Month: November 2022

Launched in 2020, the four-year programme aims to deliver evidence-led education, training and help to young people in England, Wales and Northern Ireland, as well as collaborating with other organisations in Scotland.

To date, the charities said an estimated two million young people have used the educational resources and intervention training, while gambling harm awareness workshops have been directly delivered to over 48,000 young people.

The programme has also trained more than 24,000 professionals who have care or influence over young people in gambling harm prevention, including 10,000 teachers, with resources being used to deliver lessons as part of the latest PSHE curriculum in schools.

Other data collected by YGAM revealed that 99% of delegates now feel confident about spotting the signs of gambling harms after completing the training, while 97% said they felt confident talking to young people about the topic.

Some 97% of those who took part in training said that they were confident talking to young people about the topic, while this figure was the same for delegates who felt they could now signpost and support young people if they have concerns.

In addition, 97% of professionals who received the GamCare training said they now have a better understanding of how gambling harm impacts young people.

“It’s another fantastic milestone reached for the programme,” YGAM’s head of the National Education Programme, Kyle Riding, said. “The team delivering this programme includes former teachers, safeguarding leads, youth leaders and individuals with lived experience of gambling harms, so it is so rewarding to see the impact of their hard work. 

“There continues to be huge interest and demand for the training and resources and I’m confident we will continue to achieve our objectives to effectively safeguard and support millions of young people.”

GamCare senior manager, Alexa Roseblade, added: “Alongside YGAM, we passionately believe that education on the risks associated with gambling is an essential part of tackling gambling-related harms and that every young person in the UK should receive at least one education session on it. 

“The key to helping young people make informed choices about their participation in gambling and preventing gambling harms is to give them the facts about gambling and gaming and build their critical thinking skills and digital resilience.”

Revenue for the three-month period ending 30 September fell 10.5% from $994.6m to $889.7m.

The business made a net loss of $142.9m for the period, or a loss of $1.27 per share. This works out as a 14% year-on-year decrease in losses from $166.2m in Q3 of 2021. Quarter-on-quarter, though, losses increased 9.8% from $130.1m.

The business’ core metric of adjusted earnings before interest, tax, depreciation, or amortisation (EBITDA) rose 12.2% from $154.6m to $$173.5m, an indication of the long-term health of the company’s portfolio.

Macau slump

The primary reason for Wynn’s net loss is the continuing lacklustre performance of the company’s Macau properties, where Wynn is one of the six concessionaires. 2022 has proved to be a difficult year for the global gambling hub with Covid-related restrictions ongoing. A summer lockdown led to the special administrative region experiencing its worst ever month in July with revenues declining 95% year-on-year to $49.2m.

“In Macau, while Covid-related travel restrictions continued to negatively impact our results, we were pleased to experience encouraging pockets of demand during the recent October holiday period,” said Wynn CEO Craig Billings. “We remain confident that the market will benefit from the return of visitation over time.”

Consequently, travel from both oversees and the mainland has cratered due to a combination of more restrictive visa laws and concerns over Covid policy. While at the beginning of the month restrictions for e-visas and group visas were relaxed in certain provinces, a lockdown at MGM Resorts’ MGM Cotai property illustrated the continuing uncertainty of the sector in the city. The new visa laws included an inbuilt “circuit breaker” mechanism, which could suspend the rules in the case of a new outbreak.

“We’re very impressed with the government’s reaction to the recent outbreak in Macau,” said Wynn president Ian Coughlan. “When we had an outbreak in the summer, and we had a casino closure, there was a six-week cycle of closure and recovery.

“And the government has managed to turn it around in two weeks this time. So we are starting to see a buildup in occupancy this coming weekend. So we’re coming out of our recent outbreak and I believe we will see the e-visas trickle in over the next couple of weeks and then pick up pace in the coming months.”

US strength      

However, at least part of the business’ problems in Asia have been cancelled out by Wynn’s continuing strength in the US.

“Our teams at Wynn Las Vegas and Encore Boston Harbor delivered a new third-quarter record for adjusted property EBITDA at our combined North American properties,” said Billings.

“Their relentless focus on five-star hospitality, combined with our market-leading facilities, continue to elevate our properties above our peers as the destinations of choice for luxury guests in both Las Vegas and Massachusetts.”

The business’ core strength in this market led to Billings claiming that new investor Tilman Fertitta bought stock when it was undervalued.

“Well, I guess what I can say is kudos to him because he’s done quite well, since he appears to have started acquiring in the second quarter when the stock was excessively cheap. It’s actually right around when we were buying back some stock as well that we reported in our second quarter,” said Billings.

In a financial update Zeal said that a flurry of big prizes earlier this year – including multiple record-breaking jackpots in the Lotto 6aus49 and Eurojackpot lotteries – had led to a spike in new customers.

