Month: January 2022

The Swedish government announced earlier this month plans to reintroduce a number of temporary measures for the gambling sector, including a deposit cap, after a previous SEK5,000 cap had been in place for much of 2020 and 2021.

The cap – alongside other measures such as a SEK100 limit on sign-up bonuses – was set to be made official today (27 January) and come into force on 7 February, but the government instead opted to abandon the plan.

Gustaf Hoffstedt, secretary general of industry association BOS, which met with state secretary Alejandro Firpo earlier today, said the government made the right choice as the cap did not reduce gambling harm.

“It is a wise and well-balanced decision that the government has made,” Hoffstedt said. “Partly based on the general development of the pandemic. Partly, and above all, because precisely these restrictions would not achieve their purpose of protecting public health. 

“We are in favour of strong regulation of the gaming market, and a prerequisite for this is that the intention with various reforms can also be expected to have the intended effect. That was not the case with the covid restrictions, and it is therefore welcome that they are withdrawn.”

BOS had previously criticised the rules in a response to a consultation on the matter. In its own consultation response, regulator Spelinspektionen said it would not oppose the rules, while operator Kindred said the reintroduction of the cap was “ill-founded”.

Earlier today, the Swedish government announced a host of other rules for the gambling sector, including the introduction of a gaming software licence for gaming suppliers, as well as new advertising controls.

Rank’s Grosvenor venues brought in the most revenue, at £161.6m. This is up by 275% year-on year. The digital division brought in £92.1m for the first two quarters, up by 7.2% year-on-year. Its Mecca Bingo venues contributed £65.7, a rise of 70.1%, while the Enracha venues brought in £14.1m, a rise of 66.5% from the year prior.

“Our venues performed well following the reopening in May 2020, with revenues rising until the second half of Q2 when growing COVID-19 case numbers, the emergence of the Omicron variant and the resultant return of restrictions on consumers softened demand,” said John O’Reilly, CEO of Rank.

“Our digital business performed strongly in the half and is now much better positioned to continue to deliver on our digital ambitions.”

Rank added £200,000 to the total to adjust for the impact of venue closures and foreign currency changes, leaving the underlying net gaming revenue at £333.7m.

Cost of sales came to £198.4m, a further £63.1m year-on-year. This left gross profit at £135.3m, up 217.6%. Other operating costs at £123.2m, combined with other operating income at £90.9, brought the overall operating profit to £103.0m for H1, up £155.9m year-on-year.

A combination of finance costs, other financial gains and losses and total net financing income brought profit before taxation to £102.1m, up £161.5m.

Following taxation at £20.6m, the overall profit for the period totalled at £81.5m, up £131.1m year-on-year.

“Whilst the trading environment continues to be challenging and cost headwinds are applying additional pressure on the hospitality sector, we have proven that with no restrictions, our trading rebounds quickly,” continued O’Reilly.

“There remains some uncertainty as to how Covid-19 will impact our businesses over the coming months, but we are accelerating our transformation investments and are competitively very well placed to benefit as consumers emerge from the pandemic.”

The report, which studied 16,000 UK residents, revealed that two-thirds of dads (aged 25-44) are “regular gamers”. Further, research showed that video game enthusiasts are up to 4.3 times more likely to participate in betting and up to 4.5 times more likely to participate in igaming.

Entain said the research quells popular belief that video games are for young people only, particularly Generation Z. The study found that men with children are more likely to play video games than those without kids. Men aged 25-44 are twice as likely as women to spend time playing video games or watching esports.

“Enthusiasm for gaming, mobile, and more social forms of interactive entertainment is far from confined to younger generations. People of all ages – particularly middle-aged dads – enjoy gaming and seem to love experimenting with new and exciting content,” said Dom Grounsell, deputy director of digital at Entain. “We’re developing new interactive entertainment experiences, with more gaming and social features, because it’s increasingly clear this is what people want.”

The study included other related findings. 53% of British adults under the age of 24 play video games weekly. The 25-34 and 35-44 age ranges follow closely, however, at 46% and 36%, respectively. Esports are enjoyed by smaller segments, though the breakdown remains similar: 1% of adults under 24 say they watch esports weekly, followed by 25-34-year-olds (9%) and 35-44-year-olds (6%).

Entain has shown an amplified interest in the video game sector of late. In July of 2021, the company expanded its safe play initiatives to encompass video gaming with the launch of “Mind Your Game.” The initiative takes aim at mental health issues commonly experienced by gamers and offers resources and support for families affected.

Secil Tabli Watson and Paul Finch have been appointed to the board, with the intention to serve on the board’s Audit Committee, Nominating and Governance Committee, and Compensation Committee. Their tenures will begin on 1 February 2022.

Everi’s lead independent director of the board Ronald Congemi has communicated his decision to retire on 18 May 2022, and current board member Atul Bali has been selected as his replacement.

The new appointments follow on from Randy Taylor being promoted to company CEO in December in anticipation of current incumbent Michael Rumbolz assuming the role of chairman.

Rumbolz said: “We are delighted to welcome Secil and Paul to Everi. Their achievements and distinguished experience make them ideal additions to the Board of Directors.

