PointsBet CEO says NA strategy is delivering despite growing losses in H1

The net loss grew by 21.7% year-on-year. Much of the costs during the six month period went to PointsBet’s American operations – operations that also happened to be an important part of the business’ revenue results, making up AUS$75.0m of the total. This was 86.1% higher than in H1 2022.

PointsBet launched is sports betting product in Kansas and Louisiana in September 2022, followed by Maryland in November when the state’s market officially opened.

By the time the half-year period had ended, PointsBet was live with mobile betting in 14 states, retail wagering in three, and online casino in four.

Since then, in January, PointsBet launched a new retail sportsbook in Illinois, marking its fourth retail location.

Sam Swanell, managing director and group CEO at PointsBet, said that the operator had performed strongly in the US during the period.

“These results show our North American strategy is delivering – revenue growth is up and costs are going down,” he said. “In the United States – the largest and fastest growing online betting market in the world, we are the 7th largest online gaming operator, out of a field of over 60 licensed online operators.”

He also praised the operator’s Australian results, despite revenue slipping slightly from AU$97.6m in half year 2022 to AU$95.3m.

Last month, PointsBet entered discussions to sell the Australian arm of its business to NTD Limited, a venture headed by News Corp. NTD Limited operates the Betr brand in Australia.

Betr, which was founded by influencer Jake Paul and Simplebet co-founder Joe Levy, was first launched in August 2022.

“The Australian business is continuing to deliver,” he continued. “In Australia, total turnover was AU$1.55bn, up 14% on the prior corresponding period (PCP) and total net win was AU$105.3m down 2% on the PCP.”

Breakdown by region

PointsBet generated AUS$6.7m in revenue from its Canadian operations, for which there was no prior corresponding figure as the Canadian sports betting market opened on 4 April 2022 . Technology contributed the remaining AUS$1.1m in revenue, a fall of 9.0% yearly.

Total handle for the period was AU$3.2bn, up by 39.8% year-on-year. Here, the US contribution was highest, at AU$1.57bn – a significant rise of 66.0% yearly.

Handle from Australia was AU$1.55bn, increasing by 14.1%. For Canada, handle was AU$101.3m.

Total sports betting net win came to AU$158.2m, up by 13.6%. By region, sports betting net win remained largely stable in Australia, dipping by 2.4%.

However this was slightly more dramatic in the US, where sports betting net win grew 62.0%.

PointsBet H1 results

Cost of sales, totaling AU$108.2m, resulted in net profit of AU$69.8m. This net profit was 27.6% higher than in the previous year’s H1.

Other income at AU$3.7m – consisting of net foreign exchange gains of AU$3.6m and research and development income at AU$115,000 – offset this slightly.

Turning to expenses, marketing costs at AU$131.3m were the highest of the period. This was followed by employee benefits expenses at AU$74.9m and depreciation and amortisation costs at AU$22.5m.

The remaining AU$26.8m stemmed from a variety of other costs, including consulting expenses and administration expenses.

For the six-month period, expenses totaled at AU$255.6m – AU$57.3m higher year-on-year.

Following finance income at AU$4.6m and finance expenses at AU$2.1m, the loss before income tax was AU$179.6m.

After considering income tax benefit of AU$1.4m, the total loss for the period hit AU$178.1m.

BoyleSports and Yggdrasil strike distribution deal

The partnership will see Yggdrasil’s portfolio of slots made available to BoyleSports’ customers across the UK and Ireland.

Slots games such as Valley of the Gods, as well as Yggdrasil’s Game Engagement Mechanics titles including Raptor DoubleMax and Dragon Blox GigaBlox, will be distributed as part of the deal.

“We’re thrilled to partner with BoyleSports, an incredibly well-known brand across the UK and other regulated markets,” said Yggdrasil CEO Andrew Pegler. “We want to join forces with established, forward-looking brands and BoyleSports is another strong collaboration for us,”

Steve Payne, gaming director at BoyleSports, added “Yggdrasil has a proud history of creating cutting edge, fan-favourite slots and we’re delighted to take its leading content live. We know our customers will enjoy this fantastic portfolio, and look forward to working with Yggdrasil for the foreseeable future.”

First ilottery and online sports betting solution launched in Brazil

The multi-year turnkey agreement – which was first announced in June – sees NeoGames enter the Brazilian market, in a project that will involve long-term cooperation with the state’s lottery operator.

The undertaking is NeoGames’ first large scheme led by its subsidiaries with Aspire Global and BtoBet – companies that the business acquired last year.

neogames will provide ilottery and online sports betting services to the lottery operator

NeoGames CEO Moti Malul said the organisation was “excited” to launch in the Brazilian market and to be partnering with Intralot do Brasil, who are more familiar with the local market than the Israel-based supplier.

