Revenue across all verticals was €315.5m in March, down 10.2% on February’s total, though this figure still represented an 80.7% increase on the same month of 2020.
Casino was the star performer for the market last month, with the total revenue figure of €158.7m having been bettered only once before, when GGR reached €162.9m in December last year.
Last month’s casino GGR represented an 11% rise on February and a 68.9% increase on March 2020.
The impressive performance of casino saw its share of the online market rebound strongly, reaching 50.31% last month after having fallen to 40.71% in February.
While there was no change in the rankings of the top five operators, all five – PokerStars, Sisal, Lottomatica, Snai and 888, in order of ranking – experienced slight declines in their market shares last month.
Most of the other companies that make up the top 20 online casino operators saw small rises in their shares, however, suggesting the market’s smaller players may have benefited more from the increase in casino activity than its larger ones.
After a record-breaking month in February, online sports betting activity dropped off significantly last month. Total GGR for March was €132.32m, down 28.7% on a month-on-month basis but up 168% on last March.
Retail takings remained absent due to the closure of land-based venues and it is unlikely April’s figures will show much improvement given the government only began to ease lockdown measures in the last week of the month.
Despite the lack of retail activity, those bookies with a strong retail presence have held on to or even improved their positions in the ranking of the country’s top sports betting operators by revenues.
Sisal, for example, last month climbed into top place with a 13.3% market share, followed by Snai at 12.2% and Goldbet at 11.9%.
The online-only Bet365 was in fourth place, with a 10.8% market share.
All data and figures from the regulator are processed by leading European corporate advisory firm Ficom Leisure, a specialist in all segments of the betting and gaming sector.
Total revenue from continuing operations in the 12 months to 31 December amounted to £11.4m (€13.1m/$15.8m), up from £6.9m in the previous year and in line with initial forecasts published by Gaming Realms in February.
Revenue from the developer’s licensing segment was up by 82.9% year-on-year to £7.5m, primarily due to an increase in the number of operators across Europe, the US and Latin America, and the addition of new content.
Gaming Realms also added 10 new Slingo games to its content portfolio in 2020, opening up more gaming options for customers and their players.
The developer noted particular success in the US market in terms of its licensing business, with revenue in the country rising 41.2% to £2.4m, representing 32% of segment revenue. This, Gaming Realms said, is likely to increase further, having secured a new licence in the state of Michigan, while an application is pending in Pennsylvania.
Turning attention to the social publishing arm and revenue here increased by 32.3% to £3.9m. This area of the business focuses on providing freemium games in the US market.
“By securing 26 new licensing and distribution partners throughout the year, of which many were tier one operators, and adding 10 new games to our hugely popular Slingo portfolio, we successfully increased the number of unique players playing our games by 140% and saw increased international demand for our content,” Gaming Realms’ executive chairman Michael Buckley said.
Looking at costs for the year, Gaming Realms noted an increase in spending across all core areas. Administrative expenses were the main outgoing at £6.0m, up 5.3%, while operating costs jumped 46.7% to £2.2m and marketing spend 67.3% to £355,394.
Despite higher costs, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was up from a loss of £355,116 in 2019 to a positive of £2.9m. After accounting for £499,422 in costs related to the impairment of financial assets, £372,344 in share option and related charges, EBITDA improved from a loss of £781,755 to a positive of £2.0m.
Gaming Realms noted a number of finance-related charges, including £2.8m related to the amortisation of tangible assets, £216,323 in depreciation of property, plant and equipment, and £882,032 in finance expense.
After this additional spending, the supplier’s loss before tax stood at £1.6m, compared to £4.7m in 2019. The developer benefitted from £48,229 in tax credit, meaning loss for the year amounted to £1.5m, an improvement on the £5.3m loss posted in the previous financial year.
When accounting for £226,666 in exchange loss from translation of foreign operators, this left an overall loss of £1.5m, still significantly lower than the £5.4m loss posted in 2019.
“The group made excellent progress in FY20, producing a maiden adjusted EBITDA profit of £3.3m and increasing revenue by 66%,” Buckley said. “This underscores the success of the company’s strategy to focus on its core licensing business segment, as well as its social publishing division.
“We remain committed to the expansion of our global footprint, particularly in the US and European regulated markets, through increasing and strengthening our network of distributors, operators and licensors.
“With further planned launches in the US, Denmark, Spain, Canada and Portugal, and a strong pipeline of new and exciting branded Slingo games, the board is confident in the future prospects of the business and looks forward to keeping its shareholders updated on progress.”
