Month: June 2021

For a company that is no stranger to innovation in areas such as cryptocurrency since debuting its first casino platform at ICE London 2013, it might come as a surprise that SoftSwiss’ entry into the gaming space under CEO Ivan Montik was anything but planned. 

“I actually got into igaming by chance, but chance favours the prepared. I’m not the kind of person who plans his career ten years in advance, and I’m always open to new opportunities, but I do have a certain understanding of where I’d like to be in a couple of years and am working on things that help me get there,” he said.

Starting out in software development, Montik founded an outsourcing company focusing on custom software development projects. One of these projects evolved into what would become SoftSwiss’ online casino platform which they presented at ICE London in 2013.

Montik admits he has since learned a few important lessons on the risks and opportunities to take note of when establishing a successful igaming software company.

“We took the risk of entering an industry we didn’t know well. We had profound expertise in software engineering, a small but strong team of like-minded people, and a huge desire to succeed,” said Montik. 

Play to your strengths

As SoftSwiss developed, the company made its mark on the industry through its innovative approach to igaming technology. 

Montik cited the company’s cryptocurrency casino as an example of this, which came at a time where bitcoin was starting to take off.

“At SoftSwiss, we strive to predict such trends or, what is even better, make our own ones. The development of our cryptocurrency payment solution is a good example. We were the first to introduce an online bitcoin casino to the market. Today, during the real bitcoin boom, we have a stable solution to satisfy growing demand.”

Keeping a close eye on the market and aligning tech with current trends is a way to work smarter and not harder, he continues.

“Basically, we showed the market that technical innovation can be more important than industry expertise and turned our weakness of not belonging to the gaming world into a competitive advantage.”  

Keep it agile

Montik explained the power of agility in elevating business success. A flexible approach to meeting business objectives unlocks new opportunities to innovate. While the gaming industry poses many challenges due to its rapidly evolving nature, it also brings many opportunities.

“In igaming, like in every fast-changing business, we need to quickly react to new changes and address industry challenges in a timely manner. At SoftSwiss, we empower and encourage our employees to make quick decisions and act.”

A reactive approach is what takes success to the next level. To overlook market trends is to remain static, explains Montik.

“Igaming is fully based on information technology, and IT is synonymous with innovation. There’s been a lot of exciting stuff happening in our industry lately. For example, the role of mobile gaming has grown immensely because the whole world is going mobile. If a software provider doesn’t adapt their technology to meet the needs of the new mobile generation, they can no longer compete.”            

 Unsurprisingly for a company that has got ahead under Montik’s agile approach and expertise, he remains acutely in touch with tech opportunities both within gaming and outside of it. 

“A promising sector is medicine, especially when it’s combined with high tech. I noticed that people are now more willing to learn about their health, the food they eat, how their genetics impacts health.  

“Finally, online entertainment will remain a trending subject, but the focus might shift

from gambling to pure gaming, like mobile and social games, live video streaming, etc.”

But with a minefield of data and trends out there, it’s crucial to tap into the right ones. This is a matter of research, says Montik: “We analyse the market to see what’s in demand and of course take a look at what the competitors are doing. If a product or a particular functionality seems to be important for clients and generates profit, then it’s a worthy investment.”

The affiliate has not yet announced a pricing for the initial public offering, nor has it confirmed how many ordinary shares it intends to offer. It said, however, that the net tangible book value per share as of 31 December, 2020 was $0.37.

It hopes to list its shares under the ticker symbol “GAMB”.

In its registration statement, Gambling.com said it had granted its underwriters for the listing an option for a period of 30 days to purchase additional shares.

The company intends to use the net proceeds from the offer for general corporate purposes, including working capital, operating expenses and capital expenditures, as well as potential strategic investments and acquisitions.

It said it does not anticipate paying any dividends to shareholders in the foreseeable future. Any future earnings will be retained to finance operations and expand the business, the statement said.

The group pointed to its growth in recent years, showing that its revenue for the financial year 2020 was $28.0m, up from $19.3m in 2019.

The business also saw reduced sales and marketing expenses for 2020, at $8.1m compared to $10.9m in the previous year. General and administrative expenses increased from $4.2m to $6.0m, while technology expenses remained consistent for both years.

This meant the business made an operating profit of $11.1m in 2020, up significantly from $1.4m.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came to $3.7m in 2019, and grew to $14.6m in 2020.

Finance expenses were down from $2.5m to $2.1m, while financial income increased from $140,000 to $303,000. This left the group with an income before tax of $10.8m in 2020, compared to a loss before tax of $1.0m in 2019.

After a tax charge of $872,000 in 2019, the group was left with a net loss of $1.9m. In 2020, an income tax credit of $4.4m gave a net income of $15.2m.

Sports betting revenue was down 24.8% month-on-month, but up 83.5% from May 2020, when sports across the world were suspended because of the novel coronavirus (Covid-19) pandemic.

