Month: March 2023

Under the terms of the deal, the GameTech-owned business will see brand exposure on three different locations on the team kit, front of the shirt, on the sleeves and on the shorts. The two-year agreement will also see digital deliveries of the betting brand on the club’s social networks, as well as the site’s branding promoted at Fortaleza’s home stadium of Castelão.

Club president Marcelo Paz lauded the new deal in a statement, calling the operator “a very attractive brand.

“We are happy with this situation, it is a sponsorship that will help us directly in our day-to-day activities, in the club’s expenses and on the pitch,” said Paz. “We will do everything as we always do with all sponsors to give the best possible return to those who invest in our shirt.”

Continued expansion

Brazil marks Novibet’s second expansion target in LATAM, following the brand’s 2022 launch in Mexico, which was made possible via a partnership with land-based casino operator Big Bola Casinos.  

The operator also experienced progress in its North America plans as well, securing market access in New Jersey, as well as submitting a licence application the Alcohol and Gaming Commission of Ontario (AGCO).

Novibet president Rodolfo Odoni highlighted the club’s long history in a statement, saying that the business was “very proud” to be the Fotaleza’s main sponsor.

“We are excited to start our operations in the country and the opportunity to be part of the sports culture in Brazil through the unique and innovative gaming experience offered to our members,” he added. “Through this partnership and the ones to come, we want to become one of the world’s main supporters of Brazilian football.”

Jeremy Hunt is this week due to deliver his first Budget as Chancellor of the Exchequer and while the BGC said it supports the government’s economic plan of “Enterprise, Education, Employment and Everywhere”, it warned against measures that could threaten growth, jeopardise jobs or undermine the customer experience.

The Budget will take place during the Cheltenham Festival horse racing event and ahead of the publication of the much-anticipated White Paper on gambling, which is expected to include a number of reforms for the industry.

Economic blows

BGC chief executive Michael Dugher said – aside from ongoing regulatory upheaval facing the sector – all businesses, including BGC members such as betting shops, bingo and casinos, are trying to rebuild following a series of economic blows.

As such, Dugher said the government should consider how higher taxes could impact this recovery, members of the industry and also consumers.

“The regulated industry already plays a huge role in the UK economy, and we are keen to go further and contribute even more,” Dugher said. “But in order to deliver on this ambition, we need a pro-business budget, no new tax rises and a balanced gambling White Paper that protects the vulnerable while not spoiling the customer experience of the majority who bet perfectly safely.

“Our industry includes world-leading British tech, as well as businesses supporting high street retail, plus those in the hospitality, tourism and leisure sectors. Ministers should be protecting investment and jobs at this challenging time. 

“We want to see big changes that will further strengthen safer gambling, but new taxes and draconian regulations will put businesses at risk.

The former Labour MP also took aim at the potential imposition of affordability checks on gaming businesses, which is often seen to be one of the more controversial with industry potential provisions of the White Paper.

“We need to see long overdue changes to help land based casinos in particular with their recovery. And we need to stop intrusive, blanket low level ‘affordability checks’, such as those called for by the anti-gambling lobby, which only serve to drive customers to the unsafe, unregulated black market online where there are none of the safer gambling protections that exist in the regulated industry and where not a penny is paid in tax to the Exchequer.”

Handle for the month reached $193.9m, which was down from $215.9m in February 2022 and also 17.1% behind the $233.9m wagered by consumers in January of this year.

Of this total, $176.2m was spent betting online, while the remaining $17.7m was wagered at retail sportsbooks.

Read the full story on iGB North America.

The multi-year deal will result in content being delivered to XL Media’s brands through a custom-built widget, and then full API integration across all domains.

At first, the deal will only include content surrounding UK and Irish races, but both parties have indicated the potential to include international racing content at a later date.

Darren Hale, XL Media director of commercial partnerships, praised the quality of SSG’s racing content.

“We know the quality, depth and breadth of Spotlight Sports Group’s content and data is the best in the industry and based on decades of historical knowledge and experience,” Hale said.

Hale then went on to add how the deal will help the affiliate company over the upcoming racing season.

“We believe this horse racing expertise will add immense value to our audience as we launch over the busy Cheltenham Festival.”

“The innovative Superfeed content engine will allow us to best serve our customers at scale due to the flexibility that the single API integration offers,” Hale concluded.

