Month: September 2022

This will allow the brands to offer games of chance within Ontario’s market for a one-year term. Seven licences were issued to Games Global-owned Apollo Entertainment LTD, along with the other two websites controlled by Betsson-owned GWN Limited and Boyd-owned Pala Interactive.

The Apollo sites are Zodiac.casino, Yukongold.casino, Luxury.casino, Grandmondialcasino.com, Casinoclassic.com, Captain-cooks.casino, Goldentiger.casino. On.canplaycasino.com and Ot.betsafe.com are Palo Interactive and GWN’s licensed brand’s respectively.

The Ontario regulated igaming market launched on 4 April 2022 three years after the provincial government announced plans to end the lottery’s online gambling monopoly in April 2019. This was followed in 2020 by legislation introduced by the provincial government intended establish a licensing regime – a key regulatory hurdle that needed to be overcome in the period before the launch.

At the end of August, the iGaming Ontario, an AGCO subsidiary, released its financial report detailing the result of the province’s first quarter of legal igaming, outlining a gross gambling revenue (GGR) of CA$162m (£106.4m/ $118.1m/ €121.1m). This is compared to a total amount stake, excluding bonus stakes, of CA$4.07bn.

Dave Forestell, board chair of iGaming Ontario said: “Our aim is to be the best gaming jurisdiction in the world and these positive results are an early sign that we’re on our way. With a competitive revenue share rate and low barriers to entry, Ontario is an attractive igaming market with a strong player base.”

Endeavor – a sports media business that owns IMG Arena – will pay $750m in cash for OpenBet, plus 2.3 million Class A shares, worth $50m.

The sale forms part of a general streamlining of the Light & Wonder business, formerly known as Scientific Games. It also sold its lottery arm – which retained the Scientific Games name – in October of last year to private equity group Brookfield Business Partners.

The sale also follows the exit of Barry Cottle as Light & Wonder chief executive, with Matt Wilson serving in the role on a temporary basis until a full-time replacement is found. 

Wilson said the new business can now focus on growth, now that it has a more clear focus on gaming, whether land-based, online or social.

“With the completion of the OpenBet divestiture and our now streamlined organization, Light & Wonder is well positioned to execute on our growth strategy with a singular focus on building great games fully cross-platform.”

“With our R&D engine and world-class talent at our core, we have an unparalleled ability to leverage our leading industry positions, evergreen franchises and unmatched platforms to drive sustainable differentiation and significant value. 

“I want to thank our teams for their hard work and dedication to ensure a quick and successful completion of this important transaction. Endeavor is the right partner for OpenBet and we wish our OpenBet colleagues all the best on this exciting new chapter.”

Initially, Endeavor was set to pay $1.20bn and the deal was set to close in Q2. However, at this deadline, Light & Wonder then revealed that it cut the price by a third in order to get the deal over the line.

There are some tried-and-tested business models for free-to-play betting-related games to bring in money without taking any real bets.

Some products offer paid unlockables, such as features or extra credits, which players can use real money to access.

Others exist as as entertainment in itself, usually used as a way to keep players coming back to betting sites, acting more as a piece of acquisition or retention software for operators.

But perhaps not enough attention has been given to the typical business model of most free-to-use products and services these days: gathering customer data.

So, is this type of data still a mostly untapped resource?

“I hope so,” Tally chief operating officer Rupert Huelsey says.

Holy grail to marketers

In its earliest iterations, Tally looked more like other entertainment-focused social gaming platforms. 

But Huelsey and chief executive Brad Vettesse came into the business and saw a different revenue stream. Naturally, Tally still offers a product that can engage fans, but the data collected provided a much clearer endgame.

“When we took this on, it was a very entertainment focused product,” says Huelsey. “It was all about the entertainment but with no clear endpoint. So it was just for entertainment purposes. 

“For us, with the backgrounds we have, it was clear that there was more in it, and the data is a clear aspect of that.”

That early version of the business, by the way, had been co-founded by NFL star Russell Wilson, though Vettesse points out that the nature of Wilson’s day job limited his ability to have an active role in day-to-day operations.

The data-centric view that Vettesse and Huelsey brought to the table might be explained by the pair coming from outside of the gaming space, working instead in marketing, though often with businesses that had some sort of connection to the world of sport.

