Month: March 2022

Both licences were awarded yesterday (8 March).

It is not yet known which domains the two operators will offer online games under.

The operators are the 13th and 14th to be given online gaming licences by Dutch gambling regulator Kansspelautoriteit (KSA), joining recent recipients Zebet, Casino de Spa and JOI Gaming, as well as 10 initial licensees.

The Netherlands was initially set to open its online gaming market on 1 October, six months after the Remote Gambling Act (KOA) came into effect. However, a technical fault with the country’s self-exclusion system Cruks meant that the launch was delayed by until October 4.

The act was first set to come into force on 1 July 2020, with the market opening six months later on 1 January 2021, but was delayed a number of times.

Days before the launch, 10 operators were issued online gaming licences by the KSA.

The licensees included Bet365, Tombola, Play North Ltd, Holland Casino NV and state lottery Nederlandse Loterij.

Just before the act came into effect, the KSA had estimated that it would receive 40 licence applications, but it later announced in April that it had received 28.

All applicants paid an application fee of €48,000.

888 chief executive Itai Pazner (pictured) said the growth, which comes on top of 51.6% revenue growth in 2020, means the scale of the business has “truly transformed” since the end of 2019, with revenue now close to double the amount recorded that year.

“2021 was a very successful year for 888 as we continued to position the group to become a global leader in online betting and gaming,” he said. “It was another record year from a financial perspective, and we have truly transformed the scale of the business over the past two years. 

“This step-change in scale has come from a clear market focus on regulated markets, which now make up three quarters of revenue, and where we are seeing really positive market share trends.”

B2C operations made up almost all of 888’s revenue, with takings from this segment bringing in $941.9m, up 15.7%, compared to $38.2m from B2B technology, which was up 7.7%.

Breaking down B2C earnings further, gaming was by far the largest driver of revenue, bringing in $814.5m, up 17.7%, compared to $127.4m for betting, which was 4.3% more than 2020’s betting total.

Looking at overall revenue geographically instead, the UK made up 40% of 888’s total, as takings from the country was up 17.0% to $388.9m. 

The operator noted that this UK growth itself came on top of 63% growth from 2019 to 2020. However, most of this UK revenue came in the first half of the year, as a combination of retail reopening and increased responsible gambling measures impacted revenue in H2.

Italian revenue was up 37.1% to $118.3m, while the rest of Europe, the Middle East and Africa brought in $333.5m, up 4%.

Breaking these other markets down further, earnings were impacted by the operator’s withdrawal from the Netherlands when it launched its online gambling market, as well as the impact of Germany’s Fourth State Treaty on Gambling and accompanying measures.

“The group believes Germany represents an attractive growth opportunity going forward under

the new regulatory regime and continues to invest to grow its brand presence there,” the business said. “We plan to apply for a licence in the Netherlands and are hopeful we can relaunch there on a regulated basis during H2 2022.”

Revenue from the Americas grew by 33.7% to $125.6m, while revenue from the rest of the world declined by 8.9% to $13.8m. Of this total, $22.0m came from the US. The business recently received a licence for Ontario’s igaming market which will launch on 4 April.

“We believe the Canada market represents an attractive long-term growth opportunity for the group, where 888 has an established brand presence and can exploit its sources of competitive advantage,” it said.

After paying $184.0m in gaming taxes and $149.1m in costs of sales gross profit came to $647.0m, which was 15.0% more than in 2020.

Marketing costs, however, grew by 29.3%, while operating expenses grew by 2.8% to $175.5m.

This meant that 888’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came to $165.0m, 6.0% more than in 2020.

Share-based benefit costs declined to $8.4m, though the business also incurred $9.4m of foreign exchange losses after no such losses in 2020.

Exceptional costs came to $24.0m, less than a third of 2020’s exceptional costs. This was mostly made up of legal and regulatory costs related to the purchase of William Hill’s non-US assets, with other exceptional costs including deferred gaming duties and restructuring costs. Exceptional costs in 2020 had mostly been due to impairment of intangible assets.

The business also incurred $36.3m worth of depreciation and amortisation costs, up 10.2%, leading to an operating profit of $87.0m. This was up 165.1% compared to 2020.

After finance-related income and expenses of $5.4m, 888’s pre-tax profit was $81.3m, triple the total recorded in 2020.

Despite the higher earnings, tax was actually lower in 2020, meaning profit came to $68.9m, which was more than six times the profit the operator made a year earlier.

