Month: July 2022

Earlier this month, the OLGC said it was to launch a review into the operator and its SkyCity Adelaide casino facility, following similar investigations into land-based casino activities in New South Wales, Victoria, Western Australia and Queensland.

Crown Resorts has been deemed unsuitable to carry out casino operations in New South Wales, Victoria and Western Australia, while Star Entertainemnt is the subject of ongoing review in both New South Wales and Queensland.

Upon launching its independent investigation, the OLGC said a number of the matters raised to date during other reviews outside the state “extend beyond any one organisation” and point to broader systemic issues within the casino industry.

To support this, the industry, stakeholders and the broader community have been invited to put forward submissions, with the OLGC saying it is seeking input from anyone who may have information relevant to the review

Retired Supreme Court Judge Brian Martin AO QC has been tasked with leading the review to ensure the way SkyCity operates demonstrates it is still suitable to hold a casino licence in South Australia.

“Mr Martin is a highly respected member of the legal profession,” OLGC commissioner Dini Soulio said. “He has conducted reviews of key criminal justice policies in South Australia including reforms to the handling of major indictable offences and the state’s sentencing discount scheme.

“I have every confidence he will deliver a report to help us ensure that South Australians can have confidence in the way that the Adelaide Casino is operating.”

The US state’s monthly handle, covering online, retail and limited event wagering operator licensees, was down 10.0% from $512.9m in April and some way off the record $691.0m set in March.

Of this total handle, $456.7m was bet online, while just $4.6m was spent wagering at retail sportsbooks across Arizona.

Players won $405.3m during the month, which left $55.2m in revenue, up 48.4% month-on-month from $37.2m in April.

After including $13.8m in free bets and promotional credits, taxable revenue for the month was $41.4m, a 151.5% improvement from $16.5m in the previous month.

FanDuel claimed top spot in terms of handle, processing a total of $152.4m in wagers, split $148.7m online and $3.6m for retail wagering. DraftKings placed second with $141.1m in online bets, then BetMGM with $84.2m worth of online wagers.

Turning to gross revenue and FanDuel also led the way with $24.8m in combined online and retail revenue, ahead of DraftKings with $14.3m in online revenue and BetMGM on $10.0m.

From a brief look at game performance this month, it seems that the restructure and rebrand of old Microgaming assets is yielding positive results. Other than another fishy spinner-off from Pragmatic Play (Big Bass Splash), just two other releases made it into the top 20 – both outputs of the Games Global machine. Dragon’s Cache from Spinplay Games popped up mid-month while its stablemate, Mask Of Amun, was there at month end.

Top 20 games by distribution

The freshly launched Games Global website introduces us to a couple of new studios: recent additions Circular Arrow in Canada and Infinity Dragon in the Far East are to be joined by Oros Gaming and Ino Games, whereabouts not yet revealed.

Their strategy has been relatively simple: take large stakes in new studios across the globe, provide them with development & marketing support and then crucially, give them access to a vast distribution network. This allows these ‘independent’ studios to focus on game quality, while the group ticks the quantity box too.

But how does this strategy actually fare versus competing make or buy strategies such as those of Evolution Gaming and Pragmatic Play?

In brief, all three groups continue to dominate the charts yet Pragmatic Play have performed better over the last year – that is, if the objective is to secure a larger percentage of the top spots. Note that top positions as per our charts are based on the number of times a game is found across the universe of 2,000+ operator sites.

Biggest studio dealmakers

But how have the big boys’ shares of the long tail of all 24,000+ games changed, i.e. including those that don’t hit the charts? If you remember back to February, we showed how there had been a massive 25% increase in studios and games over the previous year. This was accompanied, however, by a growth in the consolidation of games found from larger firms. Many more independents are entering the sector but their share of shelf space is decreasing. This next chart shows the production shares of groups vs others.

The great influx of new studios has meant that of the big suppliers we’re focused on here, their share of total game content available has declined from around 32% to 27%. In keeping with the overall consolidation picture, however, their share of ‘shelf space’, or their percentage of all games found across all game pages in contrast, has increased from 49% to 54%.

So, more newbie competitors yes, but not a concern to those at the top, who have extended their reach, albeit some of this coming via acquisition of smaller independents (such as Evolution Gaming acquiring Nolimit City, for example).

