The layoff tidal wave: could gaming be next?

At present, you’re probably unable to log onto Twitter without seeing the pandemonium that has come with billionaire businessman Elon Musk’s $44bn takeover of the company. From paid-for blue tick verification to banned parody accounts, Musk has had a tumultuous reign so far, and it’s only been a week.

But what has hit real people the hardest is Musk’s severe reduction of Twitter’s headcount. At time of writing around 3,700 Twitter employees have been laid off in total – close to half the entire workforce.

Meta – the company behind Facebook, Instagram and Whatsapp – was soon to follow by announcing that it would lay off 11,000 employees from its global workforce.

And there are many more big name tech companies that laid staff off but did not grab as many headlines. Lyft cut around 700 jobs last week and Microsoft announced an undisclosed number. Maybe most worryingly for gaming businesses, payments giant Stripe cut around 1,100 jobs: the business does not operate in gambling payments, but its decision to reduce its headcount by 14% might raise questions about similar businesses that do.

Elsewhere, companies that haven’t announced layoffs yet are still taking smaller steps to reduce labour costs. Last week, a report from Bloomberg stated that Apple had introduced a hiring freeze, and Amazon executives confirmed that a hiring freeze was in motion until the end of 2022.

These seismic examples of well-known companies slimming themselves down have come after months of concerns about rising costs in the gambling industry. Some businesses announced job cuts over the summer, but at the time, enough companies were still hiring that the impact was not severe.

But as third quarter results now tumble out, operators and suppliers are pointing to inflation – whether affecting their own costs or customer behaviour – to explain declines in their finances. Could the industry soon face a wave of redundancies that have a much larger impact than any in the summer?

On the out

The great resignation – as it was coined – began in July 2021, at a time when workers appeared to hold all the cards in the labour market and could easily leave for a new opportunity, or simply exit and trust that one would arrive.

But it seems we may be in a time where the tide has shifted back, with job openings once again becoming scarce, with large numbers of prospective employees hoping to fill them.

Although the onset of the cost of living crisis has undoubtedly changed how companies think about their funds, changing business trends have also had their hand in creating a perfect storm for money woes and mass layoffs.

The time beforehand was a great one for investment, characterised by low interest rates and strong investor sentiment. But businesses perhaps got too caught up in chasing hype rather than investing in ideas that may have sounded less exciting but would have left the industry better-prepared for bad times.

Where to next?

One example lies in esports betting. Esports itself has been of increasing interest to operators in the last several years, as spectators began to look for opportunities to bet.

But esports-focused betting ventures that promised to transform how young people interacted with betting have not performed particularly well, leading to a slew of company closures and subsequent job losses. At the end of October, esports betting operator Esports Entertainment Group announced that it would close down its esports sportsbook Vie.gg. In July this year, Vie.gg’s New Jersey operation posted a measly $590 in revenue for the entire month.

Then of course there’s crypto. Little needs to be said of the decline of that sector – one that is again driven by hype – in recent weeks.

Obviously, neither esports betting or crypto gaming are verticals with no future. But in both cases, many who got on board did so because of the hype rather than the fundamentals, and that might have come at the expense of a more resilient industry.

Instances like these are also reflected in mammoth tech businesses outside the gambling industry. Meta has infamously poured billions into the construction of the Metaverse and has seen little success so far.

In fact, as Meta layoffs continued to make headlines, Zuckerberg shared a message with employees that blamed Covid-19 along with “macroeconomic downturn, increased competition and ads” as the reasons behind the redundancies. He only mentioned the Metaverse to praise it, calling it one of Facebook’s “high priority growth areas”.

As the industry propels forward from the effects of the pandemic and into the cost of living crisis, concerns that the igaming sector may turn to layoffs are palpable. But if the industry pays less attention to hype, and more to building a sustainable business, the last resort of mass redundancies could be swerved.

Tim De Borle steps down from Napoleon Sports & Casino

De Borle shared the announcement on LinkedIn. In it, he said that Napoleon had been “the adventure of a lifetime”, but added that it was time for him to move on.

“It’s been the adventure of a lifetime, and although I still see huge opportunity and ambition for further growth for Napoleon, the time has come for me to move on and embrace the next challenge in my professional life,” said De Borle.

“Making this decision has been difficult and yet satisfying at the same time, as I can look back with enormous gratitude and pride on everything we’ve been able to achieve.”

