Zynga will fund the purchase using cash, with the final upfront transaction consideration to also include customary closing adjustments.
Chartboost is a unified advertising platform that includes a demand side Platform, supply side Platform and mediation capabilities. The platform has more than 700 million monthly users and over 90 billion monthly advertising auctions.
Zynga said a combination with Chartboost would create a next generation platform offering content, direct player relationships, significant reach and full-stack advertising technology, which can be applied across its game portfolio and Chartboost’s advertising partners.
The acquisition is expected to close in the third quarter of this year.
“Chartboost is one of the most dynamic monetisation and discovery platforms in mobile, and we could not be more excited to welcome their talented team to our company,” Zynga chief executive Frank Gibeau (pictured) said.
“By combining Zynga’s high-quality games portfolio and first-party data with Chartboost’s proven advertising and monetisation platform, we will create a new level of audience scale and meaningfully enhance our competitive advantage in the mobile ecosystem.”
Chartboost chief executive Rich Izzo added: “We are thrilled to join with Zynga to further build and expand our full stack advertising platform that will serve Zynga and the entire mobile ecosystem.
“Together, we share a vision of the future where a combined advertising, analytics and content platform will accelerate growth across both of our companies. Zynga already feels like family and an extension of our own company culture.”
Confirmation of the acquisition agreement comes as Zynga also published financial results for its first quarter.
Revenue for the three months to 31 March amounted to €96.7m (£83.6m/$116.2m), up from €89.4m in the same period last year. However, excluding Germany, revenue increased 19.0% year-on-year.
The operator said Germany made up 6% of revenue in Q1 of 2021, suggesting it brought in around €5.8m. The reported 19.0% increase in non-German revenue, meanwhile, suggests that the market brought in €13.1m in 2020, meaning revenue dropped 55.7%, or by €7.3m.
In addition, LeoVegas said the market made up 15% of revenue, or €14.8m, in Q4 of that year, meaning German revenue dropped by €9m, or 60.9%, quarter-on-quarter.
Breaking down LeoVegas’ entire revenue performance geographically, rest of world was the largest region for LeoVegas in Q1, accounting for 42.0% of total revenue. Some 38.0% of revenue came from the Nordics, while the remaining 20.0% was attributed to rest of Europe operations, which include Germany.
“During the first quarter we saw the full effect of the changes taking place in the German market,” LeoVegas president and chief executive Gustaf Hagman said. “Operators in the market are acting differently with respect to implementing the new restrictions, which unfortunately has led to a skewed competitive situation.
“The assessment is that up to 70%-80% of the German market for casino has temporarily been shifted over to operators that have chosen to not adapt to the coming market regulation.
“Our hope is that this will soon be sorted out by the German authorities, which is a prerequisite for the licence system’s success, with a high level of channelisation and consumer protection.”
Classic casino games remained by far the main source of income for the operator, with this segment representing 74.0% of all total revenue in Q1, ahead of live casino on 17.0% and sports betting with a 9.0% share.
Total customer deposits were up 2.8% to €295.8m in the quarter, with a 3.6% drop in the number of new depositing customers to 186,510 offset by a 25.5% increase in returning depositing players.
Turning to costs, marketing was the largest outgoing for LeoVegas in Q1, with spend here rising 15.3% to €36.1m. Staff costs were also up 9.9% to €13.3m, while capitalised development expenses climbed 33.3% to €3.2m.
However, higher revenue offset this higher spending, with earnings before interest, tax, depreciation and amortisation (EBITDA) up 15.6% to €10.4m.
After including €2.7m in depreciation and amortisation costs and a further €4.1m from the amortisation of acquired intangible assets and impairment of assets, including goodwill, this left an operating profit of €3.7m, up 68.2%.
LeoVegas incurred €1.1m in financial costs, meaning it posted €2.6m in profit before tax, an increase of 8.3% on last year. After paying €178,000 in income tax, the operator ended the quarter with €2.4m in comprehensive net profit, up 4.4% year-on-year.