Online casino revenue, meanwhile, was DKK247m, up 2.7% from 2020 and down 3.5% from April.

Revenue from land-based slots skyrocketed both month-on-month and year-on-year, as slot halls across the country were allowed to open for the first time, allowing for revenue of DKK55m.

This was more than four times the revenue recorded in both April 2021 and May 2020, when slot halls were closed, but some restaurants with slot machines were open for the last ten days of the month. However, this total was still 57.4% below slot revenue from May 2019.

Land-based casino revenue was a nonzero total for the first time this year, at DKK11m, after casinos were permitted to reopen from 21 May.

Casinos and gaming halls were originally set to reopen on 5 April, but the country opted to delay reopening to allow more vaccines to be distributed.

While May 2020’s casino revenue was also zero, revenue was down 67.5% from May 2019.

Last week, Danish regulator Spillemyndigheden released its Gaming Market in Figures 2020 report, showing that channelisation in the jurisdiction reached a record high of 90% last year.

This was up only slightly from 88% in 2019, but showed a significant increase from 69% in 2012 when the market was liberalised.

The tax – set at 5.3% of online poker and online slot turnover – was approved by the Bundestag earlier this week.

However the DSWV argues that the government is “jeopardizing the success of the new gambling regulation in Germany” with the inclusion of the tax, which will tax a customer’s individual stake rather than the operator’s earnings from slots and poker.

DSWV president Mathias Dahms said: “By taxing the individual stakes, the state asks the customer to pay for every single spin of the virtual slots – over and over again, every few seconds and even if the stakes come from previous winnings. There is a reason that all other EU countries have imposed an income tax on these games and not a gaming stake tax.”

This isn’t the DSWV’s first objection to the tax, having filed a complaint with the EU earlier this month. The European Gaming and Betting Association (EGBA) also voiced its concern and filed its own complaint, arguing that the turnover tax violates European law.

Dahms added: “When it comes to online gambling, Germany is turning the wrong way in tax policy in Europe. For years, the countries had struggled to find a compromise on the State Treaty on Gambling and to open up the online gambling markets in order to finally get this area under regulatory control. 

“Now the countries are destroying their own work with an over-tax regime for virtual machine games and online poker in the last meters. ”

The taxes will come into effect when Germany’s new online gambling framework becomes law on 1 July.

The new legislation will legalise online casino games in Germany for the first time, but impose certain restrictions, such as a €1 per spin stake limit for online slots.

Currently, operators may offer online casino games under a transition period, provided they keep to the rules of the new treaty. However, operators such as LeoVegas have said that this has had a major impact on revenue.

The MGA has ordered Magic Services to cease all gaming operations and not accept new customers, but has also specified that existing players should be able to access their accounts for withdrawal purposes.

Further orders require Magic Services to notify all current players of the licence cancellation and pay the MGA the outstanding annual licence renewal fee of €71,035.54 (£61,079.77/$86,211.50) within 5 working days of the cancellation notice.

The MGA issued a Notice of Cancellation to Magic Services in May, after Magic Services allegedly failed to pay the mandatory annual licence fee between 1 August 2020 and 31 July 2020. This broke Regulation 3 of the Gaming Licence Fees Regulation.

Following the issuance, Magic Services was given a 20 day period to provide a reason for not paying the fee, which the company did not do within the allotted time.

According to the notice, Magic Services must comply with the terms of the cancellation within seven working days.

The agreement covers live streams, live data and news video for all CWI home international fixtures across all formats (involving the men’s, women’s and ‘A’ team), including high profile upcoming tours by Australia and Pakistan, as well as CWI’s domestic competitions.

The CWI official website, apps and social media channels will also be upgraded to provide comprehensive coverage of live scores and statistics for every player and team, across all their fixtures.

The deal follows similar agreements with cricketing governing bodies in Australia, England, New Zealand, South Africa and the International Cricket Council (ICC) offered through Stats Perform’s Opta and RunningBall brands.

Stats Perform said the addition of exclusive live video of CWI games to Stats Perform’s live streaming platform, which supplies live game streams to licensed sportsbooks will further enhance in-play cricket betting.

“We are thrilled to have been selected to help CWI enrich and inform coverage of its competitions, as well as drive more entertaining fantasy and betting experiences,” said Chris Catling, Stats Perform’s senior vice president of rights and business development.

Dominic Warne, commercial director for CWI said: “Partnering with Stats Perform creates a valuable new channel to increase the audience for and distribution of West Indies and regional tournament content allowing us to further connect with fans and partners in the Caribbean and overseas.

“This partnership also delivers a new revenue stream for CWI with distribution of content and data into sportsbooks, fantasy providers, global media and broadcasters. Stats Perform should be an excellent partner for CWI, considering their understanding of fans and the sports ecosystem, and the additional reach and data benefits that this partnership provides.”

GGR for the quarter was €240.1m, which was also an increase of 3.8% on the previous quarter.

