Month: February 2021

Revenue for the 12 months to 31 December was up 49.4% year-on-year to $1.97bn (£1.43bn/€1.63bn), while bookings – which adds deferred revenue to the total – were up 45.1% at $2.27bn. 

The year saw Zynga break revenue records across the board. Online games’ total of $1.67bn marked a 59.2% improvement on the prior year. While its advertising revenue grew at a slower rate, a 12.1% increase to $307.6m represented another milestone sum.

This included $763.1m in revenue from international markets, up 54.1% year-on-year and another new record. 

This growth was aided by the strong performance of proprietary titles such as Empires & Puzzles, Words With Friends and Harry Potter: Puzzles & Spells, and complemented by the acquisitions of Peak Games and Rollic. 

Peak was acquired for $1.85bn in July 2020, adding successful casual titles such as Toon Blast and Toy Blast to Zynga’s portfolio, while an $180m deal for Rollic, a hyper-casual Turkish studio, was finalised in October.

The operator’s ‘forever franchises’, including Zynga Poker, Words with Friends, as well as Peak’s Toon and Toy Blast titles, accounted for 70% ($1.38bn) of revenue, with a further 19% ($374.3m) coming from its social casino and card games. The remaining 11% ($216.7m) came from other products. 

A year of significant revenue growth, not to mention significant expansion through M&A, resulted in a rise in outgoings. Operating costs were up 47.1% to $2.35bn, as revenue-related expenses, research and development, sales and marketing outgoings all grew. 

This resulted in Zynga’s operating loss widening to $370.2m.

After financial items, it swung to a pre-tax loss of $405.4m, compared to a $47.3m profit in the prior year. However the 2019 figure was skewed by $322.5m in other income, that came predominantly from the sale of its San Francisco headquarters. 

After a $24.0m income tax charge was factored in, Zynga’s net loss for 2020 came to $429.4m. 

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), meanwhile, soared 205.3% to $266.2m. 

That year ended with a record fourth quarter performance, in which the operator set new three-month revenue and booking records. 

Revenue grew 22.4% to $616.0m in the three months to 31 December 2020, and bookings were up 11.3% to $698.9m. 

Q4’s revenue comprised $498.6m from online games (up 14.4%) and $117.4m from advertising, a 74.4% year-on-year improvement. While the ‘forever franchises’ accounted for 69% ($425.0m) of this total, the social casino and cards portfolio’s contribution rose to 17% ($104.7m), with 14% ($86.2m) from other games. 

Costs for the quarter did rise, though only marginally, climbing 3.0% to $643.5m, resulting in Zynga’s Q4 operating loss narrowing to $27.5m. After financial items and income taxes, this resulted in its net loss more than halving to $53.0m. Adjusted EBITDA totalled $89.9m, up 138.5%.

Chief executive Frank Gibeau (pictured) said Zynga’s “talented and resilient” teams performed well in an “unprecedented” year. 

“Our execution throughout 2020 added meaningful scale to our live services platform and strengthened our position as one of the leading mobile game publishers in the world,” Gibeau said. “Our live services portfolio is off to a tremendous start in 2021 led by our Forever Franchises, momentum in Harry Potter: Puzzles & Spells and two new top downloaded hyper-casual games from Rollic. 

“Zynga’s multi-year strategy of growing our live services, launching new games and investing in exciting growth opportunities has us well positioned for growth in 2021 and beyond.”

The business expects first quarter revenue to reach $635m – which would represent a 57% year-on-year improvement – and bookings to hit $680m. 

“Our topline performance will be driven by our live services, which includes the year-over-year additions of Toon Blast, Toy Blast and Harry Potter: Puzzles & Spells as well as existing and new hyper-casual games from Rollic, in addition to collective growth across the remainder of our live services portfolio,” Zynga explained. 

“These gains will be partially offset by declines in older mobile and web titles. Our topline guidance does not assume any meaningful contribution from our games currently in soft launch.”

Lamont’s proposal would give him the power to negotiate amendments to the compact with the Mashantucket Pequot Tribe of Indians, signed in January 1993, and the agreement with the Mohegan Tribe, agreed in May 1994. 

