Month: August 2022

The news follows the June passing of a major overhaul to Macau gaming law which stated that there would be maximum table and machine numbers as well as minimum GGR requirements, and that the exact numbers would be defined at a later date by the chief executive.

The dispatch outlined the table and machine numbers to be capped at 6,000 and 12,000 respectively for each of the six concessionaires. The order is set to come into effect on 1 January 2023, as the new legal regime begins to operate.

The minimum annual GGR for tables on the other hand will be MOP7m (£739,385/ $868,317/ €866,125), and MOP300,000 for machines. This means that operators that bring in less revenue may find the number of machines they are permitted to operate to be below the overall limit.

The reforms are most significant alterations to the gaming law in Macau since the liberalisation of the sector in 2002. The law raised the number of concessionaires to six, but removed sub-concessionaires – effectively keeping the number of operators the same. In addition to the new table rules, new rules will be enforced limiting the number of junkets each concessionaire can deal with to one.

While the new law also includes a subtle tax rise by increasing the general tax-rate on GGR to 40%, there is some ambiguity regarding how high the de-facto rate will be, as rules allow the chief executive discretion in providing a tax break of up to 5%. The law states that this will be tied to the success of the casinos in attracting foreign custom.

The gaming reforms have been broadly welcomed by the current operators. Melco Resorts & Entertainment said that the new law “refines the relevant legal framework and promotes the sustainable and healthy development of Macao’s gaming industry for the benefit of the Macau community.”

The public tender process for the new concessions has already begun and will run to 14 September. The new concessions will enter force the after the current licences expire on 31 December this year. The bidding process follows the previous six-month extension to licences due to the consequences of the continuing Covid-19 pandemic.

In total, 1,003 people participated in the survey, which took place between 13 and 16 August 2022.

Participants were asked whether they agreed with five statements, which addressed bans on gambling advertising, tobacco advertising, junk food advertising during children’s viewing hours, alcohol advertising and advertising that promotes fossil fuels.

Breaking down response to the gambling survey by age, those over the age of 60 had the highest amount of participants that chose to “strongly agree” with a complete ban on gambling advertising, at 50% of the group.

Meanwhile, those aged between 50 and 59 were the most likely to “strongly disagree” with a ban, with 6% from the group doing so.

In addition,, 2% of 40-49 year-olds and those over the age of 60 also strongly disagreed.

More women than men – 40% compared to 35% – strongly agreed with a ban on gambling advertising.

One Nation voters had the highest level of support for the ban, with 41% of the group in strong agreement.

However, this group also had the highest amount of participants that strongly disagreed, at 14%.

Participants from Western Australia were in the highest agreement of a ban, with 41% in total agreement. This was followed by New South Wales at 35%, Queensland at 31% and Victoria at 27%.

Dr. Richard Denniss, executive director of the Australia Institute, said that the results showed great support for a blanket ban on gambling advertising.

“Results also show Australians have had enough of the gambling industry saturating our airwaves with messages enticing us to bet,” said Denniss.

“The majority view was clear on both junk food and gambling, across all voting intentions – give these ads the punt.”

The group, which has been selected as the UK’s new National Lottery operator from 2024, said the impact of macroeconomic factors such as inflation, cost of living concerns, the war in Ukraine and covid-19 on demand for its products has been limited thus far in 2022.

Allwyn – formerly Sazka Entertainment – said trading since the start of the year and since the end of Q2 has been broadly in line with its expectations at the beginning of 2022.

While macroeconomic and political developments have had some impact on consumer sentiment, it said any negative influence has been kept in check because of its products’ low price point and low average spend per customer.

Allwyn said all its businesses are currently operating without material impact from covid-19-related restrictions for the first time since the beginning of the pandemic, and it has not been materially impacted by the war in Ukraine.

Allwyn said current inflation and rising energy prices are having a limited impact on its costs, with its largest cost categories directly linked to revenue, such as gaming taxes and agents’ commissions, and energy accounting for a small proportion of its outgoings.

“Current trends are in line with the resilience of our revenues during previous periods of weaker general consumer sentiment – for example the early period of the Covid-19 epidemic, the Greek crisis and the global financial crisis – when demand for our products remained resilient, especially in comparison with other consumer sectors,” the group said in a statement.

“Similar to other periods when general consumer sentiment has been subject to shocks, our revenues were impacted to a limited extent in the immediate aftermath of the Russian invasion of Ukraine and the rapid increase in energy prices. However, once the period of the initial shock had passed and consumers’ behaviour had normalised, sales of most of our products in most of our geographies demonstrated a strong recovery.”

