Month: April 2022

Revenue for the three months to 31 March 2022 amounted to €36.9m (£31.2m/$39.2m), a decrease of 14.6% from €43.2m in the corresponding period in the previous year.

Kambi said this decline was primarily due to tough comparatives in the 2021 financial year, as well as the impact of new regulations in The Netherlands, which forced some operators to withdraw until they secure a new licence in the country.

Operator turnover at constant exchange was down 31.0% year-on-year. However, this was mostly due to the fact that DraftKings still used Kambi technology during Q1 of 2020. When DraftKings was removed from the comparative period, this turnover was up by 25.5%.

In terms of geographical performance, revenue from the Americas contributed 55% to the total figure for the quarter, while Europe accounted for 43% and the Rest of World 2%. Kambi also noted that 93% of all revenue came from regulated markets, up from 87% last year.

Meanwhile, total operating expenses were 20.4% higher at €29.5m, which, coupled with the revenue decline, left a reduced operating profit of €7.3m, down 61.0% year-on-year.

Finance costs also increased 93.2% to €286,000. As a result, pre-tax profit for the quarter fell 61.6% to €7.1m, while after paying €1.6m in income tax, Kambi was left with a net profit of €5.4m, down 64.2% year-on-year.

Earnings before interest, tax, depreciation and amortisation (EBITDA), meanwhile, were 41.5% lower at €13.8m.

Looking at other developments during the quarter, Kambi secured its entrance into the Canadian market by partnering with NorthStar Gaming. This will initially focus on sports betting in Ontario, which opened its legal online gambling market on 4 April. 

In February, Kambi announced an extension to its long-term partnership with Kindred Group through to 2026, while it also signed a sportsbook agreement with sports betting operator Carousel Group’s MaximBet brand. MaximBet is already live in Colorado and also plans to launch in Indiana, Iowa, New Jersey, Ohio and Pennsylvania.

Kambi powered a total of 11 launches across the US in the quarter, including Rush Street Interactive in New York in January, Affinity Interactive in Iowa, and Parx Casino in both New Jersey and Pennsylvania.

“The first quarter of the year proved to be another busy period at Kambi as we delivered new partner signings, contract extensions, continued market expansion and multiple product and technology advancements,” Kambi chief executive Kristian Nylén said.

“Operator turnover was up 25% when adjusting for the migration of DraftKings which proves the underlying financial performance of the business remains strong. This growth comes despite being up against tough Q1 2021 comparatives and the temporary impact of regulatory headwinds in the Netherlands, which we expect to ease soon.

“In short, the future looks bright for Kambi with high interest in the sportsbook and services we offer today, as well as those we are developing for tomorrow. With Kambi reaching the milestone of 40 partners during the quarter, the scale of the Kambi network has never been greater nor more diverse, and I believe we have only scratched the surface of what’s possible.”

Total revenue for the three months to 31 March 2022 was $860.7m (£684.5m/€809.0m), compared to $753.7m in the corresponding period last year.

“Our first quarter results were a great start to 2022 as we delivered another remarkable quarterly performance across our business and continued the momentum of a record 2021,” Boyd chief executive Keith Smith said.

Breaking down revenue by vertical, gaming remained by far Boyd’s primary source of revenue, with this area of the business generating $668.0m in revenue during the quarter, up 8.1% year-on-year.

Food and beverage revenue also increased by 4.4% to $63.7m, while room revenue jumped 63.1% to $42.4m and other revenue 32.6% to $86.6m.

Breaking this down by geographical performance, Boyd’s Midwest and South segment led the way with $583.7m in revenue, a new quarterly record.

Revenue within the Las Vegas Locals sector also reached a record $227.6m, with the remaining $49.5m in revenue coming from the Downtown Las Vegas region.

Looking at spending in Q1, overall operating costs and expenses were 9.0% higher at $609.7m.

Other net expenses in Q1 amounted to $40.3m, primarily down to $37.7m worth of interest expenses. 

This left a pre-tax profit of $210.8m, up 56.9% year-on-year. Meanwhile, adjusted earnings before interest, tax, depreciation, amortisation and rent costs (EBITDAR) rose 15.8% year-on-year to $338.8m.

