Month: May 2021

GiG Comply allows operators to scan and check affiliate websites for content including igaming code red words, links and regulatory requirements, set up using the operator’s own criteria and checklist parameters.

GiG said that the tool will enable Pixelbet to tailor its criteria to cover any market-specific requirements, ensuring the operator remains compliant in multiple jurisdictions.

“We are excited to partner up with GiG through its market-leading GIG Comply software,” said Eirik Kristiansen, chief executive of Pixelbet.

“This partnership will help Pixelbet ensure that our affiliates can continue offering high quality experiences that are fully compliant with regional regulations and requirements.”

Jonas Warrer, chief marketing officer at GiG, added: ‘“The growing demand for our compliance solution is a clear sign that we have created a solution that has become the go-to compliance tool within the iGaming industry.”

“It’s great to see that new and ambitious companies such as Pixelbet value the importance of marketing compliance, we look forward to supporting them in their marketing compliance efforts with GiG Comply.” 

Pixelbet owner LeoVegas has been using GiG Comply since it signed up for access to the tool in December last year.

This year, the supplier has agreed to provide its affiliate marketing compliance solutions to new operators including Greece-based Kaizen Gaming and online operator Marathonbet.

In February, Bet365 renewed its agreement with GiG to continue having access to the compliance tool.

Revenue came to €22.6m, an 18.9% increase from €19.0m year on year. Zeal reported that €21.1m of this total was generated by operations in Germany, a rise of 23.5% from €17.0m in the first quarter of 2020.

However, Zeal’s revenue growth also led to an increase in expenses. Zeal gained 156,000 new customers in its German operations in Q1, a decrease of 24.2% year on year. The business said that the increase in acquisition costs per customer, from €26.0 in the first quarter of 2020 to €33.48 year on year, came as a result of an increased effort to attract customers. In total, marketing expenses, at €7.1m, rose 7.5% this quarter compared to €6.6m year on year.

Zeal considered the rise in revenue and the lack of non-recurring expenses or income as the reasons for the rise in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter of 64.2%, from €2.8m to €4.6m year on year. Operations in Germany amounted to €4.1m of the total amount, more than double compared to the first quarter of 2020.

Zeal saw adjustments in its results following its discontinuation of lottery betting services, though these results marked the first time that year-on-year comparisons were to the lottery brokerage business.

The business model change came after its merger with lottery broker company Lotto24, which it acquired in May 2019. Zeal first bid to acquire Lotto24 in January 2019, having announced its intention to do so in November 2018.

Zeal chief financial officer Jonas Mattson said the business was still adapting to the new business model.

“We already demonstrated in the past year that we are capable of exploiting market opportunities, adapting to dynamic environments and continuously fine-tuning our business model,” Mattsson said.

“We are consistently continuing along this path.”

Rosander moves into the role despite having only taken on the role of chief customer officer at Real Luck in February of this year.

Prior to joining the group, Rosander was chief executive of Dunder Casino and had spells as chief product officer at Mr Green and section head business intelligence at bwin.

He also spent time as engagement director and business intelligence director at video games developer Electronic Arts.

“I am thrilled to be taking over as CEO and look forward to leading the company as we scale the business,” Rosander said. “We have a talented and experienced team here at Luckbox, and I am confident that we can build on the excellent work done so far under Quentin’s leadership to make Luckbox a world-leading esports betting destination.”

Real Luck chairman Drew Green added: “Thomas’s past industry success and unique operational skill sets made him the optimal choice to become our CEO as we enter our next phase, execute the concise plan Thomas established as CCO of Luckbox and build a company culture that’s focused on profitable growth. 

“Thomas has a proven track record of scaling similar businesses to Luckbox profitably, and joined us having been CEO of Dunder Casino, which saw a compound monthly growth rate above 17% over two years.”

Rosander will replace Martin, who voluntarily stepped down as CEO and as a director after just over a year in the role.

“I would like to take this opportunity to wish Quentin all the best in his future endeavours,” Green said.