The tribes hold exclusive rights to operate gaming in Connecticut, with the Mashantucket Pequot operating Foxwoods Resort Casino, and the Mohegan Tribe running Mohegan Sun. 

This expanded agreement would cover the operating of sports wagering, esports betting and daily fantasy contests, as well as online casino gaming and online keno. These would be available both on and off tribal lands. 

The new agreements would come into force as soon as they were approved by the Secretary of the US Department of the Interior. Lamont estimates they could generate $47.3m in new state revenue by the states’ 2023 fiscal year, beginning 1 July 2023. 

In a pre-recorded budget address Lamont explained that neighbouring states were moving ahead with sports betting and igaming.

“[Connecticut] should not leave these opportunities for other states to benefit from our inaction,” he said. “My administration has been in active negotiations with our tribal partners to bring the state’s gaming economy into the digital age. 

“And I am submitting legislation which reflects what I believe to be the best bet in ending this stalemate of inaction in a way which is in the best interest for the entire state.”

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Expert Link will design an entirely independent network that will operate across Great Britain and be representative of the entire British community, focusing on equality, diversity and inclusion.

Once formed, the group will also develop capacity and resource to meaningfully participate and influence national debate and policy making across the gambling sector.

GambleAware will initially fund the project for 18 months, with the overall aim for the network to become sustainable and independent, including identifying and applying for its own funding sources in the longer term.

“We know there are other lived experience groups already out there doing good work in this area, and this new group will fill any gaps and reach those who are harder to engage with,” GambleAware research director Alison Clare said.

“Our ambition is to see this independent network grow and develop so that it can help inform all aspects of the gambling debate, from policy and regulation, to research, treatment and prevention.”

Meanwhile, GambleAware has also signed a grant agreement for a new special interest lived experience group.

Referred to as ‘Affected Lived Experience Research, Treatment and Support Group’, or ‘ALERTS’, the group is made up solely of individuals with experience of treatment from within the National Gambling Treatment Service (NGTS).

ALERTS will focus on scrutinising existing treatment services and provide system-wide advice and guidance from a lived experience perspective about the NGTS.

The group will seek to ensure there is a representative voice for people with lived experience of gambling harms at the National Clinicians Network Forum of the NGTS.

GambleAware will provide initial funding for the group for a 12-month pilot, with ALERTS to operate as an independent advisor to GambleAware and the NGTS.

GambleAware commissioning manager Ruth Champion said: “In order for us to ensure that the treatment services we commission are what people want and need, but also effective in preventing and reducing gambling harms, we must ensure the voices of people with lived experience are heeded.

“The group is already contributing to existing work which builds on the peer support system which is available through NGTS. I welcome the establishment of this new group and look forward to working with them to develop further the treatment and support that people need for gambling harms.”

The double announcement comes after GambleAware this week also revealed that John McCracken, its director of commissioning for treatment services, has stepped down from his role.

McCracken spent just under three years at the charity, having joined in April 2018 from the UK government’s Department of Health, where he served as head of drugs policy.

Overall revenue for the 12 months through to 31 December stood at €387.5m (£340.0m/$469.8m), up 8.9% from €356.0m in the previous year.

Cost of sales in the operator’s financial year reached €67.9m and gaming duties €57.3m, which left a gross profit of €262.3m for the year, an increase of 10.6% on 2019.

Operating expenses for the year reached €210.5m, with marketing expenses the main outgoing for LeoVegas, after the operator spent €132.6m during the year. This left LeoVegas with €51.9m in earnings before interest, tax, depreciation and amortisation (EBITDA), up 4.9% year-on-year.

Earnings before interest and tax (EBIT), but after including depreciation and amortisation, was €22.8m, some 79.5% higher than the previous year.

After accounting for financial costs, profit before tax was €21.5m, more than double the €10.3m posted on the previous year. LeoVegas paid €2.2m in income tax, and including the impact foreign exchange, it ended the year with €19.3m in profit, up 103.2% on 2019.

Looking to the operator’s record fourth quarter, revenue for the three months to 31 December was €98.4m, some 13.0% higher than €87.1m in Q4 of 2019.

