Month: November 2022

MaximBet announced the decision in a message to customers, saying they will have until December 15 to withdraw any funds in their accounts. After this date, any remaining balances will be refunded via check sent to the address on the account.

Players are no longer able to deposit more funds or place net bets, but MaximBet said that it would settle any existing bets in line with its MaximBet House Rules until December 15. At this point, MaximBet said bets will be cashed out at “current fair value market pricing” and player balances will be returned via check.

MaximBet was founded in April of 2021 through a collaboration between sports betting operator Carousel Group and media brand Maxim, supported by a $50m investment from the xSigma subsidiary of Chinese engineering business ZK International.

At the time, it was planned for MaximBet to offer online sports betting and casino games to players both in the US and internationally across a website and supporting mobile app.

MaximBet made its debut in the US in September last year when it launched in Colorado and went on to expand into Indiana only last month using technology from Kambi Group and White Hat Gaming.

To support its expansion efforts, MaximBet also signed Charlie Blackmon, a player for Major League Baseball team the Colorado Rockies, as a brand ambassador, while it also entered into a global partnership with singer Nicki Minaj. Minaj also become an investor in the brand.

“It is with regret that we inform you that, effective immediately, MaximBet will cease operations,” MaximBet said in the message to customers. “Challenging macroeconomic conditions and an increasingly prohibitive marketplace have accelerated this difficult decision.

“Thank you for your support.” 

When IGT looked for a statement hire to serve as its president of igaming, it didn’t select someone from one of the large igaming suppliers that its digital division hoped to rival.

Instead, it opted for Gil Rotem, a veteran of the B2C side of the online industry, with more than a decade at Bet365 and five years at 888.

So how does Rotem approach leading a B2B business coming from an operator perspective? On the one hand, his view on the matter is quite simple: every part of the gambling supply chain has the same goal.

“The question we ask is, how do we create value for the players? The formula is very simple,” he says. “If the players are happy, the operator will be happy, and will be successful.”

But at the same time, Rotem says that his perspective allows for a greater focus on aspects beyond simply supplying games, towards building an operator’s strategy for how to get the most out of IGT content.

“But the advantage that I think I bring to the IGT PlayDigital team is that I also understand that even when we provide the operator the right content, we can help them learn how to operate their business efficiently,” he says.

“From my previous experience, I know what solutions make it easy for them to operate their business.

“I understand that it’s not just about the games we provide, it’s about how we support the games, how we support the games with the tools, how we support the games with distribution, how easy it is, if they want to do promotion, if they want a multi-jurisdictional strategy, if they understand how they’re going to do it and make it as simple as possible.”

More than math

It might help that Rotem also has what might be considered a distinctly un-supplier-like view on what makes a game succeed.

“Everyone says, ‘No, the most important thing in the game is the math. And the math is the experience.

“But on top of the math experience, when you play on a land-based machine, and this one part of our offering, you have the whole casino around, all the sounds. 

“This is an especially important consideration in creating our omnichannel products.

“We take the entire land-based casino experience, not just the math of the game, and convert it into online player experience.

“And for that, we use our tools, use the check board, use the real-time offering with how to make players enjoy the game. It’s the math, the sound, the set, everything. This is the level of attention to detail we incorporate.”

Data is queen

Ultimately, he explains, all of that support comes back to data. Rotem is no stranger to the subject, having come up through the data side at 888.

“In the past it used to be said that content is king,” he says. “Well, I think data is already the queen.”

Rotem is quick to dismiss the idea of simply building a multi-jurisdictional strategy around having certain games for certain markets. Instead, he says that suppliers like IGT should look deeper, as a game may perform well with one demographic in one market and an entirely different group elsewhere.

“When my team creates games, I ask them to look at key data points such as, ‘to which demographic does this game appeal to? How about features? Does this game work for this segment?’”

“It can be this segment in Italy, it can be this segment in Greece, and it can be this segment in the US.”

The important thing, he says, is understanding why a certain game or feature seems to do well with one group.

“But I want to understand, as soon as the segment is big enough,” Rotem says. “It goes much deeper than just knowing what works well in each jurisdiction.

