Month: January 2022

Revenue for the SG Lottery arm is expected to amount to between $265m (£196m/€235m) and $275m for the three months through to 31 December, according to an update published by Scientific Games.

The lower end of this estimate, Scientific Games said, would represent an increase of 4% on the previous year, while the top end of the range would be 7% more than in FY20.

Operating income has a forecast range of $70m to $75m, both of which would be up from $68m in 2020, while adjusted operating income could increase by between 11% and 16% from $99m, based on an estimated range of $110m to $115m.

Scientific Games also noted that earnings before interest, tax, deprecation and amortisation (EBITDA) from equity investments could hit $19m, which would be 58% up on the previous year.

The update comes after Scientific Games in October entered into a definitive agreement to sell its Lottery business to private equity company Brookfield Business Partners for $6.05bn.

The deal included 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.

Scientific Games first announced plans to divest its lottery business in June 2021 in an effort to position the company for “sustainable growth”. 

In September last year, 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. 

Scientific Games last week also secured the World Lottery Association’s Responsible Gaming Framework Certificate of Alignment for its global operations spanning five continents.

The independent audit recognised that Scientific Games has in place a number of processes including the Healthy Play program, which, introduced in 2020, designed to promote healthy enjoyment of games through player education.

Also this month, Scientific Games withdrew its all-stock offer to acquire the remaining 19% equity interest in its SciPlay social gaming division.

In July last year, Scientific Games put forward a proposal to purchase all SciPlay shares that it did not own. The agreement implied enterprise value of $1.90bn and would have seen SciPlay shareholders, other than SGC, receive 0.25 shares of Scientific Games stock for each share of SciPlay stock.

However, the decision to withdraw the proposal sees SGC retain its 81% economic interest and 98% voting interest in SciPlay.

Bayton joins existing members Kindred, Entain, Flutter and Betway among others.

NOGA aims to represent the majority of online gaming providers in the Netherlands.

“We are delighted that Bayton has now joined the growing NOGA family,” said Peter-Paul de Goeij, director of NOGA.

“Bayton is the company behind a number of very well-known and popular online casinos, and with their expertise and input, NOGA can add even more international experience and contribute to the improvement of the Dutch market.”

“We are delighted to be joining NOGA as it offers the opportunity to have a say in the Dutch market and hopefully bring about a positive change in the perception of gambling,” said Gregory Bettridge, director of Bayton Ltd.

“By collaborating with other well-known operators and having an open dialogue with the regulator, among others, we can improve responsible gaming systems and coordinate our efforts to better prevent fraud and money laundering.”

In May 2021, NOGA became a strategic partner of the All-In Diversity Project which aims to implement diversity, equality and inclusion within the gambling industry.

In September, NOGA called for more limits on gambling advertising in the Netherlands ahead of the market’s launch in October. Meanwhile, rival trade body Licensed Dutch Gaming Providers (VNLOK) agreed to a voluntary advertising code for online gambling, which included tighter restrictions on advertising to protect vulnerable groups- including bans on advertising bonuses to under-25s.

Payment provider Aircash, risk and identity services provider Crif, fintech business Okto and data provider Sportradar will all join DSWV as its first non-operator members as it “opens up to companies from the sports betting value chain”.

“The DSWV and its member companies stand for the legal sports betting market in Germany,” Crif chief executive Frank Schlein said. “Working together in the association to make the market even fairer and safer for customers and providers motivates us to become a partner of the DSWV.”

DSWV President Mathias Dahms said the addition of these businesses would help the entire German sports betting industry speak with a single voice.

“Aircash, Crif, Okto and Sportradar are highly innovative, technology-driven and extremely successful companies with a strong reputation in the sports betting industry,” Dahms said. “Through our close partnership, we improve the transfer of knowledge among each other and can stand up for common interests and positions with greater strength.

“As the sole voice of reliable and legitimate sportsbooks, we bring together reputable companies in the sportsbook industry. In this way we can find even better answers to the challenges of our industry and not only improve our association work, but also the German gambling regulation.”

Sportradar EMEA and LatAm chief executive Werner Becher said his business had long kept close contact with the DSWV and he was happy to see this partnership grow.

