Month: September 2021

The operator announced the £2.2bn (€2.61bn/$3.02bn) deal last week, having earlier revealed that it was in “advanced” talks with William Hill owner Caesars over a potential purchase.

Caesars itself had acquired the William Hill business earlier this year for £2.9bn, but – having snapped it up for the US operations and tech – immediately set out plans to dispose of the international assets.

888 chief executive Itai Pazner (pictured) noted that the deal drastically changes the scale of the business, as well as giving 888 a more diversified balance between betting and gaming as well as between online and retail.

“WIlliam Hill International is all of the original William Hill PLC except for the US business,” he explained. “It includes all of the technology and brands, and critically all of the talented people, with over 10,000 new colleagues.

“As a result, the transaction critically enhances the scale and diversification of the business, particularly in betting.

“The combination of 888’s technology and gaming-led business and William Hill’s sports-led business will create a really powerful and large business. Underpinned by scale, technology talent and brands, the enlarged business will be really well-placed for continued growth.”

Ivor Jones, analyst for Peel Hunt, noted that while 888’s success across a number of markets suggested it may already be suitably diversified, the scale it achieves through the deal would be more important.

“We think the scale is more important than the diversification; 888 had already demonstrated its ability to operate in multiple markets successfully” he said. “The additional scale will most obviously provide cash from more mature markets to recycle into driving growth in the US with the new Sports Illustrated sportsbook brand.”

Pazner added that WIlliam Hill had been building momentum, with its market share in the UK increasing in recent months. This, he said, was down to “good marketing, good product and good customer satisfaction”.

Despite being an online business, Pazner said 888 would retain William Hill’s network of betting shops, the largest in the UK.

However, 888 chief strategy officer Vaughan Lewis did note that 888 might choose to focus more on some brands than others, leading to a possible de-emphasis of secondary brands such as Mr Green in markets such as Great Britain, where the William Hill brand is already strong.

“We’re not going to operate all brands in full force in each market,” he said. “We’re going to see which brands deliver the greatest returns in each market, and keep other brands as more of what we’d call tactical brands.”

The auction following William Hill’s acquisition by Caesars did not mark the first time that a combination between 888 and William Hill had been proposed. Rank Group had previously paired up with 888 to bid more than £3bn for the operator, in 2016, but that offer was rejected.

Lewis noted that there was a reason why the merger had been a much-discussed topic for many years.

“This is a combination that’s been discussed many times over the years,” he said. “The reason it’s been discussed so much is just how powerful the strategic logic of the deal is. It creates a really well diversified revenue mix.

“The combination strongly enhances our position in key regulated markets, which represent our most attractive growth opportunities. We’ll continue to provide best-in-class products combining the best of both 888 and William Hill.”

In the end, the bidding process attracted a high degree of demand, with reported interest from Betfred, private equity group Apollo Global Management and German betting giant Tipico, owned by CVC Capital Partners.

That, Jones noted, helped ensure a high sale price. But he added that 888 had a clear path for the deal to deliver value at this price.

“Inevitably the auction process pushed the price up beyond what we had thought the assets would sell for, but 888 has demonstrated how it will be able to create value for shareholders by extracting cost synergies and achieving higher revenue growth and margin from enhanced market shares in key markets,” he said.

Regulus Partners, meanwhile, pointed out that with the deal complete, Caesars’ acquisition of WIlliam Hill could now be judged more clearly. With the net price paid after the disposal of non-US assets coming to around £1bn, it said the acquisition “seems a win-win deal at a highly attractive headline price”.

Regulus Partners also noted that the deal scaled up 888’s operations in a number of ways “that are hard to replicate organically or with nearly any other deal”, such as growing 888’s UK market share four-fold.

But Regulus also noted that there was a difference between a compelling deal on paper and a deal being well-executed.

“While the strategy is compelling, execution will be the big test, especially since neither company has a great M&A track record,” it said. “Further, the recent momentum seen in the UK by both 888 and WH means that there is something positive to mess up.”

Jones expressed a similar sentiment about the challenges of integration.

“Execution is key, there are decisions to be made; over management, technology, brands, marketing that need to executed decisively,” he said, “The companies have either to demonstrate that they have the relevant integration skills in house or to bring in outside expertise.”