“When we look at our data, and this is again one of my great beliefs, we understand why the game strategy is working or why it didn’t; and why these parts may work better with this set of players.”

iSoftBet acquisition

Besides the appointment of Rotem, the big statement IGT has made so far in the digital world was the acquisition of game aggregator iSoftBet in April for €160m. This deal, Rotem said, will help the business launch in a number of new European jurisdictions in the near future.

“We are connected to every big operator internationally,” he says. “I think that our combined game portfolio will make us reach all operators easily without changing integrations.”

But the acquisition hardly made IGT’s online division a powerhouse in terms of size. Revenue from the Digital and Betting segment in Q3 came to $54m, a long way behind the likes of Playtech and Evolution that IGT might aim to one day rival in igaming.

Yet it seems that IGT’s ambitions for the space are lofty.

The business separated out digital and betting as its own business segment, alongside its lottery and gaming segments that each bring in billions per year. And hires such as Rotem certainly made a statement.

So is IGT looking to buy someone else in the online space?

“We are always looking at what the market has to offer,” Rotem says. “Our tech stack is superior to the others, so for us it’s about what we can gain and what is the added value for us. 

“We are always looking for new opportunities, but right now our focus is how to deliver the right quality of games and how to make sure that every jurisdiction gets the right content.

“If we find something that really complements IGT PlayDigital’s goals, like adding a new market for us, or opening new, really big opportunities, then we’re going to look at it.”

IGT not slowed by regulation

IGT’s igaming push comes at a time when there has been more focus than ever for suppliers to play their part in preventing harmful gambling.

Where regulations once focused almost entirely on what operators must do, it has become more common – in markets from Great Britain to Ontario to Sweden – for markets to also limit game design, banning features such as auto-play and setting minimum spin times.

Does this make it tougher for IGT to make its mark and compete with those who became online market leaders in a time of less supplier scrutiny? Rotem is not concerned. Given IGT’s land-based track record, he says the business has never viewed regulation as a problem.

“Regulation is good for the industry,” he says. “You can’t argue with that. It’s good for the players, it is good for the operators, and it’s also good for the providers.

“At IGT we’re heavily regulated. We only work in regulated markets, so we do a lot of things that you mentioned and I think operators appreciate that. 

“We, IGT, are not responsible for regulation. But I think, because we work in land-based, which is heavily regulated, it’s easy for us to work in a this kind of environment and something that we are used to doing. 

“It’s natural, and on all the audits we had recently, we got very high grades. The mindset of working in a regulatory environment is embedded within the company.  I don’t see it as something that slows us down because we’ve been doing it all along.”

In Better Collective’s Q3 results announcement, chief financial officer Fleming Pedersen said it was hard to detect a negative impact from macroeconomic conditions on the affiliate’s business.

“The general business cycle still has had no noticeable impact on our business; even so, estimating whether we could have grown even faster is near impossible,” he said. “Sports wagering remains at all-time-high levels, and thanks to our persistent efforts and timely business insights, we can stay on top of any developments. 

However, predicting that there could be an impact in the future, he said that Better Collective would slot down its investment in the US in order to pursue a “prudent” and “pragmatic” approach to costs. The business had previously spent a large amount on growing in the US, with acquisitions such as that of The Action Network and RotoGrinders.

“With the current macroeconomic instabilities, we expect to stay resilient but not immune and therefore we use this chance to take a more prudent look at our total cost base. 

“Consequently, we expect the cost base growth to slow down going forward, especially in the US. The past few years, our US investments have intensified. Going forward, focus will be on scalability to be progressed by a pragmatic cost focus and from our operational leverage as we continue our growth.”

In its Q3 results, Better Collective revealed that revenue was up 31.4% to €59.7m.

Breaking revenue down geographically, it was the Europe and rest-of-world segment – representing everything outside of the US – that was responsible for most of the growth, with operations here bringing in €42.9m, up from €31.0m the year before.

In the US, meanwhile, revenue also grew, by 16.7% to €16.8m.

