Month: September 2022

The regulatory action is the eighth time that Spillemyndigheden have argued in court to have an unlicensed websites blocked since the country’s 2012 Gambling Act, when the gambling sector was partially liberalised and the regulator began blocking sites. Since the passage of the law, 227 sites have been blocked in total.  

However, the total number of sites blocked is larger. It compares with the 55 websites blocked by the regulator in 2021.

The regulator monitors the online gaming market to detect illegal gambling – in part using automated searches – but also by investigating information provided by the public and business.

If Spillemyndigheden determines that a website is offering unlicensed games of chance, it will first request that the operator ceases the activity. If they do not, then the regulator will go to court in order to seek an order for Danish internet service providers to block the site.  

A website is deemed to be aimed at consumers if the website’s features are designed to appeal to Danish players, such as offering services in the Danish language, accepting Danish currency or payment cards that only work in Denmark, includes Danish customer service, as well as is connected via the digital distribution platform Steam.

Spillemyndigheden director Anders Dorph said in a statement: “Spillmyndigheden was established to ensure the framework for a fair gambling market, he said. “One of our most important tasks in that context is to protect players against illegal gambling and to ensure that they are not exposed to gambling providers that do not have a licence in Denmark.”

Dorph continued, making the point that continued broadcasting of unlicensed sites was not fair to operators who followed the rules:

“At the same time, it is very important that we ensure that the operators who are licensed to offer gambling in Denmark can run their business under orderly conditions and therefore our work to block illegal websites is very important.” 

The news happens in the context of a recent shake-up of Denmark’s national anti-money laundering strategy, with Spillemyndigheden is involved with the Ministry of Justice led effort.

The five-member committee, appointed by Kindred’s largest shareholders as of the end of August 2022, will represent all shareholders and recommend board members ahead of the group’s 2023 AGM.

Serving alongside Meister will be Cedric Boireau from Premier Investissement SAS, Peter Lundkvist of the Third Swedish National Pension Fund, and Anders Ström from Veralda Investment Ltd

Kindred’s chairman of the board, Evert Carlsson, was also co-opted to the committee.

Confirmation of the committee comes after Corvex – which has pushed the board of Kindred to pursue a sale – became the largest shareholder of the Unibet operator in August this year, now holding a 15.0% stake.

At the time, Corvex asked to be involved in the nomination of its next board of directors, which has been reflected in Meister taking on the leading role in the Nomination Committee.

Corvex made a splash when it announced it had acquired an initial 10% stake in Kindred, and then immediately called on the board to pursue a sale.

iGB understood that the Kindred board did then reach out to other operators and private equity businesses, but was unable to find an interested buyer at the current price. Corvex then upped its stake in the group.

Earlier this week, Kindred also announced that it will remain in the Norwegian market and appeal regulator Lotteritilsynet’s decision to impose daily fines on its operations.

Lotteritilsynet earlier this month announced that it would pursue the fines for every day its Trannel subsidiary continues to operate in Norway. The fine would come into effect three weeks from the day the regulator decided to issue it – which would be 5 October.

The process diluted existing shares by 90%. The process was instigated as an attempt to save the business, following a SEK17m commitment was discovered in the supplier’s accounts that it stated it had been previously unaware of. The commitment would have impacted cash flows in the third quarter of this year.

The issuing process was approved by shareholder vote on 1 September.

Alongside the share issue, Scout initiated a major restructuring of personnel – laying off 68 of 131 full time workers, including in the company’s Lviv, Ukraine office, leaving just 63 remaining staff.

Each of the business’s shareholders were offered the opportunity to purchase nine additional shares in the company at SEK0.50 per share  

While the business stated that 202.7 million new shares would be issued as part of the process, 245.1 million were eventually subscribed for, meaning that the shares were oversubscribed. This removed the need to trigger underwriting proceedings, which had been drawn up between the business and certain existing major shareholders in the case that the share issue was undersubscribed.

The shareholders – Topline Capital Partners LP, Scobie Ward, Novobis AB, Knutsson Holdings AB and Erlinghundra AB – fully guaranteed the issue from the outset, agreeing to purchase SEK46m worth of shares and committing the buy a remaining SEK55m in the event that other shareholders did not choose to buy.  

The new shares cannot be sold without Scout’s permission for nine months.

Of the SEK101m raised, SEK2.5m will be used to cover the cost of the issue itself – while approximately 40% will be used to repay bridge financing obligations, that is short term loans the company took out to buy time for a longer-term solution to be arranged.

The remaining 60% of the proceeds, roughly SEK59.1m, will be added to the company’s cash balance.

