				More than
	amount	Tot al	Within 1 year	1–5 years	5 years
2023	€’m	€’m	€’m	€’m	€’m
Bonds	646.1	762.8	32.5	730.3	—
Lease liability	86.8	96.8	26.7	53.5	16.6
Contingent consideration	6.2	7.8	0.4	7.4	—
Trade payables	66.9	66.9	66.9	—	—
Progressive operators’ jackpots and security deposits	111.0	111.0	111.0	—	—
Client funds	41.9	41.9	41.9	—	—
Interest payable	5.9	5.9	5.9	—	—
Provisions for risks and charges	9.5	9.5	0.6	8.9	—
	974.3	1,102.6	285.9	800.1	16.6
2022
Bonds	547.6	604.6	221.1	383.5	—
Lease liability	85.8	110.2	34.1	43.1	33.0
Contingent consideration	2.9	7.9	0.2	7.7	—
Trade payables	61.2	61.2	61.2	—	—
Progressive operators’ jackpots and security deposits	114.3	114.3	114.3	—	—
Client funds	39.8	39.8	39.8	—	—
Interest payable	7.4	7.4	7.4	—	—
Provisions for risks and charges	13.9	13.9	3.9	10.0	—
	872.9	959.3	482.0	444.3	33.0

232 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 39 – Financial instruments and risk management continued

C. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the Group’s

income or the value of its holding of financial instruments.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising

the return.

Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates.

Foreign exchange risk arises because the Group has operations located in various parts of the world. However, the functional currency of those

operations is the same as the Group’s primary currency (Euro) and the Group is not substantially exposed to fluctuations in exchange rates

in respect of assets held overseas.

Foreign exchange risk also arises when the Group operations enter into foreign transactions, and when the Group holds cash balances,

in currencies denominated in a currency other than the functional currency.

				In other
	In EUR	In USD	In GBP	currencies	Tot al
31 December 2023	€’m	€’m	€’m	€’m	€’m
Cash and cash equivalents	418.7	11.2	69.7	17.0	516.6
Progressive operators’ jackpots and security deposits	(140.3)	(0.4)	(12.2)	—	(152.9)
Cash and cash equivalents less client funds	278.4	10.8	57.5	17.0	363.7

				In other
	In EUR	In USD	In GBP	currencies	Tot al
31 December 2022	€’m	€’m	€’m	€’m	€’m
Cash and cash equivalents	338.5	5.8	60.2	22.4	426.9
Progressive operators’ jackpots and security deposits	(139.0)	(0.2)	(14.9)	—	(154.1)
Cash and cash equivalents less client funds	199.5	5.6	45.3	22.4	272.8

The Group’s policy is not to enter into any currency hedging transactions.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates.

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating

interest rates. The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate bonds and loans and borrowings.

At 31 December 2023, none of the Group’s borrowings are at a variable rate of interest (2022: Nil%).

Any reasonably possible change to the interest rate would have an immaterial effect on the interest payable.

Equity price risk

The Group is exposed to market risk by way of holding some investments in other companies on a short-term basis. Variations in market value

over the life of these investments will have an immaterial impact on the balance sheet and the statement of comprehensive income.

233Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the financial statements continued

Note 40 – Reconciliation of movement of liabilities to cash flows arising from financing activities

			Liabilities
			Interest on	Contingent
			loans and	consideration
	Loans and		borrowings	and redemption	Lease
	borrowings	Bonds	and bonds	liability	liabilities	Tot al
	€’m	€’m	€’m	€’m	€’m	€’m
Balance at 1 January 2023	—	547.6	7.3	2.9	85.8	643.6
Changes from financing cash flows
Interest payable on bonds and loans and borrowings	—	—	(31.3)	—	—	(31.3)
Repayment of loans and borrowings	(77.4)	—	—	—	—	(77.4)
Proceeds from loans and borrowings	79.9	—	—	—	—	79.9
Proceeds from the issuance of bonds	—	297.2	—	—	—	297.2
Repayment of bonds	—	(200.0)	—	—	—	(200.0)
Payment of contingent consideration	—	—	—	(0.2)	—	(0.2)
Principal paid on lease liability	—	—	—	—	(23.1)	(23.1)
Interest paid on lease liability	—	—	—	—	(5.2)	(5.2)
Total changes from financing cash flows	2.5	97.2	(31.3)	(0.2)	(28.3)	39.9
Other changes
Liability related
New leases	—	—	—	—	22.0	22.0
On business combinations	—	—	—	0.4	1.9	2.3
Interest on bonds and loans and borrowings	—	1.3	29.6	—	—	30.9
Interest on lease liability	—	—	—	—	5.2	5.2
Movement in contingent consideration	—	—	—	3.3	—	3.3
Foreign exchange difference	(2.5)	—	0.3	(0.2)	0.2	(2.2)
Total liability-related other changes	(2.5)	1.3	29.9	3.5	29.3	61.5
Balance at 31 December 2023	—	646.1	5.9	6.2	86.8	745.0

