PlayAGS hits eighth consecutive record revenue in Q4 2022

Fourth quarter revenue was up by 16.4% year-on-year, and rose for the eighth consecutive quarter.

“Our record-setting fourth quarter results reflect the accelerating returns we continue to realise on investments made into our research and development, sales and product management teams over the past several years,” said David Lopez, president and chief executive of PlayAGS

“Looking ahead to 2023, I see a set of company-specific growth catalysts forming within all three segments of our business that should allow our recent operating momentum to continue.”

Q4 results

As expected, electronic gaming machines (EGM) generated the highest amount of revenue for the quarter, at $75.3m. Revenue from table products grew to $3.8m, up by 22.0%, while interactive segment revenues fell slightly by 1.1%.

Gaming operations revenue grew by 8.4% to $57.4m, while revenue from equipment sales increased by 40.7% to $24.3m.

Operating expenses for the quarter totaled $68.2m, largely stable with the $68.3m recorded in Q4 2021.

Depreciation and amortisation costs also remained stable, moving up slightly from $18.4m to $18.5m

Selling general and administrative expenses were one of the highest costs once again, hitting $16.8m – however, this was down by 11% year-on-year.

Cost of equipment was $12.4m, and cost of gaming operations was $10.6m. The remaining expenses were made up of write-downs and research and development costs.

The expenses left the operating income at $13.4m, a substantial increase of $11.5% year-on-year.

Interest expense at $12.7m affected the total further. However, interest income at $331,000 and other income $583,000 allowed for net income for the quarter to be $2.5m, a gain from the loss of $9.0m in 2021.

Following income tax at $937,000, rhe total net income for the quarter was $2.5m – another record for the operator.

Full year

Revenue for the full year was up by 19.2% compared to 2021.

A majority of the revenue was generated by the EGM business, which totalled at $284.8m for the year. This was a rise of 19.6%.

Revenue from table products was $14.9m, up by 25.6%, while revenue from the operator’s interactive segment was $10m, a slight uptick of 1.8%.

Gaming operations revenue totaled at $223.8m. Equipment sales made up the remainder of the revenue at $85.6m.

Turning to costs, depreciation and amortisation saw the highest amount of the year at $75.5m. Selling, general and administrative expenses hit $67.7m, while equipment costs increased sharply by 83.2% to $44.4m.

The remaining costs were made up of expenses from gaming operations, research and development costs and write-downs charges.

Operating expenses for the year came to $271.4m, a rise of 13.1%. This left the operating income at $37.9m.

Further to this, interest expense added another blow, totaling at $40.6m for the year. Combined, loss on extinguishment and modification of debt and other expense totaled at $8.6m.

Following interest income at $1.0m, the pre-tax income was $10.2m. After considering income tax at $2.2m, the total loss for the year was $8.0m – an improvement compared to the $22.5m loss recorded in 2021.

BGC: Punters fear betting restrictions will drive black market play

The survey found that 79% of British punters said that it was likely increased restrictions would push people towards unregulated websites, where there are no limits or oversights on gaming activities.

In another question on the YouGov survey, 70% of players said that they would consider switching to a different bookmaker if asked to provide “private financial documents” in order to place bets.

Michael Dugher, CEO of the BGC, believes the data shows how misaligned punters are from those in charge of gambling regulations.

“This research is the latest in a series outlining the genuine concerns of millions of ordinary punters who feel that the people making decisions about the future of betting are out of touch and have never had a bet in their lives,” said Dugher.

The right changes

Dugher went on to explain what changes he would like to see.

“We want to see genuinely non-intrusive checks, which use technology to carefully target and protect the tiny minority of vulnerable punters, but intrusive, blanket, low level so-called ‘affordability’ checks will be universally rejected by punters,” he said.

“Any intrusive and blanket approach risks having the opposite effect by pushing them into the unsafe, unregulated black market which offers no safer gambling tools like time outs and deposit limits. It also doesn’t support the economy or sport and doesn’t pay a penny in tax.

“Ministers should listen to the millions of punters enjoying Cheltenham rather than pander to a naive and snobbish minority of anti-gambling prohibitionists,” Dugher concluded.

The survey was conducted ahead of the government’s expected publication of the Gambling Act White Paper, which will set out new reforms for betting and gaming in the UK.

Setting the standard: Is the Betting and Gaming Council fit for purpose?

I was fresh out of ideas for a podcast episode recently, so I suggested to my co-host that we talk through some of the interesting news of the day. 

While we were talking, an email landed in my inbox. It was from the Betting and Gaming Council (BGC), the body representing the gambling industry (in all its forms) in the UK.

