Month: November 2022

HOFV will operate in the state through its partnerships with Rush Street Interactive (RSI) and Betr, the new micro-betting business founded by Simplebet co-founder Joey Levy and social media personality Jake Paul.

The HOFV/Betr mobile sportsbook will allow consumers in Ohio to wager on sports online. The app will feature a new micro-betting option, whereby users can bet on a wide range of actions in a live sporting event such as pitches in baseball and shots in soccer.

The new HOFV/RSI retail sportsbook, operating as BetRivers Sportsbook, will open at the Hall of Fame Village’s Fan Engagement Zone in Canton, Ohio.

The Ohio Casino Control Commission approved both licences ahead of the state opening its legal sports wagering market on January 1, 2023.

“The legalisation of sports betting in Ohio, opens up a breadth of opportunity across our company’s three business verticals and for our fans,” HOFV president and chief executive Michael Crawford said.

“We will have the only physical sports book in Stark County and the first dedicated sports micro-betting platform via the Betr mobile app, bringing fans and guests a multitude of different and new ways to experience sports entertainment.”

Elsewhere, Gamewise secured approval to operate an online skin in partnership with Miami Valley & Racing, while the latter was also issued a second licence without an online partner. In addition, Hard Rock was also issued approval to operate sports betting in the state.

Monthly handle for September was $450.2m (£403.2m/€461.7m), up from $408.3m in the same month last year and also 55.2% ahead of $290.1m in August this year.

Consumers bet a total of $445.6m online during the month, in addition to $4.6m at retail sportsbook facilities across the state.

Gross gaming revenue reached $51.3m, which was 126.0% up from $22.7m in September 2021, while this total was 98.1% higher than $25.9m in August of this year.

Online wagering revenue was $50.7m, with just $659,647 being attributed to retail wagering activity during the month.

Football was by far the most popular sport to wager on in September, primarily due to the new NFL season beginning at the start of the month, with Colorado players spending a total of $145.7m.

Baseball wagers amounted to $83.2m and college football bets $52.7m, while parlay and combination wagers reached $75.3m.

Colorado collected $3.0m in sports betting taxes during the month, while win percentage for licensed operators in Colorado stood at 11.40%.

Nowadays, data collection, reporting and protection are as urgent as ever. These issues often intertwine with compliance within and across jurisdictions. With a mound of information to manage, operators must put extra effort into ensuring that bettors’ data is secure both on sportsbook platforms and mobile apps. So how can a sportsbook manage and protect data?

Data Management

Three of the most common data management challenges for sportsbooks include:

The inability to load high volumes of transactional data from gaming machines to legacy systems due to formatting and support issues. Many legacy systems exist in silos and don’t communicate well with other technologies, making it difficult to manage and analyze transactional data. Verifying the massive amount of sports data feeds, delivering real-time betting odds, scores, and settlements generated across various sources makes data management an uphill climb.The supply of reliable, available data using official sports league data vs unofficial versions.

To deal with the first two challenges, you must evaluate your data architecture and adopt a cloud strategy if one is not in place.  

How data is aggregated, organized, and used is at the intersection of business and technology and provides various internal consumers (even AI) the information necessary for their respective needs. This includes the entire supply chain of information, including marketing, sales and customer support.

Migrating data to the cloud improves capacity and scalability which reduces potential down times due to cloud infrastructure measures like redundancy.

Importantly, it also scales easily when volumes of new users or wagers could potentially trigger a performance issue; especially during major sporting events. We still remember the Super Bowl in 2021 when all the major US operators — including FanDuel, DraftKings, and Penn’s Barstool App — experienced technical issues, resulting in lost revenue. Additionally, MGM’s Nevada app was unable to accept any online bets during the event.

The third challenge, official vs unofficial data, is a bit trickier. Most sports betting providers are not required to use a specific data source, while leagues and teams claim ownership of their respective sports data and deem it “official”, though their intention is to sell data or charge integrity and rights fees.

While professional sports leagues seek compensation from sportsbook operators for accessing their real-time official statistical data, offshore sportsbooks are still operating without restrictions. Furthermore, unscrupulous companies in the ecosystem have developed methods to scrape or pilfer data from suppliers that have spent millions to partner with sports leagues in the US and internationally. That six-to-eight second lag on offshore sportsbooks is not a latency issue but rather a delay that typically arises when a website uses pirated data.

Data Security

The gaming industry is particularly vulnerable to cyber threats due to the information operators retain. One of the most significant data security events to impact the sector is the 2014 Las Vegas Sands Corporation hacking, where criminals stole customer credit card info, driver’s license information, and Social Security numbers.

