Month: August 2023

Under the agreement, iGB will leverage its audience to connect the gambling industry with Glücksspielwesen’s network of policy analysts, advisers and politicians.

iGB will work with Glücksspielwesen on joint activations including content initiatives such as webinars. The deal also covers event support, with the aim of bringing together gaming operators and suppliers with Germany’s political classes.

The partnership comes in the wake of Germany’s reregulation of gambling. Earlier this year, the country welcomed Gemeinsamen Glücksspielbehörde der Länder (GGL) as its new federal regulator to oversee the market.

Creating a forum for engagement

“Clarion Gaming, the parent company of iGB, is clearly the champion of information in the gaming and gambling industry,” Behörden Spiegel senior consultant Robert Hess said. “Glücksspielwesen.de is a trusted information platform in the German-speaking region. Both partners fit together perfectly and the alliance will result in a lot of synergies.

“Both networks complement one another with their respective strengths and will help each other to expand their reach as reputable sources of information in all matters relating to the exciting market of gaming and gambling.”

Clarion Gaming’s B2B global content director Robin Harrison said the partnership provides a forum for industry professionals and policymakers to engage on level terms.

“We’re committed to harnessing our extensive international network to advance the interests of gaming and gambling.

“We’re excited to partner with an organisation that shares our commitment to showcasing the positive social and economic contribution made by the industry, while advocating for a safer, more sustainable and diverse sector.”

The complaint concerned a tweet published by Sky Sports Premier League’s Twitter account, which was promoted by Bet365. It was published in February 2023.

The tweet featured an ad that was added as part of Twitter’s Amplify feature. This feature places ads before the tweet’s video content begins playing.

The ad depicted a footballer kicking a ball from a corner. The Bet365 logo was positioned where the ball has been kicked. It then featured footage of a match between Arsenal and Manchester United, and showed Granit Xhaka scoring a goal.

The ASA challenged whether this ad would appeal to those under the age of 18.

Bet365: controls existed to ensure only over-25s targeted

Defending the ad, Bet365 said controls existed to make sure “their Amplify content would only be promoted to users over 25 years of age and above”.

Bet365 also held that no one with a strong appeal to under-18s were featured in the pre-roll advertising, referring to Xhaka. The operator said that 0.2% of all accounts following the Sky Sports Premier League’s Twitter account were under 18.

Bet365 also pointed out the length of the ad, which was five seconds. It compared this to the main video content, which was 21 seconds long.

Upon assessing Xhaka’s social media following, Bet365 noted that on Instagram, 0.4% of his audience demographic were under-18. On TikTok, this number was 32.3%.

Twitter said the tweet did not breach its ad policies.

ASA considered pre-roll ad and tweet to be same content

Although Bet365 stressed that the pre-roll ad was separate to the tweet’s main content, the ASA considered them as one entity due to Bet365’s sponsorship deal with Sky Sports Premier League. The fact that Bet365 promoted the tweet was an aggravating factor.

The ASA ruled that Bet365 had infringed its CAP code, which outlines rules for marketing in the UK. Specifically, it infringed the section entitled Gambling and Lotteries: Protecting Under-18s.

The ASA said that Xhaka would have been recognised by children at the time the ad was posted, due to being a player at Arsenal. In addition, he is captain of the Swiss national team.

The ad must not appear again in this form.

Last week, the ASA upheld a complaint regarding a Ladbrokes ad, which was ruled to appeal to under-18s. This was the third time the ASA had to take action regarding Ladbrokes ads since July.

Total handle for retail and online sports betting reached $294.9m. This was 11.3% less than $332.0m in June and the lowest monthly total since the launch of legal online betting in April.

It was also the first time that combined land-based and internet betting spend fell below $300.0m.

Online wagering accounted for $288.1m, down 10.9% month-on-month. Retail betting also fell 20.0% to $6.8m.

Handle dip leads to revenue decline

Taxable revenue from sports betting also declined in July. The combined total from retail and online wagering reached $29.4m, a drop of 8.7% from June’s $32.2m.

