Month: February 2022

H2’s handle estimates are based on bets struck between a retail player and a commercial sportsbook, and do not include casual bets between friends or office sweepstakes. 

While the American Gaming Association (AGA) notes that the total addressable market for sportsbook operators has grown by around 45 million people from Super Bowl LV, H2’s figures show the vast majority of handle is likely to be staked offshore. 

It estimates that handle for regulated sportsbooks will total $1.9bn, a figure far outstripped by the $5.1bn to be wagered via unlicensed sites.

However, the fact that 27.3% of bets will be placed legally is a significant jump from 2021, when 13.7% of bets were placed onshore. 

In terms of who could win, the Los Angeles Rams are typically 1/2 favourites to take the Vince Lombardi Trophy. Since 1991, 64.5% of Super Bowls have been won by the favourites, with 38.7% of games seeing that team covering the spread.

Their opponents, the Cincinnati Bengals, have “come out of nowhere”, with odds of the franchise winning the Super Bowl as wide as 200-1 after week two of the NFL season. The Rams, on the other hand, saw their odds start at 20-1, then almost immediately drop to 12-1 after adding quarterback Matthew Stafford to its roster.

After player winnings are paid out, H2 projects onshore gross win in the range of $190m to $230m. However, should the Rams beat the Bengals by 4-points, returns could fall as low as $120m to $125m. 

But given the level of free bets operators are offering customers, H2 expects the states with legal sports betting to be Sunday’s biggest winners, with around $32.5m and $37.5m in betting tax receipts to be generated.

By Nosa Omoigui and Daniel O’Boyle

Considering the majority of the brands competing for customers in North America are already members of the International Betting Integrity Association, its push into the US and Canada has long felt a matter of when, not if.

Already, it monitors 60% of the US online betting market. And according to chief executive Khalid Ali, the move across the pond was a natural step in its growth.

“I think this just naturally follows from our rebranding. In 2019 we rebranded to the International Betting Integrity Association to reflect our global focus. We actually had some big plans for 2020, but of course Covid scuppered that.

“This was in the pipeline and it just felt like this was the right time to move in. There was a lot of momentum and of course you have to remember that in 2018, there weren’t that many states that had opened up. Now there’s a lot more states that offer legal sports betting.”

Ali is confident the association offers a unique set of skills currently missing in the US. “We’ve been recording issues of integrity for the last 15 years,” he says. “We’ve built up a reputation and credibility in this ecosystem – we’ve built up relationships with sports and regulators.

“More importantly, we have a global dataset that we can really bring to the US. The US is really the missing piece with our members now moving there and entering that market. We will have a much more joined up approach when it comes to integrity and reporting alerts as our members start taking bets from that market.”

But aside from many of the market leaders in the US being its members, IBIA was also involved in an earlier push into the US, through the Sports Wagering Integrity Monitoring Association (SWIMA).

But Ali says IBIA only ever saw SWIMA as a stopgap, as its members started to move over to the US.

“We consulted with the operators who helped establish it and they used a version of our platform. More specifically, we always saw this as a kind of temporary fix as our members started to move into the market. But as more members started to move in, there was more of a demand for a one-stop shop to fulfil their integrity needs.”

The transition to the US isn’t without its challenges, however.

Ali admits that the process to procure the required licence – a vendor minor licence – is adding an additional complication to the entry process.

“First of all, we need to get licensed in the US. That means we need to go through a few requirements first just to get set up. In some states we’ve had to give details about us as individuals, personal disclosure forms. I’ve had to give my fingerprints a number of times.

“There’s a number of requirements. It’s not the same in every state of course but that’s part of the challenge, that there can be different requirements in every state. The fact is we will be launching in the US with six states, then we have a number of other pending applications in other states.”

And there are some local quirks that could cause problems. Ali points to some states requiring monitors to supply the local regulators with all the raw data used for bet monitoring.

“It’s just something we don’t really see the need for, because the way our process works is that everything tends to be filtered out by the operators,” he says.

“It’s not actually been enforced, because what do you do with all this raw data? We’ve been able to explain to regulators that our process involves filtering down all the raw data – and there’s obviously a lot of it – looking at the relevant information and passing that on to relevant regulators or stakeholders.”

These issues aside, state markets could actually be seen as setting a new way forward when it comes to integrity. A growing number require sportsbook operators to be a part of an integrity monitoring body.

