Sportradar Q2 revenue up as FX movements hit bottom line

Sportradar reported €216.4m in revenue during Q2 2023, up 22% from 2022. The business reported growth across all of its segments during the period, expansion in the company’s largest sector, with Rest of the World (RoW) Betting driving the majority of the of the overall growth.

Sportradar holds a “pivotal Position” in the Global SPORTS ECostyems says ceo carsten koerl (centre)

“We are very proud of our strong performance during the first half of 2023 and remain on track to achieve the highest annual revenue in the company’s history,” said CEO Carsten Koerl.

“We hold a pivotal position in the global sports ecosystem and believe our talent, technology and diverse product offering positions us for strong future growth as we continue to execute against our strategic initiatives.”

Increased sales push RoW Betting growth

Sportradar said revenue for its Rest of the World (RoW) Betting segment – spanning all non-US operations – increased 20% in Q2 2023 to €114.1m.

The business highlighted the impact of increased sales of its higher value-add offerings including its managed betting services, which rose 25% to €41.1m for the quarter. Additionally, its Live Odds and Live Data products revenue increased 19% year-on-year.

The segment’s adjusted EBITDA also grew 18% to €51.0m compared to the same period the previous year, with the EBITDA margin remaining static at 45%.

CONMEBOL deal drives AV revenue

Sportradar’s RoW Audovisual segment reported €49.6m million in revenue for the quarter –, a 25% increase. The provider pointed to the business’ new deal with the continental governing body of South American football CONMEBOL as driving the rise.  

This revenue resulted in an adjusted EBITDA increasing 26% to €16.4m compared to the same period in 2022, with a 33% margin.

US EBITDA positive in Q2 2023

Meanwhile the company’s smallest business area, the United States, experienced 31% growth to €38.0m in Q2 2023. Sportradar said increases in revenue across the board in betting, gaming and audiovisual products drove the increases.

This pushed EBITDA to €5.4m, compared to the EBITDA loss of €5.5m reported the previous year. The business said this indicated strong improvement in its operational leverage in the US business model. Margins subsequently improved to 14%, compared to 19% in 2022.

Sportradar H1 results

On a six-month basis, Sportradar announced revenue of €424.0m, 23% up from last year’s €345.1m. Due to factors mentioned above, profit fell to €6.9m from the €31.0m achieved the previous year.

On revenue, the business’ adjusted EBITDA stood at €76.8m for the half, a 42% increase.

As of 30 June 2023, Sportradar has total liquidity of €484m including cash and cash equivalents of €264m.   

Personnel costs shoot up  

The provider reported a 31% increase in personnel expenses to €84.4m. However, beyond this many of the business’ costs remained largely static.

Sportradar recorded €44.6 in purchased services and licences expenses, largely similar from the €43.2m the business spent the previous year.

The business’ depreciation and other expenses also saw little change, at €52.1m and €20.9m respectively.

Other costs

The business issued €11.1m in share-based compensation for the three-month period, up from €8.8m the previous year.

However, Sportradar did not note any litigation costs on the books for Q2 2023 compared to the previous year. The supplier had launched a betting data suit against competitor Genius Sports, which was resolved in October 2022.

The business also reported €7.1m in finance costs and paid €1.6m in income tax.

Overall, the company reported a pre-tax income of €1.6m.

Foreign exchange movements eat into profits

Despite previously mentioned revenue growth, the business saw its net profit decline 99.7% from €22.8m to €76,000.

While the company pointed to a net negative impact from foreign exchange currency rates, it also said it was affected by a €8.0m one-time loss on an equity investment.

Sportradar previously received an €18.4m boost from FX movements in Q2 2022, compared to a €1.2m loss this year.

The supplier reported adjusted earnings before interest, taxes, depreciation or amortisation (EBITDA) of €40.1m, representing a 46% rise.  

Everi tuck-in acquisitions drive revenue growth in Q2

However profits were squeezed, despite the revenue growth in the three months to 30 June.

Everi recorded $208.7m in revenue for the quarter, up 6% from the $197.2m reported in the same period the previous year. The company pointed to investments in development initiatives and several recent acquisition deals as responsible for the growth.

These included an April transaction to acquire the assets of electronic bingo provider Video King, and the October 2022 purchase of certain assets from mobile tech provider Venuetize. Everi also purchased IP from Atlas Gaming and a number of properties from marketing provider XUVI in 2022.

Everi CEO: We’re ready to invest to grow

Everi chief executive Randy Taylor said the business was in a strong position for future growth in the second half of the year.

“Importantly, despite the impact from higher interest rates and inflationary pressures, we continued to generate strong free cash flow, which positions the company to invest in our growth initiatives and return capital to shareholders through share repurchases,” he added.

“We expect to continue to invest in development initiatives to sustain longer-term growth while remaining active in share repurchases. We are confident that we have the right product strategies and capital allocation priorities in place to continue creating value for shareholders.”

FinTech growth offsets difficulties in games

By segment, Everi reported 13% growth in its FinTech operations to $95.6m, which the company said resulted from a 26% increase in software sales, 9% rise in financial access revenue and 6% growth in hardware operations.