Of this total, $28.8m came from online betting, down 10.3%. The remaining $576,139 was generated by retail wagering, which was 274.3% higher than June.

Looking at individual operators, DraftKings remained the runaway online leader, posting $14.4m in revenue off $144.9m in bets.

FanDuel followed with $9.9m from $86.2m, then BetMGM in $2.5m off a $22.5m handle.

As for the land-based sector, Encore Boston Harbor topped the charts with $349,832 in revenue and a $3.2m handle. Plainridge Park Casino was next on $153,439 off $3.0m, then MGM Springfield with $72,868 from a $607,046 handle.

Massachusetts casino revenue falls 2% in July

Turning to the land-based casino sector, table and slots revenue for the month amounted to $98.6m. This was 2.0% down from $100.6m in June.

Slots revenue reached $67.5m, while table games revenue hit $31.2m.

Encore Boston Harbor also claimed top spot in this market, posting $61.3m in total casino revenue. MGM Springfield was second on $23.5m, then Plainridge Park with $13.9m.

Combined revenue from sports betting and casino gaming in June was $128.1m, down 3.5% from June’s $132.8. It was also revealed that total tax collected during the month of July amounted to $33.8m, with $5.8m coming from sports betting and the other $28.0m casino gaming.

Licences for MGM Grand Detroit, MotorCity Casino and Hollywood Casino at Greektown will run through to August next year.

Approved casinos in the city pay tax at a rate of 18% on adjusted gross receipts. Casinos submit wagering tax daily via electronic funds transfer.

Michigan receives 8.1% and the City of Detroit 9.9% of the wagering tax, plus development agreement payments.

Casinos also pay an 8.4% tax on their retail sports betting qualified adjusted gross receipts (QAGR). In addition, each licensee pays an annual fee to cover the MGCB’s expenses.

“Maintaining high standards”

“Renewing a casino licence reflects an ongoing commitment to operate a reputable and responsible establishment,” MGCB executive director Henry Williams said. “It signifies a dedication to maintaining high standards of quality, security, and fair play within the industry.

“The renewal of these licences is validation of the casinos’ commitment to operating as responsible and valued corporate citizens within Michigan that contribute positively to the state’s gambling industry while ensuring a safe and enjoyable experience for all patrons.”

The triple renewal comes after it was revealed the three casinos Detroit’s posted $107.2m in revenue for the month of July. This was level with last year and slightly up month-on-month.

Some $106.7m came from slots and table games, up by 0.7% year-on-year. Sports betting generated $485,763 in QAGR a drop of 62.0%, while handle reached $8.0m.

The research was conducted by data analytics company Alma Economics. It focused on the ties between gambling behaviours and mental health, based off the pre-existing 2022 data.

This involved conducting a regression analysis, which is a way of finding which variables impact behaviours. It found that a one unit increase in the Problem Gambling Severity Index (PGSI) score could increase the probability of someone having a mental health condition by around 3%.

This suggests a connection between a higher volume of problem gambling and poorer mental health.

Most commonly reported mental health conditions

According to GambleAware‘s last annual survey, in 2022 an estimated 1.5 million people had a PGSI score of 8+. This indicates a problem gambler and was a rise of 23% from 2020.

The new research noted an estimated 7.5 million people reported having a mental health diagnosis in 2022. This is up by 11% from 2020.

Depression was the most commonly reported form of mental health condition at 7.2 million. Anxiety was named by 5.7 million, while post traumatic stress disorder was reported by 1.1 million.

Affected others

Also included in the study were the harms experienced by affected others. These are people who are affected by another person’s gambling behaviour, such as a spouse or sibling.

GambleAware’s 2022 survey estimated that the number of affected others in Great Britain is 3.5 million. This was up by 9% from 2020.

Out of those who identified as an affected other, an estimated 800,000 people were also in the PSGI 1+ category.