“Our growth has been driven mainly by our loyal customer base, which reached a new record level during the period,” Hagman said. “We have maintained a high pace of investment, and despite this we achieved adjusted EBITDA growth of 22%, driven by our scalability and good cost control.”
“For a long time we have created successful, exclusive games with the help of external providers,” Hagman said. “We are now taking the next step by starting our own game studio – Blue Guru Games.
“This venture will give us full control and greater flexibility in developing new games, a unique offering to our players, and also a new revenue stream for the group.”
Looking ahead, LeoVegas revenue declined in April, which was due in part to particularly high revenue in the comparative period of April 2020 with most markets under lockdown. Excluding Germany, revenue was up 4%.
Overall turnover (amounts wagered for B2C in addition to revenue from B2B and B2G deals) generated for 2020 was €364.8m, down by 16.6%.
Turnover generated from Europe and the Americas increased – Europe up 56.2% to €30.3m and Americas up 11.0% to €29.3m – while turnover from other countries fell by 45.2% to €34.7m.
Lottery games comprised 60.6% of the overall turnover, totaling €221.1m. IT products and services contributed €59.5m, whilst sports betting brought in €54.0m.
Most of this turnover was from B2B tech and and management contracts, and the majority of Intralot’s decline in turnover was due to declines in these verticals too.
A total of €19.3bn was wagered worldwide using Intralot’s products and systems – a 1.9% increase year on year.
The total amount wagered from Intralot’s licensed B2C operations amounted to €119.8m, which represents a 24.9% decrease on 2019. The company sites the reason for the decrease as Covid-19’s negative impact in key markets such as Argentina and Brazil, where it led to a €21.4m decrease, and Malta (an €18.3m decrease).
Revenue from management contracts also fell by 51.8% to €33.5m, mainly due to a €24.0m deficit in the company’s business in Turkey.
Revenue from technology and support services rose by 1.5% to €211.5m thanks largely to strong performances from US operations, including merchandise sales in Illinois, general lottery performances and a successful project in Canada with the British Columbia Lottery Corporation (BCLC).
Costs of sales – including betting winnings – came to €289.5m, with a further €102.0m costing the company in expenses; selling expenses were €23.7m, administrative expenses cost €73.3m, research and development cost €2.9m, and other expenses came to €2.1m.
Gross profit was down by 20.1% to €75.3m with EBITDA coming to €66.2m.
Overall losses after tax came to €106.2m – a 1.9% decrease from 2020.
Intralot chairman and CEO Sokratis P. Kokkalis said: “During the financial year 2020 we faced the adverse effects and disruptions of the COVID-19 pandemic, which had significant impact on the Lottery and Sports Betting industries. This impact was only partially offset by mitigation measures, operational improvements, and cost-containment efforts.
“We remained focused on developed markets seeing significant growth in the US in the Lottery operations and we launched two new Sports Betting operations in Montana and Washington D.C., while we renewed significant contracts in Georgia, US as well as New Zealand, Australia and The Netherlands.
“The Company management also dedicated significant effort in negotiations with the bondholders to optimize the Capital Structure through a transaction that is expected to be completed during the first half of 2021.”
$153.6m was spent on advertising for local spot television in Q1 of 2021 – a staggering 1339.3% increase from the $10.7m spent in 2019. This can be attributed to both the increased legality and popularity of sports betting in the country in the past few years.
The Court has affirmed the decision by Spelinspektionen, which fined the amusement park after an investigation revealed that it allowed minors to play with claw machines.
In Sweden, claw machines are categorised as a form of slot machine that gives goods as prizes instead of money. They must not be used by anyone under 18 years old.
Liseberg appealed against the fine after it was handed down in September 2020, arguing that it was unfamiliar with the country’s rules around claw machines.
“In light of the purpose of the legislation, the Administrative Court makes the same assessment as the Swedish Gaming Inspectorate, that it was a matter of a serious violation.” said Spelinspektionen in a statement.
