Online gambling revenue during the month amounted to $1.2m, up 56.4% from $751,291 in December of 2021 and also 19.0% up from $987,423 in November 2022.
Some $890,894 of revenue in December was attributed to video lottery games, $243,899 table games and the remaining $80,007 poker rake and fees.
Located inside the Crazy Pour Sports Bar at Club Hawthorne, the facility is PointsBet’s fourth retail location in the state and will be operated through its partnership with Hawthorne Race Course.
Customers can place cash wagers directly with cashiers at three betting windows or at eight self-service kiosks, while visitors will also have access to Crazy Pour’s full-service beverage and dining options.
Wagering handle for the month was $431.4m, down 6.8% from $463.0m in December 2021 and also 4.6% lower than $452.3m in November 2022.
Football was again the most popular sport to bet on, attracting $136.2m in total wagers, just ahead of basketball on $130.0m. Consumers also spent over $46.0m betting on other sports and $119.0m on parlay bets.
Commissioners voted unanimously to approve Fanatics for a category 3 sports betting operator licence, which will be tethered to Plainridge Park Casino’s Category 1 sports wagering licence.
However, Fanatics will need to undergo a full suitability review by the MGC’s Investigations and Enforcement Bureau. After this, Fanatics will also need to an operations certificate and meet additional conditions to begin accepting sports wagers.
Although Kindred’s Q4 revenue is projected to rise 24.5% year-on-year to £305.0m (€343.1m/$372.2m), Kindred said this was not up to expectations and vowed to take “immediate action”.
Addressing this, Tjärnström said that Kindred would review all areas of cost in order to improve spending for 2023, adding that no cost-cutting is off the table.
“We are looking to review all cost items for efficiency purposes and refreshing our channels for spending in 2023,” he said. “We cannot comment on the overall number at this point.”
“But we’re clearly looking across the P&L [profit and loss], and no item is sacred in that sense.”
He said this was due to how vastly the Q4 revenue is set to depart from Kindred’s, and the market’s, expectations.
“We take this very seriously, and the deviation that we see from our expectations and the market’s expectations; that’s why we’re taking actions now to improve profitability in the short and medium term,” he said.
Tjärnström said the Kindred would also rethink its investment strategies as part of its cost-cutting initiative.
“We are reprioritising investment to free up capacity for those key strategic initiatives, and also to reduce short-term costs,” he said.
“We’re also looking at continued opportunities like organic M&A to complement the organic growth of the business, but that’s nothing new,” Tjärnström said.
Tjärnström outlined four main reasons for the revenue decline, one of which being the 2022 World Cup, which he said had “disrupted” the sporting calendar.
“The World Cup disrupted the sporting calendar and resulted in approximately 25% fewer top football league fixtures compared to the fourth quarter last year,” he said. “The turnover from the World Cup was not enough to offset the impact of the reduced fixtures elsewhere.”
“During the end of the tournament, there are very few matches being played.”
Tjärnström also attributed the revenue to the low betting margin after free bets, which was 8.9%, and to a £5.3m payout from the Houston Astros’ win at the Major League Baseball’s World Series in November 2022.
Kindred’s performance in Norway and Belgium were also listed as reasons for the lower-than-expected revenue.
In September 2022, Norway’s regulator Lotteritilsynet said it would impose a fine of NOK1.198m for each day Kindred continued to operate in Norway. In October, the fines ceased as Kindred said it would no longer operate in Norway.
In November, however, Lotteritilsynet reintroduced the daily fines. This decision was ultimately overturned in December.
Tjärnström said that how Kindred changed its offerings in Norway during the quarter had an impact on its revenue.
Of Belgium, Tjärnström said that regulatory changes made in 2019 have had a strong impact on how Kindred has performed in the market.
“Looking back at 2019, limits were introduced for the first time in the Belgium market,” he said. “When these regulatory changes happen it’s also a question about making use of the experience as soon as possible to handle these changes.”
“It’s also important regarding a level playing field in the Belgium market, where we believe we have applied the processes in a more complied way than our competitors have done.”
Tjärnström followed on from this by emphasising the importance of responding to regulatory changes quickly, to negate any negative impact in the future.
“But by adapting to these regulatory changes faster than our competitors, we can turn these changes into competitive advantage in the long term.”
As a whole, Tjärnström pointed to developments in 2019 – when Sweden introduced its regulated gambling market – as a reason the company could return to financial success in 2023.
“In ‘19, it took us a couple of quarters to return to growth, but then we saw strong growth for many quarters to come.”