“We were attracted to this space because colleagues of ours said ‘you’ve both spent a lot of time in mobile marketing and sports’ and mobile marketing and sports betting, the marriage of them is where sports betting is,” Vettesse says. 

“The combination of these things provides a unique way to look at these platforms and how they can attract people into the sports betting world using basic consumer processes that we used when promoting Snickers and Mars and beer.”

To Huelsey, the type of data a product like Tally could acquire was always the holy grail to marketers. So if this data  can be collected, why wouldn’t you build the business around it?

“At my previous job, we would sell naming rights for stadiums,” he says. “People paid a lot of money for those naming rights, but it’s really hard to get the names of people who are interested in the sport. You can slap your name on the stadium or the jersey but it’s really hard to get the names or emails or phone numbers of people who are actually interested.

“I think that’s what we saw as a huge opportunity when we were exposed to Tally. There’s this huge activation opportunity for every brand that’s in sports but wants to go one step further.”

Unique combination

The position of Tally means the brand has an interesting combination of clients. Some are involved in the betting sphere, but others work in different sectors.

“We have a client that has used our platform,” Vettesse says. “They have sports rights. They use our platform, in this case a prediction game, when the fans came through and played that we were then able to take that data and provide them an offer for 30% off their first delivery – they happened to be a beer company, so a beer delivery. 

“We were able to get a 15% redemption on that. So when you think about how this works, this is an opportunity to be able to take those people who have a relationship with sports and those brands have a relationship with sports and drive revenue from it instead of just having a logo on the side of a pitch.”

Within betting, though, Tally provides an extra function as a way to get players started with a product similar to sports betting. By making players familiar with the terminology of betting and how it works, a free game can drive interest once a new market goes live.

How do Huelsey and Vettesse know that? Well, Tally has collected data on it.

“We have a poll question within our platform and we asked people in the United States how likely they are to bet on sports when it becomes legal in their state,” he says. “And then we asked, ‘How comfortable are you with the language around sports betting?’ and we found there was almost a one-to-one correlation. 

“People who were comfortable with the language wanted to become sports bettors but people who weren’t comfortable, you saw that they weren’t. So I think our role is to grow the whole pot and have more and more people know more about sports betting so they can easily make that switch and become sports betting participants”

Already, Tally has acquired a large amount of data. Now, we’ll see what it can do with that.

“We have a pretty good dataset of the 350,000 people who’ve played our games,” Huelsey says. “We understand sports fans quite well and can segment that data in interesting ways.

“We believe that sports betting is one vertical under many. Having built this and the foundation to collect data, it gives us a huge advantage to branch out within the sports betting market”

H2 has recently expanded its company coverage to over 65 businesses in the global gambling sector – whether operators, suppliers or affiliates – generating annual revenues of over €100bn.

Q2 2022: Key takeaways

Q2 2022 gambling company revenues are yet to break back through their pre-Covid levels, with revenue still 2.9% lower than in Q2 2019. However, they are up 11% year-on-year and up 5.5% compared to Q1 2022.

There still remains a significant divergence in performance between the retail and online segments, and on a geographic basis, though.
The key takeaways from the quarter are:

Q2 online revenue is up 8% year-on-year and up 77% vs Q2 2019Q2 retail revenue is up 11% year-on-year but down 21% vs Q2 2019Significant geographical differences – weakness in Asian land-based gambling continues to be driven by Macau, while non-Asian retail gambling is up 6% vs Q2 2019.

Online revenue performance

Online revenues are up 8% year-on-year and 6% quarter-on-quarter.

Within this, the main driver of the year-on-year growth was B2B, up 17%, compared to B2C revenues which were up 7% However, the sequential growth was driven by B2C, up 7% when compared to Q1 2022, whereas B2B was down 0.5% – the first quarterly decline since Q2 2020

Not all operators split their B2C operation by product, but among those that do provide a split:

Sports betting was up 5% year-on-year but up 11% quarter-on-quarterGaming was up 10% year-on-year but up only 2% quarter-on-quarter

Land-based revenue performance

Land-based revenues are up 11% year on year and 5% quarter on quarter.

