Month: November 2021

The report, which was presented to the country’s Senate earlier this week, estimates the value of Italy’s illegal gambling in 2020 as €18bn. This marked a significant increase on the 2019 estimate of €12bn, with Lottomatica warning that the illegal market could top €20bn by the end of 2021.

This led to enforcement action by Italian authorities being ramped up in recent months, the report continued. Between January 2020 and April 2021, an underground gambling room was discovered once every three days. In this period, 145 investigations were conducted by the police and 1,000 people were reported to law enforcement, up from 493 people in 2019.

Mauro Maria Marino, Senator and president of the Parliamentary Commission of Inquiry into Illegal Gaming argued that the findings showed the need for a rethink of the country’s gambling regulations. The majority of people who responded to a survey conducted as part of the report appeared to be of the same opinion.

This found that 83.6% of respondents believed the government should take responsibility for regulating and managing the gaming market, ensuring that the protection of consumers and the community remains the priority.

A majority (59.8%) were also of the option that aggressive sanctions for legal gaming would only give rise to the number of people playing illegally, while 28.9% believed an outright gambling ban would reduce the number of players and benefit public health in the process.

“We need to focus on the quality of regulation and standardise sectoral legislation at national level, thus overcoming the overlap of many rules that conflict with each other,” Marino said. 

“In this sense, there are some aspects to confront in order to bring about a real reform of the sector – in particular the issues of online gaming, illegal gambling, and the overall size of the gambling sector which was greatly affected by closures during Covid.”

The report also highlighted the impact of the pandemic on Italy’s legal gambling industry. Overall handle was down €22.2bn; player winnings decreased €15.7bn; money collected by tax authorities fell by €4.1bn, and operator revenue dropped by €2.3bn.

Land-based gaming revenue decreased by €35bn, which meant a €12.8bn increase online gaming revenue was not enough to offset the Covid-19 shut-down.

The report also noted the lack of a coordinated effort on the part of the state to tackle the issue of gambling addiction. It was suggested that an integrated support network for gambling addiction should be made a priority, so as to create a system of protection and emergency response for at-risk players.

This was particularly important to survey respondents, 81.7% of whom said that the state should be responsible for raising awareness of and informing players about the risks of gambling addiction.

“The Lottomatica-Censis Report offers us important data to understand the strategy of the legislator and eliminates many prejudices on an issue that concerns more the cultural than the legal sphere,” added Paola Severino, professor of Criminal Law at Luiss Guido Carli University.

“Regulating gambling effectively means stealing large slices of the market from the Mafias and crime. Our country must increasingly strengthen the partnership between public supervisory authorities and legitimate operators of the system in order to quickly identify illicit money flows and effectively counter the entry of capital and criminal interests into the legal economy.”

Revenue for the three months to 30 September amounted to €10.1m (£12.0m/$13.6m), up from $7.4m in the corresponding period last year.

Gambling.com Group put this increase primarily down to the improved monetisation of new depositing customers (NDCs), attributed to a combination of technology improvements and changes in product and market mix. 

However, the group also noted that NDCs fell 3.6% from 28,000 in Q3 of 2020 to 27,000.

Cost per acquisition (CPA) operations were responsible for more than half of total revenue for the quarter, generating $5.5m. Hybrid commission revenue reached $2.8m and revenue share commission $829,000, while other revenue totalled $1.0m.   

Looking at revenue by vertical, casino contributed $8.0m of the total, while sports revenue reached $2.1m, with the remaining $82,000 coming from other sources.

The UK and Ireland remained Gambling.com Group’s core market with $4.5m in revenue for the quarter. Revenue from European markets totalled $2.7m and North American revenue more than doubled year-on-year to $2.3m, while rest of world revenue was $652,000.

Looking at costs and operating expenses were 97.4% higher at $7.7m, mainly due to higher spending across sales and marketing, yechnology, and general and administrative as the group took on more staff to support is growth plans. 

Gambling.com Group also said its listing on the Nasdaq stock exchange incurred additional operating costs.

Higher costs meant operating profit was down 31.4% to $2.4m, though $293,000 in finance income helped pre-tax profit to $2.7m, marginally up from $2.6m last year. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 14% lower at $3.5m.