Meanwhile the news was less rosy for Everi’s Games segment, where revenue remained relatively stable rising only 1% in Q2. This reflected a 5% rise in the business’ gaming operations partially offset by an 8% decline in the business’ gaming equipment and systems sales revenue.    

“While Games segment revenue continued to grow, gaming operations revenues and unit sales were impacted by near-term challenges during a transition period as we roll-out new cabinets and content,” said Taylor.

“Following several consecutive years of growth in our installed base and increased unit shipments, we expect our Games segment revenue will be flat to slightly down in the second half of the year as compared to the second half of 2022,” he added.

Everi sees moderate costs increases in Q2

In terms of costs, Everi reported expenses rising overall, but not across all business segments in the three-month period ended 30 June.

While gaming operations costs increased 37.0% from $6.1m to $8.4m in Q2, this trend did not repeat across the gaming equipment and systems sector in which costs fell 13.9% to $20.1m. Overall games costs of revenue fell slightly to $28.5m.

Meanwhile, the company’s FinTech segment saw costs increase across the board, with all business areas noting rising expenses. The total cost of revenue for the segment rose to $15.2m from $13.7m.

Everi’s total operating expenses increased 11.5% to $61.4m in Q2. Costs also rose in research and development and depreciation to $16.6m and $19.5m respectively. However, the company’s amortisation costs fell slightly to $14.2m.   

In total, Everi’s costs and expenses rose 9.0% to $155.4m from the $142.7m recorded the previous year. The business also paid an additional $20.1m in interest expenses, up from $12.3m.

Profits decline year-on-year

After costs are accounted for the company reported an operating income of $53.3m, down 2.3%. This resulted in a pre-tax income of $33.1m, down 21.6% from the previous year. The business paid $5.7m in tax for the year.

Despite the increase in revenue then, Everi’s net income declined 15.8% to $27.3m.

H1 results align with quarterly figures

On a six-month basis Everi saw revenue rise 6% to $153.1m, from $144.4m in 2022. This resulted in an operating income of $105.3m and a net income of $55.4m. Like the three-month period, the company’s revenue rose, even as wider profits were squeezed.

RSI last bidder for Delaware Lottery RFP after 888 withdrew in May

While media reports suggest Rush Street Interactive (RSI) and 888 are competing for the tender, the Chicago-based operator is in fact the only candidate left bidding to power Delaware’s online casino and poker offering. 

888 ends long partnership with Delaware Lottery

Sources close to the process suggest it faced a number of delays and challenges, which ultimately left bidders with just weeks to reply to a complex series of asks. This included a number of integrations for mobile sports betting, although state laws only permit in-person wagering. iGB contacted the lottery for comment.

Efforts to regulate mobile betting did progress in the 2023 legislative session, but ultimately failed to pass. This in turn necessitated changes to the tender process. 

888 won the tender to power the Delaware Lottery’s igaming offering in 2013. It runs online casino and poker for the lottery, alongside an OpenBet-powered retail sportsbook

The SI Sportsbook operator extended its contract for two years in 2020, after rolling out an interstate poker offering connecting players in Delaware, New Jersey and Nevada in 2018 with Michigan joining in 2022

Lack of communication, high costs, small market

However it ultimately pulled out in May, leaving RSI as the only competitor. iGB understands its contract is not yet signed, although an announcement is expected this week. 

The SI Sportsbook operator would not comment on its decision to pull out.

However sources suggest a lack of communication from the lottery, a small addressable market and costs associated with the technical specifications ultimately promoted 888 to retract its bid.

Confusion over Delaware Lottery’s igaming RFP

The request for proposals (RFP) issued in January this year suggested a change in the lottery’s approach. It sought a vendor that could also provide online sports betting as well as icasino and poker, despite the fact this remains illegal in the state. 

The tender admits its uncertainty as to whether the partner could even launch online betting. It could be relevant either from the launch of the contract, “at some point in the future” or “not at all, ie outside the scope of this RFP” the document says. 

Further confusion reigned over live casino games. The RFP sought information about partners’ experience in managing third party content including live dealer products, then said in an addendum it had no intention of offering these games. 

888, as the incumbent, lodged a bid alongside Rush Street Interactive and Light & Wonder, as well as reg tech specialists GeoComply and LexisNexis. 

Live dealer specialist Evolution joined the fray, as did sportsbook technology provider Kambi. 

What does this mean for Delaware igaming?

While RSI performs strongly in the icasino vertical, it does not yet have a poker product. A platform is under development, per the operator’s website. 

The change will significantly reduce liquidity for poker, however. Delaware currently forms part of 888’s interstate poker network, which connects the First State with New Jersey, Michigan and Nevada and rules may need to be rewritten if it is removed from that network. 

The go-live date for the new igaming offering is yet to be confirmed. The Delaware Lottery suggested it must launch no later than 1 November, although if the development for an RSI-powered offering is not complete, 888 may temporarily extend its current agreement to avoid a loss of service. 

Time to reset First State gambling?

Strategy and advisory consultant Brendan Bussmann of B Global Advisors argues this should prompt a rethink of Delaware’s betting and igaming framework.

“It’s disappointing to see an RFP process fall apart but either clearly market expectations were not met by potential bidders or expectations were placed too high on what will continue to be a relatively small market that is further limited by the legislative and regulatory structure,” he told iGB. 