In her new role, Zorab will oversee the strategic development, growth and performance of the provider, as well as head up the operations and business development departments.
Zorab has been with Amber Gaming for five years and previously served as a director of the business, with responsibility for business development and strategy in gaming, ecommerce, and training.
Prior to her appointment to the board, Zorab played a major role in the internationalisation of Amber Gaming, its rebrand and commercial development.
“It is a privilege to be appointed to the position of managing director, especially at such an exciting point in our journey,” Zorab said.
“Despite global circumstances, there continues to be a growing demand for our services, and this provides us with continued optimism for the outlook of the gaming sector.
“I look forward to building on our current success using our established values and excellent service delivery to exceed the demands and expectations of both our clients and team.”
Tabcorp said that the time that now firm bids had been made.
A statement from Entain read: “Entain believes that the revised proposal is compelling both in terms of the value it represents for Tabcorp shareholders in cash, and certainty of deliverability.
“The Proposed Transaction would be in-line with Entain’s current M&A strategy, and presents an opportunity to acquire an attractive business, which when combined with Entain’s existing Australian business, would create a leading, integrated multi-channel and multi-brand wagering company.”
In its 2019-20 financial year, Tabcorp’s wagering and media business brought in AUD$2.08bn and earnings before interest, tax, depreciation and amortisation (EBITDA) of $371m.
Entain currently operates the Neds brand in Australia, having acquired it in 2018, as well as its Ladbrokes brand.
Japanese casino legalisation has been in the cards for decades, but legislative and bureaucratic fiddling has let enthusiasm burn out. The only sure thing so far has been delay at every stage of Japan’s integrated resort process.
Muhammad cohen
The national government’s selection of up to three IR licensees, scheduled to start in January and end this July, was postponed until October, to run through April next year. After all these delays and missed opportunities, it’s time for Japanese authorities finally to suck it up and… suspend the process to get it right.
Prime Minister Yoshihide Suga’s government should pause to determine why three of the world’s top five international casino operators plus Japan’s leading city Tokyo and top vacation destination Hokkaido are skipping the IR race. Finding remedies will let Japan build casino resorts worthy of the world’s third largest economy, IRs that have the best chance to satisfy government, operators, investors, customers and maybe even the skeptical Japanese public.
Participants in the IR process contacted largely agree it’s time for a time out, though they disagree on whether authorities will pause the process.
“I think they would be wise to wait to move the IR initiative forward until Covid recedes as an issue,” market research firm Carter Group chief executive Dominic Carter says. “Our nationwide polling shows that the proportion of enthusiasts for the IR project has slipped markedly in the past 12 months, from 27% to 22% – but so has the proportion of detractors, from 46% to 39%.
“IR has understandably slipped down the agenda of pressing issues on the mind of the Japanese public.”
Experts diverge on whether the public can be convinced to support IRs. “Since I lived in Las Vegas, I know the many benefits of IRs in a city,” ReNeA Japan CEO Masa Suganuma, now resident in Yokohama, where the IR bid is a key issue in the August election for mayor Fumiko Hayashi, says. “Yokohama must promote the positive aspects of IRs.” Others view IR opposition as politically motivated and inevitable.
Hogo Japan managing partner Chris Wieners believes the IR process will continue, but doesn’t think it’s the right strategy. “Using Covid-19 as a rationale for a full do-over would allow the government to save face and give ample time for a thorough review of the entire IR plan, of which many components have lukewarm acceptance at best,” the Osaka-based consultant says. “It would also give the global IR scene time to recover from the pandemic.”
“The absence of many of the world’s largest gaming operators should have alarm bells ringing in Tokyo,” independent gaming consultant Jonathan Strock says. Las Vegas Sands, Wynn Resorts and Caesars Resorts laid the cornerstones of modern integrated resorts, and all three have withdrawn from Japan bidding.
Strock, who worked in Japan from 2014 to 2020 on Barriere Group’s abandoned IR effort, views lengthening the gaming license term from five years as key to securing bank financing for projects that could cost more than US$10bn.
That stratospheric price tag – more daunting with Covid-19 cratering gaming revenue globally and China threatening to “blacklist” gaming destinations targeting its citizens – traces in part to government mandates. Each IR must include at least 100,000 square meters (1.1m square feet) of hotel space, larger than all but one hotel now in Japan, and 120,000 square meters of MICE space, 44% bigger than the nation’s existing convention centre. The latter requirement seems tailored for Sands, which abandoned its Japan bid last May.
“Post Covid-19, no one knows whether the convention business can still work,” Suganuma, a game designer turned executive, says. “Japanese or global experts must present a new vision beyond existing models.”
