Month: August 2023

The FCA is a regulatory body that act independently of the UK government.

The GCF alleged that people and companies are being “debanked” for conducting legal gambling transactions. Debanking refers to having bank accounts closed.

It also said that individuals are being debanked for having links to the industry.

In the letter, the GCF wrote that it had “deep concerns” regarding reports of bookmakers losing access to bank accounts.

“Regulated and licensed”

“We write on behalf of those in the gambling industry currently experiencing increasing and unjust difficulty when legal transactions relating to gambling go through bank accounts,” read the letter.

“We have deep concerns relating to regulated and licenced bookmakers having access to bank accounts removed.”

It added that debanking “impacts the millions of ordinary gamblers in the UK who are simply partaking in a legitimate hobby, and one that supports many of Great Britain’s most iconic sporting industries, such as horse racing”.

Concerns regarding money laundering

The GCF said that the closures are being enacted “under the guise” of anti-money laundering concerns.

The letter referred to the National Risk Assessment of Money Laundering and Terrorist Financing. The GCF said this categorises the gambling industry as having a “low likelihood of being abused for money laundering purposes”.

The letter also pointed to the 2022 National Crime Agency Suspicious Activity report. In this report, gaming and leisure accounted for 0.7% of all suspicious activity reports.

“Banking organisations are therefore applying mass exaggeration to what is a clearly defined minute risk in their practise of bank account closures.”

The GCF asked to see the FCA’s current guidance on how gambling transactions should be regarded by banks.

“We would welcome a response on these important and urgent points as soon as possible please.”

Galaxy recorded HK$8.7bn (£873.1m/ €1.02bn/ $1.11bn) in revenue in Q2, a 257% rise from the HK$2.4bn the operator reported in the same period the previous year. On a sequential basis, this represents a 23% rise.

However, the revenue results remain 33.1% below the HK$13.0bn the business announced in Q4 2019, the last quarter unaffected by the Covid-19 pandemic.

Relaxing of Covid-19 travel restrictions drives recovery

The relaxing of Covid-19 related entry restrictions and quarantine rules largely drove the recovery in Galaxy’s revenue during the three-month-period.

Galaxy founder and chairman Dr. Lui Che Woo highlighted the business’ non-gaming initiatives as the focus for future efforts.

“During the period Macau continued its business recovery and the group’s primary focus was on operational execution, recruitment and project development.

“We believe that non-gaming is the future of Macau to drive a longer staying and more diverse visitor base which aligns with Macau Government’s vision of building Macau into a world center of tourism and leisure,” said the chairman.

Galaxy’s results for the six-month period highlight the company’s accelerated revenue in Q2. The business posted HK$15.7bn, up 140.9% from the HK$6.5bn reported in H1 2022.

“Our vote of confidence in Macau is demonstrated by the fact that [Galaxy] is the first Macau concessionaire to resume dividends and return capital to shareholders after the border reopened,” he added.

Strong balance sheet leads to dividend

Galaxy highlighted its balance sheet in its Q2 report. While many of the business’ competitors took on significant debt during the pause on their Macau operators, its debt stands at HK$2.4bn.

This is a significantly smaller number than its cash and liquid investments, which were $24.4bn as of 30 June 2023.

The company pointed to its healthy balance sheet, as well as substantial cash flow from its operations as the reason it is returning cash to shareholders.

The business announced a special dividend of $0.20 share is to be paid to shareholders on 27 October 2023.

Restarted operations brings increased costs

The resumption of the company’s Macau operations saw the business report a significant increase in costs during the period.

Costs related to Macau gaming taxes rose to HK$5.5bn from the HK$1.9bn reported in the same period the previous year.

Meanwhile expenses associated with raw materials and consumables, as well as employee salaries also jumped during the period to HK$702.4m and HK$3.48bn respectively.

The company’s other operating expenses also saw a significant increase, rising 67.7% to HK$2.1bn. This trend was also seen with Galaxy’s financial costs, which rose to HK$122.9m from the HK$42.0m reported in 2022.

Galaxy gets into the black in Q2

Despite the increased costs Galaxy reported a pre-tax profit of HK$2.94bn in Q2 2023, compared last year’s HK$802m loss.