234 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 40 – Reconciliation of movement of liabilities to cash flows arising from financing activities continued

			Liabilities
			Interest on	Contingent
			loans and	consideration
	Loans and		borrowings	and redemption	Lease
	borrowings	Bonds	and bonds	liability	liabilities	Tot al
	€’m	€’m	€’m	€’m	€’m	€’m
Balance at 1 January 2022	167.1	875.0	10.4	11.0	95.3	1,158.8
Changes from financing cash flows
Interest payable on bonds and loans and borrowings	—	—	(36.7)	—	—	(36.7)
Repayment of loans and borrowings	(166.1)	—	—	—	—	(166.1)
Repayment of bonds	—	(330.0)	—	—	—	(330.0)
Payment of contingent consideration and redemption liability	—	—	—	(5.9)	—	(5.9)
Principal paid on lease liability	—	—	—	—	(22.5)	(22.5)
Interest paid on lease liability	—	—	—	—	(5.7)	(5.7)
Total changes from financing cash flows	(166.1)	(330.0)	(36.7)	(5.9)	(28.2)	(566.9)
Other changes
Liability related
New leases	—	—	—	—	19.0	19.0
Interest on bonds and loans and borrowings	—	2.6	33.6	—	—	36.2
Interest on lease liability	—	—	—	—	5.7	5.7
Movement in deferred and contingent
consideration and redemption liability	—	—	—	(4.3)	—	(4.3)
Payment of contingent consideration related to investments	—	—	—	(1.0)	—	(1.0)
Additional contingent consideration	—	—	—	2.9	—	2.9
Disposal of subsidiary/discontinued operations	—	—	—	—	(4.7)	(4.7)
Foreign exchange difference	(1.0)	—	—	0.2	(1.3)	(2.1)
Total liability-related other changes	(1.0)	2.6	33.6	(2.2)	18.7	51.7
Balance at 31 December 2022	—	547.6	7.3	2.9	85.8	643.6

Note 41 – Events after the reporting date

Post year end, the Group entered into a new structured agreement with Tenlot El Salvador S.A. de C.V. (“Tenlot El Salvador”), which

has a licence to operate online betting and gaming on behalf of the national lottery of El Salvador. Under the agreement, the Group will

provide Tenlot El Salvador its technological platform, the operational services and related services, where it will receive in return standard

operator revenue and additional B2B services fee as per Note 10. The Group has no shareholding in Tenlot El Salvador. Playtech has paid

Tenlot El Salvador an amount of $2.3 million and will pay an additional $2.5 million upon certain conditions in exchange for an option to acquire

70% of the shares in Tenlot El Salvador. The option has certain exercise conditions. Playtech also made available to Tenlot El Salvador a

$5.5 million line of credit. As of the date of this report this amount remains undrawn.

Post year end, the Group formally concluded the extension of the exercise date in respect of the Wplay option (see Note 21C) to any date after

22 February 2025.

Post year end, the receivable in Note 7 in relation to Caliplay remains unpaid. In addition, further invoices totalling €35.8 million in relation to

B2B licensee fees and additional B2B services fee for January and February 2024 have been issued and remain unpaid.

235Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Company statement of changes in equity

For the year ended 31 December 2023

Additional paid

in capital

€’m

Employee

Benefit Trust

€’m

Retained

earnings

€’m

Total equity

€’m

Balance at 1 January 2022 606.0 (22.6) 656.2 1,239.6

Total comprehensive loss for the year

Loss for the year — — (23.9) (23.9)

Total comprehensive loss for the year — — (23.9) (23.9)

Transactions with the owners of the Company

Contributions and distributions

Exercise of options — 5.4 (6.0) (0.6)

Equity settled share based payment charge (Note 11) — — 8.3 8.3

Total transactions with the owners of the Company — 5.4 2.3 7.7

Balance at 31 December 2022 606.0 (17.2) 634.6 1,223.4

Balance at 1 January 2023 606.0 (17.2) 634.6 1,223.4

Total comprehensive loss for the year

Loss for the year — — (689.3) (689.3)

Total comprehensive loss for the year — — (689.3) (689.3)

Transactions with the owners of the Company

Contributions and distributions

Exercise of options — 11.9 (11.9) —

Equity settled share based payment charge (Note 11) — — 6.3 6.3

Transfer from treasury shares to Employee Benefit Trust (Note 11) 5.8 (12.5) 6.7 —