In the context of relentless market growth over the last 20 years, it’s easy to pat ourselves on the back when many of our charts are all heading up and to the right. But are some growing faster than their peers? Our third chart below shows how Pragmatic Play and Playtech have tended to outperform some of the other larger competitors in terms of their improvement in ‘shelf-share’ visibility of all games this year.

Finally, to add a bit more colour to how the big groups compare on all the dimensions of game production, distribution and game performance on site, our last chart gives a summary of the three measures in terms of percentage change this year vs last:

% change in unique games found (i.e. production);% change in numbers of unique operator sites where their games are found (i.e. distribution) and finally,the % change in how many game positions are found across all operator sites (i.e. game performance on site, itself a function of account management and game quality/longevity).

Any figure over 100% implies an improvement on 2021. While there’s quite a bit of data to get your head around, and also a percentage change view can overemphasise those which start with a fairly low base, a couple of things do still leap out:

Play’n Go opened their product pipeline up more than most and have also managed to secure more site distribution in recent months. Echoing the percentage shares chart earlier, Pragmatic Play and Playtech (plus also Playson from a lower base) have outperformed many in the leading pack in terms of shelf space improvement.

Finally, on the deals front, Pariplay are the top aggregator in recent months, adding studios EvenBet Gaming, G and Apparat Gaming to their roster. Apparat, the new challenger studio in our space, founded by former execs of Bally Wulff, signed up not only Pariplay but also Relax Gaming and United Remote as distribution partners, taking them to top studio dealmaker position. Their ‘Gaming with a German accent’ shows no angst regarding the local regulatory issues …. Prost!

Biggest aggregator dealmakers

* Please note these are live charts which update every month so please ensure the month of June 2022 is selected in the drop-downs to match the analysis

**The interactive games chart at the top excludes live games and table games. Game rankings are determined by the number of game appearances on the casino homepages of more than 2,000 casino sites. To access many other charts including game rankings, live and table games, positions on subpages or to filter game performance by game theme, game feature or by operator type, get in touch with our partner, egamingmonitor.com. Egamingmonitor covers 40,000 games, 1,300 suppliers and 2,000+ operators. 

***Data on deals by month was collected from April 2020 onwards and the rolling chart reflects current dealmaking performance, i.e. how many deals were signed over the last 6 months. Note that only deals either a) on company websites or b) in the gaming press or c) reported to us by studios and aggregators, are collated. Deals between studios & aggregators (and aggregators & operators) from all time are available via egamingmonitor.com.

Currently, none of the “big six” clubs in the League – consisting of Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham – have gambling sponsorships.

However, seven of the remaining 14 do.  

In the open letter, The Big Step expressed doubts about the possibility of self-regulation.

“Relying on clubs to self-regulate has not worked so far, the consequence being 700 gambling adverts in one Premier League match and the same brands appearing in kids sections on club websites, in matchday programmes, and in sticker books,” read the letter.

The letter continued by addressing the delay of the review of the 2005 Gambling Act, which The Big Step said was “delaying the inevitable”

“We are saddened that the Gambling Act review white paper has been delayed yet again,” it continued. “But the government are delaying the inevitable.”

“We are in no doubt that one government one day will do what multiple European countries such as Spain, Italy, Belgium and the Netherlands have already done and restrict the obscene levels of gambling marketing in football.”

The Big Step emphasised that the aim was not to prohibit the presence of gambling in football, but to lessen its presence in advertising.

“We are not trying to stop your fans from having a bet on football, nor are we trying to completely end the relationship between gambling and football,” the group continued. “Gambling should quite rightly be tolerated and available for adults should they wish, but it should not be promoted, especially in a globally-adored league where young people make up a quarter of the audience.”

“We would happily put forward representatives from the below list of signatories to meet with you to discuss this further.”

The matter of sponsorship in football will be discussed at a shareholders meeting later this week. All 20 clubs in the League will have a vote, with a two-thirds majority of 14 votes needed to successfully amend to the current rules.

According to an unnamed source who spoke to The Times, there is an expectation that the vote will be successful.

The Times also reported that the vote could be delayed until September when the new UK Prime Minister is in place, after current Prime Minister Boris Johnson stepped down earlier this month.

The shares represent 9.2% of Bally’s total outstanding common shares, with the tender concluding at midnight on 22 July, having begun on 24 June. It originally planned to buy up almost a fifth (18.8%) of its common shares.