Breaking down its performance, LeoVegas said 75% of gross gaming revenue in Q4 was derived from classic casino games, including slots, while 16% came from live casino and the remaining 9% sports betting.

In terms of geographical performance, the Nordics accounted for 36% of revenue in Q4, behind the rest of Europe on 47%, where revenue share was up 28% year-on-year. The other 17% of revenue was generated in markets elsewhere in the world.

New depositing customers during the quarter were up by 15.0% year-on-year to 181,592, while returning depositing customers reached a record 280,391 in Q4, up 31.0% on 2019.

Cost of sales amounted to €17.1m and gaming duties €14.3m resulting in a gross profit of €66.9m, up 17.4%. Operating costs reached €58.9m, leaving €8.0m in EBITDA for the quarter.

After depreciation and amortisation, and amortisation of intangible assets and impairment of assets, LeoVegas posted an operating loss of €833,000, which was an improvement on a €2.5m loss in 2019. After financial costs, loss before tax was €1.5m, compared to €3.2m in the previous year.

LeoVegas paid €534,000 in tax during Q4, which meant it ended the three-month period was a loss of €1.9m, compared to €3.0m at the same point in 2019.

However, despite the Q4 loss, president and chief executive Gustaf Hagman was positive about the performance, declaring it’s the strongest-ever Q4 in the operator’s history.

“LeoVegas concluded the record year 2020 with its strongest fourth quarter ever, and we did this despite frequent changes to the gaming requirements in our markets in addition to finding ourselves in the midst of a global pandemic,” Hagman said.

“I am proud of our ability to quickly adapt to changed conditions through a high capacity for innovation at the same time as we are building an increasingly solid and diversified business.

“It is a demonstration of strength that LeoVegas delivered adjusted EBITDA growth of 25% for the full year while the operating cash flow increased almost 90 %. This was achieved despite maintaining a high investment pace with launches of new brands, new markets and product improvements.”

Hagman also noted a number of major highlights in the quarter, including the star of the migration of Royal Panda to its joint technical platform, as well as the launch of the Pink Casino brand in Canada.

LeoVegas also successfully issued a senior unsecured bond of SEK500m under a framework of SEK 800m in Q4.

“On the tailwinds of a strong 2020 we are now looking forward to a year with many exciting growth initiatives and an even stronger customer offering,” Hagman said.

The operator has said it will use the licence to operate “a comprehensive international operation”, targeting players across the world with the exception of the United States, where it announced last year it is making efforts to pursue licences.

5Dimes owner and board member Laura Varela said the licence was part its steps towards an ambitious goal of expansion across the globe. The expansion was made possible by a $46.8m settlement with the US Department of Justice, ending an investigation against the operator from the Attorney’s Office for the Eastern District of Pennsylvania and also included a requirement to block all US customers.

“This undertaking in the Isle of Man is a first step towards relaunching the 5Dimes brand in all legalized jurisdictions around the world,” Varela said. “We are excited to welcome back many of our loyal customers to our top-of-the-line gaming experience while keeping our eyes set on future expansion opportunities in additional legal and regulated markets in the near future.”

Varela added that the strong reputation of an Isle of Man licence made it an attractive jurisdiction from which to launch international operations.

“This licensure is an exciting milestone for the 5Dimes brand,” Varela said. “The Isle of Man is a Tier-1 jurisdiction, known for its advanced approach to gambling and e-gaming legislation and its exceptional reputation in the international gaming community. 

“The Isle of Man sets high standards for its gaming operators and players, and we look forward to upholding the same level of principles and innovation with the launch of 5Dimes.”

The operator will also establish a management and operations team base in the country.

The Netherlands is scheduled to open the regulated market on 1 October, after its launch was delayed several times. Dekker confirmed the latest delay in opening the market last month, with laws regulating the market now due to come into effect from 1 April.

Ahead of the market launching, Dekker answered a series of questions from MP Stieneke van der Graff, primarily focused around the protection of players – particularly young people – when the market opens.

