Month: May 2021

The relief with which the reopening of betting shops was greeted in the UK showed how much the sector in the UK is currently on the defensive, having to prove itself in a past-pandemic environment and still with all the negativity around gaming machines and the £2 stake limit weighing heavily on sentiment.

By contrast, the enthusiasm for retail betting in the US is palpable and might as well be happening in a parallel universe.

Here we can cite the press release from Caesars Entertainment in early May announcing its partnership with MLB’s Arizona Diamondbacks. In part, this was just another sponsorship deal that comes in the wake of the Arizona legislature recently passing sports betting regulation.

But central to the agreement is the building of a physical “sports-betting and bar concept” opposite the Diamondback’s home at Chase Field. State-of-the-art is a phrase rarely – or should that be never – used with regard to retail betting in the UK and Europe. Yet this is exactly how this combined sportsbook, sports bar and broadcast studio is being described by the partners involved in the Phoenix venture.

Chase me
What is clear from the Caesars/Diamondbacks tie-up is the importance that Caesars, in common with others of the gaming majors in the US, with its newly William Hill-augmented sports betting and online gaming capability, is viewing the potential for omni-channel to drive customer acquisition.

As the press release described it, Caesars hopes that once sports betting becomes available, fans with the mobile app will be able to earn credits and tier status to unlock Caesars Rewards loyalty points which can then be redeemed via the retail outlet at Chase Field.

This is no shot in the dark. On the recent first-quarter earnings call from Penn National Gaming, Jay Snowden, chief executive, said that Barstool’s promotion of Penn National’s retail sportsbooks had “driven significant awareness and visitation to our land-based properties.”

“This is especially true of those properties that have introduced Barstool-branded sportsbooks and we plan to open six more of them by the end of this year,” he told analysts. “In addition, progress continues on the development of several stand-alone Barstool-branded sports bar locations. We’re really excited about these projects.”

The positivity around what retail sports betting traffic can do for the demographics of Penn National’s casinos is likely alien to European ears. Not only are the Barstool-branded outlets driving retail sports betting market share, it means Penn National is also picking up casino market share.

“Just bringing in all of these younger customers, we’re really thrilled about what we see there,” said Snowden. “That’s the nice thing about having this omni-channel approach where you control and own 100% of it because we just want to get people into the ecosystem.”

Let’s go to the ball game
What Penn has tapped into with Barstool is the inherent ability of sports betting to monetise sports opinion, says David Sargeant, sports betting industry consultant. And in this regard, there is no greater concentration of such people than among the fans who attend on game-days.

“Tapping into this fan market can be a lucrative way to build brand loyalty and ultimately build revenues,” he suggests. “In the hyper-competitive US market having real human touchpoints definitely builds brand trust. This is important for new entrants with low visibility but also can be used by bigger brands as a differentiator.”

In Illinois, the debate at present is all about the dis-benefit that mandatory in-person registration brings. But this obscures the very real advantages that retail offers when it comes to nullifying the negatives of mobile registration, such as digital KYC procedures, geo-location issues and digital payment hurdles. “For many consumers cash is still king and you see this at many retail establishments even when digital sign-on is available,” Sargeant says.

But the value of retail is more than just its appeal to a segment of the audience that is happier dealing in cash. Sargeant suggests that retail adds value to any brand because of what it brings in terms of the phases of the betting journey from education through to acquisition and sign-up, deposit and bet placement.

Perhaps because of the overwhelming success of online sports betting in the US, much of these attractive characteristics are either forgotten or ignored. But Sargeant says that negativity around retail seems to fundamentally misunderstand its place in the ecosystem. “I am always intrigued by the dismissive narrative because online represents 85%-plus of omni-channel markets in the US,” he says.

“You have to remember this 15% market share for retail is not from European-style mass-market retail; these numbers are generated from a handful of venues. Using retail to add a few percentage points to market share could be the factor that makes some operators profitable. I think dismissing the power of retail is a hugely missed opportunity.”

Going by the recent statements from Caesars and Penn National, it is an opportunity that some are alive to already.

Scott Longley has been a journalist since the early noughties covering personal finance, sport and gambling. He has worked for a number of publications including Investment Week, Bloomberg Money, Football First, eGaming Review and Gambling Compliance.