During the year, 888 agreed to acquire the non-US assets of William Hill, after Caesars had bought that business with the intent to dispose all but its US operations.

This deal, 888 said, would almost triple the size of the business when it closes in Q2 of this year, suggesting combined revenue of more than $2.5bn.

888 also announced a deal with US media brand Sports Illustrated, allowing it to launch an SI-branded sportsbook in that country, which it intends to expand to more states in 2022.

The operator also disposed of its bingo business in 2021.

“Given this strong financial and operational performance, the board remains confident that, with 888’s advanced technology, products and diversification across markets, the group is well-positioned to deliver long-term sustainable growth for all its stakeholders into the future,” Pazner said.

Last week, the business received a £9.4m fine from the GB Gambling Commission after it uncovered a number of social responsibility and anti-money laundering failings. Many of these failings were linked to the fact the business had set its deposit threshold for financial checks for most customers at £40,000.

Pazner addressed this fine on 888’s earnings call, saying the business regrets the failings and had worked to ensure they would not happen again.

“This is something that I would say is something that we’re not proud of as a company,” he said. “It’s not a happy moment for us in the history of 888 because we do see ourselves as a responsible operator that takes customer safety and adhering to the highest standards extremely seriously.

“We recognise that we had some policies at the time that didn’t work as they should have and we deeply regret those. But we have worked to quickly fix those as fast as we could.”

Under the new agreement, Time2play will promote Gamban as a service to support players suffering with gambling-related problems.

Gamban runs as an application that blocks all online gambling websites when installed on a device. Time2play said it would cover this cost for any player that signs up to the service through its site.

“We can’t say that we are ‘for the user’ without considering the implications of our product on problem gamblers,” Time2play co-founder Tim Tepass said. “While most of our visitors are casual players looking for information on a casino, some could be at higher risk of gambling addiction. 

“We want to do everything we can to support those people, and this collaboration is just the beginning of our efforts.”

Gamban co-founder Jack Symons added: “It’s vital that players understand that there is support available if things get out of control. Affiliates are positioned to make people aware of these resources early on. 

“Through better visibility and accessibility of these resources, Time2play can raise standards for affiliates in reducing gambling harm.”

The ad in question ran during December 2021, detailing a free bet offer related to Paddy Power’s “Bet Builder” product.

A voiceover at the end of the ad stipulated the accompanying terms and conditions, which included minimum odds of 1/5 per leg, a minimum of four legs, a maximum free bet of £10 per day, and an exclusion of enhanced match odds.

The single complainant believed the terms and conditions were read out too fast and at too low a volume that they couldn’t be heard, which led them to label the ad as misleading.

Paddy Power claimed the terms and conditions had not been sped up in post production, and had been presented without background effects to maximise audio quality.

The ASA upheld the complaint, agreeing that the wording was delivered in such a way that listeners would not have been able to take in the full content of the terms and conditions. The ad was found to breach the UK Code of Broadcast Advertising, and Paddy Power was warned that it shouldn’t appear again in its current form.

The ASA said: “We considered that information about the offer applying to selected online bets was material information that consumers required in order to make an informed decision. These therefore must be presented to listeners in a clear and intelligible manner.

“Because those conditions had not been presented in a clear and intelligible manner, we concluded that the ad was misleading.”

Back in 2019, the Advertising Standards Authority for Ireland upheld complaints about Paddy Power ads which ran during rugby’s Six Nations that year. The ASAI said the ad was “anti-English”.

Online operator 888 recently avoided ASA an sanction for its advertising on the Calfreezy YouTube channel, after the body determined that the channel did not have a particular appeal to children.

Consolidated revenue for 12 months through to 31 December 2021 amounted to $180.2m (£137.4m/€165.1m), up 43.5% from $125.6m in the previous year and in line with forecasts published last month.

Full House said this increase was primarily down to the easing of Covid-19 measures across the US, with enforced closures and capacity limits having harmed its performance in the 2020 financial year.

Casino revenue was 46.3% higher at $130.4m, while food and beverage revenue increased by 37.9% to $27.3m, hotel revenue 29.7% to $9.6m and revenue from its other operations, including contracted sports betting, climbed 68.4% to $12.8m.

With casinos returning to normal operations, this led to an increase in expenses, with total operating costs for the year up 23.9% to $142.6m. 

