Month: May 2022

Bally’s Chicago was chosen as the preferred bidder following a request for proposals process. Other finalists had included Rush Street Gaming and Hard Rock, while other bids from Bally’s and Rush Street focused on other locations were eliminated at an earlier stage.

In its bid, Bally’s outlined that it will pay $40m to the City up front, plus annual payments of $4m. bally’s A total of 3,000 staff will be employed in construction of the resort, with a further 3,000 permanent jobs when it is complete.

The casino will be located on the 30-acre Chicago Tribune Publishing Center at the intersection of Chicago Avenue and Halstead Street. 

As part of Bally’s Community Investment Program, 25% of the equity in Bally’s Chicago will be reserved for a matched financing scheme that will allow local communities of investors to own a stake in the project.

“We would like to thank Mayor Lightfoot and her office for conducting a tough, but fair, RFP process, and for selecting Bally’s Chicago as the preferred bidder for the City’s casino,” Soo Kim, Chairman of Bally’s Corporation’s Board of Directors, said. “Our vision is that Bally’s Chicago will be of the people, by the people, and for the people of Chicago. 

“Chicago is a unique and vibrant city, deserving of a world-class gaming and entertainment destination that drives the local economy, supports local labour, creates multigenerational wealth for minority investors, and showcases the best of what the city has to offer. 

“We look forward to continuing to work collaboratively with the City Council and various City departments, the CFL [Chicago Federation of Labor], the Illinois Gaming Board, and all of our valued community partners on this exciting endeavor.”

The news comes the same day that Bally’s announced it had rejected a takeover offer from Kim’s investment fund Standard General, which already owns a 20% stake in the operator.

Today, Bally’s also announced that it had recorded revenue of $548.2m for the first quarter of 2022, close to triple the amount recorded in Q1 of 2021, due mostly to the acquisition of UK online operator Gamesys which closed last year.

The Betting and Gaming Council (BGC) have announced that the drop recorded by the Gambling Commission shoedw that the rate of problem gambling reached statistically 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.

BGC chief executive Michael Dugher said: “These newly released figures are further evidence of that positive progress and underline our calls for ministers to take a genuinely evidence based approach to the upcoming White Paper and not pander to the anti-gambling lobby.

“These latest figures showing that problem gambling is falling once again will no doubt come as a profound disappointment to anti-gambling prohibitionists and it should be a warning to ministers to ensure future changes are carefully balanced, proportionate and targeted.

“Around 22.5 million adults in the UK bet each month and it is clear once again that the overwhelming majority to so perfectly safely and responsibly.

However, Dugher also noted that the progress is “set against the backdrop of increased use of black market sites in the UK”.

Dugher cited a PWC report, which found that black market play in the UK may have doubled over two years, while he also noted that countries with strict product restrictions such as France and Norway tend to have the highest levels of unlicensed play,

“The regulated betting and gaming industry is determined to promote safer gambling, unlike the unsafe, unregulated and growing online black market, which has none of the safeguards which are the norm among BGC members,” Dugher said.

The revenue was a rise of 185.1% from Q1 2021, which was before the completion of Bally’s £2.0bn merger with online gaming operator Gamesys, which closed in October 2021.

Gaming revenue amounted to $463.7m. This was an increase of 198.6% year-on-year.

Revenue from retail, entertainment and other revenue streams totaled at $33.6m, just over triple the amount recorded in Q1 2021. Hotel revenue doubled year-on-year to $26.9m. Food and beverage revenue made up the remaining $23.9m, a rise of 54.7%.

“Our casinos and resorts’ results were strong as the US consumer returned to our properties as US Covid restrictions were lifted,” said Fenton.

Breaking revenue down by business division, revenue from casinos and resorts made up $279.9m of the total. Lee Fenton, CEO of Bally’s, said that this was due to properties reopening after the pandemic.

Bally’s international interactive division – made up mostly of the legacy Gamesys busness – recorded $253m in revenue, and the North America Interactive division reported $15.2m.

