Month: December 2022

Having gone public in July, FL Entertainment is the new name for the combined business created via a merger with special-purpose acquisition company Pegasus Entrepreneurial Acquisition Company Europe.

The merger agreement covered all Betclic Everest subsidiaries, including Bet-at-home, and also featured television production business Banijay, which first merged with Betclic to create FL Entertainment before being combined with Pegasus.

“FL Entertainment delivered strong group revenue growth for the first nine months of 2022, demonstrating continued high profitability and cash generation,” FL Entertainment’s chief executive François Riahi said.

“Our online sports betting and gaming business performed very well also, with an outstanding earnings growth, driven by its appealing digital platform and lean cost structure. 

“With an 11% growth in unique active players year-on-year, Betclic is well placed to capitalise on opportunities from the football World Cup, underpinned by its robust commitment to the highest standards of responsible gaming.”

Online sports and betting revenue for the nine months to the end of September amounted to €591.0m (£508.6m/$617.1m), up from €559.1m in the corresponding period last year.

This included €477.1m from sportsbook operations, up by 7.1% year-on-year, helped by a strong rebound in the third quarter following a first half with a quieter sports calendar compared with H1 2021, which included the Euro 2020 football tournament.

Casino revenue declined 6.5% to €71.8m, but online poker revenue increased by 8.7% to €34.9m, while other revenue from this area of the business jumped 56.8% to €7.2m.

Betclic growth, Bet-at-home declines

Much of the online sports betting was driven by Betclic, with FL Entertainment noting that at constant exchange rates and excluding discontinued Bet-at-home operations in certain jurisdictions, revenue was up 13.0% year-on-year. On the same basis, Betclic revenue was 15.0% higher and Bet-at-home down 11.0%.

The Bet-at-home business has endured a tough year. In September, Bet-at-home warned of an increased risk that it may not have sufficient liquidity to meet financial obligations when they are due, after a financial year heavily impacted by its exit from Austria.

The warning came in the context of a significant winding down of the company’s activities in other regions, most notably Austria. 

In October 2021, the business lost a legal battle against a consortium of players in Austria who sought compensation from unlicensed operators. Following this, Bet-at-home announced it would be exiting the market, as well as winding down the Maltese company set up to target it.

In July, Bet-at-home announced that it had “surrendered” its GB licence, and would be permanently withdrawing from the market – this occurred in the wake of the operator’s licence suspension by the Gambling Commission for suspected anti-money laundering and social responsibility failings.

In terms of the wider business, also including the content production and distribution arm, revenue was 15.0% higher year-on-year at €2.71bn.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 17.5% to €446.4m, with a higher margin of 16.5%.

There was a pre-tax loss of €35.1m, compared to a €14.2m profit in the previous year. FL Entertainment paid €40.3m in tax, leaving a net loss of €75.4m, much wider than €1.8m last year.

However, FL Entertainment noted that when excluding certain costs – namely €99.5m in restructuring costs and €104.7m in long-term incentive plan and employment-related earn-out and option expenses – and including €81.1m in other financial income, this left a net profit of €209.8m, up 15.4% year-on-year.

“In an inflationary environment with several macroeconomic challenges, FL Entertainment is focused on driving productivity gains, particularly in content production, to protect margins and strong cash generation levels,” Riahi said. 

“The positive momentum seen in the year to date, combined with our leading positions in attractive and growing segments of the entertainment industry, puts us in a strong position to maintain continued sustainable growth in line with our 2022 guidance and mid-term outlook.”

Read Pentasia managing director Alastair Cleland’s introduction to the 2022 Salary Survey here.

30% pay raises are not out of the question

People are no longer prepared to move jobs for a modest pay rise. Unless they’re genuinely unhappy with their current employer, candidates need serious incentives to explore new opportunities. A growing number of roles can now command increases approaching or exceeding 30%, especially for candidates with three or more years of experience or specialist skills.

Consolidation is rife

The pace of mergers and acquisitions activity in the igaming industry is brisk as suppliers and operators focus on building competitive positioning and broader capabilities. Drivers for M&A are also shifting away from market access and toward acquiring technology, content and talent.