“Secil’s global and digital experience as former head of digital solutions at Wells Fargo and Paul’s successful leadership of Early Warning Services and its collaborative launching of the banking industry’s first real-time payments network Zelle bring to the Board a wealth of business and financial industry knowledge.

“We look forward to benefiting from their insights and counsel as we focus on executing our growth strategies that will propel Everi on its path of building value for our stakeholders. At the same time, we want to thank Ron for his distinguished service to our Board. Everi will miss his insight and contributions.”

The company recorded revenue figures of £471.9m, up 16% from the corresponding period the year before. The majority of the revenue total – £398.4m – came from over the counter (OTC) leveraged derivatives.

Exchange traded derivatives added £57.6m, while stock trading and investments accounted for £15.9m.

The UK proved to be the most lucrative region during the period, generating £177.5m. This was followed by the US with £61.4m, the EU with £55.1m, and Australia with £48.8m.

Operating costs for the period came to £222.3m, a 22.0% increase on 2021. Fixed remuneration of £69.0m was the biggest expense, followed by £38.0m of advertising and marketing costs. Revenue costs were £19.0m, IT costs came to £15.7m, while depreciation and amortisation amounted to £13.9m.

Operating profit totaled £251.0m. After accounting for £42.6m of tax expenses, £4.8m finance costs and £1.0m of losses from associates, net profit for the period was £202.6m – an 8.0% increase.

Chief executive June Felix said: “This has been a period of outstanding performance with record revenues and profits. Since we launched our new strategy three years ago, the group has transformed from a UK-centric, CFD focused firm, to a global financial technology company with a multi-product trading platform.

“We believe that elevating collective financial literacy will reinforce our longevity as a business and simultaneously enhance potential outcomes for everyone in the communities in which we operate. We are here to win – for our client, for our investors, for the betterment of society.”

IG Group also completed its acquisition of brokerage and investor education platform Tastytrade during the period, finalising the deal in June 2021.

Felix added: “The tastytrade acquisition in June 2021 brought about a step-change in our reach and product offering. Through our complementary capabilities, and buttressed by tastytrade’s award winning technology platform and compelling, distinctive educational content, IG is well positioned to take advantage of the global structural shifts toward self-directed trading and deliver continued sustainable growth.”

Aspire Global-owned BtoBet said its Neuron 3 sportsbook platform is now certified as fully compliant with Dutch regulations.

Dima Reiderman, BtoBet’s chief operating officer, said: “Receiving the Dutch supplier licence offers significant growth opportunities for BtoBet, as we seek to bring first-class betting entertainment to players together with local operators.

“This licence, pending our entry in the Dutch market, will help to accelerate our foothold in the mature European market, as we continue to sustain our growth trajectory with a global market expansion strategy.

“Setting the basis for BtoBet’s entry to yet another regulated market highlights our commitment to strengthen our position as one of the leading sportsbook suppliers to the global industry.”

Gambling in the Netherlands is legalised and regulated by the Remote Gambling Act. Originally, the act was set to be enacted on 1 July 2020. However, after a number of delays it officially came into force on 1 April 2021, instead allowing market opening to take place on the 1 October, six months later.

However, only 11 operators are licensed to go live in the market, with many others forced to block Dutch customers until they receive a licence.

The news comes after Aspire Global gained the Danish betting licence last week. It now operates in more than 30 regulated markets spanning Europe, America and Africa. They have also already gained a foothold in Latin America and Africa as the business intends to further expand its US and European markets.

The business announced a number of details about its future outlook in its 2022 investor day today (27 January).

Revenue is set to reach $340m for the year thanks in part to continued growth as 2022 goes on. While revenue for Q1 is projected to be $78m and for Q2 this total is just $68m, the total then rises to $85m in Q3 and $109m in Q4, a busy period that will include both the NFL season and football’s World Cup.

Betting technology, content and services will make up the majority of revenue, bringing in $216m. SPorts technology and services will bring in $49m while projected revenue from media technology and services is $75m.

Like revenue, earnings are also expected to grow as the year goes on. The business expects to be EBITDA negative by $5m in Q1, before recording a total of in $8m in Q2, $9m in Q3 and $3m in Q4.

In 2023, the outlook is more optimistic, with revenue projected to fall between $430m and $440m, while EBITDA is expected to reach between $40m and $50m.

“Genius is the key link between leagues, sportsbooks, media outlets, advertisers, and ultimately, fans,” Genius co-founder and chief executive Mark Locke said. “Our best-in-class data collection technology is used around the clock and around the globe, powering the high-growth global sports ecosystem. 

“It is difficult to imagine this industry operating efficiently without the mission critical data and technology solutions we provide.”

In the first half of 2021, Genius’ revenue grew 76.3% to $109.6m in the first half of 2021, but net losses shot up to $464.2m because of high stock-based compensation costs.

The provider noted that $198.5m of its costs of revenue and $216.0m of its operating costs were share-based expenses. All of these were entirely new costs, as Genius had been private in the first half of 2020 before the SPAC merger taking it public closed in 2021.

Aristocrat struck a deal to acquire Playtech in October 2021 for approximately £2.70bn (€3.23bn/$3.65bn).