It may be time to start from scratch, he continued. “While that would not be necessarily the best for the one party left in the process, you need to have a clear path to accomplish their goals which will require legislative action.  

“Better to extend the incumbent, get the infrastructure in place and start again from the beginning to achieve stakeholder expectations.”

Delaware’s betting and igaming market remains small

While Delaware was the first state to launch sports betting following the repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018, only in-person betting is permitted.

It is now the only state in the region without mobile wagering, after Maryland launched in November 2022.

Igaming, on the other hand, is available through the state’s three casinos – Delaware Park, Dover Downs (now Bally’s Downs) and Harrington Raceway. However, with a population of around a million it is a small market; monthly igaming stakes average around $40m, with revenue just over $1m. 

For June, the most recent figures available, players staked $37.9m, generating net revenue of $1.1m.

Rush Street Interactive’s lottery experience

Should RSI, as expected, be announced as the new business powering the Delaware Lottery’s igaming offering it won’t be its first lottery partnership.

It won a tender to power mobile and retail sports betting for the Connecticut Lottery in August 2021, signing a ten-year agreement. However in March this year it began to wind down that partnership, although it will continue to power sports betting until a replacement vendor is selected.

National brands such as BetMGM and Caesars may bid for the contract, having missed out when RSI was selected.

Snowden talks up ESPN deal after Penn Q2 revenue ticks up 2.9%

Penn’s partnership with ESPN is part of a $1.5bn deal, which was announced yesterday (8 August).

As part of the deal, Penn’s Barstool Sportsbook will relaunch as ESPN Bet in November this year. Penn is divesting the Barstool brand and will sell it back to founder Dave Portnoy.

Jay Snowden, CEO and president of Penn, said the deal will allow Penn to “significantly” expand its digital footprint.

“A best-in-class user experience”

“The powerful combination of our operational expertise, improved product, unparalleled market access and industry-leading Penn Play database with the number one sports brands in both the US and Canada with ESPN and TheScore, will create a best-in-class user experience and allow us to significantly expand our digital footprint and more efficiently grow our customer database.”

On Penn’s earnings call earlier today, Snowden said that he believes the deal is set to follow the success seen with Penn’s acquisition of Canadian operator TheScore.

“We have seen first-hand the integration of media and betting from TheScore,” said Snowden. “This is a proven playbook and will be effective in the US.”

Positive outlook for Penn Interactive

Penn’s Interactive division brought in revenue of $257.5m, which was up 66.2% year-on-year. This follows the relaunch of its sportsbook on a proprietary tech stack, rolling out first with TheScore in Ontario followed by Barstool across the US after the quarter end in July.

“We are excited to have successfully relaunched our sportsbook app, which features major product improvements that significantly upgrade the user experience, including streamlined navigation, faster load times, expanded wagering markets, enhanced promotions and deeper media integrations,” Snowden explained.

“The migration reflects a significant achievement for our company that was completed seamlessly and with minimal disruption to our customers.”

But this isn’t the only positive development from the segment. As part of its ESPN announcement yesterday, Penn raised long-term adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) potential for the division. Projected adjusted EBITDA now stands between $500m and $1.0bn for interactive.

Around the US with Penn’s properties in Q2

Looking at its best performing segments by location, Penn’s northeast segment accounted for the most revenue at $688.0m. This accounts for performances from 16 casinos. That segment was up just slightly, by 0.4%.

The south segment, consisting of ten casinos, accounted for $308.3m in revenue, down 8.9%. The third-highest performing segment was the midwest, which brought in $293.3m.

The remaining revenue consisted of $130.0m from Penn’s west segment and $6.2m for Penn’s racing operations. Intersegment eliminations at $8.5m brought the revenue to the total of $1.67bn.

Turning to the operational segments gaming revenue came to $1.29bn, a decline of 2.4%. Food, beverage and hotel revenue made up the remaining $382.0m.

Q2 bottom line

Increased operating expenses came close to wiping out the revenue. These expenses grew by 10.9% to $1.46bn, bringing the operating income for the quarter to $205.5m. This operating income signified a decline of 32.0%.

Other income consisted of $115.6m in interest expense, $9.9m in interest income and $7.2m in income from unconsolidated affiliates. After considering $5.8m in other costs, total other expenses came to $92.7m.

This brought the pre-tax income to $112.8m, up by 36.9%. With tax totalling at $34.7m, the total net income for the quarter was $78.1m, an improvement of $52m.

Adjusted EBITDA totalled at $330.4m for the quarter, down by 30.6%.

Penn’s half-year performance

For the six months to 30 June, revenue stood at $3.34bn, a rise of 4.9% year-on-year. A total of $2.61bn came from gaming, up by just under $1.0m year-on-year. Food, beverage, hotel and other revenue was $730.7m.

Operating expenses for the six months came to $2.93bn, up by 13.3%. Once these were factored in, Penn’s operating profit for H1 stood at $404.6m.

Although interest expense cut the drop by $228.6m, this was partially offset by other sources of income. These included an $83.4m gain on the Barstool acquisition and $500.8m gain on real estate investment trust (REIT) transactions.

This left the pre-tax income at $795.1m, a rise of $613.5m year-on-year. Following tax of $202.6m, the net income for the six months totalled at $592.5m, up by $514.8m year-on-year.