Rosander’s promotion to CEO marks the latest senior appointment at Real Luck, which has in recent months also named Nevzat Ucar as head of content and Ran Kaspi its new chief financial officer.

The affiliate joins the likes of RAiG’s founding members Better Collective, Oddschecker and Racing Post, as a member of the organisation that was set up in 2019.

Slots Temple was required to meet a series of RAiG’s entry criteria, including a third-party social responsibility audit, in order to be inducted into the trade association.

“It is essential in today’s market that affiliates are as professional and trusting to players as casino operators. Being part of RAiG is a big step for Slots Temple to evidence our commitment to our users and build trust in the brand,” Slots Temple chief marketing officer Fraser Linkleter said.

“The process itself is stringent to say the least and quite rightly so. Delving deep into an affiliate’s operation, how we conduct ourselves, how our staff are trained in responsible gambling, how our ongoing processes have been set in place and actioned, and most importantly, how we present ourselves to protect the public.”

RAiG chairman Cian Nugent added: “In such a fast-moving industry it is of the utmost importance to remember the end-user, the players, and to promote best practices throughout the industry to protect the consumer. 

“This starts with the operators and the affiliate operators, so building our community of members will help to establish the trust which is essential to our philosophy.”

Revenue for the three months to 31 March amounted to $22.8m (£16.2m/€18.7m), down 59.4% from $52.3m in the corresponding period last year.

Inspired put this down to restrictions on land-based gambling in a number of its markets throughout Q1, with many facilities having to remain closed or operate at limited capacity in line with local Covid-19 regulations.

However, Inspired said that as some of these restrictions are set to be lifted, it expects some recovery in Q2, with further improvement in Q3. The UK allowed betting shops to reopen last month, with casinos and adult gaming centres to follow next week, while Greece’s betting shops also began to reopen in April.

Closure of land-based facilities meant gaming revenue in Q1 was down 56.6% from $24.9m in Q1 of 2020 to $10.8m this year. Gaming service revenue declined 66.3% to $5.6m, while gaming product revenue fell 37.4% to $5.2m.

Lockdown rules also meant leisure revenue plummeted 97.1% to $500,000, as pubs, holiday parks, motorway service areas and bingo halls remained closed throughout the entire first quarter.

Inspired’s virtual sports business, which no longer includes interactive but does include online virtual sports, saw revenue drop 19.2% to $6.3m. This decline was less steep due to the migration to gaming online, with online virtual sports revenue climbing to $1.8m.

More players gambling online saw interactive revenue increase by 143.2% year-on-year to $5.2m, with this also driven by the addition of new customers and territories, and the launch of new content.

“We continue to be encouraged by the trends we are seeing across our business with the recent easing of Covid restrictions,” Inspired executive chairman Lorne Weil said. 

“While it has only been a couple of weeks since English betting shops reopened and we are restricted to two out of four machines per shop, our gross gaming revenue per operational machine in betting shops has performed above December 2020 levels when they were operating under the same conditions.  

“Our interactive business has continued its outstanding momentum into the second quarter where our entry into Michigan demonstrates the further progress we have made in our strategic expansion into new markets.”

Turning to expenses and Inspired was able to make savings across the board, with services costs down 75.3% to $2.1m and product sales spend 48.4% lower at $3.2m. Selling and administrative costs were also reduced by 45.7% to $15.2m.

Acquisition and integration-related transaction expenses were more than halved to $1.4m, though depreciation and amortisation spending edged up 4.0% to $13.1m.

However, reduced spending was not enough to offset the decline in revenue in Q1, with operating losses for the period reaching $12.2m, compared to a $7.2m loss last year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were also 61.5% lower at $3.9m.

Inspired also noted $8.6m in interest expenses and a $3.0m impact of change in the fair value of warrant liabilities, though this was partially offset by $6.4m in other finance income, leaving a net of $5.2m in other costs for the quarter.

