Month: October 2021

The deal includes an initial $5.83bn in cash and an earn-out of up to $225m, based on the business achieving certain earnings before interest, tax, depreciation and amortisation targets in 2022 and 2023. 

Scientific Games’ lottery business works with approximately 130 government and non-government lottery entities in over 50 countries around the world, providing turn-key solutions including instant and terminal-generated lottery games, sports betting, lottery systems and retail technology and online lottery market. 

According to Scientific Games, the lottery business powers approximately 69% of instant product retail sales globally.

“This transaction is transformative in accelerating the delivery of our stated strategy to optimise our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth,” Scientific Games’ president and chief executive Barry Cottle said.

“We conducted a thorough review of paths to divest the Lottery business and we are confident that this transaction maximises value and certainty while minimising complexity and execution risk, and positions both Scientific Games and SG Lottery for continued success along their unique growth trajectories.

“The significant near-term proceeds from this transaction as well as our previously announced sale of Sports Betting will transform our balance sheet and provide the financial flexibility to invest organically and inorganically to accelerate our strategies. 

“This marks a major milestone and puts us on a clear path to achieve our vision to become the leading cross-platform global game company and unlock our full value for shareholders.”

Brookfield Business Partners’ managing partner David Nowak added: “The Scientific Games Lottery team has built a leading business, which has innovated its industry, at the convergence of games, technology and services, across retail and digital channels for its global customers.

“With our capabilities and global reach, we look forward to supporting management in the continued growth of the business.”

Subject to regulatory approvals and customary closing conditions, the deal is expected to close during the second quarter of 2022.

Scientific Games first announced plans to divest its lottery business in June this year, in an effort to position the company for “sustainable growth”. 

Last month, Scientific Games said the division was set to break $1bn in revenue this year, having contributed $266m towards the group’s total revenue of $880m in the second quarter. 

Bally’s Corporation expects the acquisition of Degree 53 to advance the company’s various online offerings and help to integrate numerous Bally’s mobile platforms. Degree 53 has a staff of 54 in Manchester, comprising design and technical experts. The team will continue to work out of Degree 53’s Manchester studio.

Adi Dhandhania, chief operating officer for North America at Bally’s Interactive, the Company’s digital division, said, “We are delighted to welcome Degree 53 to the Bally’s family. As we prepare to launch our Bally Bet 2.0 mobile sportsbook app early next year, we look forward to leveraging the Degree 53 team to develop our mobile sportsbook products and enhance our customers’ overall betting experience.”

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The Q3 figure represents a 6.0% increase on the same period last year.

However, in the 24 days after Q3 ended, Kindred experienced a 61% revenue decrease compared to 2020. The complications experienced in the newly regulated Dutch gaming market helped contribute to the revenue hit, as did extremely low sportsbook margins.

Kindred expects to take a $144m hit as a result of ceasing its activity in the Netherlands, which it started doing from the beginning of the quarter. Though it initially said it expected to receive legal guidance that would allow it to re-enter the market, Kindred announced yesterday that it would not take Dutch customers until it receives a licence.

During the opening 24 days of Q4, the number of active customers decreased by 13%, while casino revenue dropped by 24%.

Analyst Hjalmar Ahlberg at Redeye said the revenue drop shows how important the Dutch market was to Kindred.

“The surprise in the report was probably the implied size of the Dutch exposure based on the guidance for Q4 revenue – although this was already indicated in connection with the company’s earlier comment on the impact from temporary exit of the Dutch market,” he said.

“Given a strong brand in the Dutch market, Kindred will probably be able to get a decent market share in the future as well. Although with more competition and a high tax, the profitability will likely be lower.”

CEO Henrik Tjärnström said: “As communicated at the very end of the quarter, we took the decision to cease services to Dutch residents. Subject to KSA licence application approval, we look forward to being awarded our licence in Q2 2022.

“We look forward to making a positive contribution to the Dutch society as a valued expert in achieving a sustainable gambling market.”

Looking at Q3’s results, where the business took in £298.4m, Western Europe was the best performing region for the company during Q3, generating £189.6m – 64% of the revenue total.