“International Interactive revenue was down 1% year over year on a constant currency basis due to tightened consumer spending in the UK that was offset by solid performance by our Asia business,” continued Fenton. “North America Interactive continued to invest in the rollout plan that accelerated this month with the launch of our foundational 2.0 tech stack in Arizona yesterday.”

Operating expenses amounted to $525.7m, 222.9% more than in Q1 2021. Gaming incurred the most costs, at $219.2m, a rise of 363.9%.

Advertising, general and administrative costs came to $181.6m, a rise of around $100m year-on-year. Depreciation and amortisation costs increased by $66m to $78.8m.

The remaining $46m consisted of hotel, food and beverage, retail and entertainment and other operating costs.

After expenses, the operating income totaled at $22.5m – down by 23.5% year-on-year.

Other costs affected this significantly. Interest expenses were $45.8m, a rise of 120.4%, while the cost of adjustment on bargain purchases was $107,000. There was no comparable figure for the latter cost.

However, other income, including interest income at $19.7m, offset this slightly.

This meant the operator made a pre-tax loss of $3.6m. After an income tax benefit of $5.5m, the net income for the quarter was $1.8m, $12.5m more than the Q1 2021 loss of $10.7m.

Earlier today, Bally’s dismissed investment firm Standard General’s proposed $2.07bn takeover of the company, which was submitted in January.

The vast majority of the operator’s revenue – $1.29bn – came from gaming, which was a 19.3% increase. Food, beverages and other income made up the remaining $273.0m, growing 41.5%.

Breaking Penn National gaming’s revenue down geographically and by division, $658.5m came from the operator’s Northeast segment, up 15.4%. A further $341.4m came from the South, up 15.4%, $140.9m from the West, up 45.4%, and $282.9m from the Midwest, a 20.5% increase. 

A further $141.5m of revenue came from the Penn Interactive division, which now also includes Canada-based operator theScore. This total was up 63.4% from Q1 of 2021.

“We are driving momentum at our interactive segment with ongoing sports betting and icasino growth in the US, and the successful launch of mobile sports betting and icasino in Ontario on 4 April on theScore’s proprietary player account management system and bonusing engine,” said Jay Snowden, president and CEO of Penn National Gaming.

The business then $1.27bn in operating expenses, however, a 20.2% increase.

This included $686.6m in gaming expenses, up 30.1%, as well as $171.9m in foot and beverage expenses, up 39.8%.

Depreciation and amortisation costs also grew, by 45.4% to $118.2m, but general and administrative costs were down by 6.4% to $395.5m.

As a result of these costs, Penn’s operating income was up 34.9% to $292.0m.

The business then paid $160.8m in interest expenses, up 18.5%, while it made $8.7m from businesses in which it does not hold a controlling stake, down 9.4% from 2021.

However, it also incurred $40.7m in other costs, which included expenses related to the acquisition of theScore as well as costs of implementing a new resource management system. In Q1 of 2021, Penn had recorded $21.1m in other income instead.

This meant that Penn’s pre-tax income came to $99.2m, down 11.1% from 2021. 

After paying $51.6m in tax, the business reported a final profit of $51.6m, which was 43.3% less than in 2021.

The business also recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of $434.6 million, an increase of 29.1% year-on-year.

After the quarter ended, Penn launched its theScore brand in Ontario’s newly opened betting and igaming market. The business also made progress on migrating its sports betting product from Kambi to a new platform being built by theScore, as announced when it agreed the acquisition.

“Although early, we have been very encouraged by the results,” Snowden said.“ In Q3 2022, we expect to transition theScore Bet in Ontario to theScore’s proprietary risk and trading platform, which will allow us to significantly bolster the product’s features and capabilities, including expanded betting markets and exclusive bet features.

“We also remain on track to transition the Barstool Sportsbook to theScore’s PAM and trading platform in Q3 2023, which will provide meaningful cost and revenue synergy opportunities.”

