Month: March 2022

However, the Commission’s report did propose a number of other changes instead in order for Crown to be considered suitable, including mandatory limits for electronic gaming machines (EGMs).

The report followed two previous inquiries into Crown’s suitability for a licence in other jurisdictions. The Bergin Report in New South Wales looked into whether Crown was suitable to operate a casino in its new resort in the Barangaroo area of Sydney, while the Victoria Royal Commission’s report examined whether it was fit to operate its flagship Crown Melbourne resort.

Like the Perth report, both inquiries determined that Crown was an “unsuitable” licensee, but stopped short of revoking or refusing to grant a licence.

In looking into Crown’s suitability, the report uncovered a number of failings at Crown Resorts and its subsidiaries. Many of these failings were similar to those uncovered by the previous reports, with most flagged issues relating to relationships with junkets and anti-money laundering measures, as well as governance issues.

The report noted that from 2013, Crown became “increasingly reliant” on junkets at both its Melbourne and Perth locations.

The operator had claimed in 2009 – when the Western Australia Gaming and Wagering Commission first considered permitting junkets – that it would perform AML checks and not do business with junket operators deemed “high-risk”. 

However, the business “approved and maintained relationships with junket operators and junket representatives that it had assessed to be ‘high-risk’ from a money laundering perspective”.

The report also said that chairman James Packer “did not appreciate that junket operators posed a higher risk than other parts of Perth Casino’s gaming business, of either attracting criminal elements or the facilitation of money laundering, at the time of his appointment”.

“He believed those risks could be managed,” it added.

In addition, it said, other key leadership figures had limited or no understanding of how junket businesses worked and the associated risks.

In terms of corporate governance, the report found that many of Crown Perth’s key legal and compliance functions had been centralised. As a result, the central Crown Resorts business oversaw many areas related to day-to-day legal and compliance functions at the Perth casino.

This, it said, made accountability more difficult. The report noted that the Perth-specific subsidiaries of Crown “ did not have any substantive involvement in the assessment or approval of junket operators who came to Perth Casino or oversight of the assessment and approval function”.

It added that there was “no evidence” that senior management had made the subsidiaries’ boards aware of agreements made with junket operators such as SunCity.

These issues were heightened by the fact that chair James Packer did not attend board meetings for Crown subsidiary Burswood Limited, which owned the resort, from August 2013 until his resignation in 2016.

“Crown acknowledges that it was unacceptable for Packer not to attend board meetings, and that the other members of the BL board should have expressed concern and taken steps about the prolonged absence,” the report said.

Regarding money laundering, the report found that cage staff had been adequately trained to recognise potentially suspicious transactions.

David Brown, who was Crown’s general manager of cage and account admitted that he “knew there were transactions occurring in 2013 and 2014 that were suspicious” and should have been reported to money-laundering authority Austrac.

Former Crown chief financial officer Ken Barton, meanwhile, was found to have known that the Crown VIP team requested certain bank accounts used by VIPs not include Crown’s name.

“Upon becoming aware of the purpose of Riverbank, it did not raise any alarms bells with him that accounts of this character may facilitate money laundering,” the report said.

As a result of these findings, the report concluded that Crown and its subsidiaries were not “a suitable person to be concerned in or associated with the organisation and conduct of the gaming operations of a licensed casino”.

However, rather than revoking its licence, the Royal Commission proposed a number of changes which Crown Perth must undergo.

It said that Crown should adopt a “corporate structure that has more clarity than the current arrangement”, with the roles of each subsidiary clarified.

In addition, Crown Perth should “introduce a full, mandatory, binding loss pre-commitment and play period limits scheme for electronic gaming machine (EGM) play at Perth Casino (EGM Scheme) as soon as practicable”.

Under this system, players must set weekly loss limits, and if they do not, a default limit based on research into “safe” limits should be set for them. While customers may be able to raise these lost limits, there should be a “prescribed maximum” set by the Gaming and Wagering Commission.

Maximum bets on these machines should be set at $10.

VIP players, meanwhile, must provide “documentation evidencing their financial capacity”.

Meanwhile, the report also found that Gaming and Wagering Commission should also be restructured, with more funding in order to allow it to better regulate operators.