Legislation is driving demand

Regulation is having a significant impact on recruitment as countries either regulate igaming for the first time or, in the case of Germany, reregulate. New markets are creating demand for candidates from across the entire igaming sphere, with compliance and legal experts seeing a significant uplift in salaries where regulations are particularly stringent.  

Wanted: Strategic leadership

While the igaming industry includes many of the land-based giants, it’s a relatively young sector with numerous challengers and startups that are now maturing, creating demand for more strategic and C-level roles.

Igaming companies recognise the value that exceptional leadership adds and are increasingly willing to overcompensate, often in the form of bonuses and long-term incentive plans (LTIPs), to ensure they secure the required level of experience.

Remote is the norm

Employers must now pay more to get candidates into the office, even just for one or two days a week. Tech roles have gone almost entirely remote and candidates across all functions expect remote or hybrid options as standard. Remote has also created an environment for ‘geographic standardisation’, where location no longer impacts salary levels.

Will Sawney, head of marketing

An urgent issue for igaming

Igaming has a significant gender diversity problem. Across the industry, just 27% of executives are female, with that rate falling to just 15% at C-level. The gender pay gap further exacerbates the problem; female staff are routinely paid less than their male counterparts. 

Achieving greater gender diversity within gaming matters. Why? Well, diverse organisations – and this includes minorities of all kinds – make better decisions and drive stronger business outcomes. Diversity has been proven time and again as a wise business choice.

Gaming’s customer base is also far more balanced than its workforce. According to a YouGov poll, 33% of men and 24% of women in the UK placed a bet last year. Increasing the number of female executives and leaders would improve representation and, surely, deliver better services for this critical demographic.

Pentasia believes strongly that the gender diversity issue within igaming deserves attention. We’re committed to doing something about it and are always open to connecting with ambitious organisations ready to make a change.

Kerry Gillitt, principal consultant, legal & compliance

Many of the machines confiscated across the two regions were being used in facilities that were a front for illegal gambling venues. In Salzburg, these venues included an internet shop, waxing studio, wine bar and a crêpes delivery service.

In Upper Austria, the police said operators had used a host of methods to prevent the police from entering their venues, such as reinforcing doors with iron plates to prevent access. 

Police also discovered that some of the games on the slot machines were disguised as legal “games of skill” as opposed to illegal slots. 

Upon emptying the slot machines prior to them being destroyed, authorities were able to recover more than €17,000 (€14,654/$17,699) in cash that was handed over to the police for safekeeping.

For each illegal gambling machine seized, authorities can impose a fine of €4,000 per device.

“The regular focus controls of the financial police are pushing back illegal gambling and making the business increasingly unattractive for criminal operators,” finance minister Magnus Brunner said. “In terms of player protection, we will continue to take tough action here.”

StarCasino – which has received licences to offer both sports betting and casino in Spain – will use GiG’s player account management system and its Sportnco sportsbook.

These, GiG said, are “focused on delivering excellent localised and personal casino journeys and strong sports margins in competitive and regulated markets”.

More entries to come for StarCasino?

Alejandro Casanova, country manager for Starcasino Spain suggested the entry could be the first step in a wider international expansion for his business.

“We feel very pleased to have reached an agreement with the GiG Group,” he said. “After many years of work and success in Belgium we have initiated our expansion to other markets and in Spain have selected GiG’s technologies to successfully face the challenges.”

Hervé Schlosser, managing director of Sportnco Gaming at GiG, said that GiG’s technology was particularly well-suited for operators looking to enter new markets.

 “I am really pleased to have signed this partnership with Starcasino, to power their entry into the appealing Spanish market,” he said. “I am convinced that our combined sportsbook, platform technology and regulatory experience is well suited to help established operators like Starcasino power into new regulated markets.”

Marketing challenges in Spain

In October, Spain’s Senate approved a bill that would introduce a number of new advertising restrictions on top of existing tight marketing rules in the market.

Spain brought in wide-reaching advertisement restrictions in November 2020. This meant that advertising could only be on television and radio between 1am and 5am, and that gambling sponsorships with football teams were banned. Ongoing deals were allowed to continue until the end of the season.