Boyd paid $47.8m in income tax during the quarter, which meant it ended the period with a net profit of $162.9m, a 59.4% year-on-year increase.

Near the end of the quarter, Boyd struck a deal to acquire Pala Interactive, the igaming software and services supplier that is majority owned by the Pala Band of Mission Indians, for $170.0m.

Agreed through its Boyd Interactive Gaming subsidiary, Boyd said the deal would include all Pala Interactive subsidiaries and be paid for in cash. Pala Interactive currently provides B2B services in eight US states and in Canada, while it also offers B2C services in New Jersey and Canada.

Smith described the acquisition as an important step for Boyd, that would provide the operator with “the technology and expertise to build a leading regional online casino gaming operation“. 

“In all, the first quarter was an excellent start to 2022, as our proven operating strategy and experienced team continue to create long-term value for our shareholders,” Smith said in conclusion.

Looking ahead to the rest of 2022, Smith said the business expected to see its meeting and convention business recover as business travel resumes, while it would look to expand its non-gaming amenities in downtown Las Vegas.

Its casino operations will expand further with two projects either underway or set to begin in 2022. Boyd is to manage Sky River Casino in Northern California, which is under construction, on behalf of the Wilton Rancheria Tribe.

It is also targeting a summer start for construction on a land-based facility at Treasure Chest in Louisiana, replacing its riverboat casino. This is scheduled to open in late 2023.

While Smith said the acquisition of Pala would position the operator to take a direct approach to the emerging igaming opportunity, it remained committed to its sports betting partnership with FanDuel.

“By leveraging the FanDuel brand and the expertise of one of the nation’s clear leaders in online sports betting, we have built a profitable sports betting business that will contribute approximately $30m in EBITDAR to our results this year,” he said. “And through our 5% equity ownership in FanDuel, we have the opportunity to participate in the expansion of sports betting across the country.”

This marked a 34.4% decline from Q1 2021 and a 39.1% decline compared to Q4 of that year.

The integrity body added, however, that the amount of reports could potentially rise depending on the result of ongoing investigations.

Breaking these reports down by sports, tennis led the way with 14, which was down from 31 in the first quarter of 2021.

IBIA noted that of these 14 matches, six were reported to the International Tennis Integrity Agency rather than one of the sport’s governing bodies, “as they do not relate to events sanctioned by the main tennis tours”.

The number of suspicious activity reports for football fell 44.4% to 10 in Q1, while table tennis alerts rose marginally to 10.

There were four reports for volleyball matches, three for pool and one for esports.

Geographically, the majority of the reports were generated in Europe. There were 23 in total for the continent, including five table tennis reports from Germany and four from Russia, as well as three pool matches in the UK.

There were 10 suspicious betting patterns were flagged in Asia, of which six dealt with tennis and four dealt with football. A further four matches were flagged in South America, two in Africa and one each for North America and Oceania.

Artificial Intelligence (AI) has influenced how the gambling industry operates in multiple ways. It has widened the industry’s horizons, creating an environment where machine-operated capabilities are almost limitless.

Practically every area of the industry takes advantage of the applications of AI, from developers creating games to operators monitoring customer play.

AI is also changing how the world develops outside the industry, becoming a key component of self-driving cars and medical advancements.

Last year, Grand View Research estimated the global AI market was valued at $62.35bn in 2020, and predicted that this would rise to more than $930bn by 2028.

Reflecting on recent years, Paolo Personeni, managing director of managed betting services at Sportradar, sees AI as indicative of how the industry has matured and essential to its ongoing development.

“Our industry has undergone significant digital transformation in the past five years and artificial intelligence has been critical in its evolution,” he says. “[It] is an essential component of product development.”

Multiple uses

It could be argued that the gambling industry is an ideal testing ground for AI. AI functions through harvesting data, which allows it to analyse statistics and occurrences to continually improve upon its accuracy.