Gambling.com Group received $2.0m in tax benefit during the quarter but after including $1.8m exchange differences on translating foreign currencies, net profit was $2.9m, down 6.5% year-on-year.

“Our financial performance in the third quarter remained strong as we grew revenue by 37% compared to the prior year and, despite the third quarter being the seasonally slowest quarter of the year, delivered an adjusted EBITDA margin of 34%,” Gambling.com Group co-founder and chief executive Charles Gillespie said.

“Importantly, after the quiet summer months of July and August, we delivered all-time-high revenue in September. With the launch of Arizona and the kick-off of the NFL season, we saw a significant uplift in US revenue in September and our US performance exceeded our internal expectations.

“Entering the quarter with good momentum we are encouraged by the start to our seasonally stronger fourth quarter.”

In terms of year-to-date performance, revenue for the nine months through to the end of September was 80.8% up to $32.0m.

Despite operating costs increasing by 93.6% to $21.3m, operating profit was 58.8% higher at $10.8m, while pre-tax profit climbed 49.3% to $10.9m.

Gambling.com Group received $733,000 in tax credits, which., after accounting for $3.0m in exchange differences on translating foreign currencies, meant net profit was up 16.2% to $8.6m.

“We remain highly focused on prudently growing the company through both sustained organic growth and future accretive acquisitions which we continue to actively pursue,” Gillespie said.

Revenue for the month amounted to $9.1m, up 3.4% from $8.8m in October 2020 and 3.4% higher than September this year, when revenue also reached $8.8m.

The state’s handle was 36.4% higher than $61.2m in October last year and the highest ever total since Mississippi launched legal sports betting in August 2018, smashing the previous record of $67.7m set in January this year.

The start of the new National Football League season meant football was the most popular sports among consumers in Mississippi, drawing $45.8m in total bets and generating $4.3m in revenue.

Read the full story on iGB North America.

The ACMA launched an investigation into Tabcorp after receiving a complaint, and found that the operator had taken 37 in-play bets during the game on 3 January this year.

Online in-play betting on an event during play is prohibited in Australia under the Interactive Gambling Act 2001 and, as such, ACMA ruled Tabcorp broke the law.

In response, Tabcorp said that it failed to close betting in time for the game due to incorrect match information from a third-party provider, while it also admitted to a technical error from within Tabcorp. 

Upon realising the mistake, Tabcorp said it paid out winning bets and refunded losing bets, though one was only refunded after the ACMA commenced its investigation.

ACMA considered Tabcorp’s actions to deal with the illegal bets as well as its commitment to improve its systems and processes, and decided to issue a formal warning to the operator. 

Alternative enforcement options could have included penalties under an infringement notice and application by the ACMA to the Federal Court for a civil penalty or injunction.

“We know that in-play betting, such as bets on the next point in a tennis match or the next ball in cricket, can pose a very high risk to problem gamblers,” Authority member Fiona Cameron said.

“These rules have been in place for many years and Tabcorp has had more than enough time to put systems in place to ensure that in-play betting is not offered on local or international sports.”  

Cameron added that rather than paying out for the winning bets, all should have been voided so neither operators nor punters benefitted from the prohibited activity.

She added that the industry was now “on notice” that it must have robust systems to prevent live betting, or face an investigation by ACMA.

Operating revenue for the quarter grew to €400.1m (£336.0m/$453.3m), a 36.5% improvement on the prior year, when much of Cirsa’s operations were either closed or restricted by the pandemic. 

After €65.1m in variable rent on its physical properties, net operating revenue came to €335.0m, a 43.9% increase compared to Q3 2020. 

Breaking this figure down by operating unit the slots division, comprising slot machines and video lottery terminals in Italy and Spain accounted for €233.8m of operating revenue, up marginally year-on-year. 

However after rent was paid out, net revenue declined slightly to €170.3m which Cirsa attributed to reduced play in Italy as a result of the country’s Covid pass for gaming halls, indoor bars and restaurants. The operator said this impact would be mitigated as use of the so-called Green Pass becomes more widespread. 

