When Sportech was offered a free 35 per cent stake in an American fantasy sports company last year, it looked like too good an opportunity to pass up. All the British gambling group had to do for its slice of DraftDay Gaming Group was introduce the business to some of its North American customers.
What the British owner of the Football Pools did not realise when it accepted the shareholding was that it was about to become involved in a rather different kind of fantasy. One of DraftDay’s customers was Vivid Entertainment, one of the world’s largest and longest-established purveyors of pornography.
The Times can reveal today that at Sportech’s request, DraftDay has this week terminated its contract with Vivid, rescuing Sportech from the potentially embarrassing situation of being tied up with the company behind the notorious Kim Kardashian sex tape. The group is believed to be reviewing its stake in DraftDay.
Ian Penrose, the Sportech chief executive, confirmed last night: “I’m exceedingly angry about it. As an organisation we pride ourselves on our reputation and doing things correctly and properly. I’m not expressing a view on the porn industry as a business but it’s not something that I want to be associated with.”
Given that Sportech’s British operations centre on family-focused pastimes such as the Football Pools and the Spot the Ball competition, some of the comments of Bill Asher, the co-founder and part-owner of Vivid, before last month’s launch of Vivid Sports 4 Money will have been particularly excruciating.
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“Fantasy sports and naked girls have a lot in common,” he said. “They’re very popular with a certain segment.” Asked whether players signing up for fantasy sports on Vivid Sports 4 Money would get access to celebrity sex tapes, Mr Asher replied: “We’ll test that out.”
Sportech, which has built a big gaming and tote betting technology business in North America, became involved in DraftDay when the fantasy sports group changed hands in September. MGT Investments, a gaming sector investor, sold the business to a new vehicle 44 per cent owned by Viggle, an entertainment marketing and rewards business. Sportech was given 35 per cent while MGT retained 10 per cent, the balance mainly held by employees.
Sportech reported an 18 per cent fall in adjusted pre-tax profits to £11.8 million last year on revenues down 3.7 per cent to £100.2 million owing to the restructuring of its Football Pools collections operation. Earnings and revenues from the Football Pools both fell, but Sportech said that the business had been stabilised and it was pressing ahead with a possible sale.
Sportech’s shares were flat at 50p.