Month: February 2022

Revenue for the 12 months to 31 December 2021 amounted to $1.30bn, up 110.9% from $614.5m in the previous financial year as DraftKings continued its expansion into new markets across the US.

Following launches in New York and Louisiana last month, DraftKings is now live with mobile sports betting in 17 states, as well as with igaming in five states, with new launches planned for the current year.

This growth meant average monthly unique players (MUPs) jumped from 883,000 in 2020 to 1.5 million, while average revenue per MUP climbed 31.4% to $67.

However, this expansion also led to an increase in spending, with cost of revenue up 110.6% to $794.2m, while sales and marketing costs also increased 96.6% to $981.5m. Expenses for product and technology climbed 36.3% to $253.7m, while general and administrative costs hiked 92.3% to $828.3m.

This left an operating loss of $1.56bn, significantly wider than the $850.0m loss posted at the end of 2020.

DraftKings did recover some of this loss via $30.1m in gain on remeasurement of warrant liabilities, $2.0m in interest income and $12.0m in other income, but pre-tax loss still hit $1.52bn, compared to $1.24bn in the previous year.

DraftKings paid $8.3m in tax, leaving an overall net loss of $1.52bn, wider than the $1.24bn loss posted at the end of 2020. 

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was also hit, reaching a loss of $676.1m for the year, compared to a loss of $393.9m in 2020.

Turning to the fourth quarter and revenue for the three months to 31 December was 46.9% higher at $473.3m, a figure that DraftKings chief executive and chairman Jason Robins said exceeded expectations. 

This increase came despite lower-than-expected hold in October, primarily due to NFL game outcomes during the month. Average MUPs for the quarter jumped 31.6% to 2.0 million, while average revenue per MUP was also up 18.5% to $77.

Looking at spending and cost of revenue increased 59.0% to $253.2m, sales and marketing costs 45.0% to $278.4m, product and technology expenses 5.3% to $69.6m, and general and administrative costs 39.0% to $240.8m. 

Higher spending offset revenue growth and meant operating loss widened from $268.3m in 2020 to $368.8m.

Gain on remeasurement of warrant liabilities amounted to $33.0m, while DraftKings also noted $886,000 in interest income and $12.0m of other income. This left a pre-tax loss of $322.9m, wider than the $242.7m loss posted in the previous year.

DraftKings paid $6.6m in tax, resulting in an overall net loss of $326.3m, compared to $242.7m in 2020. 

In terms of adjusted EBITDA, this reached negative $128.0m for the quarter, compared to an EBITDA loss of $87.9m in the previous year.

“Our excellent quarter capped off a year in which five of our states were contribution profit positive, further demonstrating the effectiveness of our state playbook and supporting our positive view of the industry’s TAM,” Robins said.

“We enter 2022 positioned to grow our market share, further optimise our user experience and continue to strengthen our multi-product suite of offerings.”

Despite posting a wider net loss for both the full year and fourth quarter, DraftKings said it was increasing its fiscal year 2022 revenue guidance from a range of $1.7bn to $1.9bn, to a range of $1.85bn to $2.0bn, which would represent year-on-year growth of 43% to 54%.

Adjusted EBITDA loss for 2022 is forecast to be between $825.0m and $925.0m.

DraftKings said this guidance reflects its launch of mobile sports betting in New York and Louisiana, noting that it expects to be profitable across all states where it is currently live in 2022.

In addition, assuming it do will have not launched any additional states after December 31, DraftKings expects to generate positive adjusted EBITDA in the fourth quarter of 2022.

Potential further launches could occur in Maryland, Puerto Rico and Ohio, which have all now legalised mobile sports betting. DraftKings said it has the opportunity to launch via a market access agreement or direct licence in each of these states.

The order is aimed at Kindred subsidiary Trannel, which operates Kindred-owned operators in a number of different countries, including Unibet in Norway.

Earlier this week the Authority threatened Kindred with a daily fine of NOK1.2m (£99,447/€118,649) if it did not stop operating in Norway.

In response to this Kindred published an interview on its site with Rolf Sims, its public affairs manager for Norway.

In it, Sims explained that Norwegian state-owned company Norsk Tipping and private trust Norsk Rikstoto are the only operators to offer gambling services in the country, under its Gambling Act.

