Month: February 2023

In November, GamCare hosted the second in a series of Gambling Related Financial Harm (GRFH) workshops exploring gambling debt, with this event looking at how different sectors can better support clients’ gambling related debt.

The session brought together more than 60 attendees and featured expert speakers from Bristol University and Lloyds Banking Group, debt advice organisations Citizens Advice, PayPlan and StepChange, as well as speakers with lived experience of gambling related debt.

Looking at cross-sector support, attendees discussed how support should meet the unique needs and communication preferences of each client. In terms of help and support pages and content, it was agreed that these should include information about money and debt management for gamblers and affected others, and developed in collaboration with debt advice and gambling support sectors as well as those with lived experience of GRFH.

Other points discussed included that debt advice and credit sectors should use integrated marketing tools to promote their services as a safe place to disclose gambling harms, while effective partnership working should be adequately funded and resourced to ensure long-term success.

In addition, attendees spoke about how organisations across all sectors, as well as gambling operators, should be encouraged to share data, insights and reporting that can help improve support for people experiencing gambling related debt.

Meanwhile, attendees spoke about the impact of cross-sector work on training and how this could help moving forward. It was established that training in all sectors should include how to identify and understand the risk factors of harm, drivers of vulnerability and risk profiles of people who may experience GRFH, including those of affected others.

Other points highlighted on the subject of training included how to hold confident, sensitive, proactive and timely conversations with those affected by gambling harms, embedding lived experience at the heart of all training, and how to identify and support affected others.

It was also advised that customer-facing staff in the gambling support and credit sectors should reassure clients that their credit rating will not be affected by engaging with debt advice services and provide clarity on what does and does not impact creditworthiness.

Finally, in terms of the tools provided to help those in need, GamCare said sectors should work together to develop a toolkit supporting customer-facing staff to engage in sensitive conversations about GRFH for use across all markets.

In addition, it was recommended that all sectors should use lived experience voices and stories to help break down shame, stigma and barriers to accessing gambling and debt support.

“As acute financial pressures are translating into increasing risks for those struggling to control their gambling and levels of debt, including risks of housing problems and homelessness, the imperative for the debt advice, gambling support sectors and consumer credit firms to offer a range of solutions to support clients is greater than ever,” GamCare said.

“Following our series of workshops, we have developed a good understanding of the best practices to tackle gambling related debts, and the changes that need to be made across sectors to support those affected.

“We look forward to working in partnership with colleagues across the debt advice, credit and gambling support sectors to bring our recommendations into action.”

As part of the deal, over 100 F2P and DFS games will be offered to a number of Playtech’s operators around the world, giving ITP a “broader scope” in the market.

This distribution will occur “territory-by-territory”.

The deal will allow ITP to establish itself as a tool for Playtech customers, wherein they can take advantage of ITP’s acquisition and retention tools.

“The international scope provided by Inside The Pocket’s content aggregation platform represents an exciting opportunity for Playtech,” said Anthony Evans vice-president of strategy at Playtech. “ITP’s content aggregation platform also provides the requisite flexibility for newly regulated and maturing markets.

“We’re looking forward to how these games perform for the end user across this diverse range of markets.” 

Hussain Naqi, founder and chief executive of Inside the Pocket said that this partnership will further enhance Playtech’s offerings.

“This key integration allows ITP to serve as a tool for Playtech to offer their customers a responsive acquisition tool, amid an already revered B2B toolkit,” said Naqi. “Obviously, we’re thrilled to announce this partnership with a powerhouse provider whose reputation for excellence continues undimmed.”

Titled Senate Bill S4856, the bill seeks to amend New York’s racing, pari-mutuel wagering and breeding law by inserting a new section – article 15 – that proposes igaming regulation for the state.

The new rules would legislate for the offering of online slots and tables games, as well as live dealer games.

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The “Write To Your MP” campaign directs horse racing enthusiasts to write to their local MPs, as well as ministers from the Department of Digital, Culture, Media and Sport (DCMS), regarding the potential imposition of affordability checks.