However, land-based revenues remain 21% below pre-Covid levels, recorded in Q2 2019There is a significant divergence in geography, with Asian revenues still down 74% compared to Q2 2019, whereas non-Asian revenues are 11% higher than Q2 2019

Asia continues to get dragged down by the lack of a recovery in Macau:

Macau revenues remain 85% below pre-Covid levels vs Q2 2019By contrast, other Asian revenues are down 8% compared to Q2 2019

Earnings growth

We note that some major companies do not report earnings on a quarterly basis (such as Flutter, Entain, 888) and therefore the quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) is taken from a smaller number of companies than the revenues. However, for those that report quarterly data:

There has been a year-on-year decline of 5%, but a significant quarterly improvement, with Q2 adjusted EBITDA up 18% compared to Q1 2022However, this remains 29% below that reported in Q2 2019Land-based EBITDA remains 35% below that reported in Q2 2019Online EBITDA for this group of companies is 5% below that reported in Q2 2019, however, this is significantly skewed by the reporting of US-facing operators with large quarterly losses.

H2 Gambling Capital Corporate Research Service

H2’s new add-on corporate research service covers over 65 global gambling operators/suppliers/affiliates, providing analysis of company results/newsflow, conference call notes and financial models for each company. This analysis is aggregated to provide further insight into industry trends and combined operator financial performance.

The new service also includes market share analysis of major markets such as the UK, Italy, Sweden, and Australia, as well as monthly state-by-state market share for the US sports betting and iGaming markets.

For more details on the product, please contact companies@h2gc.com

The filing concerns Geocomply’s US patent 9413805B2, filed by the business’s co-founder and CEO Anna Sainsbury. Sainsbury returned to the company in January 2022, following more than three-year absence.

The patent is for Geocomply’s geolocation technology, on which much of the supplier’s business is based. The business provides location services for a number of gaming operators and providers, including DraftKings, FanDuel, 888, Caesars and Sightline payments. With this information about player locations, operators can apply the correct regulations for the jurisdiction in which a player is located.    

Xpoint, also a geolocation service business and therefore a competitor of Geocomply, was founded in 2019 and launched its product last year.

Xpoint has stated in a press release that it believes the allegations are “meritless”.   

In January, Xpoint received investment from venture capital firm, Bettor Capital. At the time, Xpoint co-founder and chief executive Marvin Sanderson said: “I am delighted to welcome Bettor Capital to the Xpoint team and want to thank them for sharing our vision. I am thrilled that Bettor Capital has seized the opportunity to invest in us at such an exciting time in our development.”

“2022 is going to be an incredible year for Xpoint as we look ahead to the full launch of our geolocation platform, and a raft of partner announcements, starting early in Q1. Bettor Capital’s investment will serve to accelerate our growth as we aim to transform a marketplace that we know is ready for innovative thinking and partner-focused solutions.”

Xpoint said it will not be making any further statements until the legal action is concluded.

Launched three years ago, Spelpaus allows consumers to exclude themselves from gambling with operators that hold a licence in Sweden. Once registered, a player must serve their full period of suspension before being able to gamble again.

Licensees in the country are required to integrate with Spelpaus and block access to anyone who has signed up to the scheme. 

Just before the summer, Spelpaus was updated to offer a more user-friendly service, as well as easier access to guidance and information on gambling problems.

First announced in March, the new-look website went live on 31 May and now also includes an option for players to extend a period of self-exclusion.

In July, Åland regional-owned gaming operator Ålands Penningautomatförening (Paf) called for Spelpaus to be improved and expanded further to help tackle problem gambling in the country.

During a gaming policy discussion titled ‘The industry we love to hate’, Paf said Spelpaus should work preventively by centralising the player limits so that it applies equally to all operators.

In terms of the actual act of getting sites online and ready to take customers’ bets, the launch of the Dutch online market was a bit of a mess.

A technical hitch with self-exclusion scheme Cruks meant that sites were not permitted to launch on 1 October as expected, going live a day later instead. This, of course, followed a number of other delays for a variety of reasons.

But if we’re talking about the general performance in the months after opening up, the Dutch market looks to have been a success.

The country exceeded its three-year channelisation target within year one. Figures released today by regulator de Kansspelautoriteit – one day before the first anniversary of that launch – reveal that 85% of Dutch players are gambling within the licensed market.