And data is at the heart of how AI operates in the gambling industry, as Lloyd Danzig, founder and managing partner at Sharp Alpha Advisors, points out. “The gambling industry relies heavily on the leveraging of historical data to anticipate future outcomes and behaviours,” says Danzig.

“This is a core competency required for game design, oddsmaking, risk management, customer profiling, rewards programme optimisation and fraud detection.”

Aiming for the goal

AI’s use in sports betting is particularly key, says Personeni, as an asset to ensure Sportradar’s products and solutions are as accurate as possible. “For Sportradar, one of our core focus areas is on utilising machine and deep learning to develop exceptional computer vision capabilities, which is a form of artificial intelligence that teaches models to interpret and understand videos and images,” he explains.

“While we, as individuals, are very good at understanding what is happening in front of us at sporting events, we have limited capacity in the amount of data we can manually interpret, record digitally and upload.”

This can lead to AI picking up on specific aspects of gameplay, which Personeni sees as a bonus for customers.

“Computer vision provides a hundred-fold increase in the level of statistics and data that we can produce and then feed into our products and services that we offer to our clients,” he says.

“For example, by calculating velocities and trajectories of players we can predict when players will go offside or predict when an attack is mounting.”

AI that goes further than data crunching, focusing on to-the-minute information, is already being used in sports betting and esports betting.

Real-time AI is the top choice for these areas, wherein data providers must provide the most up-to-date information on gameplay. Pandascore CEO Flavien Guillocheau revealed last year that the operator creates 300 data points every half-second for League of Legends with its AI, with an accuracy of over 99%.

Not only can AI facilitate betting by making the process much smoother, but it can also act as a safeguard and create areas of engagement.

AI can be designed to pick up on any and every aspect of a game, which lends to its boundlessness. In 2019, hardware intelligence company MicroTeam launched a pair of AI football boots which allow gameplay data to be captured within a millimeter of accuracy at high speed, including attack routes and distance travelled without the ball. This is then analysed and used for player and match assessments and sports betting platforms.

Similarly, AI is used to analyse and predict gameplay in esports to provide the best experience for bettors. Esports Technologies is one of the latest companies to implement AI in this way, filing a patent application last October to cover AI that can create odds models for esports betting tournaments.

Practical protection

And just as AI facilitates new permutations of gambling products, so it can act as a safeguard for the adverse effects of the industry. Leigh Nissim, CEO of Future Anthem, sees AI as a road to reducing problem gambling. However, he adds that the extensive types of technology make data collection challenging, which could stifle the full effectiveness of AI.

“In responsible gambling, there are quite traditional practices of how to prevent player risk,” says Nissim. “You’re modelling on other players who have cancelled and self-excluded. As consumers move to other tools, such as open banking and other ways of depositing, it’s increasingly hard to see how they are depositing. That data set is quite challenging.”

AI features heavily in customer interaction, particularly in maximising the player experience in areas such as customer service. Danzig emphasises that it is also of great use in detecting and preventing problem gambling.

Nissim questions whether operators are making the most out of AI in terms of customer service.

“I think people are making strides in trying to prevent player exits or departure, or trying to optimise their marketing funnel,” he says.

“There’s increasing sophistication in the use of complex models that predict those characteristics. But are they using AI in real time to improve consumer experiences?”

“Commercial AI tools are extremely capable in cases that rely on pattern recognition across large data sets,” he adds. “These capabilities allow for the efficient analysis of historical user behaviour and engagement to determine how to maximise the experience for a particular user or when to flag behaviour as being potentially harmful.”

Full potential

As the gambling industry advances, there are ongoing conversations on how to optimise, enhance and expand the sector further.

While much of these conversations focus on digital applications, AI could play an equally important role in the land-based sector. According to AI cloud service DataRobot, AI can be implemented on casino floors. The service can be used to predict the level of play that could occur on the casino floor and adjust staffing levels to match.

The rest of the industry is quickly following suit. However, AI should not be seen as a remedy for all sector shortcomings. Danzig explains how the initial implementation of AI can come as a shock to businesses, particularly if they have a cavalier attitude.