Van der Graff raised a query about section 7.2 of the Dutch Remote Gambling Act (KOA), which refers to how certain articles within the Act can be implemented at different times if the government sees fit.

The MP asked whether this would be implemented to allow Section B of Article 6.2 to come into force. This section of the Act sets out how advertisements must not be aimed at on people aged 24 or under.

In response, Dekker said that, as licensees would be required to ensure adverts do not target children or young adults as part of their licensing requirements, there is no need to implement this part of the Act at an earlier stage.

“Licensees may not target their advertising at minors,” Dekker said. “For licence-holders who offer games of chance, they are not allowed to carry any advertising that focuses on young adults. Therefore, earlier entry into force of Article 6.2. of the Act is not necessary.”

In addition, van der Graff questioned whether current restrictions on certain gambling ads appearing on television before 9pm would remain in place. Dekker said that this requirement, which became law in November 2020, would remain and apply to all licensees when the market launches.

“For higher-risk games of chance, it is prohibited to broadcast adverts for this on television between 6am and 9pm,” Dekker said. “For other games of chance, this prohibition applies between 6am and 7pm.”

In terms of the help on offer to those who do suffer from gambling problems, van der Graff asked whether the government would consider working with people who specialise in this area when developing its support options.

Dekker said the proposed addiction prevention policies set out in the Act have been developed in close collaboration with experts in addiction prevention and care.  

He added that licence-holders will be required to have in place a policy to help customers avoid addiction problems and offer support to those suffering with these issues.

“To be able to connect sufficiently with the Dutch system of addiction treatment, it is necessary for the licensee to engage an expert organisation when compiling information regarding addiction prevention,” Dekker said.

“This will improve the quality of the information and the interest of the player to protect them from gambling addiction monitored.”

Total revenue for the 12 months through to 31 December amounted to €561.1m (£491.4m/$679.8m), up 53.4% from €365.9m in the previous year.

Evolution said while this was mainly due to increased commission from clients, it was also helped by its acquisition of NetEnt, which was finalised on 2 December last year. The combined business now operates under the name Evolution.

As such, Evolution’s financial results also included revenue from NetEnt in the final month of the year.

“Through the acquisition of NetEnt, we add a second vertical to our unrivalled live casino offer and two strong and fantastic new brands to our product portfolio,” Evolution chief executive Martin Carlesund said.

“This makes us well placed for our long-term ambition of taking a leading global position in online casino.”

In terms of spending during 2020, operating expenses amounted to €261.4m, up 25.5% from the previous year, with this increase mainly driven by costs related to the NetEnt acquisition. This led to an operating profit of €299.7m.

Earnings before interest, tax, deprecation and amortisation (EBITDA), adjusted for non-recurring items, was €351.6m, up 92.2% on 2019.

After accounting for €1.0m in financial items, profit before tax was €298.7m, up 89.9% from €157.3m in 2019. Evolution paid €14.1m in income tax, leaving it with €283.6m in total profit, an increase of 90.1% on the previous year.

“The pandemic has continued to be a factor throughout the year,” Carlesund said. “Our organic growth was solid already in the beginning of 2020, and I’m pleased to see continued strong demand with many new players and high activity in the network throughout the year.”

Evolution also set out details of its performance in the fourth quarter, the latter part of which included the NetEnt acquisition. Revenue in Q4 reached €177.7m, up 67.6% year-on-year, with €17.8m of this revenue attributed to NetEnt games.

In terms of geographical performance, €81.1 of revenue was generated from the provider’s rest of Europe operations, with the next highest amount (€41.9) being from Asia. The UK accounted for €13.9m of Q4 revenue, ahead of North America with €12.6m and the Nordics on €11.m. The remaining €17.1m was generated elsewhere.

Operating costs climbed 62.0% to €92.8m, including €19.4m in restructuring and acquisition costs related to the NetEnt deal, while EBITDA for the quarter was 107.2% higher at €115.6m.

Evolution noted €818,000 in financial items, meaning profit before tax reached €84.0m, up 72.8% year-on-year. The provider paid €3.4m in tax, meaning it ended the period with €80.6m in profit, an increase of 72.2% on the previous year.

