Month: May 2022

Net revenue for the three months to 31 March amounted to $2.29bn (£1.84bn/€2.28bn), up 27.9% from $1.79bn in the corresponding period last year.

Casino and pari-mutuel commissions revenue climbed 4.9% year-on-year to $1.29bn, while food and beverage revenue jumped 100.6% to $339.0m, hotel revenue increased 78.1% to $383.0m and other revenue 278.6% to $278.0m.

Breaking down this performance by vertical, Caesars said its regional operations remained the main source of revenue for the group, with revenue for this part of the business rising 14.4% to $1.36bn.

Las Vegas revenue hiked 83.9% to $914.0m, with, and managed and branded revenue increased by 8.2% to $66.0m.

However, the Caesars Digital business posted negative net revenue of $53.0m, compared to $39.0m in revenue last year. Corporate and other revenue halved to $2.0m.

Caesars noted a number of developments in Q1 that helped drive revenue growth including its launch in New York and Washington, as well as the relaunch of mobile sports betting in Illinois.

However, despite revenue growth, Caesars also reported an upturn in spending during Q1, with total operating expenses rising 46.1% to $2.30bn. Much of this was down to casino and pari-mutuel commission costs rocketing 81.3% year-on-year to $1.06bn.

As spending outpaced revenue, this resulted in an operating loss of $10.0m for the quarter, in contrast to a $216.0m operating profit in Q1 of 2021. Caesars also accounted for $548.0m in finance costs, though this was 23.0% lower than in the previous year.

Higher overall spending left a pre-tax loss of $558.0m, compared to $496.0m in Q1 last year. Caesars received $107.0m in income tax benefits. However, it also reported a $229.0m net loss from discontinued operations, which meant it ended the quarter with a net loss of $680.0m, wider than the $423.0m net loss last year.

Breaking this net loss down by division, Caesars Digital was responsible for the majority of the loss, at $576m. Regional operations recorded a net profit of $124.0m, up 90.8% while Las Vegas net profit reached $168.0m. managed and branded services recorded a net loss of $211.0m.

The corporate and other net loss was reduced from $428.0m to $185.0m.

In addition, higher spending during the quarter led to a 44.7% decline in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) from $535.0m to $296.0m.

“Our first quarter operating results reflect sequential improvement each month of the quarter in revenues and EBITDA,” Caesar’s chief executive Tom Reeg said. 

“Our Las Vegas segment posted an all-time first quarter EBITDA record and our regional segment delivered solid EBITDA and margin growth. Consumer trends remain healthy, and we are optimistic for the balance of the year.”

Speaking on an investor call, Reeg addressed the losses within the digital business, as net adjusted EBITDA loss for the quarter reached $554.0m. Reed said Caesars had already taken steps to lower costs to help address this, particularly within marketing and advertising, with spending reduced by approximately $250.0m.

“Of the $553.0m of EBITDA loss in the quarter, a little over $400.0m is attributable to the launches in New York and Louisiana, with New York the lion’s share of that,” Reeg said. “We cut about a little over a quarter of a billion dollars of expected spend from when we started cutting in February, through the end of this year, we’ve seen no degradation in handle share, other than our planned retrenchment in New York.”

Reeg also noted that these losses began to reduce towards the end of the quarter, with digital EBITDA loss in March at approximately $44.0m, reflecting the normalising of business following the heavy launch period. He added that this expected to return to a positive figure when the new NFL season begins later in the year.

“We’ve had 1.4 million in Caesars reward signups, since we re-launched digital that came in through the digital channel; if you think about a typical Caesars property, we get about 50,000, on average, per property per year of new sign-ups a little more in destination properties a little less in regional properties,” Reeg said.

“If you think about a million for customers coming into the pipeline, in really a span of five months, it’s extraordinary. And now the work in front of us is to identify which are the most valuable customers there.

Reeg said that going forward, marketing spend would be more focused on customers it expected to be the most profitable.

“And what you’ve seen us do repeatedly in the brick-and-mortar business is targets that spend to our most valuable players, and not waste money on the unprofitable players,” he said. “That’s the task in front of us in digital. So you’re going to see us segmenting in terms of our marketing as we move forward. and that’s going to be a dramatic improvement in profitability as we move forward.”