Many of these restrictions formed part of Spain’s initial response to the Covid-19 pandemic, when initial ad limits were put in place. Those restrictions were later lifted in June, but many were reintroduced in the November decree.

The new bill looks to reintroduce more restrictions that were part of the temporary Covid-19 rules. These include instructing operators not to market their products as beneficial to social status, physical health, economic stability or mental health.

Flynn, who will move to the provider’s board at the start of 2023, has been CEO of Glitnor since January 2020.

During this time, he also served as CEO of Glitnor’s Swintt business and as an investor and board advisor at payment provider Pay4Fun.

Prior to joining Glitnor, he was CEO of operations at Jackpotjoy, where he was also the CEO of Vera & John, while earlier in his career he spent four years at NYX Gaming Group, first as executive vice-president of business development and then chief commercial officer.

Flynn’s other roles included CEO and COO of NYX Interactive and head of operations for Microgaming.

Nordlund to become interim Glitnor CEO

Upon stepping down as CEO of Glitnor, Flynn will hand over the reins on an interim basis to co-founder Jorgen Nordlund until a replacement has been appointed. 

“Over the past three and a half years I’ve had the pleasure to hire, work with, create and help develop an amazing team at Glitnor, delivering exceptional brands and celebrating outstanding year-on-year growth across the business,” Flynn said.

“With our continued strong growth aspirations in mind, I’ve decided that now is the time to look further ahead for Glitnor and make a change which, I believe, will help take Glitnor, and everyone involved, to the next level. 

“Thus, with the full support of our founders and board, I shall move to a group board role where I will continue to develop our long-term strategy and support our operational management. 

“After 20 years in igaming I really believe that my experience will better serve the group as a member of the board supporting the incoming CEO, as we continue to grow and expand the business.”

Dan Andersson, chairman of the board at Glitnor, added: “In our quest to reach excellence and make it possible to continue our growth at such a rapid pace, David has been absolutely key in developing the group and taking the next step in our growth plan. 

“It is now good timing to make such a change as we strengthen the board in preparation for the stock market, given financial market sentiment turning more positive in 2023. We look forward to having David working actively in the board.”

Acquisition cancelled, ventures arm launches

The announcement comes in what has been a busy few days for Glitnor, which earlier this week said it would not proceed with a planned full-scale acquisition of affiliate business KaFe Rocks Group as the two businesses mutually agreed not to go forward with the deal.

In February, the group reached an agreement to acquire KaFe Rocks, but the businesses “mutually and amicably” decided not to complete the transaction.

Glitnor said given current market conditions, it agreed with KaFe Rocks that “now is not the time to fully complete the acquisition”.

Also this week, Glitnor established a new venture capital arm with the aim of leveraging its network of divisions and investment areas.

Glitnor Ventures will have an initial focus on the recently announced investments in affiliate businesses KaFe Rocks and Time2Play – which is itself a KaFe Rocks brand – while the division also holds an interest in Indian-based game development studio RNGPlay. 

Earlier this month, Puig pled guilty to the charges after he was interviewed by federal law enforcement agents regarding bets he placed on sporting events with an illegal gambling operation run by an individual named Wayne Nix.

Cuban-born Puig 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.

Read the full story on iGB North America

The October handle was 7.8% lower than $60.2m in the same month in 2021, but 33.1% up from $41.7m in September this year, according to the Rhode Island Lottery.

Of this total, $34.2m was staked online, with the remaining $21.2m split across the Twin River and Tiverton Casino retail sportsbooks. Twin River’s handle amounted to $15.2m and Tiverton Casino’s $6.0m.

Read the full story on iGB North America

The BGC chair said she believed that there had been a number of “baseless allegations” against betting operators during the course of the 2022 Fifa World Cup.

The tournament is a major driver of traffic to sportsbooks and other betting sites – and operators can expect an increased level of revenue and customer acquisition during the period.

However, Simmonds painted industry critics as misinformed about the dangers of betting. She said that critics have claimed gambling harm is likely to increase because of the World Cup, despite statistics suggesting stable or declining rates of harm in recent years.    