While its revenue contribution fell far below that of slots, Cirsa’s casino division was the standout performer in Q3, with operating revenue soaring from €11.9m to €96.3m. Variable rent contributions were much smaller, meaning net revenue finished far ahead of Q3 2020, at €95.9m.

This, it explained, was aided by casino opening hours being increased, which meant that all properties in Spain, Panama, Colombia, Peru, Costa Rica and the Dominican Republic returning to full capacity. Only two properties in Morocco were still shuttered at the end of the reporting period.

The bingo division, which spans Spain, Mexico and Italy, also posted strong year-on-year growth with operating revenue up 75.9% to €40.9m and net revenue after rent contributions rising 71.0% to €39.5m. All bingo halls operated by Cirsa were open during the quarter.

For sports betting and online, growth was slower, and largely driven by the interactive channel than the sportsbook points of sale in Spain, Colombia and Panama. Operating revenue grew marginally to €31.1m, and with minimal rent contributions, net revenue came to €31.0m.

While Cirsa did not split out the betting and online revenue, it noted that the interactive contribution was up 47% year-on-year. This was aided by in-person customers betting with the brand online, it said.

Finally the B2B division saw revenue grow 25.7% to €13.1m. This was down to all gaming verticals reopening, which meant customer orders for products such as slot machines restarted. 

Turning to Cirsa’s outgoings for the quarter, the resumption of activity across multiple markets led to increased expenditure across the board. Thanks to the increased revenue however, earnings before interest, tax, depreciation and amortisation (EBITDA) was up significantly, jumping from €37.5m to €100.6m. 

Once depreciation, amortisation and impairment charges of €73.0m were factored in, earnings before interest and tax came to €27.6m, compared to a loss of €39.3m in the prior year.

The business still posted a loss for the quarter, as a result of a €9.8m premium paid for the redemption of $495m and €100m senior notes, and a €7.1m write-off related to capitalised issuance costs. This saw finance expenses jump to €55.3m, which coupled with a €6.3m in foreign exchange losses and a €1.6m loss on the sale of assets, resulted in a pre-tax loss of €35.6m. 

This was narrowed from the prior year’s €59.9m loss in Q3, however, and after a €4.3m income tax benefit and €3.1m loss on its minority interest in another venture, saw Cirsa post a net loss of €34.4m for the quarter. 

Looking ahead, the operator’s EBITDA guidance for Q4 and the 2021 calendar year remain unchanged, at €112m-€120m and €322-€330m respectively. Cirsa explained that continued easing of Covid-19 measures in Latin America, coupled with increasing vaccination rates, would aid performance. 

Its bottom line, however, may be impacted by repayment of gaming taxes in Q4 after they were deferred as a result of the pandemic. Cirsa expects these to be repaid substantially, if not in full, during the final three months of 2021.

The BGC has worked with Facebook throughout the last year, with an aim to see further opt-out tools rolled out in the future.

In July BGC voiced its support for Snapchat, after it implemented a similar feature for gambling ads.

Like Snapchat, Facebook now meets the conditions of the updated Industry Code for Socially Responsible Advertising, which was released in 2020.

The Code aimed to reduce the number of gambling advertisements seen by under-18s by stipulating that all BGC members must aim their advertisements at consumers over the age of 25, unless they can prove it’s specifically targeted towards over 18s.

“This is yet more evidence of our commitment to raising standards in the regulated industry,” said BGC chief executive Michael Dugher.

“I welcome this move by Facebook and I would urge all social media and search platforms to provide the ability for users to opt out of viewing betting adverts.”

Yesterday (November 18) Dugher branded Safer Gambling Week 2021 a “huge success” after the event recorded 25 million social media impressions, up 19% year-on-year.

Digital revenue was the biggest contributor to the total, generating AUD$2.47bn for the financial year running from 1 October 2020 to 30 September 2021. The strong digital showing (a 4.6% increase on the year prior) was aided by the performance of Aristocrat’s mobile games business.

The company operated seven of the top 100 mobile games in the US market, and continued to be a top five mobile games publisher in Western markets.

Revenue from the Americas increased 33.4% to AUD$1.82bn, aided by an increase in the number of gaming machines installed across the region. In Australia and New Zealand revenue was AUD$399.8m – a 42.5% increase which was hindered by pandemic-related venue closures across New South Wales and Victoria during the last quarter.