Crown is set to be acquired by private equity giant Blackstone, having agreed an AUD$8.9bn deal following a protracted bidding saga. Blackstone had made its initial acquisition proposal in March 2021, but later upped this offer in January 2022.

This was also a decrease year-on-year of 1.2% and 2.3% below budget for the month.

Gross betting revenue was NZ$30.1m, a decrease of 24.7% from January but a rise of 1.1% year-on-year.

Profit for February was NZ$11.3m, down 36.5% month-on-month but up 9.7% from February 2021. This was NZ$200,000 less than the budget for the month.

Betting profit made up NZ$10.1m of the total profit, NZ$400,000 over budget, while gaming profit brought up the remaining NZ$1.2m, coming in NZ$600,000 under budget.

Profit for the year to date totaled at NZ$96.9m, down 7.5% year-on-year and NZ$800,000 under budget.

Operating expenses for the month fell by $900,000 compared to January, to NZ$9m, and fell by NZ$600,000 year-on-year.

The most successful day for horseracing turnover for the month was at the Herbie Dyke Stakes at the Te Rapa venue on 12 February, which generated NZ$538,000.

The AJC Avondale Guineas at Ellerslie brought in the second most turnover, at NZ$537,000, while the Mainland 1600 at Ellerslie saw turnover of NZ$368,000.

The Superbowl LVI saw the most turnover for sports in February by far, hitting NZ$754,000 in turnover. The MMA fight between Israel Adesanya and Robert Whittaker brought in NZ$546,000 in turnover while the Rugby Union match between the Highlanders and the Crusaders saw NZ$346,000 in turnover.

Revenue, including income from jackpot insurance, for the 12 months to 31 December 2021 amounted to €86.8m, only marginally down from €87.0m in the previous financial year.

Zeal said the majority of its revenue for the full year was generated within its core German business, with this amounting to €78.5m of total revenue. The remaining €4.9m came from other activities.

The business also revealed total group billings, which comprise all stakes from customers, edged up 0.6% year-on-year to €656.5m, despite what Zeal said were “weak” jackpots when compared with the previous year.

Zeal noted a number of major achievements in 2021, including making an offer to purchase all remaining shares in Lotto24 and take full ownership of the online lottery broker it spun off in 2012. 

Zeal already owned 93% of the shares in Lotto24, with the agreement requiring Lotto24 delist remaining shares from the Frankfurt Stock Exchange in order to allow Zeal to acquire them. After settlement on 23 September, Zeal now holds 1,527,520 Lotto24 shares, which corresponds to a share of approximately 94.9% of the total share capital of Lotto24.

Zeal also made a number of changes to its senior management team, including the appointments of Paul Dingwitz as its new chief technology officer and Sönke Martens as chief operations officer.

In addition, Zeal was able to make cost savings across a number of areas, such as marketing for certain lottery games due to weaker jackpots. Zeal said this limited the opportunities for market, meaning it spent less as a result.

As such, total operating costs were cut by 23.0%, with personnel expenses down by 12.9%, marketing spend 27.0% lower, direct operating expenses down 11.6% and indirect operating costs 30.8% lower.

This led to a 117.6% year-on-year rise in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to €27.7m. After including €8.7m worth of depreciation and amortisation expenses, this left €19.0m in earnings before interest and tax, a 254.3% jump from €5.4m in 2020.

Zeal also reported €2.1m in financial expenses and a €300,000 in share loss from associates, which left a pre-tax profit at €16.7m.

The business paid €5.3m in income tax, meaning that it ended the financial year with a net profit of $11.4m, up 44.5% on 2020.

“In 2021 we have proven that we can be successful even in a difficult market environment,” Zeal chief financial officer Jonas Mattsson said. 

Looking to 2022, Zeal said it expects revenue to amount to at least €105.0m, which would be an approximate increase of 21.0% on 2021, while adjusted EBITDA is likely to increase by at least 6.0% to €30.0m. 

“Overall, we see ourselves well equipped to successfully continue Zeal’s growth in the future,” Zeal chief executive Helmut Becker said.

Mitek will pay £98m (€117.4m/$129.2m) in cash as part of the deal.