Because Trannel’s operators are accessible to Norwegians, the Authority has concluded that it is operating illegally.

However, Sims argues that it is not illegal for Norwegians to play using Kindred’s operators, “in the same way that it is not illegal for Norwegians to shop with eBay or Amazon”.

He also mentioned the “flagrant incompatibility” between Norwegian law and European Economic Area (EEA) law.

“In failing to organise a transparent licensing regime and conducting a truly consistent gambling policy, we feel that the fundamental freedoms within EEA law are systematically being violated by Norway, to the Norwegian Government’s advantage” said Sims.

The Authority first issued the order in 2019. This was appealed to, but not upheld by, the Ministry of Culture and the Lottery Authority Board.

The Authority pointed out that Norwegian currency and customer support was available on Kindred’s website. Kindred also had advertisements broadcast in Norway.

During the appeal Trannel requested that the Oslo District Court determine whether the decision to block Unibet is valid. This case is set to be heard at Oslo District Court in May 2022.

“Ensuring compliance with national and international laws contributes to a sustainable society,” said Sims. “This also extends to Norway.”

“A comprehensive judicial review of the legality of the order issued in 2019 and the gambling monopoly is for the benefit of Norwegian society, consumers and vulnerable players.”

Under the terms of the deal, the Tribe’s Kalispel Casino will use IGT’s technology to power a retail sportsbook, which is due to open at a later date.

IGT first entered the Washington sports betting market in July 2021 via its partnership with Snoqualmie Casino. The company went on to reach a similar agreement with the Stillaguamish Tribe of Indians and their Angel of the Winds Casino Resort in September.

IGT’s president of sports betting Joe Asher said: “IGT is pleased to build on our sports betting momentum in Washington State and bolster our long-standing partnership with the Kalispel Tribe of Indians by powering sports betting at Kalispel Casino. 

“We look forward to bringing a great sports betting experience to the Kalispel Casino so that our long-time partner can further engage its customers.”

The Kalispel Tribe first agreed its gaming compacts with Washington State Gambling Commission in May 2021.

Kevin Zenishek, executive director of casino operations at Kalispel Casino added: “We’re excited to roll out sports betting for our guests at Kalispel Casino. It has already proven to be a fantastic new amenity at Northern Quest and we know it will be popular at our Kalispel Casino as well.”

Enesund has over five years of experience with Videoslots, having initially been appointed as a customer service agent for the company in Malta.

He was promoted to casino coordinator in January 2018. Following this he was assigned to the role of tournament coordinator in August 2021, and was appointed as casino team leader in the same month.

Enesunde replaces former head of casino Timo Thronicke.

“I have thoroughly enjoyed my career to date at Videoslots and am really looking forward to continuing the great work of the brilliant Timo [Thronicke] as head of casino,” said Enesunde.

“When I look back on the last five years at Videoslots I am immensely proud of my achievements and that of the wider team. I’m also super excited about our plans for 2022 and can’t wait to get started.”

Videoslots deputy CEO, Ulle Skottling, added: “Enesunde has gone through the ranks quickly at Videoslots. He’s very talented and I’m delighted that he has taken up his new position.”

“I’m also really pleased that we have been able to promote another of our internal high-flyers as the retention of our best employees is one of the secrets to our success here. It bodes very well for the future.”

Data from the Pennsylvania Gaming Control Board revealed that revenue increased by 26.3% compared to January 2021.

The state’s highest performing casino for the month was Hollywood Casino at Penn National, which rose 31.2% year-on-year to $57.3m. Parx Casino came in second, with $51.8m, up 4.7%. Valley Forge Casino resort rose by 34.3% to almost $51m.

Read the full story on iGB North America.

The findings come from industry research and a PWC report commissioned by the BGC, which has not yet been released.

It will be released in response to the Gambling White Paper, which forms part of the UK Government’s Gambling Act Review.

The Gambling Act Review is led by the department of Digital, Culture, Media and Sport. It will assess the 2005 Gambling Act.

The report, from PreiceWaterhouseCoopers (PWC) reveals that the number of users on unlicensed websites has grown from 220,000 to 460,000, while the total amount wagered is said to be in the billions.