The preliminary count was taken by the depository for the tender offer, the American Stock Transfer & Trust Company. Out of the total shares, 2,143,640 were tendered through notice of guaranteed delivery.

Read the full story on iGB North America.

Looking at the data more closely over the last ten years we can see the magnitude of the change clearly.

Between 2012 and 2021 inflation has hovered around 2%. By January 2022, it was over 6% and by May had increased to 8.6%.  

This has been driven not only by supply chain disruptions resulting from the Covid pandemic but also from the brutal Russian invasion of Ukraine and the resultant price disruptions in energy markets.  The impact that has had on consumer energy prices is palpable. 

The story is no different in the UK.

After the worst of the Covid pandemic casinos reopened across the US and impressive gains in GGR were realised, in many cases, with GGR eventually exceeding pre-pandemic numbers. In general, a sense of optimism prevailed.

The progress of sports betting expansion continued unabated. Gaming stocks largely rebounded from the pandemic on the back of both impressive GGR recovery and margin improvements. These improvements were generated by FTE reductions and the elimination or curtailment of lower margin amenities which they now discovered were perhaps not so critical to driving GGR as they once thought. 

At least, that was the case in the early post-pandemic world. All this occurred despite supply chain disruptions, labour shortages and a modest uptick in inflation. However, the Russian invasion of Ukraine has upended this comforting pattern. Inflation is now rampant as oil prices skyrocket, with the concomitant sharp gasoline price increases across the US. 

For land-based gaming the news could not be more disturbing. With increasing inflation, disposable income has declined. 

Disposable income consistently increased over the last few decades before declining between July 2021 and April 2022, and projections suggest a continuation of this trend. This represents the first sustained decline in disposable income since 2013.

The implication is that GGR growth for both land-based and online betting and gaming will be attenuated in the months to come, but for land-based gaming the news is particularly bleak.

America’s regional casinos draw from very wide geographic areas in comparison to the UK. Many gaming markets draw from a catchment area of two hours drive time or more. With the doubling of gasoline prices, more and more US casino visitors will chose not to make the trip. 

For some casinos, those located in major population centres from which they draw most of their clientele, the effect may be small. For others located further from their core markets, the impact could be significant. Combined with the overall increase in inflation and the reduction of disposable income land based GGR growth, something that has continued unabated and seemed immutable over the last twenty years, may now be moving towards an absolute decline.

We are already starting to see the early warning signs of this. Derek Stevens, owner of three downtown Las Vegas properties, noted in a recent CNBC article that the amount of cash being withdrawn from casino ATMs has been on the decline. Downtown Las Vegas, unlike the Strip properties relies, more heavily on the drive-in California market that would be directly impacted by increasing gasoline prices. For regional casinos which rely more heavily on daytripping drive-in customers the impacts are likely to be even greater.

The warning signs are already showing up in May GGR results. Of 18 commercial gaming states, May GGR increased in eight and declined in ten versus the prior year.

The most significant of these were Connecticut (-11%), Indiana (-11%), Louisiana (-9%), Mississippi (-8%), New Mexico (-5%) and Iowa (-5%). Connecticut, where the two tribal casinos rely to a significant extent on the drive-in market from New York City (over 100 miles away) and Boston (75 miles away) have seen a decline in GGR of 11% year over year for the month of May.

These properties may be the ‘canary in the coal mine’. Early numbers from June suggest that declines are continuing and perhaps even broadening and accelerating.

The American Gaming Association reported a record three months of revenue ending in May of 2022. 

However warning signs are flashing: “Slot GGR fell by 0.1% year-over-year to $2.94bn. Table game GGR rose by 11% to reach $873.9m. Sports betting GGR climbed 78% year-over-year and reached $487.5m, and igaming GGR increased by 31% to $406.4m,” the AGA in its June revenue update.

Slots, which account for 77% of total land-based casino GGR, declined slightly between April and May. Despite the increase in table games, overall land-based GGR grew a meagre 1.5% from the previous month.

Despite all the attention garnered by sports betting and igaming, land-based GGR accounts for over 70% of total US gaming revenue.  

iGaming, it should be noted, contracted by 2.4 % in May, while sports betting grew 5.1%. Drawing conclusions from the growth in sports betting nationwide in any given month is spurious given the variable sports calendar, the advent and maturation of new markets, and the unique position sports betting has in the US psyche. It must also be recognized that sports betting accounts for only 7-8% of total US GGR.