The Nordic region contributed £69.8m, while central, eastern and southern Europe raised £25.6m.

The casino segment was the strongest performer for the company. The £168.3m of revenue was a 16.1% increase on the corresponding period in 2020. Sports betting revenue accounted for 39% of the revenue total with £115.9m, and poker raised £6.9m.

Expenses were roughly stable from 2020. Administrative expenses amounted to £56.8m, up from £53.9m last year. Salaries totaled £28.4m, while other expensed came to £16.7m. Marketing costs were £55.1m.

As a result, earnings before interest, taxation, depreciation and amortisation came to £84.1m, up from £74.2m last year. After factoring in non-operating costs, profit after tax was up from 2020, increasing from £52.5m to £60.6m.

The third quarter also saw Kindred complete its acquisition of Relax Gaming in a €295m deal. The company also managed to go live in US states Arizona and Iowa, launching sportsbooks in both.

On the state of play in the US, Tjärnström said: “There’s been increased competition in states such as Pennsylvania. During the autumn last year some of the now large operators launched and that’s had a consequence on our market share logically as well, it’s been declining slightly from the peaks we saw in the July period last year.

“We’ve come down to a stable level and we’re looking forward to growing from this level growing forward.”

Tjärnström added: “I’m pleased to present a strong Q3 performance with Gross winnings revenue of £298.4m.

“Revenue from regulated markets remains a central strategic focus for Kindred, and we made good progress in our UK, Danish, and Belgian markets; however, France being a sports betting only market has impacted performance during the slower sports period post Euro 2020.”

Playtech will become Holland Casino’s strategic technology supplier, giving the operator access to its multichannel technology. Playtech will offer its information management solution platform, sportsbook, casino, live casino and poker software across the Netherlands.

“Essential to Playtech’s success is our ability to partner with the leading entertainment companies in the most compelling and exciting markets,” said Mor Weizer, CEO of Playtech.

“For 45 years Holland Casino has been a pillar of the leisure landscape in the Netherlands, and we are very proud to be working alongside them to build a market leading responsible multi gambling proposition focused and sustainable entertainment experience that will take the Dutch to the next level.” 

Also as part of the agreement, a live casino studio has been built close to the existing Holland Casino property in Scheveningen. This studio gives players access to Playtech live tables through Playtech’s casino site, which include blackjack and roulette.

“At Holland Casino we know the importance of offering our customers the best product and experiences in a safe and enjoyable online environment,” said Erwin van Lambaart, CEO of Holland Casino.

“Our co-operation with Playtech means that we can deliver the new online market in the Netherlands with an engaging and enjoyable online experience with the highest level of player protection.”

Holland Casino debuted its own product on the Dutch igaming market at the beginning of the month, after it received one of the first 10 Dutch online licenses from the Kansspelautoriteit.

However, this was delayed slightly due to an issue with the Centraal Register Uitsluiting Kansspelen (Cruks) self-exclusion program.

The initial market opening date was 1 October, a date that had been delayed three times.

Several operators have recently launched in the Netherlands for Dutch-based operators, such as Finnplay and Evolution, who both launched through Janshen-Hahnraths.

Through the third quarter of 2021, Kambi announced an average of one new operator launch every week, as the business saw revenue grow 48.0% to €41.6m (£35.1m/$48.3m) while profit more than doubled.
The quarter, however, also included some less welcome news, which Kambi executives admitted was disappointing for the supplier.
Midway through the period, Penn National Gaming announced its acquisition of theScore, in a move that would see Penn move away from Kambi’s sportsbook to one currently being built by the Canadian operator.
A week on from that deal closing, Kambi chief executive Kristian Nylén says the deal was frustrating, not because Kambi was losing a major client, but because that client was planning to leave for a product that did not yet exist.
“It’s very frustrating,” Nylén says. “I think it’s one thing to move to technology that is there and proven. But to announce that they’re moving away to something that is not built is very frustrating.
“Let’s see what happens going forward if this is feasible in a couple of years.”
Nylén acknowledged that for some larger customers, there would be an appeal in trying to pursue a fully integrated sportsbook offering, especially as this can generate interest from shareholders.
“The arguments I hear is to have control over your own destiny,” he says. “I think that part of having control over it is more about how much resources are available.

