Month: March 2023

A total of $287,292 (£239,300/€269,998) was refunded from accounts that 888poker said had violated its policy on fair play.

Funds were returned to a total of 6,801 players, averaging $42 per customer, a 32% rise on the number of detections reported during 2021. 

888poker said bots and real time advisor (RTA), the use of software programming to create unfair advantages over real-life players, remain a common issue in online poker and has increased investment in its own detection capabilities to address these within its network.

The operator also said it had detected players colluding with each other to gain an unfair advantage. 

 “At 888poker, we take the issue of game integrity very seriously,” 888poker’s head of poker offering Matan Krakow said. “This year, as a result of our continued investments in technology, cooperation of our players, and hard work of our teams, we have increased the detection rate of bot accounts, RTA and collusion to give back almost $290,000 to players. 

“In the year ahead, we will continue to focus on this area to ensure that customers have a fair, safe, and entertaining experience when they play with 888poker.”

The group sold its lottery business to private equity company Brookfield Business Partners in April in a deal worth $5.8bn, while it also offloaded its OpenBet sports betting platform to Endeavor and acquired the assets of loyalty and marketing software and technology provider House Advantage.

This means Light & Wonder is now operating across three core business segments: gaming, igaming and social gaming with SciPlay. 

Wilson, who took over as CEO and president on full-time basis in October, having served as interim CEO since August after the departure of Barry Cottle, said the new-look business is now in a “strong position” to pursue growth opportunities in 2023 and beyond.

“2022 was a pivotal year for Light & Wonder,” Wilson said. “We delivered on an ambitious and transformative plan while driving operational success and double-digit growth in our business.

“We are excited about our future and see strong momentum continuing in the business in the year to come. Our industry leading talent, games and technology put us in a strong position to deliver on our product roadmap, capitalise on the enormous opportunities ahead and lead in the convergence of gaming.”

Fourth quarter

Analysing Light & Wonder’s performance and beginning with the fourth quarter, revenue in the three months to 31 December amounted to $682m (£569m/€641m), up 18% on the previous year, driven by double-digit growth across all business segments. This included $466m in services revenue and $216m from product sales.

Gaming was the primary source of revenue in Q4, with revenue in this area climbing 18% to $438m, helped by a 41% rise in gaming machine sales. Gaming operations revenue also benefited from year-over-year growth in the North American installed base and higher average daily revenue per unit.

SciPlay revenue also increased 18% to $182m, a new quarterly record for the business that was driven by the core social casino business as well as the Alictus acquisition.

Revenue from igaming climbed 15% to $62m in Q4, with an improved performance in the US partially offset by $4m in unfavourable impact of foreign-currency translation due to strengthening US dollar, impacting revenue growth by seven percentage points. 

Turning to costs, operating expenses were 1.0% higher at $583m, but financial expenses fell 23.2% to $73m, meaning pre-tax profit from continuing operations was $26m, compared to a $92m loss in 2021.

Light & Wonder paid $5m in income tax and after accounting for a $18m net profit from discontinued operations, but removing $9m in profit from non-controlling interest, this left a net profit attributable to Light & Wonder of $30m, down 68.4% year-on-year. However, adjusted EBTIDA was 23% higher at $265m.

Full year

Looking at the full year and revenue for the 12 months to 31 December was 17% higher at $2.51bn, with $1.80bn coming from services and $717m product sales.

Gaming revenue increased by 21% to $1.60bn, while revenue from SciPlay climbed 11% to $671m and igaming revenue was up 6% to $240m for the year.

Operating costs jumped 9.6% to $2.24bn while net finance expenses increased by 7.9% to $436m. This meant a pre-tax loss from continuing operations of $163m, though this was shorter than the $294m loss posted in 2021.

Light & Wonder paid $13m in tax, leaving a net loss from continuing operations of $176m, in contrast to a $24m profit at the end of the previous year.