Following a tip-off, Spelinspektionen conducted surveillance on Liseberg and found that minors were using the claw machines in the company of adults, with no signs to inform the public of the age restrictions on the machines.
Liseberg explained that when it renewed its gaming license in April 2019, it believed that the age restrictions no longer applied. The age requirement signs were then removed, but were restored once Liseberg received notice of their necessity.
Although Spelinspektionen noted that Liseberg’s conduct was a serious breach of the Gaming Act, the regulator saw little chance of the amusement park reoffending and decided not to suspend its licence. It was decided that the fine should amount to SEK20,000 as claw machines are viewed as a low-risk form of gambling.
The fine, which could have seen the amusement park hand over 10% of its licensed gaming turnover, was combined with a warning,
Gaming operations brought in the highest revenue overall at $259.9m, an increase from $208.2m compared to Q1 in 2020.
Food and beverage revenue came in second with $46.8m, a decrease of 46.9% compared to the first quarter of 2020. This was likely due to the impact of the Covid-19 pandemic and subsequent restrictions. The decrease in room revenue from $40.0m to $21.9m, a decline of 45.2%, would also be explained by the restrictions.
Under the agreement, Evolution will launch its full suite of online games on Ladbrokes, Coral and Gala online platforms, with the initial roll-out to see a selection of its game shows go live with Ladbrokes and Coral.
The full suite of Evolution’s live casino games and game shows, as well as its first-person random number generator games, will be added to the three brands in the coming weeks.
Evolution already provides Entain with online casino content in a number of European and US markets, while Evolution’s NetEnt and Red Tiger brands – which it acquired last year – also supply Ladbrokes, Coral and Gala with a range of online slots titles.
“We are enormously excited to provide our thousands of players in the UK and globally with Evolution’s world-class online games,” Ladbrokes-Coral gaming director Richard Barr said.
Evolution’s European commercial director Gavin Hamilton added: “The UK market is a particularly important market for us. We are delighted that Ladbrokes, Coral and Gala customers will now have access to the full breadth of Evolution Group online games, including our very latest gaming innovations.”
Confirmation of the expanded deal comes after Evolution last month entered an agreement to acquire Megaways developer Big Time Gaming for a total consideration of up to €450m (£388.6m/$540.4m).
Caesars agreed to acquire William Hill in September 2020 and closed the deal last month (22 April), after three weeks’ delay due to a legal challenge, for £2.9bn (€3.35bn/$4.04bn).
However, Caesars made it clear that the target of the acquisition was William Hill’s US betting business and technology, with the remainder of the operator’s assets, including its UK arm, now set to be sold.
Reeg said Caesars will launch the sale process before the end of Q2 on 30 June. It then hopes to announce a buyer towards the end of Q3 or the start of Q4, and plans to close the deal by this point (5 May) in 2022.
While Reeg did not mention an anticipated sale price for William Hill’s non-US business, chief financial officer Bret Yunker said Caesars planned to pay down $2bn of debt in the next 12 months, with the sale contributing to this. He said the $2bn target assumed a conservative sale price for the William Hill assets.
Reeg added that Caesars will be “aggressive” with investment in the newly acquired operator, noting that one reason for the deal was that William Hill’s British investors were more likely to be conservative regarding leverage.
While the Caesars chief executive noted that the operator is typically “disciplined” in spending, he said it was also “also sober enough to realize we have to invest considerably more than has been invested historically”, and that now the deal has closed, Caesars can fully focus on marketing the product.
Caesars will also rebrand the William Hill business as part of the Caesars brand.
In addition, Reeg said Caesars did not seriously consider holding onto the entire William Hill business.
“One of my pet peeves when I was an investor was companies that didn’t know what they were good at,” he said. “And I can’t tell you we’re good at running a non-U.S. digital business.
“I can tell you that there are almost certainly people out there that will do it better than us and see opportunity there.