Daniel Smith, head of UK and Ireland B2B sales for SSG, believes the new partnership will provide potential players with even greater insight.

“I’m thrilled to be working with XL Media and that the affiliate powerhouse has chosen the award-winning ‘superfeed content engine’ to provide insightful content to their audience,” said Smith.

“We know that our racing content provides prospective bettors with important insight and we are excited to help improve user engagement and grow an already loyal customer-base.”

FY revenue growth

Back in January 2023, XL Media forecasted financial year revenue growth amid its sports betting expansion. Revenue is expected to rise by 10.8% year-on-year for its 2022 financial year, primarily due to a “strong” performance by its sports betting vertical.

The bipartisan bill was introduced to the House on February 22 of 2023 by Representative Michael Meredith (R) with the support of 15 other cosponsors.  

It has passed through the House Committee on Licensing, Occupations, and Administrative Regulations after being reported favourably.

The bill is set to be voted on by the House floor today (March 13). It must pass in the House before moving onto the Senate.

Under this legislation, Kentucky racetracks would be able to partner with operators to offer both retail and online sports betting. Regulatory measures would be carried out by The Kentucky Horse Racing Commission.

This bill reflects the awaited push for sports betting in the state that hosts the most popular racing event in the US.

Player spending on betting during the month amounted to $356.2m, which was 12.9% lower than $409.1m in February 2022 and also 16.6% behind the $427.2m wagered in January this year.

Basketball remained by far the most popular sport among consumers, drawing $166.0m in total wagers during February, some way ahead of football on $20.6m and baseball with just $441,296. A further $69.3m was spent on parlay bets and $99.6m on other sports.

Read the full story on iGB North America.

Speaking on the World Series of Politics podcast, Governor Rick Perry said the proposal filed by Senator Lois Kolkhorst represented the best way to legalise betting in the Lone Star State. 

Legal sports betting in Texas will also generate significant new revenue, he continued. The full podcast will be released tomorrow (14 March).

It could net half a billion Dollars according to recent estimates, the longest-serving Governor in the state’s history said. This could pave the way for lowering other taxes, and generate more for infrastructure spending. 

Plans for Texas mobile betting

Senate Bill 715 and its House counterpart HB1942 set out the framework for regulated betting. 

The bills set out plans for a mobile market, with the state’s professional sports franchises serving as master licensees. Sports teams, golf courses accredited to hold professional tournaments, plus Class 1 racetracks, would be eligible for one master licence each. 

Each would be required to pay a $500,000 licence fee, and would be taxed on 10% of adjusted gross wagering revenue. 

The legislation would be enabled through a constitutional amendment, set out in Senate Joint Resolution 39 and HJR 102. As a result the bills must pass the Texas legislature with a two-thirds majority in each chamber. 

The proposal would then go to voters on 7 November, 2023. Governor Perry told hosts Brandt Iden and Brendan Bussmann this approach was “as democratic as you can get”.

Texas teams present a united front

Governor Perry, the 14th Secretary of Energy, went on to highlight the widespread support for the legislation. It was backed by every professional sports team in Texas, he noted.

He is a spokesman for Texas Sports Betting Alliance which has brought together some of the state’s leading teams including the San Antonio Spurs, Houston Rockets, Dallas Cowboys, Houston Astros, Texas Rangers and FC Dallas. They are joined in the alliance by betting operators Fanatics Sportsbook, DraftKings, FanDuel, BetMGM and Penn Entertainment’s Barstool Sportsbook. 

“There’s never been this coming together, to work on one issue [before],” Governor Perry explained on the podcast. “I’ve been in politics since around 1984, so I’ve seen a lot of interesting efforts but this one caught my attention for a number of reasons.

“Not least, that it is abundantly clear to me that the people of the state of Texas enjoy their sports. They are fanatical about it.”

The effort was less about expanding gambling, and more about legalising an activity that has been going on for decades.

Bettors’ private information would be protected, their bets would be honoured, and they would have safeguards to ensure they gambled sustainably.

Put it to the people

The Kolkhorst bill still faces a number of hurdles, including opposition from the casino sector. It may also face opposition from some lawmakers. 

To legislators unsure whether to support Texas wagering, Governor Perry said: “Just ask, if the voters were smart enough to elect you to your job, don’t you think they’re smart enough to decide whether this issue should be legal in the state of Texas?”