“As one of the world’s leading sports technology companies, our first point of contact when it comes to sports betting regulation in Germany is the DSWV,” he said. “I am delighted that we have become a partner of the DSWV as it is very important that companies from all areas of the betting industry share their knowledge and insights together and are represented by one organisation.”

Kostas Georgoulas, business development director at OKTO, said the partnership would help his business and German operators work together to enhance safer gambling procedures and compliance in Germany.

“Our partnership with DSWV underlines our ongoing commitment in Germany to offer customers the best payment services and our focus on well-regulated markets. We are excited to be on board and to partner with leading gaming and sports betting operators in Germany to innovate, promote responsible gaming and meet regulatory requirements.”
Last month, the body welcomed BildBet – a collaboration between German newspaper Bild and British bookmaker BetVictor – and Sportwetten.de as new members.

The operator, formerly known as Newgioco, has applied for a transactional waiver, which once approved, would permit it to begin installation procedures in the state.

Elys produces a range of gaming products including sports betting, esports, virtual gambling, slots, bingo and poker.

Michele Ciavarella, executive chairman of Elys Game Technology, said, “We are continuing to put full measures in place towards our launch with Ocean Casino Resort located in the heart of Atlantic City, and submission of our platform for certification to the New Jersey Division of Gaming Enforcement is a key milestone in achieving this objective.

“Our anticipated entry into New Jersey builds on our multi-pronged revenue strategy of expansion into the traditional casino business, development of the small business sportsbook market, and growth of the mobile igaming market.”

The technology supplier currently operates in 5 US states, and has recently announced a partnership with Lottomatica. Under this deal, Elys will design, develop and service a customised sportsbook platform for Lottomatica across North American states.

Across both retail and mobile, $466.7m was wagered throughout the month, a monthly loss of 4.0%.

Mobile sports betting wagers totaled at $459.2m, while retail sports betting came to $7.4m.

Read the full story on iGB North America.

Genesis Global had its licence suspended in July 2020 while the Commission carried out a review of the operator’s activities in relation to potential breaches of section 116(2)(a) and section 116(2)(c)(i)) of the Gambling Act.

This was appealed by the operator, which resulted in the suspension being lifted in October 2020, though the regulator continued with its review.

This investigation, the Commission said, uncovered further failings including a series of breaches of the operator’s licensing conditions.

Specific breaches included paragraphs 1, 2 and 3 of licence condition 12.1.1 – dealing with anti-money laundering, which is related to the prevention of money laundering and terrorist financing. The Commission also identified a breach of licence condition 12.1.2, which cover anti-money laundering measures for operators based in foreign jurisdictions.

Other breaches included a failure to comply with social responsibility code of practice (SRCP) 3.4.1 in terms of customer interaction, as well as a failure to comply with SRCP 3.9.1, relating to the identification of individual customers.

In one instance, the Commission noted the operator failed to carry out meaningful responsible gambling interactions with a customer that spend £245,000 in three months. No restrictions were placed on the individual’s account, despite Genesis being aware they were a nurse earning £30,000 a year.

Another lost £197,000 without meaningful responsible gambling interactions being carried out. On the day this customer closed their account saying they wanted to spend more time with their family, they were allowed to open another and deposit £200. Similar issues were identified in the case of another customer, who lost £234,000 in a six-week period.

In addition, the Commission said Genesis Global failed to act in accordance with ordinary code provision 2.1.1 on anti-money laundering safeguards. Among the failures identified, source of fund checks were only initiated after a customer lost £209,000.

The operator claimed the person was earning an estimated £111,000 a year, based on their role as a company director and the average salary for the position in London. However the company in question was dormant, and Genesis failed to verify information supplied to substantiate the level of spend.

In another case, a customer deposited more than £1.3m and lost £600,000 before any checks were carried out. The bank statement provided by this individual showed deposits into the account to the value of £23,000 and payments out to the value of £27,000, which the Commission said was clearly not enough to support the level of gambling.

The regulator also noted a further AML failing where a customer was able to lose £107,000 over six months without sufficient source of funds checks being made. The Commission said Genesis relied on assertion that the customer’s money came from an allowance from parents who owned factories overseas and failed to verify this information. The individual did provide a number of bank statements, though these did not evidence any source of income, but did show transactions with other gambling operators. 

