Month: November 2021

Mountainview Thoroughbred Racing Association, which operates Penn National Gaming’s Hollywood Casino and Barstool Sportsbook brands, was fined $57,500 for letting self-excluded individuals access its and place wagers. Sites are required to prohibit self-excluded individuals from visiting or wagering on their platforms.

The business then received a second fine of $25,000 for allowing underage individuals to gamble on the casino floor. Four individuals, aged 16, 17, 18 and 19, attempted to access the casino floor, of which two succeeded, with one using a slot machine.

Read the full story on iGB North America

Revenue for the third quarter of 2021 grew to HK$67.0m (£6.4m/€7.5m/$8.6m) – almost as much as it generated in the first six months of the year.

The bulk of this came from lottery hardware sales and services, which accounted for HK$39.1m of the total, with a further HK$9.5m from lottery distribution via physical channels and ancillary serivces. 

From the lottery games and systems segment, AGTech generated revenue of HK$10.0m from games and entertainment and HK$8.4m from non-lottery hardware sales and services. 

This increased revenue, coupled with a slight decline in operating costs, saw the supplier’s operating loss reduced to HK$10.2m for the quarter, compared to HK$18.9m in Q3 2020. 

Its bottom line was aided by HK$3.6m in gains from changes in the fair value of financial assets held by AGTech, and HK$3.9m in net finance income. This resulted in its pre-tax loss narrowing to HK$2.7m. A HK$9,000 income tax credit meant its net loss also came to HK$2.7m, a significant improvement from the prior year’s losses of HK$47.1m. 

An improved Q3 performance meant that for the nine months to 30 September, AGTech’s revenue was up 36.0% to HK$144.9m. 

Over this period, Chinese Ministry of Finance figures showed that lottery sales amounted to RMB278.5bn, a significant improvement on 2020, when the market was badly affected by the Covid-19 pandemic. 

With the market recovering, AGTech won 20 lottery hardware tenders to supply lottery terminals to Sports Lottery Administration Centres over the first three quarters of the year.

“These successful tenders further strengthened the group’s top-tier position in China’s lottery hardware market and demonstrated the continued competitiveness of the group’s lottery terminals,” the supplier noted. 

“Despite ongoing headwinds and uncertainties with regard to the Covid-19 situation globally, we have seen a steady recovery in the PRC market since lottery related activities resumed,” it added. “The group will proactively transform and build on our leading position within the Chinese lottery industry.”

The lottery hardware division also accounted for the bulk of year-to-date revenue, at HK$78.8m, with a further HK$28.8m coming from distribution services.

This was complemented by expansion into other consumer sectors, such as point-of-sale terminals for the Chinese retail market. Launching in 2021, this division brought in revenue of HK$17.1m for the year to date. 

In addition, AGTech’s games and entertainment revenue totalled HK$20.1m for the nine-month period. Its India-facing mobile gaming and entertainment platform Paytm First Games contributed HK$18.1m of this sum. 

After operating costs, the supplier’s operating loss for the first three quarters was slashed from HK$124.5m to HK$65.3m, while reduced losses on investments helped cut pre-tax losses down to HK$48.3m. 

Once HK$1.9m in taxes were factored in, AGTech’s net loss for the nine months to 30 September came to HK$46.3m, compared to a HK$156.9m loss in Q3 2020. 

This $353.6m total was a decrease of 0.5% compared to Paysafe’s Q3 2020 results.

A total of $186.8m of the revenue was generated from integrated processing, up 3.5% year-on-year. Ecash solutions added $90.1m in revenue, an increase of 9.9%, while digital wallet revenue fell by 15.1% to $83.6m.

Intersegment eliminations cancelled out $7.1m of this total.

Expenses, however, grew. Costs of services came to $144.8m, up by 7.0% compared to Q3 2020. Selling, general and administrative expenses totalled at $111.0m, a slight decrease of 1.6%.

The business also reported earnings before depreciation and amortisation (EBITDA) of $106.4m was also reported, down 0.8% year-on-year.

Depreciation and amortization also decreased, falling by 6.5% to $61.8m. Impairment costs – related to intangible assets in the digital wallet segment – totaled $337.0m.

These expenses led to an operating loss of $301.1m, a difference of $297.5m from the $3.8m loss recorded in Q3 2020.

Other income added $96.4m to earnings, up by $102.9m year-on-year. Interest expenses came to $19.2m, less than half of the total from Q3 2020.