Ultimately, Governor Perry added, he was confident that the Texas legislature would close in May with the proposal passing. 

“I feel comfortable that once it becomes a constitutional amendment and the people of the state have a chance to look at it, it will pass,” he said. “And I think it will pass rather overwhelmingly.”

In a statement, Parimatch said that it had immediately suspended operations in Ukraine and that Parimatch’s Ukraine site was now blocked for players in the country.

On 10 March, Zelensky signed Presidential Decree No. 145/2023 into law. The Decree implemented a decision from Ukraine’s National Security and Defense Council (NSDC) to impose sanctions on 287 companies – many of which are betting entities – and 120 individuals.

In an address made on 11 March, Zelensky called the move a “new sanctioning step against individuals and legal entities associated with the evil state”, stating that gambling businesses had been withdrawing funds from Ukraine and financing activities in Russia.

“These are more than 280 companies and 120 people who, through gambling business schemes, worked against Ukraine, withdrew funds from our state and financed various Russian schemes,” said Zelensky. “It took some time to prepare the decision. It has been thoroughly worked out and closes schemes worth tens of billions.”

Parimatch accuses SBU of “illegal violations”

Parimatch appealed directly to Zelensky on the decision, stating that it had not been contacted by the Security Service of Ukraine (SBU) regarding the suspension.

“We would like to inform you that during the entire period of the Russian military invasion of Ukraine, we never received any requests from the SBU regarding the suspension of the franchise in Russia,” read the statement. “Contacts with SBU employees were only in the form of threats, intimidation and extortion.”

Parimatch also asked Zelensky to verify the NSDC’s decision – claiming that information considered during the council’s decision had been falsified – and to address “illegal violations” carried out by the SBU.

“We ask to instruct you to verify the information that was falsified during the decision of the National Security Council and to take appropriate actions regarding all illegal violations by the Security Service of Ukraine,” Parimatch said.

“We are ready for public discussion, ready to answer all questions of the media and law enforcement agencies, and ready to defend our position in court.”

Parimatch statement

In a further statement, Parimatch said it was “looking for a legal refund mechanism” for customers, adding that “customers can rest assured that all personal funds are currently safe, frozen and will be transferred in full”.

“We will expect additional analysis and consideration of the situation surrounding the NSDC sanctions against Parimatch LLC and hope for a future review of the decision,” the statement concluded.

All partnerships Parimatch are involved in have also been suspended, and the business will end all staff contracts. “We understand that stopping all of the company’s operational processes won’t allow us to fulfill our obligations to the team,” the operator added.

The operator added that it had paid UAH485m (£10.8m/€12.3m/$13.1m) in combined licence and taxes payments in 2023.

iGB has contacted Parimatch for comment.

The provider reported a year-on-year increase in revenue across its gaming, virtual sports, interactive and leisure businesses, with executive chairman Lorne Weil saying this reflects the continued execution of its strategy.

Reflecting on the past year, which was also helped by a record performance in the fourth quarter, Weil said Inspired is now well placed to focus on “significant” growth opportunities in core markets, as well as new markets and additional verticals.

“Results reflect the continued execution of our strategy; our fourth quarter results ended a record year for Inspired, in which we achieved double-digit, year-over-year top and bottom-line growth and reached record annual revenue and a milestone $100.0m (£82.7m/€93.5m) in adjusted EBITDA, even in the face of significant adverse currency movements,” Weil said.

“Our results are evidence of our ability to drive high double-digit growth in our high-margin, capital efficient digital businesses, while managing our land-based businesses for modest growth, decreased capital intensity and growing cash flow.”

Fourth quarter

Revenue in the three months to 31 December 2022 amounted to $78.6m, up 17.3% from $67.0m in the corresponding period in 2021. This included $60.8m in services revenue and $17.8m worth of product sales revenue.

Breaking this down by business segment, gaming revenue climbed 41.8% to $38.0m, helped by strong UK betting shop performance and growth in the non-betting shop UK gaming machine installs, as well as the addition of a lottery systems contract in the Dominican Republic.

Virtual sports revenue jumped 35.5% to a record $14.9m, helped by an 83.0% rise in online virtuals revenue, while interactive revenue also edged up 10.5% to $6.3m, driven by growth in the US and Canada.