The order took effect last night.

In a speech made yesterday, Duterte said that e-sabong “was working against our [the Philippines’s] values”.

He cited Eduardo Año, Secretary of the Interior and Local Government, who conducted a survey on the “social impact” of e-sabong on the Filipino people, and recommended that the country “do away” with it.

“It is his recommendation, and I agree with it,” said Duterte. “E-sabong will end by tonight.”

Duterte stated that Año will decide on the details of the order.

Last year Duterte encouraged Filipinos to gamble in order to help the country recover from the Covid-19 pandemic, a U-turn from his previous hesitation to support the industry.

In February 2022 a legislative committee report found a “clear link” between Philippine offshore gaming operators (POGOS) and a number of crimes – including human trafficking and prostitution.

The Ministry of the Economy will act as the regulator and will establish a deadline – which will fall within the next six months – for operators already doing business in Brazil to comply with these rules.

There will be no limit on the number of licences that can be issued, with licences lasting five years. However, operators must pay a BRL22.2m (£3.6m/€4.2m/$4.4m) licence fee.

In addition, operators based abroad must set up a subsidiary in Brazil and must have “sufficient capital and economic and financial capacity” to operate.

The bill said whether a business’ financial capacity was “sufficient” would be determined by the relationship between its share capital and the volume of bets it takes, rather than setting a specific minimum amount of capital.

Operators will be permitted to offer bets on both traditional sports and esports, as long as the players involved are not exclusively minors.

Licensees must promote responsible gambling and provide information about the topic to players from launch, as well as including responsible gaming messaging in marketing messages.

Marketing messages also may not present betting as a solution to personal, professional or educational problems, an alternative to employment or a way to achieve financial security. Ads also must not feature or be targeted towards minors or suggest that a bettor can be consistently profitable through skill.

Licensees must also have a “contractual relationship” with an international integrity monitoring body, such as the International Betting Integrity Association (IBIA). In addition, they must share any data that would be sent to a global integrity body with the Ministry of Economy.

The Ministry will provide for an experimental “sandbox” regulatory regime, allowing certain operators to launch early before the full system is established.

It will provide details of this system, such as the criteria for selecting operators within the next 120 days.

The regulations will come into force 90 days after being signed into law by President Jair Bolsonaro, an event that is set to occur on 10 May.

The process to permit fixed-odds sports betting in Brazil was set in motion through the passage of Provisional Measure 846/18 in December 2018. This ave lawmakers a two-year window, to 2020, in which to develop sports betting regulations, though it also had the option to extend this period for two more years, meaning the final deadline is the end of 2022.

Operators were previously set to pay 3% of stakes as taxes, but this plan was later scrapped in favour of a revenue-based system last year. The regulations do not mention the tax rate, but again say that it will be based on revenue.

Earlier this year, Brazil’s Chamber of Deputies also voted to legalise casino, online gaming, horse racing, slot machines, bingo and jogo de bicho in the country.

The bill is currently under consideration in the Senate.

Group revenue for the three months to 31 March 2022 was $2.85bn (£2.28bn/€2.72bn), up from $1.69bn in the corresponding period in 2021.

Casino revenue increased 29.3% to $1.42bn, while rooms revenue rocketed by 180.8% to $557.1m and food and beverage revenue jumped 213.2% to $492.9m. Entertainment, retail and other revenue climbed 174.9% to $371.6m. MGM also noted $11.9m in reimbursed costs, which contributed to the total revenue figure.

Breaking down this performance, MGM said its operations on the Las Vegas Strip in Nevada accounted for $1.67bn of total revenue, while regional operations generated $890.8m in revenue, MGM China brought in $268.4m and management and other operations $32.2m. 

MGM said that the overall increase in revenue was helped by the inclusion of the operating results of Aria and Vdara, which were consolidated as part of the group in September 2021 following the purchase of Infinity World Development Corp’s 50% interest in CityCenter Holdings for $2.12bn.

Though MGM said revenue was impacted by a decrease in business volume and travel due to the spread of the omicron variant of the novel coronavirus (Covid-19) in the early part Q1, revenue improved year-on-year as Q1 of 2021 included much stricter measures in place.

