Month: February 2023

DraftKings CEO and co-founder Jason Robins pointed to a double effort of increased revenue and reduced costs as reasons for the Q4 growth, along with the sportsbook results.

Revenue for the quarter was $855m in total, a rise of 81% year-on-year.

Read the full story on iGB North America.

The partnership will see Aristocrat’s gaming content made available on BetMGM’s online casino.

The deal marks Anaxi’s first content release.

In February 2022, Aristocrat detailed plans to create an online gambling division. In October, it was announced that the company had rebranded its online gaming division to Anaxi. 

Executive vice president of Anaxi, Cath Burns, said the deal marked the beginning of the company’s online gaming journey.

“We are thrilled to be collaborating with BetMGM as Anaxi reimagines the world’s greatest gaming content online,” she said. “We look forward to continuing to innovate and create online gaming experiences that entertain for our partners and players.”

BetMGM chief revenue officer, Matt Prevost, said the deal would bolster BetMGM’s offerings.

“We are honoured to be the first operator in North America to offer Anaxi’s world-class content,” he said.  

“Partnering with Anaxi to provide some of Aristocrat’s most iconic games supports our goal of making BetMGM online casino the best destination for players.” 

As part of the deal, the XFL has granted Genius exclusive rights to distribute official data from all XFL games to its media and betting partnerships.

As such, Genius Sports is now the XFL’s official betting data distribution partner and free-to-play provider.

Genius Sports’ executive vice president, Sean Conroy, said that having a comprehensive data policy is an important part of a sports organisation’s financial success.

“For every sports league, an official data strategy that drives both new revenues and fan engagement levels is vitally important,” he said. “We’re thrilled to partner with the XFL, connecting their games with the media and betting sectors while creating meaningful fan interactions through the bespoke XFL Pick‘Em solution.”

XFL Pick‘Em

The deal also saw Genius Sports develop a free-to-play game titled XFL Pick-Em, a gamified football prediction app that offers prizes to successful participants.

“We continue to align ourselves with the best partners in the business to drive innovation and develop new ways to immerse our fans into the action of the game,” said Wendy Bass, chief business and legal officer at the XFL.

Bass outlined how a better use of technology could help factor into the long-term success of the league.

“Genius is a leader in exploring the new frontier of next generation fan engagement,” she continued.

“By working with Genius, we can leverage their expertise across technology and data management to make the XFL a more compelling and dynamic viewing experience for the benefit of fans, partners, and stakeholders.”

Fan engagement engine

Earlier this month, Genius Sports announced its new fan engagement engine, the Genius Marketing Suite, which offers partners an array of personalised games, media buying tools and data feeds to help businesses better connect to fans.

“Our understanding of sports fans, and how and when to engage them, is unrivalled,” said Genius CEO Mark Locke at its launch. “As a leader in sports data, we can create authentic and real-time experiences at every step of the marketing funnel.”

Spelinspektionen said the legal position it outlined in October 2020 has been cancelled in light of December’s judgment from the Linköping administrative court, which saw Avento’s licence renewal rejection overruled.

The owner of Frank Casino and SlotsV obtained a three-year licence in December 2019, but its renewal application in December 2022 was rejected by the regulator due to its negative equity in the first two years of this period. However, the court ruled the rejection should be overruled as Avento was now operating in a positive financial position and that negative equity did not necessarily mean a business was at risk of fulfilling its licence requirements.

Despite the court defeat and change to its policy, Spelinspektionen said it continues to believe that a negative equity usually means that a licensee’s suitability requirement cannot be considered fulfilled, suggesting negative equity would continue to work against applicants even if they are part of a group.

It said: “For applicants who are part of a group, in some cases the group’s combined capital strength can be taken into account. This applies to both first-time applications and applications for renewed licences. A prerequisite, however, is that the group’s resources are relevant and are actually at the applicant’s disposal, which can be shown, for example, through a capital guarantee.”

It added: “The Swedish Gaming Authority believes that a capital guarantee from a private person cannot be accepted as a starting point in view of the difficulties in obtaining a reliable picture of a natural person’s financial position.

“The extent to which the group’s capital strength can be taken into account and what capital strength is required for the conditions for a license to be considered fulfilled will be decided in each individual case.”

The closing of the deal is the latest stage of an acquisition process that began in February 2020, when the Penn purchased a 36% stake in Barstool.

Today (February 17), Penn revealed that it has paid approximately $388m for the remaining interest in the business, having exercised its option to acquire in August 2022.