Nylén adds that the move might provide a short-term boost to share prices, but isn’t necessarily the best option in the long run.

“One argument at the moment as you can see from DraftKings, with the right timing, the short term share price can definitely go up with these acquisitions, but I’m not sure that it works in every instance,” he continues.

“But I think we have shown and proven to a market over a long period of time that we are very open to moving into new markets and fitting with new regulations. So I think that’s the risk you’re taking, not having a very strong alternative.”
Nylén says that in order to keep larger customers, it may require offering lower prices in certain situations.
“Cost has been brought up in very many instances. If someone is so big that there are massive cost savings to be done, but we would be interested in keeping those customers at a lower rate,” he says.

Impressive earnings

However, in financial terms, the quarter was a clear success for Kambi. While the supplier made new entries into two US states, revenue was actually higher in Europe, something that hadn’t happened since Q3 2019.
“I’m very pleased on the quarter,” Nylén says. “It’s quite a tough comparison with Q3 last year being so packed with sporting events because of Covid, so I’m very pleased with the numbers.”

Both new customers and new launches for existing ones were key reasons for the continued revenue growth. These new market launches, Nylén argues, are a clear strength of Kambi’s.
“We’ve obviously got a few new customers. BetCity in the Netherlands and Island Luck in the Bahamas. And we’ve done a lot of launches for our existing partners. That is a great strength of ours, our ability to move with partners quickly into new markets.
“And then we’ve launched in Arizona and Connecticut during the quarter, that’s us up to 16 states now.”

A buyer or a target?

Penn National’s deal for theScore was just one of many recent acquisitions in the online gambling sector. Kambi had been busy in its own regard, buying esports data provider Abios, allowing it to position itself as a leader in a growing sector.
“Now, we feel, was the right timing to do an acquisition in esports,” he says. “We have seen some promising signs and now is the time before it becomes more popular to bet on esports. We wanted to get in as they’ll be regulating it more clearly in the US, or if the Asian market becomes regulated, as we hope will happen maybe in three to five years.
“We would like to spend more time and focus on esports, but we didn’t feel like we had the time with existing organisations already doing this. So instead of building that up we felt it was better to build an organisation that had esports in their DNA.”
However, given the recent push to integrate operators with those on the technology side of things, Kambi may be an attractive acquisition target itself.
Nylén acknowledged that such a deal was a distinct possibility, but until it happens, he says the business was happy to continue on its path of growth.
“Us being acquired, that is a little bit out of our hands of course. I think at first there is a convertible bond with Kindred that would have to be sold for that,” he says. “But I wouldn’t say it’s impossible, it’s a route that could happen, but in the meantime we are very comfortable growing organically and we keep on looking at the smaller acquisitions like Abios to fit into our strategy.”

In its original ruling in March, the Authority said Cbet had unreasonably limited the amount of bets placed and winnings received by the player, adding that its inspection did not reveal any objective reasons for the decision to limit the player’s bets.

The Authority issued a fine of €15,000 (£12,680/$17,411) to Cbet as a result of its ruling.

Cbet appealed against the decision, with the Vilnius Regional Administrative Court agreeing with the operator’s argument that an operator’s right to limit the wagering amounts to a player should not be linked exclusively to the violation of regulations or other legal acts committed by the customer.

The court also agreed with Cbet’s statement that both the risk factors and the mechanism of their identification are a “trade secret” of the company organising gambling and cannot be enshrined in the operator’s regulations or internal legislation. 

In addition, the court said such an obligation is not provided for in the law on fambling or other legal acts for gambling operators to have approved risk assessment methodologies.

However, responding to the ruling, Gaming Control Authority director Virginijus Daukšys said the decision could allow operators to offer gambling under their own rules, rather than Lithuanian law.

