Month: August 2023

The June handle was 23.3% ahead of $318.8m in the same month last year but 12.0% behind $446.9m in Arizona in May 2023.

Some $390.3m was spent betting online, with just $2.3m wagered at retail sportsbooks in Arizona.

Players won $364.9m from sports betting, leaving $27.7m in adjusted gross event wagering revenue before free bets. This represented a 79.9% increase from $15.4m in 2023 but an 18.9% fall from $33.9m in May.

Online betting adjusted gross event wagering revenue before free bets amounted to $27.6m. In contrast, retail’s share reached just $31,060.

Free bets in Arizona hit $11.4m

When taking off $11.4m in free bets and promotional credits, adjusted gross revenue hit $16.4m. This was 113.0% up from $7.7m last year but less than half May’s $33.9m total.

Online betting accounted drew $16.3m in adjusted revenue total, compared to $31,060 from retail. The retail figure was unchanged as all bets and promotional credits were for internet betting,

Sports betting tax for June reached $1.6m. Mobile, taxed at a rate of 10%, accounted for almost all tax. Retail, which is taxed at 8%, contributed just $2,485 in tax.

Under the deal, RSI will provide its igaming solution to the Delaware Lottery for an initial five-year term. This will be renewable for five additional one-year terms, depending on regulatory approvals.

Media reports previously suggested RSI and 888 Holdings were competing for the tender. However, RSI was in fact the only remaining bidder for the contract, after 888 pulled out in May.

Schwartz: Contract builds on prior success in tri-state area

RSI CEO Richard Schwartz said the operator intended to build on its record in the Delaware, Pennsylvania and New Jersey tri-state area.

“We are honored to collaborate with the Delaware Lottery team and the state’s three casinos to offer consumers who are geo-located in Delaware with safe, convenient, and innovative online gaming experiences,” he said.

“Rush Street Interactive has established itself as a leading innovator in the industry, and is a respected igaming and sports betting company,” added Delaware Lottery director Helene Keeley.

“We are impressed not only with RSI’s successes in other jurisdictions, including neighboring New Jersey and Pennsylvania, but also its strong commitment to responsible gambling practices.”

888 ends partnership with Delaware lottery

The news sees the lottery’s former supplier 888 end its decade long partnership with the lottery. The operator first signed a contract with Delaware in 2013, and since then has provided it with its online poker and casino solutions.

iGB sources suggest 888 exited the tender bid in May after a long and complex process. This included prospective vendors given just weeks to reply to a series of complex demands.  

These included integrations for online sports betting, despite state laws prohibiting the activity. The Delaware 2023 legislative session did not ultimately see a sports betting bill pass. As such this led to last minute delays in the tender process.  

Sources added 888 ultimately decided to retract its bid after a lack of communication from the lottery. It also cited the state’s small igaming market and mounting costs associated with the technical specifications.

Handle for the month amounted to $109.7m. This was 0.7% up from $108.6m in July 2022 but 5.4% lower than $115.6m in June this year. It also represented the fourth consecutive month of spending decline.

Online spend stood at $101.3m for the month, with retail betting at $8.4m.

In terms of revenue, July’s total hit $10.6m. This was 5.4% lower than $11.2m last year but a 49.3% increase from $7.1m in June 2023.

Read the full story on iGB North America

July’s total was on par with the $107.2m in the same month last year. The figure was 6.5% higher than $101.5m in June this year.

Of this amount, $106.7m came from slots and table games, up by 0.7% year on year. Sports betting generated $485,763 in qualified adjusted gross receipts, (QAGR), a drop of 62.0%, while handle reached $8.0m.

MGM remained the leader in the Michigan city with 47% market share. Casino revenue at MGM reached $50.0m and betting QAGR $121,017.

Read the full story on iGB North America

Pro forma revenue was $12.6m at Playmaker during the second quarter. Compared to the pro forma revenue for Q2 2022, this was a rise of 51.8%.

Like-for-like revenue at Playmaker was up 88.7% year-on-year in Q2 to $12.6m (£9.9m/€11.5m), as its net loss reached over $1.2m.

“During the quarter, our ecosystem of media and affiliate businesses refined internal processes, expanded syndication networks, enhanced video production and monetisation capabilities and extended strategic partnerships with tier-one advertisers and sports betting operators,” said Gnat.

Increased cost of sales lowers gross profit

Cost of sales for the quarter hit $2.2m, a $1.8m increase year-on-year. Playmaker noted that direct sales accounted for 54% of its core media advertising sales.

Direct sales revenue from Playmaker’s Futbol Sites grew 53.0% year-on-year.

The cost of sales brought the gross profit to $10.3m, up by 63.8% yearly.

Operating expenses totalled $11.2m, a rise of 64.7%. Almost half of this – $5.2m – went on salary and wages alone. Expenses for advertising, commissions and fees were $2.5m, while general and administration generated the third highest cost of $475,576.