However, Inspired also reported a 17.5% drop in leisure revenue to $19.4m as revenue from holiday parks and pub customers both fell year-on-year, with only the motorway services segment experiencing an increase.

Turning to spending and while costs of service and product sales were up, Inspired was able to reduce expenses elsewhere, with both selling, general and administrative spending and depreciation and amortisation costs down.

After accounting for $6.5m in additional finance expenses, primarily interest costs, this left a pre-tax profit of $5.9m, compared to a $2.7m loss at the end of Q4 in 2021. Inspired paid $2.8m in income tax, resulting in a net profit of $3.1m, in contrast to the $1.2m loss in the previous year.

Inspired also included a $4.8m foreign currency translation loss and $3.5m worth of actuarial losses on pension plan, meaning the provider ended the quarter with a $5.0m net loss, compared to a $1.8m profit in 2021.

However, adjusted EBITDA for the quarter was 16.4% higher at $25.6m.

Full year

Looking at the full year and revenue in the 12 months to 31 December reached $285.4m, up 36.8% year-on-year. This included $251.8m in service revenue and a further $33.6m worth of product sales revenue.

Gaming revenue jumped 37.2% to $111.7m, while virtual sports revenue climbed 53.9% to $55.4m, interactive revenue edged up 1.3% to $23.1m and leisure revenue increased by 39.0% to $95.5m.

Costs-wise, spending was higher almost across the business, with only depreciation and amortisation and acquisition and integration related transaction expenses lower year-on-year.

However, with additional financial down 37.9% to $23.4m, this, coupled with the revenue growth, meant pre-tax profit reached $25.5m, compared to a $38.3m loss in the previous year. 

Inspired paid $3.2m in income tax, meaning a net profit of $22.3m, in contrast to a $36.7m loss in 2021. The provider also noted an additional $2.5m in other profit, with a, $8.2m gain on foreign currency translation more than offsetting a $6.4m actuarial loss on pension plan.

This resulted in a comprehensive net profit of $24.8m, compared to a $24.0m loss in 2021, while adjusted EBITDA also jumped 55.6% to $99.6m.

“As we look ahead to 2023 and beyond, the stability and resiliency of our business model allows us to focus on significant growth opportunities in the future, which we intend to capture by using our best-in-class differentiated content to grow our presence in core markets, expand into new markets and extend into additional verticals,” Weil said.

“The underlying momentum that has been building throughout 2022 and the strong demand that exists for our products across each of our business lines further supports our confidence in the long-term outlook for the company.”

Elmqvist is well-deserving of his reputation as the king of slots.

But – more than 10 years on from his epoch-making launch of Yggdrasil – the Stockholm native is turning his luck to the decidedly different proposition of sports betting in his latest project ParlayBay, which seeks to make its name as the new champions of micro betting. 

The Swedish entrepreneur certainly has a nose for where the action is, describing it a “pretty interesting” time to be setting out on a venture such as this.

Elmqvist describes a US sports betting landscape that is shifting into a new, subtler gear following the marketing wars that characterised the earlier days of the PASPA repeal. 

“For a few years there’s been a shift into sports betting – and you see in the United States rollout both the need for new products and to keep the marketing costs down, as well as still get new players coming through the door,” he says.

With the recent news of yet another Indiana igaming bill has died in committee – meaning that the proposition is now dead until 2024 – it does seem that sports betting might be the place where most creative energies are spent going forward, and exactly the place the industry’s more imaginative figures like Elmqvist will be popping up. 

Like many start-ups hoping to get a foot in the door before embarking on a complex multi-jurisdictional licensing process, ParlayBay opened with a free-to-play prior to the businesses full-on real-money launch.

The business hit something of a milestone in November went it live with real money games for the first time, via the company’s partnership with Lithuanian gaming operator 7bet, around a month before Elmqvist joined.

“It’s an excellent time to join – I love this phase of a company,” he says. “At this early stage, everyone is involved in what’s going on, everyone is working collaboratively.”

Slots for sports

Micro betting is currently a vertical experiencing a great of buzz. Many operators see in the offering an intriguing vision of what a truly American betting experience will look like – the cure of the dreaded spreadsheet-ification fears that have dogged the launch of sports betting in the US.