Gross gaming revenue (GGR) of €901.7m was up 23% on Q2 2021, while Adjusted EBITDA of €277.1m was up 17% year-on-year.

Allwyn said the GGR growth reflected continuing organic growth of its businesses, primarily driven by the online channel, as well as the impact of the COVID 19-related restrictions on the comparative period.

It achieved double-digit growth in all markets except Italy, with Austrian GGR up by 43% thanks to a strong performance in numerical lotteries, iGaming and casinos.

Robert Chvatal, Allwyn’s chief executive, said: “I am particularly pleased that our focus on online sales continues to pay off, with the online channel contributing a record 44% of GGR in the Czech Republic. We see the shift to online as an unprecedented opportunity to grow revenues through upselling and cross selling, at the same time as improving our profitability and as an enabler of safer gaming.

“The strong performance of the business during an unprecedented shock to consumer sentiment has once again demonstrated the resilience of demand for our products and the resilience of our profitability and cashflow generation.”

In July, the Court of Appeal granted permission to Camelot Group and International Game Technology (IGT) to appeal a decision to award the fourth UK National Lottery licence to Allwyn Entertainment.

The Gambling Commission in March named Allwyn as its preferred applicant for the licence, a decision that would bring to an end Camelot’s 28-year tenure as the UK’s lottery operator. Camelot, which has run the lottery since its inception in 1994, was named reserve applicant.

In April, Camelot launched a High Court challenge against the decision, regarding whether the Commission lawfully awarded the licence to Allwyn. This led to the formal issuing of the lottery licence to Allwyn being suspended. 

The High Court lifted the suspension in June, though the legal challenge continued, with Camelot and IGT, which also launched a legal challenge against the decision, going to the Court of Appeal.

Earlier this month, Allwyn’s $9.3bn deal to publicly list on the New York Stock Exchange (NYSE) with special purpose acquisition company (SPAC) Cohn Robbins Holdings Corp (CRHC) inched closer to completion with an announcement from both companies on recent procedural progress. On 7 September, CRHC shareholders will vote on whether or not to approve the business combination.

In a release, CRHC stated why it believes its shareholders should vote to approve the combination.

“CRHC believes the global lottery industry has attractive characteristics, including high consumer participation across wide demographics, resiliency through market cycles and upside potential from increasing online penetration,” it stated.

“Allwyn is a leader in the $300 billion global lottery industry, operating lotteries through both retail and online channels in multiple European countries, including Austria, the Czech Republic, Greece, Cyprus and Italy.”

This compares with the previous status quo of 31 sports betting licences that could be awarded, meaning that the GC has brought down the total by one. This total had only been in force since last year, following a reduction from 34.

The news rules were passed via royal decree, and were published in the Belgian official gazette.

The announcement states that the new rules apply for the nine-year period from 31 July 2022 to 31 July 2031, and affect F1 licences, which allow for online betting.

The rule change happens in the context of a general tightening of gaming laws in Belgium. In July, a royal decree introduced €200 weekly deposit limits for online gambling, to apply to players of all verticals from 20 October.

In a statement accompanying the new deposit rules, the regulator gave recommendations for safe gambling: “In order not to risk becoming a problematic gambler and to keep the game fun, it is recommended not to spend more than 5% of your income for this purpose.”  

“If you win €2,000, this means that your deposit limit should not exceed €25 per week.”

In May, the Belgian government proposed a blanket ban on all forms of gambling advertising with the exception of the national lottery. Local consumer association Bago criticised the totality of the decision, which did not account for differing harms between differing forms of gaming:

“Studies show, however, that no game of chance is without risk and that, for example, scratch games carry a risk similar to that of sports betting,” Bago said.

“One can therefore wonder whether the government is really taking a decision here in which concern for the consumer is central.”

Following a request from the Maltese government, the ad ban has been in a “standstill” period, potentially delaying the implementation of the new law.

The Benson v. DoubleDown Interactive LLC, et. al. lawsuit was filed in 2018, with plaintiffs who had lost money through the Washington-based group’s games, claiming its range of social casino products that use virtual chips constitute illegal gambling enterprises under state law.

The plaintiffs asserted claims under Washington’s Recovery of Money Lost at Gambling Act (RMLGA), Washington’s Consumer Protection Act (CPA), and theories of unjust enrichment.

