Month: July 2021

According to the government, the merger would create a number of major benefits for both operators related to digital transformation and responsible gambling commitments, as well as providing opportunities for operating savings.

The government said that as both digitalisation and responsible gambling require strategic management and investments, a single entity would be able to create a better framework and, as such, a combined operation would therefore be more efficient and cost-effective.

Should the merger go ahead as planned, the Klasselotteri would continue to operate with an independent identity, retaining its current brand, products and customers.

“The state’s gaming companies have an important role in relation to contributing to a balanced and responsible gaming market in Denmark,” Danish Finance Minister Nicolai Wammen said. 

“I expect that a merger of the two companies can create operational benefits while supporting an even better framework when it comes to digitisation and responsible gaming. I am also pleased that we can contribute to ensuring the Klasselotteri has a stable and efficient framework in the Danske Spil Group in the future.”

The Ministry of Finance will now work with Danske Spil and the Klasselotteri to prepare a proposal for the merger, including a final law construction and business model. 

The government will subsequently seek the necessary authority and approvals to complete the merger and, subject to securing these approvals, the merger is expected to complete before the end of 2021.

Danske Spil chief executive Nikolas Lyhne-Knudsen welcomed the announcement, saying he was “convinced” a combination would benefit both Klasselotteriet and Danske Spil.

“Now I look forward to the upcoming work, where a concrete model must be developed for the merger, which could realise the benefits of a single, unified state gaming company,” Lyhne-Knudsen said.

Total market sales were up from CNY29.22bn in May 2020 and also 3.8% higher than the CNY29.10bn reported in April this year.

The Sports Lottery accounted for the majority of sales, bringing in CNY18.88bn for the month, up 24.2% on the previous year. However, there was a further decline among Welfare Lottery agencies, with sales down 19.2% year-on-year to CNY11.3bn.

Higher digital sales contributed to growth in the sports lotteries market, with sales for the channel up 8.4% to CNY6.40bn for the month. 

Sports prediction games remained the most popular with players, accounting for CNY10.13bn in sports lottery sales in May, up 5.5% on 2020, but instant Sports Lottery sales declined 3.3% to CNY23.54bn.

For the Welfare Lottery, digital was by far the main source of income, with sales reaching CNY7.28bn for the month, up 1.2% on last year. Instant ticket sales were down 5.3% to CNY2.28bn, but keno sales were 12.7% higher at CNY1.76bn.

Looking at regional performance and lottery sales increased year-on-year in 19 provinces across China, including in Guangdong, Henan and Sichuan, where sales reached CNY466m, CNY362m and CNY354m respectively in May. 

For the year to date, total lottery sales in five months to the end of May were CNY143.82bn, up 59.2% on the same point last year. That prior year was badly affected by the novel coronavirus (Covid-19) pandemic.

Welfare Lottery sales in the five-month period were 28.4% higher at CNY56.48bn, while sales in the Sports Lottery market rocketed 88.5% year-on-year to CNY87.35bn. 

As part of the WLA, Lottomatica Scommesse will commit to the organisation’s standards on corporate social responsibility, including principles related to responsible gambling practice.

Lottomatica Scommesse’s membership of the association was approved during a meeting of the organisation’s executive committee last month.

The division’s chief executive Alessandro Fiumara said its WLA membership was testament to its “responsibility and the commitment to constantly raise the quality and safety of its products and services”.

“Being accredited among the members of such an important international association is a source of great satisfaction and pride for us.”

The WLA also counts the likes of Novomatic, Intralot, Flutter Entertainment, EveryMatrix, Sportradar, Playtech and Genius Sports among its members.

Lottomatica Scommesse was sold to Gamenet Group, an operating entity formed by private equity giant Apollo Global Management in December last year.

That transaction, which saw Gamenet acquire all the Lottomatica-branded B2C assets owned by International Game Technology (IGT) for €950m, was finalised in May 2021.

Issued by the West Virginia Lottery Commission, the permit will enable Genius to provide its solutions to licensed sportsbooks and lotteries in the state.

Confirmation of the new licence means that Genius is now approved to operate in 13 states across the US.