The BGC has put out several releases that have raised a smile in the past, but straight away this one rang out as probably quite far from the truth. It’s fair to say that many such bodies and ‘industry groups’ tend to overstate their own achievements and importance in the grand scheme of things, and in that respect the BGC never lets us down. But the things that rang so hollow here were a little more disturbing and, well, I think they need addressing. 

GamCare said in january it took a record number of calls in january, and plans to expand its digital services in 2023

Why did this email stand out? Initially, it was because I had also received – not two hours before – a statement from GamCare talking about how it had taken a record number of calls in January 2023. And not by a small margin; this was an increase of 17% compared to the same month in 2022. That’s a huge leap forward. 

Granted, everyone with a gambling problem may have waited until the new year to phone in. Maybe they were waiting to start a new month of call-plan minutes on their phones, for example, or perhaps they were just really, really busy. Or perhaps… perhaps the national gambling charity has nothing to gain from embellishment; perhaps it’s not about ego for them, or posturing to look good before their members. But what do I know? I don’t even have hair.

I digress.

“Anti-gambling prohibitionists”

But the BGC email stated very clearly that problem gambling rates had gone down. It even called out the “anti-gambling prohibitionists” in a quote from its chief executive Michael Dugher.

That was the first alarm bell. So we start recording an episode of the podcast, conversation meandering around the issue. If you’ve heard the pod – The Gambling Files – you’ll know exactly what I mean. 

While we’re talking, my co-host, BonusFinder.com MD Fintan Costello, is looking for where the BGC got their data; of course, it’s from the Gambling Commission. Which states that problem gambling rates, based on the same set of data, are stable. Not down, stable

There’s alarm bell number two.

“If you change the data from one decimal place to three decimal places, you can see the real figures”

Fintan loves a bit of data. He loves his statistics; me, I’m more the looks side of the podcast, which is why we’re audio-only. 

But he’s looking at the figures and then he says – and I am very much paraphrasing here – “Hang on a second… the release says problem gambling has dropped from 0.3% to 0.2% but the Gambling Commission summary says it’s statistically stable at 0.2%. This spreadsheet then says exactly the same as the BGC has said, which is a 0.3% to 0.2% drop!

“But if you change the data from one decimal place to three decimal places, you can see the real figures. The Gambling Commission’s summary is the correct way to express this data – it is stable at 0.2% statistically.”

The Gambling Commission’s figures suggest problem gambling rates are stable, not falling

If you go and grab the Commission datasheet, go to tab 5, and look at the table showing the percentage of problem gamblers from year to Dec 2022, it does indeed show 0.2%. 

The cell above shows 0.3%. But click on the cells and you see the real figures: 0.3% for 2021 is 0.288%, and 0.2% for 2023 is 0.243%. Clearly, that’s not a 0.1% drop at all, not even close. 

And it wasn’t that difficult to find, either. This is more about misrepresenting data, and the weapons we give to the industry’s critics as a result.

The BGC’s polarised approach

The arguments for and against gambling are polarised, and the BGC continues to address issues in precisely this way. It gets us nowhere. 

The release that inspired all this includes the quote referenced earlier, which is: “These newly released figures are further evidence of the positive progress we have made on safer gambling and underline our urgent calls for ministers to take a genuinely evidence-based approach to the upcoming White Paper. 

“These figures showing that problem gambling has fallen once again will no doubt come as a profound disappointment to anti-gambling prohibitionists, who like to vastly overstate the issue.

“Their alarmist demands are not backed up by the evidence.”

Well, the only overstatement here is by the BGC, for one thing. If they had just told the truth about the numbers, it’s still a drop in problem gambling rates. 

Nobody can argue with that, anywhere. In two years – from the 2020 figure of 0.330% – it has indeed dropped almost (but not quite) the 0.1% claimed for last year. Just stick to the facts and then it’s all true, nobody has a stick and nobody can claim we hoodwinked them or massaged the figures. 

Speaking of which, another numerical anomaly in the release is the claim that “just under half of all UK adults enjoy a bet each month”. 

The figure quoted is almost 22.5 million. There are 53 million people in the UK aged over 18, so half would be 26.5 million. A difference of four million is not “just under” anything, however you look at it. It’s another lazy falsehood, which is my best attempt at politely saying it’s cobblers.

Problems with survey methodology

The Gambling Commission’s data is interesting too. It’s from a quarterly phone survey of roughly 4,000 people, selected to give as great a cross-section of the UK populace as possible. 