Turning to costs, operating expenses were 44.6% higher at $2.70bn, while the operator also noted $46.8m in net loss from unconsolidated affiliates and $176.9m worth of non-operating costs, down 3.8% year-on-year.

Despite higher spending overall, the uptick in revenue meant its pre-tax loss was cut from $430.6m in Q1 of 2021 to $71.1m.

On top of this, MGM received $36.2m in income tax benefits and also accounted for $16.8m in net profit from non-controlling interests, meaning it ended the quarter with a net loss of $18.0m, a stark contrast to the $331.8m loss posted last year.

Consolidated adjusted earnings before interest, tax, depreciation, amortisation and rent costs (EBITDAR), meanwhile, reached $670.4m for the quarter.

“We delivered a strong first quarter in our domestic operations driven by weekend demand and a better mix of business,” MGM president and chief executive Bill Hornbuckle said. “Our midweek business is improving with each quarter and our group base is growing after a tough January. 

“The results demonstrate the robust demand for our gaming entertainment offerings with the backdrop of increased sports and entertainment programming in the Las Vegas market.”

Meanwhile, MGM also announced the closing of previously announced transactions with Vici Properties and MGM Growth Properties (MGP). 

Vici redeemed a majority of the MGP operating partnership units held by MGM Resorts for $43 per unit, or approximately $4.4bn in cash, and acquired 100% of the outstanding class A shares of MGP in a stock-for-stock transaction.

As part of the deal, the existing master lease agreement was amended and restated and provides for an initial term of 25 years, with three 10-year renewals and an initial annual rent of $860.0m.

Vici, the real estate investment trust spun off from Caesars Entertainment in 2017, last August agreed to acquire MGM Growth Properties, itself spun off from MGM Resorts, for $17.2bn.

“Our partnership with MGP over the last six years has provided significant value to our shareholders and I would like to thank the MGP team and its leadership for their efforts throughout this process,” Hornbuckle said. 

“This transaction has provided us with significant financial flexibility that will allow us to continue to invest in and grow our business to further maximize shareholder value.”

The news came after MGM this week also announced it had put forward a deal to acquire online gambling operator LeoVegas for approximately $607.0m.

MGM will pay SEK61 per share to acquire all of LeoVegas’ share capital, which LeoVegas noted was a premium of 44% compared to LeoVegas’ closing share price on 29 April. The operator said it will finance the deal through its existing cash reserves.

The LeoVegas board unanimously recommended the offer.

“We announced the tender offer for 100% of the shares of LeoVegas which will allow us to expand into international online gaming with a world class management team, strong IT platform and growth prospects,” Hornbuckle said.

“We remain focused on achieving our vision to be the world’s premier gaming entertainment company.”

Licensees in the Netherlands are required to adhere to regulations set out in the Wwft, but an investigation by KSA and data from the Financial Intelligence Unit (FIU-the Netherlands) found certain rules were not being properly followed.

Setting out its findings, the KSA said some operators were failing to check customers’ origin of money, saying many licensees only saw a reason to carry out these checks when players make a deposit in excess of €2,500 (£2,097/$2,627).

However, the KSA made the point that spending this amount of money on games of chance is only possible for a few people noting how the average net monthly salary in the country is approximately €2,500.

“The KSA therefore expects licence-holders to conduct earlier research; this is important from the point of view of preventing gambling addiction and money laundering,” the KSA said, adding it would initiate further investigations into two licensees in response to its findings.

The regulator also noted insufficient compliance with regulations related to the reporting of unusual transactions. Licensees are required to report transactions of €15,000 or more in a 24-hour period and other unusual movements to FIU-the Netherlands, but the KSA said this was not the case with some operators. 

The regulator also noted that many unusual transactions are not being reported as quickly as possible. Licence conditions in the country state such transactions must be reported within 14 days.

In response to its finding, the KSA sent a warning to all licensees active within the country’s regulated online gambling market to highlight these shortcomings. The regulator noted that if further investigation shows these issues continue, it has the power to impose sanctions.

The warning comes after the KSA last month launched an investigation into gambling advertising that may be targeting minors and young people between the ages of 18 and 24.

The KSA stressed that this sort of advertising, which includes promoting bonus offers to young people, is prohibited, adding that young people are “especially vulnerable” to gambling addiction.

The land-based casino floor has traditionally been split between two types of game.

