Month: August 2023

Serving as an independent director, Liu has experience in entertainment, hospitality and financial services across China and Asia Pacific.

Liu’s role during his career included 11 years as a partner at global leadership consultancy business Egon Zehnder.

Prior to this, Liu was chief operating officer at entertainment giant Anschutz Entertainment Group China. He also founded Shanghai-based luxury lifestyle destination Three On The Bund.

His other roles included being executive director at CIMIC Holdings, managing director of Bank of America (Asia) and assistant vice-president for Union Bank of Switzerland.

“Liu’s track record and perspective on creating guest experiences in the luxury and hospitality fields, as well as his unique understanding of business talent in the Asia Pacific market, will be a significant contribution to the company,” a Wynn Resorts spokesman said. “He will offer an important perspective to the Wynn board of directors.”

Wynn Resorts operates both the Wynn Macau and Wynn Palace Cotai locations within the Asia Pacific region.

Progress on Wynn Resorts’ new UAE casino

Earlier this year, Wynn issued an updated on a new integrated casino resort in the United Arab Emirates (UAE). 

Opening in 2027, the Wynn Al Marjan Island is Wynn’s first venture in the Middle East North Africa region. The initial design includes a gaming area, hotel, dining and lounge options, spa and a range of other entertainment facilities.

Wynn is developing the new resort alongside local partners Marjan and RAK Hospitality Holding.

In May, Wynn appointed Thomas Schoen as president of the new integrated resort. An experienced hospitality executive, Schoen will oversee all operational aspects of the new resort.

Tomorrow (9 August), the business will update the market on its second quarter and first half performance.

In particular, the markets are watching for its performance in Las Vegas, where the likes of Caesars Entertainment and MGM Resorts have reported declines or limited growth. Its Asian subsidiary, Wynn Macau, on the other hand, will likely show strong growth amid the region’s rebound.

The addition of the Golf Event Centre opens up a number of new betting markets for users. These include closest-to-the-pin, longest drive and other stroke-by-stroke bets.

The Golf Event Centre also allows users to track each shot in real-time, view hole profiles and see course maps. In addition, FanDuel customers will have access to a customisable live leaderboard.

The golf betting tool will be available to FanDuel users from the FedEx St. Jude Championship, which begins on 10 August.

Read the full story on iGB North America

The six months to 30 June proved to be a mixed period for Playtika. Q2 revenue from social was down, while average daily paying users also declined. 

However, Playtika was able to reduce costs during the quarter, which was enough to offset the revenue dip and allow for a net profit increase.

As such, the developer said it remains in a strong financial position, the point where it continues to consider M&A deals. Shortly after the quarter-end, Playtika agree to acquire the Youda Games portfolio of content from Azerion, including the Governor of Poker title.

“We adapted to the changing mobile gaming environment early on,” Playtika president and CFO Craig Abrahams said. “As a result, we are in a strong position to pursue M&A deals, like Governor of Poker, fortifying the growth profile of our portfolio.

“We continue to benefit from our close player relationships and live operations expertise. We remain committed to leveraging our technological solutions and established brands to drive payer conversion.”

Social casino revenue down in Playtika’s Q2

Revenue for the second quarter amounted to $642.8m (£506.6m/€587.6m), down by 2.5% year-on-year.

Playtika did not disclose full details of its financial performance, but it did publish certain figures. These include a 9.9% drop in social casino games revenue, although casual games revenue climbed 3.7% and Blitz Bingo 6.3%.

Average daily paying users slipped 1.0% to 307,000. In contrast, average payer conversion climbed 3.2% year-on-year.

Lower costs lead to net profit growth

Reduced revenue was more than offset by lower costs. Operating costs were down 11.4% to $503.6m, with spending across R&D, sales and marketing and general administrative all being cut.

Playtika also benefited from $23.1m in positive interest. As such, pre-tax profit hiked 68.5% to $116.1m. The developer paid $40.4m in tax, leaving $75.7m in net profit, up 108.0%.