Overall, the company’s earnings before interest, taxes, depreciation or amortisation (EBITDA) stood a5 HK2.5bn. This is opposed to 2022’s HK$384m EBITDA loss.

Following the impact of a HK$46.9m tax bill, which was largely stable on last year’s total, the company posted a HK$2.88bn total profit for the period.

Under the deal, Allied will pay approximately $7.0m (£5.5m/€6.4m) to acquire the stake from Ourgame International Holdings. Allied will also assume a controlling interest in the developer’s board.

The deal remains subject to certain closing conditions, but is expected to close by the end of September. 

Founded in Beijing, China in April 2022, Zhihe mainly develops card and Mahjong casual games. During its first nine months of operation in fiscal 2022, Zhihe posted $10.0m in revenue.

“We are delighted to announce our strategic investment in Beijing Lianzhong Zhihe Technology Co.,” Allied CEO Yinghua Chen said. “In just over a year, Zhihe has made remarkable strides in the expansive mobile games market, which will harmonise seamlessly with our strategic goals and the establishment of our Allied Mobile Entertainment (AME) subsidiary.

“Zhihe brings a compelling library of popular mobile games that will bring significant traction to AME, while also providing distribution channels for our current portfolio of casual mobile games that are in the process of testing and pre-public launching. 

“We look forward to working with their leadership team to drive future value and realise the synergies of our businesses.”

Wider growth plans at Allied

The announcement comes on the back of Allied posting its second-quarter and first-half results earlier this week.

Revenue in the three months to 30 June was $3.3m, 182.3% from $1.2m in the previous year. For the first half, revenue was up 25.0% to $4.5m. 

Speaking after the results were published, Chen talked up the potential of further growth, referring back to a major restructure of the business late last year.

Details of this were revealed in December 2022, including restructuring the existing esports business. Allied also widened its focus to include a broader array of entertainment and gaming products and services.

The initiative included establishing two new subsidiaries in AME and Allied Experiential Entertainment (AEE). AME is focused on the mobile games market, while AEE operates within entertainment live events, experiential entertainment venue operation, management and consultation.

In addition, the business rebranded from Allied Esports Entertainment to reflect its new direction. Q2 was the second full quarter since the restructure.

Industry-leading software supplier TurbStars is propelling to the forefront of the industry with its triple threat opportunity. Offering three major products via its platform, games and sportsbook offering, iGB spoke to the head of sales, Vadim Potapenko to discuss how the operator is providing a 360 solution to the industry.

Max Trafimovich, CCO at SOFTSWISS, discusses the ‘Lego kit’ of products it has on offer with exciting plans to launch its platforms in more regulated markets across Europe and beyond in 2024. With a goal of 10 billion bets per month, SOFTSWISS shows no signs of slowing down and with a master plan for penetrating the LatAm market already in action, the software supplier is set to make even bigger waves across the industry.

The move marks the beginning of an international expansion strategy for BetMGM, as outlined by joint owner MGM Resorts.

This new international platform will utilise LeoVegas’ technology and platform. LeoVegas was acquired by MGM Resorts last year for $604m.

A key step forward in MGM Resorts’ international growth strategy

“BetMGM is a proven brand in the sports betting and igaming space, and we look forward to welcoming international players into our platforms designed specifically for them,” said MGM Resorts CEO and president Bill Hornbuckle.

“Today’s announcement represents a key step forward in our international growth strategy, which has been advancing rapidly since our acquisition of LeoVegas.”

BetMGM’s new UK offering will include new features for players, such as frequent jackpots and loyalty rewards.

Players can also avail of new sports promotions and exclusive slots.

Gary Fritz, president of MGM Resorts International Interactive said the company is sure it can replicate its performance in the US and Canada internationally.

“We’ve had great success in the US and Canada with our BetMGM brand and we’re confident we can duplicate this success in other markets, beginning with the UK,” said Fritz.

“The UK is a mature online gaming market, and we believe the BetMGM brand will provide distinct relevance to both sports bettors and igaming consumers.”

BetMGM without Entain

In the US, BetMGM is a 50-50 joint venture owned by MGM Resorts and Entain. However, Entain is not involved in the BetMGM UK launch.

This means that BetMGM UK will be directly competing with Entain’s UK brands. Entain owns some of the UK’s leading gaming brands, including LadBrokes, Gala and Coral, as well as leading European names such as Bwin and Eurobet.