The supplier’s loss before tax was $17.4m, greater than $9.6m in 2020, while after receiving $700,000 in tax benefits, this left a net loss of $16.7m, compared to $9.8m last year.

Inspired was able to recoup some losses with $4.6m in actuarial gains on its pension plan, but still ended the quarter with a total comprehensive loss of $12.1m, compared to the $3.4m loss it posted in Q1 of 2020.

“We have weathered the Covid-19 period to date and see the light at the end of the tunnel,” Inspired’s chief financial officer and executive vice president Stewart Baker said. “We have effectively managed our liquidity position to be well prepared for our land-based businesses to return with a more streamlined operating structure and improved overall cost structure.  

“We believe we are well positioned to execute on our strategic plan to deliver profitable growth, increase cash flows and maximise shareholder value.”

The merger agreement was first signed in April, and Gamesys will be expected to present the document outlining the full details of the deal on or around 28 May – subject to legal approval.

In return, Bally’s will be expected to publish details of the share issue required to facilitate the share alternative made available to Gamesys shareholders on the same date, subject to approval from the Financial Conduct Authority.

If all terms are agreed upon and approved by the appropriate regulatory bodies the merger will come into effect of the fourth quarter of 2021.

Bally’s first agreed upon a £2bn acquisition of Gamesys back in March, with the operator formerly known as Twin River since raising $671m via a share offering to help fund the deal. Both boards said the deal would help the combined business capitalise on the growing US market.

Both companies posted positive financial results in the lead up to the takeover, with Gamesys recording a 27% revenue increase for Q1, and Bally’s posting revenue in excess of $185m in the same period.

The transaction remains subject to certain customary completion conditions, but PointsBet said it expects the deal to go through before the end of the month.

Licensed by the Oregon Racing Commission, Premier Turf Club has been active for more than 13 years through its BetPTC.com website.

PointsBet, which agreed the deal via its PointsBet USA subsidiary, said Premier Turf Club’s industry expertise and relationships, customer-focused operations and reputation will be of immediate value to the business as it seeks to expand its presence in the US.

“The combination of Premier Turf Club’s excellence in the space with PointsBet’s mature market Australian racing expertise favourable positions us as we prepare to enter the US horseracing market,” PointsBet USA chief executive Johnny Aitken said.

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In southern Wisconsin lies the City of Beloit, further south about 20 miles -a 10-to-15-minute drive via the interstate – across the state line in Illinois is the City of Rockford. Both are in a race to develop a significant casino and both are looking to a Native American tribe to develop the casino, but each has followed a vastly different path to reach that goal.

After years of aspiring to welcome a casino to their jurisdiction, the battle to develop competing casinos is accelerating. This pits the Ho Chunk Tribe of Wisconsin against Hard Rock International, the latter owned by the Seminole Tribe of Florida.  

In Beloit, the Ho Chunk Tribe, which already operates six casinos in Wisconsin, is proposing a $405m casino plan. Upon completion, it would include 2,200 slot machines, 50 table games, a 300-room hotel with more than 45,000 square feet of meeting and convention space, and a 40,000-square-foot indoor waterpark. 

Meanwhile in Illinois, Hard Rock has proposed a $310m casino with 64,000 feet of gaming space with 1,500 slot machines and 55 table games, and a proposed 1,600-seat Hard Rock Live entertainment venue. A hotel is proposed for a subsequent phase of development.  

The race is complicated by the different process of approval for each. The Hard Rock in Rockford is being developed as a commercial casino, while to the north the Ho Chunk casino is being developed under a process outlined in the Indian Gaming Regulatory Act.  

Rockford was initially bypassed in the original development of casinos in Illinois in the early 1990s. The Rebuild Illinois Act signed into law by Governor J.B Pritzker on 29 June, 2019 authorised the licensing of new casinos in Rockford and five other cities to join the existing 10 commercial casinos in the state. 

In October 2019, the Rockford City Council selected Hard Rock International as its casino developer. This led to preliminary approval of the Hard Rock plan by the Illinois Gaming Control Board (IGCB) in February this year. Finally, it appears that Rockford will get its long-sought casino.