Regulus argued that there were six different ways the deal could go, depending on strategic and operational execution as well as regulatory questions related to factors such as the Gambling Act review.
However, it said that of these six scenarios, only one – in which the deal would be “operationally poorly executed with tough regulatory headwinds” – was truly negative, which it said shows the logic of the deal.

Ultimately, Jones said the deal was likely to be judged based on whether the newfound scale allows the enlarged 888 to become a player in markets that it may have struggled to break into otherwise.

“Beyond the initial integration phase the deal will be judged a success if the new group can take market leadership positions in territories where 888 or William Hill appeared to be permanently minor players or else excluded,” Jones said.

In its interim results for the six months to the end of June, the developer and licensor of mobile-focused gaming content saw total revenue of £7.7m ($10.6m/€9.0m), of which £5.8m came from licensing, which was up 73% year-on-year.

This included content licensing revenue growing 39% to £4.1m due to an increase in distribution from an expanded games portfolio. An enhanced brand licensing portfolio led to a 298% increase within that segment to £1.7m.

The overall £2.4m increase in licensing revenues compared to the prior period was achieved through a mixture of a £0.5m organic increase in content licence revenues from existing partners, a £600,000 increase in content licence revenues from partners that went live after June 30, 2020, and a £1.3m increase in brand licence revenue compared to the previous period.

Social revenue increased 7.0% to £1.9m from an increase in new Slingo content, as well as what it described as improved player management tools and new player engagement features.

Some £3.1m of total revenue came from its US operations, with £2.5m registered in the Isle of Man, £1.7m from its international business and £382,000 from the UK.

During a busy period for the business, Gaming Realms was granted provisional igaming supplier licence in Michigan and went live with BetMGM through a direct integration agreement. It was also granted an interactive gaming manufacture licence in Pennsylvania.

In the period it also launched Slingo content in the Italian regulated market with Goldbet and Sisal, signed several distribution deals including with GAN, and signed a content licensing agreement with IGT.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was £2.7m, which was up 116% compared to the same period in 2020. It posted a profit of £800,000, compared to a loss of £700,000 during H1 last year.

Total business expenses excluding share option and related charges increased 19%. Marketing expenses more than doubled to £207,428 as it pursued social growth in the US, with operating and administrative expenses up slightly to £1.19m and £3.26m respectively.

Commenting on the first half performance, Michael Buckley, executive chairman, said: “The group has delivered an excellent first half both in terms of significant earnings growth and new licensing and distribution agreements.

“Having recently launched in Michigan and Pennsylvania, the group is now working to capitalise on the significant opportunities in these markets. We are also looking to strengthen our position in Europe through launches in other regulated markets following the encouraging response we have seen from players in Italy for our Slingo content.

“Looking further ahead, we are about to start the process for obtaining a licence in Ontario, Canada.  Ontario has announced its intention to regulate iGaming and has the potential to be a bigger market for Gaming Realms than any one of the US states that have regulated so far. In addition, we will also pursue further licensing opportunities within the US as new states announce their intention to regulate igaming.

“This is an exciting time for the company and we intend to continue to deliver further value by scaling our platform and bringing innovative content to new audiences worldwide. With more material impact expected from Michigan and Pennsylvania in the second half of this year, the board is confident in the future performance of the business.”

Gaming Realms started trading its ordinary shares over-the-counter on the OTCQX Best Market in the US in April 2021. Gaming Realms’ ordinary shares continue to trade on the London Stock Exchange’s AIM market.

Gaming Realms reported a 65.2% year-on-year increase in revenue for its 2020 financial year, while it was also able to significantly reduce its overall loss. Total revenue from continuing operations in the 12 months to 31 December amounted to £11.4m (€13.1m/$15.8m), up from £6.9m in the previous year.

Despite higher costs, adjusted EBITDA in 2020 was up from a loss of £355,116 in 2019 to a positive of £2.9m.

The battle of the sequels resumed in August with two hot newcomers stealing into the top half of the charts. Break Da Bank Again from Microgaming and Chilli Heat by Pragmatic Play both had a Megaways makeover, courtesy of Big Time Gaming.

Top 20 games by distribution

A sequel needs to offer something new but must also stay faithful to the expectations… of the faithful. While Pragmatic kept most components from the original, Microgaming reworked many of the graphics, animations and music from their most recent ‘BDBA’ game, even adding some feature buys to boot.

But where is the balance, you may ask? Stray too far from the original and it can be too much for your loyal followers. Yet if you don’t offer enough novelty, its lifespan may be cut short.

