Tropika International Ltd. announced it has walked away from the online gambling table as part of an effort to reposition the company as a pure services and support provider.
Six-year old Tropika had previously looked like two very distinct companies operating under one business banner. While most of Tropika’s divisions provided services like customer relationship management, server hosting and database management, one subsidiary, Online Commerce Inc. was rolling the dice on online gambling.
Until last week, Online Commerce operated 11 casino Web sites and one Bingo site.
“One of the things we weren’t happy with was the mixture,” said John Ashbee, Tropika chairman and chief executive officer. “There was always this question mark with Tropika. Now, it’s clearly a technology services company right across the board.”
Ashbee said he could see the future of online gambling and like just about everything else online, it will eventually be the domain of the larger brick and mortar operations. Large brick and mortar operations in Britain (William Hill) and Australia (Jupiters Ltd.) have already gone online, and Ashbee said it’s only a matter of time before large American interests follow suit.
“I really believe the industry will be run by the big players,” he said.
Toronto-based Sprott Securities Ltd. analyst Brandon Osten said the company was wise to exit the crowded casino market. “None of their casinos were of any significance,” Osten said of Tropika. “Small casinos were tough to grow lately.”
But just because Tropika has left the table does not mean it is exiting the cyber-casino entirely. Ashbee believes online casinos will compose a substantial chunk of Tropika’s client base, as the company aims to provide its former competitors with services, particularly its anti-fraud offerings.
Previously called Signature Credit Card, the company’s anti-fraud division will in the future be known as Itecx Integrity Solutions, and will deal specifically with credit card and debit card fraud prevention on the Internet.
Itecx Integrity Solutions will be one of three distinct services units, including Tropika’s customer service division, which will shed the old APS Marketing label and take on the name Itecx Online Inc.
A new division, Itecx Trading Limited, will aim to provide back end software and system configurations for banks and other financial institutions.
Ashbee said Tropika is in discussions to provide services to a number of companies, including casinos, though nothing to date has been finalized.
Osten was less than optimistic about Tropika’s future as a service provider to casinos. “My understanding is they don’t have a lot of cash, so I would doubt (their chances).”
At the company’s next shareholders’ meeting, in November, Tropika’s board of directors will seek approval to give Tropika a completely new identity, by renaming the entire company Itecx Global Solutions.
Tropika has also brought its entire operation to Canadian soil, eliminated an offshore structure that allowed the company to avoid regulatory issues and a larger tax burden.
“Whenever you have all of your operations offshore, there is a certain cloud that falls over the top it,” Ashbee said. “Combined with online casino business (the company’s operation) got difficult to understand. And when you don’t understand, you tend to pick on the negatives.”