The region the company refers to as International Class 3, comprising slot machine sales in other markets around the world, reported revenue of AUD$44.9m, a 65.8% decline from 2020. This was largely due to land-based closures and operating restrictions resulting from the novel coronavirus (Covid-19) pandemic slowing sales.

Turning to costs, unallocated expenses for the year were AUD$641.9m, up 13.4% from last year. Design and development expenses were AUD$527.6m, corporate expenses came to AUD$112.0m, while foregin exchange losses amounted to AUD$2.3m.

Normalised profit after tax and before amortisation of acquired intangibles (NPATA) for the period came to AUD$864.7m, which was an increase of 81.4% from last year. Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased 43.0% for the year to AUD$1.54bn, with a margin of 32.6%.

“The results and momentum we’ve delivered this year demonstrates the successful execution of our growth strategy,” Aristocrat chief executive and managing director Trevor Croker said.

“We continued to take share and deliver above-category organic growth over the year through sustained investment in outstanding product, people and capability, and further strengthening our business fundamentals.”

Following the year-end Aristocrat agreed terms on the acquisition of Playtech in a £2.7bn deal in October. However, it faces competition to complete the deal, with a counter proposal from Gopher Investments potentially on its way.

Playtech also received a preliminary approach from JKO Play today (18 November), headed by Formula 1 team owner Eddie Jordan and Keith O’Loughlin.

Croker added: “Aristocrat’s recommended offer to acquire Playtech, announced after period end, is another demonstration of our appetite to accelerate the implementation of our strategy through accretive M&A, in particular where it can deliver new capabilities and access to significant growth opportunities.

“We are focused on achieving necessary approvals, and continue to expect the acquisition to complete in the second quarter of calendar year 2022.”

He added that he business was entering its 2022 fiscal year with ”excellent operational momentum, business resilience, and an appetite to continue to invest organically and through M&A to accelerate our growth strategy”.

Total gambling revenue for the month amounted to $448.7m, up 32.7% from $338.1m in the same month last year, but slightly lower than the $453.6m generated in September of this year.

Sports wagering revenue for the month reached $84.2m, an increase of 43.8% on last year and a new record for the state.

Player staking stood at $1.30bn, another record for New Jersey and the highest monthly total of any regulated state in the US since the repeal of PASPA. A total of $1.18bn was placed through online sportsbooks, while the remaining $124.2m wagered at retail facilities.

Read the full story on iGB North America.

The deal will see Flutter pay the full consideration in cash upon completion, taking charge of Tombola outright.

Flutter explained the addition of Tombola to its portfolio would deliver a number of key strategic advantages, including expanding its position in a product vertical in which it had historically been weaker.

It also talked up Tombola’s engaged and sustainable player base, noting that many customers remained active with the brand for multiple years, and that the business was the first to roll out mandatory staking and deposit limits.

Tombola has been active in the UK for 16 years, with more than 80% of its revenue generated in the UK and 16% coming from operations in Italy and Spain. It has approximately 400,000 monthly players on average and employs over 700 staff.

In its 2019-20 financial year ended 30 April 2020, Tombola generated £120m in revenue, and £9.4m in net profit.

“Tombola is a business we have long admired for its product expertise, highly recreational customer base and focus on sustainable play,” Flutter’s chief executive Peter Jackson said. “The brand aligns closely with Flutter’s safer gambling strategy, a key area of focus for us. 

“I am excited to combine Flutter’s digital marketing expertise with Tombola’s operational capabilities within the UK and Ireland division.”

Jackson also paid Tribute to Tombola’s founder and chief executive Phil Cronin: “As the time comes for Phil to hand over the reins, I would like to thank him for building the success story that the business is today, and I look forward to welcoming the Tombola team to Flutter and growing a sustainable business for the future together.”

Flutter expects to complete the acquisition in the first quarter of 2022, subject to merger control clearance from the UK Competition and Markets Authority.

In September, Tombola was named as one of only a handful of operators to secure a licence for the newly regulated Dutch market. The brand launched in the Netherlands last month, when the country opened its market on 1 October.