Let’s not forget too, that a major refurb costs time and money and much will depend on your approach to quantity versus quality. A steady stream of new variations can achieve more, or less than a carefully crafted few.

The biggest risk to all sequels is the change to mechanics and most sequels recently have had higher volatility than the originals (and not just those with a Megaways suffix either). This may either suggest a consumer trend towards more variance, or that we’re all riding the ‘ways’ wave. Or maybe, that studios are targeting the ‘ways’ faithful itself, which is now a segment in its own right…

There are two main outcomes to a product extension strategy: sequel outperforms the original at launch but fades away over time, or sequel effectively displaces and demotes the original. Whilst many Product Directors may hope for the second, the first tends to be the most common result. That familiarity we discussed last month can be very entrenched and very game-specific.

One thing is certain, even if a sequel is but short-lived it still lends the original game a leg-up. Dragon’s Dependable InfiniWhizz it is then: what’s the worst that can happen!? The only downside may be the revenues you might have made, spending that same time and money on a new game with the InfiniWhizz mechanic. Or as per Pragmatic Play this month, you do a bit of both and while you’re at it, why not test out your own new FizzyWhizz mechanic too. Their Rise Of Giza Powernudge also made the top 20 this month.

Biggest aggregator dealmakers

On the deals front, both Pariplay and Salsa Technology notched up another couple of content deals but so too did six-month rolling leader, Softswiss, so no change to the top aggregator spot.

Biggest studio dealmakers

From the studio perspective though, Red Rake Gaming gathered up three new distribution deals for their games, taking them to top studio dealmaker spot. Spread the muck and them flowers will grow.

* Please note these are live charts which update every month so please ensure the month of August is selected in the drop-downs to match the analysis

**Data on deals by month was collected from April 2020 onwards. Deal relationships between companies from all time are available on other charts. Note that only deals reported on company websites or in the gaming press are collated.

***The games chart here excludes live games and table games. Game rankings are determined by the number of game appearances on the casino homepages of more than 1,000 casino sites. To access many other charts including game rankings, live and table games, positions on subpages or to filter by operator type and size, ask for our demo from our partner, egamingmonitor.com, which covers 32,000 games, 1,100 suppliers and 1,000 operators.

The operator-led advertising board launched last month , designed as a body whereby consumers and organisations can file complaints about gambling marketing activities.

Operators and associations such as Danske Spil, Elite Gaming, Dansk Automat Brancheforening and Dansk Kasinoforening have all signed up to support the organisation. This case represented the board’s first ruling.

It had received complaints about the ad which aired on Danish channel TV2 in December of last year, directly before the showing of the Christmas film Juleønsket.

Complaints stemmed from the perceived targeting of a gambling ad at an audience of children, which is strictly prohibited in the board’s code of conduct.

Mr Green argued that it had purchased advertising space from TV2 in the 18+ and 21+ categories, and that the channel is responsible for scheduling the placement of the adverts.

TV2 has argued that Juleønsket is classified as family entertainment rather than a children’s film, meaning that the placement of the ad broke no rules and was perfectly in keeping with advertising standards.

The ad was subsequently removed from the Christmas calendar, but the board has decided to take note of the case.

Four board members – Thomas Marcussen, Lars Pynt Andersen, Kate Jacquerot and Jacob Scherfig – agreed that Juleønsket should be classified as children’s programming, and that the responsibility for the scheduling should fall with the operator rather than the TV channel.

They said: “We find that it is the gaming provider’s responsibility – in the form of more detailed agreements with the media in question – to ensure that gambling advertisements are not directed at children and young people under 18 years of age. We thus find that it is not sufficient to enter into an exposure agreement alone in the age category 18+ or 21+.

“As the defendant in this case has not ensured that the gaming advertisement was not aimed at children and young people under the age of 18, we find that the marketing initiative was in violation of the rules on marketing in the Gaming Act and in the Code of Conduct for the Gaming Industry. We thus vote in favor of the board expressing criticism of this.”

Board member Morten Rønde disagreed and issued a dissenting opinion, arguing that the responsibility lies with the TV channel rather than the operator.

Wray joins Genius Sports from ChyronHego where he led global sales for the business’ sports-data focused Tracab division for the past nine years. In that role, he worked closely with the several major football leagues and federations globally to implement data tracking, coaching and fan engagement solutions.

