Month: March 2021

Blackstone has offered Aus$11.85 for each share in Crown for 90.1% of shares it does not currently own.

Crown said it is yet to fully review the proposal and has launched an assessment of the offer, during which it will engage with relevant stakeholders, including regulatory authorities.

The operator added that its shareholders do not need to take any action at this stage, saying there is no guarantee the offer will result in a transaction.

Crown has appointed UBS as financial adviser and Allens as legal adviser for the acquisition proposal.

The private equity group already owns a 9.99% in Crown, having acquired this from Asian gaming giant Melco Resorts & Entertainment Limited in April 2020, at a price of $8.15 per share.

Melco had originally agreed to purchase a 19.99% stake in CPH Crown Holdings in May 2019 for approximately $1.76bn. With the deal to be conducted in two tranches, Melco purchased an initial 9.99% stake soon after it was agreed.

However, the deal gave rise to allegations about the businesses in the Australian press, which led to the New South Wales Independent Liquor & Gaming Authority launching an inquiry into Crown.

The inquiry was intended to examine whether Crown was a “suitable” licensee for a new integrated resort at Barangaroo in Sydney, and if not, what changes would be required to make it suitable.

The Authority also looked into whether Melco was suitable for its status as a close associate and whether the deal was a breach of the Barangaroo licence.

Shortly after the inquiry began, Melco delayed purchasing the second tranche of shares in Crown, then ultimately pulled out, selling the stake that it had already purchased to Blackstone.

The inquiry went on to find evidence of money laundering, both through the accounts of subsidiaries owned by Crown and at Crown’s own facilities.

Owner James Packer was also found to have undue influence on the business given he was not a director, including personally agreeing and executing the sale to Melco without approval from the board. As such, directors were unable to ensure the deal was not in breach of Crown’s Barangaroo licence.

The inquiry concluded that the evidence regarding money laundering alone was enough to determine that Crown was not a suitable holder of the Barangaroo licence.

However, it may still be permitted to operate the venue if it institutes certain changes.

Recommendations put forward by the Authority included that Crown continue to avoid dealing with junkets unless they are licensed by the Authority, while Packer should stop “remote manoeuvring”, referring to his practice of effectively running the company despite not sitting on the Crown board.

In addition, it was advised that Crown’s board be restructured.

The two operators combined to bring in $1.3m on bets worth $15.3m.

Gambet, operated by the DC Lottery and powered by Intralot, saw players place 124,362 wagers, worth a combined $4.2m, down 19.7% from January. 

From these wagers, players won $3.6m, leaving $600,305 in revenue, down 25.6% month-on-month.

Read the full story on iGB North America

Total stakes grew 41.6% year-on-year to $29.6m in February 2021, while handle was up 75.6% to $2.6m. However, turnover was down 15.0% and GGR was down by 30.6% when compared with January 2021.

In total 27,840 active players, up 22.7% placed bets at an average of $29.43 per player. This comes as the number of overall bets grew 29.6% to 1.0 million.

A majority of bets were placed pre-match, coming in at 659,054 compared to 346,560 live bets.

Read the full story on iGB North America.

Last month, Prime Minister Boris Johnson announced that English betting shops would be able to resume operations alongside other non-essential retail as part of the country’s roadmap out of novel coronavirus (Covid-19) lockdown.

However, adult gaming centres, alongside casinos and bingo halls, will not be permitted to reopen until the next stage of the roadmap on 17 May, when a number of other Covid-19 restrictions will be eased.

However, Gauselmann (pictured) has written to the Prime Minister, as well as Chancellor of the Exchequer Rishi Sunak, and Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng, to outline his concerns over the plans.

Gauselmann called for a review of the decision, setting out his “disappointment and regret” that adult gaming centres will not be able to reopen alongside other non-essential retail next month, saying the two venues are similar in terms of size and customer turnover.

The Gauselmann Group operates the Cashino chain of adult gaming centres in the UK through its Merkur division. There are 174 Cashino locations in the country.

“Our venues attract comparably small numbers of customers who do not stay for long,” Gauselmann said. “For this reason, we cannot understand the decision which permits betting shops to open even though they operate the same gaming machines. 

“This puts us at a great competitive disadvantage and we fear a long-term loss of loyal customers as a result.”

Gauselmann added that any further delay in reopening could harm any planned future investment by the Gauselmann Group.

“I am very concerned about the stress this recent decision places on our business and whether we can continue to invest as we had planned,” Gauselmann said.