However, the group also reported $3.70bn in net profit from discontinued operations, with this including a total pre-tax gain of $4.93bn from the sales of the lottery and sports betting businesses.

When accounting for this, minus a $22m profit from non-controlling interest, this resulted in a net profit attributable to Light & Wonder of $3.68bn, compared to $371m in the 2021 financial year. In addition, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year was 15% higher at $913m.

“We are proud of the tremendous and rapid progress we have made over the past 18 months,” Light & Wonder chief financial officer Connie James said. “We delivered quality earnings, setting the foundation for sustainable growth going forward as we continue to focus on delivering shareholder value.

“We also returned significant capital to our shareholders, totalling $413m since our share repurchase program was announced a year ago. We now have a strong balance sheet and clear roadmap to advance with discipline on our balanced and opportunistic capital allocation strategy and elevate Light & Wonder’s value proposition.”

The news was elaborated on in the company’s FY22 earnings call, where Playtika’s president and CFO Craig Abrahams outlined the decision against an “evolving” industrial landscape.

Abrahams said the decision was made as part of a wider project, with the aim of aligning “the company’s expense profile with revenue trends”, much of which has involved actively managing costs and streamlining the company at all levels.

“Based on the current marketing environment, we made the decision to temporarily suspend our new game development pipeline until the ROI for new games is economically viable,” said Abraham. “In terms of the new game pipeline, the mathematics around marketing just doesn’t work right now.”

The announcement follows December’s news that Playtika would be laying off 600 employees – amounting to 15% of the business’s total workforce – as it winds down its “non-core” initiatives.

Despite this news, the studio affirmed that it would continue to invest in its existing titles, increase its investment in other games through M&A.

Abrahams affirmed that Playtika would continue to develop casual games in its Wooga studio. Playtika purchased the Berlin-based outfit in 2018, in service of its wider goal of diversifying into new games genres.

Company CEO Robert Antokol said that the year had been “challenging” for the mobile gaming industry.

“I am proud of the way we have executed our business during a challenging year for the mobile gaming industry,” said Antokol. “Fueled by pioneering technological innovation and a tireless ambition to inspire exploration, connectivity and fun among our loyal player community, we are delivering immersive personalised entertainment experiences and advancing our position as the industry’s premier game operator.”

Fourth quarter

For the three-month period ended December 31, revenue for the business stood at $631.2m (£527.8m/€594.1m), a 2.7% decrease from $649m achieved in Q4 2022.

The studio’s net income on this revenue stood at $87.5m, down by 14.4%.

Playtika’s two largest casino games – Bingo Blitz and Slotomania – experienced divergent financial paths during the quarter. While Playtika’s bingo-themed offering generated revenue of $155.1m, its free-to-play slots game fell 9.0% to $149.2m.

Abrahams said that Slotmania was “a strategic priority for the company,” adding that Playtika was “focused on stabilising the game”.

Revenue from social casino-themed games declined in revenue during Q4, falling 8.6% yearly.

Full-year revenue

For the full year, Playtika reported a 1.6% rise in revenue to $2.61bn.

Costs of revenue at $735.7m dipped slightly by 0.9%. Sales and marketing costs were the second highest of the quarter, ticking up by 3.7% to $603.7m. Following research and development costs at $472.3m and general and administrative costs at $332.4m, the total income was $471.4m.

After considering interest and other expenses at $110.6m and provision for income taxes at $85.5m, the net income was for the year was $275.3m, a 10.8% decline from 2022.

“We made several strategic decisions in FY22 to position the company for continued success,” Abrahams said. “Playtika’s durable business model, combined with the efficiency measures we have taken over the last year, puts us in a strong position to continue to generate value for our shareholders.”

Credit adjusted earnings before interest, tax, depreciation or amortisation was $805.1m for the year, a decrease of 5.1%.

Non-financial metrics

In addition to Playtika’s financial results, the company also announced a number of non-financial metrics as added markers of its growth.