PwC integrated resort team senior manager Masahiro Terada sees a possible solution in Osaka’s February RFP revision, allowing phased development of MICE space. “My recommendation is match the market trend,” he says.
So far, central government authorities have not objected to Osaka’s interpretation of the regulation. Some observers propose broadening the MICE space definition to include arenas, museums and other public facilities plus reducing the requirement for so-called regional areas beyond mega-cities Tokyo, Yokohama and Osaka.
“We expect continued flexibility on the part of the national government,” Spectrum Gaming senior vice president in Japan Asaka Ishiyama says. However, nimble adaptability is hardly a bureaucratic strong suit, Terada notes. Formally modifying rules would boost certainty for bidders.
So would a central government vetting process for potential IR applicants to determine suitability before local jurisdictions select them, rather waiting until after localities make their nominations. “An initial qualification process would be ideal to filter any problematic bidders that may try their luck with local jurisdictions and taint the pool of bidders,” Vector Risk Management managing director Kenji Okamoto says.
“The government is focused on matching a global standard in terms of licensing requirements,” Bay City Ventures Managing Director Joji Kokuryo, a former compliance executive in Macau, says. “If an IR operator is currently unsuitable to gain a gaming license in Nevada for one reason or another, it will be hard pressed to earn one in Japan.”
Public concerns center on probity, underscored by the December 2019 arrest of ruling Liberal Democrat Party legislator Tsukasa Akimoto on charges he took bribes from Chinese gaming company 500.com, and problem gambling, which the current rules address. But unless each IR licensed emphatically succeeds, the public may dismiss casino legalization as yet another useless government economic recovery scheme. At this stage, few see three sure winners among present IR candidates Osaka, Wakayama, Yokohama and Nagasaki.
“If the government is wise enough, they should disqualify potential unsuccessful bidders,” National Council on Gaming Legislation chairman Toru Mihara says. “But I am not sure how smart they are.”
Former US diplomat Muhammad Cohen has covered the casino business in Asia since 2006, most recently for Forbes and Inside Asian Gaming, and wrote Hong Kong On Air, a novel set during the 1997 handover about TV news, love, betrayal, high finance and cheap lingerie.
The first article of the ‘Demystifying Affordability’ series set the context for affordability in Great Britain. This piece will look at why it is important for operators to automate their affordability process and adopt a layered approach, while the next piece will look at some common concerns and misconceptions that exist around affordability.
The importance of automating affordability processes
In its guidance for remote operators during Covid-19, released in May 2020, the Gambling Commission reiterated its customer interaction process for operators to follow: ‘Identify, Interact and Evaluate’
Sonny COtt | by www.andynewbold.com
First, operators should identify customers who may be at risk of experiencing harms that are associated with gambling. Then they should interact with customers in a way which minimises the risk of customers experiencing harms. From that point, it is then for the operator to understand the impact of the interaction on the customer and the effectiveness of the operator’s actions and approach.
An important part of this process is to integrate suitable auto-measures into the responsible gaming framework to identify early on those who may be vulnerable to experiencing gambling related harm. Affordability is an integral part of that early screening, and so operators need robust automated affordability controls.
The Commission, in its remote customer Interaction consultation, outlined that while operators have the capability to identify customers who may be harmed by gambling, evidence showed that often they are too slow to act and do so at a level which does not reflect the level of potential harm at stake.
In the context of affordability, for too long thresholds for customer interactions have been set too high. Many checks that were conducted came hours or days after they are required, so could be seen as too late, as the customer may already be experiencing gambling related harm.
The benefits to be gained with automated checks are not only meeting the regulator’s expectation, but also in efficiency. If implemented correctly, not only can this ensure compliance, but it can also reduce painstaking hours of manual due diligence and customer interactions.
Affordability Thresholds
Proposed changes could see the regulator prescribe set thresholds for operators to conduct affordability checks with a threshold conceivably set as low as £100.
However, the GC goes further than that:
“Operators should certainly be gathering data throughout the life of the customer relationship, starting from the point of registration which should be able to assist with a consideration of whether a customer is gambling within their means,” it said.
As such, some operators are already including affordability at the earliest stages of the customer relationship, during the customer onboarding process with initial non-intrusive affordability checks on registration or first deposit.
Automating checks to be conducted upon set thresholds means operators can conduct a high volume of checks early in the customer journey and deliver them in real-time, which can then lead to tailored future automated interactions.
A layered approach
In the same way customer interaction frameworks are required to escalate the strength of interaction where deemed necessary, operators should take a risk-based approach and escalate the level of affordability assessment at different stages in the customer journey.