“Genius Sports is fully committed to supporting the development of, and operating in, regulated territories in partnership with fully licensed sportsbooks,” Genius chief executive Mark Locke said.

“West Virginia remains at the forefront of liberalisation in the US and one of the most proactive proponents of legalised sports wagering.

“I’m honored that we have been awarded this licence to provide our industry leading services in the Mountain state, and that our sportsbook partners will continue to utilise our solutions to help them thrive in this rapidly growing market.”

Read the full story on iGB North America.

For the 12 months to 30 June 2021, Crown said theoretical earnings before interest, tax, depreciation and amortisation (EBITDA) before closure costs but before significant items is forecast to amount to between AUD$240m (£130.4m/€152.2m/US$180.4m) and $250m. This means it is expected to halve, compared to $503.8m in the previous year.

Theoretical EBITDA after closure costs, but before significant items, is expected to come in at between $90m and $100m for the financial year.

Crown noted that theoretical results have been adjusted to exclude the impact of variance from theoretical win rate on VIP program play at its Melbourne, Perth and Crown Aspinalls casinos. The theoretical win rate is the expected hold percentage on VIP program play over time. 

The additional costs incurred during the year relate to spend while Crown’s gaming facilities were closed as a result of government-enforced Covid-19 rules, such as paying staff salaries while they were not working.

Crown’s properties have been closed for intermittent periods over the past 18 months as states in Australia sought to slow the spread of Covid-19. While the facilities were able to open, they have been faced with strict operating measures such as capacity limits and social distancing protocols.

Aside from a decline in EBITDA, Crown also said it expects to report a statutory loss after tax for the full year, though this result remains subject to review by the board and management, as well as external auditors as part of normal year end processes.

Net debt for the year, excluding working capital cash, is expected to amount to $900m by the end of the financial year, with a $450m project finance facility put in place last year to support the construction of Crown Sydney having been repaid from settlements to date from apartment sales at the site.

Crown intends to publish the full results for its 2021 financial year on 30 August.

Meanwhile, Crown also provided a short outlook for its 2022 financial year, noting that a number of factors are expected to impact its financial performance.

These include the ongoing impact of Covid-19-related closures and operating restrictions, as well as travel restrictions such as the closure of Australia’s international borders. Crown also said its ongoing review of top-end local players is resulting in the exit of a number of customer relationships, and this too could impact performance.

In addition, Crown noted the potential impact of ongoing regulatory processes, saying the outcome of these could harm its financial performance. Higher corporate spending related to these cases, including legal, consulting and associated costs, could also impact financial results.

In May, Crown Melbourne was ordered to pay a total of $22.5m as part of measures set out by the New South Wales Independent Liquor and Gaming Authority (IGLA).

Crown must pay $12.5m towards the inquiry, and also pay an annual Casino Supervisory Levy of $5.0m in both FY2021 and FY2022, after the regulator found Crown “unsuitable” to operate a casino in the Barangaroo district of Sydney in February. 

The operator may pay a further levy in FY2023, but this is “subject to further consultation”.

Crown is also currently the subject of a number of takeover bids from several parties.

Private equity giant Blackstone Group 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.

Blackstone then increased its offer to $12.35 in cash for each Crown share, up 4% increase on the previous offer of $11.85 per share submitted, but Crown rejected this proposal, saying the offer undervalued its business

Australian land-based operator Star Entertainment Group also put forward a proposal to merge with Crown and create a combined operation worth approximately $12.00bn. Crown has requested more information on the offer before it makes a decision.

In addition, alternative investment management business Oaktree Capital Management last month put forward a funding proposal worth $3.1bn. Crown’s board has not yet formed a view on the proposal.

Launched in March, the review looked at a number of structural and ownership options for Tabcorp to create more value for shareholders, including potentially selling off its Wagering and Media business.

At the time it said a number of unsolicited proposals had been made for the division, but argued none of these represented the true value of the division. 

The spin-off will create two businesses; Lotteries and KenoCo, covering all of Tabcorp’s lottery operations across Australia, and Wagering and GamingCo, which will host the operator’s wagering, media and gaming services.

Tabcorp said the demerger would allow shareholders to value each of the businesses on a standalone basis, as well as enable to Wagering and GamingCo to pursue international expansion opportunities.