The number of daily paying users remained largely steady year-over-year, rising slightly to 313,000 from 311,000 the previous year.

However, daily active users fell significantly to 8.8 million, as opposed to the 10.3 million Playtika reported in the previous year.

Playtika said that it expects its 2023 revenue to be between $2.57bn and $2.62bn. EBITDA is projected to lie between $805m and $830m.

Under the arrangement, a group of lenders will provide the Allwyn International business with funds over six-year term loans as accordion facilities under the group’s existing senior facilities agreement.

Allwyn International will use the proceeds to finance the acquisition of the Camelot Lottery Solutions group of companies, which was announced in January, and for general corporate purposes.

The lottery operator said the syndicate includes both existing and new lenders.

“This transaction will help us continue to grow our business, building on our successful €1.6bn syndicated bank financing in November 2022,” Allwyn chief financial officer Kenneth Morton said. “I am grateful to our existing lending partners for their continued support and pleased to welcome the new banks to the group.”

Acquisition activity

The deal to acquire Camelot Lottery Solutions came after Allwyn last year also announced it was in talks to buy Camelot UK Lotteries, with this proposal having since been approved by the Great Britain Gambling Commission.

Next year, Allwyn will assume control of the UK National Lottery from Camelot UK having been awarded the 10-year, fourth UK National Lottery licence in September 2022, officially ending Camelot’s 28-year tenure as operator. 

Allwyn will assume control of operations on 1 February 2024, with Robert Chvátal, currently Allwyn Group chief executive, in January appointed interim CEO of its UK business to drive the transition process.

Other changes at Allwyn include plans to appoint Clare Swindell and Neil Brocklehurst, currently chief financial officer and commercial director, respectively, at Camelot, as co-chief executives to lead Camelot.

Camelot will continue to operate the National Lottery separately from Allwyn UK through to the end of the third licence in January 2024, with Allwyn scheduled to assume control on 1 February next year. 

In addition, Sir Keith Mills is expected to be appointed as the new chair at closing of the transaction, subject to regulatory approvals. At the same time, Camelot will continue to work to assist Allwyn UK on the transition to the fourth lottery licence.

As an approved member of the organisation, BetParx will work with the IBIA and its global network of partners on a range of initiatives to clamp down on betting-related corruption in sport.

The IBIA’s current membership based includes more than 45 businesses and 125 sports betting brands.

BetParx is currently licensed to offer sports betting in Pennsylvania, New Jersey, Michigan, Maryland and Ohio.

“We are thrilled to join IBIA and affirm our commitment to promoting the highest standards of integrity in sports betting,” BetParx senior vice president of interactive gaming and sports Matthew Cullen said. “By working with industry leaders, we aim to ensure a safe and fair betting experience for all users.”

IBIA chief executive Khalid Ali added: “IBIA is delighted that BetParx has chosen IBIA as the operator’s preferred monitoring partner. It highlights BetParx’s commitment to protecting the integrity of its betting products and related sporting events through the world’s premier operator-led monitoring body. 

“BetParx is a very welcome addition to IBIA and maintains our growth across the burgeoning North American sports betting market. The association looks forward to working closely with BetParx and to integrating the operator within our global sports betting integrity network.”

Under the agreement, Caesars Sportsbook & Casino customers across North America will have access to a collection of Aristocrat games and titles.

Caesars Sportsbook & Casino is licensed to operate its online casino offering in New Jersey, Michigan, Pennsylvania and West Virginia in the US, as well as Ontario in Canada.

Read the full story on iGB North America.

BlueBet attributed this drop in revenue to an increase in marketing investment and shifts in the market regarding sports.

For the six months, advertising and marketing expense totaled at $11.4m. This was 67.5% higher than in H1 2022.

Despite the drop in revenue, Bill Richmond, CEO of BlueBet said that the company had seen success in Australia and made progress in its US entry during the six-month period.