Alina Yakirevich is CMO of Fonbet. She has extensive experience in all areas of marketing – TV, digital advertising, BTL-communications, printed and radio advertising, PR, SMM, SEO and context, content and native advertising, as well as B2B marketing. She also reorganised and established all divisions of the Fonbet marketing team, setting KPIs which reflect the key business goals of the company.

Brand ambassadors have played an important role within marketing strategies for decades, with companies eager to benefit from the popularity of the celebrities they work with.

From models and Hollywood stars bringing their beauty and charisma to artistic perfume commercials to footballers selling boots and musicians wearing cool trainers, businesses pay big bucks for their access to stardust.

The activations have changed over the years from newspaper adverts or posters featuring a big name’s drafted words and signature through TV and cinema ads, and these days social media posts. The types of influencers have also changed, with reality TV and Instagram stars now pursued as well as actors. models and sports heroes.

Fonbet, the Russia-facing betting operator, is one business that has carefully selected its brand ambassadors as it expands across its major market. As well as sponsorships, such as the recently announced shirt deal with Lokomotiv Moscow, it also has associations with individuals such as NHL ice hockey star Alexander Ovechkin.

Alina Yakirevich, Fonbet’s chief marketing officer, explained why brand ambassadors are important for gaming brands and their strategies.

She said: “To start with, ambassadors are living people with their own history, reputation and audience that follows them and trusts them.

“In today’s world of social media dominance, it’s important to establish relationships with opinion leaders and work with them to convey your brand’s philosophy and advertise. So, media personalities need to be chosen carefully. It isn’t enough to just choose a star and shoot a commercial with them. The approach must be comprehensive, from social media to off-line events.”

Different audiences
Yakirevich said there is no universal answer as to which personalities Fonbet approaches, but the operator focuses on matters such as reputation, social media coverage and engagement, media personality relevance, and, importantly, personal qualities.

As well as Washington Capitals star Ovechkin, Fonbet also works with sports TV personalities Dmitry Guberniev and Vasily Utkin, and social media influencer Zhenya from 2DROTS.

Fonbet is using its association with 2DROTS to boost its profile among young people under 20 years old, with Utkin covering the 25-40 range of football enthusiasts and Ovechkin appealing to all sports fans.

“As you can see, our ambassadors are people from different spheres with different audiences,” she said. “We choose ambassadors based on what we need to accomplish. An ambassador doesn’t have to be involved in gambling. That’s just a stereotype.”

“Our objective is to increase loyalty and brand awareness in different social groups. We are working with all kinds of opinion leaders, from micro-influencers to world sports stars. Each audience has its own opinion leader. Anyone who influences an adult audience may be unrecognisable for young people, or the opposite.”

Decisions should not be taken without thorough research as brands must avoid their reputation being besmirched by someone who could attract the wrong kind of publicity.

Yakirevich added: “It’s important to find a balance here and work with the best from different niches and areas. The positioning strategy needs to be strong, as well as audience engagement.

“We mustn’t forget about brand safety, we can’t just sign any cooperation agreement with a prankster who fights with people in their videos. To avoid negativity, it is important to analyse a potential ambassador from all angles before signing an agreement and starting to work together.”

Analysing performance
Fonbet has an internal system of performance metrics that helps it find out how many new customers the ambassador has brought in, how many people downloaded the mobile app thanks to them, or made a deposit.

The company also orders analyses of brand awareness to determine whether it has become more recognisable through the partnerships.

“When we see underperformance, we analyse and think about what can be improved or even who else we can cooperate with in the target audience,” Yakirevich added.

Fonbet’s focus is already turning towards next year and the winter staging of the 2022 FIFA World Cup in Qatar. Yakirevich said Fonbet may look at partnerships with people outside of football as it looks to reach out to casual fans rather than frequent bettors and football enthusiasts.

Yakirevich said: “We expect to build our strategy on this global event, but we don’t think we’ll go running to sign former footballers, coaches and others. We might focus on the audience that knows about the World Cup but is not very interested in it and use influencers to draw their attention.

“In general, the number of our ambassadors keeps growing from year to year. I hope that 2022 will bring us new interesting partnerships and cases, and that we can continue our success with current partners.”