Although jurisdictions such as the Netherlands (and maybe Sweden in the near future) have also adopted such a policy, it is a more prevalent requirement in the US when compared to Europe.

“The requirement for operators to be part of an integrity body is definitely a plus,” Ali adds. “It’s definitely a good thing for ensuring higher standards of integrity.”

Despite the challenges and changes, Ali remains excited to bring IBIA to a new market where its wealth of experience can be put to good use. It may move state by state, but it has the know-how, experience and membership to fulfil a key role in the market.

The pilot will see live odds, information about the BCLC’s PlayNow.com sports betting site and promotions, and advice on responsible gambling displayed on digital screens in each of the trial venues.

PlayNow.com customers at participating locations will also receive a $10 free-bet voucher for PlayNow.com, which they can access by scanning a QR code at the venue.

A total of 13 venues will take place in the pilot, including 12 bars across the province and the Chances Kelowna casino.
Read the full story on iGB North America.

The company reported growth despite enduring a difficult fourth quarter. During this period client launches, including that of long-term partner (and former parent company) Kindred were derailed by last-minute changes to licensing conditions, while other partners migrated away from Kambi’s technology.

Kambi’s US expansion continued at pace throughout 2021, with its technology in use in 18 states by year-end. During the year it supported Rush Street Interactive’s launch in Arizona, while its partner Penn National Gaming launched in several states such as Iowa, Louisiana and West Virginia. Churchill Downs Incorporated, another Kambi partner, also launched in the states of Maryland and New Jersey. In total, the supplier completed more than 60 online and on-property launches in 2021.

Outside of the US, it went live with partners including the Belgian National Lottery’s Scooore sportsbook and Dutch casino operator JVH. Outside of Europe, Kambi reached agreements with Racing and Wagering Western Australia and Bahamas-based operator Island Luck.

The year also saw Kambi move into the esports market through its acquisition of esports data and technology provider Abios, in a deal worth up to SEK270m (£22.6m/€26.4m/$31.1m).

Operating expenses increased in 2021, rising from €85.5m to €105.4m. Staff costs were the largest expense at €50.2m, amortisation amounted to €16.0m, and data supplier costs added a further expense of €13.5m. Other operating expenses came to €25.7m.

Operating profit for the year came to €57.0m. After finance costs of €887,000 and income tax expenses of €9.7m, Kambi recorded profit of €46.4m in 2021 – up 92.5% compared to 2020.

Revenue for the fourth quarter of 2021 came to €34.9m, down 25.6% from the corresponding period in 2020. At the end of Q3, DraftKings migrated to an in-house platform.

Operating expenses for the quarter rose 12.6% to €27.8m. After deducting €968,000 of finance costs and income tax, profit for the fourth quarter totaled €6.1m – down from €17.3m in 2020.

The majority of fourth quarter GGR, 58%, came from the Americas. This was due to a busy US sporting calendar, and market launches in US states such as Connecticut, Louisiana and Maryland.

European markets accounted for 40% of Q4 revenue, with 2% coming from the rest of the world.

Operator turnover for the quarter decreased 23.0% compared to Q4 in 2020.

“Q4 concluded a transformative year for Kambi and as we move into 2022, I am confident the business has never been better positioned for the future,” Kambi chief executive Kristian Nylén (pictured) said. “The prospect of further regulation and additional partner signings across the globe is positive and we are firmly established as the go-to provider for the global sports betting market.

“I look forward to building on our successes this year and beyond to the benefit of both our partners and shareholders alike.”

Kambi recently signed a new three-year agreement with Kindred Group which will see the supplier continue to provide its sportsbook technology until the end of 2026 – though its former parent is developing a proprietary sportsbook platform.

In January this year, Kambi has also continued its US expansion, going live with partners in New York and Louisiana.

This is a 12.6% rise from the corresponding period in Sega Sammy’s 2020-2021 financial year.

Its entertainment content business, including iconic video games business Sega, was the main source of sales revenue, bringing in JPY178.34bn, aided by revenue from the holiday season.

Sega Sammy picked out home downloads as a key driver behind the 6.0% year-on-year growth, especially with people buying content at home during Covid-19 lockdowns.

The sale of physical games units, on the other hand, were down 32.7% year-on-year, including Shin Megami Tensei V, Football Manager 2022 and Super Monkey Ball Banana Mania among the most popular.

The sale of pachislot and pachinko machines, meanwhile, made up JPY52.06bn in revenue, up 38.4% from the previous corresponding period.