The product that has been transplanted across the Atlantic is still European in most of its essential aspects – so goes the argument – and new products that make sense for the American consumer are needed.

As sports betting evolves in the US, many operators see micro betting as the path to continued revenue growth as the wave of sports betting expansion begins to slow. The frequency of the vertical – as well as the instant gratification it provides – are features of the experience that seem to have more in common with igaming than more traditional forms of sports betting.  

A recent report by H2 Gaming Capital, in partnership with iGB, examined this phenomenon of the segment combining the skill of sports betting with many features more traditionally associated with online casino, arguing that eventually we could see similar levels of in-play betting to European Tennis and Basketball seen in American sports as a whole.

“The kind of space that Parlay Bay is in – same game parlays or micro betting – the timing is right for us to also go into the US market, which is of course is something that we are looking at now as we shape strategy in the next couple of months,” says Elmqvist. 

Big in America

Many in the industry now consider entering the US market as an operator to be something of a Sisyphean task owing to the increasingly consolidated market – and as such many look to entering as a supplier as the key to American success.

“There’s a few exits already from the operators and there’s a few operators that didn’t enter that you expected to enter, like bet365 – and there’s some providers that have not been there either,” says Elmqvist. “And there’s definitely a bottleneck in entering the market for sure with all the restrictions, regulations and scrutiny.”

Churchill Downs have paved an interesting path as an online operator than successfully managed a transition to supplier. In July 2022, the company indicated than it would be engaged in the process of transforming its online sportsbook TwinSpires into an entirely B2B offering, a project that culminated with the November announcement that the business would be providing DraftKings with a horse racing product – the wonderfully named DK Horse.

ParlayBay are not the only business seeking to make splash with the vertical. But Elmqvist does not believe that the different organisations with their different propositions will necessarily be in simple completion.

“There are a few in there now, taking a lot of the market and they have a similar but not the same product,” he says. “So I do believe that there is a room for guys like SimpleBet and ParlayBay coexisting in the same arena.”

Whatever fate lies ahead for ParlayBay in the years ahead, Elmqvist has already done more than enough to earn his reputation as one of the most innovative individuals working in the industry. 

Innovating today

Today’s gaming industry looks very different to the one that Elmqvist first entered all those years ago.

“Oh my God, it’s changed tremendously – there’ve been so many twists and turns. We saw what happened with poker, we got the UIGEA. We had the start of regulations in Europe.”

Beyond the creeping rise of the world’s regulatory regimes, the business landscape varied hugely from today’s multi-national corporate conglomerates.   

“The big guys were basically what was in UK – and of course there were guys in Italy, but they were very segregated,” says Elmqvist. “It was not so globalised or Pan-European as it is today. It was more local.”

The differences in the gaming sector from the noughties and now is a difference in kind, not in scale. Subsequently, it’s inevitable that the shape of innovation in 2023 will differ massively from what came before. Whereas before technology proved to be the limiting factor, that is no longer the case

Elmqvist argues – perhaps prosaically – that the biggest roadblock to change these days is regulation, though he argues that even regulation brings perverse kind of innovation in response.

“On one side, the regulations prevent innovation, but it forces people to innovate to provide a great user experience within the restricting regulations,” he says. “How can we find a way to provide the best UX and still be compliant with the five-second rule, for example, and that is just a small innovation that you might be able to run for six to 12 months until some regulator comes up with a reason to block exactly that.

Nostradamus

While industry still rife with dark talk of lay-offs in the year ahead, Elmqvist argues that this could prove to be a time of experimentation.

“During layoffs, it’s not just the low performers being laid off, there’s people being laid off across the board – including people with experience.”

Elmqvist says that he and ParlayBay CEO Patrick Nordwall first met in circumstances like this, having both been involved in the IT sector around the period of the Dot.com boom.

“There were a lot of companies that got in there in that explosion of innovation and drive to global markets and new products. Then when people were laid off in that crash, they came out swinging with new products that have proved to be successful today.”

“We’re going see a lot of that stuff happening. A lot of innovation will happen now in these high pressure times of people being laid off – whether or not that’s going to be part of the ParlayBay space – for sure there will be people out there.

“And we know with the global aggregation system that is here now, especially in Europe, if you get a good product out, you can actually get it to market fairly quickly and make an impact, which you couldn’t when we started.”