This brought Paysafe’s loss before taxes to $223.9m, $171m more than the year-on-year loss.

After income tax benefit generating a further loss of $76.8m, the total net loss for the period totaled at $147.1m, a 280.0% yearly rise.

These results saw Paysafe lower its full year 2021 revenue projections from the initial $1.53bn-$1.55bn bracket to $1.47bn-$1.48bn.

“In the third quarter we reported adjusted EBITDA in line with our expectations, despite softer than expected revenue, reflecting both market and performance challenges within the digital wallet business,” said Philip McHugh, CEO of Paysafe. “While the recent trend will drive an adjusted financial outlook, we continue to see strong momentum across the business.”

“Our position to win in high growth and disruptive markets including online sports betting and crypto continues to accelerate, coupled with strong delivery against our cost and technology platform targets.”

In September Paysafe appointed Zak Cutler to lead its North America business. Cutler previously held an executive position for DraftKings.

Revenue from the Danske Lotteri Spil business, which holds Denmark’s lottery monopoly, was up 5.8% from 2020 to DKK2.03bn.

Meanwhile Danske Licens Spil, which offers online betting and gaming in the private market, saw revenue grow 2.9% to DKK1.36bn. This, the operator said, was partly due to a busier sporting calendar during the reporting period, including the latter stages Euro 2020 in which the Danish national team reached the semi-finals.

The Danske Spil board noted that this improvement in revenue from the Danske Licens Spil segment came despite Denmark increasing its online gaming tax rate – from 20% to 28% – from the beginning of the year. 

Elite Gaming, Danske Spil’s gaming hall arm, brought in DKK130.9m, a drop of 30.5% from this quarter in 2020. The operator noted that more venues were closed in Q3 2021 due to novel coronavirus (Covid-19) than in 2020.

Fantasy sports business Swush, however, saw revenue soar DKK15.5m.

Turning to direct costs from gaming, taxes paid to the Danish state were up 25.2% to DKK450.7m. Dealer commission and similar costs declined by 18.8% to DKK339.1m, while direct gaming costs were up 7.0% to DKK207.3m.

This meant the business reported a gross profit of DKK2.54bn, up by 3.0% from 2020. Income from other, non-gaming sources also ticked up, to DKK25.9m.

Operating costs again rose slightly, as a 3.0% dip in other operating costs to DKK492.7m was offset by a 17.6% rise in staff costs to DKK248.1m. Depreciation and write-down costs held steady at DKK238.8m.

This led to a profit before financial items of DKK1.59bn, up 3.4%.

Danske Lotteri Spil was responsible for almost all of this profit, at DKK1.39bn. Danske Licens Spil made up DKK210.9m of the total, while the parent company was responsible for DKK124.1m. 

Swush’s profit before financial items was DKK9.8m, while Elite Gaming made a loss for the period, of DKK12.6m.

Danske Spil’s financial costs, however, were down 60.0% to DKK11.9m.

This meant that pre-tax profit was up 4.6% to DKK1.57bn. The operator paid income taxes totalling DKK346.7m, up 4.9%, resulting in an overall profit of  DKK1.23bn.

Following the results, Danske Spil revised its profit expectation for the full year upwards by DKK100m. Where previously profit was set to fall between DKK1.4bn and DKK1.5bn, it is now expected to fall between DKK1.5bn and DKK1.6bn.

During the quarter, the Danish government announced a proposal to merge Danske Spil and charity lottery the Danish Class Lottery.

The government said that as both digitalisation and responsible gambling require strategic management and investments, a combined operation would be more efficient and cost-effective.

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. 

If it gains approval, the merger is set to close before the end of the year.

Denmark is also in the process of rolling out mandatory ID cards for retail betting, a move that Danske Spil has already implemented.

This was announced on Disney’s fourth quarter results call for the period ended September 30.

Chapek stressed that ESPN’s influence in the world of sports media would be an asset as the company looks into sports betting.

“We’re also moving toward a greater presence in online sports betting,” said Chapek. “And given our reach and scale, we have the potential to partner with third parties in this space in a very meaningful way.”

“Suffice to say, we continue to see enormous opportunity in sports and all of this, the rights deals, our innovative programming and the flexibility achieved through our DTC [direct-to-consumer] business, which saw ESPN+ subscribers increased by 66% over the past fiscal year alone.”

When asked to expand upon the potential move into sports betting, Chapek said it would be driven by consumer trends.

“We do believe that sports betting is a very significant opportunity for the company,” responded Chapek. “And it’s all driven by the consumer.”