As head of football, Wray will oversee Genius Sports’ partnerships with many of the world’s leading football organisations including the English Premier League, Argentine Football Association and Liga MX. Wray will help to expand Genius Sports’ range of technology, video and fan engagement solutions across the global football sector.

Jack Davison, chief commercial officer at Genius Sports, said: “Ian is a real expert in how official data can be monetised to power the most contextual and engaging products for fans, coaches, broadcasters and other key stakeholders.

“Our global soccer business has grown significantly in recent years and Ian is the perfect person to take that to the next level.”

Wray said: “I’m tremendously excited to be joining Genius Sports at this key moment in the company’s development. The market for official sports data and video content is continuing to expand at pace.

“I’m, therefore, very much looking forward to helping Genius Sports leverage its existing technology portfolio, as well as its impressive recent acquisitions, to deliver even greater value across the whole spectrum of stakeholders within the world of soccer.”

Genius Sports recently partnered with Mediapro Canada on a project designed to enhance coverage of the country’s football competitions.

The rebrand stretches to all segments of Yolo’s business. Yolo Investments deals with fintech and gaming investment opportunities, Yolo Tech covers IT services, and Yolo Ventures covers B2B partenrships.

Yolo Entertainment incorporates the company’s B2C gaming brands including Bitcasino and Sportsbet.io, and Yolo Finance houses blockchain, fintech and banking rails related activities.

Sportsbet.io underwent a rebrand in 2017 and pursued a number of major sponsorship deals for the brand. It recently struck up a sponsorship deal with Brazilian football team São Paulo FC.

Yolo Group CEO Maarja Pärt said: “I’m both excited and proud to announce that we are rebranding to Yolo Group with a new identity for a company always looking to the future. The Coingaming brand served us well for many years, but as disruptors in industries beyond gaming, we felt Yolo Group better represented our people, our business and our vision.

“Yolo Group is about bringing next-level innovation to gaming, fintech, blockchain and many more sectors, all the while ensuring our customers are kept at the centre of the universe. You only live once and that’s why we don’t settle for anything less.”

GGR included €21.0m from licensed B2C activities, up by 52.2%. Malta revenue contributed €15.4m of this, while Argentina operations made up the remaining €5.6m. accounts for the amount wagered and the amount paid out to winners.

The remaining €142.9m of GGR came from B2B and B2G activities.

Turnover, which is the revenue from B2B and B2G deals along with the total amount wagered for B2C operations, amounted to €202.6m. This was a rise of 34.4% compared to H1 2020, a period affected by the novel coronavirus (Covid-19) pandemic.

Technology and support services made up a majority of the turnover at €117.2m, an increase of 18.7% year-on-year. Turnover from management contracts totaled at €24.2m, a sizable increase of 105.1% yearly, while licensed operation turnover came to €61.2m.

Lottery games contributed the most to revenue with €120.1m, followed by sports betting at €37.0m. Meanwhile, technology contracts made up €24.7m, while video lottery terminals contributed €19.2m. Finally, racing constituted €1.0m.

The business then paid cost of sales, which included the amount paid out on winning wagers, of €144.9m. This was a rise of 18.3% year-on-year. This left the gross profit at €57.6m, a significant rise of 103.6%.

Administrative expenses amounted to €30.4m, and selling expenses came to €11.5m. Re-organisation expenses totaled at €11.1m, while other operating expenses and research costs came out at €2.6m and €860,000 respectively. After considering €10.2m in operating income, the total earnings before interest and taxes (EBIT) was €11.2m, a rise of €22.0m compared to a €10.8m EBITDA loss in H1 2021.

Interest and similar expenses, at €24.4m, and asset disposal loss at €3.3m affected the total further. However, Intralot also saw gains from several non-operating avenues, including investment income and foreign exchange differences, of €2.0m and €2.8m respectively. A further gain of €1.2m was made up of equity method consolidations and interest income.

In total, the operating loss from continued operations after €3.9m in tax amounted to €14.2m. After a €9.2m loss from discontinued operations, the total net loss for H1 was €23.5m, a decrease of 44.8% year-on-year.
Just before the H1 period ended, Intralot completed the sale of its Brazilian business, which made up much of the discontinued operations.

Intralot also experienced a rise in GGR and fall in net loss in its Q1 results.

Yesterday, a District of Columbia audit into GamBet – the DC Lottery’s sportsbook product which is operated by Intralot – found that the product had underperformed after its launch. It recommended lower margins and a renegotiation of the Lottery’s deal with Intralot.