Except it selects people as young as 16 and I’m not sure you can really do much gambling in the UK until you’re 18, so there is an immediate issue with the data – especially as in their Excel stats, they’re lumped into a group as ‘16-24 year-olds’. So that data is, to me, corrupted. 

Sure, they might be gambling at 16 – but why not survey people down to eight years-old then, and lump all the illegal gamblers into a group of their own? Just a thought. Because if you’re lumping illegal gamblers into the data, you can’t correlate it with any figures the industry produces because if they’re using our sites, apps and physical locations they are doing so fraudulently. 

It skews data and reporting further, and when we are talking about problem gambling – the number one criticism of the industry – that data is really important. We can’t be looking for 0.243% of problem gamblers in our data sets if they’re not in there, for example.

We’re not just handing our critics the stick to beat us, we’re politely asking them to wait while we hammer nails into the end.

An organisation that exists for its own luxury?

The real driver for player protection is regulation and it appears to be working; the BGC has no legislative powers, it doesn’t set any agendas for the industry other than by asking nicely. 

It’s an organisation that seems to me to exist for its own luxury. It ‘represents’ groups with conflicting needs – seriously, at what point do the interests of bookies and casinos come together, exactly? 

How does a group that campaigned for greater oversight of FOBTs sit next to the group that campaigned for less oversight on FOBTs and find common ground? It doesn’t. Their needs are unique and just because we all fall under the word ‘gambling’, it doesn’t indicate true commonality.

The Betting and Gaming Council is in theory the industry’s lobbying group to affect pending legislation. We may find out how effective they have been if the fabled white paper ever appears. 

But with a self-aggrandising flourish, I can almost guarantee that any ‘wins’ the paper will be claimed by them immediately as being a result of their hard work, and any losses will be shouted down because, well, they did their absolute best. 

I would dearly love to know how they achieved this magical drop in problem gambling behaviours, for example, but their release omits any mention of what they actually did.

It’s not about ego, it’s not about making a mess of a press release, it’s about an industry wanting and demanding better, more effective representation. I’m not being personal here, I’m just asking the BGC to do better

We don’t have to hammer nails into the stick for our critics – a good industry body will lead and guide from the front, not tip diesel on the barbecue, hope for the best then complain the food tastes of fuel.

Jon Bruford has been working in the gambling industry for over 17 years, formerly as managing editor of Casino International and presently as Publishing Director at The Gaming Boardroom, with Kate Chambers and Greg Saint. He owns a large dog with a sensitive stomach and spends his free time learning about stain removal.

Revenue and net profit rise in “satisfactory” year for Dankse Spil

Reflecting on its full-year performance, Danske Spil chief executive Nikolas Lyhne-Knudsen referenced Russia’s invasion of Ukraine, rising inflation and interest rates, the energy crisis and historically low consumer confidence as factors that all impacted the operator in 2022.

However, the group was able to overcome these challenges and record growth, with Lyhne-Knudsen saying he was “satisfied” with this performance, adding that the business was able to fulfil its expectations.

“It is satisfactory, especially because we can at the same time state that our efforts against gambling addiction are working and that the number of customers in Danske Spil with a high risk of developing gambling addiction is continuously being significantly reduced,” Lyhne-Knudsen said.

“Responsible game selection, healthy gambling habits, happy customers and a healthy and profitable business must always go hand in hand in Danske Spil.”

Full year results

Overall gross gaming revenue (GGR) for the 12 months to 31 December 2022 amounted to DKK4.98bn (£592.4m/€668.4m/$708.0m), up 3.0% from DKK4.83bn in the previous financial year and in lien with guidance of between DKK4.80bn and DKK5.00bn.

Breaking this down, GGR from Danske Lotteri Spil, the operator’s lottery business reached DKK2.81bn, an increase of 0.7% on the previous year and a new annual record for the group.

Danske Licens Spil, which includes sports betting and online casino, reported DKK1.66bn in GGR for the year, down 8.7% from DKK1.82bn in 2022 due to a decline in sports betting while casino remained flat.

GGR from the operator’s gaming hall business Elite Gaming jumped 44.2% to DKK299.6m as a result of all pandemic-related restrictions being removed from land-based gambling venues in Denmark.

Elsewhere, Dankse Klasse-lotteri, the “class lottery” that was integrated into the business in April 2022, generated DKK192.5m in GGR, while revenue from the Swush fantasy sports platform edged up 6.6% to DKK16.1m.

Turning to spending for the year, Danske Spil paid DKK644.7m in state taxes, DKK459.6m in dealer commission and DKK269.6m in other gaming related costs. This left an operating profit of DKK3.60bn, up 4.0% year-on-year.