“And as we follow the consumer, we necessarily have to seriously consider getting into gambling in bigger way. ESPN is a perfect platform for this.”

Chapek added that Disney had considered the effects of this potential move in terms of company perception.

“We have done substantial research in terms of the impact to, not only the ESPN brand, but the Disney brand in terms of consumers’ changing perceptions of the acceptability of gambling.”

“And what we’re finding is that there is a very significant installation. Gambling does not have the cachet now that it had, say, 10 or 20 years ago.”

Chapek ultimately argued that the presence of a sports betting operation would boost the ESPN brand without a negative impact on the wider Disney brand.

“We have some concerns as a company about our ability to get in it without having a brand withdrawal,” Chapek said.

“But I can tell you that given all the research that we’ve done recently that that is not the case. It actually strengthens the brand of ESPN when you have a betting component, and it has no impact on the Disney brand.”

In September 2020 ESPN entered a deal with DraftKings to promote its daily fantasy sport updates, and a deal with William Hill – which was later acquired by Caesars – to show its betting odds.

Rockford Casino: A Hard Rock Opening Act features nearly 3,500m2 of gaming space, with more than 625 slot machines and Interblock Electronic Table Games.

The venue, which will operate 24 hours a day, seven days week, also has two restaurants and a pop-up retail shop offering the brand’s signature Rock Shop merchandise.

Located at the intersection of East State Street and Bell School Roads, the new facility will serve as a temporary venue, with a permanent Hard Rock Casino to be build one mile east of the site. Both projects will create more than 1,000 jobs in the local area.

Read the full story on iGB North America.

Revenue for the nine months to 30 September amounted to €65.1m (£55.7m/$74.6m), up 0.9% from €64.5m in the same period last year.

The majority of revenue was generated within Zeal’s core German business, with activities in the country leading to €61.5m in revenue, an increase of 5.3% from €58.4m in 2020.

This, Zeal said, was despite a comparatively weak market environment for lotteries in the country. The ‘Eurojackpot’ lottery only reached the €90.0m mark three times in the period, compared to six last year, while the maximum payout mark for German lottery ‘Lotto 6aus49’, set at €45m since 23 September 2020, was not reached at all.

Zeal said that while these low jackpots had a negative effect on its billings, gross margin and new customer acquisition, it was still able to gain 446,000 new registered customers in the German segment in the nine-month period. 

Total group billings – comprising all stakes from customers – also increased by 4.5% to €493.2m, of which the German segment accounted for almost the entire amount (€470.9m).

The period also saw Zeal Network make an offer to purchase all remaining shares in Lotto24 and take full ownership of the online lottery broker it spun off in 2012. Zeal already owned 93% of the shares in Lotto24, with the agreement requiring Lotto24 delist remaining shares from the Frankfurt Stock Exchange in order to allow Zeal to acquire them.

The acceptance period ran from 16 August to 13 September, and the offer was accepted for a total of 22,834 Lotto24 shares, corresponding to 1.42% of share capital. As such, Zeal now holds approximately 94.9% of Lotto24’s share capital.

“The fact that we have managed to continue to grow with a significantly weaker jackpot development compared to the previous year [while] at the same time significantly improve the profitability makes us proud,” Zeal’s chief financial officer Jonas Mattsson said. 

“It furthermore demonstrates that we have taken the right measures by adjusting marketing investments and implementing strong cost discipline to match the market reality.”

Turning to costs and personnel expenses were lowered by 12.7% to €14.5m while other operating expenses, including marketing and both direct and indirect operating expenses, were reduced by 22.7% to €33.2m.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 155.7% higher at €17.6m, while after accounting for €6.6m in depreciation and amortisation costs, earnings before tax and interest was €11.1m, up 286.7% year-on-year.

Pre-tax profit climbed 92.3% year-on-year to €10.8m and after paying €3.4m in income tax, Zeal ended the period with a net profit of €7.3m, an increase of 12.3% on last year.

“The scalability of our business model will also help us in the future to take advantage of market opportunities, adapt to the dynamic environment and continuously optimise,” Mattsson said.

The temporary Covid-19 restrictions first took effect in June 2020 and included an SEK5,000 (£428/€501/$575) deposit cap on online casino, along with an SEK100 limit on bonuses. 

The measures had been due to last until the end of 2020 but were extended to June 2021 and again until November as the pandemic continued. However, the government last month confirmed the restrictions would be withdrawn from 14 November.