“The BlueBet team delivered a strong performance in H1, remaining focused on delivering the strategy and on providing an excellent experience for our customers in the face of increased market competition,” said Richmond. “As a result, we continue to gain market share in Australia and make strides in our US market entry.”

In May 2022, during its third quarter results, BlueBet announced the launch of its ClutchBet brand across the US. Richmond says the roll out of the brand is still ongoing.

“In the US, the roll out of ClutchBet continues, with first bets taken in Iowa in August as we head towards an expected go-live in Colorado in March,” he continued. “We have had strong early interest for our white-labelled sportsbook-as-a-solution B2B offer in the US, with discussions underway with multiple potential B2B partners.”

Half-year results

Turnover for the half-year was $280.5m, up by 6.1% year-on-year.

After looking at payouts – which are gross of goods and services tax (GST) – at $244.2m, the gross revenue for the six months totaled $36.2m, largely stable with the AUD$36.4m generated in half-year 2022.

Promotions given, which totaled at $9.0m, brought the revenue to $27.1m. This is the revenue before considering GST.

Following GST at $2.4m, the revenue came to $24.7m.

Cost of sales at $11.6m – a stable figure year-on-year – resulted in a gross profit of $13.0m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) hit a loss of $10.5m for the period. Within the EBITDA expenses, which include administration and IT, advertising and marketing expenses were the highest of the quarter.

In terms of locations, the EBITDA consisted of $4.6m from Australian operations, $3.8m in US operations and $2.1m in corporate EBITDA.

After depreciation and amortisation expense at $889,000 and finance costs totaling AUD$22,000, the profit before income tax expense was $11.3m.

Two final sources of income – income tax expense and foreign currency translation – brought the total comprehensive loss for the six months to AUD$9.8m – an exponentially high increase of AUD$9.1m year-on-year.

Australian operations

A total of $27.2m in revenue came from BlueBet’s Australia operations, down by 4.9%.

Operations in Australia also contributed almost all the turnover, hitting $279.3m. Bets on thoroughbred racing made up over half of this at $143.5m, followed by greyhound racing at $70.1m. Sports hit $41.2m in turnover, while harness racing generated $24.5m.

Per channel, most of the total turnover came from iPhone play, which was $157.9m – up by 6.5%

BlueBet said its “strong performance” was aided by a growth of active customers during the half-year. By the end of the second quarter of FY23, the number of total active customers was 59,632, 32.3% higher than in Q2 2022.

H2 outlook

Marketing is set to take priority for BlueBet in the second half of 2023. The company plans to increase its investments in marketing technology such as Salesforce and Other Levels.

BlueBet also predicted that it is set to return to operating cashflow positive for its Australian business in the next half. For H1 2023, its net cash from total investment activities was a loss of $6.3m.

Turning to the US, BlueBet said it aims to go live in Colorado and continue focusing on the licensing process for Louisiana and Indiana.

The company’s total revenue was reported at $1.12bn (£937.9m/€1.05bn) for the full year. This is a slight increase of 2.3% compared to 2021, despite a slight drop in Q4 revenue to $279.7m from $281.9m.

Blake Sartini, chairman and chief executive officer of Golden Entertainment, remarked that the results remained above pre-pandemic levels.

“Our fourth quarter demonstrates strong financial performance that remains well above 2019 levels, while higher labour and other costs impacted the comparison to last year’s fourth quarter results,” he said. 

“For the second consecutive year, our total annual revenue exceeded $1bn, and our operating discipline continues to support the significant margin improvement we have achieved leading to a 45% increase in full year adjusted EBITDA compared to 2019.”  

During the fourth quarter, Golden Entertainment repaid $25m of its outstanding term loan and repurchased $2m of its senior unsecured notes.

Additionally, the company repurchased over $1.1m shares of common stock during the year and over $300k in shares of common stock in Q4.  

