Month: June 2022

In its annual report for Norsk Tipping’s general meeting, Lotteritilsynet examined the degree to which the operator met its requirements as a monopoly.

The regulator said it was very satisfied with the operator. In terms of its work to channel players to its offering, its report found that the number of players on Norsk Tipping’s sites and resulting turnover increased in the past year. This included a 12% increase in turnover on non-lottery games, which compete directly with unlicensed sites.

At the same time, it said, estimates suggested the number of players on unlicensed sites had declined, with unlicensed turnover estimated to be between NOK1.8bn and NOK2.2bn. This, it said suggested great success in channelisation. 

However, Lotteritilsynet noted that this may not necessarily be due to Norsk Tipping’s own offering, but might instead be related to “regulatory work by Norwegian authorities to limit the illegal offer”.

Looking at responsible gambling meanwhile, the regulator said that “Norsk Tipping has shown that they work well when it comes to preventing gambling problems and that it takes important steps towards players who have already developed a problematic relationship with gambling”.

In particular, it said Norsk Tipping showed the ability to introduce measures such as lower loss limits quickly, cutting its monthly limit for high-risk games to NOK5,000 last year.

However, Lotteritilsynet also determined that the rules for high-risk games should be tightened further.

This includes a “mandatory break” for players after one hour of play.

The regulator will also ask Norsk Tipping to record the number of games it offers under its Kongkasino brand and explain why it would need this number of games. In addition, the operator should collaborate with horse racing monopoly Norsk Rikstoto “to create similar and relevant information about the warning signs and health damage related to excessive gambling”.

Lotteritilsynet added that “Norsk Tipping should reduce the size of jackpot winnings in Kongkasino to avoid high prizes triggering dangerous play”.

The licence, which comes into effect from today (8 June) will enable Kindred to offer both commercial online gambling and betting to players in the country’s regulated market.

Kindred said the issuing of the licence follows an extensive application process including the successful completion of relevant audits. 

The group added that it will launch its flagship Unibet brand in the Netherlands within the coming days.

“The Netherlands is a large and important European market and one that we look forward to operating in with a local licence,” Kindred chief executive Henrik Tjärnström said. 

“We have been advocating local licence schemes for the past decade, and are thrilled that our newly awarded licence in the Netherlands will allow us to deepen and develop our involvement in the Dutch society, as well as actively contribute to a fair and sustainable gambling market. 

“As part of our long-term ambitions and strategy, we are eager to provide a safe, secure and entertaining gambling experience for Dutch customers.”

Kindred was previously active in the Netherlands prior to the country opening its regulated online gambling market on 1 October last year.

Upon this launch, Kindred said it would temporarily halt its operations in the Netherlands while it sought clarification from the Dutch authorities regarding its licence application.

Shortly after, Kindred said it would continue to block Dutch players until it receives a licence in the country. At the time, Kindred said it expected the move to cost the company £12m (€14m/$15m) per month in earnings before interest, tax, depreciation and amortisation (EBITDA) before any potential mitigation actions.

Kindred also announced today that it would host a capital markets day on 14 September.

Total revenue from MGM Grand Detroit, MotorCity Casino and Penn National’s Hollywood Casino at Greektown for the month was $108.7m (£86.4m/€101.7m), down from $110.0m in May 2021 and also 8.4% lower than $118.7m in April this year.

MGM retained top spot in Detroit with a 46% share of the market, ahead of MotorCity on 32% and Hollywood with 22%.

Total table games and slots revenue reached $106.3m, down 1.5% year-on-year and 9.1% from April this year.

MGM reported an 8.3% year-on-year increase in table games and slots revenue to $50.0m, though revenue at MotorCity was down 9.5% to $34.6m and Hollywood revenue declined 8.0% to $21.7m.

The casinos paid $8.6m in gaming taxes during the month, as well as $12.6m in wagering taxes and development agreement payments to the City of Detroit.

Turning to retail sports betting and qualified adjusted gross receipts (QAGR) was up 36.6% year-on-year to $2.4m, while this amount was also 27.7% higher than in April. Consumers wagered a total of $22.8m betting on sports during the month.

Hollywood led the way in sports betting with $1.6m in QAGR, some way ahead of MotorCity on $575,469, then MGM with $220,028.

The three Detroit casinos paid $90,279 in gaming taxes to the state in May and $110,341 in wagering taxes and development agreement payments to the City of Detroit.