Total transactions with the owners of the Company 5.8 (0.6) 1.1 6.3

Balance at 31 December 2023 611.8 (17.8) (53.6) 540.4

236 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note

2023

€’m

2022

€’m

Non-current assets

Investments in subsidiaries 7 1,647.9 1,208.7

Investments in associates 8 49.8 35.0

Derivative financial asset 8 4.8 1.4

Other investments 8 14.6 —

Trade and other receivables 9 67.0 770.5

Deferred tax asset — 23.4

Other non-current assets 0.3 0.3

1,784.4 2,039.3

Current assets

Trade and other receivables 9 9.4 14.8

Cash and cash equivalents 10 26.7 2.5

36.1 17.3

TOTAL ASSETS 1,820.5 2,056.6

Equity

Additional paid in capital 611.8 606.0

Employee Benefit Trust (17.8) (17.2)

Retained earnings (53.6) 634.6

11 540.4 1,223.4

Non-current liabilities

Other payables 14 10.3 9.4

Bonds 13 646.1 348.0

656.4 357.4

Current liabilities

Bonds 13 — 199.6

Trade and other payables 14 623.7 276.2

623.7 475.8

TOTAL EQUITY AND LIABILITIES 1,820.5 2,056.6

The financial information was approved by the Board and authorised for issue on 26 March 2024.

Mor Weizer Chris McGinnis

Chief Executive Officer Chief Financial Officer

Company balance sheet

As at 31 December 2023

237Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Notes to the Company financial statements

Note 1 – General

The principal activity of Playtech plc (the “Company”) is the holding of investment in subsidiaries.

Note 2 – Basis of preparation

The financial statements have been prepared in accordance with FRS 101 “Reduced Disclosure Framework” and updated for amendments

issued subsequently.

The Company has taken advantage of certain disclosure exemptions conferred by FRS 101 and has not provided:

• a statement of compliance with IFRS (a statement of compliance with FRS 101 is provided instead);

• a statement of profit or loss and other comprehensive income as per the requirements of IAS 1 Presentation of Financial Statements;

• a statement of cash flows as per the requirements of IAS 1 Presentation of Financial Statements;

• disclosure of the effect of future accounting standards not yet adopted;

• disclosure of compensation for key management personnel and amounts incurred by the Company for the provision of key management

personnel services provided;

• additional comparative information as per IAS 1 Presentation of Financial Statements paragraph 38 in respect of reconciliation of the number

of shares outstanding at the start and end of the prior period; and

• disclosures in relation to the objectives, policies and process for managing capital.

In addition, and in accordance with FRS 101, further disclosure exemptions have been applied because equivalent disclosures are included in the

consolidated financial statements of Playtech plc. These financial statements do not include certain disclosures in respect of:

• share-based payments – details of the number and weighted average exercise prices of share options, and how the fair value of goods or

services received was determined as per paragraphs 45(b) and 46 to 52 of IFRS 2 Share-Based Payment;

• financial instrument disclosures as required by IFRS 7 Financial Instruments: Disclosures; and

• fair value measurements – details of the valuation techniques and inputs used for fair value measurement of assets and liabilities as per

paragraphs 91 to 99 of IFRS 13 Fair Value Measurement.

Details of the Company’s accounting policies are included in Note 5.

Going concern basis

Detailed reference to the exact procedures applied by the Directors in ensuring that the Company will have adequate financial resources

tocontinue in operational existence over the relevant going concern period are described in Note 2 of the Group consolidated financial

statements. Based on this Note it is therefore considered appropriate to adopt the going concern basis in the preparation of the Company’s

financial statements.

Note 3 – Functional and presentation currency

The financial statements are presented in Euro, which is the Company’s functional and presentation currency. All amounts have been rounded

tothe nearest million, unless otherwise indicated.

Note 4 – Accounting standards issued but not yet effective

A number of new standards are effective for annual periods beginning after 1 January 2023 and earlier application is permitted.

However,theCompany has not early adopted the new or amended accounting standards disclosed in the Group consolidated financial

statements in preparing these financial statements.

Note 5 – Material accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been

consistently applied to all the years presented, unless otherwise stated.

Subsidiaries

Subsidiaries are entities controlled by the Company. The Company “controls” an entity when it is exposed to, or has rights to, variable returns

from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the

period inwhich the impairment is identified. Subsequent changes in value include employee share option additions and subsidiary capital

contributionsin the form of debt settlement.

238 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 5 – Material accounting policies continued

Associates and equity call options

An associate is an entity over which the Company has significant influence and is neither a subsidiary nor an interest in a joint venture.

Significantinfluence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control

over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting.

Under the equity method, an investment in associate is initially recognised in the balance sheet at cost and adjusted thereafter to recognise

theCompany’s share in profit or loss.