“When businesses first embark on the journey to integrate AI solutions, they often find that the process will be much more costly and resource-intensive than originally expected,” he says. “In part, this is due to a misconception that AI is a one-size-fits-all panacea that immediately improves efficiency and profitability.”

According to Danzig this is not a problem-free solution and relies on a certain standard of data to work efficiently.

“Once implemented, a primary downside to relying on AI solutions is that they can often exhibit unexpected behaviours that result in quickly compounding issues given the speed and scale with which they are deployed,” he continues. “AI solutions are only as good as the quality of the data being used as inputs, hence the phrase ‘garbage in, garbage out’.”

A longstanding concern with AI, which has been documented thoroughly in popular media, is its potential to dominate society. However, this is not an industry concern.

Nissim believes that while AI could lead to reduced employment demand for certain manual tasks, many roles will be needed in the data side of AI.

“I don’t think [AI] should threaten jobs,” says Nissim. “I think what it should threaten are manual processes… And actually, that’s where you find mistakes arise.”

This, he says, will lead to a growth in opportunities and employment.

“Maybe manual processes will reduce, but what you’ll see is technical upweighting. There will be more data scientists, more data engineers, more technicians and more analysis.

“It’s not about job threats at all. The focus should be betterment and improvement – delivering innovation to provide an improved experience for the player and to help protect operators.”

Danzig agrees with this, emphasising the need for human labour in keeping AI running smoothly.

“While it is possible that some jobs in the gambling industry will be lost to automation, AI solutions today rely heavily on human input and maintenance,” he says.

“In the next five years, the implementation of AI and machine learning tools across the gambling industry will create a significant number of new jobs and also enable stakeholders to refocus efforts toward more productive, and ultimately job-producing, functions.”

According to Personeni, Sportradar’s AI-based capabilities already require a workforce to maintain, with the company employing “more than 700 engineers and 40+ AI and machine learning experts to create 20 billion data files ingested from inception, 30 million odds per minute and near 100% total accuracy.”

While AI has been revolutionary for the industry, there is natural curiosity towards where it could go next.

It’s difficult to say, due to a combination of how boundless AI is proving itself to be and how fast the gambling industry is evolving. As Nissim adds, “In some instances, [AI] can only develop as fast as the technology around it.”

If the last few years of technological development are indicative of the future, AI will able to keep up with and, at times, exceed what the gambling industry can offer. 

This comes after both prefectures’ assemblies approved the development plans for the resorts.

Nagasaki’s submission of its bid – in partnership with Casinos Austria International (CAI) – follows a controversial bidding process. After three finalists were selected, Oshidori International withdrew from bidding, saying that the RFP process was not ‘implemented ethically or fairly’.

The business said it had encountered “multiple suspicions of ethical fraud in the RFP process.”

The CAI bid also faced questions from the public about the operator’s ability to fund the development, though CAI later provided more detail of its funding plan.

The total investment in the resort will be JPY483.3bn, which will be used to purchase the real estate and build and run the resort. CAI will contribute JPY105.2bn of this, with the remainder from other investors or loans.

Osaka’s bidding process, meanwhile, was less dramatic, as a consortium led by MGM Resorts and financial services business Orix was the only bidder in the process.

The Osaka resort will involve an investment of JPY1.8tn (£11.51bn/€13.80bn/$15.64) from the consortium and other investors for a 492,680-square-metre site, with 65,160 square metres of gaming facilities.

The Ministry of Land, Infrastructure, Transport and Tourism was tasked with selecting up to three bids from cities and prefectures that submit bids.

The prefecture of Wakayama had also sought to build an integrated resort and selected Clairvest Neem Ventures as its preferred bidder, with Caesars set to operate the resort.

However, this proposal was rejected by the Prefectural Assembly last week.

The launch is an extension of a previous collaboration between Gaming1 and global hospitality company Delaware North that led to the creation of supplier Gamewise, which started operating in the US in 2021.

The new product is the online brand of Southland Casino Racing. It allows bettors across the state to participate in sports betting on Southland Casino Racing’s online website and through iOS and Android apps.

To celebrate the launch, new uses of the Betly Arkansas sportsbook can claim a risk-free bet worth up to $250.