Following these strong results, the business raised its  full-year revenue guidance for 2022 to fall between $6.15bn and $6.55bn. It also raised its 2022 earnings before interest, tax, depreciation, amortisation and restructuring (EBITDAR) guidance, to between $1.88bn and $2.00bn.

Flutter chief executive Peter Jackson confirmed that the measure – backed by Flutter’s FanDuel brand, as well as DraftKings and BetMGM – was set to appear on the ballot this November, having gained more than the required 997,139 signatures.

“We’re very excited abut the Californian situation,” he said. “Clearly getting to this stage was not straightforward but we’re very, very happy to be on the ballot.”

These signatures must still be verified, though the measure reportedly has enough signatures that this is expected to be a formality. If it appears on the ballot and is approved by a majority of voters, it will become law.

The measure is titled the California Legalize Sports Betting and Revenue for Homelessness Prevention Fund Initiative (2022), as 85% of tax proceeds will gowards reducing homelessness. Sports wagering will be taxed at 10% under the measure.

Online sports betting will be open to “qualified gaming entities” and tribal operators, which may partner with online platform providers. Tribal operators and online platform providers must pay a $10m licence fee each, while “qualified gaming entities” must pay $100m.

A competing proposal – the California Legalise Sports Betting Initiative – has also already garnered enough signatures to make the ballot. This measure was proposed by 18 Native American tribes, but would permit in-person wagering at tribal properties and racetracks.

Jackson noted that both measures could come into effect if both are approved by voters, allowing tribal operators to offer retail betting and both tribal and commercial operators that pay the licence fees to operate online.

Two other proposals – one from three California cities that host cardrooms and another tribal measure that would also allow online betting – have so far not received enough signatures.

In a trading update, Playtech said its performance for the three months to 31 March, as well as in April, was, driven by both its B2B and B2C businesses. 

For B2C, Playtech said its Snaitech division experienced an “excellent” start to the year due to growth in its online business, retail recovery and favourable sports results.

Looking at B2B, Playtech said growth here was driven by strong momentum from the Americas, in particular with Caliplay in Mexico. Playtech also noted a strong performance across the wider B2B operations, including live casino, with its live casino business signing new partners and launching several new games. 

“The excellent start to the year gives the board great confidence in the prospects for FY 2022,” Playtech said. “As would be expected, the board remains cautious and focused given that we are at an early stage in the year, combined with the uncertain macro backdrop due to the pandemic and the war in the Ukraine. 

“The board is also conscious there cannot be any certainty that the strength across the business so far will be repeated throughout the remainder of the year. That said, the company’s performance to date and current trends in the business positions the company very well and the board would hope to be able to update the market further as we progress through the year.”

Meanwhile, Playtech provided an update on the ongoing talks with TTB Partners over the potential acquisition of the business. TTB made an approach over a possible takeover in February, with Playtech agreeing to release TTB from certain restrictions to allow it to form and potentially make an offer.

This came soon after an acquisition offer from Aristocrat Leisure collapsed.

Playtech said there had been some positive progress in discussions with the TTB, but there was still no certainty as to whether an offer would be made, nor the terms on which any offer might be made.

The restrictions previously placed on TTB – part of the City Code on Takeovers and Mergers – came as a result of its role in advising Gopher Investments, a minority shareholder in Playtech, over its potential takeover offer for the business. 

Gopher Investments registered an interest in making a bid in November 2021 but dropped out of the running a few weeks later. 

The restrictions on TTB, which would have blocked it from making an offer itself, were due to remain in place for six months from the withdrawal date, through to 20 May. However, with these lifted, TTB was able to begin to form its own offer.

There is currently no deadline for a potential offer from TTB, while Playtech chief executive Mor Weizer has declared his support for a possible bid.

Elsewhere, Playtech said it is still exploring the option of a possible transaction in relation to its Caliplay joint venture with Mexico’s Caliente. Plans to spin off Caliplay are already in motion, through a combination and listing with a special purpose acquisition corporation (SPAC).