Fourth quarter 

The total revenue was down by 0.8% for Q4.

Revenue from food and beverage, as well as other revenues, remained very similar across Q4 2022 and Q4 2021. Food and beverage revenue was $45.4m, up by 1.3%, while other revenues grew by $246,000 to $16.6m.

However, gaming revenue fell by 3.2% to $185m during the quarter, and profit from rooms grew by 10.3% to $32.6m.

Total expenses fell by 1.2% year-on-year to $244.2m. The highest expense was within gaming, at $105.5m, followed by selling, general and administrative expenses at $57.8m.

After the total expenses, the operating income hit $35.4m, up by 2.7%.

Further non-operating expenses, including interest expense at $17.9m and loss of debt extinguishment at $178,000, brought the income before tax to $17.3m.

Following income tax provision of $6.2m, the net income came to $11.1m, down by 42.1% year-on-year. 

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was lower in 2022 with $63.7m reported in comparison 2021’s $67.8m Q4 results.  

Full year results  

Turning to the full year report, revenue from gaming was $766.3m, down by 0.7%. Food and beverage revenue rose by 4.5% to $175.3m. However, revenue from rooms, at $122.3m, increased by 11.4% and other revenue grew by 20.0% to $62.1m.

Net income for the year was $82.2m, almost half of Golden Entertainment’s net income from full year 2021.

The operator’s total expenses increased by 4.6% during the year to $973.7m. The operating income after expenses was $147.9m, a fall of 10.9%.

The expenses also included a comparative figure of $60m, for which there was no figure provided for full-year 2022. Golden Entertainment said this was because the $60m was “income recognised from the payment related to Caesars Entertainment’s acquisition of William Hill”. 

Adjusted EBITDA for the full year in 2022 was $267.1m, falling by 8.4% from $291.7m full-year 2021. 

Future projections 

Sartini outlined a number of key projections for 2023, including growth in Las Vegas and the completed sale of its Rocky Gap Casino Resort.

“Our business trends to start this year are encouraging, and we anticipate capitalising on the strength of Las Vegas in 2023 and beyond,” said Sartini.

“We expect the sale of Rocky Gap Casino Resort to close in the second quarter of 2023, which will provide meaningful liquidity that, combined with our free cash flow, will position us to maintain low leverage, invest in our owned properties and accelerate capital returns to shareholders.”

Frazer, who was appointed to the role of culture secretary last month, said that enticements played a role in encouraging those who were experiencing problem gambling behaviours to continue betting.

She added that she had recently attended a meeting with the lived experience advisory council, and had read the House of Lords’ Gambling Harm Time for Action report, which allowed her to see the effects of enticements on those experiencing problem gambling.

“I heard some really moving stories and I am struck by how diverse their experiences were,” said Frazer. “One person had lost over £1m. Another never bet more than £1 on a spin.

“One young man had started gambling at the age of eleven. Many tried to self-exclude but found the enticements drawing them back in just too difficult.”

White paper delays

Frazer also acknowledged the multiple delays to the publication to the upcoming Gambling Act Review white paper, the Whitehall policy document which will point the way to future legislative reform.

“I also wanted to say that I know it must be very frustrating to have yet another ministerial team leading the government’s work on gambling, and I know that you might be worried about further delays to the white paper,” said the minister.

“So let me reassure you that white paper is an absolute priority for me, and for the Prime Minister, and we are committed to publishing it soon.”

Although the publication of the white paper is highly anticipated, Frazer hinted that she would need time to fully explore the brief.

“And though I’ve only been culture secretary for three weeks, meeting all of you and hearing your experiences was one of the first things I wanted to do in this role,” she said. “I am particularly conscious of the vulnerability of young people.”

“And of course you know very well, gambling doesn’t just destroy the lives of the gamblers themselves, it has a devastating impact on their loved ones.”