This left $37.6m in operating profit, an increase of 258.1%, while after excluding some costs, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) hiked 140.2% to $47.2m.

Full House also noted $25.4m in other costs, including $23.7m in interest expense, which resulted in a pre-tax profit of $12.1m, an increase of 21,974.5%.

After including $435,000 in income tax payments, Full House ended the year with $11.7m in net profit, up from just $147,000 in 2020.

“We are proud of our continued growth in 2021,” Full House president and chief executive Daniel Lee said. “Due to several years of investments in our properties and in new technology, as well as the hard work of our team in managing expenses, adjusted EBITDA increased to $47.2m from $19.7m in 2020. 

“All of our segments achieved their highest profits in any of the past five years and some properties, like the Silver Slipper, reached new all-time records for financial performance. It was an extremely strong year throughout the company.”

Looking at the fourth quarter, revenue for the three months to 31 December was $43.3m, up 13.1% on the previous year.

As operating costs were 23.2% higher at $37.7m, this meant operating profit fell 28.6% to $5.5m, while adjusted EBTIDA was also down 19.4% to $7.9m.

However, other expenses were 89.9% lower at $431,000, helped by a $5.7m gain on the extinguishment of net debt. This meant pre-tax profit was 50.0% higher at $5.1m.

After accounting for $56,000 in income tax payments, Full House ended the quarter with a net profit of $5.0m, up 42.9% year-on-year.

Lee added that the business was making major progress in the construction of new casino projects.

“We expect 2022 to be a similarly transformative year for Full House Resorts,” Lee said. “While our permanent American Place facility in Waukegan, Illinois, will require approximately three years to construct, we expect to introduce American Place to the area’s residents much sooner – this upcoming summer – via The Temporary. We have spent several months designing a temporary casino facility and expect to begin erecting the casino structure in the next month, when major components of the structure begin to arrive on-site.

“Our other major construction project, Chamonix in Cripple Creek, Colorado, should continue the transformation of our Company when it opens in the second quarter of 2023. Our confidence in Chamonix has reached new highs, driven by the success of a recent casino opening in Black Hawk, Colorado, and the significant growth in Colorado’s gaming revenues since the elimination of betting maximums in April 2021. 

“Chamonix will be the first high-quality casino hotel in Cripple Creek, and we expect it to meaningfully grow the market’s gaming revenue and generate a strong return on investment for our Company, similar to what has occurred in Black Hawk.”

Wagering was up 7.0% month-on-month from $466.7m in November, with the state’s handle split $494.5m for online bets and $4.7m at retail sportsbooks.

Consumers won a total of $454.9m from mobile betting and $4.5m from retail wagering.

As a result, despite this higher spending, gross revenue before free bets fell from $50.2m in November to $38.6m in December.

After accounting for $21.3m worth of free bets – almost all of which were distributed to online players – taxable revenue was $17.3m, down 45.6% month-on-month.

DraftKings led the way in December after taking $146.0m in total bets, followed by Flutter Entertainment-owned FanDuel Group on $128.5m, the BetMGM with $103.8m.

In terms of gross revenue, DraftKings also ranked first on $11.0m, ahead of FanDuel with $10.7m and BetMGM on $8.8m.

After taking away free bets, FanDuel was top with $7.2m in revenue, then DraftKings on $6.7m and BetMGM with $1.2m.

Total tax collected from sports betting in December was $1.7m.

Arizona’s sports betting market launched in September 2021 after an amended compact bill was approved by the US Department of the Interior.

The bill allowed players to place bets at tribal casinos and sites that are owned by major league sports teams in the state.

After a career in British rowing including an appearance at the Olympic Games, Phelps took on the role in June 2019 after working for a variety of governing bodies within the industry. The announcement comes on the eve of Cheltenham Festival.

Phelps said: “It has been a great privilege to lead the BHA during this challenging period for the sports sector, and to have recruited a fantastic CEO in Julie Harrington. I am immensely proud of what racing has achieved collectively in this time.”

She added that she was proud of the organisation for the way it handled a number of major challenges, including the COvid-19 pandemic, while she was chair.

“I want to thank the amazing BHA team for navigating the pandemic and for keeping the show on the road behind the scenes, a role that is rarely acknowledged,” she said. “It is a remarkable achievement that no fixtures were lost to Covid once British racing had become the first major sport to resume following the initial 2020 lockdown.