In 2020, SBTech-powered sites were taken down for more than 72 hours after cyber criminals used ransomware to threaten critical systems. Thankfully for clients, no personal data was compromised but the company lost at least 72 hours worth of gaming revenue. This can happen to any sportsbook, regardless of its size.

Data security vulnerabilities typically result in hacks where confidential information is stolen and is used in a variety of criminal activities (false identities is at the top of the list) with bonus abuse being one of the most common transgressions. 

Welcome bonus abuse, a common form of bonus abuse, occurs when a single player is granted a new player bonus multiple times. A recent report from Arkose Labs claimed that gaming companies experienced an 85% increase in fake account registrations in the first quarter of 2022. Bonus abuse is certainly a problem and can be exacerbated when groups of individuals or organized crime use false identities and location alteration, through VPNs, to commit fraud on a large scale. 

The responsibility of preserving integrity in sports betting is the responsibility of everyone in the ecosystem including sportsbooks, teams, leagues and the government. Sports betting companies must adhere to state, federal, international, and tribal-state regulations when collecting, processing, sharing, and managing data. The easiest way to do this is to follow these key data privacy principles: inform, consent, good data retention policies and data security.

Securing and transmitting shared data could be just as challenging as ingesting it. Complexities arise when multiple partners are involved who rely on each other to securely transfer confidential information. 

“The individual sportsbooks do not want their wagers shared necessarily back. So, there is certainly some sensitivities to all that,” Matthew Holt, CEO of US Integrity, recently told DataArt. There has to be trust between partners and an agreed upon method of security levels that will satisfy all parties involved.

Proven technology solutions are an essential piece of the puzzle in order to ensure a fair and safe environment for partners and bettors alike. Although open-source solutions are cost-effective, they can also include serious security issues such as malware injections, Denial-of-Service (DDoS) attacks, and even data breaches. The famous 2016 DDoS attack on William Hill cost the operator roughly £4.4m during a 24-hour outage. Research reveals that a quarter of all online sportsbooks experienced DDoS attacks in June 2022.  Needless to say, this is a troubling statistic which has the potential to worsen.

Sports betting operators must adopt security as a core cultural value, constantly cultivate security awareness, and evolve security practices as their business grows.

Compliance

“Compliance is key because there’s such a rapid pace at which new regulations are growing and continue to be a focus for sports betting operators. Getting launched in a sports betting market takes an army[…] to meet the regulatory requirements from licensing to product, to your internal controls and documentation, and everything that goes on behind the scenes,” says Eric Frank, Chief Executive Officer and co-founder of Odds On Compliance.

If you’re a current operator or have plans to become one, it is vital to understand the regulatory hurdles in your jurisdiction and build compliance measures into your business plan. Navigating the websites of numerous regulators is challenging though you must stay current on all of the latest regulations or potentially face an expensive penalty. For example, gaming regulators in Nevada recently fined William Hill for regulatory infractions which impacted thousands of customers. 

So how will technology streamline and introduce efficiencies for this arduous task? There are platforms on the market such as Odds On Compliance that focus on aggregating, organizing, and presenting this data by domestic and international jurisdictions in a consumable manner.  The platform must also contain extensive search capabilities, bookmarking, and exporting features.

Conclusion

Behind the enormous online betting ecosystem with sportsbooks, suppliers, operators, regulators, partners, and leagues, among others, there is a golden opportunity to leverage the latest technologies in order to build confidence in users that their information is secure. Using the correct technology can help you solve data management, security, and compliance issues, while promoting a trusted user experience for players.

As of 2020, licensees in Britain are required to participate in Gamstop and block access to any consumers who have registered with the initiative.

However, the Commission ruled LEBOM, trading from lebom.app, was not fully integrated with Gamstop and as such was in breach of its licence.

The suspension comes into immediate effect, while the Commission has also launched a review of LEBOM’s licence in line with section 116 of the Gambling Act 2005.

The regulator said the suspension will not prevent the operator from allowing consumers to access accounts and withdraw funds, adding that LEBOM should focus on treating its users fairly and keep them fully informed of any developments that may impact them during the suspension.

“Gamstop provides a crucial service for people who feel they are suffering gambling harm; it is simply unacceptable for any online operator to fail to integrate with the scheme,” executive director of operations Kay Roberts said.

Jay Snowden, chief executive officer and president of Penn Entertainment, said that the quarter had been “solid” and cited Penn’s acquisition of theScore as a particular positive.

“We are pleased to report another solid quarter despite operating in an uncertain economic environment,” he said. “Our strong retail results were highlighted by ongoing database growth and stable margin performance, which continued through October.”