There are slot machines where players commonly plough their own furrow and then table games which, whether poker or blackjack or roulette, all offer a more social component.

But online gaming has always offered the opportunity for products that may not be easy to build physically. Among those concepts, few have generated as much hype as multiplayer slots.

The reason why isn’t hard to see.

“It’s because slots don’t cater to a significant portion of the gambling audience,” says Lloyd Purser, Funfair Technologies’ chief operating officer.

A social element, operators hope, would bring the industry’s most lucrative product to a wider range of players than ever before.

What is multiplayer?

Multiplayer spans a wide range of types of games. Products shouldn’t necessarily be considered the same just because they contain more than one participant.

“It’s unquestionably the zeitgeist of the moment, but nobody really agrees on what multiplayer is,” says Helen Walton, founder of G.Games, which has become recognised as one of the leaders in the space with a number of multiplayer slots under development.

Kevin Dale, chief executive of eGaming Monitor, says people’s definitions of multiplayer will make a major difference in what products may win out.

“It’s a complex area, and that means there’s a lot of scope for innovation,” he says. “And different people’s takes on what multiplayer is will really shape what can be done with these products.”

On the side most similar to traditional slots, there’s community live play, embraced by major suppliers such as Playtech with games such as Buffalo Blitz Live. In these slots, gameplay is effectively the same as a single-player slot, but players watch one stream – like live-dealer table games – in which many players see the same results and can win and lose together. Often with these games, winnings are pooled.

“A lot of stuff that other people are talking about, and a lot of casinos are quite directly interested in funding this, is the idea of playing together,” Walton says. “And here really all we’re doing is taking the concept of a syndicate from lottery where you pool your money together and that enables you to make more bets or to bet alongside somebody else.

“And it’s particularly interesting I think to casinos because that works really well with streamers. So if you’ve got a streamer making really enormous bets and playing the bonus round a lot and he always seems so lucky… that can feel very attractive to be part of that, to share in that.”

Some suppliers have taken many of those same concepts to create community live games similar to slots but with something other than a slot machine ultimately dispensing the results. The most notable is Crash, which has spawned a wave of similar games, including from Purser’s Funfair Technologies. In these games, players are shown an ever-increasing line and multiplier, with a chance to cash out and receive their stake times the multiplier. But at a random point, the line will “crash”, and anyone still in the game will lose their stakes.

“It has a lot of the same appeal but obviously it’s, well, it’s a Crash game,” Purser says. “It’s not slots.”

Then there are tournament games – players simply play a slot as normal, but the one with the most winnings can receive a prize for their success. While play is effectively single-player, Dale notes that these games can drastically change the risk-reward ratio from a customer perspective.

“Take a tournament, you’re not only playing against the margin, against the 5% RTP, but also against the tournament standings,” Dale says. “So you can turn low-volatility games into high-volatility games by introducing that aspect.”

Then there are games that are mostly single-player but with some form of direct multiplayer component, which Dale likens to bingo. Often the normal gameplay for these products resembles a single-player slot, but when bonus features are triggered, customers have the opportunity to play these together. This allows for moments of genuine multiplayer play without interfering with the basic mechanics of how a slot game works.

The ultimate level of multiplayer, however, is peer-to-peer play, in a manner similar to poker. Here, players play directly against one another, with one player’s actions directly impacting another’s results.

To Walton, only these games are “true multiplayer play”.

“True multiplayer I would define as where one player’s actions in some way impact on the outcome of the game of another,” she says. “Poker is the best example in real-money gaming. It doesn’t mean that there’s not a great deal of luck involved, but there’s a true interaction between the people in the game.”

Pure luck?

There would seem to be one obvious problem involved with bringing that mechanic to slots, though: with the exception of certain bonus features, a slot player’s actions usually don’t even impact their own results. Letting players’ choices impact somebody else involves a major change to how slots work.

“I would say that is a fundamental challenge. It’s one that we struggle and engage with a lot,” Walton says.

“Maybe slots are perfect just the way they are. Maybe slot play is just fundamentally a non-social activity. I hear that from people a lot.

“They say, ‘People just like luck, like pressing the button; they like the fact that they are not in control’. But I think that the interaction and engagement that you see with streamers, and the way tournaments appeal to particular subgroups of players, I think those give you clues that a sense of competitive community does exist within slots. The trick is just finding the product.”