The operator said both businesses would have strong balance sheets and also benefit from focused management and optimised capital structures, increased scale and diversification, a more focused operating profile, access to new investors and the ability to take part in future M&A activity.

Tabcorp chairman Steven Gregg and the operator’s current board of directors will oversee the demerger, while David Attenborough will remain as its managing director and chief executive until the process is complete. 

Attenborough had been due to stand down from his roles at Tabcorp in the first half of this year, but with the demerger not expected to complete until June 2022, subject to relevant regulatory approvals, he will remain with the business for the time being.

Preliminary estimates suggest the demerger process will incur between AUD$225m (£122.3m/€142.7m/US$169.3m) and $275m in one-off separation costs, as well as around $40m to $45m in ongoing incremental costs.

“The foundations have been laid for Lotteries and KenoCo and Wagering and GamingCo to deliver long-term growth,” Gregg said. “The Tabcorp and Tatts integrations has set up both businesses to benefit from enhanced scale and diversification.

“The two businesses are expected to be leaders in their respective markets, creating great experiences for millions of customers. They will both build on their heritage and sharing the benefits of their commercial success with governments, the racing industry, licensed venues, newsagents and other retail and business partners.”

The decision to proceed with a demerger means Tabcorp will keep hold of the Wagering and Media business it had considered selling as part of the strategic review process. This had initially attracted several bids from a number of parties, including Entain, Apollo Global Management and BetMakers Technology Group. 

Entain lodged an offer worth $3.50bn to purchase the Wagering and Media division, while Apollo offered $4.00bn to acquire the business, as well as the gaming services segment. BetMakers also submitted a proposal worth $4.00bn for the Wagering and Media arm.

Tabcorp said it engaged with all interested parties in relation to the offers but concluded the demerger was the “optimal and most certain” path to maximise the value of both business for its shareholders. 

However, it did note that it would remain open to future engagement with bidders on any proposals that would deliver “sufficient value and certainty” to shareholders.

In the case of BetMakers, Tabcorp said it would continue discussions with the supplier in relation to potential commercial opportunities in international markets – a statement that was welcomed by BetMakers chief executive Todd Buckingham.

“Having received clarity from Tabcorp regarding the planned director of its Wagering and Media business, BetMakers will continue discussions with Tabcorp regarding international opportunities, and we believe these opportunities have the potential to be significant,” Buckingham said.

“BetMakers remains firmly of the view that the company’s opportunities in regulated wagering jurisdictions, and in particular Australia and the US, are a clear priority and we will continue to explore all opportunities that can accelerate or capitalise on this foundation.”

BetMakers last month completed its acquisition of the racing, tote and digital business from Sportech. The deal covers Sportech’s racing, tote and digital assets in the US, UK and Europe, including the Americas Tote business, which provides betting solutions, hardware and operational services to more than 200 racetracks, casinos and betting venues.

Tabcorp in February said that despite reporting a year-on-year fall in revenue and statutory net profit in the first half of its financial year, it experienced strong recovery from the impact of the novel coronavirus (Covid-19) pandemic.

Total revenue for the six months to 31 December 2020 amounted to AUS$2.87bn, down 1.5% from $2.91bn in the same period in 2019.

Earnings before interest, tax, depreciation and amortisation (EBITDA) before significant items fell 6.2% to $560.0m, while after accounting for depreciation and amortisation, earnings before interest, tax and significant items declined 7.9% to $372.0m.

Tabcorp ended H1 with $185.0m in statutory net profit after tax and significant items, down 7.0% from $199.0m in the first half of 2019-20.

The move comes as ministers continue with the government’s Gambling Act review, and are expected to produce a white paper at the end of 2021.

The BGC’s chief executive, Michael Dugher, said the call for the establishment of an ombudsman was further proof of the regulated industry’s determination to drive up standards.

The group has proposed that it be made a legal requirement for all licensed betting and gaming operators to sign up to any such body.

“We hope that the government will look favourably on our calls for a gambling ombudsman to be established as soon as possible following the conclusion of the gambling review, which we strongly support,” Dugher said.