“We appreciate the government has to make very difficult decisions, but cannot see why, in terms of infection protection, entirely unproblematic businesses should be prevented from opening.” 

Spelinspektionen launched an investigation into Bayton and its registration and identification methods in April 2020, to ensure it was operating in line with new regulations introduced in Sweden in January 2019.

Malta-based Bayton, which holds a Swedish online gaming licence for its Jackpot City Casino, Ruby Fortune and Spin Casino brands, said it had been using BankID, alongside SPAR, a register of all people living in Sweden, to identify customers and ensure they were resident in the country.

Players who registered without BankID could only use a temporary account for up to 30 days without verifying their account with an ID document like a driving license or passport, as well as household bill or account statement that showed their registered residential address.

If a player had not verified themselves by this date, their temporary account with Bayton would be shut down.

However, Spelinspektionen said the existing setup potentially left the door open for players living outside Sweden to register and gamble with Bayton.

Spelinspektionen said while correspondence with SPAR and the use of BankID was in line with regulations, it raised concerns over the use of domestic bills and account statement to identify players. It said that these documents were not sufficient proof the customers were resident in Sweden.

Instead, the regulator said Bayton should request customer provide an identity card issued by the Swedish Tax Agency, as this would provide proof of their permanent residence in the country.

“It is not possible to assess whether one person is registered or has resided in Sweden for at least six months based on one documentation that only consists of a single invoice, bank statement,” Spelinspektionen said.

“Against this background, the Spelinspektionen considers that Bayton’s routines for ITS KYC process is deficient because there is a risk that the company will register customers who are not resident or permanently residing in Sweden within the meaning of the Gaming Act.”

Spelinspektionen ordered Bayton’s to undertake a review of its KYC procedures and make the required changes before reporting back to the regulator by 1 June this year.

By Kenneth Williams

On 20 January, Morgan Stanley equity analyst Thomas Allen recanted his 2020 statements regarding investments in the betting industry. Now, Morgan Stanley has revealed its intention to enter the rapidly evolving space. The novel coronavirus (Covid-19) pandemic has had a significant effect on both traditional sports and esports, which, in turn, has impacted secondary industries such as coverage, data analysis and gambling. The move immediately sparked a 2.2% rise in DraftKings’ share price and gains in other publicly owned bookies.

Betting companies have largely gone underappreciated by big investment firms, so why would such a drastic policy change be made now at the start of the new year? The answer lies in the rise of esports and expanded legalisation.

Why switch to being bullish now?

Allen’s benchmarks make it easy to see why Morgan Stanley is chasing betting. In his note he revealed that igaming and sports betting revenues exceeded $3bn in 2020, 50% higher than he expected. Esports is used to massive year-on-year growth, but 2020 was a particularly progressive year.

The loss of traditional sports leagues last year wasn’t a pitfall for everyone. Esports took the reins as the premier subject for gambling. While their sustainability varied, the three largest esports continued to run online throughout the year – Counter-Strike: Global Offensive, League of Legends and Dota 2 gave out millions of dollars in prizes while stadiums sat empty. These games and others will continue to gain both popularity and betting market share in the future, something Morgan Stanley itself is betting on.

A significant portion of the traditional sports betting base even took the opportunity to switch over to esports gambling. Newzoo reports that NBA2K and Madden esports gambling exploded in 2020, growing by more than 35%. The rising prominence of sports simulation esports and their connection to other industries could play a role in Allen’s new investment strategy.

Alongside new betting markets gaining prominence, more and more regions are trying to legalise esports betting. Several world leaders, among them Puerto Rico’s former governor, Wanda Vázquez, and Pakistani Minister for Science and Technology, Fawad Hussain, pointed out the economic boons of legally recognising esports. The financial damage dealt by the pandemic is yet another incentive to regulate new industries.

What esports investors and bookies should know

There are several key takeaways from this policy shift. Firstly, big investment companies are still on the esports train. The hotspot has shifted from team ownership to media rights to real estate, but betting is one of the most reliable industries for growth. Esports adds hundreds of thousands of betting opportunities to sportsbooks every year. That contribution will continue to grow as more gamers become fans and new esports are developed.

Secondly, a number of those hotspots are beginning to cool down. Esports is no stranger to fads, and investors have been quick to jump on previous opportunities in marketing and stadium management. Morgan Stanley’s stance change signals a move towards smoother, more established markets. This is an investment in traditional sports betting too.