The developer also accounted for $14.8m in change in fair value of derivatives and $200,000 less foreign currency translation. As such, comprehensive net profit was 340.5% higher at $90.3m.

In addition, adjusted EBITDA for the quarter increased 6.7% to $215.0m.

Similar story in H1 for Playtika

Turning to the first half and the six months to 30 June followed a similar pattern. Revenue was 2.8% lower at $1.30bn, but costs were reduced by 10.4% to $1.01bn.

Playtika noted $51.7m in positive interest, meaning pre-tax profit reached $239.9m, up 48.3%. The developer paid $80.1m in tax, leaving net profit of $159.8m, a 33.6% rise.

After including $2.9m in positive foreign currency translation and $7.0m of fair value of derivatives, the figure was higher. Comprehensive net profit hit $169.7m, up 41.9% In addition, adjusted EBITDA jumped 9.7% to $437.7m.

Mixed full-year guidance 

As to how this will impact the full year, Playtika says guidance remains mainly the same. Revenue is likely to be at the lower end of the $2.57bn to $2.62bn range previously set out by Playtika.

In terms of adjusted EBITDA, this would be at the higher end of the $805.0m to $830.0m. The developer also said capital expenditure would be in the range of $100.0m to $105.0m, down from an earlier estimate of $115.0m to $120.0m. 

“Our operational expertise and advanced technological capabilities are drivers of our strong profitability and robust cash flow generation,” Playtika CEO Robert Antokol said.

“By pairing our human talent with the transformative capabilities of our proprietary technology, we unleash the full potential of our titles and are well-equipped to enhance the value of acquired assets, as with our recent Governor of Poker franchise deal.”

Playtika’s changing strategy

The results come following several cost-cutting initiatives at Playtika. 

At the end of last year the company announced plans to lay off approximately 600 employees – 15% of its headcount. The business said this was part of the process of winding down its “non-core products”.

Playtika also confirmed in March it would largely suspend new game development until ROI on new games becomes “economically viable”.

Founded in 2018, KTO currently operates in both Brazil and Peru, with plans to also launch in Chile.

As part of new regulatory measures in Brazil, KTO is required to join an international body for monitoring sports integrity. Its membership of IBIA satisfies this demand and puts the brand in line with new Brazilian betting laws.

KTO joins nearly 50 businesses and over 125 sports betting brands in the IBIA network.

“We view this as a step that reinforces our dedication to upholding the highest standards of integrity in sports betting,” KTO managing director Jeff Tabone said. “Trust has always been a cornerstone of the KTO brand. Joining IBIA signifies our commitment to a safe and transparent environment for our customers and the wider industry.”

IBIA chief executive Khalid Ali added: “KTO is the latest operator to make IBIA its preferred integrity partner for Brazil and its wider global operations. It further expands IBIA’s position in the LatAm region and Brazil in particular.

“The association looks forward to working closely with KTO and welcomes the operator’s commitment to protecting its sports betting operations.”

Brazil regulates sports betting

The requirement forms part of new rules set out after Brazil last month moved to regulate sports betting. President Luiz Inácio Lula da Silva signed the Provisional Measure (PM), bringing into force the 2018 law.

One obligation under the PM was to join an international body for monitoring sports integrity. Galera.bet last week also joined IBIA to satisfy this measure. 

IBIA also announced its expansion into Brazil earlier this year ahead of the PM passing. It is working with the Brazilian Institute of Responsible Gaming (IBJR).

Erwin Haitzmann and Peter Hoetzinger, co-CEOs of Century Casinos said revenue was bolstered by the purchase of Nugget Casino Resort.

“We are pleased with the results of this quarter, generating record revenue due to the addition of the Nugget Casino Resort,” said Haitzmann and Hoetzinger.

Century completed its acquisition of Nugget in April, just as the second quarter began, for a total of $104.7m.

However, the pair noted that the revenue had been “partially offset” by “construction disruption” at Century’s Missouri property. The plans for this property were announced in December 2022.

Following the quarter’s end, in July Century Casinos completed its acquisition of Maryland’s Rocky Gap Casino Resort. The deal was first announced in August this year.