The rise of US revenue share

Revenue-share deals became the largest portion of Better Collective’s overall revenue, bringing in €25.0m, up 73.6% year-on-year.

On the other hand, cost-per-acquisition deals remained flat bringing in €23.4m, almost exactly equal to the total a year earlier.

Subscription revenue grew to €4.0m while other revenue grew by 72.1% to €7.4m.

Chief executive Jesper Søgaard said the rise of US revenue-share had already proven many doubters wrong.

“The ongoing move from CPA to revenue share in the US is looking highly promising,” he said. “Last year, few deemed it doable to operate on revenue share in the US.

“I see the shift we are currently undergoing in the US as similar to tech companies moving from license-based to operating a Software-asa-Service (SaaS) model. At Better Collective we have always favored revenue share agreements as we consistently invest for the long-term. This also means our products are already built to cater to these types of agreements.”

Given that revenue-share deals pay out over a longer timescale compared to the upfront cost-per-acquisition model, Søgaard said the pivot impacted Better Collective’s bottom line in Q3.

“Last quarter, the move to revenue share was estimated to have a full year impact on US profitability of more than €5m,” he said. “As contract closings have continued in Q3 we now estimate for the full year impact to be more than €10m. These agreements will be transformational for Better Collective as they will secure more stable future revenue while also strengthening our relationship with the sportsbooks. Personally, I am exceedingly excited to follow this development while at the same time pleased that we are able to maintain our short-term targets.”

Costs grow quickly for Better Collective

However, costs grew more quickly than revenue. The business paid €21.7m in direct revenue costs, up by 39.1%, as well as €17.3m in staff costs, up 46.6%. Depreciation grew to €623,000 and other external expenses were up by 44.7% to €6.1m.

Better Collective said that reasons for the higher costs included integration of FIFA Ultimate Team brand Futbin, more spending on paid media in order to drive more traffic and a higher number of media partnerships.

As a result, Better Collective reported an operating profit before amortisation and special items of €13.9m, up by 6.1%.

After €3.7m in amortisation and impairment, Better Collective was left with an operating profit before special items of €10.3m, down by 8.0% year-on-year.

The business incurred €621,000 in special costs, but in Q3 of 2021 these costs came to €11.6m. These expenses were mainly due to earn-out costs related to the acquisition of the Action Network.

As a result, the business made a €9.6m operating profit, compared to a €362,000 operating loss a year prior.

After financial items and taxes, Better Collective reported a profit of €6.9m, which compared to a €3.5m loss in Q3 of 2021.

Much of the increased losses can be explained by increased marketing spend. Codere spent €5m more on marketing in Q3 than it did in Q2, with tan increase from €19.3m to €24.3m. Other costs remained largely static quarter-on-quarter.

Total revenue increased to €28.9m in Q3 2022, a 51% year-on-year increase, while net gaming revenue increased 54% to €30.6m. This compares with the €27.4m in total revenue and €29.2m in net revenue the company received in the preceding quarter. The increased losses can be explained by revenue not increasing at the same speed as marketing spend.

Moshe Edree, CEO of Codere Online, said this growth was driven primarily by the company’s continued expansion in its critical markets of Mexico and Spain, which make up the majority of the business’s total revenue.

“We are reporting a strong set of results in the third quarter of 2022, with net gaming revenue growing 54% versus the same period last year, on the back of stronger than expected results in our casino business,” said Edree.

“Performance in Mexico was particularly strong, with net gaming revenue up by 82% in the quarter. Spain also exceeded our expectations with a 29% growth despite the marketing restrictions currently in place.”

Codere Online was spun out from the wider Codere business at the end of last year through a SPAC merger after the creditors took control of the company.

Local hero  

Spanish gambling restrictions have made competition harder for some operators in the market. Edree pointed to the company’s status as a “local hero” due its connection with its former parent company, which has a strong retail presence in Spanish speaking jurisdictions.

“So by nature international brand that doesn’t have local brand, that the brand is not strong enough that they’re not by nature facing the Spanish market, already or still in process to withdraw,” said Edree.

