Month: March 2023

OPAP said the return of ordinary retail operations following the removal of all remaining pandemic-related restrictions, as well as expansion within its online business, helped drive growth across the group.

Chief executive Jan Karas also highlighted a record performance in the final quarter of the year, saying this rounded off a “remarkable” 12 months for OPAP and allowed the group to propose a generous shareholder return.

“OPAP reported a record-high quarterly performance in Q4, rounding off a remarkable year, with tangible progress in the implementation of our strategic objectives and increased activity across our channels,” Karas said. “EBITDA came in ahead of our latest outlook, with improved margins, while our leverage position further improved.

“Therefore, in line with our standing commitment to generating value for our shareholders, we are pleased to be proposing a generous total shareholder return for FY22 of €1.45 per share, including the already paid interim dividend of €0.30 per share.”

Full year

Revenue for the 12 months to 31 December amounted to €1.94bn (£1.70bn/$2.06bn), up 26.0% from €1.54bn in the previous year.

Breaking down this performance, the lottery business, which remained OPAP’s core sector, generated €709.5m in revenue, up 29.2% on 2021, reflecting strong trading versus 2021’s lockdowns and pandemic measures.

Betting revenue increased 15.8% to €603.7m on the back of continuous retail operation during 2022 and strong online contribution, while video lottery terminal (VLT) revenue was up 63.6% year-on-year to €318.4m.

Instant and passives revenue also climbed 21.5% to €107.9m, while online casino revenue edged up 7.9% to €199.5m.

Turning to spending and operating costs for the year were 13.5% higher at €365.1m while net finance expenses were €40.1, but such was the impact of the revenue increase that pre-tax profit more than doubled from €357.3m to €723.3m.

OPAP paid €127.2m in income tax, leaving an annual net profit of €592.3m, a 73.8% rise from €259.4m in the previous year. Excluding one-off items, net profit recurring was 73.8% higher at €436.0m.

In addition, EBITDA for the year climbed 33.7% to €736.0m.

Q4

Looking at the fourth quarter, revenue for the three months to 31 December amounted to €540.9m, up 5.5% from €498.5min the corresponding period in FY21. 

Lottery revenue reached €193.9m, a year-on-year rise of 5.5%. OPAP said this was primarily down to high jackpot rollovers in Tzoker and a strong Kino performance during the quarter.

Betting revenue slipped 3.1% to €161.0m due to customer-friendly match results, though video lottery terminal (VLT) revenue increased 26.1% to €93.4m as a result of increased footfall and machine optimisation.

Instant and passives revenue climbed 15.3% to €31.9m, driven by both higher activity and playability in scratch and passives, while online casino revenue jumped 29.4% to €60.9m on the back of a growing customer base and product enhancements, as well as strong activity momentum brought by the World Cup.

In terms of spending, operating expenses were 22.2% higher at €113.9m and while OPAP did not publish financial costs, pre-tax or income tax figures, it did reveal that net profit for the quarter was 277.6% higher at €306.5m.

Excluding one-off costs, net profit recurring was 47.9% up to €127.5m, while EBITDA for Q4 increased 18.9% to €202.7m.

“Looking ahead, we will focus on showcasing our retail estate as local affordable entertainment destination,” Karas said. “We will also expand our online presence, through our ilottery proposition, which completes our online gaming arsenal. 

“Last but not least, we remain committed on delivering sound financial results, while taking further steps towards realising our vision of offering best-in-class entertainment and giving back to society.”

Ruf will be responsible for securing and growing Merkur’s operations in existing regions, as well as driving new acquisitions in the international market.

She will replace Stefan Bruns, who will now take on a new position representing the sports betting and online gaming business segment on the Gauselmann board.

Ruf has been working for group for over 15 years, serving in roles within Merkur Casino such as head of business development, head of business development and operations manager, and special task operations manager.

She took on her most recent role as executive operations director international in June 2020.

“I am looking forward to developing new geographical markets and implementing exciting projects together with my team,” Ruf said. “One particular focus will be on developing the online markets.” 

