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By Rory Gallivan

LONDON--Online gambling technology company Playtech PLC's (PTEC.LN) attempt to diversify beyond casino and poker games into financial derivatives trading suffered a blow as it scrapped its proposed 459.6 million pound ($698.4 million) acquisition of Plus500 Ltd (PLUS.LN).

Playtech Monday said it was abandoning the proposed acquisition after deciding it was unlikely to be able to address concerns related to the acquisition expressed by the U.K. regulator the Financial Conduct Authority, or FCA, by the end of the year, the deadline it had agreed with Plus500.

Shares in Playtech were down 8.5% at 780 pence at 1219 GMT, valuing the company at GBP2.51 billion. Plus500 shares were 2.6% lower at 349 pence, valuing the company at GBP401.3 million.

The company didn't specify the concerns the FCA had expressed, but a person familiar with the situation said they related to Playtech's ability to address regulatory issues at Plus500 given Playtech's lack of experience in financial derivatives. A spokeswoman for the FCA said it can't comment on individual cases. Shares in Plus500 tumbled in May after it had to suspend some U.K. accounts following the FCA requiring it to review its anti-money laundering controls. Playtech announced in June that it had reached agreement on the acquisition of Plus500, which specialises in providing online contracts for differences, or CFDs, a means of indirectly investing in shares and other financial products.

Playtech, which provides technology for online casino, bingo and sports-betting to customers such as the bookmaker William Hill PLC (WMH.LN) and the media group Sky PLC (SKY.LN), said it remains committed to growing its financial trading division.

-Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter: @RoryGallivan

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(END) Dow Jones Newswires

November 23, 2015 08:03 ET (13:03 GMT)

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