“Together we will provide online lottery and sports betting players in Minas Gerais with a first-class online gaming experience,” he said.

“This deal is another demonstration of how we have brought the benefits of our recent strategic acquisition into play; capitalising on the online sports betting solution from BtoBet and the managed services from Aspire Global.”

Digital solution

The digital solution that the two businesses have developed for Minas Gerais will be built on top of the state’s existing retail lottery. As part of this effort, NeoGames has implemented a local cloud-based solution in Brazil in the form of its NeoSphere platform.

This includes a suite of games adapted for the local market and a customer relationship management and sports risk management system from Aspire, as well as a complete online sports betting solution created by BtoBet.

“As a market pioneer in the Brazilian lottery market, this partnership with NeoGames, one of the industry’s most innovative ilottery providers, is truly a natural fit,” said Sérgio Alvarenga, Saga Business Games Intelligence and Intralot do Brasil CEO and owner.

“The new modalities of online instant games and sport betting and investments in technology are also part of the expansion plan for new states and federal licences. We are confident that this collaboration with NeoGames will advance the lottery.”

Regulating market

The news comes hot on the heels of last week’s reports that the country’s new government may be setting in motion federal legalisation of sports betting.

According to the blog of a Brazilian sports journalist, the Ministry of Justice is to send in a proposal to the government to regulate sports betting, potentially authorising the activity after hopes seemed dashed in December, when outgoing president Jair Bolsonaro refused to sign off on the final regulations.

The path to ilottery and online sports betting was cleared in September 2020, when Brazil’s Federal Supreme Court (STF) declared that the federal government does not have the constitutional right to declare an exclusivity on the operation of lottery games.

Following this decision, each of the country’s 26 states were free to organise and promote their own lotteries without interference from central government.

Scout reduces net loss during group’s “most eventful” year

The fantasy sports provider underwent major change during its 2022 financial year, with this culminating in a restructure of its B2B segment, which led to the closure of 11 partnerships and a reduction the total number of co-operations to 13.

Upon announcing the plans at the end of Q3, Jönsson said that the restructuring programme would aim to secure profitability in all of its partnerships and also decrease expenses.

The restructure came after Scout also raised SEK101m in a share issue process to help save the business, which came in the wake of a SEK17m commitment being discovered in the supplier’s accounts that it stated it had been previously unaware of. 

In addition, Scout initiated a major restructuring of personnel – laying off 68 of 131 full time workers, including in the company’s Lviv office in Ukraine, leaving just 63 remaining staff.

Reflecting on these changes and the financial year as a whole, Jönsson said the group was confident the restructure would allow it transition to become a more profitable business in the long run.

“The most eventful year in the group’s history has come to an end,” Jönsson said. “We have during the year executed a restructuring concerning our organisation with significant reductions of personnel, our partner agreements and a successful rights issue.

“This restructuring program together with a continued cost control is a requirement for the group to come to profitability.

“To continue the transition to become a profitable company and to create shareholder value a lot of work remain, more efficiencies to achieve and sharp focus and engagement from all of us in the organisation is required.”

Fourth quarter

Looking at Scout’s financial performance and focusing first on the fourth quarter, during which much of the restructuring took place, revenue was 20.8% lower year-on-year at SEK8.0m (£638,176/€725,176/$768,240).

Revenue from B2B operations increased 70.0% to SEK5.1m due to the increase focus on this vertical, but B2C revenue slipped 45.3% to SEK2.9m, mainly as a result of previous, non-profitable marketing campaigns.

The restructuring meant that operating costs were cut 61.2% to SEK18.8m, while a positive impact of SEK10.8m in financial items meant Scout was able to post a small pre-tax profit of SEK1,000, compared to a SEK39.1m loss in the previous year.

As Scout did not pay any tax, it ended the quarter with a net profit of SEK1,000, in contrast to a SEK39.1m loss in 2021. In addition, EBITDA improved from a negative of SEK37.9m to a loss of SEK10.7m.

Full year

Turning to the full year, group revenue declined 28.1% from SEK35.6m in 2021 to SEK25.6m.

This included SEK14.0m in B2B revenue, an increase of 45.8%, and SEK11.7m from Scout’s B2C operations, a drop of 47.3% from SEK22.2m in the previous year.

Operating expenses were cut by 23.6% to SEK93.8m, while after accounting for SEK8.0m in positive financial items, this left a pre-tax loss of SEK60.1m, an improvement on the SEK82.7m loss posted in 2021.

As Scout did not pay any income tax, the group ended the year with a net loss of SEK60.1m, compared to an SEK82.6m loss in the previous year. In addition, EBITDA loss amounted to SEK67.9m, lower than the SEK84.3m loss in 2021.

“As we execute on our plans a profitable cash generative company is a possibility and a target, even if more transformative work is needed. I am determined to continue this fight,” Jönsson said.

