Month: May 2023

The KSA has imposed an order subject to periodic penalty payments on Postcode Loterij and VriendenLoterij for offering online games that are not permitted according to their lottery licences.

The two lottery operators said they will appeal the decision but will temporarily stop offering the games from 8 June.

The regulator said the operators would be liable to pay a penalty of €250,000 per week, up to a maximum of €1m, should they offer the games again.

KSA deems lottery to be offering games of chance

KSA said the lottery licence does not cover titles such as Deal or no Deal, offered by Postcode Loterij, and FriendsLottery Millionaires, which it deems to be online games of chance.

“Legislation and regulations make a clear distinction between lotteries and more risky games of chance, including online games of chance,” the KSA said in a statement. “A different licence is required for both games of chance.

“Lotteries may not be offered online; it is only permitted to sell participation tickets via the internet. The online offering of games that are linked to a lottery is prohibited. The law does not allow this. The KSA remains keen to ensure that lottery and online games of chance remain separate.”

In response, Postcode Loterij and VriendenLoterij said it would appeal the decision.

In a joint statement, they added: “The KSA is of the opinion that these free lottery games do not fit within the lottery licence. However, the games are a form of entertainment and fit within the safe nature of a non-profit lottery with only one goal: to raise funds for good causes.

“For the past 30 years, participants have always been able to participate in additional games in this way, whether or not via the mail, the internet, in special apps or live.

“Nothing is won by playing one of the games itself. In the games, like a traditional lottery, participants only receive a prize after a draw has taken place. With this, the games meet the requirements of the lottery licence.”

Last week, a report published by Marnix van Rij, the Dutch finance minister said the government is “exploring” new options for Nederlandse Loterij (NLO), including the possibility of privatising the state-owned enterprise.

From 1 June, consumers under the age of 20 placing bets on Norsk Tipping’s platform will be subject to a loss limit. Players will be permitted a maximum loss of NOK2,000 (£145/€168/$181) per month.

Norsk Tipping already imposes a NOK20,000 per month mandatory loss limit on all customers across all games. The company has now decided to lower it for its younger players. The group characterised this approach as being due to this group’s increased risk of harm.   

The exact implementation of loss limits across Norsk Tipping’s sites has in the past differed to a large extent. The company has previously set different limits for different verticals and different games.

“It is well documented that younger players are more vulnerable to developing gambling problems,” said Norsk Tipping’s director of responsibility and communication Tonje Sagstuen.

“Statistics from both the University of Bergen and the helpline for gambling addicts show that the incidence of gambling problems is higher among younger players than in other age groups.”

In particular, Sagstuen highlighted that younger demographics have a lower ability to control their impulses. “Therefore, they have a higher risk of making bad choices,” she said.

Norsk Tipping to impose loss limits on under-20s

Sagstuen said the operator chose the 20-years-old age limit due to the life situation many in this demographic share. People of this age are typically either studying, in an apprenticeship or have low incomes.

The director said that while she was aware that this discriminatory approach might seem unfair to some consumers, ultimately it made sense.

“Norsk Tipping’s main purpose is to prevent gambling problems,” she said. “In comparison, the alcohol law also differentiates between age groups over and under 20.”

The gaming business said it currently had approximately 30,000 players active on its sites under the age of 20. Of these 2,000 have lost more than the NOK2,000 per month proposed loss limit one or more times over the last year.

In September 2021, Norsk Tipping opted to reduce the monthly loss limit for as its high-risk online games to NOK5,000. The operator had previously set the limit for such games to NOK7,500.

Published in a report released today (30 May), the research – which was conducted by IFF Research and University of Bristol with expert advice from GamCare – found that women are influenced by a range of psychological, social and financial drivers.

Women are more likely to gamble through operators’ use of gendered advertising, including using female celebrity endorsement, or targeted campaigns aimed at different groups of women.

One of the main recommendations from the report is for more research to be commissioned to examine the links between advertising and gambling harm.

GambleAware commissioned the research to build knowledge about why women in Britain take part in different types of gambling, the effect this has on them and their lives and their experience of treatment and support services.

“There has been limited research previously carried out into women’s experience of gambling,” said Anna Hargrave, chief commissioning officer at GambleAware. “However, participation in gambling among women and the rate of women experiencing gambling harms is increasing more quickly, so we felt it was essential to carry out this research to explore the lived experiences of women and their relationships with gambling.

“The research shows the drivers for gambling among women, which may lead to them unfortunately experiencing gambling harms and demonstrates that there are many factors driving women to gamble more. We were particularly concerned by the effect marketing and advertising is having. We will consider the report’s findings and recommendations with interest, to see how it can help benefit our commissioning activity.”