Ruling on the case, the Commission imposed a financial penalty of £3.8m under section 121 of the Gambling Act 2005 and also issued a warning to the operator, in accordance with section 117(1)(a) of the Act. The regulator also attached additional conditions to its licence – the details of which were not disclosed – under section 117(1)(b) of the Act.

“All gambling businesses should pay very close attention to this case,” the Commission’s executive director Helen Venn said. “The Commission will use all tools at its disposal to ensure consumer safety and that extends to stopping a business from actually operating.

“Failing to follow rules aimed at keeping gambling safe and crime-free will never be a viable business option for gambling businesses in Britain.”

Genesis Global operates 17 different websites in Britain, including Genesiscasino.com, Casinoplanet.com, Sloty.com and Funbet.com.

SEAC entered into a definitive agreement to merge with Super Group in April of last year, based on a $4.75bn (£3.54bn/€4.23bn) pre-money equity valuation.

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

The boards of both Super Group and SEAH had unanimously approved this transaction, with approval from SEAC shareholders clearing the way for the combination to complete.

Super Group chose to waive the minimum cash condition to be satisfied at the closing of the combination, while SEAH said it expected all other closing conditions to be met. 

As such, both SEAC and Super Group expect the merger to close later today, with ordinary shares and public warrants to begin trading on the New York Stock Exchange under the symbols ‘SGHC’ and ‘SGHC WS’, respectively, tomorrow (28 January).

The transaction is expected to generate approximately $202.4m from SEAH trust proceeds, reflecting approximately 45% of the publicly held shares that were not submitted for redemption.

It was originally stated that the transaction would deliver approximately $450m of cash to the combined business, with Super Group’s existing shareholders holding approximately 88% of shares in the business and the new-look group to having approximately $200m in cash upon closing.

“We have established our group as a truly global, scaled and profitable digital gaming business, delivering on our vision to bring first-class entertainment to the worldwide betting and gaming community,” Super Group chief executive Neal Menashe said at the time of the original announcement last year.

“Becoming a public company will give us the tools to continue to grow our leading product and technology offering and deliver a strengthened brand-driven marketing strategy.”

Sports wagering was legalised in Louisiana in November 2020 following a parish-by-parish referendum. However, the market’s launch was delayed until 2021 due to Louisiana only permitting the passing of a new tax in an odd-numbered year.

This meant the state had to wait to pass laws taxing the vertical, with regulations eventually signed into law in June, setting the launch in motion.

Legal retail betting began in October of last year when Betfred Sports rolled out in-person wagering in partnership with Paragon Casino Resort, while Caesars followed soon after, launching retail betting at its Harrah’s New Orleans and Horseshoe Bossier City Hotel & Casino properties.

Read the full story on iGB North America.

The proposals were set out yesterday (26 January) during a press conference by Minister Ardalan Shekarabi. They are set to come into effect on 1 January, 2023.

Under the rules, a gaming software license would become mandatory for suppliers who offer their services to operators in Sweden. This, according to the Ministry, would help to shut down unlicensed gambling in the country.

Other proposals include banning the promotion of illegal gambling, as well as extending an existing ban on unlicensed gambling. The Ministry also suggested adjusting how gambling is marketed in Sweden to protect young people and those with gambling problems from being exposed to advertising, bringing in “stricter requirements for moderation”.

In June 2021, the Ministry proposed that gambling advertising should require “special moderation” as is already in place for alcohol marketing. This was supported by Spelinspektionen, Sweden’s gaming regulator.

Gustaf Hoffstedt, secretary general for the Swedish Trade Association for Online Gambling Branschföreningen för Onlinespel (BOS), said it was “unclear” whether the rule change announced today involves requiring “special moderation” or a new standard.

Hoofestedt added that that BOS is in support of the proposed measures to fight unlicensed gambling, but does not support further restrictions on gambling marketing in Sweden.

“[The] BOS position is negative regarding the government proposing additional restrictions for gambling, especially if it is targeting online casino,” read a statement from BOS.

“We believe that licensed online casino needs wide marketing possibilities to be successful in the combat against unlicensed gambling.”

The Ministry also suggested a market disruption fee, which would be issued if operators directly market to customers – for example, in the form of e-mail – in a disruptive manner.