Sales of its Pachislot Anemone Psalms of Eureka Seven Hi-Evolution machine hit 48,000 units, up 300% year-on-year. With the addition of sales from the P Hokuto No Ken Toushin machine, total machine sales for the nine months amounted to 64,000 units, an 8.4% improvement on the prior year.

Resort operations generated a further JPY6.81bn in revenue, a rise of 37.3%. Sega Sammy’s Phoenix Seagaia Resort in Miyazaki, Japan – which doesn’t offer gambling – saw a 111.4% increase in visitors compared to Q3 2020. Its Paradise City property in South Korea, meanwhile, saw a 47.8% decline in the purchase of chips by customers.

Cost of sales totalled JPY137.32bn, up 8.1%. This left an overall gross profit of JPY99.43bn, up 19.4%.

Selling, general and administrative expenses fell by 4.1% to JPY66.76bn, lowering the operating income to JPY32.66bn. However this still represented a 141.5% improvement on the previous year’s total.

Non-operating income was JPY3.66bn, which was almost cancelled out by non-operating expenses of JPY2.93bn. After factoring in other income of JPY2.75bn, and other losses at JPY555.0m, the total pre-tax income came to JPY35.5bn, a rise of JPY26.71bn year-on-year.

In Sega Sammy’s H1 results the company reported return to profit, while its pachislot and pachinko machine division struggled.

Last month Sega Sammy announced that Sega was to exit the Japanese amusement arcade business after 50 years.

It will sell the remaining 14.9% of its Sega Entertainment division to Genda, which bought 85.1% of Sega Entertainment’s shares in 2020. The sale will see all Sega-branded arcades in Japan re-branded to GiGO, with Sega Entertainment named Genda GiGO Entertainment.

As a result of its performance over the first three quarters of its fiscal year, Sega Sammy has now raised its full-year projections.

For the year ended 31 March 2022, it expects total sales to reach JPY315.00bn, suggesting revenue will rise 13.4% from its 2020-21 financial year. This will be driven by stronger than expected sales of entertainment products, and increased demand for pachinko and pachislot machines.

This will offset a “sluggish” performance from the resorts division, with the operator warning that Covid-19 is still affecting customer demand and visitation.

The partnership will see ParionsSport become the official partner of FFR and its male and female national teams until 2024.

The ParionsSport Online and ParionsSport point of sale branding will appear during the 2022 Six Nations home games in Stade de France and on FFR’s social media channels.

“We are particularly happy to establish a partnership with the French Rugby Federation, and to make it a long-term one,” said Richard Courtois, director of sports betting activity for FDJ.

“The ParionsSport online and ParionsSport point of sale brands share the values ​​of respect and solidarity that the oval has always conveyed.”

ParionsSport Online will also roll out exclusive content and competitions across its social media.

Bernard Laporte, president of the FFR, added that the partnership benefits the men’s and women’s teams as well as French rugby as a whole.

“This partnership with ParionsSport is the marker of great ambitions for the next three years,” said Laporte. “I am very happy to be able to count on the commitment of this historical support of French sport and I know that this new collaboration will be beneficial to French rugby and to our teams in France.”

Rugby is the fourth most popular sport for betting for FDJ, behind football, tennis and basketball.

Last month, FDJ appointed former Coca-Cola veteran Isabelle Bastian as its new commercial director.

The operator was awarded a sports wagering license by the Washington State Gambling Commission, allowing the new Caesars Sportsbook at Muckleshoot Casino to launch.

This came after Caesars agreed partnerships with each of the Muckleshoot and Spokane tribes, the latter of which owns both the Spokane Casino and Chewelah Casino.

The sportsbook at the Muckleshoot Casino, Caesars said, will be the largest betting facility of its kind in the Pacific Northwest, featuring four live betting windows and nine self-service betting kiosks. Plans are also in place to offer on-property mobile wagering through the Caesars Sportsbook app.

Read the full story on iGB North America.

Revenue for the 12 months through to December 31 2021 amounted to $782.1m (£575.9m/€685.8m), which was 1.3% lower than the $792.6m posted in the previous year. 

Rental revenue fell 1.4% year-on-year to $757.9m, while ground lease and other revenue remained level at $24.1m for the year.

Total expenses for the year were cut by 56.4% to $206.4m, primarily due to a 99.1% drop in property transactions expenses, which fell from $195.2m to just $1.7m. 

