Month: August 2023

While revenue grew during the 12 months to 30 June 2023, the gambling technology group missed consensus earnings estimates. BetMakers’ earnings were impacted by an impairment of its assets to the value of $8.9m. Its shares were down 15.4% to $0.110 at the close of trading on the ASX.

The Australia-headquartered group’s revenue grew by 3.7% to $95.0m compared to $91.7m in 2022.

BetMakers said revenue growth was boosted by the launch of the Next Gen wagering platform and managed trading service technology. The expansion of content distribution rights and partnerships in global markets also contributed.

Its global betting services division accounted for $43.1m of that total, which was up 6.1%. This was aided by revenue derived from the acquisition of Punting Form in November 2022. Other developments included its launch in Jamaica and advancements in New Jersey.

Global tote remained its largest division, although this was down 3.5% year-on-year to $45.3m. During the course of the year it became the exclusive provider of pari-mutuel racing services for Caesars Entertainment in Nevada.

The global racing network division was up more than 60% to $6.7m. This growth was attributed to its new fixed-odds offering in New Jersey.

Costs pressures lead to operational restructure

In terms of outgoings, cost of goods sold was up from $25.4m in 2022 to $35.9m. Gross margin was down from $66.3m to $59.2m in 2023.

Major outgoings during the year included investment in new technology totalling $8m and $7m spent on its international fixed odds offering.

BetMakers said “significant” resource was used for the development of its Next Gen platform in the first half of the year. The platform is powering the Betr brand and it is hoped this will enhance other areas of the business.

BetMakers said it was able to reduce costs across product manufacturing and operating, staff and administration following an operational restructure based on efficiency. The group announced a $20m cost reduction programme in May.

Over the course of the year, headcount was reduced by 23% compared to the peak in December 2022. The restructure also included the simplification of the global operating model and the consolidation of key software offerings.

BetMakers narrows loss

BetMakers posted negative adjusted EBITDA of $27.9m for the year. Its loss after income tax benefits was $38.8m, compared to $89.2m a year ago.

Chief executive Jake Henson, who was appointed in January, said the year had been “transformative for the group”. He said the business will seek to deliver growth by advancing current opportunities with Norsk Rikstoto, Penn Entertainment and Caesars Entertainment.

Henson said: “FY24 has been identified as a period to aggressively drive further simplification to the operating model and to retire legacy systems in order to establish a solid foundation for growth and generate positive operating cash flow.”

Henson replaced long-time CEO Todd Buckingham in January after the group warned that it could experience negative growth throughout FY2023.

Net revenue for the quarter was €27.0m (£23.2m/$29.3m), up by 82.0% year-on-year and bolstered by record performance in EveryMatrix’s casino segment. Casino accounted for €12.6m of the total net revenue, a rise of 83%.

EveryMatrix dubbed its casino segment as the “driving force” behind the growth of tier-one brands.

Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) rocketed 188% year-on-year to €15.0m.

Deep CI acquisition

Following the quarter’s end, EveryMatrix acquired DeepCI for an undisclosed sum. EveryMatrix noted that the acquisition saw 50 new clients added to its roster.

“Our acquisition of DeepCI shows we are constantly looking to add complementary and innovative technology to our existing offering,” said Ebbe Groes, group CEO of EveryMatrix.

“Alongside our PartnerMatrix business unit this game-changing technology will create even more value for our clients and I’m excited with what more we can achieve in the quarters to come.”

Increased net revenue and GGR

The net revenue consisted of €7.8m in sports revenue, a rise of 79.0%. Net revenue from EveryMatrix’s platform segment also grew, by 85% to €6.7m.

In June, EveryMatrix went live with DraftKings in New Jersey. The following month, it also went live with WynnBet in New Jersey. Plans are in place for both deals to eventually expand to other states.

In terms of gross gaming revenue (GGR), EveryMatrix recorded €432m in its casino segment, up by 86.2% yearly – another record.

GGR for EveryMatrix’s sports segment increased by 137.5% to €57.0m. The company said this was due to improved margins from reduced odds promotion.

EveryMatrix’s profit margin for Q2 grew to 55%, an all-time high. The company said this was due to the increased revenue and “successful” cost control.

EveryMatrix also maintained its cash position during the quarter, balancing at €34m by the quarter’s end.