Net profit sinks in Q2

Looking at the second quarter revenue by location, much of it came from Century’s US operations, which totalled at $94.4m. Operations in Poland accounted for $23.5m, while corporate and other revenue was $4,000.

Century Casinos holds a 66.6% stake in Casinos Poland, which operates eight casinos in the country. These include locations in Warsaw, Wrocław and Łódź.

Canadian revenue was $18.8m, a decline of 1.0%. During the quarter, Vici Properties purchased Century Casinos’ entire Canadian portfolio. This consisted of Century Casino and Hotel Edmonton, Century Casino St Albert, Century Mile Racetrack and Casino and Century Downs.

Total operating costs came to $118.1m, a rise of 29.3%. Following earnings from equity investment at $30,000 the operating profit hit $18.6m, a decrease of 10.4%.

Non-operating expenses totalled at $18.1m. This brought the pre-tax profit to $459,000.

Tax was $96,000 for the quarter. This contrasts significantly with the tax benefit of $10.4m obtained in Q2 2022.

In total, the net profit for the quarter was $363,000, a staggering 96.3% drop year-on-year.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the quarter was $29.2m, down by 1.2%.

Half-year revenue spikes 14.5%

Revenue for the six months to 30 June added up to $245.2m, a rise of 14.5% compared to the same period in 2022.

Again, much of this – $160.7m – was made in the US. Revenue from Poland was $49.0m, while revenue from Canada was $35.3m.

Operating costs and expenses for the six months were $209.3m, up by 15.3%.

After earnings from equity investment at $1.1m, the operating profit stands at $37.0m. Non operating expenses hit $31.9m, leaving the pre-tax profit at $5.1m for the period.

Total taxes of $1.7m mean that the current net profit is $3.3m for the year so far, a fall of 73.0%.

Adjusted EBITDA for the six months was $55.3m.

Last week, lawmakers filed 244 amendments to Provisional Measure (PM) No 1,182, the presidential decree which confirms the 2018 Brazil law regulating the sports betting sector. These amendments included 57 proposed by senators.

Amendments to the proposed tax rate and new advertising restrictions are among the changes proposed. These are not final and will need Congress’ approval to become law.

The measure previously received a largely negative reception from industry. Criticisms focused on the high tax rate, payment issues and potential regulatory risk.

President Luiz Inácio Lula da Silva issued the PM at the end of July. This represented the latest step on the long journey to regulate sports betting in the world’s seventh most populous country.

Since the executive unilaterally posted the measure, it requires approval from the National Congress within a 120-day period.

Congress tries to claw back authority

However, rumours lawmakers will ultimately deny approval are mounting. This would be a step backward in a long-running regulatory process.

Neil Montgomery, founder and managing partner of Brazilian law firm Montgomery & Associados, said there has been a feeling Congress has been playing second fiddle to the government in the process.

“The federal government focused more on the [PM] and not as much on the bill of law, thereby not giving Congress a leading role in the regulatory process,” said Montgomery.

Montgomery highlighted the next few months will be “key”. Nevertheless, he predicted Brazilians would not be placing bets with regulated operators anytime soon.

“In any event, given that additional administrative ordinances will also be required to be issued by the Ministry of Finance, which has been confirmed the regulator for the time being, we will not see a licensed sports betting market operating in Brazil before 2024.”

Brazil sports betting amendments jack up tax rate

Several of the amendments sought to amend the percentage of gross gambling revenue retained by the gaming operators. Many did so in order to change the amounts earmarked for particular government departments.

While the 18% tax rate set by the PM was higher than the industry expected, and despite criticism the true tax rate will stand closer to 30% once additional contributions are accounted, many amendments aimed to increase the tax burden.

Teresa Leitão, a PT senator representing the state of Pernambuco, put forward an amendment which would increase the tax on operators to 22%.

The percentage of the sports betting revenue allocated to basic education should rise to 4.82% from 0.82%, Leitão said, with the amount being diverted from the operator’s revenue.

PSB/GO senator Jorge Kajuru argued funding should instead help the federal police effectively combat match-fixing.

