Month: May 2022

Approved by the Alcohol and Gaming Commission of Ontario (AGCO), the licence will enable Wazdan to provide its content to operators licensed in the market.

The licence issue marks the 20th regulated market entry for Wazdan, with the developer having also recently secured licences in the US states of Michigan, New Jersey and West Virginia.

“We’re hugely excited to be a part of this newly regulated igaming market,” Wazdan chief executive Michal Imiolek said. “Ontario promises to be one of the biggest markets in North America and this move adds massively to our growing foothold in the region.

“We’re sure that operators throughout the province will benefit enormously from all we have to offer.”

Ontario’s regulated market opened on 4 April this year.

Revenue for the three months through to 31 March 2022 was $691.2m (£558.9m/€653.5m), up 1.6% from $680.3m in the previous year.  

Online games remained the main source of revenue, with this area of the business posting $537.7m, down 3.6% year-on-year. However, advertising revenue was up by 24.7% to $153.5m, a record first-quarter total for the group, helped by the acquisition of Chartboost for $250m.

Bookings, which adds deferred revenue to the total, were 3.5% lower at $695.0m, despite advertising and other bookings reaching a first-quarter-high of $167.0m.

Average mobile daily active users (DAUs) increased by 3.0% to 40 million, while and average mobile monthly active users (MAUs) jumped 27.0% to 209 million. 

Looking at spending, operating costs were 1.4% lower at $676.2m, meaning Zynga was able to post an operating profit of $15.0m, compared to a $5.5m loss at the same point last year.

However, other expenses reached $15.7m and interest expenses totalled $3.1m, which left a pre-tax loss of $2.9m, though this was still an improvement on the $9.6m pre-tax loss posted in Q1 of 2021.

Zynga paid $21.6m in income tax during the quarter, meaning it was left with a net loss of $24.5m, slightly wider than the $23.0m loss last year.

“We started off 2022 with a strong quarterly performance, achieving our highest ever Q1 advertising revenue and bookings led by our hyper-casual portfolio,” Zynga chief executive Frank Gibeau said. 

“Through continued execution across all aspects of our multi-year growth strategy including live services, new game development and investments in our advertising platform, new markets and technologies, we are strengthening our position as a leading mobile-first, free-to-play live services company.”

During the quarter, the business revealed that video game developer Take-Two Interactive agreed to acquire Zynga in a deal valued at $12.7bn. Take-Two, which owns both Grand Theft Auto publisher Rockstar and 2K Games, developer the NBA 2K series – will pay $3.50 in cash and $6.36 worth of shares of Take-Two stock for every Zynga share.

Following shareholder and regulatory approval, the deal is expected to close in the quarter ending 30 June 2022, which is the first quarter of Take-Two’s financial year.

Shortly after the end of the quarter, Zynga also announced that Bernard Kim is to step down from his role of president and leave the business later this month.

Under the deal, which marks BetMGM’s first such agreement in Texas, the operator will serve as the exclusive sports betting partner of the team.

BetMGM signage will be prominently featured on various surfaces across the team’s Minute Maid Park, including a permanent outfield wall sign and rotational promotional messaging behind home plate. 

Fans will have the opportunity to take part in a range of VIP experiences exclusive to BetMGM customers including throwing out the first pitch, on-field access to batting practice, and VIP getaways for away games, among others. 

In addition, BetMGM and the Astros will collaborate to offer special betting promotions for BetMGM customers in Louisiana.

“The Houston Astros are a monumental addition to our portfolio of strategic partnerships with professional sports teams across the US,” BetMGM chief executive Adam Greenblatt said.

“The organisation’s passionate fan base will be key to the growth of BetMGM throughout the South as we look for new ways to engage fans with unique experiences that go beyond the game.”

Astros’ senior vice president and general counsel, Giles Kibbe, added: “We are looking forward to our partnership with BetMGM. As we continue to strive for new ways to add to the fan experience, this partnership will provide another way for the Astros to engage with our fans.”

Sports betting is not yet legal in Texas, but a number of operators have signed agreements with sports teams in the state. Last year, Pointsbet became a founding partner of new Major League Soccer (MLS) team Austin FC, while Betway entered a multi-year partnership National Basketball Association team the Dallas Mavericks.