“Our goal is to maintain Merkur Casino International’s strong position and to confidently rise to the ever-growing demands.”

Dieter Kuhlmann, who is responsible for gaming operations on the Gauselmann board, added: “We are delighted that in Irina Ruf we have been able to win a new managing director with extensive expertise and experience in particular in international operations.

“Based on her wide-ranging career path to date, Ms Ruf brings to the job all the prerequisites to successfully continue and expand Merkur Casino’s international business activities.”

The listing would be in addition to its existing primary Nasdaq listing, with Light & Wonder’s board having identified a number of “substantial potential benefits” that would come as a result of the listing.

These, the group said, would include further strengthening its profile in Australia, one of the core markets for its gaming business, as well as allow access to new long-term institutional investors in the country that would complement its existing base of shareholders in both the US and Australia.

Light & Wonder said it would consult with its shareholders as part of the evaluation, adding that there is no assurance it would pursue a secondary listing.

“The ASX is a premium market with a long track record as a platform for global gaming companies and a deep and liquid pool of sophisticated investors and market participants who have a strong understanding of the gaming business,” Light & Wonder executive chair Jamie Odell said,

“We believe they will appreciate the value and long-term potential of L&W’s broad international business and strategy. We look forward to engaging with the market and our current shareholders on a potential secondary listing.”

The total was 10.8% higher than in Century Casinos’ full-year 2021 results.

Erwin Haitzmann and Peter Hoetzinger, co-chief executive officers of Century Casinos, said that the record had been achieved – alongside record adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) – despite a difficult end to the year.

Read the full story on ICE 365

The news follows the recent retirement of former CFO James Bunitsky, who had joined the business in 1981, and spent more than forty years in various finance roles. This included taking the lead on the 2022 sale of the company’s lottery division to Brookfield Business Partners, who opted to take on the former parent company’s legacy name, which is now known as Light & Wonder.

“We are grateful for Jim Bunitsky’s outstanding financial leadership and excited to now add Nick to our executive leadership team in the role of CFO,” said Scientific Games chief executive officer Pat McHugh.

“He has a thorough understanding of the complexity of international operations in a service-based business and broad knowledge of corporate structure, compliance and strategy.

“Guided by Nick’s financial expertise, we look forward to the next chapter of sound financial management of our global business.”

Negro, described as a “results driven professional”, has 20 years of financial, strategic, operational management and leadership experience for a number of large businesses in a variety of sectors.

Prior to joining the lottery business Negro took on various CFO appoints at Honeywell, Dover Corporation and Navistar where he gained experience developing and executing financial strategies for international companies.

The new executive holds a BSc in finance from the University of Illinois and an MBA in accounting and finance from DePaul University. He lives in Atlanta, where the company’s global headquarters are located.

New appointments

The new hire follows a number of senior personnel changes at the lottery provider at the end of last year, including the appointment of former Trump advisor James Schultz as executive vice-president of public policy and public affairs to lead on the company’s regulatory strategy.

In October 2022, the organisation also hired Mona Garland as the business’ chief human resources officer, leading on the company’s global people strategy.

Playtech will pay $85.0m (£69.8m/€79.5m) for a low, single-digit percentage stake in HRD, with proceeds from the investment to fund HRD’s global expansion. 

Hard Rock’s online and retail sports betting is currently operated in select US states including Arizona, Indiana, Iowa, New Jersey, Ohio, Tennessee and Virginia. It aims to extend its online sportsbook and igaming offerings to select international markets in the coming years. 

Global supply deal

As part of the wider arrangement with Playtech, HRD will license a range of the developer’s technology solutions and igaming content. 

In the US and Canada, HRD’s customers will be able to play a selection of Playtech’s slots, random number generator and live dealer table games through HRD’s existing proprietary platform and technology offering. 

These products will also be rolled out outside of the US and Canada, with HRD to also have access to additional software and services solutions from Playtech including its IMS player management platform and certain ancillary services such as operational, customer support, payment advisory and marketing services.