When potential voting rights or other derivatives containing potential voting rights exist, the Company’s interest in an associate is determined

solely on the basis of existing ownership interests and does not reflect the possible exercise or conversion of potential voting rights and other

derivative instruments unless there is an existing ownership interest as a result of a transaction that currently gives it access to the returns

associated with an ownership interest. In such circumstances, the proportion allocated to the entity is determined by taking into account

the eventual exercise of those potential voting rights and other derivative instruments that currently give the entity access to the returns.

Wheninstruments containing potential voting rights in substance currently give access to the returns associated with an ownership interest

in anassociate or a joint venture, the instruments are not subject to IFRS 9 and equity accounting is applied. In all other cases, instruments

containing potential voting rights in an associate or a joint venture are accounted for in accordance with IFRS 9.

A derivative financial asset is measured at fair value under IFRS 9. In the case where there is significant influence over the investment under

which Playtech holds the derivative financial asset this should be accounted under IAS 28 Investment in Associates. However, if the option is

notcurrently exercisable and there is no current access to profits, the option is fair valued without applying equity accounting to the investment

inassociate.

Derivatives are recorded at fair value and classified as assets when their fair value is positive and as liabilities when their fair value is negative.

Subsequently, derivatives are measured at fair value.

Interest income

Interest income is recognised over time, on a time-proportion basis, using the effective interest method.

Interest expense

Interest expense is charged to profit or loss over the time the relevant interest relates to.

Foreign currencies

The financial statements are presented in the currency of the primary economic environment in which the Company operates, the Euro (€)

(itsfunctional currency).

In preparing the financial statements, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at

the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are

retranslated at the rates prevailing on the reporting date. Non-monetary items carried at fair value that are denominated in foreign currencies are

retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical

cost in a foreign currency are notretranslated.

Exchange differences arising on the settlements of monetary items and on the retranslation of monetary items are included in profit or loss for

the period. Exchange differences arising on the retranslation of non-monetary items, carried at fair value, are included in profit or loss for the

period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised in other

comprehensive income and then equity.

Dividends

Dividend distribution to the Company’s shareholders is recognised in the Company’s financial statements in the year in which they are approved

by the Company’s shareholders.

Financial instruments

(i) Recognition

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and liabilities are initially

recognised when the Company becomes a party to the contractual provisions of the instruments.

Financial assets at amortised cost

(i) Classification

The Company classifies its financial assets at amortised cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing

financial assets, in which case all affected financial assets are classified on the first day of the first reporting period following the change in

business model.

239Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 5 – Material accounting policies continued

Financial assets at amortised cost continued

(ii) Measurement

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the

Company’s business model for managing them. Financial assets are measured at amortised cost and arise principally through intercompany

balances being amounts from other Group companies in the ordinary course of business, but also incorporate other types of contractual

monetary assets. They are initially recognised at fair value plus transaction costs. The Company holds the intercompany receivables with the

objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest rate

method, less provision for impairment.

Other receivables consist of amounts generally arising from transactions outside the usual operating activities of the Company such as the

proceeds from disposal of investment. Due to the short-term nature of the other current receivables, their carrying amount is considered

to be the same as their fair value. For the majority of the non-current receivables, the fair values are also not significantly different to their

carrying amounts.

(iii) Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the

rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset

are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not

retaincontrol of the financial asset.

(iv) Impairment

The Company has assessed all types of financial assets that are subject to the expected credit loss model:

• intercompany receivables; and

• cash and cash equivalents.

For intercompany receivables and cash and cash equivalents, the Company applies the general approach for calculating the expected credit

losses. Due to the short-term nature of these assets (i.e. less than 12 months), the Company recognises expected credit losses over the lifetime

of the assets.

ECL on intercompany receivables is based on past default experience and an assessment of the future economic environment. ECL and specific

provisions are considered and calculated with reference to the ageing and risk profile of the balances. The Company uses judgement in making

these assumptions and selecting the inputs to the impairment calculations based on the Company’s past history, existing market conditions as

well as forward-looking estimates at the end of each reporting period. Based on past experience and how the Company operates in relation to

intercompany positions, the ECL is negligible because these balances are usually cleared, either through repayment or capital contribution.

For cash and cash equivalents, management has assessed that no impairment arises since they are held with banks under current

accountsandthe Company has access to those funds at any time. The Company has also assessed whether an ECL on cash is needed

basedon reviewing Moody’s ratings for each financial institution cash is held. As a result, the probability of default of each institution is

considered insignificant.

Financial assets at fair value through profit or loss

(i) Classification and measurement

Financial assets that do not meet the criteria for being measured at amortised cost or fair value through other comprehensive income are

measured at fair value through profit or loss. Financial assets at fair value through profit or loss are measured at fair value through profit or loss

atthe end of each reporting period, with any fair value gains or losses recognised in profit or loss.