The most common harm reported by affected others is an inability to trust them. A total of 1.8 million of those affected cited this. Issues with money is also a common theme, with a lack of household income reported by 1.0 million people. A lack of money for larger family costs, such as holidays, was also reported by 1.0 million people.

The research also found that those who experience gambling harms have an increased risk of suicidal ideation. Financial hardship in particular could increase the possibility of suicidal thoughts by an estimated 10%.

How GambleAware aims to explore the issue further

The analysis concluded that going forward, curated types of support could be necessary for those whose gambling behaviours are symptomatic of a mental health condition.

“Our findings found that individuals with higher PGSI scores are more likely to also suffer from mental health disorders,” read the report. “Depending on the underlying mental health condition, different types of support may be necessary to help those who use gambling as a form of self-harm or a calming mechanism.”

It added that “more in-depth analysis of specific demographic groups and their experience with gambling harms and mental health” could be conducted.

“For example, focusing on the gambling experiences of specific age groups, ethnicities, or sexualities and how these groups and their mental health changes varies based on gambling harms faced.”

Zoë Osmond, chief executive of GambleAware said that recognising how gambling and mental health are connected can help to tailor treatment.

“The relationship between gambling and mental health is significant for medical practitioners and gambling support organisations, as it can influence the type of treatment and support that is best suited for each individual,” she said.

“Our findings suggest that gambling harms not only affect the individual, but also the mental health of those around them. Therefore, practitioners and support groups should encourage and provide mental health support for affected others as well.”

Eriksen resigned as chief executive in June, after being nominated in April 2022. He stepped down less than a year after taking on the position, moving on to the role of CEO of Bane Nor, the agency responsible for overseeing the Norwegian railway network.

Eriksen will leave Norsk Tipping on 31 August. Sagstuen’s tenure begins the following day. She will remain as CEO until a permanent replacement is found.

Currently, Sagstuen is the director of Norsk Tipping’s Responsibility, Society and Communications department. She has been a member of the monopoly’s management team since 2014.

Ensuring a “thorough process”

Sylvia Brustad, chair of Norsk Tipping, said that the search for Eriksen’s replacement is ongoing.

“The process of hiring Thor Gjermund Eriksen’s successor is underway,” she said. “We must have a thorough process and use the time necessary to provide the company with a good manager.

“I am happy that Tonje has agreed to lead the company until a new managing director can take over.”

Rhodes said the regulator is “very concerned” at the significant increase in the misuse of gambling statistics. This comes as different parties aim to argue for or against different proposals in the wake of the Gambling Act review white paper.

He added that the Commission has seen this come from a number of different organisations. This includes gambling operators, trade bodies, charities, media outlets and sporting venue owners.

“This is unacceptable,” said Rhodes. “All parties seeking to rely on statistics to advance their arguments must do so accurately and in the correct context.”

Abuse of 0.3% problem gambling statistics

In particular, Rhodes highlighted two commonly used statistics – “99.7% people who gamble do so without being harmed” and “only 0.3% of gamblers are harmed”.

“This is not true and misrepresents the statistics,” said Rhodes.

These figures, which are based on short form Problem Gambling Severity Index data (PGSI), are often highlighted by those against more stringent gambling reforms.

Rhodes criticised the use of the 0.3% figure. He noted that the PGSI screen produced figures ranging between 0.2% and 0.6% in the past few years.

He also emphasised that this is a percentage of the whole adult population in Great Britain that suffer from problem gambling and not “of solely those who gamble as many have tried to suggest”.

Rhodes pointed to data from the Health Survey for England 2021. It found that people over 16 who had gambled in the previous 12 months experienced a 0.8% problem gambling rate.

The CEO also warned against people who argue the 0.3% figure represents those “at risk” from gambling harms. He called this “inaccurate and misleading”.

He said this was due to conflating problem gambling and gambling-related harm. Rhodes additionally pointed to Health Survey for England figures that showed a 1.2% moderate gambling risk rate and 4% of people experiencing a low-risk rate.