Playtech will supply its products and services predominantly on a revenue share basis under long-term commercial agreements. The developer added that it expects minimal impact from the deal on its B2B results in FY23, with contribution to B2B revenue set to rise in FY24.

Advanced position

“The Playtech team is thrilled to announce our strategic partnership with HRD,” Playtech chief executive Mor Weizer said. “Hard Rock International has cemented itself as a marquee name worldwide, not just in gambling, but more widely in entertainment. 

“HRD will combine the strength of this global brand with a proven management team, some of whom we at Playtech have known for many years and believe to be among the strongest in the online gambling industry.

“For Playtech, this partnership significantly advances our position in the North American market and is very much in line with our B2B strategy.”

Hard Rock Digital was established in December 2020, led by Stars Group and Fox Bet veterans. PokerStars’ former chief legal officer Marlon Goldstein serves as its CEO, with former Stars CEO Rafi Ashkenazi named executive managing director and executive chair.

Hard Rock International and HRD chairman Jim Allen added: “This partnership will act as an accelerator to Hard Rock Digital’s planned strategic initiative to expand its online gaming offerings to international markets, becoming the first operator with a global omni-channel offering under a singular, irreplaceable brand.

“This announcement only reinforces our commitment to lead innovation in the gaming industry and expand the ‘Hard Rock’ experience worldwide. We look forward to providing an authentic, digital experience for Hard Rock’s global fan base within a comprehensive, omni-channel offering.”

Cheltenham begins today (14 March) and ends on Friday 17 March and while betting volumes are set to rise, the festival will play out amid rising concerns about affordability checks on consumers.

A study conducted by YouGov – which was commissioned by the affiliate Online Betting Guide (OLBG) – surveyed a total of 1,007 gamblers in the UK between 23 February and 2 March.

It found that 11% of punters are gearing up to gambling more on Cheltenham this year than they did last year, compared to 10% who said they were planning to gamble less than they did at Cheltenham 2022.

A total of 23% said they were planning on gambling around the same amount on the event year-on-year.

In addition, 6% of those surveyed said they did not bet on Cheltenham last year, but planned to this year, while 50% said they did not place a bet on the event last year and would not this year.

Affordability concerns

Ahead of the event, gambling licensing law firm Poppleston Allen said that punters could encounter affordability checks when placing bets on Cheltenham this year – and could be turned away if they do not provide the appropriate documentation.

“Since last year’s major racing events took place, we’ve seen a rise in bookmakers undertaking affordability checks and asking players to provide documentation such as payslips and bank statements to prove they can afford to gamble,” said Felix Faulkner, solicitor at Poppleston Allen.

“If a betting establishment asks a customer for financial information and they are unable or unwilling to provide it, the company is well within its rights to refuse to take their bet.”

Faulkner emphasises that this is both a player protection measure and a licence condition for operators.

“Bookmakers have a legal responsibility under their operating licence conditions to minimise the risk of customers experiencing gambling harm,” Faulkner continued. “If they have concerns a customer might be trying to bet more than they can afford, it is advisable they refuse the bet.”

Affordability checks are a presumed part of the forthcoming Gambling Act Review white paper, a Whitehall document that will set out reforms for gambling in the UK. The racing sector in particular has frequently raised concerns about their impact on punters.

In February it began a campaign to have bettors write to their local MP to warn of the checks’ effects, which is backed by the Betting and Gaming Council.

Faulkner said that a lack of guidance on affordability checks had allowed the industry to make its own rules – resulting in a variation across the board.

“An element of uncertainty in the market”

“There is an element of uncertainty in the market at present,” he said. “However, at present there are no hard and fast rules on what is an appropriate level that should prompt bookmakers to ask customers for proof their gambling is affordable to them.”

Faulkner concluded that although it is unclear whether bookmakers will enforce affordability at this year’s event, they must always remain compliant to the GB Gambling Commission’s licence conditions.

“It remains to be seen how the various on-course bookmakers will interpret the guidance this year,” he said. “In practice it can be difficult for them to work out who can afford what if there is a race starting in one minute and there are 20 people waving money at them to put a bet on, however compliance with licence conditions is mandatory and operators should always act responsibly.”