Financial liabilities

(i) Classification and measurement

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for

trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and

losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost

using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on

derecognition is also recognised in profit or loss.

(ii) Derecognition

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled or expired. The Company also

derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case

anew financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any

non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

(iii) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the

Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset

and settle the liability simultaneously.

Cash and cash equivalents

Cash and cash equivalents comprise cash in banks and demand deposits and are carried at amortised cost because: (i) they are held for

collection of contractual cash flows and those cash flows represent SPPI; and (ii) they are not designated at FVTPL.

Notes to the Company financial statements continued

240 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 5 – Material accounting policies continued

Trade and other payables

Trade and other payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from

suppliers. Trade and other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented

asnon-current liabilities.

Trade and other payables are recognised at fair value and subsequently at amortised cost using the effective interest method.

Share capital

Ordinary shares are classified as equity and are stated at the proceeds received net of direct issue costs.

Employee Benefit Trust

Consideration paid/received for the purchase/sale of shares subsequently put in the Employee Benefit Trust is recognised directly in equity.

Thecost of shares held is presented as a separate reserve (the “Employee Benefit Trust reserve”). Any excess of the consideration received

onthe sale of treasury shares over the weighted average cost of the shares sold is credited to retained earnings.

Note 6 – Critical accounting estimates and judgements

The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based

onhistorical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Inthe future, actual experience may differ from these estimates and assumptions. The areas requiring the use of estimates and critical

judgements that may potentially have a significant impact on the Company’s earnings and financial position are detailed below.

Estimates and assumptions

Impairment of investment in subsidiary companies

The Company is required to test if events or changes in circumstances indicate that the carrying amount of its investments may not be recoverable.

In making this assessment there were no indicators of impairment evident and, as such, no investments were impaired, although further

disclosures are included below on two of the significant investments the Company holds. Note 7 provides further information on the

Company’sinvestments.

Investment in Playtech Holdings Limited and its relevant subsidiaries

The investment in Playtech Holdings Limited and its relevant subsidiaries of €907.4 million includes the Snai operations which comfortably

coverthe investment value.

Investment in Playtech Software Limited

Playtech Software Limited (“PTS”) holds a significant number of key IP and major activities of the Group. On 21 December 2023 Playtech

Plc released and discharged PTS from its loan obligation of €948.6 million, which had a carrying amount of €352.3 million as a result of an

impairment of €596.3 million. This constituted a change of intention as at 31 December 2022 the Company had previously intended to net settle

theloan due from PTS and the associated payable to them.

The discharging of the loan increased the investment value in PTS by €352.3 million, which was deemed to be the cost of the additional

investment in PTS at the point the obligation was discharged. This resulted in an income statement charge of €596.3 million being the

difference between investment value and loan discharged. Following the discharging of the loan the carrying value of the investment in PTS

at31December 2023 was €512.5 million.

Management has assessed the increased investment cost and hence the carrying value of the investment at 31 December 2023 using 5-year

cash flow projections, taking the Company’s three-year plan and additional two years of forecasts. The recoverable amount of the investment

has been determined from value in use calculations, with appropriate capital expenditure, tax and net debt. The discounted cash flow model

alsotakes into account the availability of both recognised and unrecognised tax losses.

The recoverable amount which equalled the carrying amount of the investment of €512.5 million was determined using a discount rate of 15.9%,

with annual revenue growth rates of between 5.0% and 10.0% per year, a terminal growth rate of 2.0%, and average EBITDA growth rates of

15.0% over the forecast period. The carrying value is sensitive to movements in key assumptions, as follows:

• if the revenue growth rate per annum is reduced by 1.0%, this would result in an impairment of €42.6 million;

• if the discount rate increased by 1.0% to a post-tax discount rate of 16.9%, this would result in an impairment of €20.6 million; and

• if the EBITDA growth rate per annum is reduced by 1.0%, an additional impairment of €7.8 million would be recognised.

Included in PTS are cashflows relating to Caliplay through recharges for use of IP to another Group company. Whilst the contract between this

Group company and Caliplay under which we are entitled to receive fees is expiring in 2034, and this was the base assumption in the cashflows

used in the impairment review, should there be material changes to the cash flows arising from the Caliplay contract this could potentially lead

toa material impairment in the Company’s investment in PTS.