De Borle went on to detail his time at Napoleon, saying that he was grateful for the opportunity to meet people further afield.

“I joined Napoleon Sports & Casino as a programmer/analyst,” he said. “This started a 10-year journey – full of incredible encounters, experiences and learnings – from industry rookie to CEO of a market-leading company in Belgium.”

“I’ve been able to meet, connect and learn from so many people both inside and out of our industry, from Belgium and from much further afield. Thank you all – partners, suppliers, competitors, stakeholders and media – for sharing the same passion as I do for this business.”

De Borle also revealed that Eamonn O’Loughlin will succeed him as Napolean’s CEO. O’Loughlin was Napoleon’s COO before his new appointment.

Previously, O’Loughlin worked for B2B technology provider CarTrawler and Paddy Power Betfair.

“I’m sure Eamonn and the wider team will do great, and wish him and everyone at Napoleon Sports & Casino and the wider Superbet Group all the best,” said De Borle.

Superbet Group acquired Napoleon in July 2021.

Lottery.com confirms new chair, appoints Quraeshi as permanent CEO

Quraeshi was brought in on an interim basis last month and had also been serving on the board of directors. He will now take on the role permanently.

McGahan, who joined Lottery.com as an independent director of its board in October, will step up into the position of chairman. 

Prior to this, McGahan founded UK charity Mask Our Heroes in response to the need for personal protective equipment during the Covid-19 pandemic. The charity procured and shipped masks to the UK. He also founded – and later sold – Harley-Davidson dealer Magic Automotive Group.

McGahan replaces Richard Kivel, who earlier this week resigned as chairman, saying it had become “impossible” to perform as an independent director as his efforts to turn round the fortunes of the business had been “aggressively obstructed”.

In a damning resignation letter, Kivel made a number of accusations against the business, including that emergency funding from Woodford Eurasia had not arrived, with no sign of it forthcoming, and that the chief compliance officer of Lottery.com was under FBI investigation.

Kivel also claimed he had been forced out as chair and learned that McGahan intended to appoint two individuals he said are not suitable and are conflicted, thereby stacking the board in the new investors’ interest.

Though Kivel did not disclose the identity of these individuals, Lottery.com did confirm that in addition to McGahan becoming chairman, it had appointed Barney Battles and Naila Chowdhury as new board members.

Battles is the founder of The League of Angels, a network of ultra-high-net-worth international members investing in fast growth British ventures with a global impact and strong corporate values. He is also the former co-owner of Jackpot Games, a Maltese online gaming venture that was sold to a large German media group, and the former senior advisor to Rank Group.

Chowdhury has 25 years of leadership experience in senior management in private, public, and non-profit organisations around the world. She is co-founder and former chief executive of ‘Pillar 4 Dignity’, which supports and empowers underserved women and girls worldwide who face social and economic challenges. 

“I would like to welcome all the new directors to the board, and am delighted at Matthew’s appointment to chairman,” Quraeshi said. “Each of them brings considerable and relevant experience, which will substantially enhance our senior leadership team, compliance, CSR and strategic capability. 

“These appointments are a crucial next step as we complete the turnaround of the business and implement a strategy for future growth.”

The appointments mark the latest changes in what has been a turbulent time for Lottey.com in recent months.

Much of the group’s troubles began when after sacking its president and CFO in response to discovering instances of non-compliance with state and federal laws , the business also found that its cash holdings were overstated by $30m.

Further struggles became apparent when it said it was not able to pay employee wages and admitted in an SEC filing that as of 29 July 2022 it owed $425,000 in outstanding pay.

In an attempt to improve its situation, Lottery.com recently attempted to obtain funding from Woodford Eurasia, a subsidiary of investment firm United International Holdings Netherlands BV. 

This investor demanded that four of the five remaining members of the Lottery.com board resign as part of the terms of the loan. This led to two board members quitting in protest after claiming the company deliberately “thwarted” attempts to look into “red flags” raised regarding the new investor.

It was amid this turmoil that Armanino resigned as auditors and was replaced by Yusufali & Associates LLC last month.

Svenska Spel distributes SEK35m to Swedish grassroots sports

Launched 10 years ago, the Svenska Spel’s Gräsroten campaign has generated more than SEK500.0m for grassroots sports associations and groups across the country to date, allowing more children and young people to get involved with sports.