Ground lease costs were level at $23.6m, while acquisition expenses rocketed by 655.3% to $7.5m. and general and administrative costs increased 12.4% to $18.1m. MGP also noted a slight drop in depreciation costs, which fell 0.6% to $235.5m.

MGP also reported $265.9m in interest expense, but this was partly offset by $100.8m in income from unconsolidated affiliates and a $39.1m on unhedged interest rate swaps, which resulted in $127.1m in finance costs, down 15.1% year-on-year. 

Pre-tax profit was 116.7% higher at $368.6m, while MGP also noted that adjusted earnings before tax, interest, depreciation and amortization (EBITDA) increased by 2.5 % to $979.2m.

The business paid $9.3m in income tax, leaving $359.2m in net profit, up 123.9% year-on-year. After accounting for $153.7m attributable to non-controlling interests, $205.5m of net profit was attributable to its own shareholders, up 170.0%.

Looking at the fourth quarter, revenue in the three months to the end of December came to $199.0m, up 2.4%. Rental revenue climbed 2.5% to $193.0m, while ground lease and other revenue was flat at $6.0m.

Expenses were 10.8% higher at $75.7m and other costs amounted to $33.9m, up 7.6% from $33.9m in 2020. 

Pre-tax profit was $89.4m, down by 2.1% from $91.3m in the previous year, but adjusted EBITDA was 3.8% higher at $249.4m.

After paying $2.4m in tax, net profit for the quarter was $87.0m, a decline of 4.7% from $91.3m in 2020. When accounting for $35.0m attributable to non-controlling interests, $52.0 of net profit was attributable to MGP shareholders, up 25.3% year-on-year.

The 2021 financial year is set to be MGP’s final full operating year before it is acquired by Vici Properties, the real estate investment trust spun off from Caesars Entertainment in 2017. 

MGM Resorts International, which holds a controlling stake in MGP, reached an agreement in August of 2021 to sell the spun-off REIT MGM Growth Properties to Vici Properties for $17.2bn.

This week, MGM itself revealed it had returned to profit in 2021 after the easing of novel coronavirus (Covid-19) restrictions led to a resurgence in its properties’ performance. Revenue was up 87.5% to $9.68bn, while a net loss of $1.03bn in 2020 was turned into a net profit of $1.25bn.

Reel were found to be in breach of the Money Laundering Act after allowing a player to deposit DKK2.4m (£270,000/€320,000) into their account between 2019 and 2020, without having sufficient knowledge regarding the source of the funds.

It wasn’t until the regulator performed a random check on the player in the summer of 2021 that Reel sought out information on the player’s income and employment conditions. The operator deemed the player in question could afford to make such a deposit based on salary, even if they were depositing more than said salary after tax.

Spillemyndigheden’s ruling said: “It is the Gambling Authority’s assessment that Reel has violated the rules on customer due diligence procedures by not obtaining information on the player previously. 

“It is also the Gambling Authority’s assessment, that Reel should have investigated the player’s circumstances further, as the income and employment conditions were not sufficient to dispel a suspicion of money laundering – therefore, Reel has violated the rules of duty of investigation.”

Spillemyndigheden declined to hit Reel with any further sanctions, as the operator has subsequently “introduced new business procedures for customer due diligence procedures”.

The regulator has issued similar reprimands to both Mr Green and Cashpoint Limited so far this year.

The appointment sees Broda continue his career in the industry, having previously worked with horse racing trader Coral and Bet365, where he worked as a business analyst.

Before moving to Checkd he also worked as product owner at Sharp Gaming.

Broda has been appointed to oversee product development and deployment within the group’s Checkd Development division, which recently delivered a fully rebuilt future-proofed platform for Sky Sports Fantasy Football.

The news comes after Checkd Group launched its new US-centric sports betting website, amidst a number of new deals.

Adam Patton, managing director at Checkd Development, said: “We are in the midst of what is a pivotal moment both for Checkd Group’s growth and that of the sports betting industry as a whole.”

“The appointment of Dan, with his extensive background and industry knowledge, is a further sign of our growth ambitions around product development. In building on excellent foundations, we believe Dan is the right person to oversee our operations.”

Broda added: “Checkd Group has built a deserved reputation based around an intimate knowledge of its large sports betting community and delivering products that serve to meet that community’s needs.”

“With the US launch around the corner, this is a fascinating time to be joining an ambitious and fast-growing company and I look forward to helping delivering the best possible products to our customers and partners worldwide.”