The Stockholm-based supplier’s co-founder and chief executive Oskar Fröberg explains how esports data differs from regular sports, and highlights the importance of data integrity and compliance. The full video will be available on 7 July, on ICE365.com.

The deal was announced at the start of this month. Of the $240m price, the vast majority will be paid in cash, alongside $11.4m in new Better Collective shares, issued at a price of SEK231.35 per share. Of the cash payment, $10m is deferred.

“We are excited to finalize the acquisition of Action and to formally welcome its employees to the Better Collective Group,” Jesper Søgaard, co-founder and chief executive of Better Collective, said.

“This acquisition gives us a leading position within sports betting media in the US and a strong foundation for profiting from the continuous regulation of the US betting market.” 

Read the full story on iGB North America

As per the agreement, Sportradar will monitor betting and reporting for football, basketball, handball and volleyball competitions in Estonia using its Universal Fraud Detection System (UFDS).

The sports competitions total at almost 1,000 fixtures per year.

Sportradar’s UFDS involves a team of experts who analyse suspicious betting patterns, with any dubious behaviour reported to the necessary partners.

The company announced earlier this year that it would offer the UFDS for free to leagues and sports federation.

“We are fully committed to putting in place the measures necessary to ensure that the integrity of sport throughout Estonia is maintained, and this agreement with Sportradar Integrity Services is integral to doing so,” said Henn Vallimäe, executive director at ESTCIS.
“Global bet monitoring across a broad range of sporting competitions will give us a valuable insight into the betting activity surrounding our domestic competitions, with Sportradar’s integrity specialists able to alert us to any abnormalities.”

Last year Sportradar reported that 500 suspicious matches were detected by the UFDS globally, and over 5,500 were detected and reported in the last 15 years.

Sportradar has had a partnership with the Estonian Football Association for the last 10 years, and has supported multiple fraud and match-fixing investigations.

“Having worked alongside the Estonian FA for the last decade, we are delighted to sign this agreement with another key Estonian partner in the ESTCIS,” added Andreas Krannich, managing director of Sportradar Integrity Services.

“The services provided by the UFDS will help aid the ESTCIS in their efforts to understand the threat of match-fixing in the country and to prevent manipulation of their sporting competitions now and in the future, and we look forward to supporting their integrity programme.”

Ice hockey, badminton, beach soccer, futsal and cricket will be addressed by the agreement from summer 2022.

Last week Sportradar announced a six-year partnership with the Austrian Football Association, where it will again offer its UFDS services.

NYRA Bets is available across 30 states, and covers more than 200 horse racing tracks worldwide.

BetMGM will gain access to NYRA’s horse racing app, which will allow customers to bet on events such as the Kentucky Derby, Belmont Stakes and Breeders’ Cup.

Read the full story on iGB North America.

Under the three-year deal, Betway will become the official betting partner of the annual event, which forms part of the ATP Tour 250 series in the ATP Tour.

The event is traditionalyl known as the Stuttgart Open, but has been renamed as part of a sponsorship deal with Mercedes-Benz. 

Betway will serve as a premium partner along with Liqui Moly, Gazi, CG Elementum, Lavazza, Wir machen Druck and Emirates.

“We are overjoyed to become the official betting partner of the MercedesCup as we continue to showcase our support of Tennis around the world and we look forward to being part of such a historic event,” Betway chief executive Anthony Werkman said.

MercedesCup tournament director Edwin Weindorfer added: “In challenging times like these, we are very happy to have agreed on a sponsoring deal for the MercedesCup with a worldwide successful company like Betway.”

“The MercedesCup takes centre stage in Betway’s international orientation – not least due to the comprehensive live TV broadcast offering, digital presence and innovation as well as the social media and fan engagement initiatives of the grass court highlight.”

The MercedesCup deal comes after Betway in March secured an online sports betting licence from the Regional Council of Darmstadt (RP Darmstadt) in Germany.

Betway had already agreed partnerships with Bundesliga football clubs SV Werder Bremen, Hertha BSC and VfB Stuttgart prior to gaining approval.

The operator has commercial deals in place with a wide range of other sports events and properties, including tennis’s Mutua Madrid Open, Miami Open and Estoril Open.