Tjärnström acknowledged that Kindred had experienced success in the Netherlands, France and Sweden during the quarter, adding that Kindred had plans to “regain leadership” in the country during 2023.
“The Netherlands continues to do really well,” he said. “We believe that the plan we have is solid and we’re well on our way to that.”
Kindred was absent from the Netherlands in the nine months leading up to July 2022, as the company awaited a licence from the country’s regulator in June.
Massachusetts has always had a bit more of an eye towards Europe politically than much of the rest of the US. Higher taxes, higher spending, you’ve even got a dynastic family passing on power from generation to generation.
Maybe it’s that it looks right across the Atlantic Ocean to Europe, maybe it’s because the state is one of the few parts of the US where an “old building” isn’t one that dates back to the ‘60s. Whatever it is, the state seems to resemble some European markets much more than the rest of the US when it’s come to regulating sports betting.
And from the start, Massachusetts seemed to want to do things differently from the rest of the US when it came to sports betting.
The Senate’s draft of the bill that ultimately legalised sports betting in the Bay State included a ban on all promos, though thankfully the House’s less restrictive approach to marketing won out.
Now, early licensing hearings suggest that the Massachusetts Gaming Commission intends to be much stricter than other US regulators so far.
The online operators approved so far in the state have typically had specific conditions attached to their initial licence, areas where the Commission would still like to see improvement.
For Penn Entertainment’s Barstool Sportsbook, there were long discussions around the Barstool brand in general and controversial founder Dave Portnoy, as well as the sportsbook arm’s marketing activities. Ultimately, Penn agreed to allow an investigation of the Barstool brand – as well as to stop using the term “risk-free” – as part of the conditions for its licence.
BetMGM was told, as a condition of its licence, to provide the regulatory with “timely updates” on confidential investigations in other jurisdictions, after the Commission raised questions about a record regulatory settlement for BetMGM co-owner Entain in Great Britain.
Fanatics, meanwhile, agreed to improve an internal responsible gambling plan in order to receive its own licence.
Generally, the message is clear: Massachusetts is putting operators under the microscope in a way other US states have not yet done.
In some ways, its approach to the gambling sector looks a bit more like what we’ve seen in Europe in recent years.
There is, of course, both a positive and a negative way of viewing that.
On the one hand, many European countries’ approaches to online gambling in recent years have been stifling to the industry.
If Massachusetts was to introduce the sudden post-launch tightening of a market like the Netherlands, the licensed market would be unlikely to ever make it off the ground. If rules are too strict, offshore players might never make the switch to legal brands.
However, the consensus for quite some time has been that a Europe-like backlash to aspects of the US sector was inevitable. If so, Massachusetts is more of a necessary evil.
The constant ads have already turned many against the sector, and it seems like only a matter of time before some sportsbook gets tied up in a responsible gambling scandal that gets national attention.
Soon, stricter rules could be common across the US. Legislatures will bring in laws restriction how operators can do business, regulators will be expanded into much more professional organisations and media scrutiny will be higher than ever.
Operators will likely have to get used to approaches that look more like Massachusetts.
There’s also room for Massachusetts to make a push for changes that might have an impact beyond the US.
If the regulator asked BetMGM about Entain’s regulatory settlement in Great Britain, it seems reasonable to think that it could probe operators’ association with unlicensed gambling in other markets.
Maybe alone, Massachusetts wouldn’t be a big enough market to change operators’ approach to these markets, but if it can help make that a more common approach in the US, eventually operators may have to choose between access to “dark grey” markets and access to the multi-billion-dollar US opportunity.
Of course, strict scrutiny from the Massachusetts Gaming Commission wasn’t something that began with sports betting. The regulator has already taken on a big name through its investigation into Steve Wynn and Wynn Resorts, which ultimately let to a $35m fine. Its final report into Wynn was highly publicised, as were appearances of key executives before the Commission.
That attitude of scrutiny towards the industry seems to be in place in the Bay State.
It is, obviously, also true that regulatory scrutiny is not unique to Massachusetts. The Ohio Casino Control Commission announced in December that it plans to deny PlayUp’s licence application, after it discovered “potential illegal gambling activity”, New York has considered multiple bills to limit advertising and early igaming adopters Nevada and New Jersey both raised questions of operators’ unlicensed activities when considering which brands to approve.
But in Massachusetts it’s less a state going out alone, completely against the tide of what others are doing, and instead a state that looks set to go much further, much faster with something that was already trickling into the US market. That is exactly why the state could be so important.