“It should be noted that, according to surveys by Sportradar […] Brazil is the country with the highest number of alerts in the world of possible manipulation of results in football,” he said.

As suggested by Leitão, Kajuru argued gambling operators should pay for this out of their contributions, meaning a 23% tax.

Proposal to reduce Brazil tax burden

However, not all of the amendments were unfriendly to the industry. MDB deputy Newton Cardoso Jr proposed an amendment reducing the sports betting tax to 11%.

Cardoso submitted the proposal after warnings about the “potential impacts on the viability of the Brazilian market” a high rate would cause.

The deputy highlighted the British 15% GGR tax as the model Brazil should aspire to. Cardoso pointed to additional contributions, such as PIS, COFINS and ISS, which would push the effective rate to 32.3%.

“Excessive taxation tends to encourage the illegal market and organised crime, since it makes legalised activity highly unfavourable to consumers and companies,” he said.

Senator proposes total betting ad ban in Brazil

Many senators proposed competing visions of the restriction of sports betting advertising in Brazil. However, NOVO senator Eduardo Girão submitted the most comprehensive one.

Highlighting the Premier League’s front of shirt ban on gambling advertising, the senator’s proposal would ban sports betting advertising “of any kind and in any mass media”.

This would include within newspapers, television, radio and social media channels. It would also apply inside sports venues, on the kit of sports players and on online portals.

Penn’s Barstool Sportsbook is relaunching as ESPN Bet this autumn through the $1.5bn deal. This immediately provides the brand with a footprint across 16 legal betting states, covering its mobile website and app and desktop site.

Penn says its partnership with the largest sports brand in the US increases the long-term adjusted EBITDA potential for its interactive segment by between $500m and $1.0bn.

Penn is divesting Barstool Sports, its sportsbook brand since 2020, as a result. Barstool founder Dave Portnoy buys back 100% of its share capital “in exchange for certain non-compete and other restrictive covenants”.

The terms of the deal

ESPN and Snowden comment

What about theScore and icasino?

Barstool back with Portnoy

Disney’s history with betting

Exclusive access to ESPN assets

ESPN Bet leverages ESPN’s multi-platform reach, while taking advantage of Penn’s operational expertise and product offering, including a new platform that launched in the US last month.

It becomes ESPN’s exclusive sportsbook, effectively ending existing partnerships with the likes of DraftKings and Caesars. Both brands were previously mooted as potential sportsbook partners for the broadcaster. 

Penn, meanwhile, receives odds attribution and promotional services including digital product, traditional media and content integrations. It gains access to ESPN talent and other services to maximise awareness of ESPN Bet. 

The audience it can access is vast. ESPN is the largest sports media brand in the US, with over 105 million monthly unique digital visitors. Its social media presence tops 370 million fans and 25 million subscribe to its ESPN+ streaming service.

The terms of US sports betting’s latest mega deal

Penn will pay $1.5bn in cash payments over the ten-year term of the deal. ESPN is granted a further $500m of warrants to purchase 31.8 million common Penn Shares in return for media, marketing services, brand and other rights provided.

ESPN’s stake in the business could grow further should ESPN Bet hit market share targets for online betting. Meeting these performance thresholds grants ESPN an option to purchase up to 6.4 million additional common shares.

It also gains an option to appoint one non-voting board observer. After year three of the agreement, this converts to an option to designate a director to Penn’s board.

“Give fans what they’ve been requesting from ESPN”

“Our primary focus is always to serve sports fans and we know they want both betting content and the ability to place bets with less friction from within our products,” said ESPN chair Jimmy Pitaro.

“The strategy here is simple: to give fans what they’ve been requesting and expecting from ESPN. Penn Entertainment is the perfect partner to build an unmatched user experience for sports betting with ESPN Bet.”

Penn and CEO Jay Snowden was “the right long-term strategic partner to build ESPN Bet into a leading US sports betting platform”, he continued.

Snowden: “We can’t wait to get started”

Penn Entertainment takes a step forward as an industry leader thanks to the “transformative, exclusive” agreement, CEO Snowden added.

