Month: August 2023

The ONJN determined Betting Frenzy did not declare RON3.20m (£560,000/€650,000/$710,000) in gambling taxes. In addition to failing to declare the owed amount, the operator also did not pay the money to the relevant fiscal body.

The regulator also found the operator failed to provide the correct accompanying paperwork for its payment obligations to the government.

As such the ONJN decided to revoke Betting Frenzy’s licence to operate slot games in Romania. However, the operator will still be required to pay the amount already owed.

The decision – which was signed by ONJN president Mihail Silviu Pocora – can be appealed. Betting Frenzy have a 30-day period to submit an objection to the ruling if they so choose.

ONJN adds to Romanian blacklist

The country’s gaming regulator also announced it has added five new sites to the country’s blacklist of unlicensed gaming sites. These are:

Ice-casino34.com/roPs3838.comCarscor.comRomaniarandom.comPozeledevinrealitate.com

Romania launched the blacklist in 2015 ahead of the regulation of the online gambling market the following year.

The ONJN periodically updates the list, as it did in March 2022 – when 26 sites were added – or August 2020, in which the ONJN added 20 portals to the list, including one run by Bet365.

The country’s 1,184 ISPs are required to block a blacklisted site within 48 hours of being notified by the gambling regulator.

Romanian consumers attempting to visit a blocked gambling portal will instead see a message stating: “Your access to this site has been restricted by the National Gambling Office”, as well as summarising the ONJN’s powers to create the list.

Under the deal, Million Games will acquire STHLM Gaming Sweden, the entire Rhino Gaming portfolio and related intellectual property rights.

According to Spiffbet, the game development division has not contributed to its business for the past year. It added that the segment has been subject to a liquidation analysis.

Spiffbet also said the sale reflects its shift in focus from game development to online casino operations. Spiffbet will solely focus on running its online casinos when the deal completes.

The deal states Spiffbet can offer games included in the transaction to players free of charge for one year after content has been added to the Million Games platform. This covers offering games on its own casino platforms and via partner businesses.

Spiffbet added that the sale will have a positive impact on earnings from the third quarter. 

Games development investment not possible for Spiffbet

Spiffbet CEO Henrik Svensson said STHLM Gaming delivered a good level of return to the business. However, it did not have the resources to develop the segment alongside its online casino operations.

“For a successful business in game development, investments are required in developing new games and developing sales channels,” Svensson said. “Given the focus on the casino business, this did not exist. 

“Therefore, it was a fairly simple decision to search for a new owner of the game development business who can develop it further.”

Million Games founder Thomas Nimstad added: “Completing this acquisition and gaining access to STHLM Gaming NG and the games under the Rhino Gaming brand is a great opportunity for Million Games to rapidly expand the game portfolio to strengthen us in a market with high competition and many players.”

This is another consecutive record for PlayAGS, beating out Q1’s then-record revenue of $83.2m.

David Lopez, PlayAGS president and chief financial officer, said this quarter was helped by consistent growth in all three of PlayAGS’ segments – electronic gaming machines (EGM), table products and its Interactive division.

“Our record-setting second quarter financial performance clearly demonstrates the strength of our products, team members and strategy, which is creating significant momentum within all three segments of our business,” he said.

Most of the revenue came from the EGM segment, which totalled at $82.6m. This was up by 17.3%.

Table products revenue generated the highest increase, at 25.1% to $4.3m. This was another record for the operator.

Interactive revenues totalled at $2.7m, up by 5.8%.

Expenses tick up

Revenue from gaming operations made up $60.9m of the total revenue for the quarter, a rise of 7.6% and yet another record for PlayAGS. The remaining revenue – $28.8m – came from equipment sales.

Turning to operating expenses, selling, general and administrative expenses totalled at $19.7m. Depreciation and amortisation costs totalled at $18.6m, while cost of equipment sales hit $12.9m.

Gaming operations generated costs of $12.0m.

After considering write-downs and research and development costs, total operating expenses for the quarter were $74.7m, a rise of 12.0%.

This left the operating income at $15.0m, up by 53.6%.

Interest expense at $14.0m all but wiped out the operating income. But interest income and other income totalling $329,000, aided the figure slightly, bringing it to a pre-tax total of $1.3m.

Following income tax benefit at $484,000, the net income for the quarter was $851,000, a decrease of 44.8%.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) also hit an all-time high, at $39.5m – an increase of 16.0%.

H1 financial performance

Looking at PlayAGS’s half-year results, revenue was $173.0m, up by 15.8%. Gaming operations revenue grew 8.9% to $119.6m, while equipment sales revenue totalled at $53.3m.

Total operating expenses for the six months came to $146.1m, up by 9.1%. This left the income from operations at $26.8m.