“We saw that in like other public companies like William Hill and we saw that they are decreasing their marketing span in Spain and obviously Codere is being like a local hero with retail operation, with a strong brand, with the back of years of the sponsorship of Real Madrid, we are harvesting more of this, I would say traffic or at least the market share that those operators are living behind.”

According to Edree, this contrast with Mexico, where many large operators are intending to enter the market.

“The spend per customer is quite high,” he said. “Although the entry level is not as obvious or easy, you need to have like a strong IP that you need to have, and from our experience you need to have a strong local, I would say troops, people, operation, setting up the overall scheme of license with regulation, with the relations with the regulators and the banking system.   

“So I think that the trend is that we’ll see more and more international brand trying to enter to the market. But I think that this market will be dominated by the end by few local heroes, local brands such as our self, Caliente and then a few others.”

In recent years, the gambling industry has tried to get much more serious about inclusion. Diversity, equality and inclusion (DEI) has become a major part of company policies and recruitment efforts look at a wider range of candidates than ever.

But you don’t have to go far back to see a very different picture.

When Cassie Stratford first began working in the industry, she says that diversity was lacking, and only declined at the top level of businesses.

“I think when you looked around – and this was sort of an industry norm – there was a real lack of diversity when you looked particularly at leadership roles,” she says. “There was a real lack once you started to get into supervisory, and then the higher you went, the less and less diversity you saw.”

While Stratford doesn’t think the lack of diversity was intentional, she sees it as a missed opportunity for development that could not be remedied by ticking boxes.

“I think it’s that this industry has been around for a while, and it was certain groups of people,” she muses. “I think just naturally, organically, they reached out to other people, they knew their friends there and it just sort of happened that way.”

“There were people that were starting to pay attention to this and starting to talk about it – ‘How do we address this?’ And address it the right way, because you can’t just throw people into a role for the sake of checking a box.”

Prioritising diversity

Many companies these days will speak highly of their DEI initiatives. But Stratford says it’s obvious when a company is only interested in implementing DEI measures for the sake of wider recognition, as opposed to genuinely looking to improve.

“I think companies are really starting to pay attention to diversity and understand that that’s something we need to be paying attention to,” she says. “A shiny mission statement that somebody in marketing wrote or PR wrote, that nobody follows – you know the difference versus a company that puts that mission on the wall and then does it.”

This difference between genuine goodwill and box-ticking has become more apparent amid shifts in industry trends. The fallout of the Covid-19 pandemic for the land-based industry and the overturning of the Professional and Amateur Sports Protection Act (PASPA) specifically have seen the industry adjust in a unique way, as online gambling has become ascendant.

Naturally this has hurried in a technological revolution – one Stratford says has helped to change how the industry operates by ushering in different types of workers.

“What’s happened in the industry in more recent years is it’s grown and become much more technologically savvy,” she adds. “I think it’s been really healthy for the industry’s growth and long term survival.”

“I think when you saw an influx of some of these more progressive, technology-focused thinkers, it helped push the envelope. And I think that’s what makes our industry so unique and so interesting, just from an intellectual perspective. I find that that balance of different thinkers coming together has created some really cool things.”

But while it may have sped up the move to online, the pandemic also dealt a serious blow to gender equality in the workplace in how it has affected working mothers.

“I don’t believe in stereotypes and blanket sayings because everybody’s a little different and everybody’s situation is a little different,” she says. “But statistically speaking, it [Covid-19] really set back progress for working mothers.”

Forging a path

Stratford is aware of the responsibility that comes with being a woman in a senior role – a position that has become more important than ever in the wake of the pandemic. As such, the subject of mentorship is one that comes up a lot, as companies want to know the best way to help employees achieve their goals.

“My perspective on that is, mentorship is a real two-way street,” she says. “And there’s a difference between having role models and mentors. They both serve really important purposes.”

Mentorship is also about taking an interest, she continues, and making a concerted effort to learn from another person.

“People are paying more attention to mentoring in a way that is intentional,” she says. “And that has to be a two-way street.”