[Read full story on iGB North America]

Reflecting on the past year, president and chief executive Pontus Lindwall (pictured) praised the group for achieving record results despite having to contend with an “uncertain” macroeconomic and geopolitical global environment.

Lindwall said while this is likely to continue to impact all operators moving into 2023, he is confident that Betsson’s diversification into markets around the world will allow it to pursue more profitable growth over the coming year.

“We can look back at the best year ever for Betsson with strong growth and profitability, driven by disciplined capital allocation, geographical diversification and investments in new markets, as well as continuous strengthening of the tech platform and product offering,” he said.

“I would also like to take the opportunity to thank our employees for all the hard work put in during the past year. Together we will continue to deliver the best customer experience in the gaming industry and create long-term value for our shareholders. 

“Even if the macroeconomic and geopolitical situation in the world remains uncertain, we remain optimistic about 2023 thanks to our geographical diversification, focus on profitable growth, strong balance sheet and our sustainable gaming solutions.”

Q4 results

Focusing on the record Q4 performance first, revenue for the quarter reached €220.6m (£194.9m/$236.8m), up 40% from €157.5m in the previous year.

Breaking this down, casino accounted for €146.1m, or 66%, of total revenue, an increase of 27% on 2021. This was helped by the addition of 230 new casino games, 14 of which were developed exclusively for Betsson.

Sportsbook revenue was €70.7m, representing 32% of all revenue. This was 76% higher than in the previous year and an all-time quarterly higher, primarily due to the 2022 Fifa World Cup, which took place during November and December.

The remaining €3.8m in revenue, making up the other 2% of overall revenue, came from poker, bingo and other products. This was 68.5% higher year-on-year.

Betsson also said that customer deposits across all operational subsidiaries were 40% higher at €1.10bn for the quarter, while active customer numbers increased 23% to 1.4 million.

In terms of geographical performance, Central and Eastern Europe and Central Asia (CEECA) remained Betsson’s most active market with €85.4m in revenue, up 53% and representing 38% of all revenue for the quarter.

Elsewhere, Nordic revenue was €53.1m, up 2.4% on the previous year and accounting for 24% of all revenue, while Latin America revenue was €52.3m, a 101.6% year-on-year rise and also represented a 24% share.

Western Europe revenue was 26.4% higher at €25.8m, taking a 12% share of total revenue, while rest of world revenue climbed 17.3% to €4.0m, or 2% of all revenue.

Turning to costs, operating expenses for the quarter were 36% higher at €104.8m, while financial expenses stood at €4.2m. As such, this left a pre-tax profit of €35.8m, up 87% year-on-year.

Betsson paid €3.1m in tax, leaving a net profit of €32.7m, an increase of 75% on 2021. In addition, earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 68% to €51.1m.

Full year

Turning the full year and while Betsson did not go into as much detail as it did with Q4, it did reveal that revenue increased 18% year-on-year to €777.2m.

Operating expenses were 21% higher at €373.2m and financial expenses reached €6.6m, which meant a pre-tax profit of €124.6m, up 11% year-on-year. The operator paid €9.9m in tax, resulting in a net profit of €114.7m, up 10% on 2021, while EBITDA also increase 12% to €172.4m.

In a note to shareholders, Flutter referenced the success of its US-facing FanDuel Group brand, saying that if trends continue as expected, this will become the group’s largest business by both revenue and value.

Flutter said that an additional US listing of its ordinary shares would result in a number of long-term strategic and capital market benefits, as well as support further growth within FanDuel.

The group’s board said the listing would strengthen its profile in the US, better enable the recruitment and retention of talent in the country and grant the group access to deeper capital markets and US domestic investor.

Other potential benefits sounded out by Flutter included greater overall liquidity in Flutter shares and the optionality to pursue, as a second step, a primary US listing, listed as one of the criteria for access to important US indices.

“The board appreciates that this is an important topic for shareholders and intends to consult extensively before deciding whether to put forward a formal resolution for approval,” Flutter said in the shareholder note.

“The group expects to start this consultation immediately. In the event that there is broad shareholder support for an additional US listing, this would take precedence over any plans to list a small shareholding in FanDuel.

“The results of the consultation will be announced in due course.”

Largest market

The proposal comes on the back of Flutter announcing its Q3 results in November, with the group having revealed that the US became its largest market during the period. 