Operating expenses amounted to DKK1.33bn and net financial costs were DKK92.5m, which resulted in a pre-tax profit of DKK2.22bn, an increase of 6.9% from 2023. Danske Spil paid DKK490.7m in income tax, meaning it ended the year with a net profit of DKK1.73bn, up 6.2% year-on-year.

In addition, the operator noted that EBITDA for the year increased by 3.7% to DKK2.56bn.

Seven casino closures deliver final blow on SJM FY22

An eventful year for the operator was compounded after it closed five of its “satellite” casinos – which are third-party promoted casinos – and two self-promoted casinos on 27 December 2022.

The satellite casinos were Casino Babylon, Casino Diamond, Casino Golden Dragon, Casino Million Dragon and Casino Royal Dragon.

Revenue for self-promoted casinos in 2022 fell by 41.9% to HK$3.78bn for the full year.

SJM operated 14 satellite casinos in 2021. The operator noted that from 31 December 2022, it operates nine satellite casinos.

The two closed self-promoted casinos were Casino Eastern and Casino Tapia. Self-promoted casino revenue was reported at HK$1.25bn for the year, down by 15.9%

The 12-month period had been somewhat chaotic elsewhere. In May, it agreed to acquire the Casino Oceanus property from its parent company, Sociedade de Turismo e Diversões de Macau. This was so that SJM could fulfil the requirements needed to apply for a gaming concession in Macau.

SJM applied for one of six concessions in September. The new concession process came about as part of an attempt to reform gambling in Macau.

SJM, alongside MGM Resorts International, Galaxy Entertainment Group, Las Vegas Sands, Melco Resorts and Wynn Resorts, won the six concessions. The Macau government signed contracts with the operators in December.

In August, SJM announced that it would raise HK$5.03bn in the form of a share issue and a loan from its parent company. This came after the operator announced a 75% drop in H1 revenue, compared to pre-pandemic levels.

Full results

Net gaming revenue alone was HK$6.09bn, down by 36.6% year-on-year.

Before operational costs were factored in, SJM suffered a cost of HK$2.68bn in special gaming tax, special levy and gaming premium. This was a HK$1.50bn difference yearly.

The most significant cost of the period was HK$8.47bn, from operating and administrative expenses. This increased by 1.2% yearly, a fairly unremarkable difference.

Impairment loss on property and equipment – with no comparable figure from 2021 – was HK$1.21bn.

Finance costs jumped significantly. The total came to HK$1.12bn for 2021, a rise of 227%.

This was due to rocketing gaming operations costs, which went from HK$321.4m to HK$1.08bn year-on-year. Hotel, catering and retail and leasing operations costs at HK$16.6m, along with corporate-level costs at HK$18.7m, made up the remaining total.

Despite income in the form of other income, gains and losses at HK$36.2m, along with share of profits of joint venture at HK$3.6m, the range of remaining costs brought the loss for the year before tax to HK$7.78bn.

Taxation at HK$61.1m brought the total loss to HK$7.84bn, 86.9% higher than in 2021.

Property operations

Turning back to net gaming revenue, a grand majority of the total came from mass market table operations at HK$5.55bn. Revenue from VIP gaming operations fell sharply, by 64.2% to HK$486.3m.

Revenue from slot machine and other gaming operations was HK$416m.

The total net gaming revenue was reached after factoring in commissions and expenses at HK$362.1m.

SJM’s Casino Grand Lisboa accounted for HK$1.06bn in revenue, a drop of 50.4% year-on-year.

Satellite casino revenue was HK$3.78bn.

An additional HK$1.25bn in revenue was generated by what SJM labels as “self-promoted” casinos.

These casinos consist of Casino Lisboa, Casino Oceanus at Jai-Alai and Jai-Alai Hotel and other non-gaming areas.

Everi taps Debra Nutton to serve on board

Serving as an independent director, Nutton will also become a member of the Audit Committee, the Nominating and Governance Committee and the Compensation Committee.

Nutton has been working as an executive coach and gaming consultant since founding her own business in October 2019, prior to which she spent over a year as vice-president of casino administration at Wynn Resorts.

Earlier in her career, Nutton was executive vice-president of casino operations at Wynn Las Vegas for five and a half years and also had a short spell as senior vice-president of casino at the Bellagio in Las Vegas.

Nutton’s longest stint with a gambling business was as the senior vice-president of casino operations and marketing at MGM Grand Hotel & Casino Las Vegas, where she spent more than 11 and a half years.

“We are delighted to welcome Debra to Everi and believe her distinguished record of gaming achievements and leadership make her an exceptional addition to the company’s board of directors,” Everi executive chairman Michael Rumbolz said. 