Commenting on the deal, Victor Araneda, chief business development officer at Gaming1, said: “We’re excited to have launched in one of the most important markets for our partner, Delaware North. It’s encouraging that the collaboration has produced some amazing business opportunities in such a short amount of time.

“We look forward to continuing this momentum in our professional relationship with future initiatives, that will see Gaming1 further enhance its foothold in the North American market.”

Luisa Woods, Delaware North vice president, added: “Thanks to the strong relationship we have forged with Gaming1 via our Gamewise joint venture, we’re providing Southland patrons and Arkansas locals with the opportunity to enjoy sports betting at their fingertips.”

Dave Wolf, general manager at Southland Casino Racing, added: “Adding the Betly online sportsbook to our gaming options lets us bring the excitement of sports betting to our patrons wherever they are and enhances the value of our successful retail sports book. 

“This is great news for both existing and future guests right across the great state of Arkansas.”

This was a decrease of 3.2% year-on-year, which Svenska Spel attributed in part to the cancellation of sports games and limited casino opening hours at the beginning of 2022 due to the Covid-19 pandemic.

In terms of business areas, Svenska Spel’s Tur offering – its lottery business – reported revenue of SEK1.13bn for the first quarter. This was down 6.3% compared to Q1 2021.

Online sport and casino made up SEK556m of the total net revenue, a decrease of 14.1%. Patrick Hofbauer, president and CEO of Svenska Spel, explained that this loss was due to a combination of the Covid-19 pandemic and responsible gaming measures.
“This is mainly due to the large impact of the pandemic due to canceled sports events at the beginning of the year, but also to our strengthened gambling response measures that have been introduced so that customers do not play for more than they can afford and with special care for our young customers,” he explained.

Revenue for the Casino Cosmopol land-based business, plus its Vegas brand of slot halls and its chain of restaurant casinos was up 81.6% to SEK240m.

“The start of the year was still challenging for both our land-based casinos and the Vegas vending machines due to the pandemic restrictions,” Hofbauer continued. “After the restrictions were
lifted on February 9, our Casino Cosmopol has expanded its opening hours and gradually returned to a larger range of games.”

Breaking this net gaming revenue down by sales channel instead, online made up almost half of the total at SEK962m, falling by 5.3% year-on-year.
Retail lottery agents sales brought in SEK732m of the total net revenue, down by 11.5%. Restaurant casinos and slot halls brought in net revenue of SEK138m, while casino and land based amounted to SEK102m.

Net other income came to SEK77m, compared to SEK38m in net other costs in 2021. After gambling taxes of SEK355m and direct gaming business costs at SEK248m, the total net sales from gaming came to SEK1.40bn- up by 6.6%.

Operating expenses for the quarter were SEK818m, up by 12.5%. Svenska Spel attributed the rise to sponsorship, IT investments and the rise in casino operations.

Breaking this down, personnel costs amounted to SEK279m, SEK18m more than in Q1 2021. Other external expenses rose from SEK374m to SEK452m.
After amortisation and write-downs of intangible and tangible fixed assets at SEK87m, total operating profit came to SEK595m, down by just SEK3m from Q1 2021.

“Despite challenges during the first quarter, I look forward with confidence to the rest of 2022,” said Hofbauer. “We continue to provide our customers with entertaining gaming experiences in a responsible manner, as we want gaming to be a joy for everyone.”

The action plans were presented by 202 casinos and seven gaming clubs in France, and focused on preventing irresponsible gambling practices and gambling by minors.

Gambling operators in France must submit actions plans to ANJ for approval each year, in order to ensure constant communication with the regulator and the industry and allow ANJ to adapt its regulation accordingly.

The regulator noted that the approval of these action plans comes in a “specific context” referring to issued operators have faced in France due to the Covid-19 pandemic.

ANJ also published a number of general recommendations.

For casinos, ANJ recommended that monitoring systems used to identify excessive gamblers be strengthened, on the basis of customer management tools already in place.

It also noted that France’s self-exclusion system, LVA, should also be widely promoted to gamblers, along with information on the risks of excessive gambling on websites and slot machines.