Various further costs, such as interest expense at $27.7m and income tax benefit at $705,000, combined with other forms of income brought the net income to $517,000 for H1. This was a significant improvement from the loss of $11.0m in H1 2022.

During the six months, PlayAGS agreed to a supplier deal with Caesars and appointed Adam Chibib as its new chairman. It also named Robert Ziems as its chief legal officer.

The three months to 30 June were a mixed period for the land-based casino operator. Red Rock Q2 group and casino were down, but it experienced growth in other areas and net profit was also up.

Total revenue for the second quarter was $461.1m, down 1.4% from $422.2m in the same period last year.

The main sticking point for Red Rock was its casino business, where revenue dropped 4.0% to $269.5m. In contrast, revenue from food and beverage, rooms and other sources was up year-on-year.

Red Rock’s Las Vegas operations drew $412.6m of all revenue in Q2, down 1.8%. The other $3.6m came from corporate and other sources, an increase of 71.4%.

Reducing spend pushes Red Rock Q2 net profit up

Despite revenue falling, there were plenty of positives for Red Rock in Q2. Total operating spend was down 18.3% to $289.2m, mainly due to last year’s results including a $79.0m asset impairment charge. Without the charge from Q2 2022, operating costs increased by 5.2% year-on-year.

Lower costs offset the revenue drop, meaning operating profit hiked 84.3% to $127.7m, with $754,000 coming from a joint venture.

Red Rock also reported $44.3m in interest expense, leaving $44.3m in pre-tax profit, a rise of 105.7%. The operator paid $8.4m in tax, resulting in a net profit of $74.9m, up 131.2%.

Some $35.4m of this was from non-controlling interests. As such, bottom line net profit was $39.5m, a jump of $151.6m. However adjusted EBITDA declined 7.2% to $175.3m.

Read the full story on iGB North America

Match Time Solutions-owned online operator Galera.bet is focused on the Brazil market.

Galera.bet joins almost 50 companies and more than sports betting brands within the IBIA network of members.

“We are honoured to work with IBIA and to be able to reinforce our purpose of developing business with integrity as our priority.,” Galera.bet CEO Marcos Sabiá said. “We believe that collaboration between partners is extremely important to protecting the integrity of sport and betting markets from corruption.”

IBIA CEO Khalid Ali added: “We welcome Galera.bet’s decision to join IBIA. It recognises the unique benefits of IBIA’s operator-run integrity monitoring network and its ability to track members’ individual consumer transactional activity, rather than just analysing simple odds movements. 

Brazil regulates sports betting

The decision to join IBIA coincides with Brazil moving to regulate sports betting last week following years of delays. President Luiz Inácio Lula da Silva signed the Provisional Measure (PM), bringing into force the 2018 law.

Galera.bet joining IBIA fulfils an obligation under the PM to join an international body for monitoring sports integrity.

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).

The attack took place on 1 June, with the hacker gaining access to an Aristocrat server. The criminals have since published extracts of this data online.

Aristocrat said the hackers exploited a newly identified vulnerability in MOVEit – third-party file sharing software used by the business. 

In response, Aristocrat has taken a number of steps including containing the incident and addressing the vulnerability with MOVEit. The business also notified the relevant law enforcement, required gaming and other regulatory authorities.

Other actions include working with experts to determine what data was stolen and offering all staff complimentary credit monitoring and identity theft protection.

Aristocrat added that it has completed a risk assessment of the potential impact to its business. It expects only low business impact, with the execution of an appropriate risk management and mitigation plan.

“Aristocrat upholds high probity standards and takes the privacy and security of all personal data seriously,” the company said.

“We will continue to manage this incident proactively and comprehensively, in the best interests of our people, business and other stakeholders.”

Tracing the untraceable

Aristocrat is by no means the first gaming business to suffer an attack like this. In November last year, an attack on certain DraftKings customer accounts affected €300,000 in funds.

Customers’ two-factor authentication was also rendered useless as the hack had allowed their phone numbers to be changed.

Earlier this year, iGB spoke with a number of experts in cybersecurity about the threat the industry faces from such attacks.

Lindsay Slader from GeoComply, Zak Cutler from Paysafe and Continent 8’s Leon Allen said the industry must remain one step ahead when dealing with threats to financial security.

The VGCCC’s ban applies to sporting events where all participants are minors. It also prohibits betting in Victoria on the individual performance of athletes aged under 18 who are playing in senior or junior events.  

This includes wagering on outcomes such as first goal scorer or first wicket taken, when the player is a minor. However, bets can still be made on team outcomes in senior sports when minors are playing. 

Sports controlling bodies have been directed to amend agreements with betting providers to ensure they prohibit offering markets involving minors. The VGCCC said the ban also applies to other sports not governed by an approved sports controlling body.   