“ESPN Bet will be deeply integrated with ESPN’s broad editorial, content, digital and linear product and sports programming ecosystem. ESPN Bet will also benefit from Penn’s operational experience, extensive market access and proprietary technology platform, which successfully debuted in the US this July.

“Together, we can utilise each other’s strengths to create the type of experience that existing and new bettors will expect from both companies and we can’t wait to get started.”

What does this mean for TheScore and icasino?

TheScore, another media property acquired by Penn, remains its flagship brand in Canada. That business, Snowden said, provided evidence of the operator’s ability to leverage media brands in betting.

Hollywood Casino, its igaming brand, will also benefit from ESPN Bet. The rebranded app will include a separate Hollywood-branded icasino product in legal states.

Barstool back under Portnoy’s control

ESPN Bet means Penn has no need for Barstool, a sports media brand it first bought into back in 2020.

The operator began rebranding its betting offering as Barstool Sportsbook later that year. In the years since it upped its stake, ultimately acquiring the business outright in August 2022.

Whether the non-compete and other restrictive covenants mentioned by Penn block Portnoy from relaunching a Barstool betting product remains to be seen. The operator retains rights to 50% of gross proceeds from any subsequent sale or monetisation event around the brand.

“Barstool has been a great partner and we are thankful to Dave Portnoy, [CEO] Erika Ayers, [media personality] Dan Katz and their team for helping to rapidly scale our digital footprint across 16 jurisdictions in the US and introducing their audience to our retail and digital products,” Snowden said.

“The divestiture allows Barstool to return to its roots of providing unique and authentic content to its loyal audience without the restrictions associated with a publicly traded, licensed gaming company.”

Disney finally places a bet

The deal brings to an end years of speculation about ESPN’s – and parent company the Walt Disney Corporation’s – plans for sports betting.

As far back as 2021 then-CEO Bob Chapek suggested the House of Mouse was looking to grow its presence in sports betting. ESPN, he said, was “a perfect platform” for these plans.

It previously took a less enthusiastic view towards gambling. After acquiring Marvel and Star Wars studio Lucasfilm, slot licensing deals lapsed. A slot based on The Simpsons also disappeared from casino floors after Disney acquired 20th Century Fox.

Betting forms a key part of the sports experience for its under-35 audience, he said a year later. Speaking at the D23 fan event that year, he suggested there was huge industry interest in partnering ESPN for a sportsbook app.

“If you have a house that you’re gonna put up for sale and you have a hundred buyers, you probably got a pretty cool house.”

Group revenue was up 41.9% in the six months to 30 June, while net loss also flipped to a profit. Much of this, Flutter said, was down to the performance of its US segment, namely the FanDuel Group brand.

Since taking ownership of FanDuel in May 2018, the brand has gone from strength to strength. FanDuel has moved far from an initial daily fantasy sports offering to now deliver sports betting and online casino in states across the US.

FanDuel investment coming in H2

US is Flutter’s star performer in H1

A strong six months for European operations

Australia disappoints

Working down the balance sheet

FanDuel US listing nears

Flutter CEO: Profits will fuel H2 investment for FanDuel

With CEO Jackson revealing that the US business took on more than two million new players in the first half, there is little chance of this growth slowing. 

“The first half marks a pivotal moment for the group,” Jackson said. “Our US business is now at a profitability inflection point, helping transform the earnings profile of the group and significantly enhance our financial flexibility. 

“The US delivered another exceptional performance. We acquired over two million new players in the period, cemented our leadership position in sports and grew our share in igaming to 23%. 

“The US business was profitable in the first half with FanDuel generating over $100.0m (£78.3m/€91.1m) in EBITDA. This profit profile provides us with a clear platform to invest materially in the second half, as we strive to continuously improve our customer offering. 

“Our player acquisition strategy has consistently delivered, generating excellent returns on investment, embedding even greater value into our customer base and increasing our future profitability.”