IGT and DoubleDown, which it sold to DoubleU Diamond in June 2017, have now announced that they will settle this lawsuit. IGT will contribute $269.8m and DoubleDown $145.25m into a $415m settlement fund.

IGT said that under the terms of the settlement, all members of the class action who do not exclude themselves will release all claims relating to the subject matter of the lawsuit.

Subject to final court approval of the settlement of the Benson v. DoubleDown Interactive LLC, et. al. lawsuit, IGT and DoubleDown have also resolved all indemnification and other claims between themselves and their respective subsidiaries and affiliates relating to the case.

IGT said the settlement agreement would add a $119.8m non-operating expense in the third quarter related to the incremental loss associated with the Benson case and related claims between IGT and DoubleDown and their respective subsidiaries and affiliates. This is on top of the $150m accrued in the second quarter.

In its most recent trading update, DoubleDown said operating costs of $128.6m included $71.5m of expenses associated with the Benson class action complaint.

In filing the suit in 2018, original plaintiffs Adrienne Benson and Mary Simonson said they hoped to represent a class of “[a]ll persons in the United States who purchased and lost chips by wagering at the DoubleDown Casino” and to recover those losses on behalf of the class.

Both Benson and Simonson claimed they were not aware of the games’ terms of use as these were not easily accessible on the site. They also argued that while the virtual chips could not be redeemed for actual money, their value within the game amounts to gambling as defined by statute.

Total revenue for the business came to $15.9m, up from $10.3m a year earlier. Chief financial officer Elis Mark noted that rather than seeing a slowdown in demand amid higher inflation, the business instead has continued to experience a large level of custom.

“Given the macroeconomic headlines from Europe and North America, we feel it’s prudent to mention that we have seen no deterioration of consumer demand for online gambling year-to-date,” Mark said. 

“We are monitoring and we will continue to monitor consumer behaviour closely in Europe and North America as the fall and winter sports seasons develop. 

“From our perspective, demand for performance marketing services for the online gambling industry remains strong. As US operators try their businesses toward profitability, performance marketing becomes even more important.”

The UK and Ireland remained the largest source of the group’s revenue, bringing in $6.7m, up by 24.1%.

However, North America was close behind, as revenue from this region hit $6.2m, more than four times the total from Q2 of 2021.

Revenue from the rest of Europe declined, by 26.2% to $2.1m, while rest-of-world revenue was up by 20.0% to $902,000.

Looking instead by product type, performance marketing continued to make up the bulk of revenue at $12.3m, up 30.3%. Subscription revenue – a new channel – came to $744,000. Advertising and other revenue was up by more than 150% to $2.9m.

Finally, if revenue is broken down by the type of gambling products advertised, casino brought in $12.0m, up 33.0%, while sports betting revenue more than tripled to $3.8m.

Operating expenses rose more quickly than revenue, though, more than doubling to $17.7m. Sales and marketing expenses were the largest cost, up 169.1%, $8.5m, of which roughly half was due to employee expenses.

Technology costs were $1.5m and general and administrative costs were $4.8m. In addition, the business faced a new cost of $2.8m, related to changes in the fair value of contingent payments the group may make because of the acquisition of BonusFinder.

Gillespie said that BonusFinder had performed “ahead of plan” since the acquisition.

As a result, the group reported an operating loss of $2.2m, compared to a $3.2m profit a year earlier.

After $3.5m worth of finance-related income and $1.1m of finance-related expenses, the group made a pre-tax profit of $186,000.

It paid $56,000 in tax, for a profit of $130,000.
However, after also accounting for exchange rate changes, the business reported a $6.5m loss attributable to shareholders.

Mark added that the business was confident in its ability to generate revenue going forward, but that currency fluctuations could continue to represent a challenge.

“I think looking forward, we’re positive about the second half of the year, but we’re cautious about having to make up the lost revenue from the currency headwinds,” he said.

“While we continue to see some inflationary pressures, we’re working to mitigate those headwinds by increasing the proportion of our operating expenses for more cost-efficient jurisdictions as we expand.”

Philip Crawford, the current chairperson of the Independent Liquor & Gaming Authority (ILGA), has been selected as chief commissioner of the NSW Independent Casino Commission (NICC).

Minister for Hospitality and Racing Kevin Anderson named Crawford, Janine Rolfe, Murray Smith, Craig Sahlin and Stephen Parbery as the five experienced casino commissioners who will transfer from ILGA to lead the newly established organisation when it begins operations on 5 September.