Adjusted EBITDA for the six months was down by 27.2% to $662.6m.

ESPN Bet to launch in November

Penn and sports broadcaster ESPN’s transformative $1.5bn deal will consist of Penn relaunching its existing Barstool Sportsbook as ESPN Bet.

Off the back of the deal Penn is divesting its Barstool Sports sportsbook brand and selling it back to Dave Portnoy, founder of Barstool.

Snowden confirmed the month for launch on Penn’s earnings call today, following the publication of its second quarter results.

When the deal was announced yesterday, Penn said the launch had been set for “the fall”, with no specific details as to when.

On the earnings call, Snowden skipped around the month with “sometime this fall” and “certainly before Thanksgiving” before landing on November.

Snowden defended the timing of the launch amid claims it would come too late in the NFL season.

“I think our launch in November is good, because it won’t get lost at the beginning of football season,” he said. “We’re going to be mid-season.

“We feel like the launch timeline is really good in this space.”

Barstool vs ESPN

Snowden highlighted the differences between its former betting brand Barstool and ESPN, arguing the Disney-owned broadcaster’s profile speaks for itself.

“Barstool skews to the younger side,” he explained. “With ESPN, you’re talking about a brand everyone in the world knows about. Its not a young brand, it’s an everything brand. We think it will be extremely complementary.”

He added that the opportunities for integration with ESPN form a central part of the deal.

“We are particularly excited by the level of integration in ESPN Bet,” he said. “With over 25 million ESPN+ subscribers, ESPN has an unparalleled reach in the world of sports.

“We look forward to getting exclusive promotional services.”

Bolstering the digital database

Snowden credited Barstool for growing Penn’s digital database, predicting ESPN partnership will only accelerate this growth.

“They [Barstool] were the ideal partners for allowing us to launch in 16 jurisdictions in the US. Barstool helped us grow our digital database by 1.5 million people. Our relationship with ESPN will help us build on this.

“[For] brand recognition for sports fans, there is no brand more powerful in this space than ESPN.”

Snowden bullish on market share

Penn’s CEO is particularly confident about ESPN Bet’s growth prospects, setting a target of 20% US market share. Based on H2 Gambling Capital’s figures for 2022, this would set it just behind second-placed DraftKings in a podium position. “We’re not doing this deal to have 4%, 5% marketing share,” he emphasised.

While the deal with ESPN is certainly monumental, Snowden says there is more to come for Penn’s Interactive division.

“We will continue to make strategic investments in Interactive,” he said, adding Penn will continue to build on its “best in class technology”.

Entain takes £585m provision amid HMRC Turkey investigation

The operator warned it faces a “substantial” penalty from the case in May, after entering a deferred prosecution agreement (DPA) with the Crown Prosecution Service.

DPA negotiations are at a point where it can reach a resolution on the HMRC investigation, Entain said. It feels confident enough to calculate the £585m settlement sum, that the operator expects to pay over a four-year period.

The sum was reached on the assumption the operator will receive “full credit for its extensive co-operation with the investigation prior, and subsequent, to entering into any DPA”.

Any settlement hinges on judicial approval. HMRC will seek this in Q4 2023, Entain predicted.

Settlement covers Entain – but what about former execs?

This settlement relates to alleged offences under Section 7 of the 2010 Bribery Act. Section 7 is the area of the law which says businesses must put in place proper procedures to prevent people associated with the company for making bribes for the organisation’s commercial benefit.

Entain emphasised the resolution just covers the company and the group. This suggests individuals may also face charges, or be negotiating separate settlements.

The operator admitted in May historical misconduct involving former third-party suppliers and employees of the group may have occurred.

“Entain of today bears no resemblance to GVC of yesterday”

Entain stressed it was a changed business. It has taken a comprehensive review of anti-bribery policies and procedures and decisive action to strengthen compliance and related controls.

The operator reiterated it only operates in regulated markets, or territories with a clear path to domestic regulation. Today it is licensed in more than 40 territories around the world.

Entain chair barry Gibson stressed the alleged offences took place under a previous management team

Entain chair Barry Gibson said he was pleased a resolution over the HRMC investigation is close.

“We are pleased to be making good progress towards drawing a line under this historical issue, which relates to a business that was sold by a former management team of the group nearly six years ago,” Gibson said.

“We have been working closely with the CPS throughout this process and they have recognised our extensive co-operation. Following a complete overhaul of our business model, strategy and culture in the last few years, the Entain of today bears no resemblance to the GVC of yesterday.”

The history of HRMC’s Turkey investigation

HMRC’s investigation into the historical Turkish business stretches back to 2019, when it sought additional information from GVC Holdings related to the online betting and gaming operations. 

GVC owned Headlong Limited, its Turkish subsidiary, from 2011 to 2017. It sold off the business to Ropso Malta Limited for a performance-related earn-out of up to €150m. The operator later waived that earn-out to smooth the approvals process for Ladbrokes Coral. 

Entain divested its Turkish subsidiary in 2017

However reports persisted it still benefitted from the Turkish operations, despite repeated denials. HRMC began looking into the case shortly after. 