Market research comparisons provided in the report show that black market activity is present across Europe. In Norway, with a monopoly structure, unlicensed gaming accounts for 66% of all money staked, while in France, with strict product limitations, it makes up 57% of all money wagered. In Italy, where all advertising of betting and gaming is banned, 23% of money staked comes from the black market.

The report argues that these rules are a key reason for high levels of black market play.

“This analysis suggests that the UK has a more ‘open’ online gambling market and currently has a smaller unlicensed market share than our European benchmarks,” the report reads.

“Whilst it is not possible to isolate the impact of individual regulatory characteristics, the above assessment suggests that jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive regulatory or licensing characteristics.”

In December 2021 the BGC appealed to the government to place focus on child protection as part of the Gambling White Paper.

Michael Dugher, chief executive of the BGC, warned that the black market could benefit if the regulations become too restrictive.

“We support the Gambling Review but there is a real danger that it leads to the regulated industry being smaller and the illegal black market growing substantially,” said Dugher. “This research is stark about the dangers of the black market, we have to learn lessons from abroad, and make the right choice at this dangerous crossroads.”

“Any shift to the unsafe black market would also jeopardise the £350m a year which our members currently give to horseracing in sponsorship, media rights and the betting levy – financial support which has proved crucial during the pandemic.”

Total gambling revenue in the state for January amounted to $381.7m, up 10.3% from the same month last year, but down 5.5% from $404.1m in December 2021.

Sports betting revenue declined 26.9% year-on-year to $60.2m. This was despite the state’s handle reaching an all-time, monthly high, with the $1.35bn bet by players comfortably surpassing the previous record of $114.8m set in November last year.

Some $1.21bn was wagered online during the month, while the remaining $139.2m was spent at retail sportsbooks.

FanDuel and PointsBet, both partnered with Meadowlands, remained the runaway leaders in New Jersey, posting $38.4m in sports betting revenue for the month. Resorts Digital and DraftKings followed with $10.2m, then BetMGM partner the Borgata on $4.8m.

Looking at igaming and revenue for this segment reached $137.8m, a new monthly record for the state and an increase of 32.8% on last year.

Online casino accounted for $135.3m of total igaming revenue for January, while the other $2.6m came from peer-to-peer poker games.

Borgata claimed top spot in the igaming market with $39.1m in revenue, ahead of Golden Nugget Online Gaming with $36.5m, then Resorts Digital on $33.0m.

In terms of land-based casinos, revenue here increased 14.8% year-on-year to $183.6m, with $129.1m coming from slot machines and $54.6m table games.

Record monthly figures in New Jersey come despite the competition from the rollout of legal online sports betting in neighboring New York in early January.

New York’s market launched on January 8 and, in the 30 days since opening, players bet a total of $1.98bn on sports – far eclipsing the total amount spent in New Jersey in January. Revenue for the same period was also far higher at $138.5m.

Do you offer the same deal to every partner on your network – is there a baseline?

Enrico Bradamante (EB): In the whole value chain, everybody needs to be able to make their fair earning. Commercially, it’s paramount that it works for all parties. We aim to be as flexible as possible in our offering and support our partners the best we can. There is certainly a lot of content currently being produced. Last year we launched over 3,500 new games, which is almost 10 titles a day! With such a great offering, we aim to ensure maximum coverage immediately on launch, leveraging our global regulated network and proven technologies.

Simon Hammon (SH): Relax has several key partnership types and this is reflective largely of the different position some suppliers are in. Some partners require more technical assistance, commercial assistance and also licensing/sheltering. Ultimately, we tailor our approach to each partner depending on their needs. We of course have guidelines, but again, it’s partner dependent.

Vladislav Hveckovich (VH): At the moment slot studios decide on their commercials and then we discuss it with them, we talk about whether it’s in line with the market given their unique advantages, etc. Usually, we have a baseline in mind as there are quite a few established slots providers on the market and we have already integrated virtually all of them, so we feel we know the market quite well. Looking at the operator’s side, if the operator uses us for aggregation, we usually tailor our solution to what the operator is interested in.

Is it as simple as providing studios with access to operators? What other benefits or development support, such as retention and engagement features, do you provide to partners?