The following month, Playtech directors urged shareholders to vote unanimously for the offer, as this could provide stability as opposed to waiting until the company’s shares reached 680 pence.

Yesterday (January 26) Playtech reiterated this message in response to media reports that suggested Playtech would break up and sell the business if shareholders did not approve the bid.

Before Aberdeen’s statement, the Playtech board acknowledged that it remained unsure of how its largest stakeholders would vote.

“A number of material investors have not to date engaged meaningfully about their views on the Aristocrat offer, including certain investors that have disclosed or taken material positions in the company following the announcement of the Aristocrat offer,” Playtech said last week.

However, Wes McCoy, investment director at Aberdeen, expressed support for the bid and said his business would vote in its favour at next week’s meeting. Aberdeen owns 3.05% of Playtech shares.

“Playtech is a unique set of assets with a rich heritage and an attractive future,” said McCoy.

”That being said, we believe that Aristocrat’s offer represents a fair assessment of value and certainty of cash and we intend to vote in favour of the transaction next week.”

Last week, JKO Play – controlled by Formula One tycoon Eddie Jordan and industry veteran Keith O’Loughlin – confirmed that it would not make a bid to takeover Playtech after it expressed an interest in acquiring in November 2021.

In April last year, SEAC entered a definitive agreement to merge with Super Group, based on a $4.75bn (£3.54bn/€4.26bn) pre-money equity valuation.

The boards of both Super Group and SEAH had unanimously approved this transaction last year, while SEAC shareholders gave the green light to the merger this week, clearing the way for the combination to complete.

Prior to completion, the two businesses applied to list shares in the combined business on the New York Stock Exchange under the new ticker symbol ‘SGHC’, with the new, combined business to operate under the name Super Group.

Following confirmation of completion, ordinary shares and public warrants in the combined business are set to begin trading today under the ticker symbols ‘SGHC’ and ‘SGHC WS’, respectively.

“Today marks a major milestone for our company, our employees and our shareholders,” Super Group chief executive Neal Menashe said. “Now as a public company, we plan to continue to strengthen our brand among the worldwide online betting and gaming community by growing our customer base, expanding into new markets and developing strategic partnerships with major sports franchises.”

SEAC chairman and chief financial officer, Eric Grubman, added: “We were attracted to Super Group for its proven business model, strong leadership and exceptional products and technology. 

“We are pleased to complete our business combination with Super Group and look forward to continuing our collaboration with Neal and rest of the management team, helping Super Group strengthen and grow its position in the global online betting and gaming industry.”

Operators are going to great lengths to add content to their lobbies that engages the lucrative millennial and generation z demographics, but to date the vast majority have failed to offer a truly compelling reason for these players to ditch video and mobile games in favour of online casino.

Developing games for these players requires an entirely new approach and simply tweaking the format of traditional slot games does not go far enough.

Sure, bringing in elements from video games such as missions and tasks and allowing players to progress through the game by climbing levels and unlocking bonuses is a step in the right direction, but to create games that really tap into their psyche requires something entirely different.

Taking a new approach leads to an entirely new type of casino game that combines the key elements of video and mobile games, as well as elements such as skill development and social interaction, with the ability to place a wager and potentially win real money.

Crash games, or turbo games as we call them, offer exactly this. In short, they feature an “increasing curve” that can crash at any time. There is a multiplier that continues to increase as the game plays out, and players must decide when to “cash out” their winnings.

If they cash out too soon, they only receive a small prize. If they wait too long and the curve crashes, they forfeit any winnings they have accumulated.

These games have been developed specifically for mobile play – although they still offer a fun and thrilling experience on desktop – with a simple UI. They also have social elements – our Aviator title offers in-game chat as well as live bets and statistics for all players – and are multiplayer.

They also provide incredibly fast game sessions which is exactly what millennials and generation z players are seeking. Of course, slots offer similar session speeds, but they simply cannot compete when it comes to engagement and interaction.

A growing number of operators are now offering these games – we are live with more than 1000 – but some are still struggling when it comes to where they sit in their game lobbies and how they market them to players.

We recommend that operators offering crash games should consider them more of a casino game than a slot.

It is also important for operators to carefully consider how they market these games to new and existing players and in particular the player segments where they will have the greatest appeal. Millennials and generation z are a given, but as the game becomes more and more popular, boomers are starting to play it too.

In terms of marketing, we suggest operators use free bets, since they are best way to introduce the game to the players. Aviator also has “free bet rain” promo tool that throws free bets in the chat at random times.

It is also important for developers of turbo games to do their part when it comes to educating players about the experience they offer and also how they work. This is something we are currently doing by working closely with some of the biggest affiliates in the market.

Operators are pulling out all of the stops to attract new, younger demographics to their casinos and sportsbooks, and those offering innovative content such as crash games are well on their way to doing exactly that.

Making these titles clearly visible in the game lobby and combining this with smart marketing and the education efforts being undertaken by providers will ensure more players are aware of these titles and the fast-paced, thrilling experience they provide.

It will take time but ultimately this content will dominate online casino game lobbies as the levels of fun and engagement they provide goes way beyond that delivered by a standard slot.