Statistics show complicated pictures

Rhodes said the statistics show that overall the problem gambling rate is low compared to the level of participation.

“But when we go beneath the surface of those numbers, the picture is more complicated and requires statistics to be properly understood and properly used when discussing these matters,” said Rhodes.

“Even with a relatively low proportion of people experiencing problem gambling we must remember that this can and does have catastrophic consequences and equates to hundreds of thousands of people directly affected and a greater number among friends, families and others.

“I therefore ask anyone commenting on this area to take a greater degree of care to ensure they are using evidence and statistics correctly, accurately and in the proper context.”

Having enjoyed a long career in journalism, I soon noticed after joining The Health Lottery that the gender balance in my new industry was very different to my previous one.

While the upper echelons of national newspapers may well still be dominated by men, at the women’s magazines where I spent the bulk of my career, the workforce was very much dominated by women.

As editor-in-chief of New! and Star magazines, I was surrounded by other women in leadership positions. In contrast, in my new role I often find myself at C-suite level meetings where I am the only woman sitting around the table.

Some people might find this off-putting, but I see it as a challenge – I want to help change what these meetings look like in the future.

Even split

On the celebrity magazines where I worked, our readership was inevitably mainly women, so it was natural that our staff tended to be female-dominated, particularly on the editorial desk.

But in the gambling industry, that’s simply not the case. The staff might be mostly male, but the customer base is not.

The Gambling Commission’s statistics for gambling participation in the year to March 2023 showed very little difference between the percentages of men and women who had gambled in the previous four weeks.

It’s also worth noting the difference between the sexes has narrowed considerably over the past five years. This is perhaps one reason so many gambling companies publicly declared their support for this year’s International Women’s Day theme of “Embrace equality”.

On a personal level, I have long been a keen gambler and enjoy the experience of gambling as much as the potential thrill of winning. If I’m betting on the Grand National, I’d like my horse to win, but the most important thing for me is that my horse is still in the running at the end of the race. That keeps the adrenalin flowing for as long as possible.

Major relaunch

As a magazine editor, I used to take my staff on social outings to the former Walthamstow Stadium, which offered a fabulous mix of fish and chips, a flutter on the greyhounds and a few beers. Nothing could beat the excitement when the lights went down in the bar and up on the track as the dogs set off in pursuit of the hare.

At The Health Lottery, our current player base is split roughly 50/50 between men and women. Since taking up my post, I’ve spent a lot of time making sure our product is correctly tailored to both our male and female players. We’ve made small changes to appeal to our female demographic, such as teaming up with Tastecard from September.

We’ve just undertaken a major relaunch of The Health Lottery, with a new website, logo and identity for the overall brand. Throughout every stage of this, I have thought about our female users.

I know from my experience as a journalist how much true life stories appeal to a female readership and so I’ve overhauled and expanded the section of the website that features stories of people who’ve benefited from the funds raised via The Health Lottery.

And to make sure we’re getting it right with all our players, we’ve asked 20,000 players (split by gender in line with our users) to take part in a customer panel, inviting their views on all of the changes we’ve made to make sure we’ve keeping everyone happy.

Challenges in the recruitment space

But while our player base is fairly evenly split, our male-to-female staff ratio is closer to 75/25 and that’s something I hope to change in the future.

I know it won’t be easy because I’ve already seen firsthand how challenging it is to recruit women. The applicants we’ve had for roles since I took up my post have predominantly been male. There seem to be fewer women both working in the industry and interested in joining it.

We’ve tried to improve this by using a specialist recruitment consultancy and were delighted to welcome a female product manager and lottery specialist to the team recently.

Changing our gender balance won’t happen overnight, but I like to think that by drawing on some of the lessons learned in my former career, I can go some way towards having an impact.

Step by step

First and foremost, it’s important to enable women to progress in their careers by helping them balance their professional and personal lives. In the post-Covid world, the most obvious step is to improve flexible working options to encourage more women to apply for roles.