Land of opportunity for Flutter 

Total revenue for the first half was £4.81bn, up from £3.39bn in the same period last year. Of this figure, £3.00bn came from sports betting and £1.81bn gaming.

As Jackson stated, the US was by far the highlight for Flutter in H1. Revenue was 71.0% up to £1.79bn, of which 98% came from the FanDuel brand, while adjusted EBITDA turned from a £132m loss to a plus of £49m.

US sports betting revenue hiked 78.1% to £1.37bn, with stakes also up 42.5% to £15.55bn. Flutter said this was aided by favourable sports results as well as its launch in new states. The operator went live in Kansas, Maryland, Ohio and Massachusetts, meaning it is now live, either online or via retail, in 23 states across the US.

As for igaming, revenue climbed 51.3% to £425m, which Flutter said was in line with strong player growth of 48%. The operator added that the FanDuel Casino was able to take market share during H1.

Growth continues in UKIE and International segments 

Looking away from the US and revenue in the UK and Ireland climbed by 13.7% to £1.24bn led by the Betfair and Paddy Power brands. Of this, £1.09bn came from Flutter’s online business and £153m retail operations. Sports betting accounted for £709m of all UK and Ireland revenue, with gaming’s share at £533m.

Flutter said strong customer acquisition and retention of World Cup users, together with an ongoing focus on growing customer value, drove online revenue up. As for retail, Flutter said it felt the benefit of product investment across its estate.

As for its International business, total revenue jumped 84.7% to £1.17bn. Some £845m was attributed to gaming, while sports betting generated £315m in total revenue in H1.

Flutter highlighted the ongoing benefit of the Sisal acquisition, saying this helped drive up Italy revenue. Turkey, where Sisal powers the national lottery, performed strongly while the Flutter Edge brand in India pushed revenue up 54.0% in the country.

Australia stumbles in H1

Seemingly, the only real negative point for Flutter in the first half was the performance of its Australian business Sportsbet. Here, revenue fell 1.8% year-on-year to £601m as sportsbooks stakes slipped 4.9% to £4.95bn. 

Average monthly players with the Sportsbet brand in Australia were 7.0% higher, due to the retention of a pandemic-enlarged user base. However, Flutter said revenue was down year-on-year as a result of “challenging” comparatives in 2022.

Revenue was 7% lower per customer, with Flutter saying this was most notable in racing when compared to the Covid-related peaks. During this period, options for other leisure spend were significantly restricted.

Rising costs fail to dent Flutter H1 success

Turning attention to spending and Flutter’s expenses were higher across all areas. Cost of sales climbed 48.4% to £2.01bn, while sales and marketing spend jumped 13.6% to £930m.

Other operating costs were 43.3% higher at $983m, while depreciation and amortisation climbed 28.7% to £552m. When also including £131m in finance expense, pre-tax profit reached £83m, compared to a £51m loss last year.

Flutter received £45m in tax benefits during the half, meaning net profit was £128m. This was in stark contrast to the £112m loss posted at the end of H1 2022. In addition, EBITDA increased 76.3% to £765m, with a margin of 15.9.9%.

US listing for FanDuel nears

Aside from statutory results, Flutter also published adjusted results, which account for items that are separately disclosed. These include costs related to the amortisation of acquisition-related intangible assets, transaction fees and associated expenses and restructuring and integration costs.

The adjusted results only impact certain costs, EBITDA and net profit. Adjusted depreciation and amortisation costs were £238m, meaning adjusted pre-tax profit was higher at £454m. This was also 63.9% more than last year’s adjusted figure.

Adjusted taxation costs were £34m, meaning adjusted net profit reached £420m, up 137.3% year-on-year. In addition, adjusted EBITDA amounted to £823m, a rise of 72.9%.

“The second half of the year has started well,” Jackson said. “We look forward to adding a US listing for Flutter shares later this year or early next year.”

Revenue reached all-time highs across both businesses, following record performances by the segments in Q1. L&W also noted revenue growth within its core gaming segment during Q2, helped by a rise in sales in North America and Australia.

