Teddy Sagi: Israeli Billionaire and Founder of Playtech
Some people admire the success stories of Steve Jobs or Bill Gates, while others look up to top sportsmen in the world. The gambling industry has its celebrities; one of them is the Israeli billionaire and businessman Teddy Sagi, who is the founder of Playtech — one of the largest gambling software developers. In 2020, his personal capital was estimated at $5.6 billion. This is a story of a fraudster and a bigwig in the securities market who later became a law-abiding businessman and a respectable family man.
First Steps in Big Business
Teddy was the only child in the family. The future tycoon was born in 1971 in the north of Tel Aviv. The businessman’s father was Ami Sagi, the owner of a travel services company. The mother, Lizi Sagi, was a certified cosmetologist. Almost all childhood the Cypriot-Israeli businessman spent in a wealthy Shikun Lamed area.
|Year of Birth||1971|
|Place of Birth||Shikun Lamed area, northern Tel Aviv, Israel|
Sagi didn’t continue the work of his father and chose another direction in life, having started to study the stock market. In the 1990s, Teddy was engaged in stock trading and went into a fraudulent collusion with representatives of large banking institutions in order to quickly make a fortune. Using information inaccessible to other persons, the group entered into transactions with shares, bonds, bank certificates, and other investment papers.
Insider trading in shares didn’t last long; in January 1996, Teddy voluntarily surrendered to the authorities and began to cooperate with law enforcement agencies. This paid off and helped to avoid a long prison term for the offense committed. Sagi was sentenced to 9 months in prison, as well as a fine of 300,000 shekels for stock exchange fraud. However, participation in corrupt deals helped him to make his first fortune.
First Steps in the Gambling Business
In 1999, Teddy created the Playtech PLC holding together with his partners in Tartu, the second largest city of Estonia. In 2001, the studio began to supply software for online gambling sites, poker rooms, instant lotteries, and websites that offered sports betting.
As a result of a rapid development, the services of the developer Playtech PLC were used by well-known operators from Britain such as:
- William Hill
In 2006, Playtech PLC securities were listed on the Alternative Investment Market (AIM), a sub-market of the London Stock Exchange. The total value of the company was estimated at £550 million. To date, Playtech PLC is still the leader among providers of gambling software. Only NetEnt and Microgaming compete with the studio.
Teddy Sagi’s Business Principle
Teddy’s dizzying success in the gambling field allowed the businessman to become a billionaire in a very short time and get into the rating of the richest people in Israel, taking 6th place. Although, according to Forbes, these changes in Saga’s life were not due to Playtech, but to his approach to doing business.
Sagi has never rested on his laurels and has always strived to improve the performance of the organization through risk sharing and expansion. Therefore, the employees of his holdings regularly worked on the creation of new products, which made it possible to scale and absorb smaller firms and enterprises.
Timeline of Playtech PLC expansion:
- 2011. The company bought out PT Turnkey Services, which was personally owned by Teddy Sagi. The business tycoon received £125 million from Playtech.
- 2012. Teddy Sagi and Playtech purchased the Belarusian slot developer Viaden Media. The transaction price was €95 million. In the same year, the company began to cooperate with representatives of the sports betting industry.
- 2013. Playtech acquired the PokerStrategy.com gambling site, having paid about $49.2 million for it. Together with the website, the developer got access to the data of more than 7 million of its customers.
- 2014. Playtech acquired Aristocrat Lotteries for €10.5 million
- 2015. Another studio added to the company’s list of successful deals is YoYo Games, the developer of Game Maker: Studio software. The transaction value was $16.4 million.
- 2016. Playtech acquired Swedish studio Quickspin for €50 million and Best Gaming Technology software provider for $153 million.
- 2018. Playtech Playtech launched a multi-market poker network with shared liquidity.