“We have also dealt successfully with some serious and complicated ethical and integrity matters that have set important precedents for the future, laid the foundations for greater diversity and inclusion across the sport, enhanced the industry’s educational resources and safeguarding provisions and further increased our focus on the welfare of our horses and our people; all of which are essential to the sustainable health and prosperity of racing.”

Joe Saumarez Smith, currently an independent non-executive director, will take on the position of chair until the end of his term in September 2023, following the conclusion of Phelps’ term in May.

Smith is currently the CEO of Sports Gaming Limited, a London-based management consultancy to the gaming sector. He has over 20 years’ experience in the industry, having had shares in more than 80 horses and written for a variety of horseracing and gambling publications, as well as founding Bede Gaming.

“On behalf of the BHA board, I would like to express my thanks to Annamarie, who has brought a broad perspective from other sports to the BHA board table,” Saumarez-Smith said. “During her time as chair, she has laid the groundwork for significant change across the industry in a number of areas, and helped us navigate a series of challenging issues, not least the coronavirus pandemic and the BHA’s own governance.

The agreement of a number of core governance principles is potentially a defining moment for the industry. I look forward to continuing to work with Annamarie until the conclusion of her term.”

The business has also suspended its mobile gaming business in Russia.

Pixel United, which rebranded from Aristocrat Digital in November 2021, usually employs approximately 1,000 people across its business units.

However, operations have been disrupted by the invasion, with the majority of staff having elected to voluntarily relocate, either internationally or to safer locations within the country with the support of Aristocrat.

To support this process, Aristocrat has set up a special task force in Poland to assist staff and families on the ground, while the business is also providing transport, visas and legal help, housing and settling-in assistance for relocated staff.

For employees and their families that have chosen to remain in Ukraine, Aristocrat has been providing funds, shelter, emergency supplies and other direct aid. 

“The thoughts of all Aristocrat people are with our Ukraine colleagues and the team members who are supporting them at this difficult time,” Aristocrat said.

“The wellbeing and safety of our people remain our highest priority and Aristocrat’s Pixel United team continues to lead a comprehensive response.”

Aristocrat said Pixel United is continuing to actively manage and prioritise game content releases, adding that it does not anticipate a material impact on earnings as a result of the crisis.

Relocated staff are working remotely, supported by existing Pixel United studios across Europe, while Aristocrat will open a new office in Wroclaw, Poland, shortly.

“The business is leveraging its broad network of studios and operations across Europe, US and Israel, and its combined global capabilities, to put in place effective mitigations and uphold business continuity,” Aristocrat said.

Aristocrat added that it has suspended operating its mobile games in Russia, saying offering games in the country is “currently not viable”. Aristocrat said that Russia made up 3% of Pixel United bookings before the suspension.

“In respect of our Russia-based employees, we are exploring our strategic options and we will continue to do what we can to support our Russia based employees,” Aristocrat said.

“We will continue to closely monitor impacts given the fluid situation and provide an update at Aristocrat’s half-year financial results in May.”

The decision to halt activities in Russia follows a similar move by a host of other gambling businesses 

Genius Sports Group suspended operations in Russia and Belarus, while online gambling operator LeoVegas halted all betting on domestic Russian and Belarusian sports.

Parimatch Tech also said that it would withdraw its franchise from Russia in response to the ongoing invasion of Ukraine. The Parimatch brand was founded in Ukraine in 1994 and the main development centre of Parimatch Tech is in the Ukrainian capital of Kyiv.

Last week saw the launch of Gaming Industry for Ukraine, an initiative that aims to raise £250,000 for those affected by the war. So far, more than £184,000 has been raised, with the largest donation of £25,000 coming from Betsson Group. 

The Rally, which was jointly organised by the All-Party Parliamentary Group on Gambling-Related Harm (APPG) and Peers for Gambling Reform, included a number of individuals and groups who have campaigned to reform the gambling industry with an increased focus on responsible gambling.

During his speech Philp said that gambling reform was “undoubtedly long overdue”, adding that the Gambling White Paper, which forms part of the government’s Gambling Act Review, would contain a “revised policy” on gambling.

The review will contain assessments of the 2005 Gambling Act and suggest areas of reform. Philp was selected to lead the review following his appointment as UK Gambling Minister in September.

Commenting on the necessity of reforms, Philp emphasised that the much has changed in the 17 years since the Gambling Act was put in place.