As of right now, the state could look like an inconvenient market where a wrong step could have serious consequences.
But at every step so far, it’s avoided crossing the line. Its final sports betting bill looked much more like the reasonable House version than the Senate’s; it hasn’t denied licences over the concerns raised in its meetings; and its rules about ads targeting children avoided banning marketing at major sporting events.
Unlike markets that simply set sky-high tax rates, the potential inconvenience of Massachusetts’ approach might actually help the industry as the US market evolves.
Because it’ll be a lot more inconvenient for the industry when other states eventually apply the same scrutiny.
In August 2022, Paul – alongside SimpleBet founder and CEO Joey Levy – launched Betr, a microbetting offering, designed at allowing players to place bets on fast-resolving markets. Paul is president of Betr, while Levy acts as CEO.
This was followed by the September launch of Betr’s mobile app, which nationwide launched on a free-to-play basis ahead of a real money offering.
The application has a reworked interface that simplifies betting UI by presenting the bet as a multiple choice question, as well as displaying odds as payout multiples.
Betr entered Ohio through a 10-year market access agreement with Hall of Fame Resort & Entertainment Company.
Levy said he was “thrilled” to be launching Betr’s real-money betting business in Ohio. “This launch marks the beginning of our gradual, methodical approach to state-by-state expansion where we will take the time necessary to discover and validate product-market fit of our highly differentiated product experience to ensure we scale in a profitable manner.
“This launch also sets a US online sports betting record for the fastest launch from company founding to a fully licensed and regulated real money betting product, speaking to the capabilities of the Betr team to execute quickly and efficiently.”
Ohio is the first state that Betr has launched in, though the start-up has outlined plans to expand to more states in future.
“I couldn’t be happier that my home state of Ohio is the first to receive access to Betr’s real money gaming product,” said Paul. “People are going to love watching and rooting for bets tied directly to their favorite players, whether it’s a Donovan Mitchell 3-pointer, a Ja’Marr Chase 50-yard bomb, or a Jose Ramirez home run. Betr makes every game more fun by adding these stakes throughout.”
The Ohio regulated online sports betting market launched on 1 January 2023, which a number of major brand launching on day one, including FanDuel, BetMGM and DraftKings.
The new year’s day day was set out in House Bill 29, which legalised online sports betting in the Buckeye state. The date was agreed following a conference between the state house and senate on a number of provisions within the legislation.
“Today marks a monumental day of growth for both BetMGM and the sports betting industry,” said BetMGM CEO Adam Greenblatt. “Ohio is home to thousands of passionate sports fans, who now have the opportunity to enjoy first-hand the excitement and benefits of wagering with BetMGM.”
Players will be able to buy and sell Sparket bets both on the websites of operators that partner with Sparket and on the WagerWire mobile app when it launches early this year.
Markets available on Sparket include the next state to legalise sports betting and who will be thanked first in the host intro of Saturday Night Live.
Sparket CEO Aaron Basch noted that the deal would allow for in-play betting for events traded on Sparket for the first time.
“Combining forces with WagerWire creates powerful possibilities for our users,” he said. “The ability to flip in and out of bets gives our users more power and freedom over their wagers. For the first time in history, pari-mutuel markets will now become tradable after the event begins and the windows are closed.
“This enhanced user experience takes Sparket to the next level and is already being eagerly anticipated by our partners.”
Zach Doctor, co-founder and CEO of WagerWire, said both startups shared similar goals.
“WagerWire and Sparket are aligned on our journeys to bring new dimensions to the sports betting experience,” Doctor said. “Sparket’s system allows for betting on new and interesting markets.
“Adding WagerWire means that each bet originated by Sparket will become a tradable asset. This partnership is going to pave the way to an entirely new era of betting.”
Group revenue for the final quarter of the 2022 financial year for Kindred is forecast to be up by 24.5% year-on-year at £305.0m (€343.1m/$372.2m).
However, the operator said in an unaudited trading update that this fell short of expectations. The figure from 2021 had been adversely affected by the operator’s decision to withdraw from the Netherlands at the start of that period. When compared with Q4 of 2020, revenue was down by 16.4%.
Kindred said the 2022 Fifa World Cup, which was moved to the winter from its traditional summer date due to hot weather in host nation Qatar, disrupted the sporting calendar and resulted in approximately 25.0% fewer top-tier football league fixtures.
