Month: November 2021

Revenue for the three months to 30 September was down 12.9% year-on-year to KRW150.8bn (£95.2m/€111.2m/$127.5m), which on the DoubleDown Interactive side was said to be a result of people not being confined to their homes by the Covid-19 pandemic.

The quarter also marked DoubleDown’s first as a US-listed business, after it closed an initial public offering (IPO) of 6,316,000 American Depositary Shares. Priced at $18.0 apiece and representing 0.05 of a common share, it received net proceeds of $86.5m after underwriting discounts and commissions, and offering expenses. 

Revenue came predominantly from DoubleDown Casino, which accounted for KRW98.0bn of the total, down 6.2% from the prior year. DoubleDown Interactive’s earnings report revealed the subsidiary’s monthly active users (MAUs) were down 22.1% from the prior year, to 2.3 million. 

Daily active users (DAUs) dropped below one million, falling 15.7% to 986,000 for the quarter. Yet while there were fewer players, those that continued to play were spending more. Average revenue per daily active user across DoubleDown’s products increased 11.6% to $0.96, while average monthly revenue per player jumped 14.3% to $224. 

DoubleU Casino, meanwhile, generated revenue of KRW47.1bn, down 21.6%, while revenue from other titles fell 33.7% to KRW5.7bn. The parent company did not release player metrics across all products. 

Turning to expenses, operating costs rose to KRW102.7bn for Q3, which was predominantly down to increased marketing spend and a sight rise in platform fees. This resulted in a marginal decline in operating profit, to KRW48.1bn. 

Earnings before interest, tax, depreciation and amortisation (EBITDA) also declined, from KRW60.7bn in Q3 2020 to KRW52.8bn. However DoubleU then saw its non-operating income increase significantly, with higher interest income and favourable currency exchange rates contributing an additional KRW4.9bn to its operating profit. 

This was partially offset by KRW0.5bn in non-operating costs, but pre-tax profit still rose 7.6% to KRW52.5bn. Its tax paid during the quarter was also down to KRW9.3bn, meaning net profit grew 16.1% year-on-year to KRW43.2bn – a new record for the business.

Looking ahead, DoubleDown has expanded beyond social casino for the first time with Undead World: Hero Survival. The game launched globally, in late September as part of its ‘beyond social casino’ push to diversify its product range. 

It has been downloaded 500,000 times in the North American market to date, without a large-scale marketing push. 

Total revenue for the three months through to the end of September amounted to $35.6m, up from $25.9m in the corresponding period last year.

GNOG drew most of its revenue from gaming, with revenue in this segment of the business rising 38.9% year-on-year to $31.8m, while other revenue also increased 26.7% to $3.8m.

The quarter also saw a number of major highlights, not least an agreement for DraftKings to acquire 100% of the GNOG business in an all-stock deal with $1.56bn. Brokered in August, the GNOG’s chairman, chief executive and largest shareholder, Tilman Fertitta, join the DraftKings board.

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Revenue for the three months to 30 September was €99.4m (£85.1m/$114.1m), up from €88.9m in the corresponding period last year. 

Classic casino games accounted for 76.0% of all revenue in the quarter, ahead of live casino on 14% and sportsbook with 10%, while LeoVegas experienced a 5.4% increase in customer deposits, to €308.6m.

The number of new depositing customers reached 188,221, up 5.2% on last year and also the highest quarterly total since Q2 2020. Returning depositing customers amounted to 281,500, an increase of 8.4% on last year.

In terms of geographical performance, the Nordics remained the operator’s core market, accounting for 44.0% of all revenue in Q3. Net gaming revenue in the region increased 39.0% year-on-year, helped by the acquisition of the Expekt brand in May, and its subsequent relaunch.

Sweden in particular had a good quarter with record revenue and customer numbers, president and chief executive Gustaf Hagman noted, aided by a better-than-expected performance from Expekt and a stronger performance from the core LeoVegas brand.

“All key markets performed well during the quarter, where our home market in Sweden was the brightest star,” Hagman said. “It is positive that the company can show strong performance in one of the world’s most competitive and strictly regulated gaming markets.”

Revenue from the rest of Europe represented 34% of all revenue for the quarter, with net gaming revenue in the region up 19.0% on last year due to growth in both Spain and Italy. However, legal changes in Germany, coupled with the ongoing regulation process, stunted growth.