In January, the two businesses reached an agreement to merge and publicly list on the New York Stock Exchange (NYSE) by the end of the second quarter, resulting in a total enterprise value of approximately $9.3bn (£8.8bn/€9.7bn)

Allwyn in June announced that this arrangement had been pushed back to the third quarter, but insisted the agreement would still go ahead and close by the end of September.

The lottery operator said it received strong indications of support during recent meetings with investors, but the marketing period coincided with significant market volatility amid a backdrop of concern about the prospects for inflation, interest rates and recession. 

Despite this, investors offered commitments of almost $700.0m to support the combination with Cohn Robbins.

However, after consideration, Allwyn and Cohn Robbins jointly decided not to proceed with the transaction, though Allwyn said it remains committed to joining public markets in due course when conditions are more favourable, as well as to expanding its business into the US.

“Allwyn was encouraged by the feedback from many leading investors, demonstrating the attractiveness of our business to the investment community,” Allwyn group chief executive officer Robert Chvátal said.

“However, due to the prolonged and increasing market volatility, we and Cohn Robbins have decided not to proceed with the proposed business combination. We are grateful to the firm’s founders, Gary Cohn and Cliff Robbins, for their support over the past year and hope to work with them again in the future.

“As demonstrated by our recent results, Allwyn is a highly cash generative business with a strong financial and operational platform to pursue its organic and inorganic growth strategy and to invest in new opportunities. These include the National Lottery in the UK, where we are set to become the operator in 2024. 

“We continue to pursue sustainable and profitable growth and remain excited about the many opportunities we see in the lottery business in Continental Europe, the UK, the US and elsewhere.”

The announcement comes after the Great Britain Gambling Commission last week formally awarded the UK’s fourth National Lottery licence to Allwyn, ending Camelot Group’s 28-year tenure as operator.

The Gambling Commission announced Allwyn as its preferred applicant for the UK lottery in March, but full approval was delayed because of a legal challenge by incumbent Camelot. As a result, Allwyn could only be awarded the tender once that legal challenge was dropped earlier this month.

CRHC’s co-founders and co-chairmen, Gary Cohn and Clifton Robbins, added: “Our partnership with Allwyn was announced in January and since then we have witnessed a pronounced negative turn in market psychology, and just last week the market suffered its worst day since June 2020, with the sharply negative trend continuing this week. 

“Karel Komárek and his teams at KKCG and Allwyn have much to be proud of in the lottery-led entertainment company they are building. Nevertheless, the persistently volatile and negative market conditions have led to our mutual decision with Allwyn not to proceed in completing the transaction. We wish them every success going forward.”

CRHC added that its board will consider in due course CRHC’s next steps, including whether to seek an alternative business combination. 

Gaming Realms has gone through a number of evolutions, from a bingo operator to its current incarnation as the Slingo-powered B2B supplier, which last week reported a 9.8% year-on-year increase in revenue for the six months to 30 June. 

The strength of Gaming Realms’ content licensing business – revenue was up 57% on H1 2021 – offset a significant drop in brand licensing’s contribution, which fell following a major deal recognised in the prior year figures. The start of H2 has continued that upward trajectory; content licensing revenue is up 53% between July and August, chief financial officer Mark Segal points out. 

“We’ve got a strong pipeline there,” he says. “We’re not at our potential in Michigan, still growing in New Jersey as well so that’s all really positive.”

This has helped offset the 82% drop in brand licensing revenue, though he points out that is partially down to accounting. The deal struck last year was a four-year agreement, but was recognised as up-front revenue. 

In other cases, such as its domain licensing deal with SkillOnNet, Gaming Realms receives a monthly fee, which is recorded on a monthly basis.

Segal says that these licensing deals have usually focused on areas where Gaming Realms has determined it would not make sense to fully enter the market itself.

“We try to do [brand licensing deals] in places where we don’t think it’s best to fulfil ourselves,” Segal explains. 

Live dealer Slingo?

This means it’s hard to say when and how these brand deals arise, and whether or not they are pursued, he adds. But there’s significant scope for growth here. For example Segal wants to see it go further, such as a live dealer Slingo game. “There is potential for more,” he says.

The Slingo mechanic, a combination of slots and bingo, has come a long way from its origins as a machine-based product, first moving into social casino before Gaming Realms rolled it out across the real-money sector. There has even been a Slingo board game. 

This proliferation means there are Slingo variants of popular titles such as Da Vinci’s Diamonds, and branded titles such as Slingo Shark Week. Segal says the Slingo mechanic falls into a sweet spot; there’s very little crossover with slots, but players recognise the brand or the brand that’s licensed for the game, creating some unique cross-sell opportunities. 