This year, the funds were split between 8,567 associations in 35 different sports, including mainstream sports in Sweden such as football, ice hockey and handball.

Funding was also committed to associations dedicated to more niche sports in the country such as cheerleading, skateboarding and cricket.

Confirmation of the funding total comes after Svenska Spel in the summer commissioned a study into how organisations use this money. Four out of 10 said it had helped children and young people take part in sport that they otherwise could not afford to play.

In addition, 62% of associations said they had been able to purchase more equipment as a result of the Gräsroten campaign.

“For my part, I feel that Gräsroten is more than just a sponsorship initiative. It’s so much bigger,” Svenska Spel president and chief executive Patrick Hoffbauer said. “I dare to say that during these ten years we and our customers have made it possible for more children and young people to play sports in playful ways and meet new friends.

“Gräsroten is thus an important addition to the associations’ coffers and, by extension, contributes to a better society, because children and young people should have the opportunity to move and have fun together regardless of where in the country they live.”

Last month, Svenska Spel announced that it had recorded gaming revenue of SEK1.95bn in the third quarter of the year, down by 0.9%, amid calls for its services to be broken up.

Much of this revenue – SEK490m – came from Svenska Spel’s sport and casino segment, which competes in the licensed sector and is the arm of the business that critics have said should be sold. This was 6.8% less than in Q3 2021.

Belgian regulator issues pre-World Cup compliance warning

The World Cup is being held in Qatar from 20 November to 18 December.

The reminder came in the form of a letter, wherein F2 licence holders – retail betting operators – are reminded of two sections of the Belgian Gaming Act – Act 5 and Act 6.

Act 5 mandates that a sign is placed less than one meter from any betting terminal reminding players that no loans or advancements are to be used to bet. It also must stipulate that it is illegal for minors to gamble.

Act 6 dictates that operators must have at least two folders containing information on problem gambling placed on a stand below the aforementioned sign, allowing it to be readily available for players.

Last month, Belgium made two changes to its responsible gambling regulations. A new weekly loss limit of €200 came into effect, with a royal decree published three months prior.

Belgium’s self-exclusion scheme, the Excluded Persons Information System (EPIS) was also extended to retail betting.

The US midterms and what they mean for the industry

This year’s US midterm elections have plenty riding on them for the industry.

iGB has put together a panel of experts to discuss the fallout for US sports betting, online casino and land-based gaming.

California dreaming

A clash of the titans in California looks set to end in disappointment for both sides. There’s still much to discuss, namely whether an immovable force and an unstoppable object can reconcile after a bruising campaign. And more importantly, when will legal betting actually come to the Golden State?

State elections to watch

Developments in several state legislatures could also have a game-changing impact for US gaming regulation. Sports betting and casino hangs in the balance in Georgia, while Minnesota candidate Scott Jensen has voiced support for legal wagering.

Then in Oklahoma, Governor Kevin Stitt may have his second term denied by disputes over tribal gaming.

That’s not even mentioning potential developments in Kentucky, Missouri, and Virginia. In a number of other states, sports betting, igaming, and land-based developments all hang in the balance.

Change at the top

In addition, Congress looks set to be significantly reshaped, bringing new challenges and opportunities, supporters and detractors to the industry.  

And one key question remains, will 2023 be the year online casino in the US finally accelerates across the nation?

iGB and its panel of leading industry names will cover all the key developments from the 2022 midterms.

Check out other on demand videos here

A change in pace: Melissa Summerfield on leading a startup

To Summerfield, the main appeal of her latest role was the fact the business was a startup.

Summerfield’s experience so far has been mostly at large companies, but the chance to lead a new project was the change she felt she needed.

“It’s the opportunity to lead a company, that’s obviously the number one job that anybody who’s ambitious aspires to get to. But most importantly, because it’s a startup.”

She told iGB that the role would offer the chance for her to use the experience she gathered from a number of other roles in a brand new situation.

melissa summerfield, ceo, markor technology

“I can bring in all my experience into one business here and really see something grow from nothing,” she says.

“Being able to be the CEO and start something from scratch – as an ambitious person, I think is something I really needed to tick off my list.”

From B2C to B2B

Summerfield has built an impressive CV. She started at BetVictor heading their CRM, and then moved to Party Gaming and – after the merger of the two companies – BWin.Party, where she was promoted to head of gaming operations.