Taxman widens scope of GVC Turkey case

The scale of the case was laid bare by HMRC widening the scope of its investigation to cover “potential corporate offending” in 2020. 

The operator previously believed the inquiry targeted former third party suppliers, namely payment providers. However it later dismissed a connection with its former payment subsidiary Kalixa – sold to Senjō Group in 2017 – collapsed German behemoth Wirecard and the Turkish operations.

GVC is dead, long live Entain 

Wholesale changes followed later in 2020 with Kenny Alexander stepping down as CEO. Shay Segev, his replacement, moved on to sports streamer DAZN in short order. Jette Nygaard-Andersen now holds the top job.

The corporate make-up of the business is markedly different, following its rebrand to Entain in November 2020. This, Segev said at the time, better reflected the business’ socially responsible ethos. 

Earlier that year it shifted its place of management and control from the Isle of Man to the UK, resulting in its tax residence moving as a result.

What next for Kenny Alexander?

With the settlement relating to the group, the prospect of prosecutions for its former executives including CEO Alexander looms large. 

This seemingly put paid to a proposal by Alexander, former chair Lee Feldman and former CFO Stephen Morana to take charge of 888 Holdings earlier this year. FS Gaming, an investment vehicle backed by the trio, took a 6.57% stake in the operator in June.

A bid to install Alexander as CEO, Feldman as chair and Morana as CFO followed. However the Gambling Commission intervened, warning it has final sign-off for a change of corporate control. 

If it does not ratify this change, the operator faced a GB licence suspension, prompting 888 to end talks. It still faces a licence review as a result of the case, however.

Per Widerström was ultimately named CEO in July, replacing Itai Pazner.

Wynn talks up “substantial” UAE growth potential as Q2 revenue rises

The business first announced plans to open Wynn Al Marjan Island in early 2022. The Wynn Resorts facility will be located on the man-made Al Marjan Island in the Emirate of Ras Al-Khaimah and will cost approximately $3.90bn.

The venue is not due to open until early 2027 but Wynn is already busy making plans for the casino. Construction partners were appointed in March, initial designs were revealed shortly after and Thomas Schoen was recently named project president.

‘We have everything we need to operate gaming in Al Marjan’

Wynn released renderings of its property in Ras al-Khaimah earlier this year

In addition, the operator is pushing secure early approval ahead of the planned opening. Speaking on its earnings call, he said Wynn expects to receive regulatory approval for the project in the near future.

Regulatory approval in the UAE works on an Emirate-by-Emirate basis, rather than legalisation across the UAE as a whole, he explained.

“We have everything we need to operate gaming in Al Marjan,” Billings said. “While there may be conversation in other Emirates about legalisation or at federal level, thereby covering all Emirates, I expect that we will have our license for Ras Al Khaimah actually imminently. 

“But there should be no concern that there is a legalisation process that needs to occur in order for a broader legalisation process for gaming to occur in that property.

“We have a very substantial growth opportunity in the UAE, the most exciting new gaming market in decades.”

Casino success drives revenue growth at Wynn Resorts

Turning to Wynn’s Q2 and revenue in the three months to 30 June amounted to $1.60bn, up 75.8% year-on-year.

Casino was by far the main source of revenue, with this segment drawing $913.0m in total revenue. This was 153.9% higher than last year due to the removal of all remaining Covid restrictions in Macau, which in turn allowed VIP and high-value customers to return to its Wynn Palace and Wynn Macau venues.

Rooms revenue also increased 37.4% to $276.5m, while food and beverage revenue was up 11.8% to $257.0m. In addition, entertainment, retail and other revenue climbed 26.4% to $149.3m.

Q2 Macau revenue reaches $769.9m

Breaking down performance by property and operating region, revenue in Macau amounted to $769.9m. This was 556.9% ahead of $117.2m in the previous year, with the 2022 period impacted by Covid restrictions.

Revenue at Wynn Palace stood at $468.4m, up 698.0% year-on-year. It was a similar story at Wynn Macau, where revenue rocketed 414.7% to $301.6m. 

Vegas revenue was up 3.0% year-on-year for Wynn in Q2

Turning to Las Vegas, operations in the Nevada city increased 3.0% to $578.1m. The business operates both the Wynn Las Vegas and Encore Las Vegas on the city’s iconic Strip.

There was also growth at Encore Boston Harbor in Massachusetts. Revenue at the facility was up 5.6% year-on-year to $221.9m.

In addition, the Wynn Interactive business posted a 27.0% rise in revenue to $25.9m. This was reported as part of the entertainment, retail and other revenue segment.

Wynn Resorts Q2 profits up despite costs

Operating costs for the quarter increased 40.1% to $1.35bn but financial expenses were down 26.5% to $160.7m. Given the spike in revenue, which more than offset increased operating spend, this allowed Wynn to post a pre-tax profit of $132.1m, compared to the $212.7m loss last year.

Wynn paid $4.3m in tax, leaving a net profit of $127.8m, in contrast to last year’s $223.4m loss. After also taking of $22.7m in loss attributable to non-controlling interests, bottom-line net profit was $105.2m, compared to a $130.1m loss in 2022.

In addition, adjusted EBITDAR was 192.7% higher year-on-year at $524.5m.