But it’s also important to have a culture that supports women to begin families in the first place. I was incredibly lucky earlier in my career when I was deputy editor at New! in that my editor and I coincidentally interspersed our pregnancies. This gave me the opportunity to step up into her role while she was off and in turn gave others the chance to step into mine.

Maternity leave should not be seen as a problem to be overcome, but as an opportunity to provide progression for staff.

Also, as the head of a mostly female department, too often I saw how frequently men’s employers assumed it was the woman’s job to jump in when childcare emergencies arose. While I can’t change our gender ratio overnight, I can make sure I don’t make the same assumption when issues arise in my male employees’ families.

Hopefully, by taking such steps I can eventually help bring about change within the makeup of our organisation. If other CEOs in the gambling industry did the same, it would go some way to improving the gender balance in the wider industry.

The six-month period to 30 June was the second half-year since 888 acquired William Hill’s non-US assets for £1.95bn. The deal went through on 1 July last year, with integration of the business taking place throughout H2 of 2022.

The 12 months that followed the acquisition were busy for 888. CEO Itai Pazner departed in January after the group revealed failings in AML and KYC processes for customers in the Middle East. However, upon posting its Q2 results, 888 said it has now reached a settlement with the Gibraltar regulator in relation to these failings.

Last month, industry veteran Per Widerström was named as 888’s new CEO with effect from 16 October.

However, uncertainty remains over FS Gaming. The investment vehicle backed by former Entain CEO Kenny Alexander, chair Lee Feldman and chief financial officer Stephen Morana, which acquired a 6.75% stake in 888 in June.

The trio made a bid to take charge of the operator, prompting a warning from the Gambling Commission, which suggested 888 may face a GB licence suspension should it appoint the trio.

888’s board concluded their appointments had “no reasonable prospect of being approved”, ending talks as a result.

However, the operator remains subject to a Gambling Commission licence review following the matter.

888 ahead of schedule with William Hill synergies 

Against this backdrop, H1 pro-forma revenue fell year-on-year, with the only growth coming from 888’s UK and Irish retail operations. 

Despite this, executive chair Lord Mendelsohn was upbeat about the performance. He said the integration of legacy William Hill assets progressed faster than expected. As such, he said 888 will realise the full £150.0m synergies from William Hill a year earlier than expected.

“I am very pleased with the progress we have made in the first half of the year,” Lord Mendelsohn said. “The group delivered against the plans we committed to at our investor day last year, while also successfully navigating business, market and regulatory volatility.  

“We have successfully delivered against our focused market strategy, changing the mix of our revenue and creating a more profitable and sustainable platform for future growth.”

Retail the shining light for 888 as online declines

Breaking down 888’s revenue pro-forma performance in the first half – reported as if the acquired William Hill business was part of 888 in the same period last year – revenue was lower.

Starting in the UK and Ireland, online remained the group’s single source of revenue. However, the £335.9m posted was 9.4% lower than last year. This, 888 said reflected both the impact of the business mix shifting towards lower-spending customers and a short-term revenue impact from the removal of low-return or unprofitable marketing.

As for UK and Ireland retail, this made for better reading where pro-forma revenue was 6.0% higher at £279.4m. The operator highlighted continued strong customer engagement and a slightly higher sportsbook net win, predominantly driven by bigger racing festivals.

International revenue falls in H1 

There were further declines for 888 within its international business, where revenue slipped 13.8% year-on-year to £266.3m.

888 said this was caused by a “significant” reduction in revenue from its optimised markets. This, it said, primarily reflects the impact of regulatory and compliance changes, mainly the suspension of VIPs in the Middle East.

However, the operator was able to report double-digit growth in Italy and Spain and an 11% increase from growth markets. This excludes Germany, where further regulatory restrictions impacted the market and its business. 

