Month: August 2022

Speaking after the business published its results for the two operating periods, RSI’s chief executive Richard Schwartz said that the operator continues to move towards becoming profitable.

Schwartz said RSI experienced profit across six of its markets during the second quarter of its 2022 financial year, with the states of New Jersey, Pennsylvania, Illinois and Michigan, along with Colombia in South America, being profitable in the quarter. In addition, West Virginia also turned profitable after only four full quarters of operation in the state.

“We are continuing to build a global business,” Schwartz said “With the recent launches in Ontario in Canada and Mexico, we are now live in a total of four countries. This gives us a diverse set of growth opportunities.

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DraftKings launched in Ontario in May, mid-way through the quarter, after the market opened in April.

Earlier today, DraftKings reported a year-on-year revenue rise of 57.1% to $466.2m (£387.1m/€458.8m) in its Q2 2022 results.

Jason Park, chief financial officer at DraftKings, said that the operator’s full-year revenue projection had been raised as a result of the quarter’s success.

Read the full story on iGB North America.

Scheduled to be submitted to parliament next week, 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.

Independent compliance auditors would be appointed and report to the NICC on casino operators’ compliance with their regulatory obligations, with casinos also to be required to give regulators continuous access to gaming data.

Cash transactions of more than $1,000 per patron per day would be phased out and cashless gaming introduced at casinos, with card-only gaming helping identify players and track their play, with the aim of assisting with financial crime monitoring and prevention.

A new requirement would also be introduced for applicants who want to become close associates of a casino to demonstrate if they are suitable, while there would be an increased scope for probity assessments of a casino operator’s related entities within the same group.

In addition, a multi-agency coordination committee with NSW Police and the NSW Crime Commission would be set up to guide the regulatory efforts of NICC and identify potential law enforcement collaborations in areas such as money laundering.

“Reforms to be introduced to parliament next week deliver on all 19 recommendations of the Bergin Inquiry and introduce additional measures to strengthen casinos’ compliance requirements, including some key recommendations from the Victorian Royal Commission into Crown Resorts,” minister for hospitality and racing Kevin Anderson said.

“The new regulator will be truly independent and will be directly funded by the Casino Supervisory Levy paid by both casinos, with independent decision-making on licensing and disciplinary matters.

“With all penalties under the Casino Control Act to be increased at least tenfold and a new maximum fine of $100m for disciplinary action, the NICC will have scope to deal appropriately with serious misconduct of the type uncovered by various recent inquiries.”

In May, the Queensland government also proposed tightening laws for land-based casinos in the state including raising maximum penalties to AU$50m, also in response to inquiries into casinos by other states, with both Crown Resorts and Star Entertainment Group having faced investigations over their activities.

Also in June, the NSW government proposed new betting and racing legislation, which would class special odds and welcome offers as banned inducements to gamble.

The proposed Betting and Racing legislation clarifies that gambling advertising must not encourage people to gamble. Under these rules, welcome offers that require users to create an account are banned, with the Liquor and Gaming Authority deeming these as presenting “new opportunities for gambling-related harm”.

Similarly, the law would also ban “special odds” for similar reasons.

Responding to the latest set of proposals, Star Entertainment said it welcomed the plans and would support the government with the increased measures. 

“The Star has previously indicated its support for the recommendations of the Bergin Inquiry; the Star will review the details of the proposed reforms and the potential implications for its operations once available.”

The operator only completed its $1.63bn acquisition of The Cosmopolitan in Las Vegas mid-May, but said that the integration of the property as part of its operations had a significant impact on its performance. 

This, MGM said, was also true of the Aria, acquired in September 2021 through its purchase of Infinity World Development Corp’s 50% interest in CityCenter Holdings for $2.12bn. CityCenter – a project from MGM and Infinity World – owns the CityCenter Las Vegas development, which includes the Aria resort, Vdara hotel and the residential Veer Towers. 

Also towards the end of the half, MGM agreed to sell the operations of its Gold Strike Tunica land-based casino in Mississippi to Cherokee Nation Entertainment Gaming Holdings, a subsidiary of Cherokee Nation Businesses, for $450m. 