Mernov is so far the only online slots business named on the white list of approved online slots operators, published by Glücksspielbehörde, the new national regulator based in the state of Sachsen-Anhalt.

It has received a licence to operate online slots at both Jackpotpiraten.de and Bingbong.de, and appears to be part of Gauselmann Group as it is based in Espelkamp in Nordrhein-Westfalen. Its office address is even listed as being on Merkur Allee.
Online slots in Germany were permitted nationwide – rather than only in Schleswig-Holstein – for the first time thanks to the passage of Germany’s Fourth State Treaty on Gambling, which came into effect in July 2021.

However, that treaty carried a number of conditions, including a €1 stake limit for slots. In addition, operators must pay 5.3% of their turnover in tax.

The treaty also allowed online poker to be offered across Germany. However, so far no poker licensees have been approved.

Online table games may also be offered, but with a limited number of licences, as states can choose between a monopoly model or a number of concessions equal to the number of land-based casinos in the state. Schleswig-Holstein and Nordrhein-Westfalen are among the states issuing multiple licences, while Thüringia opted for a monopoly.

For almost a year after the treaty came into force, no online slots or poker licensees were listed, as operators and industry body Deutsche Sportwettenverband (DSWV) argued the rules in place made it too difficult to operate.

Earlier this week, the State of Hesse – which handled the sports betting licensing process under the previous Third State Treaty – revealed that it is the subject of a lawsuit from all 33 approved sports betting operators. These operators are protesting the conditions of their licences, including limits on in-play betting markets and a €1,000 spending cap with only limited exceptions.

Revenue for the three months to 31 March 2022 was $242.0m (£196.1m/€228.7m), more than double the $119.7m posted in the same period last year and also record quarterly performance for the business.

Streaming was by far FuboTV’s primary source of revenue, with this area of the business generating $219.2m, up 104.7% from $219.2m in Q1 of 2021, while advertising revenue increased 84.1% to $23.2m.

However, FuboTV also said that its wagering operations posted a loss of $301,000. FuboTV launched the new Fubo Sportsbook through its Fubo Gaming subsidiary and the product is now live in Arizona and Iowa, with more launches planned for this year.

Breaking down performance geographically, revenue from FuboTV’s operating within the North American market amounted to $236.7m, while the remaining $5.5m came from its rest of world activities.

Looking at costs and operating expenses were 104.2% higher at $377.3m with increased spending across all areas. Subscriber-related expenses was the main outgoing at $245.7m, up 116.9% year-on-year.

As the increase in spending outweighed revenue growth, this left an operating loss for the quarter of $135.2m, more than double the $65.1m loss posted at the same point in 2021.

FuboTV also noted $6.0m in other costs, namely $3.8m in interest expenses and $1.7m of change in fair value of warrant liabilities. As such, pre-tax loss amounted to $141.2m, compared to $70.7m last year.

After accounting for $403,000 in tax benefits and $93,000 in profit from non-controlling interests, this resulted in a net loss of $140.7m, which was significantly wider than the $70.1m loss posted in Q1 of 2021.

“In our first quarter, against a challenging macro environment, fuboTV achieved strong growth in subscribers and revenue, with North American subscriber growth of 81% year-over-year,” FuboTV co-founder and chief executive David Gandler said.

“In a less robust advertising market, however, we experienced some pressure on adjusted contribution margin due to slower ad sales growth than we had initially expected, with ad revenue up 81% year-over-year. Importantly, we strengthened fuboTV’s balance sheet, ending the quarter with over $456.0m in cash.”

Speaking on an investor call, Gandler referenced the sports wagering part of the business in particular, saying this remains a key pillar of its strategy to integrate interactivity into its live TV streaming experience. 

“We believe our differentiated approach of bringing to market our proprietary Fubo Sportsbook, which integrates live sports streaming and wagering into a single ecosystem will disrupt both video and gaming,” Gandler said.

“Mindful of the increasing cost of capital, we’ve taken a measured approach to our rollout of our Fubo Sportsbook, however, we do not see this is a long-term challenge. 