“And I can deploy that capital into businesses that I know will drive better returns to shareholders. So, no, we’ve not had a moment’s pause in terms of selling the non-U.S. business.”
Key to Gaming Innovation Group’s (GiG) €18.3m (£15.8m/$21.9m) first quarter revenue was a record performance from its media services arm. The division’s €10.0m revenue for the three most to 31 March was the result of two years’ work by the team to facilitate moves into new markets, and refine its offering, according to chief executive Richard Brown.
“We see really strong growth mechanics within the media business,” he explains. “The work put in by the team in 2019 and 2020 has pushed a lot of new market entries, and the results have started to come in.
Richard Brown, GiG
“We have a positive outlook regarding the efforts that have been put in [to date] and we’re continuing to build for the future with new markets, new website launches. We’re confident we have a good strategy.”
This, he adds, may be complemented by further M&A activity. At a time when affiliate deals are once again accelerating, most notably with Better Collective’s $240m Action Network acquisition, Brown notes that the business carried out a “tremendous” round of acquisitions around 2016. The following years were spent building these into a cohesive unit.
“We continue to look at the M&A landscape, and will continue to look for opportunities,” he continues. “We will continue to remain disciplined, and evaluate whether the move is right for us.”
The platform business, meanwhile, continues to expand, with Q1 revenue rising 88.4% to €8.1m, or 36.8% to €5.2m on a normalised basis. This has been aided by new deals in Germany, to power an online casino for betting shop operator Tipwin, signed in September 2020, followed by a similar agreement with an as-yet unnamed operator in February this year.
However, with industry enthusiasm for German regulation tempered by criticism of restrictive operating conditions and high tax rates, Brown admits it has been a “difficult” situation.
“We have experience there and have been transparent about the numbers we were generating for Germany,” he explains. In Q1, Software-as-a-Service revenue from the market declined by €600,000.
However, he adds, that downward trend had “bottomed out”, allowing clients to grow going forward. Furthermore, Brown points out that a number of recent contracts were only possibly as a result of the changing regulatory situation.
“Tipwin has around a thousand betting shops [throughout Germany] and bringing that online casino segment live wouldn’t have occurred without regulation,” he says. “I think it’s still a huge market, though the tax rates are somewhat prohibitive for operators. “They will continue to work to improve that to make it an attractive market, and hopefully take preventative measures to stop the rise of the black market.”
Looking beyond Germany, Brown describes the Netherlands as “a market that is underestimated”.
“When we look at the official figures coming out, it’s going to be a very strong market, though with a very high tax range. But the player values, and the size of the market, will be very attractive for operators.”
Further growth could come from less mature markets across Eastern Europe such as Romania, where GiG launched in Q1, and Croatia. Much of this will be driven by partnerships with land-based brands moving online, such as Casino Win in Hungary; North Macedonia’s K.A.K. DOO Skopje, and Irish operator Slotbox. “A lot of it comes down to demand for that product,” Brown explains. “We have an omni-channel solution that provides a lot of value to the customers.
“It’s a good fit for us and we see obvious financial value, in terms of how we can sustainably build the business.”
This is driven predominantly by online casino, something that Brown believes sets GiG up for expansion in the US. While it made some inroads to the sports betting market, he sees igaming as the core focus for the time being. The US opportunity, he explains, should be split between sports betting and casino. “We have a strong track record in the casino space; we’ve been live in New Jersey for a couple of years, powering a brand that took market share in a mature state, that grew faster than anyone else in 2020.
“Based on what we can do with casino, we are now looking towards more states launching online casino, and not only the sports betting roll-out,” he says. “I think that can be a highly rewarding focal point for GiG, if we focus on the casino development.”
“The team completed some really important product milestones over the past year, and we have reduced the cost base significantly,” he says. “We have clients [ready to go] live, and longer-term we have a really good product that will fit an array of client types and markets, and we will do so in a pragmatic and controlled manner, to build the business slowly but surely.