Financial terms of the deal were not disclosed, but it was confirmed that Interblock will continue to operate as an independent business.

Interblock provides electronic tables games to customers in markets across North America, Latin America, EMEA and APAC.

Oaktree has a history of investments in both gambling and leisure companies, including J&J Ventures and Cannery Casino Resorts. Last year, it also submitted a number of funding proposals to Australian integrated resort operator Crown Resorts, though these were not accepted.

“We have delivered robust growth over the past six years, which can be attributed to the company’s dedicated team of electronic table games specialists, best in class product portfolio, data driven decision making and our continued focus on innovation,” Interblock global chief executive John Connelly said.

“There is significant momentum within the Electronic Table Game sector, making it the right time to partner with one of the largest private equity firms in the world – Oaktree. 

Oaktree’s Special Situations Group managing director, David Quick, added: “We look forward to being a part of this exciting new chapter for Interblock, which boasts significant market leadership in an incredibly fast-growing industry, an attractive financial profile and durable customer relationships. 

“We will work closely with John and the company’s world-class leadership team to advance the growth plan and achieve their long-term vision for the business.”

The business now advertises itself as a B2B only technology services provider, with an end-to-end software supplier operating model. JenningsBet, the UK bookmaker, became the final client to exit FSB’s licensed white label business.  

FSB had triggered a three-year plan to evolve its business after securing a multi-million growth investment from private equity group Clairvest in 2019.

Dave McDowell, chief executive officer at FSB, said that “over the last couple of years we’ve collaborated closely with our white label partners while they secured independent banking facilities, successfully obtained their own remote operating licences and ultimately transitioned to assume their own regulatory responsibilities.”

“Our platform technology products, headlined by our award-winning omnichannel sportsbook, have been the bedrock for our growth over the last 18 months and we now look forward to expanding these trusted services further across regulated markets in multiple global regions in the months and years ahead.”

The FSB white label arm had previously faced regulatory difficulties in Great Britain. The GB Gambling Commission had in 2019 reviewed FSB technology’s licence – finding problems with businesses operating white label sites under FSB’s licence including issues with anti-money laundering processes, marketing and social responsibility failings.

The business eventually agreed a £634,300 settlement with the regulator.

For online casinos, the introduction of blockchain technology has faced a number of challenges. Being a relatively new concept in data infrastructure, combined with a lack of awareness across the industry, there is a degree of confusion and uncertainty towards it as a solution.

In igaming however, some pioneers believe it can tackle the intrinsic problems facing the gambling and gaming verticals. The sector continues to face issues of trust and player safety – with the calculation of odds, stakes and payments just a few of the concerns.

At nChain, they’ve recognised that integrating blockchain technology such as their Kensei solution on igaming platforms, has drastically alleviated the industry’s reputational issues around player protection. 

So, is it not just for crypto?

The common misconception is that blockchain technology is limited to cryptocurrencies and crypto exchanges – and this has discouraged many operators from using it. 

However, Hill stresses this couldn’t be further from the truth. Blockchain technology enables a trustless system without relying on a central authority. With blockchain, every aspect of a transaction is compiled into a block. This process of logging, storing and distributing across a network of computers gives operators and regulators the ability to verify data for all parties involved. 

“People assume that blockchain is crypto,” he explains. “But there are two sides to blockchain. I got involved in crypto back in 2017 and very quickly realised there is another side to this technology. Cryptocurrencies are built on blockchain and use some of the same attributes, yes, but the utility application side of the technology is a whole other side.”

Hill says blockchain based technology can be utilised in the gaming vertical for player protection, safer gambling, responsible gaming, and other areas of compliance and probity checks.

“The best use for this technology, in my personal opinion, would be as a utility application, encouraging companies and operators to be more transparent, more accountable, and to focus their efforts and energies in player protection and safer gambling.”

He argues blockchain is slowly becoming essential, having matured in a time where player safeguarding has gained additional scrutiny from regulators.

“What the regulator is now looking for is for operators to be more proactive in identifying potential at-risk players and interacting with them in a positive way in order to educate before they self-exclude. 

“Once a player self excludes from any website, there’s already a deeper problem.”

From a regulatory and player protection perspective, it is therefore crucial to have a record of everything that happens between a player and operator after the first marker of harm is triggered.