Much of the reason for that is likely due to a no-tolerance approach to unlicensed gambling. Operators without licences could not take any Dutch customers, even passively, which meant the most recognisable names of the grey-market era were not available to customers from 1 October.

But authorities should not be popping the mousserende wijn just yet. Achieving a strong legal market is a long process, and the tougher days might still be ahead.

Pushing rates upward

There may already be early signs that efforts to keep pushing channelisation rates upward will be tougher.

New operators – most notably Unibet – continued to enter the market in 2022, but there were no real signs of growth during the year. The most successful month for online gambling revenue in the Netherlands is still January of this year.

Now if revenue stays at these levels, channelisation will still hit the target of 80% after three years. But truth be told, the Dutch government probably could have aimed higher.

In fact, even the 85% figure may prove to be somewhat of an overestimation, as the KSA acknowledged that the design of the surveys, which were conducted by market research agency Ipsos on behalf of industry trade body NOGA, to measure the size of the unlicensed market means it would miss the long tail of smaller operations.

And there’s no guarantee that channelisation will remain steady, as a group of anti-industry politicians could make things much more difficult.

We’ve seen similar effects in Sweden. Channelisation figures in year one looked great. But the share of players using licensed sites declined in 2020, as the government imposed new requirement after new requirement on the licensed sector.

The fight to channel players to licensed sites is a long process, as illustrated earlier this week when Danish authorities published details of its channelisation rates over the past 10 years. Figures in the year of launch weren’t great, but over time, the country has sustained an impressive 90% channelisation rate.

So if those in the Netherlands wish to look north, it would appear that they have two paths ahead. So far, it looks like things are heading towards the Swedish trajectory.

Anti-industry lobby

Earlier this year, the government, under heavy pressure from some MPs, announced a ban on “untargeted” advertising for online gambling amid claims of an overload of gambling ads.

Marketing is perhaps the area of industry activity most likely to upset the general public. It certainly doesn’t help that many operators have adopted an irritating style in many of their ads.

But in a new market, those ads serve a purpose beyond helping operators make money. By letting licensed operators advertise, the go-to option for customers that wish to gamble will be something within the licensed sector.

Maybe a mature environment like the UK can sustain a larger amount of ad controls, but in the Netherlands it’s putting a lot of good work at risk.

And then there’s the question of what’s next. History suggests that this group won’t simply sit back once most ads are banned. Instead, they will look for new potential changes: maybe stake limits, maybe product restrictions, maybe even further crackdowns on marketing, who knows? We’ve seen all of those things elsewhere in Europe.

Stagnation ahead?

Whatever happens, the black market will be there to take advantage. The KSA has done a very good job so far of attempting to fight unlicensed operations, but it’s just much easier to create and promote a new site than it is to shut one down.

With that in mind, Dutch licensed operators will need to be competitive with their unlicensed rivals. 

Otherwise, there’s a risk that the Netherlands follows an overwhelmingly successful opening few months with years of stagnation.

One of the principle goals of the 2020 Remote Gambling Act (KOA), the law which created the provisions for the launch of the legal market in the Netherlands, was to attain an 80% channelisation rate; that is having eight out of 10 players using legal licensed websites of their gambling activities. One year after the full implementation of the law, a survey by market research firm Ipsos on behalf of the Netherlands Online Gambling Association (NOGA) reports that the new regime has brought about a 85% channelisation rate.

However, the KSA said that there may be some reason to doubt the top line figures. Because the Ipsos survey only allowed respondents to choose out of a list of 22 illegal providers, and there are currently many more than that unlicensed sites operating with the country, the KSA state that the 85% figures probably overestimates the total channelisation rates.  

 The KSA also can estimate channelisation rates by analysing web traffic, though the data does not distinguish between those who gamble on a website and those who are just visiting. It said the web traffic stats are useful mainly as a tool to examine total time spent on a website and as a proxy to compare with other data sources, such as survey results.

While launch of the regulated market immediately brought about an increase in legal and a decline in illegal offerings – the figures demonstrate a resilient grey and black market sector – hovering at around 20% of total hours spent on a gambling website. This indicates, when combined with the caveats to the Ipsos survey, that a slightly lower channelisation rate than the 85% reported may be closer to the truth.