Revenue for the 12 months to 31 December 2020 amounted to €113.0m (£97.1m/$127.6m), down 1.1% from €114.2m in the previous year.

Paf’s internet business was by far its primary source of income in 2020 with the €100.4m generated from this segment being 18.8% higher than in 2019. 

The operator said this was due to its acquisition of Mandalorian Technologies in February 2020, with this business, now renamed Paf Multibrand, contributing €18.4m in online revenue.

Paf noted strong development across its bingo, slots and live casino products in 2020, but declines in sports betting, due to the number of sports events that were cancelled as a result of the novel coronavirus (Covid-19) pandemic.

Despite this growth, Paf said its decision to introduce lower loss limits for online players had an impact on internet revenue. The loss limit in 2020 was €25,000 per customer, down from €30,000 in 2019, though this has since been cut again to €20,000 for 2021. As such, average revenue per online customer decreased by 17% in 2020.

The number of customers gambling online increased to 336,206, a new record for Paf, while the operator anticipates that this figure will continue to climb during 2021 through effective marketing and continued development of its platform.

Turning to its land-based and ship business, revenue dropped 59.3% to €12.3m due to a sharp decline in customer activity as a result of the pandemic. However, Paf did note that average revenue per passenger onboard ships was higher in 2020 than the previous year.

Other operating income rocketed 1,075.0% to €4.7m due to external sales of gambling platforms and associated services.

“Covid-19 has had an extremely negative impact on land and ship and resulted in reduced revenues by as much as 59%,” Paf chief executive Christer Fahlstdet said. 

“There are also major changes in the Internet segment, where both Paf’s self-imposed work to reduce the revenue from the biggest players has had a major effect and the restrictions introduced in various markets as a result of Covid-19 during the year have had a large impact.

“However, these effects are to some extent offset by the acquisition of the Swedish-licensed operator No Account Casino, which was completed during the first quarter of 2020. An acquisition that, despite Covid-19, has turned out very well and has largely compensated for the reduction in revenue in other markets.”

Looking at spending in 2020 and staff costs were up 4.7% to €26.8m, while depreciation and amortisation jumped 84.8% to €10.9m and other operating costs increased 14.6% year-on-year to €37.0m.

This left an operating profit of €17.4m, down 33.6% from €26.2m in the previous year. After taking into account financial costs totalling €63,188, profit before tax was €17.4m, a drop of 33.3% on 2019.

Paf paid €92,931 in income tax and €576,714 in deferred taxes, leaving a profit for the year of €16.7m, down 34.8% from €25.6m in the previous year.

“Our world is undergoing major changes, but in 2020 Paf was quite successful in maintaining the same pace in our own development,” Fahlstdet said. “There is no indication that the challenges and pace of change will abate. 

“Constant change – whether we like it or not – is the new reality and something we as a company must continue to be open to.”

Alongside its financial results, Paf also published further details of player spending, as part of its ongoing commitment to responsible gambling, including the recent lowering of loss limits for online gambling.

Across the Paf and Paf Multibrand businesses in 2020, loss limit restrictions meant that no players registered losses in excess of €30,000 online. In 2019, 0.05% of customers were in this category, compared to 0.13% in 2018 and 0.21% in 2017.

Some 0.28% of online users registered losses of between €15,001 and €30,000, down from 0.43% in 2019, while 0.69% of customers lost between €8,001 and €15,000 playing online with Paf and Paf Multibrand.

The vast majority of online users – 72.9% – recorded losses of under €8,000, up from 70.8% in 2019, while 26.1% of customers ended the year with winnings, down from 27.8% in the previous year.

In terms of revenue from these customer groups, Paf reported €219,812 from players with losses in excess of €30,000, down from €6.1m in 2019.

Revenue from players with losses between €15,001 and €30,000 was €18.3m, compared to €26.2m in the previous year, and revenue from the €8,001 to €15,000 loss category fell from €28.9m to €24.8m.

Some €120.7m was drawn from players with losses of under €8,000, up from €104.5m in 2019, while Paf and Paf Multibrand paid out €42.4m in net winnings to players who won more than they lost. 