After “the number of bigger jackpots… back on statistical average” in comparison with 2021, transaction volume increased by 10% to €544.4m (£476m/$542m) in the first three quarters of this year, driving a 14% increase in revenue to €74.5m.

With 501,000 sign-ups in the first three quarters, marking a 12.3% year-on-year increase, Zeal is bullish about the “resilience” of the lottery sector amid a broader ecommerce landscape buffeted by inflation and declining purchasing power.

The provider also recently announced a public buyback offer, set to run until 29 November 2022, for up to about 3.2% of the business’ share capital, in an effort to further strengthen its financial outlook.

“We are proud of our continued growth trajectory, which proves that we have also taken the right measures in the first nine months of 2022 to improve even further both in terms of customers and results,” said Jonas Mattsson, Zeal’s chief financial officer.

“With the share buyback offer, we want to further optimise the capital structure of Zeal Network SE. In addition, we look forward to continuing to make our products accessible to more and more new target groups through targeted partnerships, thus systematically further expanding our reach.”

Zeal’s net profit grew from €7.3m to €12.1m on the back of a 25% increase in earnings before tax and deductions to €22m in the first three quarters.

This was despite margins being mitigated by a 32% rise in customer acquisition costs – labelled as “cost per lead” – to €36.42 on the back of a 29% increase in marketing costs to €24.1m, with a special offer for the freiheit+ social lottery cited as a primary cause. The provider also described a 22% rise in other operating expenses to €40.6m as a slight increase in the context of “intense marketing activities”.

Based on average jackpot projections Zeal expects revenue to hit at least €105m in 2022, with earnings reaching at least €30m.

Pollard first noted inflationary increases in the price of materials such as paper, ink and freight in the later part of 2021, with these having impacted the business throughout 2022. Further rises came into effect in Q3 and while another increase is due in Q4 Pollard said this will be smaller.

As its instant ticket contracts average around four years in length, with primarily fixed prices for the entirety of the term, Pollard said it is difficult to pass on input cost increases in the short term.

However, co-chief executive John Pollard said that despite these issues, the business was able to reach a quarterly production volume record for instant tickets in Q3 and that the business has in place a number of strategies to help offset price increases.

“Our instant ticket business attained a quarterly production volume record; this was a nice return to more efficient production following some challenges in the second quarter, which negatively impacted production,” Pollard said. “Fewer mechanical issues and, while still a challenge, our ability to staff and maintain full operations throughout our production facilities improved in the third quarter.

“One of our key strategies to offset these significant inflationary input cost increases is through raising our selling prices during contract extensions and RFPs as they come up for bid.

“While still early in the process, we have had a number of successes retaining work at higher pricing in new bid situations, reflective of the input cost increases we have to absorb. Indications within the marketplace so far appear to confirm the industry recognises the need to adjust pricing and we believe this will continue.

“Most new contracts are awarded in advance of the end of the existing contract’s term and come into effect sometime in the future. Therefore, most of the price changes we have already negotiated will be implemented throughout 2023.

“However, ultimately, these higher prices will allow us to improve our margins on our instant ticket business. We also continue to diligently review our customer profiles to identify opportunities to focus our efforts on more profitable clients, which may result in lower volumes as we reduce sales to lower margin clients.”

Looking at Pollard’s financial results for the third quarter, revenue was up 7.4% year-on-year to $125.5m (£110.1m/€126.2m), helped by an increase in revenue across both its igaming and charitable gaming segments.

Combined ilottery revenue from its online gambling deal with the Michigan Lottery and its share in the NeoPollard Interactive joint venture with NeoGames amounted to $20.2m, a new quarterly record for the business.

Cost of sales for the quarter were 11.4% higher at $104.9m, while administration expenses also increased 3.3% to $12.5m. Selling costs were level at $4.5m and other expenses were down, but Pollard did note a negative $6.0m impact from equity investment activity.

Foreign exchange loss amounted to $4.7m and interest expense $2.0m, which mean that pre-tax profit was a flat zero. Pollard accounted for $2.9m in tax but benefitted from a deferred reduction of $2.7m, meaning it ended the quarter with a net loss of $200,000, compared to $600,000 last year.

In addition, earnings before interest, tax, depreciation and amortisation fell from $12.3m to $12.1m in the quarter.

“The fundamentals of all of our business lines remain very strong and we are confident that our higher pricing strategy for instant tickets will, over time, allow us to increase our margins back to historic levels,” Pollard said.

“We believe our charitable gaming operations will continue their market leadership and generate excellent results, and the large investments we are making in the digital areas are laying the foundation for further growth, in partnership with our lottery and charitable gaming customers.”

Gross profit – defined as gross revenue minus direct costs paid to game suppliers – came to €16.8m, up by 33% year-on-year. EveryMatrix noted that prior-year comparative figures no longer include the period before Germany’s Fourth State Treaty on Gambling, the introduction of which had a strong negative effect on earnings.