“Our sportsbook is both a differentiated product feature within our streaming business as well as a standalone service. Unlike other books in the market, we have the advantage of leaning in on our growing customer database to scale therefore significantly decreasing our marketing cost to acquire players, which we expect will shorten our path to profitability.”

Under the renewed agreement, 888sport will remain as the league’s official sports betting partner in both the UK and Ireland until 2025.

888sport, which has been working with the league for the past two seasons, will continue to benefit from branding placement at the NFL’s annul UK-based games at Tottenham Hotspur Stadium and Wembley Stadium.

The brand will also become the exclusive presenter brand of the NFL’s apps and fantasy products in the UK including Pick’em, the Super Bowl Challenge and Draft Predictor. 

In addition, 888sport will broadcast video content, filmed in partnership with the NFL, on its social channels, and offer fans exclusive prizes including official merchandise and tickets to upcoming Super Bowl events.

“We are really delighted to be the official sports betting partner of the NFL and playing our part in the continuing growth and success of such an amazing brand and sport in the UK and Ireland,” 888sport’s vice president and head of sport, Kieran Spellman, said.

“Our partnership will bring 888sport closer to the heart of live sport and continue to inspire us to create great content-rich and entertaining experiences for our customers.”

NFL UK senior director for commercial Michelle Webb added: “We are very pleased to be continuing and expanding our partnership with 888sport. We look forward to working with them on innovative ways to create touchpoints that will resonate with our fans and help us to reach a broadening audience.”

In a statement on its website, Spillemyndigheden said that operators are “obliged” to comply with regulations that prohibit financial interactions with “countries, individuals, groups, legal bodies or entities”.

The regulator added that operators must screen players against sanction lists to prevent allowing prohibited players to gamble. This includes referring to Spillemyndigheden’s list of sanctioned persons.

If a player becomes subject to financial penalties from the EU, operators in Denmark must freeze the player’s gaming account.

Laws regarding financial sanctions in Denmark fall under the scope of the country’s Money Laundering Act.

Last month Spillemyndigheden updated its guidelines for promoting certain gambling products in the country.

Revenue grew 33.6% to $417.2m in the quarter.

B2C online betting and gaming continued to make up the vast majority of DraftKings revenue, with revenue from this segment up 41.6% to $386.7m.

DraftKings chief financial officer Jason Park added that revenue in this area would have been $25m higher if not for lower-than-normal hold percentages.

Other revenue, such as revenue from media operations and the operator’s non-fungible token (NFT) “marketplace”, more than doubled to $17.0m.

“DraftKings delivered significant growth across our key revenue and performance metrics,” said Jason Robins, DraftKings’ co-founder, chief executive officer and chairman. “We are not seeing any impact from inflationary pressures on customer demand, and we continue to improve the user experience by adding breadth and depth to our DFS, mobile sports betting and igaming products.”

Almost all of DraftKings’ revenue, at $402.6m, came from the US, up 43.7%. The amount from other jurisdictions was down 54.5% to $14.6m.

Costs of revenue, however, grew faster than revenue, by 71.0% to $313.4m. Sales and marketing expenses also grew rapidly, by 40.5% to $321.4m. Product and technology costs were up 44.9% to $81.4m, while general and administrative costs were up 27.8% to $216.6m.

As a result, DraftKings made an operating loss of $515.6m, up 58.7%. Much of this was due to high spend in states that had launched online sports betting more recently, such as New York which launched in January, as the business was contribution positive in 10 states.

It then made $12.7m from the remeasurement of its warrant liabilities, plus $37.9m in other income.

As a result, DraftKings’ pre-tax loss was $464.9m, up 32.5%. After income tax losses from businesses in which DraftKings owns a controlling stake, the business reported a net loss of $467.9m.

Total adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the year came to a loss of $289.5m, of which $269.2m came from B2C and $20.3m B2B. While this was more than double the EBITDA loss in Q1 of 2021, it was significantly better than the expected $320m to $340m loss.

Because of these results, the business again increased its guidance for both revenue and adjusted EBITDA for the full year. The business now expects revenue to fall between $1.925bn and $2.025bn, and its EBITDA loss to be between $760m and $840m.