Turning to digital, MGM in May agreed to acquire online gambling operator LeoVegas for approximately $607m to strengthen its online operations. Speaking in an earnings call, MGM president and chief executive Bill Hornbuckle said the deal is expected to complete in the third quarter of 2022. 

“We believe, ultimately, the digitisation of our business and therefore, our ability to take brands through omnichannel and otherwise and make something real of it is a real business,” Hornbuckle said. 

“We are interested and want the rest of the world. LeoVegas has a talented management team, a cloud and mobile-based technology platform and an appreciable growth plan that we’ll execute on as we develop our digital gaming presence in Europe. “

In addition, he hinted that the business may take further steps to expand to new territories after the LeoVegas deal. 

“We recognise it’s not as large-scale and therefore, needle moving as we might want over time. But we thought that it was a great place to start, and most importantly, we like the platform and the team.” 

Acquisition-drive growth

Looking more closely at the group’s performance in the second quarter, revenue for the three months to June 30 was $3.26bn, up by 43.9% on the previous year. 

Las Vegas Strip revenue, helped by The Cosmopolitan and Aria acquisitions, jumped 110.0% to $2.10bn, while regional operations revenue increased 12.2% to $960.0m. However, MGM China revenue fell 54.0% to $143.0m as a result of venue closures in Macau in line with local Covid-19 measures. 

Breaking revenue down by product type, casinos brought in $1.35bn, up slightly, rooms revenue increased 112.3% to $774.7m, food and beverage revenue hiked 123.9% to $677.8m and entertainment, retail and other revenue was up 135.6% to $445.3m. 

Turning to costs, operating expenses were 60.4% lower at $827.9m, primarily due to a $2.28bn gain as MGM Growth Properties – the real estate investment trust that was previously part-owned by MGM Resorts – was sold to VICI.  

MGM also noted a $55.6m loss from businesses where it holds a non-controlling stake, which included a $71.2m net loss from its BetMGM venture with Entain. However, even after accounting for this and $186.0m in non-operating spend, pre-tax profit was $2.20bn, up 1,654.6% year-on-year. 

Hornbuckle noted that BetMGM was second in the US in combined betting and online casino market share, with 21%. The net loss from BetMGM came on $608m worth of revenue, up 70% year-on-year. 

This, Hornbuckle said, put the business “well on track to meet our forecast of $1.3 billion” for the whole year. 

MGM paid $572.8m in tax and after accounting for income attributable to noncontrolling interests, the operator ended the quarter with a $1.78bn net profit, more than 17 times the total from H1 of 2022. 

In addition, adjusted earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) reached $919.7m 

The strong Q2 performance had a positive impact on MGM’s first half, during which revenue was 54.3% higher at $6.12bn. 

Operating expenses were 10.8% lower at $3.53bn, while MGM also noted a $102.4m loss from unconsolidated affiliates such as BetMGM and $362.9m in non-operating costs. 

As such, pre-tax profit was $2.12bn, a stark contrast to the $305.5m loss posted at the same point in 2021. MGM paid $536.5m in tax, leaving a net profit attributable to the business of $1.77bn, compared to a $227.1m loss last year. 

MGM also noted that adjusted EBITDAR for the six-month period stood at $1.59bn. 

“We look to the future with optimism, as our convention and event calendar for the next year remain notably strong and BetMGM continues to be a market leader with a roadmap for growth,” Hornbuckle said. 

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

The regulator published data based on reports from operators making up 80% of the GB online gambling market and 85% of the retail betting shop market, building on its earlier online-only reports launched in 2020. As such, the absolute figures reported do not include the entire market within these verticals.

Month-on-month, online gross gambling yield was down by 13.2% to £370.2m in June. The total was also a drop of 20.0% from the highest monthly total of the year, recorded in January. Revenue was, however, higher than March, when sports betting revenue experienced a sharp drop that was likely related to special officers around the Cheltenham Festival.

At the same time, revenue from retail bookmakers was down as well, by 5.6% to £181.7m.

Revenue from almost every single gambling vertical was down. Within the online sphere, esports betting was the only exception, where revenue rose by 38.3% to £924,300. Slot revenue was down 7.4% to £179.1m, while real-event betting revenue dropped by 22.6% to £130.6m as most European football seasons ended. Online gaming revenue – excluding slots and poker – was £49.1m, down 10.4%.