H1 revenue surpasses $3.00bn

Looking to the first half and revenue for the six months to 30 June reached $3.02bn. This was 62.2% higher than $1.86bn in the same period last year.

Casino revenue almost doubled to $1.68bn while rooms revenue increased by 47.7% to $549.0m. Food and beverage revenue was up 21.3% to $489.6m, with entertainment, retail and other revenue rising 26.8% to $300.8m.

Macau revenue jumped 229.6% to $1.37bn, while Vegas’ contribution increased 16.3% to $1.17bn. Encore Boston Harbor revenue was up 9.3% to $438.2m and Wynn Interactive revenue climbed 7.2% to $46.4m.

Operating costs jumped 29.4% to $2.60bn but finance costs were lower at $285.5m. As such, pre-tax profit hit $134.3m, in stark contrast to a $466.2m loss last year.

Wynn paid $5.3m in tax, resulting in a $129.0m net profit, compared to last year’s $468.0m loss. The operator also noted $11.5m in loss attributable to non-controlling interests, which left bottom-line net profit at $117.5m, against a $313.4m loss in 2022.

As for adjusted EBITDAR, this was 167.5% higher at $954.2m.

“Our second quarter results reflect continued strength in North America and Macau,” Billings added. 

Entain hails record online players after revenue hits £2.40bn in H1

The group revealed growth in all business areas for the six months to 30 June. Both online and retail revenue, excluding US operations, was up year-on-year at Entain.

When including $944.0m in revenue contributions from its BetMGM joint venture with MGM Resorts, NGR was up 19%. That business, Entain added, BetMGM posted its first positive EBITDA figures in the second quarter.

Higher revenue also meant an increase in pre-tax profit for Entain. However, its bottom-line was hit by the £585m provision set aside as part of deferred prosecution agreement (DPA) negotiations with the UK’s Crown Prosecution Service (CPS) over historic activities in Turkey.

Entain makes ‘clear strides’ towards strategic goals

CEO Jette Nygaard-Andersen was pleased with H1. She said the operator made “clear strides” towards delivering strategic goals and remains confident over future growth prospects.

“In particular, we are making excellent progress in broadening our customer base and deepening our audience engagement, as evidenced by the record number of active online customers on our platform,” she said.

CEO Nygaard-Andersen hailed BetMGM’s Q2 performance

“BetMGM continues to show momentum and backed by our technology and capabilities we are excited by the improvements we are delivering for customers in the US. 

“This clear focus on driving sustainable long-term growth combined with our global operating capabilities underpins our confidence in our prospects for FY23 and beyond and delivering value for our shareholders.”

Online revenue up despite sports wagers dip

Breaking down Entain’s performance in H1, online led the way with £1.68bn in NGR. This was 145% more than $1.47bn in the same period last year.

Entain said strong underlying trading and NGR from acquisitions more than offset continued regulatory headwinds. This was primarily in the UK and Germany. It also highlighted the success of its focus on recreational customers.

Stand-out points include a 2% drop in UK NGR, though Entain said without regulatory changes, this would have been 7% higher. NGR also fell across Australia, Germany and Brazil. However, there was growth in Italy and Georgia, as well as in both the Baltics-Nordics and CEE regions.

Sports NGR increased 6% to £742.2m, despite a 3% dip in online wagers to £6.68bn. Gaming NGR in this segment increased 19% to £918.3m, while B2B NGR jumped 52% to £23.8m

Trolley dash – acquisitions aplenty

Referring back to acquisitions and the changing face of Entain, the business has completed a number of major deals in recent months.

These include Sportsflare, which it purchased in June, while its Entain CEE, the joint venture with Czech investment fund Emma Capital division, also agreed to acquire Poland’s STS.

Elsewhere, Entain has a deal in place to purchase Angstrom Sports with another new addition to the Entain family is Dutch-facing BetCity, which accommodated its re-entry into the country’s market after regulation.

Retail therapy

Crossing over to retail and NGR for this segment was 11% higher year-on-year at £709.3m. Entain pointed to the end of Covid restrictions as one of the main reasons for this rise. The last measures having been removed in the early part of H1 2022.

Retail enjoyed a strong quarter, Entain said

Sports betting NGR contributed £415.7m to the retail total, an increase of 16% on last year. This was helped by an 11% rise in sports wagers to £2.16bn. Retail gaming revenue also climbed 4% to £293.6m.

As for geographical performance, Entain picked out a number of markets. UK NGR was up 5%, while there was double-digit growth in Italy, Belgium and Croatia. By the end of H1, the group’s retail network comprised 4,894 shops and outlets.

Entain’s land of opportunity with BetMGM

Turning to the US and BetMGM, which was reported separately from other revenue for the half. NGR for BetMGM jumped 65% to $944.0m and is on track to post full-year revenue of between $1.800bn and $20.0bn.

The BetMGM brand is now live in 26 markets, having launched in three new regions – Ohio, Massachusetts and Puerto Rico – in H1. Launches are also in the pipeline in both Kentucky and North Carolina, which Entain said means BetMGM will have access to approximately 53% of the US adult population.

Entain also noted how BetMGM delivered a key milestone of profitability for Q2 2023, with the business turning EBITDA-positive. The brand remains to also be EBITDA positive in H2, with a long-term target EBITDA margin of 30-35%.