Meanwhile in Wisconsin, the Ho Chunks have been pursuing a casino in Beloit for close to a decade. In April 2020, after 5 years of consideration, the tribe won approval of their project from the Bureau of Indian Affairs of the Department of the Interior to take the 33 acres of land into trust for gaming purposes. 

The Governor of Wisconsin subsequently approved the project in March 2021. The Department of Interior can now proceed to take the land into trust and an amendment to the compact between the Ho Chunks and the state needs to be approved. Once this occurs, development can start.

Final approvals, as represented by the taking of land into trust and the final negotiation and approval of the Ho Chunk compact with Wisconsin, is expected within four to six months, meaning construction will begin this year, and completion of the first phase of development would occur by the end of 2022. So, it appears that the Beloit will also get its casino.

Two into one
However, there is a problem. The market is unlikely to be able to sustain both developments as currently planned. 

Both the Ho Chunks and Hard Rock have recognised the impact the other could potentially have on their own project, and have hedged their bets by proposing phased developments. These two casinos will compete for what is largely the same market.  

Currently, projections for both casinos are in the region of $200m in gross gaming revenue (GGR) per annum. In neither case do these projections account for the presence of the other. It is likely that with both casinos in operation the revenues for each would be reduced by up to 35%, a significant change that would impact the likely building programmes of each property. 

If one of these developments were to get built first, it is likely that would impact the development of the other, hence the race to get open.

While Hard Rock has received preliminary approval of its license application, this does not represent a “green light” to proceed. Hard Rock has espoused a three-phase plan with the first phase the development of a temporary casino at an interim location hosting 700 slot machines.   

As this is occurring Hard Rock will develop its permanent Phase II casino, with Phase III being the construction of a hotel. To date, only site preparation work has been done at both the temporary and permanent casino sites. Neither the temporary nor permanent casino can proceed until final licence approval is obtained from the state.  

When that is obtained, work on the temporary casino can begin and could be up and running in a few months. At the same time, licence approval will initiate a local review of the permanent casino plan which then will be sent to the State for approval. That approval could take into the late autumn, with construction of the permanent casino requiring a further 18 to 24 months.  

Meanwhile the Ho Chunk Tribe awaits final approval of its plan from the Department of the Interior.

Neck and neck
Right now, it appears that Ho Chunk and Hard Rock are neck and neck in the race to develop.  While the Illinois Gaming Control Board has raised some issues about a local investor connected to the Hard Rock project, it is not thought that this will unduly delay the project. 

Should the Ho Chunks secure final approval from the Department of the Interior within four to six months as planned, construction of both casinos could start almost simultaneously. And with similar construction schedules, there seems little to separate the two projects in terms of timing. 

The first to market will have an advantage that will likely see the winner garner the greater revenue and the fullest realisation of their development plans. In this Hard Rock has the advantage, of a more powerful brand name – strengthened by the involvement of Rick Nielsen, lead guitarist of the band Cheap Trick and a Rockford native. It also appears, at this juncture, that Hard Rock will be first to market at least with a temporary facility.  

The Ho Chunks, however, have some inherent advantages that could offset this. Not least of these is the tax burden that Hard Rock will face. 

While owned by the Seminole Tribe of Florida, Hard Rock is operating in Illinois as a commercial entity subject to state taxation. It is estimated that the effective tax rate on a casino generating $200m in GGR would be approximately 23%. For the Ho Chunk development there is no equivalent tax burden. 

The local jurisdiction will receive 2% of gaming revenues while the state will receive a currently unspecified amount. It is likely that the overall “tax” burden for the Ho Chunk development will be well under 10% of GGR. This lesser burden will allow the Ho Chunks to finance their development more easily and to compete in the market more effectively. The importance of this race, and the relative strengths and weaknesses of the two projects, is clearly top of mind for backers of the Hard Rock project.  