“When you meet somebody, follow up with them and find out if they’re willing to go to coffee with you. And you might be able to ask them a few questions. Don’t be afraid to do that. Because early on in my career I always thought, ‘Well these are very busy, important people. They don’t have time to sit down and chat with me.’ And then a few people were willing to do that for me.”

Passing the baton

But for Stratford, mentorship and trailblazing can take different forms. Some people can be involved in another person’s progress and development in a practical way, while others can be the first person to achieve a particular feat.

“A person can be both – most trailblazers are also mentors to some fantastic people,” she continues. “But when I think of the word trailblazer, I think of somebody who’s a role model.”

“They’ve got all these people that look up to them because they’ve done something really impressive with their career, and gone and done something where they really were the first. Just being able to see someone else having done it can be really, really encouraging and inspiring.”

Off the back of this supportive environment, Stratford believes that the present is an optimal time for women to consider a career in the industry and begin to make a difference.

“I think it’s a really ideal moment in time to come into this industry because you’ve got the background of all this growth, and more openness for innovation than the industry has ever had before,” she says.

“Every gap needs to be filled in this industry. And what a time to do it.”

The issue with Cruks was first reported on 11 November and concerned a malfunction with BSN checks, which are used to validate a person who registers with the system.

A BSN, also known as a citizen service number, is a unique identification given to each Dutch resident that the government uses to process personal data.

KSA said the issue meant some consumers were unable to register with Cruks for the past few days, while licensed operators also encountered issued when carrying out checks through the system.

However, KSA said the system is now operating normally again, saying the cause of the issue was with the BSN management facility.

Previous Cruks malfunctions

The latest glitch comes after a problem with Cruks’ use of the DigiD identification system temporarily halted all new registrations at the end of September. This issue was resolved quickly, with KSA saying that the malfunction did not prevent sites signed up to Cruks from checking the details of existing registered users.

In August, KSA announced more than 20,000 people had registered with the self-exclusion system had reached since its launch in October 2021. 

Cruks was set to go live the same day that the country launched its regulated online gambling market. The Dutch Gambling Act requires licensed retail and online gambling organisations to compare a player’s details with Cruks before allowing them to participate in games of chance.

However, when the market launched, a malfunction with the self-exclusion system meant it could not function. As a result, the launch of online gambling in the Netherlands was delayed until the issue with Cruks was resolved.

Federal law enforcement agents interviewed Puig regarding bets he placed on sporting events with an illegal gambling operation run by an individual named Wayne Nix. The Cuban-born baseball star has agreed to plead guilty to one count of making false statements – an offense for which he could face up to five years in federal prison.

Puig, who currently is a right fielder for the Kiwoom Heroes in South Korea, has agreed to pay a fine of at least $55,000 and to make an initial appearance in US District Court.

“Under our system of justice, no one is above the law,” said United States Attorney Martin Estrada. “The integrity of our nation’s criminal justice system depends on people telling the truth, and those who fail to abide by this simple principle must face consequences.”

“When given the opportunity to be truthful about his involvement with Nix’s Gambling businesses, Mr. Puig chose not to,” said IRS Criminal Investigation Los Angeles Field Office Special Agent in Charge Tyler Hatcher. “Mr. Puig’s lies hindered the legal and procedural tasks of the investigators and prosecutors.”

[Read full story on iGB North America]

Revenue for the month amounted to $19.1m (£16.0m/€18.3m), up from $6.6m in the same month last year, but 24.8% lower than $25.4m in September of this year.

Of this total, $16.4m was attributed to online sports betting, while the remaining $2.7m came from wagering at retail sportsbook facilities across the state.

Read the full story on iGB North America.

The gaming technology provider said it experienced success across both its European and US operations in Q3, revealing that its European business returned to profitability during the quarter, with potential for continued earnings and revenue growth in 2023.

In the US, Elys completed the real-money deployment of its retail platform architectures at both the Grand Central Restaurant Bar and Sportsbook in Washington DC and the Ocean Casino Resort in New Jersey.

Elys also said that it began to finalise plans to provide sportsbook technology and services for Lottomatica to support a potential launch in the US during the first.

These achievements came despite the group posting a wider net loss in the quarter, though executive chairman Michele Ciavarella said its activity in Q3 and its future launch plans with Lottomatica will likely result in further growth.