Poker revenue declined to £5.7m and virtual sports betting to £3.8m.

Within retail betting shops, gross gambling yield from over-the-counter bets was up by 7.0% to £62.4m. However, revenue from self-service betting terminals dropped by 26.5% to £24.6m, wiping out any gains in over-the-counter betting.

Gaming machine revenue at retail betting shops was down by 5.9% to £94.6m.

Looking at revenue by quarter, online gross gambling yield of £1.20bn was up by 1% when compared to the prior three months, driven by a 4% increase in slot GGY to £564.7m. Most of the growth in slot yield occurred in April and May, with the figure then declining in June to £179.1m.

While slot revenue increased, revenue from every other online gambling vertical declined. Real-event betting revenue was down by 2.8%, while poker yield declined by 4.7% and other online gaming revenue by 1.2%. Esports betting revenue, meanwhile, was down by 11.4%. Virtual sports betting, esports betting and other forms of gambling also experienced declines.

The total number of bets placed and the number of active accounts also increased during the quarter, which the Gambling Commission said was likely due to the Grand National in April.

The Commission also noted that during the quarter, the number of slots sessions lasting more than an hour was up by 5.0% to 8.4 million between Q4 and Q1, though average session lengths decreased.

The regulator said it continued to expect “extra vigilance” from operators, even as most rules relating to the Covid-19 pandemic have come to an end.

“We continue to expect extra vigilance from operators as consumers are impacted in different ways by the circumstances brought on by the pandemic and the wider economic environment,” it said. “Many people will still feel vulnerable as a result of the length of the pandemic period, further uncertainty about their personal or financial circumstances or readjusting budgets and time as life returns to normal with a wider set of finance drivers.”

Sneyd will oversee the core marketing functions across the group’s full portfolio of brands within sports betting, daily fantasy sports, casino, advance-deposit wagering, retail, and free-to-play. 

He will also support growth marketing, media, customer engagement, and marketing operations, as well as brand and product marketing strategy, creative, customer insight, press relations and partnership activation.

Sneyd takes on the role have previously served as senior vice president of brand marketing, a position he held since joining FanDuel in January 2021.

Prior to this, he was marketing board advisor at Properly and also spent three-and-a-half years as vice president and head of brand marketing and strategy at Priceline.com.

Earlier in his career, Sneyd served in a number of marketing roles during an eight-year spell with Anheuser-Busch InBev, while he was also marketing director for Labatt at Labatt Breweries of Canada and marketing manager for Kraft General Foods.

“Since his arrival at FanDuel, Andrew has elevated our creative efforts and continued our explosive growth,” FanDuel’s chief commercial officer Mike Raffensperger said. “His acumen for brand marketing has separated us from the field and under his leadership, I expect that we will continue to make moments matter more for our customers.” 

The appointment comes after FanDuel this week also announced Carolyn Renzin as its new chief legal officer, while the group last month named Christian Genetski as president and Raffensperger as chief commercial officer.

Financial terms of the deal were not disclosed, but Playmaker did confirm that its Futbol Sites brand will integrate the JuanFutbol team to strengthen its campaigns across Latin America and US Hispanic markets.

The JuanFutbol team, based in Mexico City, includes social media experts, media planners, video editors, copywriters and data scientists.

JuanFutbol operates a number of social media and digital channels as well as sports-focused web properties from Soccerly SAPI de CV. The publisher has more than six million followers across social media and its content generates a monthly reach in excess of 50 million.

The acquisition deal also includes the publisher’s JuanBeisbol baseball-focused asset and the FridaPop women’s-focused sports property. JuanBeisbol will be the first baseball-oriented brand in the Playmaker ecosystem, while FridaPop will complement Playmaker’s existing Redgol Fem female branded asset in Chile.

“JuanFutbol is one of the most respected and recognised brands within the sports media industry in Mexico,” Playmaker executive vice president and Futbol Sites chief executive Federico Grinberg said. “It is a fantastic complement to our existing portfolio in Mexico and puts us in a unique position in this market.