Gambling with Lives

Gambling with Lives had invited the minister to speak at a House of Commons event aimed at emphasising the negative effects of gambling on mental health and lobbying for regulatory reform.

“There will be at least another gambling-related death today, there was one yesterday and will be one tomorrow,” said co-founder of the organisation Liz Ritchie, speaking at the event.

The tech giant was able to reduce certain costs across the business in line with its strategy, while group revenue was higher year-on-year, with growth noted within both its Global Gaming and PlayDigital businesses.

While IGT did report a decline in Global Lottery operations, the group said 2022 was a year of “significant” financial accomplishments and the business is in a strong position across all segments moving in to 2023.

“We achieved all our financial goals last year while strengthening product leadership positions across our Global Lottery, Global Gaming, and PlayDigital activities,” IGT chief executive Vince Sadusky said. 

“Important strategic work executed over the last few years has transformed IGT into a company with higher growth prospects, a better profit profile, and a solid path to delivering on our long-term goals. 

“It has also enabled record capital returns to shareholders in 2022. We enter 2023 from a position of strength with good momentum across business segments.”

Fourth quarter

Beginning with IGT’s performance in the fourth quarter and revenue for the three months to December 31 was $1.09bn (£906.5m/€1.03bn), up 4% from $1.05bn in the corresponding period in the 2021 financial year.

Global Lottery revenue slipped 7% to $639m as strong multi-jurisdiction jackpots and product sales were offset by impact of Italian commercial services sales.

However, Global Gaming revenue jumped 21% to $389m, helped by growth across service and product sale revenue streams, while PlayDigital hiked 56% to a record $65m due to organic growth, market expansion and contributions from the iSoftBet acquisition.

In terms of geographical performance, $714m of all revenue in Q4 from activities in the US, while $226m was generated in Italy and $153m the rest of the world.

Looking at spending, operating expenses were level at $863m, though non-operating costs increased 114.7% to $161m. As such, pre-tax profit reached $70m, down 36.9% from $111m in the previous year.

IGT paid $101m in tax and also accounted for a $34m profit from non-controlling interests, which, when taken away from the final total, left a net loss attributable to IGT of £64m for the quarter, in contrast to a $19m profit in 2021. However, adjusted EBITDA was 8% higher at $419m.

Full year

As to how this impacted IGT’s full year performance, revenue for the 12 months through to 31 December increased 3% from $4.09bn to $4.23bn.

Segment performance made for similar reading as in Q4, with Global Lottery revenue down 8% to $2.60bn due to lower same-store sales in Italy and the impact of Italian commercial services sales.

Global Gaming revenue climbed 28% to $1.40bn, helped by significantly higher US and Canada replacement machine unit sales and increased installed base yields, while PlayDigital jumped 27% to a record $209m, driven by igaming organic growth, market expansion and the iSoftBet deal.

US and Canada operations accounted for $2.55bn of group revenue, with Italy revenue at $1.06bn and rest of world revenue $618m.

Operating expenses increased 3.6% to $3.30bn, though a reduction in interest expenses meant non-operating costs were lowered by 10.7% to $333m. 

Pre-tax profit was 11.3% higher at $589m, though after accounting for $175m in income tax payments and the subtraction of $139m in profit from non-controlling interests, this meant a net profit attributable to IGT of $275m, down 43.0% year-on-year. Adjusted EBTIDA also slipped 1% to $1.66bn for the year.

“2022 was another year of significant financial accomplishments,” IGT chief financial officer Max Chiara said. “With reduced interest expense and improvements to the effective tax rate, 2022 adjusted EPS highlights IGT’s significantly improved earnings power. 

“We generated strong cash flow while funding increased investments for future growth. This, coupled with proceeds from sales of non-core businesses, allowed us to meaningfully reduce debt and leverage to the lowest levels ever. 

“The company’s enhanced credit profile and significant liquidity provide solid support and flexibility as we execute our multi-year plan.”