Contrary to expectations, Kindred said turnover from World Cup betting was not enough to offset the impact of reduced league fixtures, while the operator noted a lower than long-term average sports betting margin.
Other factors that impacted performance during Q4 included a payout of £5.3m following the Houston Astros winning Major League Baseball’s World Series in November, which resulted in a negative revenue contribution of £4.4m. Virtually all of this total came from extremely large bets placed by US businessman Jim “Mattress Mack” McIngvale.
Excluding the impact of the Astros bets, Kindred said North America delivered a solid underlying growth.
Kindred reported continued strong development in other markets such as the Netherlands, France and Sweden, but regulatory changes and increased sustainability focus in some key markets including Belgium impacted revenue negatively.
In addition, Kindred said changes to its offering in Norway harmed the group’s performance in Q4. During the quarter, Kindred changed its approach in Norway to stop targeting local customers, following threats of daily fines from the Norwegian regulator.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter are expected to reach £39.0m, up 41.3% year-on-year, but when excluding North America, this would have reached £54.0m.
As a result of the weaker than anticipated performance, Kindred announced that it will take immediate actions to improve profitability in the short and medium-term across the business.
These include re-prioritising its investment projects to free up capacity for key strategic initiatives and reduce short-term costs, as well as decreasing marketing spend in North America prior to the Kindred platform being launched.
In addition, Kindred said it would further optimise its operating expenses to reduce cost growth and improve scalability.
Looking ahead to 2023, Kindred said that as management does not believe the Q4 results are indicative of is “true earnings power”, it decided to communicate a non-recurring indicative guidance for the fiscal year 2023.
In this non -recurring guidance, Kindred estimated underlying EBITDA for the full year to reach at least £200.0m, assuming long-term average sports betting margins and the impact of the actions it will take to further improve the profitability.
The earnings announcement led to a collapse in Kindred’s share price, which fell from SEK116.25 (£9.15/€10.31/$11.19) yesterday to SEK96.78 at the time of writing.
This was the lowest point the share price has reached since October 2022.
Under the agreement, which has been approved by the board of directors of each business, the MeridianBet group of companies will become wholly owned subsidiaries of Golden Matrix.
The deal, Golden Matrix said, would provide it with access to new and fast growing regulated B2C markets, while also creating a combined group of profitable and cash positive companies.
Following the acquisition, Golden Matrix said it expects to be positioned for growth, both organically and through further acquisitions, with synergetic growth opportunities in core markets via the MeridianBet brand and other GMGI B2C brands and market entries.
Headquartered in Malta, MeridianBet operates in a number of markets across Europe, Africa and Latin America. Combined revenue of the two business is expected be in excess of $100.0m in the 2022 financial year, while EBITDA is estimated to be greater than $22.0m.
Both businesses plan to continue operating under their respective brands, while the board structure is expected to remain the same, with the exception of William Scott, currently an advisor to MeridianBet, joining as chairman of the board.
Golden Matrix will fund the deal by issuing 65.3 million in common shares to MeridianBet stockholders, as well paying $70.0m in cash.
The deal is expected to complete during the first half of 2023, subject to customary closing conditions including Golden Matrix raising the required funding, due diligence, shareholder approval and regulatory approvals.
“We believe that this acquisition will provide us entry into a well-established and highly scalable B2C vertical in new markets outside of our core markets,’ Golden Matrix chief executive Brian Goodman said. “MeridianBet Group appealed to us with its proven business model that emphasises organic growth, resilience to external economic factors, and exceptional products and technology.
“We are pleased to be on the path to completing this acquisition and look forward to strengthening and growing our position in the global online betting and gaming industry, expanding into new regulated markets, and maintaining our ongoing drive to scale the business as a whole at a rapid growth rate.”
Golden Matrix trades on the Nasdaq Mapital market. MeridianBet chief executive Zoran Milosevic said being part of a public company should help the business expand.
“As a public company traded on Nasdaq, in synergy with Golden Matrix, we expect to set an industry standard when it comes to worldwide gaming platforms and to be in an even stronger position to deliver on our aggressive growth strategy and expand into new markets, including Brazil and the US, he said
“Our brands, which are well known among worldwide online betting and gaming communities, are stronger together; and I am looking forward to working closely with Brian as we conclude the acquisition.”
The deal comes after Golden Matrix in November also acquired the remaining 20% interest in UK-based prize draws brand RKings. The developer acquired the majority of RKings in November 2021 and said that the deal had a positive impact on its performance during both the first and second quarters of its 2022 financial year.