Anderson said NICC’s most pressing task will be considering the findings of Adam Bell SC’s Star review and continuing the supervision and ongoing suitability assessment of Crown Sydney.

“Mr Crawford has a comprehensive understanding of the regulatory issues facing modern casinos and the need to fundamentally reset the way they operate,” Anderson said.

“Under his leadership, NSW casinos will be monitored in line with the new laws and face strong disciplinary action for compliance failures, past and present.”

The NICC was created under the Casino Control Act 1992 as a statutory authority with a high level of independence around decision-making on licensing and disciplinary matters. Its creation was one of the 19 recommendations included in the Bergin Report into Crown Sydney, which was published in February 2021.

The NICC has been established as an independent, standalone, specialist casino regulator, alongside a series of legislative reforms aimed at preventing criminal activity related to casino operations.

“Mr Crawford will work full-time as chief commissioner and in this role will continue to support ILGA as an ordinary board member to ensure consistency in approach,” Anderson said.

“The NICC will be a collaborative body, working with ILGA and Hospitality & Racing, and as part of a multi-agency coordination committee with NSW Police and the NSW Crime Commission to guide the regulatory efforts of both NICC and ILGA, and to identify potential law enforcement collaborations in areas such as money laundering.”

Earlier this month, the NSW government introduced new legislation to increase the maximum fine for land-based casino operators in the Australian state to AUS$100m (£57.3m/€68.5m/US$69.7m).

The legislation would grant additional powers to the NSW Independent Casino Commission (NICC), allowing it to issue the larger fines to casinos.

Other reforms in the legislation include regular reviews of casino licences to be conducted as public inquiries with Royal Commission-like powers, while casino operators would be compelled to provide full disclosure of requested information and notify the NICC of any breach or likely breach of the law.

Nesset switches to the position having previously held the role of senior vice president of global sports at GAN and Coolbet. Prior to joining Coolbet in 2020, he served as the director of sports at Gaming Innovation Group (GiG).

Karlsen, who has resigned, was one of Coolbet’s first employees and served as the chief operating officer upon its founding in 2015. Since GAN’s acquisition of Coolbet in January 2021, Karlsen has played a leading role in the launch of GAN Sports in the US.

Nesset said: “I am excited and honoured to take on this new challenge to keep growing Coolbet into the new heights together with all our cool people. We have an amazing team, an extraordinary platform and that positions us perfectly for long-term growth.”

Dermot Smurfit, chief executive of GAN, said: “I want to thank Anders and express the gratitude of the entire GAN team for his leadership, expertise and hard work since the combination of the GAN and Coolbet teams almost two years ago.

“Since our acquisition of Coolbet, the product has performed spectacularly, and Anders has helped lay the foundation for what we expect to be a robust and exciting market acceptance of our GAN Sports offering in the very near future. I’d also like to congratulate Endre, who in his time here has built an incredibly strong Sportsbook organisation and is highly deserving of his new role.”

Earlier this month, GAN reduced its full-year revenue and earnings forecasts after posting lower-than-expected results for the second quarter of its 2022 financial year.

Chief executive Dermot Smurfit also revealed that the business had already cut employee numbers in response to “current market dynamics”.

Group revenue for the quarter reached $35.0m (£29.1m/€34.5m), which was up 1.7% from $34.4m in the corresponding period last year.

B2B revenue increased 36.5% to $14.2m, helped by growth in the development services and other segments, though B2C gaming revenue slipped 13.3% to $20.8m due to a lower sports margin and unfavourable foreign currency fluctuation.

This was reported by iGaming Ontario, a subsidiary of the Alcohol and Gaming Commission of Ontario. iGaming Ontario was established during the preparation phase for Ontario’s online gaming market launch, which took place on April 4.

Total stakes for the quarter, excluding bonus funds staked, came to $4.07bn.

Read the full story on iGB North America.

Prophet was founded in 2018 by CEO Dean Sisun and COO Jake Benzaquen. Last year, the betting exchange hoped to launch in time for the year’s NFL season through a partnership with Caesar’s Entertainment – but was delayed in achieving that goal.

In 2020 the business lost its GB license over social responsibility failings after failing to integrate with the UK self-exclusion scheme GAMSTOP, which became a mandatory requirement for operators in January of that year.

Prophet will be the only sports betting exchange with a license for a US market. Betfair previously operated a horse racing exchange in the country, but withdrew from the market. Political exchange PredictIt allowed for bets on non-sporting events, but regulators announced last month that the site would be forced to close from 15 February 2023.

[Read full story on iGB North America]