The acquisition ensures that Mitek now has ID document validation, geolocation and identity confidence scores across all channels.

“Having a single platform that easily orchestrates and configures a KYC journey to manage identities and identify bad actors is becoming a prerequisite for any business transacting digitally,” said HooYu CEO Keith Marsden.

“Bringing together Mitek’s lead in identity, liveness and biometrics, with our orchestration, configuration and journey services simplifies identity management for financial institutions.”

This news follows HooYu announcing the launch of its open banking technology in January, which is used to enhance their responsibility compliance requirements. The identity confirmation tool is used by betting and gaming operators such as Tombola and Betfred, as well as banks such as NatWest.

KYC technology links biometric verification with real-time bureau and sanction database checks which ensure truthful identity and prevention of fraud.

“Our current geopolitical, commercial and technological environment represents a perfect storm for bad actors. Mitek is leading the fight against fraud by providing the technology that businesses need to stamp out digital money launderers and sanctioned individuals,” said Max Carnecchia, CEO of Mitek Systems.

“The only way to combat this scourge is to use artificial intelligence (AI) and stop bad transactions before they happen.”

The group will allow EGBA members to exchange information about cyber threats to prevent future attacks and work together to track and resolve incidents.

The group is currently made up of cybersecurity experts who are also EGBA members. However, operators that are not EGBA members are also allowed to join if they comply with certain cyber security and data protection standards.

The type of data that will be shared in the group has been established through a Memorandum of Understanding between members.

“We have launched this expert group to encourage and establish a much-needed platform for cross-industry cooperation on cybersecurity issues,” said Maarten Haijer, secretary general of EGBA. “Cyber criminals are increasingly determined and sophisticated in their efforts to try to hack into gambling websites to steal customer data and money.”

The group will also strengthen the protection of operators’ customer bases by preventing theft and data breaches.

“Cyber threats tend to be cross-border in nature, affect operators in the same ways, and are a common threat to the industry,” continued Haijer. “That’s why it is crucially important that operators work closer together to strengthen cyber security protocols and procedures, find common solutions to the latest threats and security vulnerabilities, and implement the highest security standards.”

BetMGM was judged to have accepted wagers on two “prohibited events”, one on 10 March and one on 20 March 2021.

The first event was a Metro Atlantic Athletic Conference tournament game between Niagara University and Marist College, which took place in Atlantic City.

The second event was an NCAA Tournament game involving New Jersey-based Rutgers University.

New Jersey sports betting operators are only permitted to take bets on collegiate sports games if they do not take place in New Jersey or involve New Jersey-based teams.

As a result, BetMGM was ordered to pay a $25,000 civil penalty.

A referendum to remove this requirement appeared on the ballot for the November 2021 election, but was defeated by 57% to 43%.

With 1v1.LOL being a battle royale-style third-person shooter game, Playtika said the acquisition fit its strategy of widening the types of game it offers.

“The acquisition of JustPlay.LOL and its leading title, 1v1.LOL, continues our strategy of diversifying the game genres we operate in as we leverage our industry-leading game operations technology to grow revenue via our Boost Platform,” Playtika chief strategy officer Eric Rapps said. 

Boris and Lior Alterman founded Israel-based JustPlay.LOL in 2018  and owned the business up until the Playtika deal, while also serving as chief executive and chief technology officer, respectively.

Its games boast more than 50 million downloads and around 700,000 daily active users.

“JustPlay.LOL has organically built an impressive community of engaged users,” Rapps added. “We look forward to working with the JustPlay.LOL team to further expand that base and to provide them the best entertainment experience possible.”

Playtika did not disclose the purchase price for the deal.

Playtika’s efforts to diversify have also included pursuit of blockchain-related opportunities. Last week, the business announced the appointment of Jacob Mendel as its vice president of blockchain technology.

The deal will allow AGTech to enter the fintech business with a focus on the Guangdong–Hong Kong–Macau Greater Bay Area, with Macau Pass becoming an AGTech subsidiary.

Macau Pass issues the Macau Pass Card, which was the first and is the most commonly used contactless payment card in Macau, with more than 3 million active cards in issue. The card was initially used for buses but is now accepted by a wide range of businesses.