“We are pleased with our strong revenue and adjusted EBITDA performance in the first quarter, which was driven by healthy underlying customer behavior and our ability to capture efficiencies,” Park said. “Therefore, we are increasing the midpoint of our fiscal year 2022 revenue guidance by $50 million and improving the midpoint of our fiscal year 2022 Adjusted EBITDA guidance by $75 million.”

After the quarter ended, the business closed its acquisition of Golden Nugget Online Gaming (GNOG), which was agreed nine months earlier. DraftKings will pay 0.365 of its own shares for every GNOG share.

“From our perspective we just made a very significant acquisition with Golden Nugget Online Gaming,” Robins said. “That’s the template of what we’d look for, something that’s strategically complementary, something with a great team and then a strong, healthy business.”

Robins also revealed that the business hopes to launch in the Canadian province of Ontario “in the near future”, after the market opened last month.

The business’s full-year projections do not include the GNOG business, or new launches such as in Ontario.

Robins and Park also discussed the business’ promotional activity, as other operators such as Caesars have made efforts to reduce marketing spend. Robins said that the business would reduce general new user acquisition spend, but would continue major promotional events around key moments on the sporting calendar.

“There’s sort of two parts to this – one would be new user offers and the second would be tentpole events like the start of the NFL season and the NCAA basketball tournament,” Robins said. “I think we’ll always run promotions around those events. They’re great for reactivating users and great for acquiring and the money spent on those tends to be put back into our products.

“We always stayed disciplined, we never went as far as some of our competitors did with new user offers, but there may be some reduction in promotional intensity compared to some of the previous offers.”

The International Tennis Integrity Agency (ITIA) confirmed that Fernandez has received a fine of $3,000 for the offences, with an additional $5,000 suspended on the basis that he commits no further breaches of the Tennis Anti-Corruption Program (TACP) rules.

The TACP Proposal for Disposition framework meant that Fernandez was sanctioned by the ITIA upon the admission of guilt, as opposed to after an official hearing.

Fernandez, who had the highest Association of Tennis Professionals (ATP) ranking of 901, admitted to accepting money for not producing his “best efforts in a match” in 2018 and failing to report the approach.

Fernandez has been provisionally suspended since December 2019. As a result of this, he is allowed to resume playing tennis immediately.

Fernandez admitted to breaching three TACP rules, which all fall under section D. The first was purposefully not performing his best in the match, while the second was accepting money for underperforming.

The third breach was that he did not report being approached to fix the match.

These sanctions follow the ITIA’s decision to ban Kyrgyzstani tennis player Ksenia Palkina for 16 years after she admitted to a series of betting-related offences.

Both rulings comes after it was announced that Jonny Gray will step down as chief executive of the ITIA later this year.

Céline Crawford has been appointed to the role of chief people officer. Crawford previously held the role of chief communications officer at Smarkets’ headquarters in London.

She first joined Smarkets in 2015, after working in the banking and communications sectors for over ten years. Before joining Smarkets she worked for FinnCap and Commerzbank.

“I’m proud to be part of a company like Smarkets that elevates women while they are away on maternity leave juggling the art of caregiving and parenting,” said Crawford. “I also believe Smarkets has a compelling product proposition to win in betting.”

“I’m delighted to welcome Céline back as chief people officer on the Smarkets leadership team – she’s helped grow the business to where it is today.” said Jason Trost, CEO and founder of Smarkets.

Joe Foulds has been promoted to the newly-created role of head of engineering. Foulds previously led Smarkets’s backend technology team.

In his new role, he will oversee Smarkets’s software engineering. He will report to Hrafn Eiriksson.

“Joe will be working closely with me to ensure we are building a world-class platform and tech stack, and inching ever closer to our goal of fixing betting,” said Eiriksson. “This is a well-deserved promotion for him.”

Arnaud Thiercelin will take on the role of chief product officer. Thiercelin previously worked at drone software company Austerion.

“I’m passionate about creating products that customers love and what Smarkets is building has limitless potential,” said Thiercelin. “This is an industry ripe for change and I’m excited to be a part of that.”

Trost said, “Arnaud is someone I’m very excited to build products with. We all have our sights set very high for this company.”