Old Sins Resurface
Gambling regulators always monitor the huge deals and their participants; therefore, Teddy Sagi had a problem when striking one of these deals. In 2015, Playtech acquired Plus500, an online foreign exchange trader, for $699 million; this was the largest deal in the provider’s history at the time. To raise this sum, Teddy Sagi was forced to use his connections and attract other companies as partners.
The shareholders of the two holdings were in favor of the merger. Therefore, representatives of both firms were able to very quickly obtain permission for the transaction from the regulatory authorities of Cyprus and Israel. They had to obtain permission from the UK financial supervisory authority in order to sign the statutory papers. However, the FCA deliberately began to delay the completion of the transaction, which aroused suspicion. No one knows the details of the terms of the sale and purchase, since the conversation between the regulatory body and Playtech was confidential; many different versions appeared as a result.
Some media have speculated that the regulator wanted to take a closer look at the developer’s business practices and receive more information before signing the papers. The completion of the transaction was scheduled for November 2015. For some reason, Playtech didn’t have time to prepare and transfer all the necessary information on time, so the deal didn’t take place and the management refused to merge with the Plus500 company.
Some media claimed that the British regulator was unwilling to allow a former economic criminal to run one of the largest financial institutions.
Farewell to Playtech
Gradually, Sagi began to reduce the percentage of his shares in the holding’s portfolio. In November 2016, Sagi, who at that time owned 33.6% of Playtech’s assets, announced the sale of 10% of the shares. But in the end, Teddy sold 12% for $400 million. In 2018, the businessman sold the rest of the stake for $88 million. The gambling magnate was forced to take this step by the actions of one of the investors. It was Jason Ader from the New York-based SpringOwl Asset Management private investment fund.
The investment manager said that Teddy Saga’s past illegal activities couldn’t be hidden. This means that in the future, regulators would not allow the company to realize all its ambitious plans. In the short term, Jason Ader’s outlook turned out to be disastrous; after Teddy’s departure, Playtech’s stock began to plummet. In 2017, the company’s shares were traded on the stock market for £900 or more; by March 2020, the prices fell to £150.80. However, the pandemic changed everything dramatically; thanks to the increased demand for gambling, the company’s shares began to grow again.
Teddy Sagi’s Main Investments
While Playtech grew and scaled, the core founder didn’t rest on his laurels either. The gambling tycoon invested his funds in various areas:
- Teddy Sagi was a 68% majority shareholder in SafeCharge, which is the credit card clearing house for the online gambling industry. In 2019, the businessman sold the company for $889 million to Nuvei Corporation. In August of the same year, the acquisition transaction was completed.
- At the end of 2012, Sagi bought a new company, Crossrider, for $37 million, which subsequently went public on AIM for $250 million. In March 2018, the name of the organization was changed to Kape Technologies PLC.
- In 2014, the businessman became the owner of Camden Market Holdings. Teddy Sagi bought a 50% stake from Bebo Kobo for £400 million and the same from Richard Caring and Elliott Bernard for NIS £2.3-2.6 billion. Subsequently, this transaction turned out to be the largest IPO on the London Stock Exchange in 2015.
- In 2015, a deal was made to buy startup Stucco Media, a company that develops e-commerce website technology, for $43 million.
- In the same year, the businessman acquired the marketing firm Glispa for €32 million.
- In November 2018, a $7.5 million deal was made to buy mobile advertising company Mobfox from Matomy Media.
Mogul’s personal life
Since 2010, Israeli billionaire Teddy Sagi has been living with Yael Nizri, Miss Israel 2006. To date, the couple has six children. The eldest daughter is already 14 years old. The age of the rest of the children varies from 10 months to 10 years. In an interview on Israeli television, the businessman admitted that he dreams of 10 children.
Sagi owns the most expensive house in Israel with an area of 2000 sq m. The villa is located in the resort town of Herzliya between Tel Aviv and Netanya. The house has a gym, wine cellar, and an elevator to the beach. Teddy Sagi also owns two penthouses, which are located in the Tzameret Towers and in London’s Knightsbridge.