GamCare increases digital presence with new online offerings

MyGamCare, a free-to-access, online portal, has been designed to help users self-manage their journey by understanding how gambling may be their impacting time, relationships, money and wellbeing.

The portal allows users to set goals, view content that is personalised to them, track their moods and access resources to help and support them in their journey with gambling.

MyGamCare will run as an extension to the National Gambling Helpline, which GamCare has operated for over 25 years. In January, the helpline attracted a record number of calls with more than 3,700 online chats and calls, up 17% year-on-year.

As part of its digital push, GamCare will expand the National Gambling Helpline so that users can contact the service online through both WhatsApp and Facebook Messenger

“With almost four in five people who used our services last year citing issues with online gambling, we know that the nature of gambling has changed significantly over the last 10 years and that more can be done to reach people when and where the harm is occurring,” GamCare chief executive Anna Hemmings said.

“With the introduction of MyGamCare – along with our WhatsApp and Facebook Messenger capabilities – we hope to open the door for people to get help sooner and to reach out for support in a way that works for them. 

“We know how difficult making that first step can be and how many people might not feel at a stage to talk about their gambling yet. It’s important that the options are there for people to start that journey in whichever way they are most comfortable.”

Delivering sustainable growth during esports’ market correction

Much of the talk of esports over the past few years has been that there will be this moment of critical mass: where esports will just explode into what all of that potential speculation said it was. At the time, much of this communication rode the way of excitement that comes with esports being at the forefront of modern entertainment and a melting pot of sports, gaming, pop culture and more.

In 2023, the esports sector is undergoing a market correction. Headcount reduction, reduced advertising spending and some project closures indicate that esports is past the age of hype and easy money – it’s the businesses that value substance and sustainability that will endure.

These changes have implications for esports betting as well. Notably, it’s not about touting some big bang theory of growth that has dominated the conversation, with big and brash marketing, lots of puff and a lot less substance. Gambling itself is generally a recession-proof industry, and it’s in this year that esports betting will take stock of what the real essence and measure of growth is.

Growing the pie sustainably

Leading into 2023, we’re confident that esports betting will continue to grow, and do so through the steady, sustainable growth that has become a staple at PandaScore. Rather than chasing a big bang growth or leaning on tournaments to do the leg work, offering a comprehensive, robust product from top to bottom is essential for operators and suppliers.

Oliver Niner, head of sales, Pandascore

We found that operators who joined PandaScore in 2022 benefited from an average overall increase in turnover of 33% for their esports betting product. When looking into this on a main and side market basis, the composition hasn’t largely changed, but the total turnover amounts grew. Across all our customers, total turnover on Winner and Main markets in 2022 grew by 61% when compared to 2021 numbers.

Side markets betting also grew by 54% while retaining a similar share of overall turnover, indicating that interest in these markets and products like player props isn’t going to be left behind by influxes of new players only playing on Main markets.

From small operators through to Tier-1s, 2023 will be about growing overall turnover in a steady fashion with quality product iteration based on customer feedback. When looking at the esports sector itself, there are several strong indicators of sustainable growth this year.

Esports calendar stabilising

Through this first wave of capital investment and professionalisation of esports, consistency for teams, competitions and the overall calendar has been a challenge. Teams come and go as would tournaments which led to franchising (for better or for worse) and the establishment of more structured, returning competitions throughout the year.

More consistency in more game titles across the esports calendar means it’s easier for operators to guarantee content for bettors.

The top-tier competitions have mostly found consistency for a few years now, and we’re now seeing that same consistency develop in lower-tier tournaments to fill the gaps left by your S-tier and A-tier competitions.

The Champion of Champions Tour has given Counter-Strike a tournament outside of the top flight for teams to compete in a professional environment that runs for an extended period of time with global reach. The inaugural Central Europe Finals in Malta on 16-19 in February will be a litmus test for the popularity of CS:GO at this level with bettors.

Valorant continues to make leaps and bounds as an esport and betting product. Riot Games-endorsed competitions obviously lead the way, but we also saw a proliferation of more regional and locally backed tournaments last year. This was matched by bettors with great enthusiasm, with overall bet volume on B, C and D-tier competitions tripling from 2021 to 2022 while retaining margins of almost 10%.

The restructuring of the Valorant Champions Tour and the introduction of the Partner Program also will create a more consistent calendar for top-flight competition, and hopefully the longevity that League of Legends has enjoyed.

Regulation and diversification

Everyone watches the US market closely, with good reason. Since PASPA and the gradual state-by-state legalisation, sports betting has been a dam bursting for many operators who’ve been first to market.

The same can’t be said for esports. Largely because it is legislated inconsistently, with varying parameters that can help or hinder the performance of the vertical. Specific legislation for esports with an understanding of how competition and the calendar is structured will be rewarded, rather than lumping esports in with general sports regulation.