In terms of revenue, GGR for the country stands at approximately €80m (£70.4m/ $ 78.6m) per month. However, after peaking in January at €90m, revenue has been largely stagnant since. The KSA noted that this came despite new entrants continuing to join the market.

Further analysis of the data shows that a majority of revenue comes from online casino – representing roughly €69m of a €86m total market size in July 2022. Casino games played against the house constitute 73% of the market, with the rest of the casino figure coming from peer-to-peer games.

The remaining €17m in revenue obtained by legal operators originated in the sports and horse betting verticals. Horse race betting was marginal activity, being just 0.2% of the market, or around €172,000.  

While a true player number is difficult t measure, due to many users having more than one account, by July 2022, there were 563,000 active accounts in the country, with an average monthly loss per player of €153.

Jaldung has led the operator since November 2008 but said in a post on his LinkedIn page that he will leave the business before the end of the year.

Having joined Casino Cosmopol as security manager in June 2002, he went on to serve as its general manager before taking on the top role almost 20 years ago.

Prior to his time with the operator, he spent over nine years working in law enforcement, spending 18 months as acting detective superintendent for Sweden’s National Criminal Investigation Department between January 2001 and June 2002.

Jaldung was also detective inspector for the National Criminal Investigation Department for five-and-a-half years, while he also spent three-and-a-half years as a police officer for the Stockholm Police Department.

In addition, Jaldung has been chairman of the board for the European Casino Association since February 2015.

“Since 2008, I have served as CEO and it has been an exciting roller coaster ride, including events such as the opening of the casino in Stockholm, with the Deputy Prime Minister performing the first spin on the roulette; media headlines countless times, for good and bad; robberies and gun shots, casino weddings and happy guests, diversity award, as well as reports of discrimination; penalty fee from the gaming authority and revised AML program, and investigation by the competition authority,” Jaldung said.

“We’ve also had yearly Casino Meet & Awards, floods and fires on the gaming floors, Super Jackpots, chairman of the VLT project, Svenska Spel’s biggest project of all time in terms of investments; improved gambling responsibility with duty of care and affordability checks and speaking and moderating at numerous summits and shows.

“Above all, during these years, I have worked with so many incredibly talented and wonderful casino people, both with colleagues in our group and with others internationally. 

“I have done my best for a very long time. But now it is time to hand over the helm to a new person who will continue the important work of developing of our casinos for the future. 

I will continue to lead the business as usual, and I will prepare for the shift in management. 

“I will leave by the end of the year and then we will see what exciting challenges the future will bring.”

Designed for use in the education sector, the Gambling Education Framework provides a set of evidence-based principles to deliver effective gambling education for anyone who works with young people aged between seven and 24.

The framework can be used across formal and informal settings, including schools, and was established with input from the Gambling Prevention Education Forum, which includes organisations that deliver gambling prevention education or train practitioners to offer this. 

The principles were produced free of industry funding or influence and can be applied in all educational settings. GamCare, YGAM and Fast Forward will help deliver education in line with the framework, as well as support those offering gambling harm prevention education.  

The framework is intended to complement the public health approach outlined in the National Strategy for Reducing Gambling Harms.

“We know from our work with professionals that gambling can often feel like an issue that goes under the radar,” GamCare chief executive Anna Hemmings said. “The framework builds on our existing work with young people and highlights the need for evidence-based solutions that are straightforward, accessible and scalable. 

“The framework will support professionals to raise the conversation about gambling harms and ensure education on this issue gains parity with education about other risky behaviours.”  

Principles set out in the framework include that education should be needs-led and evidence-based, adapted to the life-course of a young person, as well as be embedded within wider approaches and work holistically.

It was also recommended that those following the framework assess and evaluate the delivery and impact of their programme, implement continuous and repeated sessions, use interactive and participatory techniques, and build protective factors and reduce risk factors.

In addition, the framework said education should be delivered by trained professionals and be based on approaches that influence intention and motivation to change behaviour.

Fast Forward chief executive Allie Cherry-Byrnes said: “Fast Forward is delighted to have worked with GamCare and YGAM to create the Gambling Education Framework, we are confident that this will become an invaluable resource for anyone working in education and prevention work focusing on gambling harms across the UK.”