Instead, Kambi will be powering BetMGM UK’s sportsbook, extending an agreement with LeoVegas dating back to 2016. That partnership was renewed in June this year.

MGM is building up its interactive capabilities in the wake of its LeoVegas acquisition, acquiring games developer and aggregator Push Gaming in May 2023. This adds in-house slot studios to its portfolio, which LeoVegas CEO Gustaf Hagman told iGB fits into the business’ strategy to own “a large part of the value chain in this industry”. He suggested it would look beyond gaming into payments next.

“The strategy is to take over a large part of the value chain in this industry,” Hagman explained. “Then it becomes natural for us to look at games suppliers, maybe payments suppliers.”

Revenue in the six months to 30 June grew along with the company’s adjusted EBITDA and its cash flow. This comes following a significant period without making an acquisition, the last being the €60m purchase of BonusFinder in February 2022.

Charles Gillespie, CEO and co-founder of Gambling.com Group said the results pointed the way for further growth in the North American market.

“Despite North America already being our largest reporting market, it still represents a significant growth opportunity for Gambling.com,” said Gillespie. “We remain very confident in our ability to continue to increase market share in existing states as they continue to grow.”

He also highlighted opportunities to complement this growth through expansion to North Carolina and Kentucky once the states launch igaming and sports betting. The CEO also said the company expects to benefit from its media partnerships and internal development projects going forward.

Gillespie added Gambling.com Group is “demonstrating the benefits of what we believe to be the most attractive business model in the industry as we leverage our many growth drivers and capital efficiency.”

Across-the-board growth in Q2

Gambling.com Group’s record Q2 revenue at $26m represents a 63% increase from 2022’s $16m in the same period.

Gross profit saw similar figures with a matching 63% increase year-on-year with a reported $25.1m, with operating profit revealing a 113% increase from a $2.25m loss to $735,000 profit.

The affiliate’s activities resulted in new depositing customers rose by 60% year-on-year to over 91,000. Free cash flow grew from $2.8m in Q2 2022 to $8.53m in 2023 for the period ending in June 30 helping the company to invest further into the development of Casinos.com.

Gambling.com Group launched the new domain in July 2023 to feature content on the casino industry. The site also offers free-to-play casino games, strategy guides from casino professionals and videos and interviews.

The company also grew its adjusted EBITDA by 161% in Q2 year-on-year taking the figure from $3.62m to $9.42m.

Shareholder earnings & H1

Gambling.com Group was able to deliver a 396% increase in net profit for the period attributable to shareholders from $56,000 to $278,000.

The company also repurchased 77,683 ordinary shares at an average price of $9.83 per share.

The affiliate for the first six months of the year reported revenue of $52.66m, representing an increase of 48% year-on-year.

In this extended period, gross profit increased by 50% to $50.78m and operating profit by an even larger 338% to $2.03m.

Along with the announcement of Casinos.com, the affiliate also unveiled a series of media partnerships during the six-month period. In July, it signed a deal with The Independent to deliver sports betting and casino content to the UK publisher’s readers.

This comes on top of the US news media deal with McClatchy Company that was agreed back in January 2022.

Free cash flow in H1 also saw a spike, registering a 252% increase to $14.73m and the company’s adjusted EBITDA rose by 48% to $52.66m.

2023 outlook

Along with the growth reported in Q2, Gambling.com Group has raised its revenue expectations to between $100m and $104m. Adjusted EBITDA for the year will now have an aim of between $36m and $40m.

The company has no expectations to provide contributions from any new acquisitions this year.

Sattar co-founded the business and has been serving as co-CEO since September 2021. As well as becoming the sole CEO of Sightline, he will now lead its Payments Innovation arm.

Elsewhere, Sightline confirmed Mike McManus, former CEO of Joingo, will become president of the Customer Innovation business. McManus moves into the new role after 10 months as senior vice president for integrated casino resorts at Sightline.

“Mike is equipped with the requisite skills, experience and vision to actualise our commitment to the industry,” Sattar said.

Sightline shuffles the C-level pack

Other changes include Tom Sears transitioning from chief operating officer to the position of strategic advisor to the CEO. Felicia Gassen will remain as chief of staff and also assume the additional role of chief administrative officer.