This total came thanks to record traffic for Everymatrix games during the quarter, resulting in operator GGR surpassing €100m in the month of September alone.

Of this €16.8m total, €7.7m came from the casino unit, up 31% year-on-year.

The business reported earnings before interest, tax, depreciation and amortisation (EBITDA) of €6.4m, which was up by 23.1%.

Future EveryMatrix investment

The business said it would continue to invest in growing across the US and in its games arm. Last month, the business announced its first US launch, through BetMGM.

During the quarter, EveryMatrix won the exclusive tender to supply its casino games to Veikkaus, effectively giving it a monopoly on supplying regulated online casino games in Finland.

“I am pleased to see a fantastic third quarter, with global sales performance and very good financial results,” chief executive Ebbe Groes said. “Even more important, we won two new Tier-1 clients in the quarter, Veikkaus in Finland and Bet-at-home in Germany and international markets.

“EveryMatrix launched with BetMGM in the US and Morroco’s state-owned lottery MDJS. The group’s record gross profit across all business segments clearly underlines our strong market position.”

The consultation will run until 14 December and invite input from relevant stakeholders on the MGA’s plans to introduce new rules and regulations regarding these areas.

As part of the consultation process, the MGA will launch a series of “Regulatory Workshops”, with the aim of introducing a more regular and structured touchpoint between industry stakeholders and the MGA and to encourage an informal exchange of views around regulatory topics.

The first of these sessions will take place next month and focus on the regulator’s proposed policies regarding ITAs, VFAs and virtual tokens. The MGA will invite interested stakeholders to participate in this workshop. 

“The ongoing consultation shall give the opportunity to such stakeholders to submit their feedback, if any, regarding the proposed policy,” the MGA said.

The consultation comes after the MGA last month pledged to introduce “detailed player protection guidelines for licensees”, having opened a separate consultation on the subject.

The MGA launched a “closed consultation” in September to cover “licensees’ obligations regarding their responsible gaming policies and procedures and the introduction of five markers of harm that must be considered by licensees when determining effective measures and processes to detect and address problem gambling”.

This, it said, followed a review of its player protection directive by “an expert in the field”, as well as MGA research and the work of its Responsible Gaming Unit.

Bragg had undergone a number of changes during the quarter. In September, the company consolidated all its businesses under one single brand. Also in September Bragg secured $8.7m in funding from investment entity operator Lind Global and facilitated Kalamba’s entry into Ontario through a partnership.

In July, Bragg appointed Mark Clayton to its board of directors.

Yaniv Sherman, chief executive officer for Bragg, said that the quarter had been successful for the company.

“In the third quarter of 2022, we generated third quarter records for revenue of €20.9m, gross profit of €10.4m, gross profit margin of 50.0% and adjusted EBITDA of €2.2m,” said Sherman. “Our operating momentum has been consistent throughout the year as for the first nine months of 2022 revenue, gross profit and adjusted EBITDA have improved significantly, compared to the same period in 2021.”

Looking ahead

Looking towards the future, Sherman said that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) – which came to €2.2m – and revenue were both set to grow.

“Our positive adjusted EBITDA, combined with capital we raised in the third quarter positions us to continue to invest to drive further growth,” he continued.

“Looking ahead, we expect our consistent execution against our strategy and growth initiatives will drive further revenue and adjusted EBITDA growth in 2023.”

Unadjusted EBITDA came to €837,000 during the three months.

The cost of revenue for the quarter was €10.4m, a rise of 66.9%, bringing gross profit to €10.4m. This was still a rise of 58.0% year-on-year.

Selling, general and administrative expenses also grew, from €8.8m in Q3 2021 to €12.0m.

This meant the business made an operating loss of €1.6m, an improvement of €579,000 year-on-year. Net interest expense was €246,000, bringing the pre-tax loss to €1.8m.

After an income tax benefit of €114,000, the net loss for the period came to €1.9m – up by €479,000.

For the nine months to date revenue is up by 43.4% to €61.0m. Cost of revenue is €28.9m, bringing the gross profit so far to €32.0m.

The operating loss for the period stands at €990,000 and the loss before income taxes is €1.5m. In total, the net loss for the nine months is €2.6m, down by €3.2m.

The Commission said it accepted the recommendation made by the Sports Betting Bureau to grant licences to seven companies, including five temporary licences.

The sports betting operators Ballers Puerto Rico Sportsbook, Liberman Media Group Gaming (LMG) and CCHPR Hospitality (Casino Metro) have been given temporary licences.

The suppliers Swish Analytics Puerto Rico and US Integrity have been granted permanent licences. Continent 8 Technologies PR LLC and Caesars Digital PR Inc have been given temporary supplier licences.