The blockchain technology, Hill emphasises, then notarises everything that happens and protects the underlying data, by storing it in an immutable, distributed ledger. This ensures that the data is there, time stamped for perpetuity for the player, the operator and any other permissioned third-party access from regulators.

nChain estimates that the global online gaming market is forecast to grow to £160bn by 2026. However, Hill stresses that player safety is paramount if the regulated market is to reach this figure and avoid stringent regulations that reduce the appeal of licensed offerings. 

“Gambling is not going to go away,” he explains. “All you’re going to do is drive it underground and offshore if regulators don’t listen to operators and suppliers.”

“Our platform encourages the operator to be transparent and accountable by giving them the ability to identify and protect potentially at risk players and intervene proactively before self exclusion.

Getting there before the curve

nChain’s use of blockchain reframes it as a utility application rather than the underlying technology for a cryptocurrency, something Hill argues was not being done before the supplier’s Kensei platform launched in 2021.

One of the platform’s key selling points is its APIs, which allow for transparent integration between an operator’s existing data management processes and the BSV blockchain.

“We sit in between the complexities and math of blockchain and the traditional legacy systems that are currently operating in the gambling sphere,” Hill explains. “Traditional blockchain technology is incredibly complex, and the bridge we’ve built has taken an enormous amount of time and effort to build.

“The network nChain has built is incredibly scalable and cost effective, plus it’s fast. Now is the time for the operators to get on board. 

“Eventually, in my opinion, everybody will be using blockchain without even knowing about it.”

Where is the most education needed?

However, he admits that more education is required for industry operators and suppliers to realise blockchain’s potential.

Hill points out that many of the conversations happening at ICE London in April centred around player protection. 

“Every supplier, regulator and legislator were talking about it – even the North American states and market were being open about how they were behind the curve of the European operators and regulators.”

Since he feels blockchain provides a potential solution for this and other pain points, he sees the educational component around the benefits as key to accelerating adoption by showing how it can streamline processes.

What are the other benefits of blockchain in igaming?

“At nChain we take out the middleman of sifting through traditional forms of data storage to try and get to the information”, says Hill. “Blockchain technology can streamline and automate operators’ processes as well as assist with cost reductions.

“Buzzwords like player protection, education and sustainable gameplay are such huge parts of the industry, and by implementing blockchain you’re protecting your players –  and that’s obviously a huge positive.”

The proactive interaction with the player also helps to educate players to continue wagering within their entertainment zone, leading to more sustainable gameplay. This creates loyalty and lifetime value for operators. That in turn helps businesses grow wallet share, while also making potential pain points such as affordability checks simple, fast and reliable. 

As a result he’s confident that adoption of blockchain will happen, slowly but surely. 

“Blockchain is the plumbing,” he adds. “It will become like the internet. We won’t be able to survive without it.”

If other suppliers follow suit in deploying blockchain technology solutions, the future of the industry is being shaped into a more compliant, player-safe environment. This, after all, is key if the industry is to maintain its growth and avoid regulatory headwinds.

Nick Hill is a seasoned igaming professional with over 20 years of experience, including as chief operating officer at gaming operator and platform provider EveryMatrix. Nick has singular insight into the needs of the gaming industry and an ability to anticipate emerging trends as a result of his work on the development and launch of the first fully automated sportsbook; unique processing products; and content aggregation platforms making use of innovative technologies.  

Nick has used these insights to identify the specific issues of the igaming industry that can be solved using blockchain technology. As nChain’s sales director, Nick has successfully introduced blockchain technology to industry participants to address supply chain management (SCM), responsible gaming (RG), anti-money laundering (AML), know your customer/business (KYC/B) guidelines, and source of funds identification.  

In his new role, Flores will be responsible for leading multiple product development teams, including the R&D department and the Jackpot Aggregator platform.

Flores will bring more than 15 years of experience from financial and igaming to SoftSwiss, joining the developer from Gaming Innovation Group (GiG), where he served as director of production operations for three years.

Prior to this, Flores spent three years with JackpotJoy, first as head of applications and network services and later director IT operations.

Flores also had a spell as head of technical operations at Nexus Gaming Intelligence, as well as senior system engineer for Continent 8 Technologies and IT manager at Betway Group. 

“I am excited to join a leading team of professionals who have produced a remarkable and innovative suite of products in such a competitive landscape,” Flores said. “I look forward to bringing my experience and contributing towards the SoftSwiss success story.”