“Anti-gambling lobbyists, backed by poorly informed commentators, have reached for ever-more extreme reasons to claim this World Cup will cause harm, despite there being no evidence to confirm that,” she said.

“Around 22.5 million adults enjoy a flutter each month on the lottery, bingo, in casinos, gaming online and on any number of sports, including football. Despite that popularity, and despite the very public vitriol directed at betting, the actual rates of problem gambling among UK adults remains low by international standards at 0.3%.

“In fact, despite Covid, and the cost-of-living crisis, problem gambling rates in the UK have been falling for the past number of years. It is not soaring, it is not rocketing, it remains a small number of the many millions who bet safely and responsibly.”

The 0.3% problem gambling statistic cited by Simmonds is taken from the latest gambling participation and prevalence survey conducted by the Gambling Commission. That number was consistent with September 2021’s total.

The same survey found that problem gambling rates for those aged between 16-24 had increased to 1.4%, compared to 0.4% the previous year. However, due to the relatively small sample size of the population at 293, the change was not statistically significant.

BGC self-imposed measures

Simmonds pointed to a number of self-imposed measures that industry had taken as proof of how seriously it has taken the issue of people experiencing harm from gambling.  

“Our members introduced the whistle-to-whistle ban, preventing betting advertising during live football before the watershed,” she said. “Now, no betting advertising can be shown five minutes before until five minutes after live games on television. This reduced the numbers of children seeing betting ads by 97%.”

Simmonds said that this also reduced the numbers who saw betting ads during the 2020 Euros by 47% compared to the previous World Cup. In addition, she said that 20% of advertising is committed to safer gambling messaging.  

In addition, Simmonds pointed to new age-gating rules on social media platforms that restrict ads to those aged 25 and over for most sites. According to the chairman, this had removed over 100 million social media impressions.  

“This measure alone was one of more than 20 separate industry standards or initiatives enacted since the BGC was established just three years ago,” she said.

Gambling Act white paper

The government is currently in the process of updating the country’s gambling laws via a review of the 2005 Gambling Act. The long-awaited product of this process will be a white paper which will propose a number of specific policy changes that will point the way to legislative reform.

Simmonds used the opportunity to urge the government to scale back the size of the potential reforms.

“Our members support the white paper as a further opportunity to drive up standards,” she said. “But none of the measures from the government should risk driving punters to the unsafe, unregulated black market.

“As this long process draws to a conclusion, MPs should not allow emotions to overrule common sense. Any dispassionate analysis of the facts leads to the obvious conclusion that betting is popular, problem gambling is low, while the industry is good for sport, the economy and tax take.

“The industry takes its responsibility for safer gambling very seriously. To shackle it with the kinds of regulations being called for by prohibitionists would create harm, not prevent it. Common sense must prevail.”

The November magazine from the International Masters of Gaming Law (IMGL) contains a comprehensive look at eight emerging gambling markets in Africa, Asia and the Americas.

As well as the pure legalities, we reveal what gaming companies should consider culturally to enter these hugely promising new jurisdictions.

We also look at emerging technology, review tribal bingo and Florida’s new regulatory regime. Plus we ask just why are financial penalties in the UK so high!

IMGL Magazine November 2022

Currently, the site is live in Brazil and in Canadian provinces other than Ontario. Soon after the Entain deal was announced, Unikrn closed with a promise to return in 2022. 

“Over the past year, the passionate team at Entain has worked closely with us to create a safe, accessible, secure and compliant product that players can trust – even if they’ve never placed a bet before,” said Justin Dellario, CEO of Unikrn and managing director of esports at Entain. 

“The launch of Unikrn in both Brazil and Canada is the first step as we introduce a video games and esports betting platform that truly puts a new generation of players and their passions first.” 

As well as betting on esports and traditional sports, the site will offer casino games video game options in which players can “bet on their own skills”, as well as betting on virtual esports events with computer-generated results.

Going forward, Entain said that Unikrn will “continue plans to enter new, regulated markets around the globe in 2023 and into the future”.