The final proposal includes obligating licensees to provide information that will allow the Ministry to follow trends and developments in the gaming market. Hoffstedt said BOS was “cautiously positive” about this.

Ardalan Shekarabi, Minister for Social Protection, said the rules were about both limiting the unlicensed market and limiting excessive advertising from licensed operators.

“We are now taking the next step to regain control of the Swedish gaming market,” he said.

“It is both about limiting aggressive gaming advertising and stopping gaming companies that do not have a license. Strengthened gambling regulation is a prerequisite for strong protection for consumers.”

Earlier this month the Ministry launched a consultation on a deposit cap of SEK4,000 (£325.6/€389.2/$439.2) for casinos. A controversial deposit cap of SEK5,000 was put in place in July 2020, in response to the novel coronavirus (Covid-19) pandemic lockdowns. This was extended multiple times and ended in November 2021.

In October, the Ministry of Finance announced a crackdown on offshore gambling operators, which would permit the blocking of all unlicensed forms of gambling from the Swedish market.

During the operator’s investor call following its 2021 results, UBS analyst Robin Farley noted that the valuations of many online businesses have dipped since Sands first expressed its interest in the sector and asked what this meant for its current plans.

Sands chief executive Rob Goldstein said this decline in sector share prices coincided with a recovery for Sands’ core business.

“I think we have said in the past, we have always been interested in digital and all these interests that’s happening in the market,” he said. “But two things are happening at the same time. Our business, I think, is coming back to a stronger place. I think 2022 finally, especially in Singapore, and I think, as well in Macao, we will see that getting better. Our balance sheet speaks for itself and we have all followed what’s happening in digital equities and the struggle there.”

Last year, the business set up a team focused on digital investment opportunities.

He added that while there may come a time when a deal makes sense, the business would continue to “wait patiently”.

“So I believe there will be a day when sports betting and online gaming are very successful businesses and we will continue to look at the opportunity,” he said. “We will wait patiently. 

“It hasn’t been a bad idea to wait for the last six months to eight months to see how this shakes out and there’s been a lot of blood spilled.

“The question is when does that situation get better? And I think it will and is an entry point for us and we will keep our eyes and ears open for that possibility. But waiting hasn’t been the worst idea to see things shake out.”

Chief operating officer Patrick Dumont added that the business was looking at a number of different opportunities for digital investments, covering “a variety of different markets” and different digital verticals.

In Sands’ core market of Macau, meanwhile, gaming legislation is set to be overhauled by a new law that is currently making progress through the Legislative Assembly, being approved at the first reading earlier this week. The law will effectively keep the number of operators in the market at six, despite the government initially looking into reducing concession numbers in its consultation on the bill.

However, it will also include strict new restrictions on junkets – which only be allowed to operate at one concessionaire each – and a limit on gaming table numbers, linked to the amount of revenue each table produces.

Sands China chief operating officer Grant Chum noted that the law was still fairly vague about the latter provision, and that the business would need to know more about how the rule would work before knowing what kind of effect it had.

Regarding junkets, Golstein said that the VIP customers attracted by junket operators “are not going to just disappear”. He said that therefore demand “will just resurrect in different segments and find new ways of materializing in the casino and it always is that way in any business”.

Elsewhere, executives also spoke about new markets for Sands’ land-based business. This week saw rival operator Wynn Resorts announce plans to develop the Middle East’s first integrated resort in the UAE, a move that Dumont said Sands would pay close attention to as it determines if it could take steps to enter that market.

“I understand why Wynn would have interest going there,” he said. “It’s a tremendous tourism market, has a lot of potential. And to be fair, it is an economic center for that region. 

“So in terms of opportunity, we all understood why there would be interest there for them to go.

So it’s something that we will continue to watch and look at. But there are a lot of high quality markets that are available to our company.”

In the US, Goldstein noted that the business is “in the hunt” for one of the state of New York’s three downstate casino licences that could allow for a casino in New York City, noting that it should be a “massive market” for his business. 

Goldstein also noted that Sands was “in the hunt” in Florida, where it was gathering signatures for a ballot measure to allow gaming expansion. He added that in Texas the business was hoping to find an entry point, but said that market was “probably the farthest away from a decision”.