LeoVegas noted that if it was to exclude its activities in Germany, then overall revenue for the third quarter would have increased by 31.0%. Germany’s State Treaty on Gambling (Glücksspielneuregulierungstaatsvetrag), which mandates a €1 per spin stake limit on online slots among other restrictions, has impacted operators’ performance across the industry and already contributed to a year-on-year decline in LeoVegas’ Q2 revenue.

Rest of world revenue net gaming revenue increased 42.0% year-on-year and accounted for 22% of all revenue in Q3. LeoVegas said development was particularly strong in Canada, where it posted double-digit growth for the period. 

“The favourable revenue growth for the group confirms that the strategy to simultaneously scale up a number of markets and relaunch the Expekt brand has been a success,” Hagman said.

“The company today is more diversified than ever, and we have succeeded in compensating for the sharp drop in revenue in Germany.”

Looking at outgoings, cost of sales increased 8.9% to €17.1m and gaming duties expenses climbed 28.2% to €15.9m. Personnel costs were level at €12.4m, but marketing expenses were 13.8% up to €36.2m, capitalised development costs by 50.0% to €3.6m and other operating spend 33.8% to €9.9m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was 0.8% lower at €11.8m, but operating profit was up 7.8% to €5.5m. 

After accounting for other expenses, including €1.1m in financial costs, this left a pre-tax profit of €4.3m, down 8.5% on last year. LeoVegas paid €204,000 in tax, resulting in a net profit of €4.1m, flat year-on-year.

As to how this impacted the operator’s performance in the year to date, revenue for the nine months to the end of September was 1.3% higher at €292.9m.

EBITDA declined 27.6% to €31.8m, while operating profit fell 49.6% to €11.9m and pre-tax profit 60.9% to €9.0m. LeoVegas paid €1.4m in tax, leaving a net profit of €7.6m, a drop of 64.3% from last year.

Looking ahead, the fourth quarter kicked off with revenue falling 5.2% to €31.1m in October, with the ongoing struggles in Germany exacerbated by LeoVegas withdrawing from the Netherlands. The Dutch market accounted for 6% of Q3 revenue, and generated higher profits than most. Excluding these markets, revenue would have been up 21%.

However, an “abnormally low” sportsbook margin also had a negative impact, though underlying customer activity remained solid, Hagman noted.

Detroit’s three commercial casinos saw revenue rise 12.5% year-on-year in October, though there was a sharp decline in retail sports betting’s contribution. 

Total revenue from the MGM Grand Detroit, MotorCity Casino and Penn National’s Greektown Casino Hotel came to $114.1m. 

This marked a 3.6% improvement on September 2021, and a 12.5% improvement on October 2020 – a time when the properties were operating at 15% capacity after reopening from their Covid-19 shutdowns. 

The vast majority of the properties’ revenue came from slots and table games, which made up $111.5m of the total, an 18.9% increase from the prior year, and up 4.2% from the prior month.

MGM Grand reported the biggest increase in revenue compared to October 2020, with its monthly revenue growing 39.4% to $52.7m. 

While MotorCity remained ahead of Greektown, its slot and table game revenue was only up marginally, rising 1.8% to $36.9m, with Greektown reporting a 10.8% increase to $21.9m. 

The three properties paid $9m in gaming taxes, compared to $7.6m last year, to the State of Michigan. A further $13.8m in wagering taxes and development agreement payments went to the City of Detroit during the month.

While casino gaming performed strongly, retail sports betting revenue fell significantly. Qualified adjusted gross receipts were down 65.2% to $2.6m, though in October 2020, retail wagering was the only legal form of sports betting, with online betting going live in January 2021. 

Again, MGM Grand led the market with $1.4m in revenue, ahead of MotorCity on $671,009 and Greektown on $588,847. Players staked $34.2m across the three properties’ sportsbooks. 

This resulted in a tax take for the state $99,977, with a further $122,194 paid to Detroit. 

This means that for the year to 31 October, MotorCity tops the market in terms of revenue, with $7.4m. MGM Grand followed on $7.1m, and Greektown on $7.0m.

The debt-for-equity agreement was originally scheduled to complete on 5 November, but the date of the acquisition has been pushed back by two weeks.

Codere recorded revenue figures of $233.3m for Q3, representing a 63.1% increase on the same quarter last year when revenue had dropped by 57.2% – the result of the closures of its physical properties across Latin America.

The Latin American business – comprising Argentina, Mexico, Panama, Uruguay and Colombia – contributed €110.9m, or 47.1%, of its total revenue. This was a significant improvement – of 430.6% – on the €20.9m recorded in 2020 when the novel coronavirus (Covid-19) pandemic forced venues to close indefinitely.