The stage at which a check is conducted, and ultimately the risk posed to the customer, will determine the invasiveness of the check.
Non-intrusive checks designed for assessing affordability at the beginning of the customer journey can be conducted seamlessly in the background, but more invasive checks requiring more sensitive financial information may be conducted later on in the customer journey or when the customer wants to increase their level of spend.
Instant checks
With operators now being required to consider customer affordability earlier in the customer journey, it’s important to ensure that any interactions, such as setting limits, are applied as close to instantly as possible.
This is to ensure operators both fulfill the requirements of the Commission – to implement real-time protection through auto-measures – but also ensure frictionless onboarding for the customer.
For if these checks were conducted manually and couldn’t be delivered in real time, it could cause unnecessary inconvenience to the player at this early stage.
These non-intrusive affordability checks are best suited to screen an operator’s customer base and identify those who may experience gambling-related harm, as they can be conducted in the background, without friction or disruption to the customer.
As these checks are based primarily on open data, customers aren’t required to hand over highly sensitive financial information like bank statements or p60s.
Automated, non-intrusive affordability checks conducted at this initial stage can be used by operators as a first screening tool to gauge an individual’s affordability and then, where necessary, escalate to more invasive manual checks where they are needed most.
Interactions based on affordability
By screening for vulnerability early in the customer journey, operators can also identify those who may be likely to experience gambling-related harm and set suitable protections in real-time.
For those matching derogatory data registers, such as those listed as insolvent, stronger interactions may be conducted earlier in the journey. But even for other customers, an affordability estimate can act as a measure which triggers automated interactions.
These interactions come in various forms, including safer gambling messaging, “reality checks” showing how much money has been lost, or in the form of limits.
To bring this to life, beBettor provides operators with discretionary income estimates for each customer. If a customer was estimated to be able to afford to spend £500 on gambling per month, operators could set an initial net deposit limit for that customer at that amount.
If that customer then wanted to increase that limit, an operator could then conduct further checks to ensure they could afford a higher level of spend without experiencing harm.
Once both the affordability checks and customer interactions have been conducted, it’s important for operators to record how they’ve interacted with customers.
By automating this process operators will also be able to create a clear audit trail which can be used to explain the treatment of customers to the regulator.
An enhanced experience
It’s important for operators to now consider affordability early in the customer journey: not only to meet the requirements of the GC, but also to create a more personalised experience for the customer.
Considering affordability earlier in the journey enriches the data that you have on that customer, allowing for interactions that are suitable for the individual as opposed to a one-size-fits-all approach.
This means that those who may be vulnerable to harm receive increased protections while those who are gambling within their means are receiving protected yet uninterrupted play, creating a better customer experience.
Enhanced affordability assessments
With information from the initial affordability assessment, operators can identify those who require additional and more enhanced checks. This can occur when a customer breaches an initial spending limit or if they display other indicators of harm.
In the remote customer interaction consultation, the Gambling Commission refers to operators applying a ‘handbrake’ or ‘hard stop’ at a certain threshold to prevent gambling beyond a point until it has been proven a customer can safely gamble beyond this limit.
Enhanced assessments could be through further open source data checks like search engines or social media).
Alternatively, it could be through information collected directly from the customer; such as through income and expenses questionnaires; or, verified Source of Funds or Source of Wealth documentation like bank statements or payslips. However, while this may be a more accurate level of assessment, this comes at the cost of being invasive of customer privacy, inconvenient to the customer and requiring the sharing of potentially sensitive financial data.
This can result in the customer at times being unwilling to provide this information and instead choosing to take their custom elsewhere, thus not addressing the problem but spreading their problem gambling among multiple operators or worse, to the black market where protections are lacking.
A recent report, commissioned by GambleAware to investigate online patterns of play, found that the majority of revenue for remote gambling operators came from the highest spending 5% of accounts.
Therefore, it’s important for operators to have an affordability framework that includes both initial and enhanced affordability assessments, to protect both the mass market customer and those who wish to spend more.
Resource efficiency
As well as assisting operators in meeting the required regulatory standards, and ensuring player protection is tailored to the individual, a layered approach to affordability is also resource-efficient for operators.
Automating early stage affordability assessments means operators will be able to relieve pressure on compliance teams, avoiding undertaking lengthy manual checks for high volumes of customers.
Early-stage affordability assessments also inform where further, more invasive, costly and time consuming checks are required. This means operators are able to allocate more resources to customers who need them most, as opposed to applying costly and invasive checks to all their customers.