EB: Our Fusion aggregation platform is not only about making games available. We act as a technical conduit, supporting both our vendors and operators where needed. Among other things, we offer support around regulation and entering new markets. Our GRT (Gaming Regulation Technology) solution is a type of ‘wrapper’ for any game, from any vendor that is hosted on our Fusion platform. It dynamically adapts the game for the respective regulatory requirements.

We also offer our sophisticated seamless suite of engagement tools which requires no extra integration work and supports our partners in acquiring and retaining players.

For vendors that do not have their own RGS, we have established our Ignite programme. This offers the possibility to rebuild games on our platform, which we then certify in the 15+ regulated markets where we are active, giving them access to the amazing distribution network that we have at Pariplay.

SH: Relax aims to make the process as simple as possible for both our Silver Bullet and Powered By partners. It’s possibly a little easier for our Silver Bullet partners as we are representing and distributing to our operators; however, we aim to make the distribution and access to operators as easy as possible for our Powered By partners too. Relax has a very easy integration process which also includes the need to integrate to some baseline retention tools which aid not only uptake by our operators but also to market the games once selected.

VH: It is pretty standard for slot studios to develop and host their games and provide an API. The benefit that studios get from working with us is by access to a roster of large operators that use our aggregation services. As we provide a unified integration, there is a significant time and cost advantage. Operators also save months of time on commercial and legal discussions and receive our bonus engine, free support and reports as part of the package.

What is your preference – do you look to fully integrate with every partner, or does this depend on the partner?

EB: We have structured our tech stack to be able to make our solution available regardless of the integration approach. We can integrate into operators or vice versa without any hindrance to the offering. Our strategy is to ensure that technically, each connection is as seamless as a direct integration, if not better. We therefore aim to feature each of our vendor partner’s full offering, including engagement tools and such. Of course, we cannot insist on this and each vendor may need to extend the integration to apply this but our tech stack supports everything.

SH: The level of integration really depends on the partner. Some partners require much more in-depth technical support than others. Relax likes to ensure a key baseline delivery for its operators on both a jurisdictional and functionality basis. However, it is impossible to support all functionalities that may be proprietary to a partner due to maintenance and consistency.

VH: We fully integrate the slot studios and our operators then have an option on what to use. We do not force our operators to take everything from us and we are quite flexible in tailoring to their needs.

Talk us through the account management process with the operator clients; can you offer any sort of additional benefits, such as guaranteed positioning on sites?

EB: We see ourselves as an enabler and not a controller. Our mission is to support our partners through transparency. We work hard to understand the wishes of all partners and help them meet in the middle. Sometimes it’s as simple as helping them communicate directly and us being flexible enough to support whatever they agree. Other times we can be the driver. We do not make decisions on behalf of either side; instead, we ensure they are not hindered by inflexibility.

SH: We always do our utmost with partners to best represent the content available and ensure the strongest positioning possible. Operators always take the decision here based upon recommendations of course. The competition in the market is fierce, therefore quality and a specific focus are always key factors.

VH: We help our operators with promotions and are able to get great promo offers from the studios given our size. We work together with the larger operators and slot studios to ensure the best positioning of the games, as it’s a win-win scenario for the studios and the operators.

How do you balance multiple needs and demands across such a wide range of third-party partners, as well as with proprietary content?

EB: I think the content can be split into different categories. There are tier-one vendors that are very well established and work across several markets with well-known brands and games.

We then have localised content, for example converted land-based titles, that are known and popular in a particular geography and we can support them in launching an online product. Finally, we have what we would call tier-two vendors that do not hold many licences and we provide them with access to regulated markets. This is a shortcut for smaller companies to enter those markets without having to invest into the full licensing process.

SH: Relax keeps the tracks separate. Our aggregation business has its own dedicated bandwidth vs Relax own content. This was done primarily to ensure there was no internal resource conflict. With an expanding partner base now numbering over 70, a myriad of discussions and alignments over new opportunities, new markets and much more take place. However, our effective process and great tech help remove a lot of unnecessary headaches.

VH: It is a complicated process, as with the number of providers that we have it’s a never-ending process of adding new integrations and making changes to the existing ones. We understand that we have to make this process as simple as possible to our operator clients. We know how to aggregate content, how to ensure that the connection is fast and stable, and we try to remove as much complexity as possible for the operators.