“Our principle of openness is easy to understand for everyone,” Fahlstedt said. “Do our customers play for large sums of money or do they play at a more sustainable level? 

“We could, of course, choose to wait a few more years so we get a common scientifically-based table that all gaming companies can agree on before openly showing our numbers. Or we do something right now.”

The three raids were conducted at a café and its adjoining house.

In total, 22 people were found in attendance and over €12,000 cash was seized as well as one Rolex. 19 illegal slot machines were seized by the KSA which were later disposed of – one of which showed a monthly turnover of €100,000.

Of the 22 people found, two of them were arrested for money laundering.

Venlo’s mayor Antoin Scholten said: “Tackling illegal gambling is important to Venlo. With this we protect our young people, we give criminals no chance of money laundering and we stop breeding grounds for possible drug trafficking. 

“Moreover, these criminal activities cause a lot of unrest and nuisance in the area. We will continue to take action against that.”

This is the second illegal gambling raid conducted by the KSA in the last week, following action being taken in Velsen and Spain.

Gross betting revenue in April amounted to $35.3m, which was $2.6m above budget for the month and 11.4% higher than in March.

TAB NZ said this was primarily due to wagering turnover being $2.0m above its budget target for the month at $209.0m, also noting that turnover during April was more than double the $101.6m recorded in the same month last year.

The Manco Easter Handicap horse racing event at Ellerslie was the most successful event across racing and sports in term of turnover in April, drawing $599,000 in turnover. 

In terms of sports, single biggest event of the month was the Crusaders vs. Highlanders Super Rugby match, which saw $326,000 in turnover. 

TAB NZ said wagering within its sports business was helped by pre-match betting on rugby union and rugby league events, as was as in-play wagering on basketball, particularly North America’s National Basketball Association (NBA).

Higher revenue and turnover meant helped push profit to $14.8m in April, which was $4.2m ahead of the $10.7m budget for the month. Betting profit was $4.4m ahead at $14.1m, while gaming profit reached $1.6m, which was $100,000 above budget.

Operating expenses were $400,000 above budget at $10.5m, while distributions to racing codes amounted to $11.9m, some $900,000 ahead of the initial budget for the month.

During the month, TAB NZ also confirmed a one-off, special distribution payment, of $5.0m, to racing codes, following a scheduled review of its trading performance for the third quarter. This was in addition to TAB NZ’s budgeted distribution commitment for this year and was paid on 20 May.

Looking at year-to-date performance, total profit was $33.1m above budget at $131.7m, with $121.6m attributed to betting and $15.4m to gaming. 

Distributions to racing codes in the year-to-date amounted to $132.0m, some $7.5m ahead of budget.

Currently, gambling in Northern Ireland is regulated under the Betting, Gaming, Lotteries and Amusements Order, which dates back to 1985, but Communities Minister Deirdre Hargey said new legislation will be introduced in the coming weeks. A further update – dealing with online gambling, among other topics – will then follow in the longer term.

“Gambling legislation has remained largely unchanged since it was enacted thirty-five years ago,” said Hargey.

“As a result, gambling regulation here has not kept pace with industry and technological changes. In my view change is long overdue.”

Hargey listed some aspects of the upcoming legislation, including a “mandatory code of practice” for those holding gambling licenses and allowing gambling contracts to be enforceable by law..

Further proposed changes include making it an offence to allow children to use gaming machines, expanding the definition of cheating to include attempted cheating, and imposing a statutory levy on gambling operators.

Statutory levies has been a frequent topic in the responses to the Department of Digital Culture, Media and Sport’s (DCMS) Gambling Act review, having been mentioned by GambleAware and YGAM in their responses.

Permitting bookmakers to open on Sundays and Good Friday is also to be included in legislation.

This was supported by the public consultation in 2019, which revealed that 66% of participants thought that bookmakers office hours should be relaxed, while almost all of this percentage thought that bookmakers should be allowed to open on a Sunday.

Politicians in Northern Ireland sought guidance from colleagues in Westminster as the inquiry progressed.

The initial legislation will be introduced in the next few weeks, and will then be followed by a second update over a “much longer timescale”, which will include a “completely new regulatory framework”, which will include the regulation of online gambling.