Brigid Simmonds, chairman of the BGC, encouraged those with an interest in racing to partake in the campaign.

“I would urge anyone who has an interest in racing and in protecting their enjoyment of betting on the sport to sign up to this campaign,” she said.

Simmonds also spoke about how reforms should be aimed at those who experience problem gambling behaviour.

“Around 22.5 million UK adults enjoy a bet each month, and according to the independent regulator, problem gambling rates remain low at 0.3%,” said Simmonds.

“We have always called for a package of reforms that will deliver real change, but these need to be carefully targeted to protect the small minority who are vulnerable, not impact on the enjoyment of the vast majority who bet safely and responsibly.”

Martin Stevenson, CEO of Racing TV parent company Racecourse Media Group, said that a recent survey of Racing TV members showed how customers were being affected by the ongoing wait for the Gambling Act review.

“Our survey revealed that 15% of respondents bet, or know someone that bets, with an unregulated bookmaker, which is of real concern,” said Stevenson. “With millions of customers betting on racing, the findings of this survey indicate that hundreds of thousands of punters are potentially using the black market.

“A key priority for the white paper is needing to listen to consumers and, according to this survey, their widespread rejection of affordability checks.”

Affordability checks – which have also been called financial risk checks – are one of several assumed facets of the upcoming Gambling Act review white paper.

The white paper will be the Whitehall policy document which will recommend a number of specific changes to UK gambling law.

While many reform campaigners have long demanded measures such as affordability checks as a tool to prevent problem gambling, the industry has criticised the introduction of these checks.

Stéphane Pallez, chairwoman and CEO of FDJ Group, said that the full-year results were indicative of growth across the business as a whole, as well as a steady balance of retail and online betting activity.

“FDJ recorded very strong results for the year as a whole, marked by an increase in all of our business activities and supported by significant growth in our 30,000 points of sale and sustained momentum online,” said Pallez.

“This good performance benefits all our stakeholders, in particular our employees,
our retailers and our shareholders.”

This growth was seen across the board. Lottery revenue rose by 10.9% year-on-year to €1.91bn. Revenue from sports betting and online gaming activities came to €467m – up by 0.6%.

In addition, FDJ said that 6% of the total revenue for the year was generated by the 2022 World Cup.

Full-year breakdown

Turning to the full results, revenue consisted of €2.38bn in net gaming revenue and €72.7m in revenue from other activities.

Gross gaming revenue (GGR) for the year totaled at €6.52bn, a rise of 8.6% yearly. This resulted from €20.61bn in stakes, which was affected by €14.09bn in player payouts. Following public levies at €4.14bn and sports betting revenue at €10.2m, net gaming revenue hit its total.

GGR from other activities totaled at €1.5m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) was €590m.

Varying costs

Cost of sales affected the revenue the most, coming in at €1.32bn. Marketing and communication costs were the second highest of the year, at €460.9m, while general and administrative expenses hit €200m.

After considering other recurring income at €4m, recurring operating expenses at €15.4m, €200,000 in non-recurring income and €10.6m in non-recurring operating expenses, the total operating profit for the year was €448.8m. This was up by 14.5% yearly.

Various other incomes and expenses – spanning financial debt, financial income and financial expenses – took a further €28.7m from the total. After a net income share of €1.1m, profit before tax was €421.2m for the year, up by 1.1%.

Following income tax expense of €113.3m, the total net profit for the year was €307.9m, an increase of 4.6%.

Outlook for 2023

FDJ also outlined its outlook for the year ahead.

It projects revenue growth between 4% and 5% for 2023, which would see revenue hit around €2.51bn. This incorporates FDJ’s acquisitions of payment solutions provider Aleda and payment management company L’Addition.

FDJ also estimates a 20% rise in digital stakes.

In addition, the operator’s €175m acquisition of ZEturf Group, which was agreed in November last year, is set to be completed in the second half of 2023.

Last month, FDJ partnered with Ligue 1 football club Paris Saint-Germain to launch a responsible gambling campaign.