Derivative financial assets

As per Note 21A of the Group consolidated financial statements, the Company holds an option to acquire further shares (up to 18.11%) in

LSports. The fair value assessment for this option falls under Level 3 of the fair value hierarchy. As such, the Company has used a model with

unobservable inputs for the valuation, which are inherently uncertain because there is little or no current market data available from which to

determine the level at which an arm’s length transaction would occur under normal business conditions. Unobservable inputs for the LSports

option were determined based on the best information available and using the Monte Carlo simulation model. The fair value of the LSports option

at 31 December 2023 was €4.8 million (2022: €1.4 million).

241Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 6 – Critical accounting estimates and judgements continued

Estimates and assumptions continued

Impairment of financial assets

Loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Company’s financial assets

consist of intercompany receivables and cash and cash equivalents. ECL on cash balances was considered and calculated by reference

toMoody’s credit rating for each financial institution.

Impairment of non-financial assets

Investment in associates

In assessing impairment of investments in associates, management utilises various assumptions and estimates that include projections of future

cash flows generated by the associate, determination of appropriate discount rates reflecting the risks associated with the investment, and

consideration of market conditions relevant to the investee’s industry. The Company exercises judgement in evaluating impairment indicators

and determining the amount of impairment loss, if any. This involves assessing the recoverable amount of the investment based on available

information and making decisions regarding the appropriateness of key assumptions used in impairment testing.

Deferred tax asset

In evaluating the Company’s ability to recover deferred tax assets in the jurisdiction from which they arise, management considers all available

positive and negative evidence, projected future taxable income, tax-planning strategies and results of recent operations. Deferred tax asset

is recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Judgement is required in determining the initial recognition and the subsequent carrying value of the deferred tax assets. Deferred tax asset is

only able to be recognised to the extent that utilisation is considered probable. It is possible that a change in profit forecasts or risk factors could

result in a material change to the income tax expense and deferred tax asset in future periods. The key items for which the reported tax charge

has been adjusted in 2023 are UK tax losses on which a deferred tax asset of €23.4 million was derecognised as expected utilisation would fall

outside the forecasting period and therefore there is not sufficient certainty they will be recovered.

Note 7 – Investments in subsidiaries

2023

€’m

2022

€’m

Investment in subsidiaries at 1 January 1,208.7 1,201.4

Additional capital contribution

352.3 —

Additions in the year

80.6 —

Employee stock options 6.3 8.1

Disposals

— (0.8)

Investment in subsidiaries at 31 December 1,647.9 1,208.7

1 On 21 December 2023 Playtech Plc released and discharged PTS from its loan obligation of €948.6 million, which had a carrying amount of €352.3 million. This loan arose following an internal

restructuring which resulted in the Group’s key operating entity transferring its business to PTS in 2021. As consideration for Playtech Plc releasing PTS from its obligations, PTS issued fourteen

ordinary shares to Playtech Plc at nominal value (€1 each). This increased the investment value held by Playtech Plc in PTS by €352.3 million, which was deemed to be the cost of the additional

investment in PTS at the point the obligation was discharged.

2 In March 2023, the Company acquired PT Holdings (Delaware) Inc from Playtech Services (Cyprus) Limited, another Playtech Group company, for a nominal amount of $8.0 being the net book value

of the shares at the time. Playtech plc then subscribed for additional shares in the newly acquired subsidiary for cash consideration of $85.0 million. On the same date, PT Holdings (Delaware) Inc

invested $85.0 million (€79.8 million) in Hard Rock Digital (HRD) in exchange for a small minority interest in a combination of equity shares and warrants.

3 In July 2022, the Company completed the disposal of its investment in Finalto Group Limited (formerly known as TradeTech Holdings Limited) realising a profit on disposal of €49.0 million. Out of the

€0.8 million disposals, the €0.4 million relates to PT Gaming Limited which was dissolved during 2022.

Notes to the Company financial statements continued

242 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 7 – Investments in subsidiaries continued

The details of the investments are as follow:

Name Country of incorporation

Proportion of voting rights and

ordinary share capital held Nature of business

Playtech Holding Limited

(ex.PlaytechSoftware Limited)

Isle of Man 100% Holding company, transferred its activities in 2021 to Playtech

Software Ltd UK

Video B Holding Limited British Virgin Islands 100% Trading company for the Videobet software, owns the intellectual

property rights of Videobet and licenses it to customers

PTVB Management Limited Isle of Man 100% Management company

Technology Trading IOM Limited Isle of Man 100% Holding company

PT Turnkey Services Limited Isle of Man 100% Holding company of the Turnkey Services Group

Playtech Holding Sweden AB Limited Sweden 100% Holding company of Mobenga AB

Roxwell Investments Limited Isle of Man 100% Holds the Employee Benefit Trust (2014 EBT)

Factime Investments Ltd Isle of Man 100% Holding company of Juego Online EAD

VS Technology Limited United Kingdom 100% Licensing online gaming software and games to customers in