“There is much to look forward to in 2021,” Carlesund said. “We enter the new year with an intense and successful 2020 behind us, a proven strong, competent and energetic team and tremendous business momentum.

“2021 is off to a strong start and I am excited to soon share more news from the group on how we plan to work with operators to take product innovation and player experience to the next level.”

Keevill took over from Brent Scrimshaw as the lottery’s chief executive on 1 May 2020. Prior to this, he had been chief executive of creative agency Colour, where he had worked since 2002.

“The Board of Directors would like to take this opportunity to thank Chris for his contributions to Atlantic Lottery over the past several months,” Sean O’Connor, chair of Atlantic Lottery’s board of directors, said.

Daigle has worked at Atlantic Lottery since 1997, most recently as chief financial officer.

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Net gaming revenue for the 12 months ended 31 December 2020 amounted to SEK7.67bn (£667.1m/€761.6m/$923.8m), down 9% from the previous year (excluding non-recurring revenue of SEK163m, which was all received in Q4)

The closure of the operator’s Casino Cosmopol chain of land-based casinos as a result of the novel coronavirus (Covid-19) pandemic resulted in a SEK777m reduction in net gaming revenues, it said.

Excluding its land-based casino operations, which brought in SEK886m the operator saw a 1% increase in net gaming revenue to SEK6.78bn.

The Tur lottery division made up most of this revenue, up 2.0% at SEK4.84bn, while the Sport and Casino digital brand brought in SEK1.95bn, down 8.0%.

The operator said its digital business was growing strongly, accounting for 46% of revenue in 2020, compared to 35% in 2019. This was despite temporary measures on online casino including a SEK5000 deposit cap, which Svenska Spel said “squeeze revenue and reduce revenue growth”. The Tur lottery business also broke online sales records during Q4.

Operating profit for the group was down 3% from 2019 at SEK2.40bn. The closure of its land-based operations resulted in a SEK441m reduction in operating profit, the operator said. Net profit for the year came in at SEK1.87bn, down 31% on 2019.

Of the full-year net gaming revenue, SEK2.13bn was brought in during Q4, down 14% on the same period last year.

The closure of physical casinos reduced net revenues by SEK250m in Q4, resulting in a decrease of SEK121m in operating profit.

Excluding casino operations, however, net gaming revenue was up 3% for the quarter. Net profit for the period came to SEK547m, down 18% from Q4 2019.

“We have good profitability for the Group and strengthen the operating margin for both the quarter and the full year 2020, despite the fact that our physical casinos have been closed for three quarters.”

“As in the previous quarter, revenues for our Sport & Casino and Tur business areas are increasing. This shows strength and stability that two out of three business areas deliver growth despite the fact that they are also affected by covid-19 in the form of temporary gaming responsibility measures and reduced sales in stores,” said Patrik Hofbauer (pictured) president and chief executive of Svenska Spel.

In August 2020, the operator’s board decided to permanently close its casino operation in Sundsvall due to a decline in profits and footfall at the property. This decision carried a non-recurring cost of SEK81m, it said.

In November, Sweden’s government launched a consultation on extending temporary controls for online casino, including the controversial SEK5,000 weekly deposit limit, until June 2021.

The government said its aim was to better protect players throughout the Covid-19 pandemic.

The self-serve solution will allow Marathonbet to set up checklist parameters with bespoke criteria to check thousands of affiliate websites for content.

GiG said this will enable the operator to ensure affiliates are aligned with its brand and marketing message, as well as identify where to rectify potential promotional breaches.

“We believe this tool fits in seamlessly with our business objectives moving forward, providing us with the perfect service to manage our affiliate compliance operations,” Marathonbet affiliate manager Germán Soto Noche said.

“We look forward to GIG helping us ensure our affiliates can offer their audiences an outstanding user experience in line with regional regulations.”

GiG Media managing director Jonas Warrer added: “At GiG, we like to place the power in our partner’s hands and with the flexibility built into GiG Comply, Marathonbet can create bespoke compliance checks, which are tailored to their needs and market.

“This will not only help to ensure they remain compliant but will also help to safeguard their licence in multiple jurisdictions.”