The total operating loss came to $854,865, an increase of 76.4%.

Adjusted EBITDA – including Playmaker’s corporate segment –- was $2.2m, up by 37.5%.

Mike Cooke, Playmaker CEO, said that despite the quieter sporting season, Playmaker continued to deliver “strong top-line growth”.

He added that Playmaker’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was a particular highlight for the quarter, alongside improved cash flow.

“Meanwhile, our consistent focus on profitability is reflected in continued growth in adjusted EBITDA – and in the fact that we have generated $6.9m of year-to-date cash flow from operating activities.”

The cash flow total marked an improvement of £6.1m year-on-year.

Discontinued operations brings loss to over $1m

Further costs brought the pre-tax loss to $408,000. The most expensive of these further costs was interest expense, at $627,155.

However, these costs were all but wiped out by $1.3m in foreign exchange gain, which had improved significantly from the $139,514 loss in Q2 2022.

Playmaker paid $77.7m in tax for the quarter. Net loss from continuing operations was $330,252. After incorporating net loss from discontinued operations, at $934,105, the total net loss for the quarter was $1.2m This was a further loss of $151,512 year-on-year.

Half-year revenue rockets 135%

Revenue for the six months to 30 June was $28.3m, a significant increase of 135.0%.

Cost of sales for the period grew by $3.5m to $4.2m, bringing the gross profit to $24.0m.

Looking at expenses, salary and wages incurred the highest costs, at $9.4m. Advertising, commissions and fees generated $5.8m costs for the six months. Depreciation and amortisation saw the third-highest costs, at $3.5m.

Total operating expenses were $22.0m. This brought the operating income to $1.9m. As seen in Q2, foreign exchange gain at $1.5m largely made up for further operating costs. These saw the income before taxes total $1.2m.

Following taxes of $1.1m, the income from continuing operations was $152,664. Net loss from discontinued operations at $1.2m brought the total net loss for the six months to $1.1m, signalling an improvement of $3.4m.

According to Gnat Playmaker is well placed to continue its growth for the remainder of the year.

“Entering the sports-heavy Q3 and Q4 periods, Playmaker is better positioned than ever to drive value for fans, customers and shareholders,” he said.

Revenue hit $402.3m for the three months ended 30 June. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $113.0m, up by 9.8%.

Performance in both Q1 and Q2 prompted Paysafe to increase its full-year outlook to between $1.59bn and $1.60bn. Prior guidance projected full-year revenue between $1.58bn and $1.60bn.

Bruce Lowthers, CEO of Paysafe, said the revenue had been aided by small and medium sized business (SMB) volume and ecommerce, as well as improvements in online gaming performance in North America.

“We are pleased with our results through the first half of 2023, including 6% revenue growth and 7% adjusted EBITDA growth, driven by strong volumes across SMB and ecommerce, particularly North America igaming, as well as progress in classic digital wallets, where we continue to see improved user engagement,” said Lowthers.

“Based on our results to date, we are raising our full-year 2023 revenue growth outlook to the range of 6.5% to 7.5%, while maintaining more than 100 basis points in adjusted EBITDA margin expansion this year.”

North America operations improve overall revenue

The 6.0% growth in Paysafe’s merchant solutions segment was attributed to igaming operations in North America during the quarter. In May, Paysafe launched an updated version of its Skrill digital wallet for customers based in Ontario.

Merchant solutions generated $225.6m in revenue for the three months. Digital wallets accounted for $179.0m, while intersegment revenue incurred a loss of $2.4m.

Turning to Q2 expenses, cost of services hit $166.6m. Selling, general and administrative expenses were $133.6m, while depreciation and amortisation costs were $66.4m.

Impairment charge widens year-on-year increases

Impairment expense on goodwill and intangible assets was $193,000, a staggering difference from the $676.4m impairment charge noted in Q2 2022.

Paysafe recognised the impairment charge during the prior corresponding quarter due to a decline in its market capitalisation.

Following restructuring costs, operating profit was $34.1m, significantly higher than the operating loss of $703.0m year-on-year.

Other income of $7.3m, combined with interest expense of $36.7m, brought the pre-tax profit to $4.7m, marking another significant yearly increase of $680.1m.

Paysafe paid tax of $6.5m throughout the year. This brought the total net loss to $1.7m.

Half-year revenue ticks up

Looking to the half-year results, revenue for the six months to 30 June came to £790.1m, up by 5.8%.

Due to the impairment charge in Q2 2022, there was once again a major difference in impairment expense for the second quarter of 2023. This totalled $275,000, compared to $1.88bn year-on-year.

The total costs for the period resulted in operating profit of $69.1m. Other income at $9.9m and interest expense at $74.2m resulted in pre-tax profit of $4.8m.