When Allwyn was announced as the winner of the fourth UK National Lottery licence in March 2022, it was assumed there would be some degree of fallout. After all, Camelot had held the UK National Lottery licence unrivalled for the previous 28 years.

But the aftermath was more ferocious than first thought. Days after the announcement, Camelot launched a High Court challenge against the decision, with Camelot chief executive Nigel Railton saying the GB Gambling Commission had got the decision “badly wrong”.

Although the legal challenge was subsequently dropped last September, the sense of disbelief hung around. Despite the disruption to the preparations, Allwyn chief executive Robert Chvátal says the business is fully prepared to take on the licence. The challenges have ultimately been eased, with Allwyn acquiring Camelot’s UK operations and Chvátal stepping in as interim CEO to ensure plans go without a hitch.

“We definitely felt very proud, and humbled, when we learned last March that we had prevailed in the process,” says Chvátal. “I strongly believe that we were able to bring the best of Europe to bear in our bid, and highlight opportunities to make the UK National Lottery bigger, better and safer.”

So what will Allwyn’s tenure consist of? According to Chvátal, digitalisation – with an equal balance between retail and online lottery – and a change-up in the lottery’s portfolio.

“Going forward, it has to be a journey of portfolio innovation, a journey of further digitalisation – not only in the online space but also in retail,” he explains. “Retail is really important to us and we’re committed to growing this channel, helping the brick and mortar world move with the digital times.”

Spearheading the transition

Player protection was a key component of Allwyn’s bid for the fourth National Lottery licence and will take a front seat in the company’s plans. This will feed directly into the National Lottery’s Good Causes scheme, Chvátal adds.

“It’s also a journey of robust player protection because that’s what the lottery is or should be,” he continues. “We don’t want to be dependent on a few high rollers.

“We want to be as broad as possible, and have a very broad customer base, which plays either regularly or occasionally and ultimately contributes the maximum possible returns to good causes in the UK.”

But Allwyn is not aiming to reinvent the wheel. Chvátal says its plan centres around improving practices that are already in place.

“Our first priority is to make a seamless transition on day one between the third licence and the fourth licence,” he explains.

“Then the emphasis will shift to innovations in product portfolio. But ultimately, what we put in our bid for the transition and beyond is a gradual build-up of what is already there, and further developing it.”

Operation transformation

While Chvátal is confident in laying the groundwork for Allwyn’s newest tenure, he doesn’t take its position for granted – particularly in Europe where Allwyn has a large presence.

“We strongly believe that having an exclusive licence is not something that you should take for granted, or become complacent about,” he says. “No monopoly or exclusive position in the world will guarantee you success or relevance with consumers.”

Even if Allwyn is granted a monopoly – like it has with OPAP in Greece – Chvátal sees strength in humility.

“We basically work with our teams as if we do not have a monopoly, because there is a broader gaming entertainment space for consumers to freely choose from.”

Nonetheless, Chvátal turns back to the UK, where he recognises the role that the National Lottery plays in improving day-to-day life.

“What I feel in the UK – what is especially advantageous compared to other markets – is that there is a very finite, very concrete set of beneficiaries in the UK, ranging from culture, sports, heritage and social,” he continues. “I think this makes the link between what the lottery does, both for the consumers and for society, much more palpable, much more visible.”

The Land of the Free

Though Allwyn has undoubtedly seen success elsewhere through its operations in Greece and Cyprus (OPAP), Austria (Casinos Austria), Italy (Lottoitalia) and the Czech Republic (Sazka), US plans have yet to take off.

Last August it announced its intention to list on the New York Stock Exchange (NYSE) through a deal with special purpose acquisition company Cohn Robbins Holdings Corp. This fell through the following month, but that’s not to say plans to import its expertise stateside are dead.

“The US has always been an interesting market for Allwyn to enter,” Chvátal explains. “Firstly, although US lotteries are generating big revenues, they are not necessarily the fastest in adopting online or ilotteries.