Argentina and Panama, which conducted no business during Q3 2020, recorded revenue of €40.1m and €13.6m respectively. The revenue for Argentina was supplemented by a four year sponsorship deal agreed with Argentine football team River Plate. Mexico’s revenue grew 407.1% to €42.6m, while Uruguay’s €10.5m revenue was a 13.6% reduction from last year.

The European market consisting of Italy and Spain added €103.2m, with Spain contributing €37.9m and Italy €65.3m.

The online portion of the business had revenue of €19.1m. Back in June, the company announced plans to list its online arm Codere Online on the US Nasdaq stock market, following a deal $350m with special purpose acquisition company (SPAC) DD3 Acquisition Corp.

Operating expenses for the company amounted to €200.4m, up by 44.8% from 2020. Gaming expenses were €87.3m, personnel costs were €46.9m, rental costs were €6.4m, while other expenses totaled €49.0m. Costs of good sold for the quarter were €10.8m.

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) came to €32.8m, up from €4.6m last year.

Operating losses, after accounting for inflation regarding operating expenses, came to €25.1m – down from €52.1m in 2020.

Interest expenses were €45.3, €7.0m losses came from financial investments and exchange rate variations, and inflation from corporate income tax in Argentina came to €2.4m. However, the company made €1.1m from interest income and income from minority investments. Overall, Codere’s net losses for the quarter were €74.7m, down by 20.3%.

Codere believe the company is beginning to show signs of recovery from the pandemic, “with a growth that is largely due to the progressive reactivation of the operation presence of the group in the third quarter, with the reopening in July of Argentina and Uruguay after the closures resultant of Covid-19 during the previous months.”

Codere maintains its operations are up and running in all markets, albeit under numerous restrictions on hours and capacity.

A consent solicitation for exchange offer was launched in September and was approved by more than 90% of Codere shareholders a month later. The transaction is expected to be completed by 19 November.

Codere added: “The company and its bondholders estimate that the expected date for the implementation of the financial restructuring of the group will take place on November 19, 2021.

“The company expects to have also completed the merger of its gaming subsidiary this month online with the SPAC DD3 Acquisition Corp II, which will lead to the creation of Codere Online, the first online gaming operator in Latin America to be listed on the American securities Nasdaq.”

Cherniak will also serve as an advisor to Parleh, calling on his experience as managing director of Don Best Sports, which was sold to Scientific Games in 2018.

Grove, who is a partner at Eilers and Krejcik Gaming, has made multiple investments in the sports betting and media sector across North America.

“The rise of open and regulated sports betting markets has created a once-in-a-generation disruption in the business of sports and media,“ said Mark Silver, founder of Parleh Media Group.

“Having Benjie and Chris, two highly-respected leaders in the sports betting industry, invest in Parleh Media Group and also helping us on our journey is validation that we’re on the right track.”

In addition to platforms Parleh and Parleh TV, the company will aim to create new sports verticals after the launch of Parleh TV Toronto in October.

Cherniak said: “The Parleh has launched at a pivotal time as the regulated Canadian market plans to open in the coming months.

“I see parallels between The Parleh’s journey to that of Don Best, and am thrilled to support the founders in expanding the business beyond Canada.”

Grove said he met Parleh’s founders soon after it launched, and quickly recognised how its brand of sports betting content could potentially fill a void for sports fans.

“Watching as they paired that potential with impressive execution across acquisitions and organic growth initiatives convinced me to back this management team,” he added.

It develops connected reality solutions, and aims to create the largest, live skill-based gaming platform in the world. Its flagship app Winner Winner enables users to play real claw machines and physical arcade games through video live streaming from its Las Vegas studio. 

Its app is available in the US and UK, and has recorded 1.2m downloads since its launch in 2020. Users have played almost seven million games since launch, winning over 20,000 prizes each month.

The business was founded in 2019 by Jon Davidman, who previously founded marketing agency EarthQuake Media and was a Caesars Interactive shareholder, and Cody Flaherty.

Its app has 1.2m downloads since its launch in 2020, playing almost seven million games since launch, winning over 20,000 prizes each month.

Playtertainment raised $5m through the round, led by SDV Holdings, with investors including former Caesars Interactive and PartyGaming chief executive Mitch Garber and Gamesys founder Noel Hayden. 