South America

Playtech Software Limited United Kingdom 100% Main trading company from 2021, owns the intellectual property

rights and licenses the software to customers

PT Holdings (Delaware) Inc USA 100% Holds the Hard Rock Digital (HRD) investment and the

USsubsidiaries including PT Services (Delaware) LLC

Playtech Retail Limited British Virgin Islands 100% Dormant company

Note 8 – Investments in associates, derivative financial assets and other investments

Investment in associates

The Company has the following investments in associates:

Name Country of incorporation

Proportion of voting rights and

ordinary share capital held Nature of business

LSports Data Limited Israel 31% Partners with sportsbooks to create engaging customer

offeringsby utilising the most accurate real-time data on a

broadrange of events

NorthStar Gaming Inc. Canada 27.5% Offers access to regulated sports betting markets and robust

casino offerings and live dealer games

Sporting News Holdings Limited Isle of Man 12.6% Specialists in selling digital advertising and inventory, offers digital

media services

Balance sheet

2023

€’m

2022

€’m

LSports Data Limited 35.2 35.0

NorthStar Gaming Inc. 9.0 —

Sporting News Holdings Limited 5.6 —

Investments in associates at 31 December 49.8 35.0

Profit and loss impact

2023

€’m

2022

€’m

LSports Data Limited 2.1 (0.3)

NorthStar Gaming Inc. (2.8) —

Sporting News Holdings Limited (0.2) —

Total share of loss from associates (0.9) (0.3)

243Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 8 – Investments in associates, derivative financial assets and other investments continued

Investment in associates continued

Movement on the balance sheet

LSports

€’m

NorthStar

€’m

Sporting News

Holdings Limited

€’m

Tot al

€’m

Balance as at 31 December 2022/1 January 2023 35.0 — — 35.0

Additions — 3.4 5.8 9.2

Conversion of convertible loan to shares — 8.4 — 8.4

Share of profit/(loss) 2.1 (2.8) (0.2) (0.9)

Dividend income (1.9) — — (1.9)

Balance as at 31 December 2023 35.2 9.0 5.6 49.8

Note 21A of the Group consolidated financial statements includes all the information in relation to these investments.

Derivative financial assets

As per Note 21A of the Group consolidated financial statements, the Company holds an option to acquire further shares (up to 18.11%) in LSports.

The fair value of the option at 31 December 2023 was €4.8 million (2022: €1.4 million).

Other investments

In 2023, the Company acquired shares in a listed security for €14.3 million. The fair value of these shares is determined by reference to published

price quotations in an active market. In the year ended 31 December 2023, the fair value of these shares has increased by €0.3 million, to a total

of €14.6 million.

Note 9 – Trade and other receivables

2023

€’m

2022

€’m

Other receivables 3.5 —

Amounts due from subsidiary undertakings 63.5 770.5

Total non-current 67.0 770.5

Other receivables 1.8 9.8

Amounts due from subsidiary undertakings 7.6 5.0

Total current 9.4 14.8

During 2023, the Company impaired €1.3 million of receivables from PT Investments GC Inc. given that the latter company also impaired the

remaining part of its external receivables (2022: impairment of €2.4 million).

During 2023, Playtech plc released and discharged Playtech Software Limited (“PTS”) from PTS’s obligation to pay to the Company an amount

of €948.6 million, which was a net receivable created following an internal restructuring which resulted in the Group’s key operating entity

transferring its business to PTS in 2021. As consideration for Playtech plc releasing PTS from its obligations, PTS issued 14 ordinary shares to

Playtech plc at nominal value (€1 each). This increased the investment value held by Playtech plc in PTS by €352.3 million, which was deemed

tobe the cost of the additional investment in PTS at the point the obligation was discharged.

The total non-current amount due from subsidiary undertakings at 31 December 2022 of €770.5 million included the receivable of €948.6million

which was netted off by a payable to PTS of €179.5 million at 31 December 2022. As at 31 December 2022, it was expected that this amount

would be settled net. The payable amount of €179.5 million has decreased to €167.7 million at 31 December 2023 and is now included

incurrentliabilities.

Included in other receivables at 31 December 2022 was a convertible debenture of C$12.25 million (€8.4 million) issued to NorthStar Gaming

Inc in 2022 that subsequently converted to equity and warrants in 2023 following NorthStar’s reverse takeover (the “RTO”) of Baden Resources

Inc. A new convertible loan was issued to NorthStar in 2023 of C$5.0 million (€3.4 million). The fair value of the convertible debenture was

assessed as being materially in line with its face value at 31 December 2023. Refer to Note 21A of the Group consolidated financial statements

for further details.