After income tax expense of $10.4m, the net loss for the period was $5.5m.

Revenue in the six months to 30 June was higher across both the GiG Media and Platform and Sportsbook segments. GiG Media performed well in particular, driven by all-time high publishing revenue.

Against this backdrop, preparations for splitting the business have continued to take place. GiG revealed plans to split Platform and Sportsbook from GiG Media after launching a strategic review. Each segment will run independently as publicly listed companies.

A few months later, Richard Brown announced he would step down as CEO of the group by the end of 2023. Earlier this week, former SBTech CEO Richard Carter was appointed to lead the Platform and Sportsbook division, ahead of it being spun out.

Speaking about the plans after GiG posted its Q2 results, Brown, who remains at the helm of the group, said he was pleased with progress made during the quarter. He added that, ahead of the split, the group will focus on growth and operational improvements in the second half.

“Progress towards the strategic review has moved well,” Brown said. “We believe operationally the group will be ready to execute the planned spin off by year end, targeting execution, dependent on market conditions, in the first half of 2024.

“We now look into the second half of the year with total focus on ensuring strong growth mechanics, continued operational improvement and long-term scalability for GiG.”

Widespread growth for GiG in Q2

Group revenue for the second quarter was 31.7% higher year-on-year, surpassing the record €28.4m set in Q1 this year.

Of this total, €21.7m came from the GiG Media segment, an increase of 46.6% and a record for the division. GiG said this was again helped by the addition of AskGamblers.com, which it acquired from Catena Media in January.

Publishing revenue climbed 58.0% to reach a record high, while paid revenue was also up 26%. Some 64% of revenue came from revenue share agreements, 10% cost per acquisition and 26% listing fees and other services.

First time depositors within the GiG Media business also climbed 38.0% to 109,400. This, GiG said, reflects technological and product initiatives from previous quarters, which led to greater search engine exposure, resulting in higher traffic volumes.

New launches drive up Platform and Sportsbook revenue

Turning to the Platform and Sportsbook segment and revenue here was 27.4% higher in Q2 at €9.3m.

GiG noted several key developments within the business during the quarter. These included new licences in Pennsylvania and Maryland and a new gambling software provider licence in Sweden. Elsewhere, Betsson’s Rizk brand went live in Germany in June. 

Q2 also saw the launch and completion of the migration of all GiG legacy sportsbook clients to the Sportnco solution. GiG said this has led to material costs savings and an enhanced product.

GiG net profit hikes 318% 

Looking at spending during Q2, operating costs climbed 15.8% to €19.1m. Depreciation and amortisation expenses were also higher, as was amortisation on acquired affiliates. 

GiG noted €70,000 in financial income, meaning pre-tax profit hit €7.2m, a year-on-year rise of 176.9%.

The group noted a €149,000 loss from discontinued operations, but also received €24,000 in tax benefit and reported €20,000 in positive foreign currency exchange.

As a result, bottom line net profit for the quarter reached €7.1m, a 317.7% increase on last year. In addition, adjusted EBITDA jumped 68.7% to €14.0m.

Similar story in H1 as revenue rises 37%

In terms of GiG’s performance in the first half, revenue in the six months to 30 June was up 36.7% to €64.8m. 

Operating costs jumped 10.5% to €34.8m, while after also including both depreciation and amortisation, as well as amortisation on acquired affiliates and financial costs, this left a pre-tax profit of €12.2m. GiG said this was 171.1% higher year-on-year.

The group paid €143,000 in tax, reported a €520,000 loss from discontinued operations and a negative €14,000 foreign currency exchange impact.

This resulted in a net profit of €11.5m, some 283.3% ahead of H1 of 2023, while adjusted EBITDA also jumped 71.3% to €25.7m.

“I truly believe there is a strong and clear path to continued success for the business units both operationally and strategically and we are fixated on achieving it,” Brown said. 

Following a regulator-led investigation, Bet Right was found to have illegally offered boosted odds to NSW consumers.

The NSW Betting and Racing Act prohibits adverts that include an inducement to play, or participate frequently, in gambling.

The ruling was announced in Sydney’s Downing Centre Local Court last week. However, Bet Right was found not guilty of three other, undisclosed, charges.

“We have actively engaged with online bookmakers and provided guidance on their compliance obligations,” Liquor & Gaming NSW’s executive director of regulatory operations, Jane Lin, said. “There is simply no excuse for wagering companies to advertise inducements. They can be assured that the risk of being caught and prosecuted is extremely high.”

Illegal advertising fines surpass $1.1m 

Since it began issuing fines for illegal advertising in 2016 the regulator has handed out more than $1.1m in penalties. 

Operators prosecuted in court have been fined more than $830,000, while the regulator has issued penalty infringement notices totalling $270,000.

These include 14 penalty infringement notices that were issued to Betr in April this year alone. These penalties amounted to a record $210,000.