In addition, Playtech said that the disposal of its Finalto financial trading division to Gopher remains on track to complete before the end of the second quarter, with two of the four required regulatory clearances having now been received.

Financial terms of the deal were undisclosed, but Playmaker said that the purchase would support its ongoing growth plans in the US and allow it to reach more English-speaking and Hispanic sports fans in the country.

The Sports Drop generates an average of more than 30 million monthly page views and 200 million monthly ad impressions. Playmaker said it would contribute an average of more than three million monthly users to its North American audience.

In connection with the deal, The Sports Drop founder, Mike Bellom, will join the Playmaker senior leadership team as head of paid media.

“Adding The Sports Drop to Playmaker’s portfolio aligns with our thematic growth strategy of acquiring brands that add new skill sets to our team and create new opportunities for our business,” Playmaker chief executive Jordan Gnat said.

“The Sports Drop’s following of highly engaged and attentive sports fans will complement our existing brands that have a US presence including Yardbarker Media, Bolavip US, and Daily Faceoff.”

Bellom added: “The Sports Drop is already one of the most visited sports sites in the US and by combining forces with Playmaker, we will be able to invest more resources in the creation and distribution of high-quality content that our loyal community of sports fans deserve. 

“In my role as head of paid media, I look forward to working alongside some of the most talented individuals in the digital sports media space to grow Playmaker’s already robust network of highly successful digital properties.”

The deal comes after Playmaker in March revealed how a string of acquisitions continued to drive sharp revenue growth for the business in the fourth quarter of 2021, although the group reported a net loss of $3.5m for the financial year.

Revenue reached $7.0m in the fourth quarter – up from $4.8m in the third quarter of 2021. Its revenue was nil in the fourth quarter of 2020, with the soft launch of its new sports betting vertical only having happened in early August 2021 in partnership with operators like BetMGM and Circa Sports.

The defendant in the lawsuit will be the State of Hesse, which will be represented by the Regional Council of Darmstadt. 

“All holders of permits for the organisation of both land-based and online sports betting have filed lawsuits against individual ancillary provisions in their respective permits,” a spokesperson for the Regional Council told iGB.

Germany’s sports betting legislation set out in the Third State Treaty on Gambling has been widely criticised for putting licensed operators at a disadvantage compared to offshore competition.

While a limit on the number of licences was removed following a series of court cases that delayed it coming into effect from 2012 to 2020, operators still face their in-play offering being limited to match winner markets and total goals scored.

This, German Sports Betting Association (DSWV) has previously raised against the restrictions, with president Mathias Dahms warning the in-play restrictions were particularly likely to push players to the black market.

“It should not be forgotten that live betting is particularly popular and accounts for around 60% of all bets,” he said in January 2020. “Disappointed consumers will turn to black market offerings that don’t comply with legal requirements.”

In 2021, Dahms then noted that German betting revenue had dropped from 2019’s record €9.3bn (£7.84bn/$9.86bn) to €7.8bn after the rules were put in place.

The cost of operating in the market is also particularly high. Players are restricted to a monthly spending limit of €1,000 for all customers – though with limited exceptions – and operators must pay a 5.3% tax on turnover.

Online sports betting licences were issued under the country’s Third State Treaty on Gambling, which was only ratified in March 2019, in its third iteration. The licensing process was then repeatedly delayed, first as no operators applied for licences and then by a lawsuit from Austrian operator Vierklee, before the first licences were finally awarded in late 2020.

Last year, from 1 July, Germany’s Third State Treaty was replaced by a new regulatory framework, which also allowed online casino to be offered nationwide for the first time, while including similarly strict sports betting rules.

This treaty also includes a number of restrictive conditions for casino games, with slot stakes capped at €2. Table games may only be offered separately, with states given the option of handing a monopoly to their lotteries, and limited to issuing as many licences as each has land-based casinos. As with sports betting, the 5.3% tax on turnover will be levied on these products. 