“We look forward to benefiting from her counsel and insights, as we continue to focus on products and services designed to make our customers more efficient and more profitable. Debra joins us at an opportune time to assist with the expansive growth opportunities that we expect will take Everi to even greater prominence in coming years.”

Starlizard launches new online integrity alert system

Available free of charge, Komodo will flag suspicious matches to relevant organisations around the world and provide them with an analysis of betting market activity and on-field performances.

SIS said that the reports produced by Komodo can be used to assist with anti-match fixing investigations and also provide evidential value in legal proceedings, with SIS evidence having already been recognised by the Court of Arbitration for Sport (CAS).

Komodo will initially cover football, with cricket and other sports to follow soon. 

“We believe the future success of anti-match fixing efforts depends on more and better information being made freely available to integrity officers and investigators by true experts in this field,” SIS head, Affy Sheikh, said.

starlizard say that komodo’s reports will have evidential value in legal proceedings

“Komodo is an innovative tool that does just that. It is the result of significant investment in time and development costs on the part of Starlizard and we are delighted to be able to offer it free of charge to sports bodies and law enforcement agencies around the world.”

Starlizard chief executive, Steve Edery, added: “Starlizard is committed to supporting sports governing bodies and enforcement agencies around the globe in their efforts to combat match-fixing. 

“Having provided integrity services to sports since 2010, we established Starlizard Integrity Services in 2017 as a dedicated division of the company, focusing entirely on integrity matters and working closely with sports integrity stakeholders to provide them with valuable insights and intelligence into market activity and behaviour. Komodo represents our latest contribution to this global collaboration against corruption in sport.”

In March 2022, SIS signed a match-fixing agreement with the Moldovan Football Federation after previously collaborating on an investigation into a possible instance of match manipulation.

BetMGM partners IGT on Wheel of Fortune Online Casino launch

Initially available in New Jersey, the new online casino will be based on the long-running US television gameshow, Wheel of Fortune.

Players will have access to a range of branded slot titles, as well as a series of additional themed games and features. IGT had been providing Wheel of Fortune-branded slots to the market for a number of years.

Read the full story on iGB North America

Belgium ad ban to begin 1 July

The date was made official following its publication in the Belgium’s Official Gazette.

The ban covers all forms of advertising from gambling organisations, both land-based and online, with the only exception being the country’s National Lottery.

Vincent van Quickenborne, justice minister of Belgium praised the confirmation of a date.

“With the publication in the Belgian Official Gazette, the decision is now clear: gambling advertising will be seriously restricted from 1 July 2023,” he said. “This is necessary because the normalisation and banalisation of gambling must finally stop.

“The strict rules will have an immediate impact. A transition period is provided for the sports sector so that the sector can adapt to the new reality.”

Sports advertising in stadiums will be banned from 1 January 2025, and gambling operators will not be allowed to sponsor sports teams from 1 January 2028.

Backlash

The ban was first announced on 10 May, and received widespread criticism in the subsequent months.

Dutch minister for legal protection Franc Weerwind criticised the ban in June, calling for a more regulated gambling environment as opposed to an outright prohibition.

The Belgian National Lottery disputed allegations that it had unfairly influenced ministers to support the ban.

Weeks before the ban was announced, the Belgian Gambling Commission (Kansspelcommissie) called for a limit on gambling advertising in the country.

MGA pens data deal with Badminton World Federation

The deal will see the two organisations work to improve the monitoring of suspicious gambling activity in badminton.

MGA head of financial crime compliance Antonio Zerafa said he was “very pleased” to see BWF added to the list of sports governing bodies whom the regulator is already engaged with on a day-to-day basis.

“I am very pleased to see the Badminton World Federation added to the long list of sports governing bodies whom the Authority already assists on a practical level, and we look forward to working with the BWF’s Integrity Unit on any issues that may arise,” he said.

Thomas Lund, BWF secretary-general said that this partnership will support BWF in its mission of identifying possible instances of match-fixing, and will improve its capabilities in its investigations and anti-match fixing operations.     

“This partnership helps the BWF Integrity Unit protect the integrity of the sport with MGA helping to facilitate the sharing of data between betting operators and the BWF Integrity Unit,” said Lund.

“We see this as being a deterrent to potential corruptors of the sport as we continue to preserve the integrity of badminton.”

Stats Perform

At the beginning of the month, BWF entered into a long-term integrity services agreement with Stats Perform.

Under the terms of the agreement, Stats Perform will provide BWF’s Integrity Unit with new suite of tools and capabilities to better detect suspicious betting and instances of match manipulation.