“Less than four months before the start of the FIFA World Cup Qatar 2022, it allows us to have a unique offering in terms of quality and reach for advertisers. Cracks, Bolavip and JuanFutbol together form an unstoppable attack front.”

JuanFutbol co-founder and chief executive Miguel Ramirez Lombana added: “Since the first day of 2022, we knew this year would be a critical one for JuanFutbol as each World Cup year presents great opportunities.

“We feel very fortunate to partner with Playmaker, which we believe is the ideal group to take JuanFutbol, JuanBeisbol and FridaPop to the next level. Playmaker’s commitment to building the most relevant ecosystem in digital sports media is unprecedented and we are proud to add our brands and experience to their successful ride.”

The deal comes after Full House in May also acquired creator agency and podcast network TPN Media Group, which owns sports betting information site PropsHQ.com, known as The Props Network.

Lupo’s appointment is subject to regulatory approval stemming from Hard Rock’s purchase of the Mirage Hotel and Casino in Las Vegas from MGM Resorts for $1.08bn (£888.8m/€1.06bn). The deal was agreed in December 2021.

Lupo was previously named as president of Hard Rock Hotel and Casino in Atlantic City in 2018. Before this, he was president of Seminole Hard Rock Hotel and Casino in Tampa, Florida. He is expected to move into the role after Hard Rock receives its licence from the Nevada Gaming Commission.

Read the full story on iGB North America.

Player spending during the month amounted to $13.8m, down 29.3% from $19.5m in June of last year and also 19.8% lower than $17.2m in May 2022.

Gross gaming revenue from sports betting reached $1.0m, less than half the $2.2m posted in the same month in 2021 and also down from $2.0m in May this year.

The year-on-year declines came despite the DC market now having five active operators, whereas in June 2021, there were just three brands taking sports bets.

Caesars processed the largest number of bets during the month, reporting a total handle of $6.0m and posting $409,057 in revenue.

Gambet, which is operated by the DC Lottery and powered by Intralot, placed second after paying out $3.3m in winnings from $53.8m in wagers, resulting in $444,635 in revenue.

BetMGM, which operates in DC in partnership with Major League Baseball franchise the Washington Nationals, was next with $106,589 in revenue from $3.6m in bets.

Grand Central Restaurant, Bar and Sportsbook, which offers sports betting via an agreement with Elys Game Technology, placed fourth with $39,647 in revenue off a $402,553 handle.

Finally, FanDuel reported $717 in revenue and the same figure for its handle. The operator did not formally launch in DC until July 8 when it opened a FanDuel-branded retail sportsbook at Audi Field, though took some bets – which had not paid out – ahead of this.

The home of DC United, Audi Field became the first Major League Soccer stadium to feature a sportsbook facility.

DGV had been operating the AurumPalace and FlipperFlip brands under the licence, but the permit has now been withdrawn by the regulator.

In its ruling, the MGA said DGV breached a series of rules, including Regulation 3 (1)(b) of the Gaming Licence Fees Regulations that relates to requirements for licensees to pay set licence fees.

The MGA said DGV is yet to pay an agreed licence fee of €25,000 (£20,901/$25,484) for the period between 23 November 2021 and 22 November 2022, placing the operator in breach of regulations.

DGV was also found in breach of Regulation 3 (1)(a) and Regulation 6 of the Gaming Licence Fees Regulations by failing to pay applicable compliance contribution fees to the regulator. The MGA said a total amount of €10,333 is due for the period from December 2021 to the present day.

The regulator also said DGV breached Article 41 (2)(a) of the Gaming Authorisations and Compliance Directive (Directive 3 of 2018) by failing to submit a set of audited financial statements for the period from January 2020 to December 2020 within the allotted 180-day period.

In addition, DGV was found in breach of Article 41 (1) of the Gaming Authorisations and Compliance Directive by failing to submit interim financial statements covering the period from 1 January 2021 and 30 June 2021 by a deadline of 30 August 2021.

DGV will have 20 days from today (4 August) to respond to the decision with a reason as to why the MGA should not proceed with the cancellation. If it does not meet this request, the licence will be withdrawn.