Various drivers

The psychological drivers observed included seeking positive emotions – which many women described as “the buzz” or “the thrill” – or using gambling as a mental escape to try to avoid negative emotions such as stress or boredom.

Social drivers include partaking in gambling to help develop and maintain relationships with friends, acquaintances, family and colleagues, while financial drivers would be the idea of winning money, often in an attempt to boost household finances and to relieve financial pressures, or to provide hope of escape from relationships, poverty, or domestic abuse.

The report makes several recommendations to better support women experiencing gambling harms, including more gender-specific services that offer comprehensive support for women experiencing gambling harms and other overlapping issues such as poor mental health, financial issues or domestic violence.

Another recommendation is for more services to offer support for affected others – who are at risk of harm from someone else’s gambling – as GambleAware said women are also more likely to be affected other than men.

Announced in January, the cost base reduction and global efficiencies programme launched with the news of several senior management changes. 

These included Todd Buckingham stepping down as chief executive to take on the new role of chief growth officer. Jake Henson was appointed as its new CEO to replace Buckingham.

Matt Davey was also appointed to the provider’s board as president and executive chairman.

Job cuts

These core changes were made, BetMakers said, to enable the optimisation of the provider in order to reach its full potential. Over the past four months, BetMakers undertook a wide-ranging operational review in line with the initiative.

This led to the normalisation of annualised staff and operating overheads of the business being reduced to AU$70.0m (£36.7m/€42.5m/US$45.5m) from $91.5m. BetMakers also noted its total number of employees is expected to fall from 568 at the end of 2022 to 440 by the start of 2024.

BetMakers said the drop in cost was primarily driven by restructuring of global operations and technology. This was made possible by streamlining and consolidating key software offerings and leveraging technology monitoring and reporting capabilities.

In addition, the provider said that the total cost of executing the global efficiencies program is expected to be between $2.0m and $2.5m.

Shareholder value

“The company’s cost base has been reset on the back of the deployment of proprietary technology and a strategic review of our operating model,” Henson said. “BetMakers is committed to providing long-term value to shareholders and this restructuring is an essential step towards achieving that goal. 

“The changes made aim to provide the business with a clear path to profitability while also providing a more streamlined operating structure to maximise future growth opportunities. 

“For our customers, who are at the core of our value creation process, we are committed to delivering best- in-class levels of service and quality. The investments in our technology and the extended roll out of our platforms and products into all regions both domestically and globally will support this ongoing commitment.”

Profitable growth

Executive chairman Davey added: “As detailed when we presented our Q2 FY23 results, and reiterated in our Q3 FY23 announcement, the company is focused on delivering operational efficiencies, simplifying our global operating model, and positioning the company for profitable growth. 

“Management and our global team have delivered on this promise, and we now expect the company to be well positioned to drive operating leverage as we expand our revenue base.

“Importantly, this restructure will allow increased focus on our core platform and products, improving the benefits and value we can deliver to our domestic and international customers.”

Websites and domains including Investor Junkie, Greedy Rates and Young and Thifty were sold to MPD Media for $1.3m (£1.1m/€1.2m).

The assets were owned by XLMedia Publishing Limited and Webpals Systems SC Limited, subsidiaries of XLMedia. All proceeds from the sales will be used to support day-to-day operations of the business.

XLMedia said this is in line with a strategy to focus on its sports and gaming business, expand its North American sports footprint, as well as refine and develop its European sports portfolio and gaming assets in certain markets.

The affiliate had announced in December it was exploring the potential sale of its personal finance division as part of a restructuring process.

The group added that the process to sell its remaining personal finance assets is at an advanced stage, but there is no certainty that transactions will complete.

Schneps Media deal

In related news, XLMedia signed an extension with Schneps Media to remain the exclusive provider of sports betting and igaming content to amNewYork.

Under the three-year deal, XLMedia will supply sports betting content while also managing commercial deals with regulated sportsbooks. XLMedia will also establish an igaming content hub on amNY.com.

The multi-year extension follows an initial two-year deal, with XLMedia saying the extension will support its objective to continue to expand its North America footprint and grow sports betting and gaming revenue.

“We are pleased to be able build upon our sports betting success with amNY.com in the years to come and to extend our partnership to include igaming in what we believe will be another important revenue opportunity for both businesses,” XLMedia chief executive David King said.

“In line with our stated strategy, this agreement furthers our efforts to expand our North America footprint and drive igaming in select markets like the US to capitalise on the high-margin gaming vertical.”

Schneps Media chief executive Joshua Schneps added: “We are delighted with the success from our partnership over the last two years and thrilled to continue in the years to come. The collaboration and commitment from the XLMedia team has been exceptional.”

In November 2019, the group’s Entain Holdings UK Limited subsidiary received a production order from HMRC to provide information relating to its former Turkish-facing online betting and gaming business. This was held from 2011 until it was sold in 2017.