The old adage ‘that the US casino market is recession-proof’ has long been debunked. Consequently, rampant inflation exacerbated by skyrocketing gasoline prices will likely result in stock price declines for commercial operators, as punters fear the likely impacts of inflationary pressures. 

Some of this has already dramatically manifested, for example, Caesars Entertainment’s stock has fallen 57% between 3 January and 24 June this year. Over this same period, Bally’s has dropped 46%, while Penn National Gaming and MGM Resorts shares have declined by 44%.

Meanwhile the S&P 500 is only down 20% over the same period. For tribal casinos these threats to GGR represent more than just a decline in value but an existential threat to the tribe’s wellbeing and a direct impact on tribal services that will be felt personally by individual tribal members.  

For igaming a rise in gas prices and a reduction in land-based gaming travel could theoretically be considered a boon, as gamers turn to their computers rather than their cars to access gaming options. However, with broad declines in disposable income and inflation on a wide variety of necessities that sector will also see increasing pressure on GGR.  

Could we already be seeing the impacts on igaming revenue? It is still early to assess the impact with a high degree of confidence but early numbers from the four big igaming states suggest we are.

Declines in igaming revenue for Michigan, Pennsylvania, New Jersey, and Connecticut from December 2021 through June 2022 are outlined in the chart below.

Change in igaming revenue: March to June 2022

March-June 2022Pennsylvania-12.9%Michigan-7.7%New Jersey-5.3%Connecticut-11.4%Total-8.6%

Between March and June 2022, igaming revenue in each state has declined. Pennsylvania leads the pack with a decline in this period of 12.9%, followed closely by Connecticut registering an 11.4% decline. 

Totals across these four states shows igaming revenue down by 8.6% between March and June.

Again, while it is too early to be definitive, this decline should be considered against a backdrop of consistent month-over-month revenue growth in prior periods.

Some of this variation could be associated with a maturing igaming market and seasonality, nevertheless this weakness could serve as an early warning sign. The next quarter of revenue data will be definitive.

Should these declines persist month over month then a consistent pattern will have been established.

Paul Girvan is chief executive of PKC Gaming & Leisure Consultancy. He has been involved in the US gaming industry since its development beyond Atlantic City and Las Vegas, conducting project-specific and statewide analyses for governments, tribes and commercial casino operators. Girvan has conducted numerous nationwide and state level analyses on igaming and its legislative development. He is also the author of the annual ICE 365 Tribal Gaming Report.

The platform consists of several components, spanning risk and trading, player account management systems and promotion engines.

This is set to increase theScore Bet’s mobile offering in Ontario by increasing in-game wagering options and event propositions.

Read the full story on iGB North America.

Under the agreement, the two regulatory bodies will exchange information, share details of good practice and trade ideas on how to improve gambling, deepen their knowledge of the industry and ensure the implementation of relevant laws in each country.

Industry experts from each organisation will also collaborate to exchange legal information, market regulation practices, topical issues surrounding the application of legal acts and the requirements for businesses.

In addition, the two regulators will hold joint seminars, lectures and other practice exchange events for specialist staff from each organisation. 

“We are ready to share with our Ukrainian colleagues our experience in areas where we already have considerable expertise and practice, such as in the field of problem gambling prevention, application of measures against entities providing illegal remote gambling services, and technical requirements for gambling devices,” Lithuania’s Gambling Supervision Service director Virginijus Daukšys said.

“We are very happy with this agreement and the fact that our new partners are colleagues of this persistent, unyielding and proud state institution. We hope that this cooperation will be mutually beneficial, and we will, as much as we can, help our Ukrainian colleagues in their needs according to our competence.”

The MoU comes after Ukraine’s Commission on the Regulation of Gambling and Lotteries this week issued a reminder to gambling venues in the country to ensure they are operating in line with wartime curfew measures.

Some gambling establishments have begun to reopen across Ukraine despite the ongoing invasion by Russia, with some operators having relocated to western regions away from the main areas of conflict in the east of the country.

While such venues are allowed to open, they are required to operate in line with temporary measures that have been put in place as a result of the country moving to martial law during wartime.

Under the agreement, Scientific Games will provide the lottery with instant games, lottery systems and retail technology. It will also supply a draw-based game system for the launch of the country’s first electronic lottery draws.

The agreement also extends to business intelligence software and an instant game management system, designed to streamline game inventory control and logistics.

The extension continues a partnership that has lasted for more than 20 years.