However, Summerfield says that she needed a change.

 “I spent around 12 years as an operator. But then I moved over. I felt that I wanted to develop, learn new skills and move over to the other side of the business, which was B2B. And that’s when I set up the office for Microgaming in Gibraltar.”

She was named VP of operations at Microgaming, and shortly afterwards received the opportunity to become chief commercial officer at Pragmatic Play.

“All this combination of starting as a CRM executive, then moving up to chief commercial officer both on B2C and B2B definitely allowed me to prepare myself for this role.”

Summerfield went in-depth on what Markor Technology does and offers. To her, the key factor is the ability to offer solutions across a range of product types and licenses.

“We’re offering a one-stop-shop to other online gaming operators.”

“When you’re looking to set up a casino with sportsbook and with bingo, we are able to give you the solution or we’re able to manage it.” Markor Technology has B2B and B2C licences, and has the ambition to acquire even more licences and offer products globally. At present, the company is in the final stages of the MGA license application process and expects to receive the licence in early 2023.

“In addition to planning on acquiring more licences, for operators that already have the PAM system, we are able to offer gaming content, so we have an extensive content aggregation platform offering over 5000 titles and that keeps increasing every month, with over 70 suppliers integrated into our platform.” Summerfield sees the company as innovative because of the vast array of products and is a reason why she wants to lead the company.

Strategic direction

If Summerfield had to select one key strategy that makes Markor Technology, it would be acquiring licences.

“One of the main pillars of strategy is the strong licensing and certification of our technology. If we see opportunities where we can acquire licences, and we’re able to partner with local operators, that’s exactly what we want to do.” As of now, the Markor game aggregator platform is certified in the UK, Gibraltar and Spain, and Markor is hoping to imminently receive approval in Portugal and Ontario.

With access to a large number of markets, what will the next step be? Summerfield notes that competing with the most established aggregators on the number of integrated games is difficult.

Instead, she highlighted that a successful strategy the company is currently focusing on the “best service” as a key differentiator from competitors: with a large number of industry contacts, that’s one area where her past experience may come in handy.

“We all knew that in the business there are a lot of aggregators or PAM solutions that maybe have more integrations than us, but we are striving to be the best in service and we can only do that if we have good relations with our partners. That’s something that we feel will be part of our strategy and something that we’re going to continue to focus on in 2023.”

Developing Markor’s presence

But how does a supplier like Markor reach clients? Summerfield says that the business has just launched its new corporate website and brands, and that she is helping in the formation of the new brand identity.

“We will be promoting ourselves extensively in the industry through trade shows and now exhibitions,” Summerfield notes.

“We’ve had such a positive response in the last conferences that we’ve attended in SBC Barcelona and in G2E Vegas. Now we’re going to Sigma Malta, where we’re exhibiting for the first time, so that gives me a lot of confidence in terms of our future and where we’re heading.”

Into the future

Markor Technology is the new kid on the block, but Summerfield has big ambitions and is positive about the journey.

Having worked with bigger-name operators and suppliers, Summerfield says she hopes to see Markor rise to those ranks within the next year.

“We have a big ambition to be the top-three game aggregator out there, competing with the very best, and the top PAM solution provider within the next year,” she says.

“In essence, there isn’t a reason why an operator in this industry wouldn’t want to work with us, with the product services and the licences we have. We are really excited about that and the journey our company is starting in this market.”

LeoVegas manager arrested for insider trading

Swedish newspaper Aflonbladet reported that three people – of which one was a “top manager” at LeoVegas – were arrested on suspicion of insider trading. It added that this one employee was the only one of the three that had any direct connection to the operator.

In June, the Swedish Economic Crime Authority launched an investigaiton into potential insider trading of LeoVegas shares in connection with the operator’s acquisition by US land-based giant MGM.

The operator said at the time that it was assisting authorities in the investigation. 

MGM agreed to pay SEK61 (£4.90/€5.85/$6.16) per share to acquire all of LeoVegas’ share capital, which LeoVegas noted was a premium of 44% compared to its closing share price on 29 April.

As a result of the offer, LeoVegas’ share price skyrocketed to SEK60.30 on 2 May, but it had already risen by more than 30% in the preceding month.

Leovegas director of communications and public affairs Daniel Valiollahi confirmed the events described by Aflonbladet but added that the manager was not part of the executive management team or the board.