US revenue in Q3 amounted to $598m (£492m/€557m), up 114% year-on-year, or 82% on a constant currency basis. This was put down to a 106% rise in sports revenue – comprising sportsbook, exchange, daily fantasy sports, advance deposit wagering and B2B product verticals, while US igaming revenue also climbed 36%.

Take Macau as an example. The Special Administrative Region is only just beginning to look to a future free from China’s zero-Covid policy, after posting its lowest annual revenue figures since the concession system for casinos was launched in 2002.

This allowed the US, thanks to the casino sector’s resurgence and the rampant spread of sports betting, to become the industry’s focal point, especially as the climate in Europe and Great Britain became frostier for online operators.

But as the pace of state sports betting launches slows, and economic conditions worsen, operators are looking further afield, to Latin America and Africa in the hunt for growth. To help readers plot a path through the evolution of gaming around the globe, we’ve gathered local experts to share their thoughts on what 2023 will bring.

This is complemented by insights from subject matter experts, spanning marketing, technology and investment. On the supply side, Richard Brown from Gaming Innovation Group (GiG) discusses how he has built out a business that competes on multiple fronts, in multiple markets, and how developments in its target markets and verticals will evolve over the coming 12 months.

A huge thanks to GiG for sponsoring this report, and to the iGB editorial team for their efforts in compiling our most comprehensive set of predictions to date.

Interviewees

Jamie Mitchell, co-founder and CEO, Low6
Sergio Muscat, founder, Oxygia
Eric Frank, founder Odds On Compliance

What will be the most important technological trend of 2023?

Jamie Mitchell: The metaverse has been doing the rounds on buzzword bingo for pretty much all of 2022 and we have seen some interesting ideas of what that future space could look like. The upcoming year will really start to define the underlying foundations of web3 as we move into that more immersive world. Blockchain will undoubtedly be at the forefront and we’ll start seeing NFTs being better applied as practical value-adds.

Eric Frank: How the economic downturn will impact the industry remains top of our mind going into 2023. The sports betting and igaming industries are not immune from the potential implications of an economic slowdown.

Therefore, the ability to integrate technology to work smarter, more efficiently and cost-effectively will be the most crucial trend in 2023. Doing more with less and continuing to expand jurisdictional reach while limiting cost increases will be paramount to competing in 2023.

Sergio Muscat: I think that, despite (or maybe also partly due to) the ups and downs, crashes and scandals surrounding blockchain, it will remain a very important focus for 2023. The crashes have started the process of weeding out the trash, de-hyping and maturing the technology, so finally maybe we can start seeing its real value and the potential.

In 2023 and beyond, I believe there will also be a strong drive towards regulation of the field – whether that is good or not is still to be seen – and this could possibly start winning some favour from the general public to feel safer touching the space. I think the combination of de-hyping, regulatory effort and innovation in a practical direction will most likely allow for the technology to be integrated into new industries and provide new experiences.

What technology do you believe is perhaps overhyped and will fail to meet expectations next year?

Jamie Mitchell: Virtual reality (VR). While it’s very much championed as part of the future metaverse, I’m just not convinced that we’ll see mass adoption of this technology any time soon. I’m sure Zuckerberg would probably say otherwise but let’s take Facebook’s Horizon Workrooms – it’s pure novelty for virtual meeting software. I don’t need to stick on a headset and have a 360° mock-office space to have a successful online meeting. I get more human interaction from a Zoom call.

Eric Frank: As a technology company, it’s hard to be overly critical because trying and failing leads to more innovation and new ideas. We keep this in mind whenever we see both downtrends and upticks in technology as a whole.

Sergio Muscat: I have to say that, although we are already seeing clear signs, social media and the metaverse could be something we might see as being a general disappointment. We have already seen huge investments in the development of social media and Meta’s shift into pushing for the metaverse.

I think that there is (maybe like blockchain) a lot of noise with little results. Social media will not, clearly, disappear – rather, it may change and evolve, but not in the directions we might be expecting. I think that the metaverse, for one, will go into hibernation for some time. It will emerge eventually as a tool for gaming, and probably igaming. However I believe we’re maybe a couple of years away.

How should business be thinking of its relationship with technology in 2023?

Jamie Mitchell: Leaders need to think more holistically with their tech strategy. Specifically businesses that have established themselves in the “physical world” first and foremost. They may well have launched a successful online store but I see so many cases of tech advancements being siloed to either physical or digital. It needs to be about bricks and clicks. How can we enhance the customer experience with technology to bridge both of these worlds.