Senator Dave Syverson, representing the Rockford area, and an ardent backer of the project certainly does, saying of the Ho Chunk project: “They are about 10 minutes north and being Indian they pay no taxes, while Rockford Hard Rock will pay at one of the highest levels in the country. That being said, the Hard Rock brand is hard to beat and will be very successful with its key location.”

Publicly, the Ho Chunk Nation has been more circumspect in their comments. They have noted that the addition of the Hard Rock casino in Rockford combined with their development in Beloit will create a “regional powerhouse” of gaming and have suggested that the presence of Hard Rock will encourage them to take a closer look at their building program and phasing.  

In addition to a much lower public payments burden, the Ho Chunks also have the advantage of an existing database of players in the market. Twenty miles to the north of Beloit near Madison, the Ho Chunks operate an 1,100 slots-only facility, with an additional five casinos spread throughout the state.  

This regional presence impels the Ho Chunks to consider the impacts that the Beloit casino will have on revenues at their other properties in the state. Some of the revenue at their Beloit casino will inevitably be cannibalised from their existing operations.  

This is a consideration that is absent for Hard Rock. On the other hand, the development of the Ho Chunk Beloit casino could act as a “buffer” to competitive intrusion from Hard Rock into Ho Chunk’s other core market areas further to the north.

Much now will be determined by the speed at which the Department of the Interior moves to take the Beloit land into trust and approve any amendments to the Ho Chunk compact with the state of Wisconsin. Unless there is an unusual component to the Ho Chunk agreements with the state then that approval could come quickly, setting up a race to develop and compete in this limited market.  

Any delay by the IGCB or the Department of the Interior could have significant ramifications.

Winning this race is seen as significant by Hard Rock’s stakeholders, as Senator Syverson states about being first to market: “It would be nice because we don’t want people to get accustomed to going to one location. Some people are creatures of habit. Again, the benefits of the Hard Rock brand name cannot thrive if we are not first to open.”

Regardless, the relatively short time taken for the approval of a commercial casino in Illinois (despite the delay in approvals by the IGCB) is two to three years. The Ho Chunk project, on the other hand, has been under review by the Department of Interior for at least 5 years – it initially filed a Notice of Intent with the Department on the Beloit casino as far back 2012. 

This highlights the disadvantage that tribal casino development operates under in comparison to its commercial cousins. That the tribe could now miss out on the full benefit of this market is the cost of this lack of nimbleness. 

If a Beloit casino had been in existence two or three years ago it is fair to speculate whether Illinois, or Hard Rock, would have zeroed in on Rockford as a potential casino location.

On another level this represents the success of tribal gaming. Hard Rock International, a world-renowned brand owned by the Seminole Tribe of Florida who, with funds from their tribal casinos in Florida, purchased it in 2007.  

Thus, we have the unique situation of one tribe and its successful commercial gaming company competing against another tribe operating under the auspices, some might say limitations, of the Indian Gaming Regulatory Act.

Paul Girvan is chief executive of PKC Gaming & Leisure Consultancy. He has been involved in the US gaming industry since its development beyond Atlantic City and Las Vegas, conducting project-specific and statewide analyses for governments, tribes and commercial casino operators. Girvan has conducted numerous nationwide and state level analyses on igaming and its legislative development. He is also the author of the ICE 365 Tribal Gaming Report.

The non-binding proposal sets out a share exchange ratio of 2.68 Star shares for each Crown share, valuing Crown shares at $14 each. Crown shareholders would also be offered a cash alternative of $12.50 per share, up to a maximum of 25% of Crown’s issued share capital.

The proposal would mean the merged entity would be 59% owned by Crown shareholders with the remaining 41% for Star shareholders.

Star said the merger represents a “compelling value proposition” for all shareholders for the following reasons, adding that the combined operation would create a national tourism and entertainment leader in Australia.

Should the merger go through, the group would be expected to deliver between $150.0m and $200.0m in cost synergies per year, with an estimated net value of $2.0bn. 