Fredriksson is currently HR director at global software development group SAS Institute with responsibility for several business areas in Europe and Asia. She will be part of Svenska Spel’s group management and report directly to chief executive Patrik Hofbauer after taking up her new position in May.

“I am very happy to welcome Anna-Clara Fredriksson to Svenska Spel,” said Hofbauer. “Her solid competence from the tech industry and long experience in leading positions in HR will be valuable to us. In her role as CHRO, Anna-Clara will, among other things, be responsible for the important work with our corporate culture and the further development of our HR.”

Fredriksson has worked at SAS since 2014 and previously held HR positions at Carnegie Investment Bank, SEB and Telia.

“Svenska Spel has a strong brand and a fine corporate culture that I look forward to continuing to develop,.” said Fredriksson. “I also like that Svenska Spel has an interesting and important social commitment, is a major sponsor of Swedish sports and that the group is a role model in sustainable gambling.

“I hope to contribute with my experience in HR from various industries and having worked internationally for many years. Among other things, it has given me valuable insights into the importance of diversity and how to best use that dynamic for innovation and continuous development.”

Established regions

North America: Eric Frank, CEO, Odds On Compliance

What are your hopes for the US gambling sector in 2023?

My main hope is that one of the remaining large states without legal sports betting – Texas, Florida, California – advances their legislative efforts significantly, with the regulatory framework for a competitive market – favourable tax rate, licensing fees, large number of skins available, favourable operating conditions.

What challenges will the US industry face in the coming year?

Responsible Gaming seems to be a keen area of focus for 2023. The industry, and regulators in particular, seem to be questioning whether the current processes, tools and innovation are insufficient to protect consumers facing or suffering from responsible gaming behavioural problems. 

What one thing could transform the industry?

Silicon Valley. A major tech giant like Google, Amazon, and Facebook entering the market could be a game changer for innovation in the marketplace. Additionally, another key state adding igaming in 2023 could open the door for a few other states to follow suit.

Asia: Alidad Tash, managing director, 2NT8

What are your hopes for the Asian gambling sector in 2023?

Recovery and getting back to 2019 levels, which would be easier for most jurisdictions except Macau. Anywhere else, they have a chance – Singapore can do it. Korea can do it, but Macau? Hell no.

What challenges will the Asian industry face in the coming year?

Inside Macau, battling Covid; there will be uncertainty until an equilibrium is reached. Outside Macau, the Chinese government’s stance on allowing people to travel there. We don’t know if or when China opens up, whether China will allow hardcore gamblers to travel to Manila.

Number two, you have to get your money there. There’s uncertainty whether high rollers will be allowed to travel abroad. This extends to Macau as well. That is a mystery to eveyrbody. Will Singapore be able to survive without the Chinese high rollers, when China is making it more difficult to get there? That’s harder without the junkets.

What one thing could transform the industry?

I have no idea. I’ve given up being an optimist – let’s get back to running the race before we even think about optimising things. Within the context of 2023, it’s very difficult. Innovation is not what you need. When you’re starving, you don’t think about recipes; you just think of what you can get to eat.

On the other hand, Las Vegas is a miracle. They are breaking all-time records, though there are question marks there as to whether the recession will burst that bubble in 2023.

There’s so much uncertainty, with this potential reopening in China coming at the end of the year, that makes things really difficult to predict. If this was six months ago, I would have a good idea of what to predict, but there is so much uncertainty. They haven’t even announced things yet. They’re leaning towards opening but a big outbreak could derail everything.

Great Britain: Rawa Kaftan, associate, Wiggin

What are your hopes for the British gambling market in 2023?

If you were to cast your mind back to 8 December 2020 – the date on which the government announced its review of the Gambling Act 2005 – we were promised that a white paper would be published during the course of 2021 setting out “proposals for reform”.  It might be the glaringly obvious thing to say, but it’s high time for its publication.