“According to the court decision, gambling operators are given the opportunity to impose any kind of restrictions on gamblers and not to disclose the reasons for the decisions made by the entrepreneur, basing their decisions on the protection of trade secrets,” Daukšys said.

“These circumstances would complicate the enforcement of the protection of gamblers’ rights, may create opportunities for abuse by gambling organisers and allow gambling organisers to carry out their activities only in accordance with the rules known to them.”

The court decision is not final and can be appealed to the Supreme Administrative Court of Lithuania.

In his new role, Haywood will work with other members of the Interactive Gaming Group team to support the business with is technology development strategy.

Haywood’s focus areas will include video streaming, an area in which Interactive Gaming Group specialises. 

“Streaming is going to be one of, if not, the hyper growth market for some time in technology – and we will be on the cutting edge of that,” Haywood said. “The opportunity to work with Cristina, a key player in this space meant this was a chance too good to turn down.

“We have an incredibly exciting opportunity in front of us as we strive to maintain our position as leaders in the streaming space while implementing our tech roadmap over the coming months and years.”

Interactive Gaming Group chief executive Cristina Niculae added: “Alex’s knowledge building a world class live streaming service that has placed Evolution Gaming at the top of the immersive market will be hugely valuable for IGusG in the coming months and years. 

“Our team has been working hard to bring to life more interactive experiences driven by creators via live streaming and we are looking forward to the next products on our roadmap scheduled for launch this year.”

Under the agreement, Charter Hall will acquire the Treasury Hotel and the Treasury Casino buildings, as well as the Queen’s Gardens Car Park, for AUS$248m (£135/€160m/US$186m).

Star will lease back both the car park and the Treasury Hotel building for an initial term of 30 years with two 15-year options. The lease has an initial cap rate of 4.7% and includes fixed annual rent increases over the term of the lease.

The deal will see Star retain its existing interest in the former State Library building, which is not part of the transaction, and explore future uses and ownership models for the site.

The transaction is structured to allow for the early settlement of the Treasury Hotel building and car park, while the Treasury Casino building will settle upon the expected opening of Star’s new Queen’s Wharf Brisbane in the first half of 2023.

The transaction remains subject to state consent in Queensland. 

The deal comes after the New South Wales Independent Liquor and Gaming Authority this month announced several public hearings in relation to its review of Star Casino’s suitability to hold a casino licence.

The investigation will examine The Star’s compliance to the Casino Control Act 1992 and the Casino Control Regulation 2019, as well as compliance regarding licensing and legal agreements between The Star and the NSW Authority.

Revenue for the three months to the end of September amounted to $843.1m, up 29.3% from $652.2m in the same period last year.

This was mainly due to casinos now operating at near-full strength, having faced certain measures and limitation last year as a result of the pandemic.

Boyd’s casinos in the Midwest and South region were the main source of income during the quarter, with revenue at these locations reaching $569.8m, an increase of 22.9% on 2020.

Las Vegas local casinos generated $231.3m, up 35.2% year-on-year, while Boyd’s Downtown Las Vegas casinos experienced the largest increase, with revenue at these sites rising 140.2% to $42.1m in Q3.

Read the full story on iGB North America.

HappyBet, which operates in the German and Austrian market, will benefit from a presence on Virtual Cam Carpets and on LED boards inside Inter’s Stadio San Siro during home games.

Branding will only be visible in select European countries through the use of Digital Overlay geolocation technology, whereby marketing messages are adapted for fans watching games on television in those countries.

HappyBet, which was taken over by Playtech subsidiary Snaitech in May, will also work with Inter on a range of exclusive initiatives to promote its brand to fans. 

The deal comes after Asia-facing online gambling operator AYX this week also secured a new partnership with Inter Milan. AYX will become an official regional partner of the club in Asia.

In August, HappyBet also linked up with Inter’s fierce rival AC Milan in a similar regional partnership.

Pkaytech, which ultimately owns HappyBet, is set to be acquired by Australian slot machine manufacturer Aristocrat in a deal worth approximately £2.7bn (€3.2bn/$3.7bn) on an enterprise value basis.