“Secondly, we wanted to enter the US because we believe there are opportunities to make the case for greater liberalisation of lotteries.”

“When, not if”

Chvátal says market conditions played a big part in the shelving of its listing plans.

“For Allwyn, the listing was always a very logical next step,” he explains. “However, in the end we decided not to do it because financial and capital markets were very volatile.”

“The idea of listing was basically about reconfirming [Allwyn] as the operator of choice for lotteries vis-à-vis the individual regulators and governments that we are also publicly listed with.”

“The question for Allwyn when it comes to listing is when, not if.”

Earlier this month Allwyn completed its acquisition of Camelot’s US business, Camelot Lottery Solutions, following a deal that was finalised in January. So what does this mean for Allwyn’s presence in the US, considering it has now taken over a business that runs the Illinois state lottery?

“Camelot US was an opportunity that arose at the same time as the opportunity to acquire Camelot in the UK,” says Chvátal. “It was almost like a double deal, because it was an immediate entry into the US market for us, with the risk that we have to extend the licence in the state of Illinois.”

Facing forward

Regardless of the challenges Allwyn has faced, Chvátal is excited about the future outlook.

“At the moment, we are at the stage where we want to consolidate our position in individual markets,” he explains. “This is definitely the case in the UK, where we need to focus on the transition.

“So there might be a pause when it comes to the new flags on the map, because we believe our biggest priority is to master the transition in the UK and master the entrance into the US, where we are taking over the Illinois lottery and developing it.”

Ultimately Allwyn aspires to be number one, he says. The number one operator of choice, the number one enactor of player protection schemes and the number one UK National Lottery facilitator.

With a ten-year tenure for the latter beginning in 2024, Allwyn has plenty of time to prove itself as top of the pack.

Consumer spending on sports betting in February amounted to $1.47bn, down 3.9% from $1.54bn in the same month last year and also 17.9% behind the record $1.79n wagered in January 2023.

In terms of gross gaming revenue from mobile betting, this reached $108.3m in February, a 31.4% increase from $82.4m last year but 27.5% shy of the record $149.4m generated in January of this year.

Read the full story on iGB North America.

Under the agreement, brokered with the Tiidal Gaming Holdings subsidiary of Tiidal Gaming Group Corp, Entain will purchase all issued and outstanding shares of Sportsflare.

The purchase price will be retained by Tiidal in a holding account for 180 days following the closing, during which it may access the funds to satisfy any working capital adjustment or claims brought by Entain, and up to 20% of the funds to pay reasonable costs related to the deal.

The deal was negotiated at arm’s length and remains subject to certain conditions including the approval of Tiidal shareholders, with a vote to take place at a meeting on 26 April, and the receipt of all required consents. 

In addition, the agreement includes a $500,000 termination fee, payable by Tiidal Holdings to Entain in the case of certain terminating events.

Sportsflare counts Flash Markets, which allows users to bet in-game on live esports events, among its innovations. 

Strengthening Entain’s presence in esports

“I am incredibly proud of what the Sportsflare team has done over the last year; given the capital markets environment, we believed it was best to find a great home for Sportflare in order to maximise value for Tiidal shareholders,” Tiidal chief executive Thomas Hearne said.

“Sportsflare will be a great fit with Entain’s strong presence in the industry and our board of directors is confident that Sportsflare joining Entain is the best long-term solution for its employees and partners.”

In connection with the deal, Tidal Gaming Group, Tiidal Holdings and Sportsflare entered into a definitive loan agreement with Ladbrokes Group Finance, an affiliate of Entain. This arrangement includes a secured credit facility in the aggregate principal amount of up to NZ$1.7m, an advance of NZ$1.2m of which was made on 2 February. 

Should the acquisition not be terminated but not complete in time, then further advances of NZ$250,000 will be made this month and NZ$250,000 next month.

Building on Unikrn relaunch

The acquisition further strengthens Entain’s presence in the esports betting vertical, and follows the relaunch of Unikrn in December last year.

Entain acquired Unikrn’s product, platform and technology in October 2021, then shuttered its customer-facing operations for redevelopment.