2021 and 2022 have now passed and the continued delay has left the industry in a protracted state of limbo and unable to draw up meaningful future plans beyond what is immediately around the corner. Publication would allow market players to properly assess the potential opportunities that the proposals might bring, but also reflect upon the impact of the likely introduction of a framework of tighter regulation – in particular, for example, on gambling marketing and the imposition of stake limits on online slots. Either way, publication will bring an end to the current uncertainty and help businesses make longer term strategic plans for their British-facing operations. 

What challenges will the British industry face in the coming year?

The British gambling industry has faced uncertain times for quite some time now, and it seems that is set to continue into the new year which will, of course, bring a variety of challenges.

As touched upon above, while we can make an educated guess as to what the white paper might say, the industry continues its wait with bated breath for the published proposals. Where operators may face more immediate challenges in 2023 is in its dealings with the Gambling Commission. Over the last few years, the Commission has introduced concepts such as special measure processes and affordability, and enforced against operators on these concepts without giving the industry direction or guidance as to its expectations. This only serves to create tension between operator and regulator and results in a sense that the Commission might regulate as an authoritarian body rather than engaging with the businesses it licenses.

One only needs to look at the Commission back-peddling on the customer interaction guidance that was supposed to take effect in September 2022 before deciding to consult on the guidance instead, but somehow still insisting that the majority of the new requirements will take effect from the September date. It will be interesting to see what position the Commission will take with regard to enforcement on the new requirements in the period that, due to its own shortcomings, has left the industry in a state of confusion by virtue of a lack of guidance on those new requirements.

What one thing could transform the industry?

The obvious answer here is the white paper. Though, actually, what might be more transformative is if the publication of the white paper serves as a reset between the relationship between the Commission and the industry it regulates, and it might be helpful to look backwards before moving forwards.

2014 was a significant year in the British gambling industry not only because amendments to the Act led to an influx of licence applications, but also because the government published the Regulators’ Code. The foreword to the Code sets out a government commitment to “reducing regulatory burdens and supporting compliant business growth through the development of an open and constructive relationship between regulators and those they regulate”. The Code itself states that regulators – such as the Commission – must have regard to the Code, and provisions contained therein state, for example, that regulators should:

Carry out their activities in a way that supports those they regulate to comply and growProvide simple and straightforward ways to engage with those they regulate and hear their viewsEnsure clear information, guidance and advice is available to help those they regulate meet their responsibilities to complyEnsure that their approach to their regulatory activities is transparent

In light of the (hopefully) imminent publication of the white paper, 2023 might serve as a good time for the Commission to familiarise itself with the Code in the hope that it and the industry it regulates can rebuild what, at times, appears to be a fractured relationship. The recent speech given to industry CEOs by Andrew Rhodes hints at a desire for a less abrasive relationship but the proof will be in the pudding.

Emerging regions

Latin America: Karen Sierra-Hughes, vice president, Latin America and the Caribbean, Gaming Laboratories International (GLI)

What are your hopes for Latin America’s gambling sector in 2023?

Political changes that took place in important markets before the end of the year may have slowed down the progress of regulatory development that would have brought certainty, stability, and sustainable growth for key markets that the global industry was so looking forward to, but I am hopeful that 2023 will bring the revamp of these opportunities for countries such as Peru in the first half and Brazil in the second half.

I am looking forward to seeing how the new online gaming industries in Cordoba and Mendoza in Argentina will develop and hopeful that more regulatory developments will start in the Argentinean Provinces that have not advanced yet in that direction.

I am also hoping that 2023 will bring the materialisation of new lottery verticals and sports betting opportunities at the State Lottery level in Brazil, and that Chile passes the online gaming legislation that had an important impulse in the first half of 2022 but was halted and still pending discussion in the Congress.

Finally, I hope that more LatAm operators start exploring markets outside the region. We have sophisticated operators with great technology, professionals, and experience that are in condition to compete outside the region, and it will be a great pride to see them exploring opportunities around the globe.

What challenges will the Latin American industry face in the coming year?