“It has come to our attention that an employee within the company has been notified about criminal suspicion regarding the disclosure of insider information,” he said. “The employee is neither a member of the executive management team nor the board of directors. 

“LeoVegas Group takes ethical conduct and regulatory requirements very seriously, and we are committed to upholding the highest standards of integrity and fairness.

“We have, and will continue to assist authorities with their ongoing investigation.”

MGM-LeoVegas acquisition

The acquisition of LeoVegas by MGM closed in September after the majority of shareholders accepted the MGM bid.

Bill Hornbuckle, chief executive and president of MGM Resorts, said that the deal would allow MGM Resorts to offer online gambling across Europe and elsewhere.

FDJ launches online poker offering

The first poker product launched by FDJ is Jackpot Sit & Go, which will be available through its ParionsSport en ligne mobile application, and will be followed in future by other games. The company has stated that the group’s experimentation in the new vertical is part of a wider strategy to bolster the business’s presence in the French online gaming market.

“We’re pleased to offer our players a new range of games,” FDJ head of sports betting and poker Richard Courtois. “They’ll be able to use the ParionsSport en ligne app to enjoy a recreational poker range that is designed for all types of players.

“This move enables FDJ to round out our presence in the online gaming market, in line with our strategy focusing on growth and ongoing innovation, based on a business model that combines performance and responsibility to keep gaming fun.”

The games will run through gaming supplier Playtech’s iPoker offering. The business has stated that it intends to expand its range of poker products to include all online poker formats approved by France’s regulator Autorité Nationale des Jeux.

Revenue growth

FDJ reported strong revenue growth in its Q3 financial statement, leading to an increase of the group’s full year revenue projections.

“Our digital business continues to attract a growing number of players, almost five million,” said FDJ chairwomen and CEO Stéphane Pallez. “The good performance expected for the full year reflects the relevance of our strategy, which is based on these two distribution channels, and confirms our long-term responsible growth model.”

Study: 56% of GambleAware treatment service participants say wellbeing improved

In the study, 14,500 qualifying referrals and 95,000 attended appointments were analysed.

Results showed that treatment length translated into improvements in the Problem Gambling Severity Index (PGSI). For example, behaviours such as chasing losses diminished severely in the first three appointments before levelling out.

Overall 77% of problem gamblers who completed treatment showed significant clinical improvement in their gambling practices and 56% displayed improvement in their wellbeing when finishing their treatment.

New insights also revealed that people experiencing problem gambling who completed their treatment were “78% more likely” to have a positive clinical change in both gambling behaviours and general wellbeing than those who dropped out from treatment.

The report also revealed a series of other insights. For example, 81% of those who were analysed completed their treatment, which on average is made up of 6.6 sessions spanning an average of 12 weeks. In addition, the analysis showed that significant differences in improvement from clinical treatment were noticed at weeks 14 and 11, for wellbeing and gambling behaviours respectively.

Making a difference against gambling harm

GambleAware has shared in previous communications that awareness for the NGTS continues to grow and has shared its future intentions of offering more and improved treatment services.

“We know the National Gambling Treatment Service makes a real difference to service users and we’ve already seen how its user-led approach can a have a positive impact on the lives of people experiencing gambling harms across Britain,” said Anna Hargrave, chief commissioning officer at Gamble Aware.

“However, it is encouraging to see new findings highlighting how fast improvement can happen. These novel insights into the potential optimum range of appointments, and the importance of supporting users to not miss sessions and completing treatment, will help make the service even more effective. This could mean more people are helped and more quickly.”

NGTS gambling treatment services are available to people experiencing different forms of gambling-related harm. Of the overall group taking part in the treatment service, 84% were male. The data showed that 15% were people who are indirectly affected by another person’s gambling. This group was mainly female.

“These findings add to the growing body of research highlighting the efficacy of the National Gambling Treatment Service,” said Ben Hickman, one of the report’s authors. “The assessment and treatment of problem gambling is a relatively new field, with depressingly expanding demand, and it is important for us to continuously challenge our own assumptions about what works.”

The NGTS wants to improve the data they collect and the way it is collected. “We must be open to challenging the way that we have done things while being realistic that, for those on the frontline, data is secondary to their role of helping people improve their lives. We hope this report goes some way towards moving the conversation forwards,” said Hickman.