Playtech co-founder Elad Cohen and DraftKings’ founders Jason Robbins, Paul Liberman and Matt Kalish also participated, as did Astralis Capital and Sharp Alpha Advisors. Following a $3m seed capital round, it has raised $8m in total.

“We’re really excited about the future,” Davidman commented. “What we’re working on has never existed on a large scale, and we truly believe what we are building will change the way we think about physical games and competition. 

“Through technology, we’re able to create a highly interactive, connected gaming experience that allows players to compete with real, physical games and get rewarded when they win those contests.”

Lloyd Danzig, managing partner of Sharp Alpha Advisors, which completed a $10m fundraising in October, said Playtertainment was “advantageously positioned to provide the bridge between digital and physical worlds that is fundamental to the future of competitive entertainment”.

“As compelling as the current game offerings are, we are even more excited about the underlying infrastructure that can support a robust content library, as well as skill-based, head-to-head competitions and social tournaments.”

Photo by Imani Williams from Pexels

Capecod has been part of the Novomatic Italia business since 2017 and its products will now be integrated within Greentube’s offering.

Greentube said the acquisition would strengthen its presence in Italy. Capecod’s game development capabilities will be made available to Novomatic Italia’s land-based clients in the amusement with prize (AWP) segment and become part of the NovoElsy AWP games portfolio.

The deal will also mean Novomatic Italia’s conversions of AWP titles will now be supplied to Capecod, with the overall aim of providing a continuous output of new games for both the online and AWP sectors.

“This acquisition ticks all the boxes, strengthening our hand in Italy across both online and land-based sectors,” Greentube chief financial officer Michael Bauer said. 

“We have seen over the last few years how successful Capecod has been in developing games that resonate with players in Italy and in bringing the expertise of such a well-regarded company under the Greentube umbrella, we envisage all parties going from strength to strength in offering products to the widest audience. 

Novomatic Italia chief executive Markus Buechele added: “It is an honour to be able to bring all of the know-how and experience gained in recent years through working with the renowned software house Capecod to the whole Novomatic AG Group. 

“The acquisition is proof of the good work that has been achieved and the importance of investing continuously in technology and human resources. Moreover, it also enables us to give our Group an even stronger international focus, presenting ourselves to our customers synergistically while relying on the best products available on the market.”

The acquisition comes after Greentube last month launched its catalogue of games in the Netherlands in partnership with Holland Casino, while the developer also entered into the US market via a partnership with Golden Nugget Online Gaming in New Jersey.

Fubo is set to pay €164.3m in a cash-and-equity deal, with 85% of this total to be paid in equity. It said that the deal – set to close in the first quarter of 2022 – is “expected to enable FuboTV to launch its interactive sports and entertainment streaming platform on a global scale”.

Molotov – which Fubo described as “France’s number one live-streaming company” – currently offers television programming, films, documentaries and children’s content. However, with the acquisition, Fubo said it will provide Molotov with sports content and “sports-first product features”.

“Molotov has set the benchmark for ad-supported and subscription streaming platforms in Europe,” David Gandler, co-founder and chief executive of FuboTV, said. “We believe this strategic asset will help accelerate our goal of achieving global scale and operating leverage as we continue to improve and innovate on our live, interactive streaming TV experience for sports fans and their families.”

Molotov also offers a “freemium” model for its streaming services, allowing customers to choose a free option with advertisements or a subscription option with more channel packages.

Molotov and its approximately 100 employees will continue to be based in Paris and led by co-founder JeanDavid Blanc, who will become president of Molotov.

“We’re thrilled to scale Molotov with fuboTV with whom we share the same ambition and vision for a live TV streaming platform,” Blanc said. “Our goal is to provide consumers with a best-in-class streaming experience with premium television content on a global scale.”

Fubo launched its sportsbook brand earlier this year after it completed its acquisition of sportsbook operator Vigtory in March.

Earlier this week, Fubo Sportsbook officially launched in the US, after securing approval to launch in the state of Iowa.

Led by growth fund Left Lane Capital, the round included participation from famous names such as Hollywood actors Kevin Hart and Whitney Cummings, entrepreneur Mark Cuban and baseball star Manny Machado.

Other participants included previous investors Greenspring Associates, The Raine Group, Anchor Capital, Gaingels, Conductive Ventures, BlueRun Ventures, Digital Currency Group, PROOF.

Jackpocket said it would use the new investment to fund a series of new additions to its team, as well as support its wider growth plans, including expansion into markets outside the US, new marketing initiatives and partnerships, and potential acquisitions.

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