The group’s independent research council will contribute SEK4.1m ($377,000/€347,000/£298,000) towards the research studies. The council has distributed SEK45m to 35 research projects and studies since 2010.

The five studies selected in 2023 are spread across academic institutions working with a variety of partners. They will investigate topics such as the impact of self-exclusion to the challenges brought about by fast payments.

“This year’s granted research project will contribute both to increased knowledge about gambling addiction and which gambling responsibility measures work,” said Sara Lindholm Larsson, chairperson of Svenska Spel’s independent research council.

“It is important for society that we can continue to support this research.”

SEK1m has been awarded to a study examining the impact of fast payment solutions on problem gambling. The recipient is Nathan Lakew of the Department of Clinical Neuroscience at Karolinska Institutet.

The Department of Psychology at University of Gothenburg will get SEK800,000 for a study that explores craving among problem gamblers. SEK800,000 has also been awarded to the Department of Clinical Sciences at Lund University for a study into family-centred treatment.

The Department of Clinical Sciences at Lund University will receive SEK800,000 for the study into how gamblers and concerned significant others are affected by the Spelpaus self-exclusion tool.

Finally, the Department of Criminology at Malmö University has been granted SEK700,000 for a study into gambling among university students. Claes Andersson’s study is part of a larger international project within the including the World Health Organisation (WHO).

A four-year deal between Nascar and Sportradar will now feature official betting data. The deal extends their long-term media data rights partnership that covers live timing and scoring data.

Nascar said sports betting on its events has increased exponentially since it signed its first agreement covering the sector. Betting operators saw a 51.5% year-on-year increase in the total amount of money wagered on the sport in 2022.

“As the sports industry’s leading technology company and a trusted partner of sportsbooks and media companies, Sportradar is uniquely positioned to support Nascar in capturing commercial opportunities,” said Eric Conrad, Sportradar’s executive vice-president of strategic partnerships and content.

“Our ability to leverage these rights in the marketplace will ultimately enrich the Nascar experience for fans.”

Nascar’s presence in the gambling sector includes partnerships with authorised gaming operators BetMGM, FanDuel and Penn Entertainment. In September 2020 it became the first league to partner with the American Gaming Association (AGA).

The Sportradar partnership covers 97 races annually from the Nascar Cup Series, Nascar Xfinity Series and Nascar Craftsman Truck Series.

Joe Solosky, Nascar’s managing director for sports betting, said: “Our partnership with Sportradar is foundational to our sports betting strategy from ensuring the integrity of our product to quickly providing authorised gaming operators and media partners with accurate, reliable data.

“Adding official betting data to the partnership will continue to catalyse Nascar’s rapid growth in the sports betting space and allow fans to further engage with the sport.”

Integrity services agreement

Since 2015, Nascar and Sportradar have agreed to several contract extensions related to media data rights. Additionally, in April 2022, the two organisations entered into a separate multi-year integrity services agreement.

Sportradar also has partnerships with major organisations such as Fifa, the National Basketball Association and Major League Baseball.

In another initiative to drive its betting profile, Nascar recently entered into a multi-year partnership with micro-betting technology provider nVenue.

Under the deal, nVenue will become an official micro-betting data and technology provider to Nascar. This will see nVenue develop in-race micro-betting markets and predictive content for fans across the US.

The Victorian Gambling and Casino Control Commission (VGCCC) said it has uncovered incentives being offered that breach Victoria gambling rules.

It said some operators are entering into agreements with sporting clubs and inducing their members to create gambling accounts. These inducements link financial incentives to each member of the club that signs up.

Some operators breach Victoria gambling rules

Providers are prohibited from offering incentives to open an account or refer another person under Gambling Regulation Act 2003. Within that legislation, Section 4.7.10 covers any credit, voucher, reward or other benefit.

The Commission said such actions would also be considered a breach of operators’ “social licence”. This runs in tandem with their legal licence in Victoria.

“The VGCCC demands wagering service providers cease promoting their products in this manner as they may be in breach of legislation by doing so, in addition to being inconsistent with their social licence to minimise harm,” the VGCCC said in a statement.

“The VGCCC doesn’t just hold gambling providers to the minimum letter of the law – but their social licence as well.”

Clubs asked to be mindful of community expectations

Sports clubs must be mindful of community expectations around encouraging members to sign up to gambling products, the body added.