Pre-tax profit rises 88.7%

Entain did not publish a full breakdown of costs for the half, but it did reveal that gross profit was 10% higher at £1.46bn. Contribution – earnings remaining after all direct costs have been subtracted from revenue – was also up 10% to £1.13bn.

Underlying EBITDA climbed 6% to £499.4m, while after including share-based payments, underlying depreciation and amortisation, and a share of joint venture loss, underlying operating profit jumped 25% to £307.4m.

Entain also accounted for £19.8m in net financial costs. As such, is pre-tax profit before separately disclosed items hit £287.6m, up 88.7% year-on-year.

HMRC settlement leads to net loss

Setting out separately disclosed items, these primarily relate to the HMRC settlement. It was confirmed today (10 August) that Entain has taken a £585m provision in respect of its DPA negotiations with the CPS in relation to its historic activities in Turkey.

Full terms of a DPA are subject to judicial approval but Entain said it has a “sufficient degree of confidence” to take a provision of £585m against a potential settlement, This, it said, would be paid over a four-year period.

After including this £585m provision, as well as £110.2m in costs related to the amortisation of acquired intangibles and a further £40.5m in undisclosed expenses, this impacted bottom line.

Entain paid a further £54.4m in tax and also took off £3.7m from discontinued operations. As such, total net loss for the half was £506.2m, in contrast to the £25.0m profit posted in H1 of 2022.

iGB L!VE: Soft2Bet’s story of success

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The markers of gambling-related harm in poker and beyond

For researchers that study topics related to behavioural psychology and addiction, the data that comes from online gambling is a veritable gold mine of actionable intel.

In the days prior to the modernisation of the gambling industry, any analysis of behavioural patterns relied on things like manual data tracking from in-person operators or notoriously unreliable surveys from the customers themselves.

The lack of reliable, granular data made it difficult to draw a detailed picture of the connections between a player’s behaviour and their overall exposure to risk.

How data fills in the blanks for safer gambling

dR MARIS CATANIA

Thanks to the richness of digital data, however, researchers today are starting to be able to fill in some of the blanks with empirical evidence.

We’re starting to understand more of the context, the causes, and the effects of disordered gambling.

The industry is starting to make and test some data-driven predictions about where players sit on the risk spectrum based on the choices and behaviours they exhibit. We might even be able to get a sense of which games or game formats are inherently riskier than others from a safer-gambling standpoint.

Let’s dig into one recent study that explored the markers of gambling-related harm across various categories using data from a regulated website. There are a few tidbits that might be of interest to poker players, in particular.

Markers of harm for different gambling products

The paper we’re looking at is entitled Behavioural Markers of Harm and Their Potential in Identifying Product Risk in Online Gambling. It was commissioned by Kindred Group and Unibet in 2022, and it covers a cohort of 100,000 of their UK customers across a period of six months.

The group of researchers included myself, as Kindred’s former head of responsible gambling and now the senior safer gambling consultant for SG:certified.

The purpose of the research was to explore whether certain products are more strongly associated with the established behavioural markers of harm than others. These markers have been uncovered through previous research and include:

–          Bonus-seeking behaviour
–          Playing at unusual hours
–          In-session deposits
–          Easing RG settings
–          Declined deposits

The analysis was rooted in the broader finding that these markers scale in a predictable way with the total amount of time a customer spends gambling. What the researchers found is that there is a measurable difference in the levels of correlated risk from one category of games to another.

“All markers apart from easing/removing responsible gambling settings appeared to covary with the number of active days engaging in specific product types, most notably slots, in-playing betting and some most forms of combination bets on sports,” they explained.

“These findings highlight the potential value of using measurable markers to differentiate the risk and potential harm associated with different online products.”

Play mapped to markers of harm

Here’s the table from the paper showing the correlation between active days played and the known markers of harm across the different gambling products analysed:

This Table shows the link between days played and markers of harm

This dataset helps reinforce some of the perceptions we may already have about the inherent differences in the risk profile of various types of gambling.

It’s easy to grasp why slots, for example, correlate so strongly with harm-based markers considering the pace of the game and the immediacy of the results.

The researchers call this a “short event frequency,” and this attribute seems to dovetail with a number of major risk factors. Among the categories studied, slots players produced the highest rates of bonus page visits, RG changes, and declined transactions.

What do the authors think?

“The results showed that there were consistently larger associations between various behavioural markers of harm and the number of active days on specific gambling activities,” they concluded.

“Specifically, short event frequencies (such as slots and in-play betting), betting on different permutations of more than one bet selection in a single transaction (for example, combination bets) and, contrary to our expectations, engaging in live rather than simulated table games play were the three structural configurations of products which appeared more strongly associated with patterns of riskier play.”

The full paper on product risk is available through the International Journal of Mental Health and Addiction.

Where does poker fall on the risk spectrum?

With a mean correlation of 0.07 across all markers of harm, poker ranks near the bottom of the list.

Poker players do not exhibit especially high levels of bonus-seeking behaviour, they infrequently top-up during a session, and they experience fewer declined transactions than most other gamblers.

Initially poker may appear less of a high-risk game than slots or in-play betting

At first glance, the research seems to frame poker as a comparatively low-risk game. Mean correlations for both tournaments and cash games indicate that players who play more often are not necessarily exposing themselves to proportionally more risk.