So far, no online casino licences have been handed out.

Revenue for the three months to 31 March 2022 was $134.9m, up 20.7% from $111.8m in the same period of last year and a new quarterly record for the business.

RSI said this growth was driven by a number of developments in the quarter including its launch in both New York and Louisiana, while it also went live in the Canadian province of Ontario shortly after the end of Q1.

Also in the quarter, RSI expanded its ambassadors and betting content production portfolio with the likes of NBA great Joakim Noah and former New York Mets manager Bobby Valentine, while it became an official sportsbook partner of the New Orleans Pelicans.

However, the rise in revenue was accompanied by an increase in spending, with operating costs jumping 33.0% year-on-year from $139.1m to $185.0m.

Costs of revenue were up 25.4% to $99.9m and advertising and promotions spend hiked 58.3% to $66.8m, though general administration expense were down 6.6% to $15.5m. Depreciation and amortisation costs were also 306.1% up to $2.7m.

After including $222,000 worth of net interest expense, this left a pre-tax loss of $50.3m, compared to a $728,000 profit in the previous year. Higher costs also meant that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) reached a loss of $43.4m, close to triple the $15.1m loss in 2021.

RSI paid $2.0m in income tax, which resulted in a net loss of $52.3m, far greater than the $76,000 loss posted in Q1 of 2021. However, RSI noted $37.6m of this was attributable to non-controlling interests, meaning the loss attributable to RSI was $14.7mm still much wider than the $17,000 comparable loss last year.

“Launching five new markets in seven months with an additional market set for launch by the end of the second quarter, positions us well to continue to rapidly expand and diversify the business with an eye towards profitability,” RSI chief executive Richard Schwartz said.

“We remain disciplined in our approach and are balancing profitability from more developed markets with investments in new market launches. In fact, excluding the impact of our New York launch during the first quarter, our adjusted EBITDA loss is less than $15.0m, demonstrating the growing profitability of our previously launched markets. 

“Achieving consistent profitability is our top priority and we expect RSI to be adjusted EBITDA positive for the second half of 2023.”

Based on its performance in Q1, RSI said it would raise revenue guidance for the full year to the end of 2022 from a range of $580.0m to $630.0m, to between $600.0m and $650.0m.

At the midpoint of the new range, revenue of $625.0m would represent 28.1% year-over-year growth when compared to $488.0m of revenue posted in 2021.

Of these alerts in the three months to 31 March, 243 were raised before a sporting event, 12 during the match or game and the remaining 45 after the event had ended. The total was down from 323 in the same period last year.

The GLMS said 185 of these alerts were classed as a ‘green notification’, which refers to alerts based on suspicious odds movements that later could be explained away. 

Some 65 were mid-level amber alerts, while just 14 were code red, which concern the most serious alerts such as specific allegations of match-fixing. A further 36 alerts were classed as ‘others’ and included requests for information from members and partners.

Football drew the most alerts with a total of 176 notifications during the period, followed by basketball with 57, ice hockey on 35, esports with 23, six for tennis and three for volleyball.

In geographical terms, 170 of the alerts were in relation to events in Europe, 61 in Asia, 36 in South America, 22 in Africa, nine in North America and one for Oceania. A single alert was also registered for an international event. 

The primary reason for alerts was team-related news, with this being responsible for 112 alerts. Other reasons included significant odds changes, which led to 62 alerts, 31 for the wrong opening price, 24 for odds changes requiring further investigation and 15 related to motivation. 

Alerts are raised when irregular betting patterns are detected, after which the GLMS then consults with members to investigate the reasons behind the odds changes. When the patterns cannot be justified, the GLMS then produces a formal report.

During Q1, 10 reports were filed in Q1, seven of which were developed and circulated by the GLMS following internal investigation and significant alert. A further three reports were produced following a specific request from a member or partner to support internal investigation intelligence gathering.