Lastly, some of Thomas Allen’s original reasons for avoiding sports betting weren’t still valid six months later. He claimed that the return of in-person betting would stop the online gambling boom, but people still prefer to bet on their own now in February. He also remarked that certain stocks would be overvalued due to legalisation efforts, though those efforts will lead to a bigger market anyway. Now that Morgan Stanley has had time to re-evaluate, they’re betting on esports – intentionally or otherwise.

Image: Alex Proimos via Wikimedia Commmons

Yesterday (18 March), XLMedia agreed to buy Sports Betting Dime for £26.0m, in a deal it said would provide the business with a US affiliate sports betting brand and strengthen its presence in the country’s legal wagering market.

XLMedia said that it would fund the majority of the purchase through a series of share offerings, including a core placement of 58,727,398 shares.

These shares were placed at a price of 40 pence each, with both new and existing investors taking part in the oversubscribed offering. The placement conditionally raised gross proceeds of £24.0m, though after also taking into account expenses, net proceeds will be approximately £22.9m.

In addition, certain XLMedia directors and employees agreed to subscribe to 1,272,602 in shares at an issue price of 40 pence each, leading to a further £509,041 in funding

Read the full story on iGB North America.

Vainiomäki takes on the role having previously worked for Danske Bank, where she was country manager for Finland and also spent time as head of business banking in the country.

Prior to this, Vainiomäki spent time with Nordea and has also served on the boards of a number of organisations, including Finance Finland, Varma and Danske Bank Russia.

Vainiomäki’s appointment was approved at this week’s annual general meeting, where it was also announced that Olli-Pekka Kallasvuo will continue as chair of the board.

Veikkaus also confirmed that Christian Cedercreutz, Pekka Hurtola, Anne Larilahti, Juha Pantzar and Hanna Sievinen will continue as members.

Jukka Gustafsson will continue as chairman of Veikkaus’ supervisory board and Jani Mäkelä as deputy chairman.

Earlier this month, Veikkaus published its results for the financial year 2020, showing a total profit of €680.2m (£580.8m/$809.2m), down 32.6% on the previous year.

The initial invitation to interested parties saw five companies put themselves forward, with this quintet all invited to submit initial questionnaires. 

With two of the five now cut, the three to move forward are Casinos Austria International, Oshidori International Development and its partner Mohegan Gaming & Entertainment, and Niki Chyau Fwu Group. 

Niki Chyau Fwu Group comprises Japenese commercial real estate developer The Niki Group and Taiwanese construction business Chyau Fwu Group, also known as Parkview Group.

The two that have failed to progress are One Kyushu, a consortium led by Japanese conglomerate Pixel Companyz and featuring France’s Groupe Partouche, and Current Group. 

Current Group comprised junket operator Guangdong Group, Japan’s Current Corporation, Get Nice Holdings, property investor Success Universe Group and Hong Kong-listed ITC Properties. 

The trio that move forward will now be required to complete a second set of questions about their plans for the venue, which will be located on the site of the Huis Ten Bosch theme park in Sasebo. 

They will also have to undergo an audit by an independent investigator to ensure the business is fit to run an integrated resort, with a view to selecting the final partner by August this year. 

The Japanese government’s selection process to choose three integrated resorts sites is also still to run, though the Nagasaki prefectural government expects that to be finalised in summer or autumn this year. 

Construction on the property would then be subject to consent from the citizens of Sasebo, with construction unlikely to begin before 2023, and the venue not expected to open for years after. 

There are currently a number of cities in contention for one of the three IR sites alongside Sasebo. The capital Tokyo, Yokohama, Okinawa, Osaka and Wakayama could also host one of the facilities. 

The project was greenlit by the government in July 2018, and aims to encourage tourism with sites featuring multiple commercial and cultural attractions. 

Legislation states that the resorts can dedicate no more than 3% of their floorspace to gambling, while local citizens will be required to pay an entry fee.

The agreement is part of a broader deal, which sees Fox Bet owner Fox Corporation receive digital and media rights to NFL for the next 11 years, up until the 2033 season.

In addition to the authorization of Fox Bet as an official sportsbook operator for the league, Fox Corporation extends its coverage of games and expands its digital rights, the company said.

Fox also extends its rights to continue operating its free-to-play wagering game, Fox Bet Super 6.

The NFL holds a one-time termination right for the deal, which covers the 2030-2033 seasons.

“This long-term agreement ensures that we will continue to deliver the best in football coverage to our viewers while also strengthening and providing optionality to our business,” Fox executive chairman and chief executive Lachlan Murdoch said.

Read the full story on iGB North America.