A number of recommendations were also published for racing companies represented by La Fédération Nationale des Courses Hippiques (FNCH).

The racing companies, ANJ said, should reinforce their ban on allowing minors to bet at racetracks, particularly by ensuring a strict distance between spaces dedicated to horseracing and spaces dedicated to family activities,

Similar to casinos, the racing companies should strengthen their monitoring systems used to identify and support problem gamblers, as well as creating a procedure for detecting problem gambling.

Earlier this year, ANJ reviewed the marketing plans of all licensed operators and warned that operators were not doing enough to “de-intensify” their marketing.

The approvals come after the ANJ launched a public consultation on gambling advertising last year, which focused strongly on encouraging responsible gambling practices and protecting minors from gambling practices.

The quarterly telephone survey conduct by Yonder consulting found that of a sample of 4,018 adults aged over 16, there was a general increase in gambling activity in the UK.

Of all the respondents, 43.3% had participated in at least one form of gambling in the past four weeks, with males aged 45-54 the most likely group to gamble.

In year to March 2022, the in-person gambling participation rate increased to 26.0%, from 23% the previous year. The Commission noted that the increase in participation appears to be driven by a return to in person gambling activities since the pandemic.

The participation rates for in-person activities still, however, remain below pre-pandemic levels.

Meanwhile, 25.7% of people said they gambled online, continuing a long-term increase.

Looking at participation by game type, 5.2% took part in betting, while 27.2% took part in National Lottery draws and 7.2% used scratchcards. Meanwhile, 13.3% played another lottery and 3.4% played online slots.

The problem gambling rate, is statistically stable at 0.2% while the moderate and low risk rates are also stable at 0.9% and 1.4% respectively. While this problem gambling figure was lower than in the previous edition of the survey, the Commission said the difference was not statistically significant.

The survey did find that there was a statistically significant decline in problem gambling among males, however, as this rate reached only 0.3%.

In its previous edition of the survey, the Commission noted that 2021 was the first year to show a switch towards more positive perceptions of gambling, shown by the proportion of respondents who agreed that ‘gambling is dangerous for family life’ reducing by 5%.

Schrier will bring more than 25 years of experience in the technology and gaming sectors to Tekkorp, which only announced the establishment of its advisory arm a few weeks ago.

He joins the business having served as chief executive of Sales Tribe for the past four years, prior to which he had a spell as chief commercial officer at SG Digital.

Schrier also spent more than four years as vice president of sales and customer relations at Playtech, while he was commercial director at Ash Gaming for almost six years.

His other roles included business director for AliQuantum Gaming, general manager for ArcSoft Europe, vice president and business development at 365 Media and EMEA sales, product management and business development for Pinnacle Systems.

Schrier will work alongside a number of other executives on the strategic and advisory team at Tekkorp. 

Other members include former chief executive of William Hill’s online division Crispin Nieboer; US media and gaming specialist Andy Clerkson; senior investment associate Martin Kostov; former PokerStars executive, Tarvi Randve; and Tekkorp’s Cryptocurrency and Blockchain initiatives lead Roger Lu.

Davey, the founder of NYX Gaming Group, leads the business, with support from president Robin Chhabra and chief financial officer Eric Matejevich. 

“If Tekkorp Capital is to fully realise its potential as a key strategic player in the development of the global gaming sector then it’s essential we ensure we have the best possible mix of talents and experience,” Davey said.

“Steve Schrier’s commercial know-how at the forefront of this industry gives us even more strength in depth.”

The appointment comes after Tekkorp last week was revealed as part of a consortium that will launch a new wagering venture in Australia and New Zealand.

Tekkorp, together with News Corp Australia and TGW, whose investors include Sportsbet founder and former BetEasy chief executive Matthew Tripp, will roll out NTD Pty later this year.

The venture will apply for a sports bookmaker licence, under which it will operate an online wagering product for Australian and New Zealand punters to bet on racing and sports.

BetMakers Technology Group, via its OM Apps subsidiary, will provide both a B2B platform technology and wagering solutions to the venture.