Month: March 2023

In December, the committee stated its intention to examine the government’s approach to gambling, in the wake of warnings that “more needs to be done” to protect people from gambling-related harms.

A number of government bodies – including the Public Accounts Committee, the National Audit Office and a House of Lords committee – have called for more action to fight problem gambling, with both the Gambling Commission and DCMS singled out criticism.

As such, the committee will investigate a number of issues relevant to industrial regulation, such as links between gambling and sport, technical advances in the sector, as well as the progress the government have made in dealing with the issues that have been raised in Parliament.

“Gambling acts as an enjoyable pastime for large numbers of players, but regulation is struggling to keep pace with the rapidly changing way in which it happens today,” said Julie Elliott MP when the committee was announced. “This puts people at risk of the devastating harm it can sometimes cause to lives.”

The inquiry into the UK’s approach to gambling is being conducted in the shadow of the government’s review of the 2005 Gambling Act, which concluded last year.

The next stage in the process will the issuing of a White Paper, which will be a Whitehall policy document which will recommend a number of specific policy proposals. While the report has been delayed a number of times, the government now says that it is expected to be released “shortly”.

Written evidence

The Gambling Commission provided an overview of the UK regulatory environment, as well as sought to answer a number of questions posed by the committee.

The regulator provided a particularly detailed response to question of whether it is possible for a body such as it to continue to stay abreast of innovation in the online sphere.

“The pace of change in the online gambling industry gives rise to new risks, opportunities, and regulatory challenges, which as a regulator we must be equipped to understand and respond to,” said the Commission.

The organisation also took note of the way in which digital developments have changed the relationships that consumers have had with operators – which it warned has the potential to impact young people who are present in adjacent online spaces such as social media.

In order to stay ahead of transformation in the online sphere, the regulator highlighted its establishment of a Digital Advisory Panel to advise it on the evolving landscape and emerging trends.

Industry trade body, the Betting and Gaming Council (BGC), on the other hand made repeated reference to the Gambling Act Review White paper in its submission document.

It highlighted the popularity of gambling activities in the UK, the Commission’s statistics on the relatively low levels of problem gambling, as well as what it described as a “strong culture” of safer gambling among industry.

Despite this, the BGC said that it understood that further change was needed.

“However, the sector also understands the deep sensitivities around the issue of gambling harm and its responsibility to support and work towards reducing such harms and providing support to those who need assistance for problem gambling,” said the BGC’s submission document.

“The sector stands ready to implement the measures emanating from the White Paper.”

British Medical Association

The UK medical doctor professional association and trade union, the British Medical Association (BMA), argued that gambling disorders should be “recognised as being as serious and complex a medical problem as other addictions and be able to be treated on the NHS.”

In this context, the BMA proposed four main approaches that government should undertake to better regulate gambling.

The body said that there should be restricted advertising for gambling in the UK in order to “help control exposure”. In service of the goal, the BMA added that the DCMS should look at options for reducing the spread of gambling advertising, ranging from restrictions to outright bans.

The second proposal submitted by the trade union was that gambling research and prevention should be funded through an independent process. It emphasised that the current model – wherein businesses in the sector make voluntary contributions to a central charity which funds research – “is not appropriate”.

Widely rumoured to be a provision of the upcoming White Paper is the implementation of a statutory levy which would be imposed on gaming companies to replace the voluntary system.

The BMA also argued that prevention should receive increased resources.

“There should be a focus on public health approaches to tackle gambling harms through a combination of prevention methods, including restricted advertising and marketing, restricting licenses and availability, and strengthening regulatory frameworks,” said the association.

In additional to these recommendations, the professional body also said that a cross government approach is needed, arguing that the decisions to regulate gambling should be made jointly by the DCMS and the Department of Health and Social Care.        

Troy Paul founded influencer marketing specialist SGG Media with his father after graduating from university during the Covid-19 pandemic. The sports betting industry had long appealed to him, leading him to dive in.

“I knew that once PASPA had been repealed, there was a huge industry being created – I wanted to be a part of it,” he explains.

The idea for SGG Media came to life after Troy noticed sports betting marketing was dominated by cost-heavy traditional media forms, such as television and billboard advertising, that offer little way to track results. 