“Sporting clubs need to be mindful of community expectations around incentivising members, and potentially junior members, to gamble,” it said. “We encourage sporting clubs to refrain from entering into such sponsorship deals which may harm members and may constitute illegal behaviour by the wagering provider.”

The warning is the regulator’s latest attempt at restricting gambling’s expansion within the state.

The VGCCC took over as the state’s regulator in July of 2022 with a mandate to minimise gambling harm and problem gambling.

In June, the VGCCC said operators would be responsible for preventing and minimising gambling harm. It said it would take a zero-tolerance approach to those that deliberately contravene their obligations.

Victoria recently banned betting on all youth sports competitions. In another recent move, Victoria recently announced a suite of new gambling reforms aimed at reducing harms from “pokies”.

Victoria announced the reforms following the Royal Commission inquiry into malpractice at Crown Melbourne. 

In April 2022, the Commission found the casino “unsuitable” to hold a licence in the state. It also found that the casino engaged in conduct which was “illegal, dishonest, unethical and exploitative”.

The regulator reported the streamer to the police, who assessed that the individual had broken the law.

The fine of DKK10,000 (£1,153/$1,466/€1,341) was recommended by the gambling authority. In its streams, the individual advertised for a game provider without first obtaining a Danish licence.

The Danish regulator makes its stance on gambling advertising clear: “If a gambling operator does not hold a licence to provide gambling in Denmark, the operator must not market its gambling offers in neither print, electronic, nor social media.”

This is the first occurrence that the gambling authority has reported a streamer in the case of dissemination of illegal gambling advertising.

Blocked sites

Denmark also recently blocked 49 websites from offering unlicensed gambling following a complaint from the country’s gambling authority.

Copenhagen City Court ruled in favour of Spillemyndigheden in all 49 cases heard during a session last month.

Bally’s Corporation’s sports betting division announced earlier this year that it would be relaunching its app. After shuttering its Bet.Works-developed app, the new platform has been created with Kambi Group and White Hat Gaming.

The new app has debuted in Ohio, where Bally Bet has a licence through its partnership with the NFL’s Cleveland Browns. It withdrew from five states in June ahead of the relaunch, only remaining operational in Arizona.

Bally Bet announced on its website that the new app is now live in Ohio. It will be rolled out in further US states in the coming months, according to partner White Hat Gaming.

“With extensive coverage of all major sports, near-endless wagering options, and features made to heighten the experience, our mobile sportsbook app is poised to deliver unmatched sports betting thrills,” Bally Bet said.

Costly mistakes

In February 2023, Bally’s CEO Robeson Reeves admitted the app designed by its Bet.Works subsidiary was not fit for purpose. Speaking to investors, he said the $150m acquisition of Bet.Works in 2020 and launch of the app were costly mistakes.

In May, Bally Bet announced that it had entered into exclusive, multi-year agreements with Kambi Group and White Hat. In June, it announced that it had temporarily ceased operating in Iowa, Colorado, Indiana, Virginia and New York.

Under the terms of the Kambi partnership, Bally’s has integrated its omnichannel products, trading capabilities and content solutions. White Hat is supplying its PAM platform, which includes its proprietary cashier, multiple RGS integrations and travelling wallet.

The Philadelphia-based operator enters the Colorado market with strategic partner GF Gaming. The pair said Coloradans will benefit from Sporttrade’s unique structure within the sports betting market.

In particular, it highlighted its capital markets-like approach centred around its use of market makers to provide liquidity to the exchange. Low liquidity in ring-fenced US jurisdictions have been a long-standing problem for betting exchanges.

The Colorado launch comes after Sporttrade entered New Jersey as its first sports trading platform in September 2022.

“Today we’re privileged to introduce the Sporttrade experience in Colorado,” said Alex Kane, Sporttrade’s founder and chief executive.

“Our launch today proves that Sporttrade can operate in any jurisdiction, with the same great features our customers have come to know us for; instant in-play betting, great prices, awesome liquidity and the ability to always trade in and out of bets at fair value.

“As our industry continues to shift focus towards differentiation and product, I’m proud to say that Sporttrade delivers the best in-play experience the world has ever seen.”

Growth opportunities

Sporttrade and CF Gaming believe the Centennial State offers growth opportunities having generated $12bn in handle since 2020. However, betting exchanges have struggled to flourish in the US since the market opened up in 2018.