But in Dale’s view, there is also value to community games in which one player’s actions may not directly affect another’s results.

“You go and play bingo, the multiplayer component is there but does everyone participate in that?” he asks. “Does everyone chat to the other players?

“No. It’s often only a handful of people. For some people just having the community around them while they play there is the appeal.”

Critical mass

Besides that aspect, there are more challenges that explain why the games have yet to take off.

“Casinos are more than clever enough to be able to say, ‘What about liquidity?’ ‘What about cheating?’ ‘What about all the things that make poker difficult?’” Walton says.

“And these things they say, I think they’re all true; it’s technically and commercially, in a sales and marketing sense, challenging.”

The problems that arise for poker, Walton says, are solved in multiplayer slots in ways similar to the solutions for poker. But other factors may be more challenging.

“One thing that is going to be interesting is compliance,” she adds. “Regulators have got ever-further down a path where they’re writing their rules to an existing set of products as if innovation never happens. They’re not very outcome-based.

“Are regulators going to say, ‘This is something more social that we should try and support’? Or are they going to say, ‘Oh no, it’s new, we’re going to tie it up in red tape,’ and it’s going to die.”

Meanwhile commercially, operators face a challenge working out how to promote these games.

“One of the biggest issues we have in distributing our content is that I don’t think the operators really know what to do with it,” Purser says. “At the moment we don’t have a critical mass to warrant a place where the players that are looking for these games can find them.”

But the need for a critical mass may mean that multiplayer slots and similar games quickly turn from being a product of the future to one of the present.

In Dale’s view, multiplayer sits somewhere between a new mechanic and an entirely new product, meaning it may sit on top of existing products rather than acting as its own type of game. In that role, it may not completely change gaming, but it may not have to.

“There’s definitely been a general trend towards multiplayer play that I would expect to continue and maybe accelerate,” he says. “Will it become 20% of all slot play? I doubt it, but I’ve been wrong before. And a smaller share of slot play is still a very large market.” 

Palkina, who had a career-high WTA singles ranking of 163, was founded guilty of breaching a number of rules of the Tennis Anti-Corruption Program (TACP), with the offences having taken place in 2018 and 2019.

The suspension will be backdated to the start of her provisional suspension on 22 November 2019, though six years of the ban will be suspended. She was also fined a total of $100,000 (£79,789/€95,216), with $87,500 of this suspended.

The sanction means Palkina will be prohibited from playing in or attending any tennis event authorised or sanctioned by any international tennis governing body or national association for the length of her ban.

Providing she does not further break the Tennis Anti-Corruption Program rules, Palkina will be able to resume a career in tennis on 21 November 2029. 

Specific breaches included Section D.1.b of the 2018 and 2019 TACP, which states that no covered person shall, directly or indirectly, solicit, facilitate, or conspire to assist any other person to bet on the outcome or other aspect of any event or other tennis competition.

This covers the display of live tennis betting odds on the individual’s website, writing articles for a tennis betting publication or website, conducting personal appearances for or taking part in any event run by a tennis betting operator, promoting this operator to the public, or and appearing in advertisements to encourage betting on tennis.

The ITIA also referenced Section of D.1.d of the 2018 and 2019 TACP, whereby players shall not contrive the outcome, or any other aspect, of any tennis event, as well as Section D.1.e of the 2018 and 2019 TACP, which refers to a player not using their best efforts in a match.

Palkina was also found in breach of Section D.1.f of the 2018 and 2019 TACP, which states players must not agree to receive any money, benefit or consideration on the basis of not giving their best efforts in an event or negatively influencing another player’s efforts.

In addition, the ITIA cited Section D.2.a.i of the 2018 and 2019 TACP where in an event that a player is approached by any person who offers a benefit to influence the outcome or any other aspect of an event, this should be reported to the ITIA as soon as possible.

The ruling comes after it was announced last week that Jonny Gray will step down as chief executive of the ITIA later this year.

Gray was appointed to the position in 2019 to oversee the formation of the ITIA, which replaced the Tennis Integrity Unit (TIU) in January 2021, and as of January this year is also responsible for the administration of the Tennis Anti-Doping Programme.