He realised social media could provide a less costly alternative to traditional advertising – and saw a bright future for influencer marketing.

He notes the sole focus of the company is social media. “We’re putting all of our eggs in that basket,” he says. 

“That’s what we believe in. We think it’s the future of sports fans and sports gamblers.”

Age of the influencer

After the repeal of PASPA, major operators spent millions, if not billions, on traditional forms of advertising. As the market matures they are looking for more innovative ways get their products in front of the right audiences.

Social media provides a cheaper way to offer advertising solutions. In particular, SGG’s strategy relies on the power of the “micro-influencer”, in which an influencer provides custom content directed at a specific sport or area.

The influencer gains followers and builds up a base for targeted advertising campaigns by creating content.

SGG’s network of influencers span the country and collaborate on content, to varying degrees. Strategy differs depending on the influencer and scale of the account, though the majority of follower retention relies on the influencer rather than SGG itself.

Despite the difference in approach and partnership strategies, Paul maintains this niche is an integral part of success for influencers in the industry. 

“The accounts that always have the best engagement and are growing and are continuing to build their audience are ones that focus on the specific niche,” he says. 

“Instead of trying to do everything at once, they focus on a specific team or region to cover. Out of that comes a really loyal audience and accounts that continue to grow and produce the best engagement for us.”

Forging online communities 

Much of the brand loyalty and trust that has been lost by hyper commercialisation and competition is returning via online community and influencer loyalty.

Paul stresses a loyal audience sets social media marketing apart from its traditional counterparts. These influencers and their followers shape communities, bonded together by sports teams.

In terms of the value social media has over traditional forms of advertising, Paul notes that the community aspect is second to none. 

“The overwhelming factor that social media has in its favour is that it creates communities of fans that come together and interact with each other,” he explains.

“This can encourage fans to sign up for a sportsbook and consume content because it involves their social media community”.

Bonuses and first-time bettor deals only go so far. But when a betting ad targets a specific niche group, it better resonates with the end user.

While this specific type of advertising may sound nuanced, there is an air of past familiarity in influencer marketing.

Looking towards the future

It is clear many companies are turning to the “Barstool method”, as Paul puts it. In this model, content production and online fan interaction is as much of a product as the sportsbook is. Think of Dave Portnoy, founder of Barstool Sports, or Jake Paul entering the market with Betr.

Russell Karp of DataArt notices this trend being adopted by other operators in a recent article he wrote for iGB. 

“Increasing fan participation through an interactive and multi-layered experience – chat, play, compare, learn, etc. – has fast become one of the priorities for US betting providers,” he writes. 

“And the playbook for doing so shouldn’t surprise anyone: in-game betting, social media activity, educational content and live streaming are just some of the tactics proven to drive engagement and, ultimately, retention.”

Paul makes a similar conclusion, and has full expectations that the industry-wide focus on content and direct engagement will continue to grow in the coming year. 

He attributes the lower cost and high return value of social media campaigns as a driving force for the future. Notably, he points out how big operators have started creating more interactive content for fans.

DraftKings, for example, is developing communities through podcasts and its sportsbook app, where fans can interact with one another’s bets.

The evolution of sportsbooks, and how they are marketed

“The sportsbooks and the apps that we’ll see five years from now will look completely different than what we see today,” says Paul.

“Three to four years down the line when the sports betting market matures, big operators will be able to continue to produce ads and get new signups through the investment in social media and content beginning today.” 

“As opposed to traditional advertisements, where publicity ends after the ad airs, social media will be able to provide constant advertising via minimal spend,” he adds. 

The instantaneous nature of today’s life also plays a part in the future of social media marketing within the industry.

New forms of betting, such as micro betting, are taking over the industry. In-play bets and being on your phone during a game whilst engaging with different media and apps is becoming the norm.

Paul agrees. That instantaneous nature of social media will shape the future of the industry. 

“We want it all and we want it now,” he says. 

“That’s what we’re trying to hit with our advertisements and that’s what you’re seeing a lot of these operators do as well.”

Total gross receipts from commercial and tribal operators across igaming and online sports betting for the month amounted to $170.8m, which was up from $145.3m in February 2022 but 8.8% behind $187.3m in January this year.