“The BGC and its members recognise the need for further change in our industry and a new gambling ombudsman would be a step forward in customer redress – I’m proud to be giving it our backing.”

Flutter UK and Ireland’s chief executive, Conor Grant, also added his support to the proposal.

He said: “True commitment to putting customers first also means making sure that they have somewhere independent to go if something does go amiss – that is why Flutter is fully behind the call from the BGC today for the government to include an ombudsman in its plans for reform of the gambling industry.”

Terms of the UK’s long-anticipated review of the 2005 Gambling Act were released by the Department for Digital, Culture, Media and Sport (DCMS) in December last year, and included questions on advertising and bonuses, limits on stakes, speed and prizes, and other consumer protection measures.

DCMS said the review would be built around three core objectives; to examine whether changes to gambling regulations are needed, strike a balance between consumer freedom and harm prevention, and ensure customers are protected in both land-based and online environments.

Industry stakeholders have been calling for the establishment of an industry ombudsman for years, including Tom Watson during his tenure as deputy leader of the Labour Party.

An ombudsman was also proposed as part of the Social Market Foundation’s (SMF) report on regulatory reform, which called for the Gambling Commission to be split into two distinct bodies. Under the SMF’s proposal, a Gambling Licensing Authority would oversee license suitability and compliance issues, while the Gambling Ombudsman would handle customer protection and affordability.

Under the agreement, WynnBet will work with the tribe’s San Carlos Apache Tribal Gaming Enterprise, which operates the Apache Gold Casino and Apache Sky Casino, to secure a new licence in the state.

Market access for WynnBet in Arizona remains subject to licence eligibility and availability, as well as regulatory approvals.

Should WynnBet gain the necessary approvals and secure a license, Arizona would become the 16th state in which the brand operates or plans to launch.

WynnBet is currently active across Colorado, Indiana, Michigan, New Jersey, Tennessee and Virginia, with market access in a number of other states.

Read the full story on iGB North America.

The supplier’s Beijing AG GOT Technology subsidiary will provide the terminals to lotteries in Guangxi Zhuang Autonomous Region, Fujian, Jiangsu, Hubei, Sichuan and Shandong.

The deal will allow AGTech GOT to provide lottery solutions and advanced product development to the operator.

Other recent contract wins, in June 2020 and September 2020, saw it supply devices to Sports Lotteries in Anhui, Shanxi, Jilin, Hubei, and Guizhou, along with Hebei, Fujian, Sichuan and Zhejiang and the municipality of Tianjin.

A drop in hardware sales, caused by manufacturing delays and the novel coronavirus (Covid-19) pandemic, affected AGTech’s revenue in its full year 2020 results.

However, the company managed to reduce its losses and gained a total of 16 lottery hardware tender deals in total.

In its April results, Sports Lottery sales totalled CNY17.93bn (£2.0bn/€2.3bn/$2.7bn), a 56.3% year-on-year rise.

VBet will also sponsor the Ukrainian Super Cup, for which the 2021 edition takes place in Kyiv’s Olympic National Sports Complex on 27 July.

“This is a new player in the Ukrainian market, which is serious about supporting Ukrainian football and developing sports in general,” UPL executive director Yevhen Dyky commented.

“We are ready for a fruitful cooperation, which will help to further promote Ukrainian football and make it even more interesting for fans.”

Over the past year, VBet has expanded its global presence through its partnerships with AS Monaco and the Armenian premier league.

“We are happy to work with one of the strongest leagues in Eastern Europe, which is progressing and becoming even stronger every year,” Anton Svitlychny, head of VBet Ukraine’s partnership development department said.

“This year, 16 professional clubs will play in the Ukrainian Premier League, which demonstrates the development of Ukrainian football and we are happy to be part of this process.”

Ukraine has recently re-developed its regulatory standards with President Volodymyr Zelensky officially signing a new Gambling Act into law, in August 2020.

Gambling has not officially been launched yet and lawmakers are still debating a framework for taxation. In March, Ukraine made Parimatch the first operator approved to launch wagering in the country and VBet followed on 31 May, obtaining its casino and poker license last month.

An earlier version of the approved bill banned casinos from advertising their services, but this clause was later removed by the Committee on Finance, Tax and Customs Policy.