Eric Frank: Any company that isn’t constantly evaluating its use of technology – both internal technology and external resources – will have difficulty competing. Our team at Odds On Compliance builds and develops tools inspired out of necessity to improve efficiency in the industry, which will help those who lean in on technology win in 2023.

Sergio Muscat: As always, technology should be seen as a tool, rather than a solution. This has not changed, and throughout the years I believe that the fluctuations we have seen were mainly due to seeing technology as the solution, ignoring the human factor.

We cannot ignore the drive towards net zero, and there is a huge push towards that, so any relationship with technology needs to keep that in mind. This does not exclude any industry, as it is a change that is happening at the human mindset level and will therefore reflect in choices that people make in every aspect of their life.

In general, I believe that in the use of technology, especially through 2023 and beyond, it will be important to not forget the human interaction aspect of technology – both between the provider and client – and also interactivity between clients. The job of technology, in the end, is to make life easier.

Through a multi-year agreement, Betfred will be utilising IGT’s PlaySports technology to support both mobile and retail sports betting at the Mohegan Sun Sportsbook inside Virgin Hotels Las Vegas.

Betfred plans to launch retail betting first and introduce its mobile fixture at a later date.

This partnership marks the first IGT-powered Betfred sportsbook in the US.  

“IGT PlaySports’ remarkable reputation and influence in the US sports betting market, coupled with their ability to navigate complex regulatory environments, give Betfred supreme confidence in our choice to partner with IGT in Nevada,” said Bryan Bennett, COO of Betfred USA Sports.

“IGT PlaySports’ experienced, in-market team and proven technology will enable Betfred to scale our operation in parallel with market opportunities, and to establish a competitive and engaging betting experience in the most exciting gaming destination in the world.”

Joe Asher, president of sports betting at IGT said that the company was excited to integrate its technology with Betfred’s sportsbook.

“IGT PlaySports looks forward to applying our vast experience in Nevada and beyond to help Betfred create a successful sportsbook that will appeal to local sports fans and visitors alike.”

Betfred enters Maryland market

Last week, Betfred secured an online sports betting licence in the state of Maryland.

The Maryland Lottery and Gaming Control Commission issued the licence, which will enable Betfred to roll out its Betfred Sportsbook mobile wagering app in the state.

Gustavson, who officially assumed responsibilities on 1 February, will also serve as principal financial and accounting officer of the business until a replacement is found.

He replaces Sohail Quraeshi, who was only appointed CEO on a full-time basis in November after being brought in on an interim basis in October.

Gustavson joins Lottery.com having last year co-founded Zenios Technologies Corporation, the company behind the Zenios Search augmented social search engine.

Prior to this, he spent eight years as lead consultant at Wookey Technologies Corporation, while he also had spells as chief financial officer at Tri Capital Energy Corporation and as acquisition integration consultant for Play Gig-It Games.

Gustavson’s other roles included co-founder and CFO of MedicuRx Corporation and also vice-president for the private banking division and HSBC.

His appointment is the latest change at senior management level at Lottery.com, with the business last month having also confirmed the resignation of Edward Moffly resigned as interim CFO.

In December, Amer Rustom also stepped down as a director of the business despite having only been appointed as an outside director in October.

Turbulent year

The announcements came following a year of great change at Lottery.com. Issues began in July when its president and CFO was sacked over instances of non-compliance with state and federal laws, while the business found its cash holdings were overstated by $30m and also admitted it was not able to pay employee wages.

In an effort to improve its fortunes, Lottery.com attempted to secure funding from Woodford Eurasia, a subsidiary of United International Holdings Netherlands BV. However, the investor demanded four of the five remaining members of Lottery.com’s board resign as part of the terms of the loan. 

This led to two board members quitting in protest after claiming the company deliberately “thwarted” attempts to look into “red flags” raised regarding the new investor.

In November, Richard Kivel stepped down as chairman, saying it had become “impossible” to perform as an independent director as his efforts to turn round the fortunes of the business had been “aggressively obstructed”.

Days later, Lottery.com confirmed Matthew McGahan as chairman and announced Quraeshi as CEO on a full-time basis. McGahan initially joined as an independent director of its board in October.

In December, Lottery.com was issued another warning by Nasdaq, this time because of the late filing of its third quarter results. Lottery.com was required to file its quarterly statement with the US Securities and Exchange Commission (SEC) via a Form 10-Q but said it has been unable to do so as it has not yet completed an evaluation of an ongoing review into its accounting controls.

The operator gave the same reason for not filing its second quarter results on time earlier in the year.