Finally, in March 2023 and following acquisition of PT Holdings (Delaware) Inc from Playtech Services (Cyprus) Limited, the Company was also

assigned by Playtech Services (Cyprus) Limited to the rights of a $35.3 million loan receivable due from PT Holdings (Delaware) Inc bearing

interest at 4% repayable on or prior to 30 April 2029.

Notes to the Company financial statements continued

244 Playtech plc Annual Report and Financial Statements 2023

Financial Statements

Note 10 – Cash and cash equivalents

2023

€’m

2022

€’m

Cash at bank 26.7 2.5

Note 11 – Shareholders’ equity

Please refer to Note 27 of the Group consolidated financial statements.

Note 12 – Loans and borrowings

Please refer to Note 28 of the Group consolidated financial statements.

Note 13 – Bonds

Please refer to Note 29 of the Group consolidated financial statements.

Note 14 – Trade and other payables

2023

€’m

2022

€’m

Suppliers and accrued expenses 5.7 6.6

Payroll and related expenses 47.4 37.9

Amounts owed to subsidiary undertakings 575.7 234.4

Accrued interest 5.2 6.7

634.0 285.6

2023

€’m

2022

€’m

Split to:

Non-current 10.3 9.4

Current 623.7 276.2

634.0 285.6

In 2022, the Company was granted a €214.0 million loan from Playtech Services (Cyprus) Limited, which was used to partially repay

€330.0million of the 2018 Bond. The loan bears interest at the rate of 3.5% and is repayable upon demand. At the same time, a separate loan

of€7.5 million was granted on the same terms from Playtech Services (Cyprus) Limited to partly fund the acquisition of LSports Data Limited.

Refer to Note 21A of the Group consolidated financial statements for details of the acquisition.

In March 2023 and following acquisition of PT Holdings (Delaware) Inc from Playtech Services (Cyprus) Limited, the Company was also

assigned by Playtech Services (Cyprus) Limited to the rights of a $35.3 million loan receivable due from PT Holdings (Delaware) Inc bearing

interest at 4% repayable on or prior to 30 April 2029. As a result of the transfer, a respective loan payable due to Playtech Services (Cyprus)

Limited was created bearing interest at 3.5% also repayable on demand.

Finally, to easily facilitate the bond interest repayments and other outstanding debt requiring settlement, an intra-group facility agreement was

introduced with Playtech Services (Cyprus) Limited, whereby the Company has the ability to draw down an aggregate amount of maximum

€150.0 million. The loan bears interest at the rate of 5.3% and is repayable upon demand. As at the reporting date, the credit facility drawn

amounted to €123.2 million.

245Playtech plc Annual Report and Financial Statements 2023

Financial Statements

2023

€’m

2022

(Restated)

€’m

2021

€’m

2020

€’m

2019

€’m

Income statement

Total revenues from continuing operations 1,706.7 1,601.8 1,205.4 1,078.5 1,440.5

Adjusted EBITDA from continuing operations 432.3 395.4 317.1 253.6 375.3

Adjusted Profit from continuing operations 156.8 160.5 127.6 27.3 138.0

Balance sheet

Non-current assets 2,475.9 2,300.8 2,300.5 1,667.3 2,062.4

Current assets 830.6 703.5 845.9 935.3 1,005.5

Assets classified as held for sale 19.3 19.6 507.4 468.9 36.8

Current liabilities 597.7 755.4 490.3 513.7 773.7

Non-current liabilities 920.9 565.0 1,236.0 1,352.4 1,108.8

Liabilities directly associated with assets classified

asheldfor sale 1.0 1.0 344.8 309.2 3.6

Net assets 1,806.2 1,702.5 1,582.7 896.2 1,218.6

Equity

Additional paid in capital 611.8 606.0 606.0 592.1 601.0

Reserve for re-measurement of employee termination

indemnities 0.4 0.4 (0.5) (0.4) (0.3)

Employee Benefit Trust (17.8) (17.2) (23.2) (14.5) (16.2)

Put/call options reserve — — (3.7) (3.7) (16.4)

Foreign exchange reserve (7.4) 0.3 (22.7) (21.3) (1.4)

Retained earnings 1,219.2 1,113.0 1,026.5 343.7 656.2

Non-controlling interest — — 0.3 0.3 (4.3)

Statistics

Basic adjusted EPS (in Euro cents) from continuing

operations

51.7 53.5 42.8 9.2 45.5

Diluted adjusted EPS (in Euro cents) from continuing

operations

50.2 51.5 40.9 8.8 44.6

Ordinary dividend per share (in Euro cents)

— — — — 18.1

Share price low/high 370.0p/634.5p 390.8p/731.5p 351.0p/770.0p 140.3p/424.3p 360.5p/457.7p

Five-year summary

246 Playtech plc Annual Report and Financial Statements 2023

Financial Statements