Regarding Australia, L&W proceeded with a secondary listing on the Australian Securities Exchange (ASX) in Q2. To date, over AU$1.00bn (£514m/€598m/US$656m) in L&W stock has been traded on the ASX.

SciPlay acquisition closing in Q4?

Q2 growth across all gaming segments

Lottery sales weigh on year-on-year comparisons

How did Light & Wonder perform in H1?

CFO transition approaches

SciPlay deal expected to close in Q4

Also in Q2, L&W set out plans to take advantage of growth within SciPlay by acquiring the remaining public shares of the business. Announced in May, the deal is worth US$422m (£331m/€385m) and brings SciPlay fully back into the L&W business.

The group currently holds 83% of the economic interest in the social gaming business and 98% of the voting interest. L&W CEO Matt Wilson said the deal is close to conclusion and should close before the end of the year.

“We are excited about the announcement,” Wilson said on L&W’s earnings call. “We’re in a definitive agreement. We expect it to close in Q4, but this is really the last big milestone for us in terms of kind of streamlining the platform.

“There’s not a lot of players in the industry that have the unique collection of assets that we have, the land-based business, the leading igaming position and then the fastest growing social casino company. So, unlocking that full potential about building the world’s greatest products was key to bringing SciPlay back into the family.”

Light and Wonder Q2: Revenue growth across the board

Group revenue for the three months to 30 June was $731m, up 19.8% year-on-year. This was the result of growth across all three of L&W’s business segments.

Some $496m of total revenue was attributed to services activity and the remaining $235m product sales. 

Gaming continued to lead the way with revenue up 20.8% to $471m. L&W noted a 41% rise in gaming machine sales, while gaming systems and table products revenue climbed 20.0% and 34.0%, respectively.

Turning to SciPlay, revenue reached a record $190m, a year-on-year rise of 18.8%. L&W put this down to the core social casino business, which it said delivered strong payer metrics and outpaced the market and gained share.

Revenue from the igaming business also climbed 16.7% to $70m, another new record for L&W. The group said this was driven by continued growth in the US, where revenue was 32.0% higher. This will likely increase again as L&W prepares to launch live online casino in Michigan during H2, pending regulatory approvals.

Lottery sale impacts year-on-year comparisons in Q2

Looking at spending in Q2, operating costs were 9.6% higher at $618m. L&W spent more in all areas, with the exception of restructuring. Selling, general and administrative remained the main outgoing at $203m. 

L&W also noted $93m in other, finance-related costs, meaning pre-tax profit from continuing operations hit €20m. This was in contrast to the $140m loss posted at the same point in 2022.

The group paid $15m in income tax, leaving a net profit from continuing operations of $5m, compared to last year’s $150m loss. Adjusted EBITDA was also 32.6% higher at $281m.

However, when including discontinued operations, the results make for different reading. L&W completed the $5.80bn sale of its lottery business to Brookfield Business Partners in April last year.

Net profit from discontinued operations in Q2 last year was $3.26bn. As such, after also taking off $6.0m in net profit from non-controlling interest this quarter, the year-on-year comparison reads $1.0m net loss in 2023 versus a $3.29bn profit last year.

Revenue reaches $1.40bn in first half

Turning to the first half and how Q2 impacted L&Ws performance in the six months to 30 June, revenue hit $1.40bn. This was 18.3% more than $1.18bn in the previous year.

Gaming revenue was 19.5% higher at $890m, while SciPlay revenue hiked 18.2% to $376m and igaming revenue 11.7% to $134m. As for overall performance, services revenue was $973m and product sales revenue $427m.

Operating costs were 8.0% higher at $1.19bn and finance costs reached $169m. As such, pre-tax profit from continuing operations stood at $46m, compared to a $213m loss last year.

L&W paid $14m in tax, meaning net profit from continuing operations totalled $32m, a significant improvement on last year’s $217m loss. Adjusted EBITDA also increased 22.8% to $529m.

As for discontinued operations, last year net profit was $3.54bn. After taking away $11m in net profit from non-controlling interest this quarter, the year-on-year comparison was $21m in net profit for 2023 against a $3.32bn profit last year.