The executive director of the regulatory body Jaime Rivera Emmanuelli explained that to complete the licensing process, the seven companies will have to pay a fee to the government based on the functions they will perform in the sports betting industry.

Operators will have to pay $50,000, the service suppliers will have to pay $5,000 and the lone technology provider – Caesars Digital PR – will have to pay $15,000.

“The sports betting industry is growing under the regulations and supervision of the Puerto Rico Gaming Commission,” stated Rivera Emmanuelli. “Online betting has the potential of being an important source of jobs and the creation of commercial spaces for entertainment. In the same way, it will generate new income for the treasury.”

Operators and suppliers have been eagerly waiting for the launch of online sports betting in Puerto Rico. As of today, sports bets can only be made in person, but granting the licences will be a key step toward launch.

Total group revenue for Genius increased 28% year-on-year in constant currency. On this basis, the business’ three verticals experienced strong growth themselves with betting revenues rising by 13%, media by 41% and sports by 6%.

In adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), the business achieved profitability, reporting $7.7m compared to the $392,000 loss Genius announced the same period the previous year.

“We are pleased to deliver another quarter of growth and group adjusted EBITDA profitability, and we remain on target to achieve our full-year goals set on our investor day at the start of 2022,” said Genius CEO Mark Locke. “This year has been characterised by strong execution as we continue to deploy innovative technology, win new customers and strengthen our key partnerships across the sports, betting, media and broadcasting ecosystem, all with an eye towards cost discipline and profitable growth.”

Beyond EBITDA, Genius reported a wider loss for the business. The company outlined an 87.5% increase in quarter-on-quarter losses from $4.8m to $9m amid continuing revenue growth in US and other markets. However, this increased figure is mostly driven by a combination of currency fluctuations and changes in value of warrants.

The loss is significantly below the $70.7m the company announced in net loss in the same period the previous year, but this was mostly due to lower stock-based costs, after these had been extremely high in 2021.

The company also reported a $150m cash balance in the three-month period with $10m of this total adjusted to account for currency fluctuations. For the whole year, the company is expecting to receive revenues of $340m.

In its ruling, the VGCCC said Crown failed its responsible service of gambling obligations over a number of years by consistently failing to intervene to prevent gambling harm at its Crown Melbourne land-based casino in Victoria.

Crown was found to have allowed customers to often gamble for long periods without a break, sometimes for more than 24 hours.

The VGCCC also said Crown failed to comply with a statutory direction by the regulator to take all reasonable steps to prevent patrons from using plastic picks and other devices to simulate ‘automatic play’ when gambling on certain electronic gaming machines, also known as ‘pokies’.

As such, the VGCCC issued two separate fines, the first totalling $100m and in reference to the operator’s misconduct and code breaches in terms of its failure to protect customers and adhere to responsible gambling requirements in the state.

The second fine of $20m was for the button picking, which the VGCCC said was in breach of laws in Victoria and was therefore classed as an illegal activity.

Crown accepted that disciplinary action should be taken and also the need for it to continue working on reforms to address these and other responsible service of gambling obligations.

The decision comes following a royal commission into Crown Melbourne. Headed up by Ray Finkelstein KC, the commission launched in February last year to investigate misconduct at the casino facility.

Crown was warned in September this year that it could face a fine of up to $100m for this activity, while in the same month, the state imposed spending limits on customers at the casino as part of broad to the 1991 Casino Control Act in Victoria and recommended by the commission.

“At the royal commission, Crown accepted the responsible service of gambling as both a legal obligation and a condition of its social licence to operate,” VGCCC chairperson Fran Thorn said. “For a long time, Crown failed in its legal and moral obligation to ensure it provided its gambling products and services in a manner which minimised potential harm to its patrons, their families, friends and communities.

“The record fines totalling $120m that we have imposed on Crown today will send a powerful message to Crown that the Commission will not tolerate misconduct that exposes our community to increased risks of gambling related harm. 

“These were not isolated breaches. They were part of a pattern of extensive, sustained and systemic failures by Crown that spanned roughly 12 years.”

“We urge all gambling licence-holders to read this decision. This disciplinary action also sounds a warning to all in the Victorian gambling industry that we expect them to do everything they can to minimise the harmful impacts of gambling. 

“The Commission will be resolute in pursuing our new requirement to regulate for harm minimisation, and the industry can expect further action from the Commission on this matter.”

Crown’s total fines in Victoria this year now stand at $200m, after the VGCCC in May also issued a fine of $80m in relation to Crown’s China Union Pay process. An investigation by the VGCCC found that between 2012 and 2016, Crown Melbourne illegally allowed patrons to use CUP credit or debit cards to access funds to gamble. 

The VGCCC added that is considering further disciplinary proceedings against Crown related to the other findings of the royal commission, while Crown also faces inquiries in New South Wales and Western Australia.