In addition, Jonathan Michaels moves from senior vice president of strategic development and government affairs at Sightline to become principal of Michaels Strategies, an advisory firm with Sightline as its inaugural client.

“As we envision Sightline’s imminent and promising future, spearheading the industry’s innovation emerges as our foremost endeavour,” Sattar said. “Our motto remains clear: Innovate, and then innovate some more.”

Sightline Payments: Nevada’s first fintech unicorn

Sightline Play is the supplier’s core product
(Photo credit: Sightline site)

The provider’s flagship Sightline Pay product enables players to use a single digital payment method across all gaming channels and throughout land-based resort. The solution is used by over 80 partners in more than 40 US states across sports betting, lottery, horse racing, covering the online and land-based casino markets. 

In October last year, Sightline secured new investment from the JP Morgan Payments arm of investment bank JP Morgan to support its growth plans. The investment took place during a funding round. 

Under the investment agreement, Sightline has been working with JP Morgan Payments to develop new solutions for the gambling sector. 

Sightline also previously secured investment from Cannae Holdings, run by US businessman William Foley. Its valuation at the time rose to $1bn, making it Nevada’s first fintech unicorn.

July’s handle in New Hampshire was down from $42.7m in July 2022 and also 6.1% lower than $39.3m in June this year.

Of this total, $33.4m was wagered online with DraftKings and $3.5m at retail sportsbooks. DraftKings has held the exclusive rights to offer sports betting online via the New Hampshire Lottery since November 2019.

Turning gross gaming revenue from wagering, this amounted to $3.5m. The July total was down 22.2% from $4.5m last year and 20.5% behind $4.m in June 2023.

Breaking down the monthly revenue performance, some $1.4m came from online betting with DraftKings. Retail sportsbooks generated just $179,994 in revenue.

In terms of tax, New Hampshire was able to generated $1.6m during the month.

New Hampshire betting revenue and handle up in FY23

July was the first month of the state’s new financial year. During fiscal 2023, players spent a total of $883.7m on sports, 2.6% higher than the previous year when $861.1m was bet.

The increase was driven solely by the online market, with spend in this area up 5.9% to $709.8m. In contrast, retail bets fell 8.9% to $173.8m.

Full-year handle for FY23 also hiked 57.0% year-on-year to $81.0m, with increases across both online and retail betting.

Revenue for the month amounted to $506.2m. This was 5.3% up on last year and also 10.7% higher than New Jersey’s total June this year.

Land-based casino gambling drew $290.0m in revenue during the month, down 3.0% on July 2023. This was due to a 13.2% drop in table games revenue to $72.2m. In contrast, revenue from physical slot machines, the largest source of revenue in the state, edged up 0.9% to $217.8m.

Turning to online gambling and overall revenue in this segment was 13.5% higher year-on-year at $155.2m. Online slots revenue jumped 13.4% to $152.5m while peer-to-peer poker revenue was 18.5% higher at $2.7m.

Breaking down this market, Borgata moved into top spot with $43.0m. This was higher than Resorts Digital on $40.6m and Golden Nugget, which led the market in June, with $39.8m.

New Jersey sports betting revenue up over 35%

Looking at sports wagering and revenue for this segment was 35.6% higher year-on-year at $61.0m.

The increase was helped by a marginal rise in handle, which grew 1.4% to $587.0m. Of this total, $561.6m was wagered online and $25.4m at retail sportsbooks across New Jersey.

Meadowlands, which is partnered with FanDuel, continued to lead the market with $25.7m in sports betting revenue. Resorts Digital and DraftKings claimed second with $19.0m, then Borgata and BetMGM on $6.1m.

Year-to-date gambling revenue passes $3.2bn

Turning to the year-to-date performance for New Jersey gambling revenue, total revenue was 11.0% higher at $3.23bn by the end of July.

Some $1.65bn came from land-based casinos, an increase of 2.3%. Online gambling revenue climbed 14.2% to $1.09bn and sports betting revenue was up 41.9% to $501.8m.

However, it was also noted that the state’s year-to-date sport wagering handle in the seven-month period fell 8.9% to $5.75bn. This included online spend of $5.45bn and retail bets totalling $293.6m.