Read the full story on iGB North America.

Ahead of the elections, Brendan and Brandt take a look across the US, including a final examination of whether there’s any hope of the people of California voting to legalise sports betting.

In Texas, there may be less clarity as the industry may have to consider whether to prioritise betting or casinos, while Brandt is “optimistic” that sports betting legislation could be passed in Georgia once a new legislature is elected.

There’s also a look at Washington DC’s efforts to fix what has been a struggling sports wagering regime, and at efforts to get legal betting up and running in Massachusetts.

The pair look further afield as well, pondering the impact of Lula da Silva defeating Jair Bolsonaro in Brazil’s presidential election, while in the UK, Brandt throws his name into the ring as a prime ministerial candidate, but Brendan has other ideas.

Remember, the World Series of Politics is also available through Apple Podcasts.

And if you can’t wait for your next fix of Brendan and Brandt after you’ve listened to the episode, don’t despair. Both will be giving their instant reaction to the midterm election results in an iGB webinar on 10 November, looking at the fallout for US sports betting, online casino and land-based gaming.

Fenton stated that Bally’s plans had entered a new phase where loss-making assets would be examined to ensure how they fit into the operator’s wider strategic picture.

The business made a major wave of acquisitions in 2020 and 2021, including those of Gamesys and Bet.Works.

“We pulled together a fairly large number of assets in small space of time, we’ve now had 12 months of looking at that and knitting that picture together, the assets that are not showing us a near-term path to profitability will of course be under the microscope, as they should be,” said Fenton.

“We’re evaluating how that all knits together and will make the decisions quickly in terms of what doesn’t work now that we have our stack pulled together. The overall strategy remains. We’re identifying effectively what becomes non-core.”

Pivot to igaming

CFO Bobby Lavan outlined what this would look like in terms of Bally’s online offering, and the wider pivot to online casino rather than sports betting.

“There’s about $7m in the third quarter of losses, that we view as non-core or we need a plan to make sure they are at least flat,” said Lavan. “iCasino in New Jersey continues to ramp up, we’re very excited about early results in Ontario, we’ll have icasino Pennsylvania next year. We’ll be minimising the losses related to sports betting – and in the end that’s what North America Interactive should be.

“The trajectory is positive and we’re feeling very confident about that – we just really need to look inside at those$7m in losses and have a path. Because burning money for money’s sake was where the market was two years ago is not where we’re going in the future.”

Bally’s Q3 results

Revenue for the quarter increased 4.7% from $552.5m (£492m/ €564.9m) in Q2 to $578.2m. This worked out as an 83.7% year-on-year increase from $314.8m.

Operating expenses were $524.6m, with a further $51.9m in other expenses. This left a net income of $593,000 for the three-month period ending 30 September.

Adjusted earnings before interest, tax, depreciation or amortisation stood at $151m for the quarter, compared to $78m the previous year. Earnings per share stood at $0.01.  

In his new role, Burroughes will be responsible for directing FSB’s account management function, with his key remit to grow the relationships of existing platform partners.

Burroughes joins the supplier after two years as chief commercial officer of esports provider GameScorekeeper, prior to which he spent one year as commercial director for Genesis.

Before this, he was commercial director for the SG Digital arm of Light & Wonder, then known as Scientific Games, while he also spent time as client director for enterprise accounts at NYX Gaming Group.

Burroughes had five years with OpenBet Technologies, first serving as commercial director for gaming before going on to become client director for enterprise accounts.

His other industry roles included sales director and business development manager at OpenBet subsidiary Electracade, as well as sales account manager for OpenBet.

“FSB’s growth, momentum and accolades have shone strongly in 2022 and this is a great opportunity for me to join a rapidly growing organisation,” Burroughes said.

“My brief is clear: collaborate closely with our partners to help them grow their business and give them a strong voice and representation within our global organisation. With the World Cup a matter of weeks away and a number of new platform products rolling out this is going to be an exhilarating end of the year.”

FSB’s chief operating officer, Glenn Elliott, added: “Marc is another dynamic appointment into our growing, global senior management team. Listening to and understanding our partner community is integral to our values at FSB and Marc’s appointment signals a strong desire to strengthen these relationships further. 

“Being empowered to curate their optimal offering means our key clients have enjoyed impressive growth in 2022 and Marc will now take this forward and build on the momentum into 2023 and beyond.”

The appointment comes after FSB last month also added Michaela Bonomini, formerly the group head of HR for GVC, as its new chief people officer.