Some $148.2m of this came from online casino activities, up 2.3% on the previous year but 3.6% lower than January.

Read the full story on iGB North America.

The Right of Withdrawal Act regulates agreements between consumers and businesses.

In the proposed amendment, the Ministry argues that gambling should be given an exception from the law since requirements for prior information and the right to withdraw are “difficult to implement” for gambling activities.

The Right of Withdrawal Act is a 2014 law which implements a 2011 EU consumer rights directive into Norwegian law.

Among other provisions, the law regulates what information a business must provide before entering into an agreement with a consumer, as well as gives said customer 14 days to withdraw from the agreement.

While the EU directive contained a clause dispensing games of chance from the provisions, the Norwegian law contained no such exemption.

The proposal follows a series of consultations that the Ministry undertook with a number of Norwegian government bodies, academic institutions, political organisations, gaming businesses and NGOs.

Response from industry

The amendments to the Act received a mixed response from industry. The country’s online gaming trade association, the Norwegian Industry Association for Online Gaming (NBO), applauded the specifics of the bill – but argued that the real issue was stringent regulation buoying the strength of the illegal market.

“The Norwegian Online Gambling Industry Association understands the ministry’s wish to amend the Right of Withdrawal Act so that it is more in line with today’s consumers’ relationship with gambling,” it stated in a response to the consultation. “As they write, it is a main principle in Norwegian gambling policy ‘to channel gambling activity towards safe and sound gambling offers that are subject to public control.’

“And to succeed in that, ‘the games Norsk Tipping and Norsk Rikstoto offer must have sufficient competitiveness and be user-friendly.’”

“This is not the case either with or without the amendments to the Right of Cancellation Act.”

The NBO further pointed to H2 Gambling Capital’s analysis of the level of channelisation rate for online gambling in Norway, highlighting that non-Norwegian regulated companies made up 67% of the total market in 2021. It emphasised that what this meant in practice is that more than half of the online sports betting and igaming market happened outside a context of national regulation.

“It is all the more gratifying to see that the ministry indicates in the consultation letter that they have checked with the applicable law and practice in a number of European countries regarding their application of the right of withdrawal for gambling,” continued the lobbying organisation. “What these countries have in common is that they have also chosen to regulate gambling through a licensing model – with the exception of Finland, which is expected to adopt this shortly.”

In January, the Norwegian gambling regulator Lotteritilsynet reported that the number of banks contacting customers over illegal transactions had increased since the study was first completed in 2020.

The bill – sponsored by Republican Rep. Killian Timoney – sought to ban “grey machines”, which are coin operated gaming machines with cash pay-outs that aim to side-step gambling laws by adding an element of skill to their operation. Many of these machines are found state-wide in locations such as gas stations and convenience stores.

The law authorises the state to empower prosecutors to establish a penalty not exceeding $25,000 for any person who conducts, finances, manages, supervises, directs or own such a machine as defined under the text of the bill.

Such “skill-based” represent a huge chunk of US gaming revenue, with more than $109.2bn bet per year according to a report by the American Gaming Association (AGA).

[Read full story on iGB North America]

The state-owned company came to the conclusion after analysing gambling statistics from January and February 2023.

In a blog post on Svenska Spel’s website, Kajsa Nylander, head of sustainability at Svenska Spel, attributed the find to a number of safer gambling measures the company had implemented in 2021 and 2022.

These consist of a mandatory income review for customers aged 18 or 19 who want to impose a gambling limit of over SEK1,000 (£78.91/€90.01/$96.71) each month, and for other customers who want to impose a gambling limit of over SEK100,000 per month.

The company had also implemented a mandatory 10-minute break for players using its Vegas slot machines and introduced a rebranded version of its gambling harm prevention tool, Min spelkoll.

Cost of living crisis

Nylander said that Svenska Spel decided undertake the study in light of the rising cost of living, which has affected food supplies, energy prices and other aspects of day-to-day life in the country.

“Many people are currently feeling worried about their finances,” said Nylander. “Inflation and increased housing interest rates hit households hard.”

“There are therefore fears that the increased vulnerability could lead to more people developing gambling problems.”