“We are very excited to go up against the major US mobile operators with our powerful Elys Gameboard technology on the back of Lottomatica’s robust market strength,” Ciavarella said. 

“Apart from our core strengths in the US retail channel, this digital distribution will round out Elys’ full suite of sportsbook technology in the US and leverage the market knowhow we have developed in the regulated Italian market for the past 20 plus years.”

Turning to the results, revenue reached $9.6m (£8.1m/€9.3m), up from $8.0m in the corresponding three-month period last year. This included $8.9m in net gaming revenue and a further $679,205 in services revenue.

However, total costs also increased 14.4% to $12.7m, as both selling expenses and general and administrative spend having climbed year-on-year. Operating loss remained level at $3.1m but after accounting for $564,010 in financial costs, pre-tax loss was $3.8m, compared to $3.5m in Q3 of 2021.

Elys paid $167,574 in income tax – whereas last year it received $284,636 in benefits – and after also including a negative $367,765 foreign currency translation adjustment, the provider ended the quarter with a net loss of $4.2m, wider than $3.7m last year.

The provider did not disclose its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter.

Revenue was AUS$5.57bn (£3.17bn/€3.62bn), an improvement on $4.73bn in full year 2021.

The year had been an active one for Aristocrat. In the first quarter, it agreed terms on a £2.7bn acquisition of Playtech. However, in February of this year, Playtech’s shareholders did not back the acquisition, leading to the deal falling through.

In the same month, Playtech was approached by TTB Partners for a potential takeover deal, while Aristocrat set out plans to find another way to expand its presence in real-money online gambling.

Trevor Croker, chief executive officer and managing director of Aristocrat, said that the full year results were indicative of Aristocrat’s financial recovery from Covid-19.

“Aristocrat delivered an increase in revenues of almost 18% year on year, and an annual profit of $1.1 billion that exceeded our 2019 financial year performance by approximately 23%,” said Croker. “This highlights the strength of our post-Covid recovery and our ability to execute in a challenging environment.”

He also said that Aristocrat’s land-based results had “offset headwinds” in its Pixel United mobile social gaming business. In March of this year, Aristocrat helped to evacuate over two thirds of its employees from Russia-invaded Ukraine, where part of Pixel United has been based.

Aristocrat online gambling plans

In addition, Croker provided an update on Aristocrat’s “build-and-buy” strategy, wherein it committed to look for online opportunities and build upon to launch of its real-money gaming division, Anaxi.

“We have made further progress in our build-and-buy strategy to scale in online RMG, with the launch of our new business, Anaxi,” he continued. “While we are focusing first on the North American igaming vertical, we ultimately aim to be the leading gaming platform within the global online RMG industry.”

But when asked when Aristocrat could expect Anaxi to break even, Croker emphasised that Anaxi was a mid-term investment with no specific timeline.

“This is a mid-term investment, this is about entering a segment,” he said. “We’ve continued to invest in D&D (design and development), which has been confirmed within the 12% of D&D investment, and we’ll continue to invest and hold within our target range.”

“But it’s a mid-term growth opportunity for our organisation.”

Revenue breakdown

Almost half of the revenue came from the Pixel United segment, which brought in $2.59bn. This was 5.0% higher than in 2021.

Within the land-based segment, the Americas generated $2.42bn, rising by 32.2%, while Australia and New Zealand saw $460.7m of the revenue. International Class III gaming made up the remaining $106.8m.

The cost of revenue was $2.49bn, $217.7m higher than in 2021. This left gross profit at $3.07bn, up by 25.1%.

Other income at $26.0m offset these costs slightly. However, selling, general and administrative costs came to $955.4m, $89.4m higher than in 2021, while design and development costs came to $666.5m, a rise of $139.2m. Finance costs also rose, by $117.0m to $254.8m.

After considering these costs, the pre-tax profit was $1.22bn, up by 31.3%.

Income tax expenses more than doubled, rising by 142.1%. Following this, the overall profit for the year was $948.5m, a rise of 15.6%.