The funds will be used to support the ongoing Red Cross Red Crescent Movement response in the country, following the invasion of Ukraine by Russia.

The appeal has so far reached one million people in both Ukraine and across Europe, providing financial assistance, food, clothing, water and psychosocial care.

“The conflict in Ukraine is one that has deeply touched us at Pragmatic Play. We have valued colleagues and their families directly affected and we are keen to help them and the wider community in Ukraine in whatever way we can,” Pragmatic Play chief executive Julian Jarvis said.

“Our contribution will help ensure that the incredible work that the Red Cross undertakes can continue, and those caught up in the crisis will be able to receive much needed humanitarian support.”

Gibraltar Red Cross chairman Edward Davies added: “Our work is vital as we look to bring aid to those most in need, and through financial assistance from those such as Pragmatic Play, we can make a difference. 

“We are incredibly appreciative of this donation and would like to express our thanks to Pragmatic Play.”

Business from across the gambling sector have announced a whole host of initiatives to help those impacted by the invasion of Ukraine.

Last month, Ukraine-based Parimatch Tech announced its support for a project aimed at helping Ukrainian refugees find work. Parimatch also partnered WeHelpUkrainians, a platform that provides Ukrainians with aid resources as part of the Ukraine Hospitals Appeal, and set aside funds to provide resources for those fighting for Ukraine.

In March, ‘Gaming Industry for Ukraine’, a global gaming industry fundraiser that launched to support people in Ukraine, exceeded its initial £250,000 target, with more than £260,000 having now been raised.

You can donate to the Gaming Industry for Ukraine fundraiser here.

April Henry, Charles Prober and Constance James will join the SciPlay board of directors with immediate effect, increasing the number of directors on the board from eight to nine.

Henry brings more than two decades of experience advising global corporations across the technology industry on investments, mergers and acquisitions and global business development partnerships. 

A former Wall Street analyst from Morgan Stanley, Henry is currently founder and managing partner of strategic consultancy Hawkeye Digital.

Prober has worked in the digital entertainment and gaming industries for over two decades, including a spell as a senior executive at Electronic Arts between 2008 and 2014.

After this, Prober joined GoPro, Inc. as chief operating officer and went on to become chief executive of mobile app-based smart location business Tile.

Financial executive James has nearly 20 years of gaming experience working in financial and operational roles, including in her current position as executive vice president and chief financial officer Light & Wonder.

Prior to joining Light & Wonder, James was a finance executive at Cargill Corporation and was also previously chief financial officer for global land-based Gaming at Aristocrat Leisure.

“April, CJ and Connie bring decades of leadership experience in relevant industries and important strategic expertise that will enrich the Board’s oversight of the company,” SciPlay chief executive Josh Wilson said. 

“I am excited at the prospect of what the management team and our newly refreshed board can achieve together as we continue to execute our strategy and accelerate our growth.”

SciPlay executive chairman Barry Cottle added: “SciPlay is operating at the cutting edge of mobile games, and as we work to achieve our potential, having the right mix of perspectives in the boardroom matters. 

“I look forward to working alongside April, CJ, Connie and our other board members to oversee SciPlay’s strategy to become a leading diversified global game developer and enhance value for our shareholders.”

The triple appointment comes after SciPlay last month also appointed former Glu Mobile chief executive Nick Earl to its board of directors.

Last week, Light & Wonder, the largest shareholder in SciPlay, completed its rebrand from Scientific Games. 

The March handle was 54.4% higher than $304.1m in the same month last year and 16.9% up from $401.9m in February of this year, while it fell 3.2% short of the record $485.5m set in January 2022.

The Virginia Lottery said the year-on-year and month-on-month increase in player spending was helped by betting on the NCAA college basketball tournament that ran throughout the month.

Adjusted gross gaming revenue, defined as total bets minus total winnings, bouses and promotions and other authorised deductions, also increased 3.6% from $13.8m in March 2021 to $14.3m and 81.0% from $7.9m in February this year.

Players won a total of $435.8m from sports betting during the month while $14.1m worth of bonuses and promotions were issued to players. 

The state generated $2.1m in tax from sports betting in March, with $2.06m of this going to the General Fund Allocation and $52,907 the Problem Gambling Treatment and Support Fund Allocation.