“It’s a really strong supplementary product to our existing client base, and it’s an important part of the business, and one we will support for the long-term, but we need to make sure we do it in a controlled and pragmatic approach to get to the ultimate goal.”
This, he believes, will result in year-on-year growth continuing throughout 2021. “We have a very exciting onboarding platform; we have three brands live, two in development complete phase, then a pipeline of approximately ten brands that will go live.
“We see a lot of work being done throughout the company. The media business continues to grow, and we are very excited about a lot of the new markets we’ve entered, and the paid segment continues to do well.
“We have a lot of exciting opportunities and the guys have worked very hard to push us forward month-on-month.”
Revenue for the three months to 31 March totalled €48.1m (£41.5m/$57.8m), a record for the supplier and an increase of 42.6% from €33.7m in the same period last year. This was also 8.4% higher than the €44.4m it made in the final quarter of 2020, which was the previous high.
Aspire Global reported growth across all segments during the quarter, with B2B revenue up 42.2% year-on-year to €32.3m, excluding inter-segment revenue. The supplier put this down to good business momentum and the impact of the BtoBet acquisition, which was finalised in October of last year.
The supplier also noted growth within its Aspire Core B2B sub-segment, with revenue rising 26.0% to €26.8m. Aspire unveiled the new Aspire Core gaming platform brand in February this year, following the acquisitions of BtoBet last year and Pariplay in 2019.
Looking at B2C performance and revenue here also climbed 43.3% to a record €15.7m for the quarter. Aspire put this increase down to significant marketing spend to promote the launch of its new Griffon brand, as well as material investments in the UK market.
In terms of geographical performance, the majority of revenue was generated from Aspire’s rest of Europe operations, comprising European revenue from outside the UK, Ireland and Nordic countries, with revenue here rising 12.9% to €24.5m. UK and Irish revenue was also up 142.4% to €14.3m, driven by good development in all segments.
Nordics revenue declined by 20.0% year-on-year to €3.6m, but Aspire was able to record a 256.3% rise in rest of world revenue to €5.7m, which it said reflected the group’s geographic expansion plans and the consolidation of BtoBet.
“Growth was particularly strong in the UK and Ireland in both the casino and sports verticals,” Aspire chief executive Tsachi Maimon said. “The solid growth in the quarter is particularly impressive, given that the first quarter is historically the weakest of the year.
“The acquisition of BtoBet and its proprietary sportsbook has created an offering that covers the main elements of the B2B igaming value chain and gives Aspire Global control of the IP in the full value chain.
“We have recently accomplished the integration of BtoBet’s sportsbook to Aspire Core’s cutting-edge technology platform. This, in combination with Pariplay’s leading game offering, provides Aspire Global with crucial competitive advantages.”
Turning attention to spending and operating costs for Q1 were up by 38.7% to €38.0m, as Aspire reported higher costs across distribution, gaming and administrative activities.
However, this did not stop earnings before interest, tax, depreciation and amortisation (EBITDA) rising 65.4% to €8.6m. When taking into account depreciation and amortisation costs of €2.0m, operating profit was €6.5m, up 66.7% on last year.
Profit before tax climbed 139.3% to €6.7m and after paying €567,000 in tax, this left a net profit of €6.1m, up 144.0% year-on-year.
Aspire noted a €111,000 loss from its share in associated companies, which meant it ended the quarter with a net comprehensive profit of €6.0m, an increase of 150.0% on Q1 of 2020.
“We see tremendous growth opportunities for Aspire Global,” Maimon said. “With our complete igaming offering, we will target both new customers and broaden our presence with existing partners.
“We have proven our ability to gain tier 1 operators as customers with names such as Rush Street Interactive, Betfair, William Hill and 888casino. The strategy to grow in regulated markets is proven efficient, and we will continue to licence our offering in more regulated markets and enter new markets.
“We remain confident in our ability to deliver on our 2021 financial targets and are truly excited by Aspire Global’s future prospects.”