“We are very pleased to extend our excellent relationship with Scientific Games through an instant game contract that includes new technology and enables us to launch a new mode of instant and draw-based lottery games for the enjoyment of our players, and ultimately generate more funds to support our causes in Ecuador,” Lotería Nacional de Ecuador general manager Jorge Medina said.

Scientific Games’ president of Americas and global instant products John Schulz added: “We are honoured to expand our 20-year relationship with Lotería Nacional de Ecuador with our world-leading instant game services, and by launching electronic draw games for the very first time in Ecuador. 

“Drawing upon our global experience with national lotteries, our goal is to support the Lottery’s retailer network expansion with our patented technologies to drive more profits for Junta de Beneficencia de Guayaquil’s social work.”

Amid the record-breaking heat in the UK this week, you’d be forgiven for beginning to see things.

Such as, for example, iGB making the case that the industry should push for speedy publication of the Gambling Act white paper?

The very command of “publish the white paper” has become almost a rallying cry for those who wish to see a review that will come as close as possible to banning gambling altogether. So it could be easy to assume those who support a healthy industry should want the government to stall for as long as possible.

In fact, that seems to be how it has mostly shaken out. Reformers have staked out a position calling for movement in the review, and the industry has fallen to the other side of the debate – the side of unpopular intra-party bickering that’s slowed down government’s ability to tackle a range of challenges.

But reactively assuming a view based on opponents’ positions may not always be wise. In this case, it may be time for the industry to let the Gambling Act review get to its next step and work on improvements there.

Opening salvo, not closing scene

There is no doubt that some of the reported measures – such as certain affordability checks coming in at just £125  – could be improved based on the way they have been presented so far.

Yet here, it is worth reflecting on exactly what the white paper will be, and what it is not.

Just this weekend, DCMS published its “other” white paper: on loot boxes. The document offers plenty of guidance for change, but is a long way from concrete regulation.

By all accounts, the gambling edition will include more specificity, but the loot box edition was this way for a reason: there’s still a long way to go before a white paper becomes law.

There will be plenty of opportunities for the industry to have its say in what comes next, but the place for that may now be in the true legislative process in Westminster rather than behind the scenes in Whitehall.

Ultimately, this area – where more specifics need to be hashed out – is where the industry can really think about having its loudest say. 

We’ve not had enough of experts

Reformers can call for general ideas to tackle areas where they have recognised high risks of harm, but only those with industry experience can truly understand the specifics of what new laws should look like. Here, the industry can offer its expertise on – for example – the customer journey, to help create affordability checks that prevent harmful gambling without pushing customers to sites with fewer protections.

All of this can be conducted relatively openly, with those who will have the final say ultimately directly responsible to their voters. With this transparency, the industry can make its case to the public, and focus on avoiding unpopular measures such as those involving widespread sharing of bank statements, even if it means concessions in areas where reform is popular, such as football sponsorship. 

With the debate hidden from view, meanwhile, businesses face uncertainty that may be as bad as the impact of the review itself. A number of operators have made efforts to pre-empt rules, but with little clarity on what they’re pre-empting.

That uncertainty has certainly already spooked the financial sector, as banks struggled to sell on debt owed by 888 without knowing what will happen to the GB market that is now comfortably its largest. With plenty of other challenges in the current fundraising environment, an extra reason for investors to have their doubts cannot be ideal.

And while uncertainty persists, the window of possible reforms is also exceptionally wide, and as long as that happens, those receiving a platform to discuss changes will mostly be those pushing for the most stringent measures. It can’t help the industry to continue lending legitimacy to ideas like a total marketing ban.

And all the while, certain corners of the media draw up conspiracy theories, based on tenuous past links, in which the betting and gaming sector secretly pulls the strings of the Cabinet Office. 

With every delay, the industry is presumed to have exerted further influence to get its way, giving fuel to the extreme voices among the reform side of the debate, who are handed a media platform every time the document is pushed back.

Those extreme voices will mostly insist that the industry will accept nothing that risks disrupting short-term profits in any way.

The vast majority of the industry, though, can accept that some reforms make sense, and simply have concerns about certain proposals that would be counterproductive. 

The industry can show it is serious about sensible reform by welcoming the next phase of the review, and taking steps to ensure the final piece of legislation is truly based on evidence.

Daniel O’Boyle is deputy editor for Clarion Gaming’s B2B brands.