Roger Brown, general manager of GF Gaming and Easy Street Casino, said: “Having seen what Sporttrade has already achieved with its innovative and successful launch in New Jersey, we firmly believe that the brand and platform make for an ideal partnership for us in Colorado.

“Providing a better odds experience for the player is what GF Gaming has always been about and Sporttrade brings that same priority to the sports betting market in Colorado.”

In its most recent revenue report for June 2023, total Colorado sports betting handle declined for the third consecutive month. Colorado’s total betting handle stood at $310.7m, which was its first drop on a year-on-year basis.

Last year, Prophet Exchange became the first P2P sports betting exchange to go live in the US when it launched in New Jersey. Betfair previously operated a horse racing exchange in the country, but withdrew from the market. Political exchange PredictIt allowed for bets on non-sporting events, but it was closed down in early 2023.

This month, commission-free exchange Novig completed its pre-seed round, receiving money from a number of well-known tech investors.

The report was undertaken by the New South Wales (NSW) Minister for Gaming and Racing. It was released almost exactly one year on from the publication of the Bell report.

The eight remaining recommendations are currently in progress.

The 30 total recommendations spanned from The Star ending the provision of free liquor to patrons as an inducement, to updating anti-money laundering (AML) and social responsibility rules.

Wide-ranging misconduct

After The Star was declared “unsuitable” to hold a casino licence in NSW, 30 measures were set out for improvement.

The Bell report revealed wide-ranging misconduct at the casino. Among the most serious infringements were risk management failings and producing false documents.

In the weeks after its publication, the NSW Independent Casino Commission – which was set up in the wake of the Bergin inquiry – appointed Nicholas Weeks as casino manager. This followed The Star’s indefinite licence suspension and AUS$100m penalty.

The Star acknowledges report

In acknowledging the report, The Star said it will continue to work with regulators “in relation to its remediation initiatives”.

The Star highlighted a section of the report concerning the timeline for implementing the recommendations.

“…many of the recommendations are multi-faceted, with complex workstreams which require longer time frames to allow for effective implementation and monitoring,” read the report.

“In addition, many of the recommendations are expected to be built into The Star’s remediation plan, which is in the process of being finalised.”

Uncompleted recommendations

One of the recommendations concerns The Star introducing carded play at the casino. The measure will enter effect in August 2024. Currently, Liquor & Gaming NSW is providing technical guidance about how exactly Star should implement it.

Last month, Daniel Andrews, the Victorian Premier announced a similar measure. This was imposed on all electronic gambling machine operators in the state.

Bell also recommended The Star develop a system for identifying whether patrons are “not normally a resident in New South Wales”. The casino was also asked to update its training.

But before heading over to LatAm, our hosts discuss the progress made in Florida since episode 20 was released.

In the weeks since, West Flagler filed an en banc rehearing. Instead of dismissing this petition, the court has asked the Seminoles for a response – which is due on 31 August.

With so much red tape, it’s assumed that sports betting in Florida will not come any time soon. However, the idea that it could launch during the upcoming NFL season is not out of the realm of possibility.

What’s on the cards for Brazil?

Meanwhile, in Brazil, Neil Montgomery says “anything’s possible”.

The country regulated sports betting in July, after president Luiz Inácio Lula da Silva signed the Provisional Measure.

This officially implemented the sports betting regulations that had been approved in Law No 13,756 in 2018. But the regulations included a few “surprises”, says Montgomery, including heightened GGR tax, more marketing restrictions and an increased licence fee.

Although the regulations represent a conclusion of sorts, not everyone is pleased with the outcome. Hopes are now set on it being amended in Brazil’s National Congress, where it will need to be approved to become permanent.

“We still have a lot of opposition from certain sectors of society, certain sectors of congress,” says Montgomery.

“There’s a lot of activity going on in Brazil, but we need to see what will actually happen.”

Some progress being made

Regardless of any political tension over sports betting in Brazil, Montgomery says progress is being made in implementing the regulations.

“In parallel to the federal law discussion, certain states and municipalities have already spearheaded the process and have implemented their own products locally.”

For Hugo Baungartner – the first returning guest to the World Series of Politics – the regulation of sports betting is a mammoth step forward for the country.

“From my perspective… I think it’s a big step for Brazil,” he says “The Provisional Measure is something really really really positive. It’s the first step.”

Listen to the World Series of Politics on Apple Podcasts!