The deal, which was agreed in January of this year, is worth a total consideration of £23.0m (€26.7m/$26.4m). Jumbo paid an initial £12.0m in addition to £6.5m in surplus cash funds that was also due upon completion of the acquisition.

A deferred consideration of up to £4.5m will be held in escrow and payable in the first half of 2024, subject to the achievement of certain earnings targets for the 12-month period ended 30 June 2023.

Jumbo, which settled 63% of the consideration from available cash reserves and 37% using existing debt facilities, said it remained in a net cash position following the deal.

The acquisition was able to complete after Jumbo was able to satisfy a number of closing conditions, including regulatory approval from the Great Britain Gambling Commission, which was secured last month, after other approvals had been received earlier this year.

In July, Jumbo warned it was unlikely that the acquisition would close before the end of the current year as initially hoped due a longer-than-expected regulatory approval process. However, approval from the GB Gambling Commission cleared the way for the deal to complete.

StarVale provides services to over 850,000 active lottery players across over 45 charities and not-for-profit organisations, many of which are major UK charities. It also owns DDPay Ltd, a digital payments business that facilitates Direct Debit payments and solutions to StarVale’s weekly lottery clients.

StarVale will now form part of Jumbo’s Managed Services business segment, along with Gatherwell, which it purchased in December 2019, and Stride, acquired in July this year.

Reeg was speaking in an earnings call shortly after Caesars posted the results for its third quarter, during which the digital business experienced significant year-on-year growth, following two successive quarters of loss.

Reeg said since launching the digital business, Caesars has been able to monitor verticals and identify what type of customer is playing to adjust spend based on what is getting a return on investment. This effort has been led by Eric Hession, the president of the Caesars Sports and Online Gaming business.

“We made some significant changes in the last 60 days that have flowed virtually entirely basically shutting off particular segments and that cash has flowed immediately to the bottom line with no degradation in market position,” Reeg said.

“So, we feel very, very good about where we’re at. This is what we’ve done on the brick-and-mortar side is figure out how to invest more in your best customers and less in your less profitable customers, and that’s really the basic blocking and tackling that we’re doing in Digital that has led to these results.”

With new digital sportsbook launches planned for Massachusetts and Puerto Rico, the latter expected late this year or early 2023, as well as plans to pursue online casino in a range of markets, Reeg was asked whether this could lead to Caesars spinning off the digital operations.

Reeg did not rule out the idea but said there are no plans to do so at present.

“I’d say that our competitive advantage here is tying it to the existing brick-and-mortar business and our Caesars Rewards database, and it would be my preference that that remains 100% owned by the parent company,” Reeg said.

“If you get to different shareholder bases for the two businesses, there’s a complexity introduced that you see in. You can see that in some of our peers in terms of when you get to different shareholder bases in the same business.

“But I’d tell you, you know that we’re constantly focused on how we drive shareholder value. If you get into a market where that ultimately makes sense, and that’s the way to increase the pie for shareholders in total.

“Certainly, that’s something we would consider. In the recent market environment, there hasn’t been much value placed on digital assets. So, it’s a very easy decision as we sit here today.”

Caesars results

Looking at Caesars’ performance in full for the third quarter, total revenue for the three months to the end of September was $2.89bn (£2.51bn/€2.92bn), up 6.4% year-on-year.

The operator’s regional casino business contributed $1.53bn to this total, while Las Vegas revenue came in at $1.08bn. Digital revenue rocketed 120.8% year-on-year to $212.0m and managed and branded revenue reached $70.0m.

In terms of how this revenue was generated, casino and parti-mutuel commissions was responsible for $1.61bn, with food and beverage revenue at $411.0m, hotel $544.0m and other operations $327.0m.

Turning to costs, total operating expenses were 3.5% higher at $2.23bn, while Caesars also noted $598.0m in additional finance costs, though this was 29.6% lower than in Q3 of last year.

Pre-tax profit was $61.0m, compared to a $317.0m loss in 2021, while after paying $8.0m in income tax and accounting for a $1.0m loss from non-controlling interests, this left $52.0m in net profit, a significant improvement on a $233.0m loss posted last year.

In addition, Caesars reported that its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 15.0.% year-on-year to $1.01bn for the quarter, representing a new quarterly record for the business.

“Our third quarter results reflect a new quarterly record for consolidated adjusted EBITDA,” Reeg said. “Results in the quarter also reflect a new quarterly record for our brick-and-mortar properties led by a new all-time high third quarter EBITDA performance in our regional segment and continued strength in Las Vegas.

“Caesars Digital reported strong revenue growth in the quarter and a smaller than expected EBITDA loss driven by improved operating efficiencies.