Its player base also skews more female than a traditional slots audience, expanding its appeal. But Slingo, with its origins in New Jersey, appeals more to the US audience – it was first conceived as a gameshow, after all. That’s reflected in Gaming Realms’ revenue; 55% of the H1 total came from North America. 

That doesn’t mean it isn’t gaining traction in Europe. Segal picks out the UK as a market where it has been successful, and on the continent some operators are adding dedicated Slingo sections to their sites, such as SuperBet. 

Opportunities in ilottery

This potentially puts Slingo, and Gaming Realms, in an unique position to attract a wide range of players. If it comes with that mass market appeal, what scope is there for growth in lotteries, the industry’s most widely available segment?

“I guess it depends on how a lottery is run,” Segal says, pointing out that the UK National Lottery only offers scratchcards alongside its draw-based games. This means opportunities are likely to emerge further afield, whether that’s in Europe – where Gaming Realms has submitted tenders – or further growth in Canada, where it launched with Loto-Québec as a client in Q1. Some lotteries take a simple approach, he continues, of classing suppliers either as a lottery or a casino provider.

“But I would like to see more of our games going into lottery,” he adds. “If you take Ontario [which opened to private operators in April this year] you have Ontario Lottery and Gaming as the biggest operator, and there will be more online opportunities.”

Life beyond Slingo

And while Slingo, as a unique mechanic that has become a brand in its own right – something that few others beyond Big Time Gaming’s Megaways has achieved – is central to Gaming Realms’ growth trajectory, there are other opportunities for the business. 

Segal admits “that’s easier said than done”, as nice as it would be to have a range of unique, niche products to offer. For example, it has created a unique side game for blackjack. “But it’s not easy to say we’re going to have another big success [simliar to Slingo],” he warns. 

Having said that, Gaming Realms has more scope than most to try new things. Whereas other studios may stick to the tried and tested as innovative products or features launch only to disappear without a trace in a crowded vertical, Slingo provides some additional leeway. 

“The difference between us and new slot studios is people will take our more experimental content, because we’re more established,” he says. 

There’s also its foray into aggregation to consider. Gaming Realms struck a deal to offer games provider 4thePlayer in the US market, and it’s something Segal sees as of growing importance to the business. 

“We want to be a multi-product game studio, and we’ve been lucky to lead with something very different, so we’ve got so much more mileage,” he explains. In North America, this increases the business’ value to operator clients by providing a wider range of content from one point of access, while it doesn’t significantly increase costs as the third party studio handles the development. 

“We’re never going to say our core is aggregation, unless something crazy happens with some of the games [on our remote games server],” he adds. “But it will be accretive; we become a bigger studio, and we’re offering something different.”

Moving beyond North America

North America remains the main contributor to revenue. The continent’s contribution, which rose 160% from H1 2021, is likely to grow further as it becomes more established in markets such as Michigan – where Segal believes there is significant room to grow – and New Jersey, through the aggregation solution. Connecticut is expected to be added in Q4, increasing its US footprint to four states. 

Europe is still a growth market, with Denmark and Spain live in the first half alongside rollouts for Betway and PokerStars. 

But the supplier is only just getting started in Latin America; its games are live in Mexico and Colombia. Bingo as a product has tended to rank highly in LatAm, and Segal sees Brazil in particular as an interesting opportunity. 

“Video bingo is quite popular there, and Slingo is similar to [that kind of product]. It’s a different type of game but I definitely see more potential there; it’s a market we’ll put more effort into.”

Gaming Realms has gone through a number of iterations, but the current Slingo-led strategy for content is catapulting it further forward.

“As a business we’re really happy with how things are going,” Segal adds. “We’re happy with our pipeline and there’s a lot to come.”

The new manufacturers and information service provider licence will enable FSB to work with sports betting operators that are also approved to offer wagering in the US state.

The NGCB unanimously recommended FSB for a licence earlier this month, with the license being finalised and formally awarded late last week.

The latest approval comes after FSB was also recently given the green light to launch in South Dakota and the Canadian province of Ontario.

“Receiving our licence in this crucial, critical jurisdiction clearly captures the momentum we’re experiencing as a business at this moment,” FSB chief executive Dave McDowell said.

“We aspire to be part of the long-term sports betting story in Nevada and look forward to embracing this market opportunity and, in the long term, aspiring to disrupt the North America region generally with our tier-one tech stack.”

Financial terms of the agreement were not disclosed, but Aristocrat said the deal would help to accelerate its online real-money online gaming strategy.