Overall handle collected in July amounted to $369.1m, down 22% from the $476.5m collected in June.

Online was by far the most popular channel, accounting for $351.4m of the state’s handle. Of this total, $178.8m was staked on final results, with a further $169.1m was wagered online on prop bets and points totals for the same sports.

Over 10 million online bets were placed on professional sports during the month in total.

Retail wagering accounted for just $17.7m of the total, split between $12.4m worth of wagers placed in-person on final results, and an additional $5.0m spent on prop bets and points totals.

Read the full story on iGB North America.

Yokohama had previously taken steps towards building an integrated resort in the city under Japan’s 2018 law permitting three such resorts, opening a request for proposals to find bidders to operate the resort.

However, the process faced a great deal of opposition internally, which became a central theme in Yokohama’s mayoral election, with none of the three final candidates for mayor supporting the proces.

That election was ultimately won by Takeharu Yamanaka, who publicly opposed the resort. Upon becoming mayor, Yamanaka announced that the IR process would be scrapped.

Following this news, a consortium led by Genting Singapore, and also including pachinko operator Sega Sammy, said it was disappointed but had no choice but to discontinue its pursuit of the licence.

“We are surprised and disappointed by the unexpected turn of events leading to the city’s decision to cancel the Yokohama IR Bid, as the board of directors and management of the company, together with our consortium partners and supporting partners have devoted considerable time and our best efforts to prepare and submit a compelling bid and proposed a significant investment that will benefit the city of Yokohama and its community, and at the same time make Yokohama a world-class tourism destination,” Genting Singapore’s board said.

“The Company would like to thank all parties who have supported and contributed to our Yokohama IR Bid and we extend our best wishes to Yokohama City.”

In June, Yokohama’s government announced that it had narrowed its bidders to two contenders – the Genting Singapore-led bid and one from Melco Resorts.

Other integrated resort bids in Japan have faced their own drama. In Nagasaki, Casinos Austria International was selected as the winning bidder, but only after Oshidori International Development, which had partnered with US-based Mohegan Sun announced its withdrawal from the bidding process.

Oshidori said it did not approve of the development and operation rules imposed by the prefecture and that the request for proposals process was not being implemented ethically or fairly.

Meanwhile, in Wakayama, a bid led by Clairvest was selected. However, last month, a number of anonymous documents emerged in Japan, arguing that William Weidner – president of Gaming Asset Management, which is advising Clairvest – is unsuitable to be involved with the bid due to conduct during his time as president of Las Vegas Sands.

The documents were addressed to Japan Casino Regulatory Commission, Wakayama Prefecture Government, Clairvest and its Wakayama arm Clairvest Neem Ventures. However, ICE365 has confirmed that three addressees did not receive them and did not get a response from JCRC.

Weidner terms the documents “sophisticated but unsubstantiated name calling” containing nothing “that would constitute criminal activity.”

The ‘Gambling Harms Awareness and Support’ initiative will reach out to professionals and community leaders who work or volunteer across eight sectors: debt advisors, faith leaders, primary care, social care, occupational health, criminal justice settings, housing and homelessness services and community pharmacies.

GambleAware said people working in these settings may lack the awareness, knowledge, and skills to identify gambling harms or provide appropriate support but are still approached by members of the public for help and advice.

The training programme, GambleAware said, will allow people in this position to offer both guidance and support at an early stage and help reduce gambling harms in the community.

GambleAware will invest £3.0m in the project over a three-year period, with the programme to run alongside GambleAware’s existing portfolio of training and educational resources

“Upskilling professionals and community leaders through the new training programme will also contribute to expanding the National Gambling Treatment Service provision and promoting a whole-system, community-based approach,” GambleAware said.

To help support programme, GambleAware has launched an invitation tender for qualified organisations to develop and deliver the training and resources, in collaboration with the existing GambleAware networks, on a national and local level across England, Scotland and Wales.

The successful bidder will work with new and existing providers of training on gambling harms awareness and intervention.

The tender is open now and a deadline for applications is set for 5 November this year.

Confirmation of the new programme comes after GambleAware this week also announced plans to establish a network of new Gambling Education Hubs across England and Wales, committing approximately £2.5m to the project.

GambleAware last month also said it would commit £4.0m in funding to Great Britain’s first academic research hub specialising in gambling harms research.