Upon announcing the end to these measures, the government instructed Spelinspektionen to carry out an in-depth evaluation of the temporary rules and the impact they had on the country’s regulated market.

This review, it has now been revealed, will include how marketing, the range of games on offer, forms of gaming and the availability of gambling developed as the country tackled the Covid-19 crisis. The regulator will monitor and analyse how the consumption of gambling and behaviour develops, with a specific focus on gaming problems.

Spelinspektionen will also propose new rules within the framework of the existing licensing system to strengthen consumer protection in the Swedish market to help counteract public health problems related to gambling.

The government has set an initial deadline of 15 March next year for the first part of the assignment, with the regulator required to submit a partial report by this date.

The Swedish Gaming Inspectorate must submit a partial report of the first part of the assignment to the Government Offices (Ministry of Finance) no later than 15 March 2022.

Spelinspektionen will then conduct further analysis and produce a full-length report and submit this to the government no later than 31 October, 2023.

Revenue for the three months to September 30 reached $122.9m, up 57.2% from $78.2m in the same period last year.

Much of this increase was down to RSI’s growth and expansion efforts during the quarter, including securing the third and final sports wagering skin in Connecticutthrough a 10-year deal with the Connecticut Lottery Corporation (CLC) and fully launching this offering.

RSI also confirmed the full launch of its BetRivers online sportsbook in Arizona after it was issued a license in the state, while the operator was also selected as one of nine mobile betting licensees in New York.

Read the full story on iGB North America.

The business noted that the sharp rise in revenue was due to a number of new businesses that it acquired in the past year. Acroud acquired Power Media Group in January for €4.8m, which allowed it to offer Software as a Service (SaaS) as part of its capabilities. Acroud also acquired affiliate business TheGamblingCabin in April, in a deal worth SEK47.3m (£4.1m/€4.7m/$5.6m).
The company recorded organic growth of 0.3% this quarter, meaning that without the acquisitions, the revenue would have grown by just 0.3%.

“I am happy to see that we continue to increase sales quarter on quarter reaching €6.4m in the third quarter,” said Robert Andersson, CEO of Acroud.

“I am very positive to that we will see solid organic growth in our core affiliate business, where we operate with high margins, as well as restarting our growth in the US going forward during 2022.”

When it broke down its revenue by segment, Acroud compared the 2021 results of each segment to the combined 2020 results of Acroud and the businesses it acquired.

Revenue from Acroud’s SaaS business made up €3.7m of the total, up by 15.2% year-on-year.

Acroud’s igaming affiliation segment, meanwhile contributed €2.7m, up 14.0%. This meant that revenue from direct operations came to €6.4m.

Capitalised work for its own accounts added €334,000 to the total revenue, up 27.4% compared to Q3 2020. Other operating income also added to the total, generating €31,000- an increase of 47.6%. to bring total revenue when including these other sources to €6.7m.

However, external expenses totalled €4.5m, a rise of 443.3% year-on-year, again due to the acquisitions. In addition, personnel expenses came to €1.0m, up 16.7%.

This brought the total earnings before interest, tax, depreciation and amortisation (EBITDA) to €1.2m, up 30.9% year-on-year.

After considering depreciation and amortisation expenses of €520,000, the total operating profit for the quarter came to €738,000, which was a decrease of 7.9% year-on-year.

Other financial income added €111,000 to the total. However, interest at €633,000 took the total profit before tax to €216,000. This was a decrease of €128,000 from last year.

After considering taxes, which rose to €377,000 – a major difference from the €47,000 tax benefit Acroud received in 2020 – the total Q3 profit came to €593,000, up by 81.3% from the previous year’s third quarter.

Looking ahead, Andersson provided an outlook on the Dutch igaming market, which opened on 1 October this year.

“The Dutch market has previously been an important market for Acroud with strong presence and local knowledge,” said Andersson.

“I believe what has caught people’s attention is how big the market seems to be, considering the information released by many operators in conjunction with the regulation coming into force. For me this shows the power of the Dutch market.”

Andersson also commented on the 10 operators that received a licence from Dutch gaming regulator de Kansspelautoriteit. He said that the opening of a new market was naturally a major opportunity for an affiliate business, even despite a low number of licensees.

“At first only 10 operators have been granted a license with the second and major batch of new estimated to be announced in the spring. The opening has been slower than expected, since there are so few licence-holders to begin with but the best way to describe the long term future is a
‘Land grab’, which puts affiliates, and Acroud in particular, in a favourable position.”