Earlier this year, SportsChamps was also fined $40,000 and ordered to pay $14,000 in costs for breaching NSW gaming laws. This was the third time SportChamps was prosecuted in NSW. 

“We will continue to monitor television, print and social media for this illegal advertising and advocate for the courts to issue higher penalties,” Lin said.

Gaming reforms continue in NSW

The latest fine comes against a backdrop of major gaming reform in the state, with a number of changes being mooted.

This week, an independent panel set up to oversee reform met for the first time to discuss a cashless trial for electronic gaming machines (EGMs).

The panel will also be consulted on a review of ClubGRANTS, which provides grants to NSW causes. This has not been formally reviewed since 2013.

Other measures put forward in recent months include a ban on external signage for gaming rooms. Announced in May, the ban will come into effect from 1 September.

The government is also lowering the cap for poker machine entitlements by over $3,000. In addition, the government has passed legislation to ban political donations from clubs with pokies machines in NSW.

The matches flagged represent 0.48% of the total 16,336 games analysed by SIS in the six months to 30 June. The figure was slightly lower than the 84 matches identified in the first half of 2022.

Matches are categorised as suspicious when they are found to have suspect betting patterns associated with them. This, SIS said, may be a sign of match-fixing.

Of the games reported, 40 took place within the Uefa confederation region, which covers all of Europe. A further 11 were flagged in Conmebol’s South American region.

Some 24 different countries had at least one alert in a domestic men’s competition. SIS also noted that leagues below the top division accounted for 61% of all alerts raised in H1.

A total of 11 games were “international” matches, which are classed as not falling within a specific country or confederation region. These include international games, cross-border club competitions and club friendly matches.

Match-fixing hangs over football

“These statistics show that suspicious betting activity and the spectre of match-fixing continue to hang over football and are not about to go away,” SIS head Affy Sheikh said.

“The fact that we’ve seen similar levels of suspicion over the past three years, serves to emphasise that concerted ongoing efforts and stronger collaboration among anti-corruption stakeholders are required to tackle this persistent problem in the beautiful game.”

Sheikh also spoke about concerns over more specialised markets, such as first half only betting. Some 21 of the matches flagged in H1 were due to suspicious betting patterns in this market.

This highlights the variety of markets in which attempts at match manipulation may occur,” he said. “Unfortunately, the increase in integrity alerts from lower domestic leagues again demonstrates the vulnerability of those involved in lower-funded leagues and competitions where continued vigilance and education are of utmost importance.”

Starlizard’s new integrity alert system

The latest report comes after SIS in March launched a new online integrity alert system for sports governing bodies and enforcement agencies.

Available free of charge, Komodo flags suspicious matches to relevant organisations around the world. The system provides them with an analysis of betting market activity and on-field performances.

Komodo is initially covering football, with cricket and other sports to follow soon.

This represented an 8.1% increase from the total US gaming revenue recorded in Q2 2022 and is the second-highest grossing quarter in industry history, with only Q1 this year reporting a higher figure.

Overall, the US gambling industry generated $32.71bn in commercial gaming revenue for the six-month period, up 11.9% from last year.

AGA estimated the results led to $7.28bn in gaming tax revenue for state and local governments, a 12.9% increase from 2022. The trade body highlighted the industry is on track to contribute the highest total in tax revenue it has done in its history.

“While commercial gaming is on track for an unprecedented third consecutive year of record revenue, the lasting impact we’re making on our communities through this record growth is even more impressive,” said AGA president and CEO Bill Miller.

Online gaming drives US gaming revenue growth in Q2

AGA highlighted land-based gaming continued to account for over three-quarters of the total commercial revenue during the period. However, the growth compared to the previous year was driven largely by growth in the online sports betting and igaming segments.

Q2 revenue from land-based slots, table games and retail sports betting stood at $12.38bn, up 0.9% from 2022. This compared to the 43.1% reported in the online gaming segment, rising to $3.68bn.

The expansion of regulated online gambling to new states principally drove the increase. Within the last year Kansas, Maryland, Massachusetts and Ohio all launched online gaming.

Lighter sports betting calendar pushes OSB results below Q1

In Q2 2023, combined online and land-based sports betting revenue ran to $2.3bn. This represents a 56.6% year-on-year increase from the previous year. However, a lighter sports betting calendar pushed revenue in Q2 below the previous quarter’s.

Meanwhile online casino reported a relatively more modest 22.5% rise in revenue, totalling $1.48bn.

“These results are a clear indication that our post-pandemic recovery wasn’t a fluke: the gaming sector continues to thrive and when we do well our communities do well,” said Miller.

“To sustain this momentum, the AGA will continue enlisting more allies in our fight against the illegal market, bolstering responsible gaming and building a business environment that allows our innovative industry to bring world-class entertainment to adults across America.”