Before that request for information in 2019, the operator denied claims it continued to benefit from the Turkish business, Headlong Ltd.

At the time, Entain understood the investigation was directed at certain former third-party suppliers, relating to the processing of payments for online betting and gaming in Turkey. Earlier in 2019, it spoke out to deny it continued to benefit from the Turkish business.

However, in July 2020, Entain announced HMRC was widening the scope of its investigation to examine potential corporate offending within the group. These offences include, but are not limited to, section 7 of the Bribery Act 2010.

Entain acknowledges historical misconduct involving former third-party suppliers and employees of the group may have occurred.

Changes at the top

Following the 2020 announcement Entain dismissed media reports of a link between the Turkish business, via former payment processing subsidiary Kalixa, and collapsed payments giant Wirecard.

Days before the investigation was announced, Kenny Alexander stepped down as CEO. Under his replacement Shay Segev, the business rebranded from GVC Group to Entain as part of a repositioning of the business as a socially responsible, sustainable operation.

Possible resolution

The group is now in deferred prosecution agreement (DPA) with the Crown Prosecution Service (CPS), Entain said it is now in and is working towards a resolution. However, Entain added that it is not possible to say how the investigation will conclude.

“Whilst prosecution of a group entity or entities, which may defend the action successfully or be convicted, remains a possibility, the group is seeking to conclude DPA negotiations with the CPS,” Entain added.

“Negotiations remain ongoing and any resolution would be subject to judicial approval.”

Entain expects substantial financial penalty

The group added that it is likely the HMRC investigation will result in a financial penalty for the business. 

“While the company cannot say at this stage what the consequences of the investigation will be, it is likely that they will include a substantial financial penalty which is yet to be determined,” Entain said.

“The company cannot identify reliably at this stage the size of any financial penalty.

“Since the investigation first commenced, the group has undertaken a comprehensive review of anti-bribery policies and procedures and has taken action to strengthen its wider compliance programme and related controls.  

“Whilst the discussions with the CPS remain ongoing, the board is content with progress to date and looks forward to pursuing an orderly conclusion to this matter.”

Shares in Entain are trading down 1.78% at 1,3550 pence per share in London following the announcement.

Historical issue

In a statement issued following the announcement, Entain chairman Barry Gibson said the group is hoping to achieve a resolution to the matter.

“We are keen to achieve a resolution to what is an historical issue relating principally to a business that was sold by the group nearly six years ago,” Gibson said. “Entain has been through a period of extraordinary transformation since then, and has taken decisive action to be a best-in-class, responsible operator with outstanding corporate governance.

“The board and leadership teams have been overhauled, 100% of our revenue is now from regulated or regulating markets, and our business model, strategy and culture have been reviewed, analysed, and stress-tested.

“We will continue to work closely with both the CPS and HMRC to ensure that this matter can be concluded as soon as is practical.”

Gaming Innovation Group’s board announced late Monday (29 May) that it had agreed Brown would depart his role on 31 December 2023.

It comes in the wake of a strategic review that could see GiG split into two independent corporate entities. The affiliate arm GiG Media, led by CMO Jonas Warrer, will continue under its current leadership, meaning the platform and sportsbook business is on the hunt for a new CEO.

During his tenure as CEO, the group has continued to expand into new markets, completed major acquisitions, sold off its B2C assets to Betsson and delivered record revenues in Q1 2023.

‘Richard has done a tremendous job’

“Richard has done a tremendous job with GiG over the years and the company is in a very good position driving shareholder value going forward,” GiG chair Petter Nylander said.

“We are pleased that Richard has agreed to stay until the end of the year to secure a smooth transition.”

Brown joined GiG in February 2016 as managing director for GiG Media, progressing to the role of chief digital officer. He was then named chief operating officer before elevated to the CEO role.

Richard Brown on his GiG tenure

Before GiG, Brown worked in various senior roles in companies such as Highlight Media Group, Web Guide Partner and THG Sports.

Brown said: “It has been a true honour and privilege to be part of Gaming Innovation Group’s development over the past eight years and the last four years as CEO, leading an incredible group of people towards, as I see it, the unparalleled strategic position across the B2B value chain that the group has created.

“I have no doubt that the teams throughout the organisation and the management groups of the respective business units have the skills and passion to continue the growth of the business towards its financial and operational targets.”

GiG: Strategic review progressing well

Some three months after it was initially announced, GiG issued an update on its strategic review alongside announcing Brown’s departure.

“The board is pleased to share that the strategic review is making good progress. GiG Media will continue under its current senior leadership, and a search for a new CEO for Platform & Sportsbook has commenced.”

A split would create two independent, publicly listed companies.