Along with revealing the lack of increase in problem gambling, Svenska Spel found that those who had shown signs of risky gambling had gambled less during January – February 2023 than in the same period in 2022. This was especially obvious in online casinos.

Further measures

Nylander said that in order to continue these positive trends, Svenska Spel has placed more focus on its game check calls, a move it also made during the Covid-19 pandemic.

A game check call is a preventative measure that takes place when Svenska Spel notes concerning gambling behaviour in a new customer.

“We want customers to play in a planned and safe way, so we often talk in these conversations about the importance of having limits that are reasonable for the customer,” explained Nylander. “We also talk to the customer about the risks of the particular form of game they are playing and inform them about our game control tools so that they get good protection.”

Nylander also said that this service had intercepted problem gambling behaviours in those that are struggling with the cost of living crisis.

“In some of these conversations, we have intercepted people who mentioned that, for example, they had a hard time paying the electricity bill or ran out of food,” she said. “So even if risky gambling has decreased overall, it is important that we continue with our preventive talks to help customers keep track of their gambling behaviour.”

Last week, Swedish regulator Spelinspektionen revealed that gambling revenue in the country rose by 5% in 2022.

Under the multi-year deal, Playtech will provide a range of content for Dazn Bet customers including casino random number generator games, table games and live casino games.

The partnership has already gone live in the UK with more markets to come later this year including expansions in Spain, Italy and Germany.

Dazn Bet soft launched in the UK in August 2022, just several months after details of the new venture were announced in partnership with betting and gaming supplier Pragmatic Group. 

“I am delighted to partner with the team at Playtech, adding additional new industry leading products to the brand and supporting our mission to create a new fun Dazn Bet sports betting experience,” said Mark Kemp, who was appointed chief executive of Dazn Bet in April last year.

Playtech chief operating officer Shimon Akad added: “At Playtech we pride ourselves not only on retaining our longstanding industry partnerships, but on building new ties and innovating with fresh, new and exciting brands. 

“We are delighted to be working with Dazn Bet, a disruptor on the scene. We look forward to building on this momentum and finding new ways to work together as part of this exciting deal.”

While the vote is a step forward in the authorization of sports betting in the Show-Me State, a formal roll call vote is required in the House before the bill is sent to the State Senate for final confirmation.  

House Bill 556, which would allow for retail and online sports wagering in Missouri, is being co-sponsored by Republicans Dave Hinman and Adam Schwadron, as well as Democrats Keri Ingle and Ashley Bland Manlove.

The bill was introduced to the House at the start of the year and approved last night (March 20). Following a formal roll call, which is expected to take place later this week, the bill will then progress to the Senate for further discussion.

Read the full story on iGB North America.

Bragg’s revenue for the fourth quarter was €23.7m (£20.8m/$25.5m) a rise of 50.3% year-on-year, while revenue for the full year was €84.7m – up by 45.2%.

Yaniv Sherman, chief executive officer at Bragg, said that the results were “transformational” and added that they signified Bragg’s growth throughout the year.

“Bragg concluded a transformational 2022 with another quarter of record results, as fourth quarter revenue, gross profit and adjusted EBITDA grew significantly compared to the fourth quarter of 2021 and exceeded our prior expectations,” said Sherman.

“These record results highlight Bragg’s ongoing substantial momentum as we continue to successfully diversify our operations from serving primarily central-European igaming markets to become a global, content-led, igaming solutions provider with extensive distribution across North America and Europe.”

The year had been an eventful one for Bragg. In March 2022, it was granted supplier licences in Ontario and the Bahamas.

It officially completed its $30.0m acquisition of Spin Games in June following approval for a licence in Pennsylvania.

In September, it secured $8.7m in funding from Lind Global Fund. Also in September, Bragg announced that it would consolidate all its companies and businesses under a single brand.

Full year results

A majority of Bragg’s revenue for the year came from its operations in the Netherlands. As the Netherlands’ online gaming market only opened on 1 October 2021, the revenue for 2022 was significantly higher then in 2021, growing by 533.7% to €36.8m.

Curaçao was the second highest territory at €17.2m, while revenue in Malta came to €14.6m. The remaining revenue came from the US, Croatia, Serbia, Romania, and other territories.