“Our reported numbers continue to validate the investments that we’ve made in our business and demonstrate the significant progress we are making towards our long-term targets,” Wilson said. 

“Year to date, we delivered double-digit top and bottom line growth across all three of our businesses, generated strong cash flows and reduced leverage, resulting in an exceptional second quarter.”

James prepares to depart Light & Wonder as CFO

Q2 marked the final full quarter of Connie James’ spell as chief financial officer at L&W. Last month, it was confirmed she will step down by the end of August.

Oliver Chow, senior vice-president of corporate finance at L&W, will become interim CFO. He will serve in the role until a permanent replacement is appointed, with a search currently ongoing. 

“I am proud to have been part of such a diverse and capable team and of our many accomplishments during my time here,” James said. “We accomplished a number of meaningful milestones in transforming the company and are now well-positioned with a healthy balance sheet and a strategic capital allocation plan. 

“The continued growth we saw in the second quarter reflects the focused execution that is in our DNA. With a wealth of talent, sound financials and an outstanding portfolio of assets, L&W continues to be in good hands moving forward as the leading cross-platform global games company.”

DoubleDown Q2 revenue was 6.7% lower year-on-year at $75.2m (£59.0m/€68.5m). The social games developer said the drop reflects a return to normality for players following the lifting of Covid restrictions and a return to usual consumer entertainment-focused behaviour.

The developer also noted the impact of changes in player behaviours due to inflation and global economic concerns.

DoubleDown CEO talks up real-money opportunities

However, CEO Kim remained upbeat over future prospects, pointing to the pending acquisition of SuprNation as a highlight. The deal, which is due to complete later this year, sees DoubleDown expand into real-money gaming.

“Our ability to consistently generate positive cash flow, combined with our strong balance sheet with more than $150.0m (£117.6m/€136.6m) in uncommitted capital, provides us with the flexibility to invest in new gaming categories and high addressable market opportunities,” Kim said.

“These include igaming through our pending acquisition of SuprNation, which is expected to close later this year. 

“We are encouraged by our performance in the first half of the year and expect to continue generating attractive cash flow over the balance of 2023 and beyond.”

DoubleDown Q2: Higher revenue, lower costs 

Group revenue for the quarter amounted to $75.2m, down from $80.6m last year and 3.1% behind $77.6m in Q1.

Monthly active users (MAUs) also declined 22.5% year-on-year to 1.8 million, as did daily active users (DAUs) to 793,000. However, average monthly revenue per player increased slightly to $235.

Looking at spending, operating costs were 62.9% lower at $47.7m. This was primarily due to last year’s figures including expenses related to the Washington class action case. 

DoubleDown also noted $4.4m in finance-related income, including interest income and foreign currency translation gains. As such, pre-tax profit reached $31.9m, compared to a $46.1m loss last year.

The developer paid $7.6m in tax, leaving a net profit of $24.4m DoubleDown, in contrast to a $34.1m loss in 2022. After also accounting for pension adjustments and foreign currency translation, net profit was $24.2m, compared to a $37.3m net loss in 2022.

Adjusted EBITDA also increased from $25.0m to $27.6m.

DoubleDown’s H1 follows similar pattern to Q2

Turning to H1, revenue for the six months to 30 June was $152.8m, an 8.0% drop from the previous year.

Operating costs were reduced by 47.3% to $99.9m, again due to costs related to the legal settlement. Finance income reached $9.4m, resulting in $62.3m in pre-tax profit, in stark contrast to the $21.6m net loss in 2022.

DoubleDown paid $14.3m in tax, leaving $48.0m in net profit, compared to a $15.6m loss last year. When including pension adjustments and foreign currency translation, net profit was $46.6m, in comparison to a $20.8m net loss in the previous year.

In addition, adjusted EBITDA edged up 2.1% to $53.0m.

“DoubleDown’s attractive business model combined with our disciplined focus on managing operating expenses delivers solid adjusted EBITDA margins as demonstrated by the 34.7% margin through the first six months of 2023,” Kim said.