Star’s chairman John O’Neill added that the overall operation would be worth around $12.0bn, with combined group pursuing growth opportunities across marketing and events, digital and technology initiatives, investment in online capabilities and optimisation of a combined loyalty program.

“A merger of Star and Crown would result in significant scale and diversification and unlock an estimated $2.0bn in net value from synergies,” O’Neill said. 

“With a portfolio of world-class properties across four States in Australia’s most attractive and populated catchment areas and tourism hubs, the combined group would be a compelling investment proposition and one of the largest and most attractive integrated resort operators in the Asia Pacific region.”

Star added that it hopes to complete necessary due diligence and agree binding merger and definitive debt financing documentation within the next three months, with plans in place to engage with a range of investors on a potential sale and leaseback of the enlarged property portfolio during diligence. 

The proposal comes as Crown also received a revised takeover proposal from Blackstone Group.

Blackstone in March put forward an offer of $8.02bn to acquire the remaining shares in Crown, having already acquired 9.99% of the business in April 2020 with the purchase of a stake from Melco.

The new proposal of $12.35 in cash per Crown share represents a 4% increase on the previous offer of $11.85 per share submitted in March but is lower than both the $14 valuation and $12.50 cash alternative proposed by Star. 

Other terms of the original offer remain in place, with Blackstone having last month altered its bid so that the deal would not go ahead if either of Crown’s existing licences are suspended or its New South Wales licence were not granted.

An inquiry in New South Wales found Crown was “unsuitable” to operate a casino in the Barangaroo district of Sydney. 

The Crown board will review both the Star proposal and Blackstone revised offer before making further announcements, stating that there is no guarantee either proposal will result in a transaction.

Meanwhile, Crown has also announced the appointment of Steve McCann as its new chief executive and managing director.

Subject to the receipt of certain probity and regulatory approvals, McCann will officially join Crown on 1 June.

Subject to the receipt of certain probity and regulatory approvals, McCann will officially join Crown on 1 June.

He will replace Ken Barton, who stepped down as CEO in February after an inquiry into the operator’s activity found it “unsuitable” to operate a casino in Sydney’s Barangaroo region. 

McCann has spent more than 25 years working in executive roles and is currently the group chief executive of real estate and investment group Lendlease Corporation, a position he has held for over a decade.

McCann had planned to retire from Lendlease last year but remained with the group to lead its response to the novel coronavirus (Covid-19) pandemic. He will officially step down from the Lendlease board on 31 May and assume his new role at Crown the following day.

Prior to joining Lendlease in 2005, McCann worked in senior leadership roles at ABN AMRO and Bankers Trust.

“I am looking forward to joining Crown at a crucial time for the organisation and see a real opportunity to help drive significant shareholder value as the company addresses its challenges and emerges from the constraints of the pandemic,” McCann said.

Helen Coonan, who will continue to perform her executive responsibilities as interim executive chairman at Crown until McCann receives the necessary approvals, said the addition of McCann represented a “first-class appointment” for the operator.

“Recognised as one of Australia’s most respected business leaders, Steve has a unique blend of strategic, financial and corporate governance expertise and a track record of building strong employee engagement and driving cultural change,” Coonan said.

“During a comprehensive recruitment process, Steve was the clear choice from a quality field of prospective candidates. The board was looking for a CEO firmly committed to building on the momentum for change within our business and Steve is ideally placed to hit the ground running as our sweeping reform program takes hold.”

The appointment comes as Crown today (10 May) announced that it had received a merger proposal from rival operator Star Entertainment Group, as well as a revised takeover offer from private equity giant Blackstone Group.

Star’s proposal sets out that a merger agreement would lead to the creation of a Aus$12.0bn (£6.71bn/€7.76bn/US$9.43bn) business and result in pro forma ownership of the merged entity of 59% for Crown shareholders and 41% for Star shareholders.

Blackstone’s revised proposal increases an $8.02bn offer put forward in March, having already upped its stake to 9.99% in April 2020 with the purchase of a stake from Melco.