Consolidated gross revenue for the six months to 31 December 2021 was AU$577.1m, down from AU$741.4m in the corresponding period in the previous year.

Star’s Sydney property was closed from 26 June to 11 October, while its Queensland sites were both closed for a short period during the half. The operator also said that fluctuating social distancing requirements, domestic border closures and other pandemic-related health orders impacted domestic visitation, while international border closures continue to “substantially” reduce its international VIP business.

Revenue before commissions from its Sydney operations declined 39.5% year-on-year to AU$240.3m, while in Brisbane, revenue fell 11.1% to AU$160.6m. However, despite Covid-19 measures and restrictions, revenue in the Gold Coast climbed 5.1% to AU$180.4m, driven by the reactivation of hospitality venues throughout its casino property.

Star also faced a series of regulatory-related issues, one of which concerned claims that it ignored a report by KPMG over supposed anti-money laundering (AML) failings. Star initially said media reports over the matter were “misleading”, later issuing an expanded response, which said it was committed to improving its AML compliance.

Last month, the Australian Transaction Reports and Analysis Centre (Austrac) announced it was to expand an investigation into financial irregularities at Star Sydney to assess other entities within the group.

Also in H1, Star revealed that it had withdrawn its indicative proposal made in May last year to merge with rival business Crown Resorts and create a combined operation worth approximately AU$12.00bn, citing concerns over ongoing regulatory processes with Crown in Victoria.

Turning to costs, while government levies and taxes fell 20.8% to AU$145.8m, expenses were up elsewhere. Personnel costs jumped 26.3% to AU$277.4m, costs of sales edged up 5.9% to AU$28.6m, advertising and promotions costs 5.9% to AU$24.9m and other expenses 28.1% to AU$56.6m.

When also including AU$25.0m in financial costs, this left a pre-tax loss of AU$103.9m, compared to a AU$73.7m profit at the same point in the 2020-21 financial year. Earnings before interest, tax, depreciation and amortisation (EBITDA) also fell 86.8% to AU$30.7m.

Star did receive AU$29.7m in tax benefits during the half which reduced the impact of closures and other restrictions, but the operator still posted a net loss of AU$74.2m for the period, compared to a AU$49.7m profit in the previous year.

Star also reported normalised results to reflect the underlying performance of the business as they remove the inherent win rate volatility of its international VIP rebate business. These results are adjusted using an average win rate of 1.35% on actual turnover, taxes and revenue share commissions, excluding significant items.

Normalised gross revenue was 21.5% lower at AU$575.8m, while EBITDA fell 87.0% to AU$29.4m and net loss reached AU$73.7m.

Zebetting and Gaming will be permitted to offer bets on sports and horse racing at the Zebet.nl and Zeturf.nl websites.

It becomes only the 12th operator to be permitted to launch online in the Netherlands. When the Dutch online market opened on 1 October – after a number of delays – only 10 operators were permitted to launch. 

These initial licensees included Bet365, Tombola, Play North, Dutch land-based operator Holland Casino and state lottery Nederlandse Loterij with its Toto Online brand.

The Janshen-Hahnraths Group with FPO Nederland, Italy-based BetEnt, Belgian brand Bingoal, NSUS Malta, which runs the GGPoker.eu brand, and sports media and betting business LiveScore Malta also secured licences.

Soon after the market launch, JOI Gaming, a division of Dutch land-based casino operator JVH Gaming & Entertainment Group, became the 11th licensee, after JVH had been one of the more surprising omissions from the initial licence list.

Yesterday (16 February), JVH was granted two more licences, allowing it to operate additional websites.

At the time of the market opening, KSA chairman Rene Jansen said he expected more operators to launch, with a number of licence applications pending. 

The newly regulated Dutch market has been notable in its approach to unlicensed operators. Any operator that could accept bets from Dutch customers – even if it did not target them specifically – would not be permitted to receive a licence until it had blocked access from the Netherlands for two years. As a result of this rule, a number of high-profile operators, including Entain, Kindred Group, 888, Betsson, Leovegas and Casumo, announced that they would block all Dutch customers.