When played online in particular, the game does not meet any of the three highest-risk criteria identified by the researchers. It has a long event frequency, a relatively concise betting structure, and is entirely simulated by software.

But is that the whole story?

What’s missing in the data, however, is a consideration of the intangible characteristics that set poker apart from most forms of gambling – most notably the element of skill.

In broad terms, research is not yet conclusive on how the role of skill in a particular game affects its correlation to these risk markers. And it may seem logical that the presence of skill would naturally mitigate some of the exposure to gambling-related harm.

If we look harder, however, we can start to spot some ways in which skill-dependent games like poker could expose a player to a unique set of risks related to time management.

Preoccupation and poker

Poker demands so much more time than the other games you’ll find in a casino, and that’s the start of any discussion about its associated risks. It is an all-consuming game in ways that most forms of gambling are not, and becoming a successful player fundamentally requires a substantial investment of time.

That leads to the complementary issue of potential preoccupation.

Slots players, as a contrary example, aren’t typically preoccupied with the games they play. Once you walk away from the slot machine, you’re probably done thinking about it.

But poker has a way of sticking with you after you leave the table, partially because of that element of skill. The fact that your results depend on your skill to a significant extent provides a built-in incentive to invest more of your time and energy into mastering it.

Online poker is a particularly immersive game, that may draw players back in

You might therefore spend your free time reading poker books or consuming poker content to try to boost your overall level of skill. Your friends probably play poker too, and you likely spend a considerable amount of conversation talking through hands with them. There aren’t many decisions to analyse after you leave the roulette wheel, but poker players live in constant pursuit of perfection.

We can see some evidence of this preoccupation in another section of the paper that analysed activity rates. A full 18% of the online poker population was found to play on a weekly basis, nearly double the percentage of the next-largest cohort (slots). The average online poker player plays approximately 33 days out of every year too, almost twice as frequently as any other category of gambler. Slots players by comparison average about 17 days of activity per year.

Beware of the Tetris effect

It’s all too easy for poker to cross the line from hobby (or job) to a dangerous preoccupation. And it’s certainly not unique as a threat in this regard. Video games, social media, television drama, secular jobs – all of these things have the potential to occupy too much of our brains through periods in which we should be tending to other responsibilities.

Behavioural researchers already have a term for this sort of unconscious preoccupation: The Tetris Effect.

As early video games like Tetris began to become a part of pop culture in the late 1900s, some players began to experience the sounds and visuals of the game in their subconscious thoughts and dreams. For a cohort of Tetris players, the game became a preoccupation. Even when they weren’t playing it with their hands, they were playing it in their heads.

The way people started to play Tetris in their heads could be compared to online poker

The point at which this preoccupation becomes dangerous in a game like Tetris or poker is hard to define, and it’s indeterminable using the established time-based markers of harm in gambling.

It’s also hard to spot in poker in particular, because the element of skill and the other fundamental qualities of the game tend to excuse some of the time commitment as the mere pursuit of perfection.

Maintaining a healthy balance in poker play

If you played slots from sundown to sunrise, for example, your friends would probably start to get worried about you. That sort of behaviour would be a fairly obvious cause for concern. But in online poker, playing long or odd hours is not necessarily an indication of increased risk.

Maybe the game is running in a different time zone, or maybe it’s a big tournament day, or maybe you’re just leveraging the pensive nature of the game itself.

That said, it is worthwhile to pay attention to your habits in this regard. The data seems to show that most poker players don’t let the game deplete their finances. But beware of the hidden dangers that arise when poker begins to consume your everyday thoughts and behaviours.

Being cognisant of the risk factors associated with your non-financial resources can help you maintain a healthy balance between the time and energy you spend playing poker and the effort you put into betting yourself away from the tables.

Making markers into mileposts

SG:certified is one of the groups leading the effort to put real regulatory action behind this type of research into gambling behaviour. After all, what good is new insight if we don’t use it to implement some responsive practices? And what’s the use of making rules if they’re not enforced?

Think about traffic laws as a parallel. Most drivers can appreciate the correlation between excessive speed and traffic accidents, and decades of transportation research has led most governments to impose speed limits for their public roads. It’s the only reasonable response to the data.

These restrictions not only serve to make the public aware of the safe limits, they also provide a defined threshold for enforcement.

Merely identifying the safe speed for a given road isn’t enough to protect drivers. Making the roadways safer requires monitoring and enforcement. It requires speed checks and the issuance of citations for those who violate the posted limits. Rules need to have consequences in order to matter.

Gambling regulation is not so different from traffic management. The rules designed to make gambling safer are rooted in empirical evidence, and their main purpose isn’t to dole out punishments. Regulations, like speed limits, primarily exist to protect the public.

Catania and SG:certified operate in that overlap between safer-gambling research and policy, leveraging their bespoke compliance dashboard to help stakeholders collaborate on strategies for building products and processes that truly protect consumers – particularly those at high risk. In this way, the gambling industry can begin to mark its progress toward a safer future.

If you’re an operator or a regulator keen on keeping your product up to speed with the most-current behavioural research in gambling, SG:certified is eager to show you the path forward. You can schedule a free demo with their team here.