Player deposits and withdrawals were up 6.1% and 6.4% respectively over Q4 2020, while the number of new accounts registered monthly grew 7.9% over the same period to 422,533.

The total monthly average of active gaming accounts was 1.1m, an increase of 22.7% year-on-year.

Sports betting represented €110.3m, or 45.6% of the quarter’s GGR, down slightly on Q1 2020, when sports betting represented 50.4% of GGR, but up 6.5% on Q4 2020.

Casino accounted for 41.4% of GGR this quarter, at €99.5m, up 28.3% on the same period in 2020.

Poker was the next largest vertical, bringing in €25.0m, up 3.1% from the previous year, while bingo brought in €3.6m, down 2.4%.

Prize draws brought in a further €1.7m in GGR, down slightly from €1.9m in Q1 2020.

Marketing spend for the quarter stood at €148.4m, representing €71.5m in advertising, €56.0m in promotional costs, €12.4m in affiliate marketing and €8.5m in sponsorship.

Compared to the previous quarter, marketing spend was down 1.7% following a decrease in spending in all areas except for affiliate marketing, the cost of which increased by 1.2%.

Spain had a total of 80 licensed operators during the quarter, of which 51 offered casino gaming, 44 offered sports betting, nine offered poker, three bingo and two prize draws.

The licence will initially be valid for a period of seven years during which time NetBet will distribute its online games to the Greek market, including more than four thousand titles.

CEO of NetBet Enterprises, Gabriela Arnautu, said: “We are excited that the Hellenic Gaming Commission granted NetBet Enterprises with these two new licences. For over 20 years we have delivered the best sports betting and online casino experience to our players across the world and we are looking forward to growing our footprint in Greece.”

The move comes after the HGC updated its regulatory system in January 2020, allowing two licensing options to become available, one for online betting and one for gaming, both of which NetBet have obtained.

However, the legislation also caps slot spend at €2 a spin and a three-second spin minimum. A previous draft of the bill considered banning RNG games all together, but lawmakers eventually opted to allow slot with the restrictions in place.

NetBet joins GoldenRace, Playson, Betsson, Bet365 and Play n’ Go in obtaining a licence under the new regulatory system.

Owner StadtCasino Baden Group announced the exclusive deal which will allow Swiss players to enter PokerStars’ global tournaments.

PokerStars – which left the Swiss market in 2019 as the country opened its regulated online market – will initially be available via a dedicated Swiss homepage via desktop computers and Android devices, with an app for iPhones and iPads planned soon.

All players must have an account with Casino777, which will also handle transactions and support through Swiss consumer protection rules. Players can sign up either via Casino777 or PokerStars.ch.

StadtCasino Baden Group said Robert Kocher has prioritised the integration with PokerStars since assuming the role of chief gaming officer at Casino777 in February. PokerStars is likely to be available at the latest by early July.

“I can assure everyone that the joint teams from PokerStars and Casino777 are working almost around the clock in order to be able to go live as quickly as possible,” Kocher said.

“The preparatory work for this launch has been going on for months. The project is not completely without challenges. All provisions of Swiss legislation must be complied with, for example with regard to player protection or money laundering prevention.”

Casino777 went live in September 2019, powered by Gaming1, a subsidiary of Ardent Group.

In 2019, Stadtcasino Baden Group generated gross revenue of CHF7.6m (£6.3m/€7.2m/$7.8m) from legal igaming. As the first to launch, Jackpots.ch contributed CHF6.3m of this total, with CHF1.3m coming from Casino777.

PokerStars, now part of Flutter Entertainment, departed the Swiss market in 2019 having been unable to partner with a local gambling establishment as required by Federal Act on Money Games that came into effect in January of that year. Online casino licences are available only to existing Swiss land-based casino operators for the first six years until 2025.

Under a new three-year deal, Scientific Games will provide its portfolio of instant games to SCML, which is the fourth-largest instant game operator in Europe with instant games representing approximately $1.9bn in annual retail sales.

The agreement expands a partnership that began when the Portuguese national lottery launched in 1995, with instant games responsible for much of its success over more than 25 years.

“We are honoured to be the primary instant game supplier to Europe’s top four performing lotteries and nine of the top 10 performers globally,” said John Schulz, Scientific Games’ senior vice president of instant products.

“Scientific Games is excited to expand our long-time, successful relationship with SCML in Portugal to continue the lottery’s growth by offering exciting instant game entertainment to Portuguese players while responsibly generating maximum proceeds for the lottery’s charitable cause.”

Dr Edmundo Martinho, head of SCML, said: “We are pleased to award this new instant games contract to Scientific Games. Our long history with the company provides an excellent foundation to continue the responsible growth of SCML instant game entertainment to generate maximum funding benefitting our charitable causes.”

Scientific Games currently supplies its instant games to 48 European lotteries including Italy’s Lotterie Nazionali, Française des Jeux, and the UK’s National Lottery. Earlier this year, it signed an extension to its long-term technology partnership with Canadian provincial lottery operator Loto-Québec.