Despite the drop in group revenue, 888 said it remains on track to perform in line with its full-year expectations. This includes a low- to mid-single digit decline on a pro forma basis, with the decline now likely to be at the mid-single digit end of this range. This, 888 said, reflects a slower-than-expected pace of recovery in the Middle East.

Finance costs soar as a result of William Hill debt

Turning to pro-forma spending, cost of H1 sales was down 3.3% to £291.6m, due to reduced revenue. However, the size of the revenue decline still meant gross profit fell by 8.1% to £590.0m

Marketing spend was reduced by 22.3% to £138.2m while adjusted operating costs excluding depreciation and amortisation decreased 7.7% to £296.8m. This, 888 said, was driven by the delivery of synergies.

As such, pro-forma adjusted EBITDA increased 9.0% to £155.6m, with a margin also up from 15.1% to 17.7%. Again, 888 said this was helped by the early benefits of synergies and an increased focus on cost efficiency.

888’s net debt was reduced by £68m to £1.66bn as a result of the William Hill acquisition. In comparison, net debt for the first half of 2022 was a gain of £227.4m.

Total interest on bank loans and bonds was £85.1m. This was whittled down by £25.8m in foreign exchange on financing activities, associated with servicing its debt. After considering £7.6m in hedging activities and £600,000 in other finance charges and fees, the total finance expenses were £71.9m. This was £71.1m higher than H1 2022.

Looking towards the bottom line, adjusted profit after tax fell 63.0% to £11.8m.

888 also reported £25.4m in exceptional costs related to sales and operating expenses, as well as £8.1m in the amortisation of finance fees and £52.6m in amortisation of acquired intangibles.

These costs were slightly offset by £15.4m in tax benefits and £25.2m in foreign exchange gain. However, 888 still slipped to a net loss of £32.5m, compared to last year’s £12.0m profit.

“The strategic progress made during the year to date has created a fundamentally stronger business with higher profit margins and we remain on track to deliver against expectations for the full year,” Lord Mendelsohn said.

The developer did not publish full results for the quarter ended 31 July but said in a market update that record revenue was in line with expectations GMGI set out last month before the end of Q3.

GMGI said growth was driven by RKings tournaments within its B2C segment in the UK. The group took full ownership of RKings in November last year, having initially purchased a majority holding in November 2021.

CEO Brian Goodman highlighted a number of operational improvements within RKings in Q3. These included an expanded tournament platform, offering multiple prizes and allowing for more winners with each drawing.

Goodman also noted the impact of GMGAssets, a complementary business offering RKings’ tournament winners of high-ticket items the option to take a pre-determined cash option in lieu of prizes.

RKings tournament competitions revenue in Q3 hit $5.8m, with GMGAssets at $1.7m.

“July marks our best monthly financial results at RKings since it was acquired almost two years ago,” Goodman said. “It contributed $7.5m toward total revenues in the quarter, which is $1.0m more than contributions of about $6.5m generated in both Q1 and Q2.”

Further success for GMGI with Mexplay

GMGI also noted the performance of Mexplay, its online casino and sportsbook operating in Mexico. 

Wagering on Mexplay amounted to $5.8m, which was 393.0% more than during the second quarter. Total player deposits were also 610.0% higher quarter-on-quarter at $476,000.

In addition, total registered players on Mexplay hit 32,800 by the end of Q3, some 368.0% higher than the previous quarter.

GMGI will publish further details on its Q3 performance in due course.

GMGI edging closer to MeridianBet Group acquisition 

Meanwhile, Goodman updated the market on progress with GMGi’s planned acquisition of MeridianBet Group.

GMGI struck a deal in January to purchase MeridianBet for approximately $300m. Terms of the agreement were amended in July, with GMGI hoping to complete the deal in the fourth quarter.

Goodman said GMGI made progress in securing the financing required to complete the deal. This will be put forward for shareholder approval in the coming weeks. 

“Obviously, we are extremely excited to complete this transaction, as it will transform GMGI into a dynamic and highly profitable global gaming company,” Goodman said.