I prefer to transform challenges into opportunities, so I will respond to the question the opposite way. The opportunities I see are all industry stakeholders coming together with a collaborative industry approach to fill the gaps that lack of regulation or insufficient regulation has left for diverse reasons in different jurisdictions. We should aim to establish consensual frameworks and guidelines for self-regulation where needed, and a good example is a proactive approach regarding responsible gaming and player protection. Fraud prevention is also crucial, as is establishing a collaborative network among operators to report and communicate when it happens. It not only protects their operation and the fair game but also directly impacts our efforts to protect our sports leagues and prevent match-fixing.

We can’t deny the proliferation of illegal gaming, and this brings the need for regulations to be construed with the aim to support the success of legal operators with the most diversified gaming experience and fair conditions for all while protecting the player and vulnerable. That requires the customisation of regulation per the specific culture and economies of each jurisdiction, allowing operators to offer the best gaming experience for the players in a protected and safe environment.

What one thing could transform the industry?

Omnichannel for me, continues to be a fascinating opportunity to link the land-based gaming industry with online customers.

Taking advantage of the technological development around omnichannel gaming and sports betting platforms, game content and the use of cashless and non-traditional payment methods in land-based operations is key to this, but in some jurisdictions, support from regulatory agencies by updating regulations may also be needed.

Africa: Yahaya Maikori, partner, Law Allianz

What are your hopes for Africa’s gambling sector in 2023?

The industry grown exponentially in the last seven years or so, and so have some of the companies. What I would love to see starting from 2023 is indigenous operators listing their operations in their local stock exchanges.

For me that will signify the coming of age of the industry – such a move will move gaming into the mainstream, placing it side by side with other blue-chip companies which are considered significant players in the financial sector.

Such initiatives will help attract the needed investments from financial institutions, and bring confidence to the public while debunking the long held misconception that gambling operations are largely pipelines for criminal activities and therefore incapable of transparency.

Outside of South Africa, I cannot point at any other African operator which has successfully achieved this milestone. Recently, a listed South African media company bought significant shares in a Nigerian operator but as far back as 2002 Phumelela was listed on the Johannesburg Stock exchange.

What challenges will the African industry face in 2023?

One of the catalyst for the explosion of the gaming market is the ease of payment, which is primarily driven by fintech and grassroots adoption of cryptocurrencies.

The high adoption rate of cryptocurrencies by Africans was primarily to save money against unstable local currencies, to speculate, avoid exorbitant remittance fees and avoid bank bureaucracy while also using crypto for easy payment for goods and services.

Research shows that Africa has the highest adoption rate, receiving 3% of global crypto at a total value of $106bn for the period from June 2020 to July 2021, which one study said was a 1200%, increase compared to the previous year.

As of November this year, crypto has shed about 70% of its market value since hitting an all-time high of roughly $69,000. The crash is bound to rattle the confidence of the entire African market, underscoring the fears of most governments across Africa Central banks. The overall market capitalisation of crypto assets has dropped to less than $1tn, from its November 2021 peak of $3tn.

Additionally the collapse of FTX exchange will push central banks across Africa to impose additional restrictions on the financial activities concerning cryptocurrencies.

What one thing could transform the industry?

The one thing I believe will radically transform the industry by unleashing the market potential is access to affordable broadband, which is the single most important infrastructure for digital commerce.

There is a famous Airtel advert that is often aired across Africa which says “you are lost without data – data is life”. While this is almost true elsewhere, data is still a luxury in Africa and definitely doesn’t come close to becoming a life essential.

Having said that, it is important to contextualise our peculiar situation. In research conducted by A14, juxtaposing the cost of data-only mobile broadband as a percentage of average income in 2020, African countries ranked eighth out of the ten most expensive countries in the world for 1GB of mobile data. The Central African Republic was the most expensive, with 1GB of data costing the equivalent of 24.44% of average income.

So imagine the economic disenfranchisement of hundreds of millions of people in the continent and what that means to the industry.

The rest of the series

Predictions: Technology and innovationPredictions: The investment climate in 2023Predictions: Marketing

In a trading update for the three months to 31 December 2022, LeoVegas – which was acquired by MGM Resorts International late last year – said total revenue stood at €99.5m, which was up 1% year-on-year.