One would consist of media services, including GiG’s affiliate lead generation services. The other would be focused on platform and sportsbook, which would consist of the company’s technical igaming platforms including Sportnco, which GiG acquired for €51.3m (£43.2m/$56.7m) in April 2022.

The purpose of the split is to “sharpen the focus” of each segment, optimise growth opportunities and ensure that each new business can benefit from strategic and financial flexibility.

The quarter saw LeoVegas secure a new gaming licence in Germany and sell its 25% share in online gambling company BeyondPlay to Bettor Capital for €1.9m.

Since the quarter ended, LeoVegas has been involved in two major deals – its acquisition of Push Gaming and the finalisation of MGM’s bid to purchase the company.

LeoVegas said that gross gaming revenue fell by 3% yearly in the Nordic countries, compared to 17% in is Rest of Europe segment. Comparatively, in the Rest of World region, gross gaming revenue fell by 28%.

First quarter results

The cost of sales during the quarter hit €14.6m, down slightly by 6.1% yearly. Following gaming duties costs at €18.8m, the total gross profit for the quarter was €61.5m, a decrease of 7.5%.

Turning to expenses, the highest of the quarter came from marketing, which hit €33.7m. Personnel costs came to €19.1m, and other marketing expenses totaled at €17.0m.

Capitalised development costs added €5.3m to the total, while other income and expenses added €3.0m. Following this, the earnings before interest, tax, depreciation and amortisation (EBITDA) was €3.0m.

Depreciation and amortisation costs at €4.0m, plus amortisation of acquired intangible assets at €1.1m, brought the operating loss to €8.2m.

Various other costs affected the total further, resulting in an increased loss of €9.3m. After income tax of €784,000, the net profit for the period was €8.5m, an increase of 18.5% yearly.

KSA said that the Netherland’s ad ban will “better protect” vulnerable groups and young people against the risk of gambling addiction.

The regulator added that it intends to monitor compliance with the new rules. It said it had already informed licence holders about the new regulations.   

According to the new rules, recruitment and advertising activities are not to reach minors, young adults or other vulnerable groups in any way. This means that KSA will prohibit gambling businesses from advertising using mass-media platforms. These include television, radio, newspapers or magazines.

The regulator said it will not allow advertising in public places, for example using billboards or bus shelters. KSA added that it will also not be permitted to advertise in buildings accessible to the public, up to and including gaming venues themselves like casinos and slot machine arcades.

Netherlands untargeted gambling ad ban

However, the regulator is to allow so-called “targeted advertising” via the internet, direct mail, on-demand TV, social media or in on an online gambling platform to take place “under certain condition”.

Permit holders have a “best efforts obligation” to take measures to ensure that vulnerable groups do not view the ads. KSA outlined that there will be a “result obligation” to ensure that 95% of those reached must be 24 or older. The new regulations require operators to demonstrate that they are in compliance with this.

Those who received or view the ads must have an opt-out option to indicate that they no longer wish the receive the advertising.

KSA expect operators to monitor the reach of their ads. The regulator can a request a report from an operator on request.

“The KSA has indicated to providers that advertising on the games of chance interface of providers does not fall under the advertising ban, because this concerns a form of targeted advertising to visitors to the website,” said the regulator. “In addition, it is still not allowed to target bonuses at vulnerable groups, including young adult players.”

The new rules will also limit sponsorship as a form of “untargeted advertising”.

This was revealed in a document published by the FA’s Regulatory Commission. The document contained the written reasons behind Toney’s ban.

The Brentford player had admitted 232 breaches of FA rule E8. This rule prohibits players, coaches and club employees from placing bets on football matches around the world. He had initially been charged with 262 offences, but 30 of these were retracted by the Commission.

The document read that the decision to reduce the ban was a “common ground” decision between the involved parties.

The Commission said that his age at the time of the offences, expression of remorse and good record of behaviour off-field factored into the reduction of the sanction. However, it highlighted the “particular importance” of his gambling addiction diagnosis.

“In addition, and of particular importance, the Commission finds that a significant reduction should be made to reflect the diagnosed gambling addiction identified by Dr Hopley,” read the document.

Dr Philip Hopley was named as the psychiatry expert who gave evidence to the Commission via video call.

“The lack of control the player has in respect of gambling is clearly a reflection of his diagnosed gambling addiction,” it continued. “He is determined to address his gambling problem with therapy at the conclusion of this season.”

Eight-month ban

The Commission said 50 of the breaches were “the most serious” of the total offences. These included 16 bets on his own team to win and 13 bets on his own team to lose.

A total of 15 bets for Toney to score and six bets for others to score were also among the most serious.

Toney first confirmed that he was “assisting” the FA with an investigation in November last year. At the time, the Daily Mail reported that he had been under investigation by the FA for seven months.