SoftSwiss co-chief technology officer Ilya Karol added: “Jan, without a doubt, has a deep understanding and immense expertise in the igaming industry and will empower our technical leadership team.”

Revenue for the 12 months from 17 January 2021 to 15 January 2022 amounted to £139.8m (€164.0m/$175.1m), up 14.4% from £122.2m in the previous financial year.

Buzz Bingo said the relaxation of novel coronavirus (Covid-19) measures in the UK meant its land-based bingo venues were less restricted and were able to welcome more customers. 

However, in contrast, online revenue declined 31.0% year-on-year as players returned to land-based venues following their reopening and easing of Covid-19 measures. Buzz Bingo noted that the prior year’s high performance was due to the widespread temporary closure of its venues in line to Covid-19 rules, with players turning to online in the absence of retail.

Costs of sales were 10.0% higher at £46.4m, but the increase in revenue meant gross profit was up 17.1% to £93.7m.

Looking at other spending, administrative expenses were 32.6% lower at £113.8m. Lower costs, coupled with higher revenue, meant operating profit before exceptional items for the full year was £10.2m, compared to an £11.0m loss in the previous year.

Buzz Bingo also reported £3.2m in exceptional items and £28.7m worth of depreciation, amortisation and impairment. However, these costs were significantly lower than in 2020, when exceptional items totalled £14.3m, while a £28.8m non-cash impairment of goodwill pushed depreciation, amortisation and impairment costs to £69.1m.

This left an operating loss of £20.1m, an improvement on £88.7m last year. Net financial expenses amounted to £31.7m, down from £42.0m, meaning pre-tax loss was £51.9m, again lower than £130.7m in 2020.

As Buzz Bingo did not pay any tax, net loss was also £51.9m, compared to £141.9m in the previous year.

“The current trading performance and linked underlying customer resilience are encouraging signs and provide the directors with additional comfort that the business is now well placed to respond to the ongoing uncertainty that Covid-19 continues to bring,” Buzz Bingo said.

During the year, Buzz Bingo was acquired by asset manager Intermediate Capital Group for a ‘nominal amount’ from Caledonia Investments.

The case stems from a dispute that concerns Svenska Spel scratchcard Trisslot, which appears on TV4 talkshow Nyhetsmorgon, where a guest scratches a Trisslot card every day in a feature known as Trisskrapet.

Online gambling operator association BOS has argued that this feature acted as a gambling advertisement, yet did not abide by the rules expected for these ads, such mandatory consumer protection information. 

BOS first submitted a complaint about TV4 and Svenska Spel to the Swedish Consumer Agency in 2019.

In order to determine the nature of the relationship between TV4 and Svenska Spel, the Agency then asked the Patent and Market Court to order Svenska Spel to provide details of its commercial deal with TV4. 

While this court agreed that Svenska Spel should hand over he information, the operator appealed to a higher court, which said it should not do so.

However, BOS appealed that decision to the Supreme Court. This appeal has now been accepted.

“In other words, the Supreme Court will assess whether Svenska Spel is obliged to submit the commercial agreement between them and TV4 to the Swedish Consumer Agency,” BOS said. “Only then can the actual question – whether Trisskrapet constitutes editorial material (as Svenska Spel and TV4 consider) or advertising (which the Swedish Consumer Agency and BOS consider) be decided.”

The operator last month secured approval from the Alcohol and Gaming Commission of Ontario (AGCO) to roll out the three brands in the province, which launched its regulated market on 4 April this year.

The AGCO issued three licences, covering the SpinGenie and SlotsMagic brands, as well as a third licence simply assigned to SkillOnNet. All three licences will last one year, expiring on 1 May 2023.

SkillOnNet already holds licences across a number of European jurisdictions such as the UK, Portugal, Spain, Sweden, Denmark, Germany and Malta, as well as Latin American markets such as Mexico.

“Ontario is a really exciting opportunity and we’re thrilled to be part of this new regulatory space and see immense potential to drive company growth,” said Michael Golembo, sales and marketing director of SkillOnNet.

“We’d like to thank the gaming commission for their due diligence and also for really understanding the value SkillOnNet can bring to this market. We provide a network of the most popular online casino brands across Europe, and it’s a joy to be able to showcase our games to Ontarians and engage with our new customers in the province.”