Instead of a dam bursting, esports will likely look more like a steady stream, building momentum over time given the right regulatory conditions.

Additionally, we expect a diversification of how data is provided and accessed. Be it how data is captured and distributed, the provision of said data to operators through to how it’s presented to bettors through product.

Operators will move away from esports being in the bargain bucket. Tier 1 operators are looking for esports specialist providers with products catered to audience needs rather than a generic trading instrument as part of the sportsbook long tail.

Esports audience is still growing

In light of the market correction, the actual viewing audience for esports itself is still growing, indicating that the customer base shows no signs of shrinking. For 2023, equitable partnerships based on robust products, research and development will deliver sustainable growth.

At the end of the day, we want operators to grow their businesses. It’s why PandaScore works with our partners on a revenue share basis. Rather than cashing in on the value of the asset now, we’re putting the effort in to grow the vertical long-term. Our success is our customers’ success, and the success of the esports betting vertical.

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Zeal hails “sustainable” investment with revenue expected to rise in 2022

In a preliminary results announcement, Zeal said it experienced “strong” development despite ongoing global uncertainty that has impacted the wider gambling industry.

Chief financial officer Jonas Mattsson said ongoing investment in all areas of the business not only helped in 2022 but will allow it to grow further in 2023 and beyond.

“We are proud of our strong development despite the ongoing global uncertainty and the resilience in the lottery products these times,” Mattsson said. “The positive development of our business figures in almost all areas proves that we have sustainably invested in our own growth with our measures in 2022. 

“In 2023, we will not only focus on further expanding our base business, but also drive innovation to further extend our market leadership.”

Preliminary results

For its 2022 financial year, Zeal said revenue is expected to hit €105.2m (£92.7m/$111.5m), which would be a 21% increase from €86.8m in the previous year.

Total group billings, which comprise all stakes from customers through Zeal’s offering, are forecast to increase 16% to €758.4m, while the group was able to acquire 29% more new customers that in the previous year.

This rise in customers came as a result of increased marketing activities during high jackpot phases, which in turn is expected to lead to a 52% rise in marketing costs to €34.1m, with operating expenses also set to rise 39% to €57.0m.

However, due to higher business volume, Zeal said earnings before interest, tax, depreciation and amortisation (EBITDA) will reach €3.9m, while market share is likely to increase to 41%, compared to 39% in the previous year.

Key events noted by Zeal in the preliminary result announcement included Lotto24 securing a follow-up licence for lottery brokerage in Germany, with this to run for seven years until June 2029.

Zeal also highlighted the decision by the German Federal Fiscal Court in August to reject an appeal of the Hanover North Tax Office against the decision of the Hanover Fiscal Court of November 2019 in favour of MyLotto23 Ltd. This led to the tax office refunding a down payment of around €54.0m made by myLotto24 at the start of 2023, with an additional repayment of €2.0m in associated interest still expected. 

Looking ahead to 2023, Zeal said it expects to further expand its market leadership with the introduction new products including online games under the licence for virtual slot machine games that the group company applied for. 

Depending on general conditions – and an average jackpot development – Zeal anticipates billings to be between €800.0m and €830.0m for the Germany segment, with revenue to be in a range of €110.0m and €120.0m.

EBITDA for the full year is expected to be in a range of €30.0m and €35.0m, while with plans in place to invest significantly more in the acquisition of new customers, this will likely lead to marketing expenses reaching between €34.0m and €39.0m.

Book of Ra Deluxe Win Ways by Greentube

The popular Egyptian title returns with the Win Ways mechanic in Book of Ra Deluxe Win Ways. This slot is now available for Greentube’s B2B partners!

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Beter scores esports deal with Fortuna Entertainment Group

Under the agreement, Beter will provide FEG with an esports odds feed and full coverage of esports events and tournaments.

Beter covers 25,000 live events a year, with FEG now be able to offer its customers a wider range of tournaments with a higher number of markets.

Beter’s partnership with FEG stretches back to 2020, having provided the operator with in-house tournaments across efootball, ebasketball, ehockey and CS:GO.   

“Throughout our time working together, Beter has proven to be a reliable and highly effective partner,” FEG’s head of trading operations Polinský Tomáš said. “We are very pleased with the results we have already achieved together and we’re excited to be taking our collaboration to the next level, to ensure we are offering our customers the very best solutions available. 

“We expect plenty more achievements and successes on the market with the professionals at Beter by our side.”

Beter esports general manager Evgeniy Bekker added: “Working with leading operators gives us an excellent opportunity to continue driving the igaming industry with the best possible esports betting product. 

“I am confident that our product will help FEG to enhance its position as a market leader whilst providing a significant boost to the quality of the services it brings to its customers.”