Despite the takeover, LeoVegas must still report its own quarterly report as it still has bonds on the Nasdaq Stockholm corporate bond list.

In the Nordic countries, net gaming revenue (NGR) increased 9%, with a strong performance in Sweden aided by new records for the Expekt brand. In the Rest of Europe, NGR increased 4% year-on-year thanks to healthy growth in the UK and Spain and despite negative impact from Germany.

In the Rest of World region, NGR decreased 15% year-on-year. The trend was favourable in most markets in the region, but growth was adversely impacted in the short term by the business closing a couple of smaller markets in the region earlier in the year.

Fourth quarter results

Gross profit for the fourth quarter was €65.8m, which was up slightly on 2022. Cost of sales, relating to external game and payment service providers, decreased by a small amount to €14.8m. Gaming duties were up slightly and totalled €18.8m.

LeoVegas saw an almost 26% rise year-on-year in personnel costs, which it said was due to provision for the group’s incentive programmes for management, investment in highly qualified technology and product employees, and a headcount increase. Marketing costs during the quarter totalled €34.7m, up compared to €33.8m last year.

A significant burden on LeoVegas’ performance was the €16.6m attributed to other operating expenses. The business said a major proportion of the increase from €10.6m last year was the result of provisions for player claims in two markets. The increase was partly the result of items affecting comparability during the quarter of €700,000, which was driven by transaction-related costs.

EBITDA of €2.6m was down from €11.6m in Q4 2021, while an operating loss of €2.5m compared to a profit of €6.1m a year ago. The group’s depreciation and amortisation excluding acquisition-related depreciation and amortisation totalled €3.9m, which related to acquired intangible assets totalling €1.2m. In the third quarter of the preceding year, Royal Panda’s acquired customer database became fully amortised, which was the main reason for the year-on-year decline.

With income tax up significantly due to deferred tax assets and financial costs up in relation to the business’ bond issue, LeoVegas reported a net loss of €7.8 compared to a profit of €4.2m a year ago.

Full-year overview

Revenue for the full year totalled €394.7m, which was up 0.8% year-on-year.

For the year, LeoVegas reported an operating loss of €1.6m compared to a profit of €18.0m. Over the course of the 12 months, personnel costs were up around €10m with other operating expenses up 77.0% to €64.2m.

LeoVegas elected a new, three-member board ahead of its acquisition by MGM Resorts International last September. The board includes current LeoVegas chief executive Gustaf Hagman, MGM Resorts CEO William Hornbuckle and Gary Fritz, head of gaming at IAC, a major shareholder in LeoVegas. 

Earlier this month, MGM Resorts International reported a fifth consecutive record-breaking quarter in Las Vegas during the final three months of 2022. In a trading update for the period ending 31 December 2022, the gaming group said it generated consolidated net revenues of $3.6bn (€3.35bn/£2.98bn), an increase of 18% compared to the prior year quarter. 

The group’s operating loss for Q4 was $2.0m compared to operating income of $369.0m in the prior year’s quarter, due primarily to a $1.2bn increase in non-cash amortisation expense relating to the MGM Grand Paradise gaming subconcession and an increase of $338m of rent expense recorded within general and administrative expense related to the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022. These were partially offset by a $1.1bn gain on the disposition of The Mirage.

According to preliminary figures issued by the New Jersey Division of Gaming Enforcement (NJDGE), the state’s 12 retail sports books and 27 sports wagering mobile sites brought in $109.3m for the NFL championship game, which was down 23.9% on 2022.

To read the full article, visit iGB North America.

The group said that should Caesars be successful in its bid for a license and open the Jay Z-backed Caesars Palace Times Square in Manhattan, Caesars Rewards members will be able to use their reward credits by converting them to gift cards, valid across the Caesars Rewards Gift Card Network. Partners would include participating hotels, restaurants, retailers, comedy clubs and entertainment venues across New York.

To read the full article, visit iGB North America.