Cost of revenue for the full year was €39.6m, an uptick of 32.1% from 2021. This brought the gross profit to €45.0m, a rise of 59.1%.

Selling, general and administrative expenses also grew, from €34.6m to €46.7m. Employee costs generated the highest expense, at €23.1m. This was followed by depreciation and amortisation costs, which totaled at €8.4m, and professional fees, which came to €3.4m.

The remaining expenses consisted of corporate, sales and marketing and IT and hosting costs among others.

These expenses, alongside three gains on remeasurement – consisting of derivative liability, consideration receivable and deferred consideration – which added up to €854,000, resulted in an operating loss of €828,000, significantly less than the loss of €6.3m recorded in 2021.

Net interest expense came to €1.0m, up from €340,000, bringing the pre-tax loss to €1.9m.

Following income tax at €1.5m, the net loss for the year was €3.4m, down by 53.6% yearly.

Adjusted EBITDA for the year was €12.1m, up by 64%.

Wagering revenue came to €17.7m, a rise of 24%.

Fourth quarter results

Gross profit for the quarter was €13.0m, a rise of 61.1%. Bragg stated that this increase was due to a change in product focus to turnkey player account management (PAM) customers, managed services and proprietary content. Bragg also said that this resulted in the adjusted EBITDA total for the year, which was €3.6m, shooting up by 128.3%.

Wagering revenue generated in the fourth quarter was €5.1m, 65.4% higher than in Q4 2021.

Operating profit for the quarter was €162,000. This was up from the operating loss of €1.8m generated in Q4 2021.

Net loss was €900,000 for the quarter, an improvement from the loss of €2.0m in Q4 2021.

Projections for 2023

Due to these results, Bragg has updated its full year 2023 guidance to lie between €92.0m and €97.0m. If the midpoint of this bracket is reached, this will signify growth of 12%.

Adjusted EBITDA has been updated to be between €14.5m and €16.5m, the midpoint of which would represent year-on-year growth of 28%.

The Brazilian Institute of Responsible Gaming (IBJR) features Bet365, Flutter Entertainment, Entain, Betsson Group, Betway Group, Yolo Group, Netbet Group, KTO Group and Rei do Pitaco as founding members.

The group will work across a number of sectors to learn about the industry and understand how it can be integrated into the Brazilian economy.

The process of regulating sports betting in Brazil still remains ongoing despite the country’s legislature voting in 2018 to legalise the activity. However, a series of recent match-fixing scandals have ignited new hopes that a legal path could be around the corner. 

“We want to help build a safe regulatory environment for customers, while financing the public sector and creating a sustainable operating environment for companies,” said André Gelfi, managing partner of Brazil for Betsson Group who was elected president of the IBJR.

“The issue of responsibility appears in the name of the institute precisely because this is the mainspring for all actors involved in markets that have successful regulation. In these places, sports betting is seen as a source of entertainment that helps preserve the integrity of sport. 

“And it is clear that the sector’s sensitive aspects, such as compulsive gambling and money laundering, must be addressed in a forceful, logical and responsible manner.”

Importance of regulation

Rafael Marcondes, legal director of Rei do Pitaco, who has also taken on the same role with the new group, said moving forward with regulation is hugely important for Brazil.

“The US and Brazil legalised sports betting in 2018,” he said. “While in the North American country, regulation has been happening quickly in its various states and bringing positive results, especially when it comes to tax collection, Brazil has fallen behind, allowing the proliferation of companies that are not committed to responsible gaming, which jeopardises the credibility of the market without providing minimum guarantees to consumers.”

Gelfi added: “No other country has enjoyed such a favourable environment for the construction of a successful regulation that can be an example for the world. The government can use aspects of countries that have successfully regulated and adapt them to the local reality.”

The IBJR becomes the latest industry group to form in Brazil following the launch of the new Associação Brasileira de Defesa da Integridade do Esporte (Abradie) non-profit sports integrity body earlier this month.

Involved in the creation of the association are Genius Sports, Entain, daily fantasy sports operator Rei do Pitaco, as well as law firms Bichara e Motta and Maia Yoshiyasu Advogados.