“Internet gambling didn’t really exist in 2005,” said Philp. “We now have evidence, including a Public Health England report, which identified 409 gambling suicides a year. It is imperative that we respond to that.”

Philp went on to state that operators are “failing to meet their duties to protect people”, citing recent examples of fines and errors that have been publicised in the media. These included the Gambling Commission handing down a £9.4m fine to 888, after discovering a number of social responsibility and money laundering failures, many linked to setting thresholds for financial checks too high.

“That is simply not right, and it shouldn’t take the Gambling Commission acting after the event to catch them,” said Philp. “It shouldn’t happen in the first place.”

He suggested that gambling data could be used to prevent gambling harm, proposing that the regulator have more power to analyse customer data.

“One of the things I’ve spoken about previously is the role that technology and data can play in preventing harm from arising, because the big gambling companies have enormous troves of data which they use very effectively for the purposes of cross-selling, and encouraging people to gamble more,” Philp continued.

“So I think we need to use that data to help protect the public, which means having a regulator that has the powers and capability to get hold of that data and properly analyse it, to understand where bad practices are happening and ensure compliance.”

This data, Philp continued, could be of benefit in a few areas. One of those mentioned was a Single Customer View (SCV), which the UK’s Information Commissioner’s Office backed in October last year. An SCV approach would allow customer data shared between businesses, with the aim of reducing gambling harm.

“It wouldn’t be appropriate or proportionate to have intrusive checks for someone who is betting relatively small amounts of money on the Grand National,” explained Philp. “But there are definitely levels of more significant gambling losses where proper checks should be done.”

“That is the kind of intervention we’re looking at, in a way that is proportionate and balanced.”

Philp concluded his speech by emphasising gambling harm prevention as the key to effective reform, as opposed to curing an addiction after it has begun.

“Prevention is a lot better than cure, which is why we do see this as a public health issue and why we do have, and should have, controls that protect everyone who chooses to gamble – through the licensing regime to regulation to technical standards.”

“People are being exposed to risks in an unreasonable way, led down what can be a very dark path. So we are going to act, and act quickly.”

Other speakers at the event included MP Carolyn Harris, chair of the APPG, who criticised the 2005 Gambling Act and the availability of 24-hour gambling in the form of apps on personal devices.

“Technology has come a long way since 2005,” said Harris. “But that doesn’t excuse the fact that [the 2005 Gambling Act] was a bloody awful piece of legislation.”

“We have a situation now where people can look at a phone, an iPad or whatever piece of technology they have, and they can gamble 24 hours a day, 7 days a week.”

The supplier did not disclose the full details behind the decision but did confirm that the termination would be effective immediately.

Aspire added that the ending of the contract, which began in October 2020, would not have any impact on its income and earnings in 2022.

The termination came after a number of other businesses in the gambling severed their ties with Russia over the ongoing invasion of Ukraine, though Aspire did not mention the invasion in its announcement.

Genius Sports Group suspended operations in Russia and Belarus, while online gambling operator LeoVegas stopped all betting on domestic Russian and Belarusian sports.

Parimatch Tech announced it would withdraw its franchise from Russia in response to the invasion. The Parimatch brand was founded in Ukraine in 1994 and the main development centre of Parimatch Tech is in the Ukrainian capital of Kyiv.

Aristocrat also said it has suspended operating its mobile games in Russia, saying offering games in the country is “currently not viable”.

Last month, Aspire posted record revenue of €213.3m (£177.8m/$234.0m) for 2021, which was 31.8% up on the previous year.

The revenue figure included B2C continued operations. In December, Aspire reached an agreement with Esports Technologies to sell off these B2C assets in a $75.9m deal.

Net profit for the year totalled €24.1m – a 60.7% increase from the year before. If the B2C segment was excluded, net profit was €19.8m.

In January, NeoGames commenced a public offer worth SEK4.3bn to acquire 100% of the shares in Aspire Global.

The proposal comprised a combination of cash for 50% of Aspire Global shares at a price of SEK111 per share, and equity consideration for the remaining 50%, consisting of 7.6 million newly issued shares in NeoGames.

NeoGames said that Aspire Global shareholders, who in aggregate own 67.0% of Aspire Global’s outstanding shares, elected to accept the offer and will elect to receive up to 100% of the 7.6 million offered NeoGames shares.

A bid committee of independent Aspire Global directors, formed in response to the offer, also unanimously recommended shareholders accept the offer.