Founded in 2019 by former Gamesys Chairman and co-founder Noel Hayden, Roxor Gaming previously operated as the in-house studio and product team of Gamesys Group.

Since its independent launch, Roxor Gaming has rolled out content in the US state of New Jersey and has plans to expand further in North America, as well as in the UK.

The acquisition is expected to complete in the first quarter of the 2023 calendar year.

“Roxor is a great fit for Aristocrat and this acquisition is another step forward in Aristocrat’s strategy to scale in online RMG,” Aristocrat online real-money gaming chief executive, Mitchell Bowen, said. “We look forward to growing together with the talented Roxor team.”

Hayden added: “I am delighted to see this deal signed as I feel it brings together two great companies that complement each other perfectly. 

“Roxor holds a very important place in my heart as the team and the games we have built, have delivered so much to so many over the last 20 years. I couldn’t be more excited for Roxor Gaming and the road ahead.”

The deal is the latest step in an effort for land-based slots and social gaming business Aristocrat to expand in the real-money online gaming space.

Upon announcing its first-half financial results in May, Aristocrat also detailed the “acceleration” of its “build-and-buy” strategy for online gambling, with revenue and profit having increased in the six months ended 31 March.

During the reporting period, Aristocrat attempted to acquire online gambling technology giant Playtech, only for shareholders to reject the deal. Following this, the business said it would continue to pursue online opportunities, and then announced the launch of a new online real-money gaming (RMG) arm of the business.

In its earnings report, Aristocrat outlined that its goal for this business was to be the world’s leading online gambling platform.

SWARC opened applications for mobile sports betting licenses on September 7.  The application period will end on October 21 at 5pm.

The application fee is $500,000.

Read the full story on iGB North America.

Macau chief executive Ho Iat-Seng announced the news at a Saturday press conference as part of a package of reforms intended to drive economic growth almost three-years since the onset of the Covid-19 pandemic, which has devastated the land-based gaming sector in the former Portuguese colony.

The chief executive said that he predicted that the number Macau of daily visitors should rise to 40,000 as a result of these measures.  

While it is possible for mainland visitors to enter the city on individual exit-visas, the sanctioning of group and online visas will aim to streamline the visitation system for Chinese guests.

The city however has not yet followed Hong Kong’s lead in scrapping the mandatory seven-day hotel quarantine rules for international visitors, which remains a major impediment to recovery in international visitation numbers.  

The new rules will first apply to Guangdong, then to Zhejiang, Jiangsu, Fujian and Shanghai. Visitors from these four provinces and city represented a majority of mainland journeys before the arrival of the pandemic.

There is a designed “circuit-breaker” mechanism to the visa policy, which will automatically suspend the online visas again in the case of a new Covid-19 outbreak.   

Ho said that the topic of economic recovery in Macau has been on the central government agenda, with Chinese Communist Party (CCP) central committee member Han Zheng hosting a video conference in Beijing to discuss options for the special administrative region.

The package of policy initiatives also includes infrastructure spending, economic diversification and business support.

The new measures have been announced in the context of the ongoing public tender licence process, which has heated up in recent weeks with the announcement that Malaysia-based gaming operator Genting Group has thrown its hat into the ring, alongside the existing six concessionaires.

Hogg took on the position on a temporary basis in June this year, becoming the third person to led the business in the space of just three months.

Matt Bekier stepped down as CEO and managing director in late March in connection with issues raised during the review of Star’s operations in New South Wales, while John O’Neill, who replaced Bekier, also left after less than two months as executive chair.

Hogg came in as acting CEO at the same time that Ben Heap was named as interim chair of the business, but will now step down from the role and all other positions at Star.

In July, it was announced that Robbie Cooke would become managing director and CEO of Star on a full-time basis, though it was not confirmed when he would join the business.

The Star board accepted Hogg’s resignation, though his final departure date is yet to be determined. Hogg will continue to work with the board to transition his executive responsibilities in an orderly manner.

Heap will assume the role of executive chairman, on an interim basis, effective immediately and serve in the role until Cooke joins the group. Star noted that Heap declined to be paid any additional remuneration while he is acting as executive chairman.

Hogg’s departure comes after Star earlier this month was declared unsuitable to hold a casino licence in New South Wales and given 14 days to respond to the findings before disciplinary action is taken.

Adam Bell SC’s report into wide-ranging misconduct at Star Sydney found that the business’ dealings with the troubled junket operator SunCity represented “a breach” of Star’s casino licence, as well as uncovering a slew of social responsibility failings.

Shortly after the report was published, Heap set out the operator’s immediate priorities to address the issues set out by Bell.