In addition, the business owns the online payment platform MPay, which is used by more than 90% of adult Macau residents.

“As a local business, Macau Pass’s years-long investment in the community and economy of Macau has borne fruitful results, and is fully recognized and highly appreciated by AGTech,” AGTech chairman and chief executive Sun Ho said. “Over the years, Macau Pass has been actively involved in the local fintech industry, expanding its e-payment applications to different levels of Macau people’s daily lives.”

Sun added that, as part of AGTech, he hoped Macau Pass could help transform Macau through further payment innovations.

“AGTech shares Macau Pass’s ideology of services-oriented livelihood,” he continued. “While enabling a stable transition of Macau Pass into the AGTech business, we will cooperate with the local government to turn Macau into a smart city of the 21st century. 

“Through innovation, we will strive to facilitate the integration of MacauPass, and will invest more resources into integrated payment scenarios that combine online and offline payments, as well as to create a hybrid platform that integrates mobile payment, e-commerce and local services for users and merchants.”

Sun added that he believed Macau Pass – the first payment platform based outside of mainland China to be approved for use on the mainland – would also help to deepen the level of integration between Hong Kong, Guangdong and Macau.

The deal to acquire Macau pass was first announced in October, and last week AGTech announced that it had received all necessary approvals for the deal to close.

At the time the deal was agreed, AGTech said the acquisition would create “tremendous” synergies to its existing business, particularly in terms of its mobile games and entertainment and the supply of non-lottery hardware businesses.

Earlier this week, AGTech announced that its revenue rose 56.7% to HK$253.2m (£24.5m/€29.3m/€32.4m) in 2021. Lottery hardware sales made up the majority of AGTech’s revenue, with this total rocketing 129.1% to HK$168.0m.

No.1/2022/SRIJ, which was put in place on 18 March, states that operators must not publish live odds on matches on any platform, including on LED advertising boards inside stadiums and arenas.

SRIJ said any appearance of live, up-to-date odds would be considered illegal advertising and operators could face regulatory action.

The new rule comes after proposals aiming to establish limits on gambling advertising in Portugal were unanimously approved following a debate in by the country’s legislature in October last year.

Portugal’s decision to ban live odds mirrors similar regulations in other European nations including The Netherlands, where law prohibits advertising during sports events in order to discourage players from impulsive betting.

Last month, Dutch gambling regulator Kansspelautoriteit issued a warning to a licensed operator for advertising on social media platform Twitter during football matches.

The unnamed operator tweeted updates on games and in some posts quoted odds and included a direct link to its website where consumers could place bets on the matches.

Opened in 2017, Chasers offers poker and a wide range of table games to customers in the local area, with a portion of revenue allocated to non-profit organizations licensed in the state.

CDI said that it plans to build on this offering by developing an expanded charitable gaming facility in Salem to accommodate historical racing machines. This would be possible under regulation introduced last year that enables existing charitable gaming operators to offer historical horse racing at licensed facilities in New Hampshire.

Should the acquisition go through as expected, New Hampshire would become the fourth state in which CDI operates historical horse racing. 

CDI currently operates historical horse racing machines in Kentucky and will expand into Virginia upon closing of the pending acquisition of Peninsula Pacific Entertainment, as well as in Louisiana upon completion of the expansion of its 14 existing off track betting facilities.

“New Hampshire is an exciting opportunity for us, one that allows us to put our historical racing machine expertise to work in the growing New England market,” CDI chief executive Bill Carstanjen said.

“We look forward to sharing more about our plans to build an expanded, state-of-the-art gaming facility in Salem in the coming months.”

The transaction is contingent on usual and customary closing conditions, including approval from the New Hampshire Lottery Commission. Should CDI gain the necessary approvals, it expects to close the deal during the second quarter of 2022.

The agreement comes after CDI last month revealed it will abandon its online sports betting and online gaming business within the next six months, in what it described as the “next step forward” for the company.

The news came as part of an earnings call for CDI’s 2021 financial results. Its online product TwinSpires – which includes horse racing as well as sports betting and igaming – brought in $431.7m in total revenue for the year. However, TwinSpires also accounted for $325.4m in costs.

Group net revenue at CDI for the full year reached $1.59bn, up 51.1% year-on-year.