Sporting bodies and betting operators will have 60 days from 3 August to comply with the new rules. After this period, offering bets on minors could lead to regulatory action. 

VGCCC raises integrity and gambling harm concerns

In letters sent to sports bodies and betting providers, the Victorian Gambling and Casino Control Commission said permitting betting on minors poses integrity and gambling related harm concerns. 

These concerns, the VGCCC said, include the susceptibility of minors to approaches seeking to undermine the integrity of an event and normalising gambling on events involving children.

“The idea that it is okay to bet on minors just doesn’t stand up,” VGCCC chair Fran Thorn said. “We think minors deserve to be protected. It also raises integrity issues, with the prospect of people attempting to influence how minors might behave playing sport.”

Sports controlling bodies and betting providers that fail to comply face losing their approval to run sports in the state, or prosecution, Thorn added.

“The VGCCC is of the view that betting on contingencies in sporting events relating to the performance of an individual minor in that sporting event is contrary to the public interest.”

Sweeping pokies reforms in Victoria

The ban comes after Victoria last month announced new reforms aimed at reducing harms from electronic gaming machines.

Set out by the premier, Daniel Andrews, and the minister for casino, gaming and liquor regulation, Melissa Horne, the reforms remain subject to final approval.

Changes include mandatory pre-commitment limits, identity verification through carded play, reduced load-up limit, curfews in venues enforced between 4am and 10am and reduced spin speed.

At the time, Andrews said the reforms provide the strongest gambling harm preventions and anti-money laundering measures in Australia.

Reforms sparked by Royal Commission 

The reforms were announced 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”.

Following the inquiry, the government formed the Victorian Gambling and Casino Control Commission to regulate gaming in the state.

The 2023 Victoria budget included AU$71m for the VGCCC to take on a larger role in gambling harm reduction. In this capacity it will take over most of the functions of the Victorian Responsible Gambling Foundation. This will come into effect from 1 July 2024.

SFJL holds a Type 2 Gaming Services licence in Malta, but this is now suspended for an undisclosed period. The MGA ruling officially came into effect on 3 August.

The Malta regulator said SFJL breached several sections of Malta’s Gaming Compliance and Enforcement Regulations. These included regulation 9(1)(c), (k) and (j).

Section 9(1)(c) covers failure to comply with obligations in terms of regulatory instrument or other applicable law. 

The MGA also flagged Section 9(1)(k), where licensees must seek the regulator’s approval over certain material changes within the business. 

In addition, the regulator identified a breach of Section 9(1)(j). This states that if the MGA had been aware of particular circumstances, it would not have given its authorisation over certain matters.

It did not go into full detail on the case, nor did it set out any specific actions that resulted in the regulatory breaches. SFJL cannot carry out gaming operations during the suspension period.

SFJL has the option to appeal against the decision.

EGMIT Elite’s Malta licence cancelled

The latest ruling comes after the MGA last week cancelled EGMIT Elite Limited’s B2C gaming service licence.

EGMIT Elite operates its Elite24bet site via the licence but must now cease all operations. The MGA also flagged several breaches of the Gaming Compliance and Enforcement Regulations.

Withdrawal of the licence means the operator is no longer authorised to carry out gaming operations under the MGA licence. It must remove any reference to approval from the Malta regulator from its websites and other platforms.

The regulator also filed a police report against the operator and initiated liquidation proceedings.

Further details of the breaches were not disclosed by the MGA.

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Put forward by the Committee of the Verkhovna Rada on Finance, Tax and Customs Policy, the proposed amendment to Ukrainian gambling laws would require lenders to carry out expanded checks.

These should establish whether the individual self-excluded from gambling. This includes blocking themselves from gambling online and accessing land-based facilities across the country.

If the consumer is on the list, they will not be able to enter a credit agreement with the lender.

The amendment is awaiting final approval.

Earlier this year, the Ukrainian Commission for the Regulation of Gambling and Lotteries (KRAIL) revealed an increase in players self-excluding.  

During the first four months of the year, 245 people signed up to the list. This compares to 195 individuals in 2021 and 315 people in 2022. By the end of April, 687 people were on the list.  

Changing gambling regulations in Ukraine

The proposal marks the latest in a line of changes in Ukraine’s gambling market.

Last month, a new law outlining procedures for organisations subject to anti-money laundering and counter terrorist financing (AML/CTF) risk came into effect. This means operators in the country now face stronger inspections.

The law outlines the circumstances in which a gambling operator may face a scheduled or unscheduled inspection of their facility.

In other news, a set of proposals from KRAIL were included in the government’s 2023 action plan. These included a reform of laws concerning the process of suspending and cancelling the licences of gambling operators.

One proposal was to suspend the licences of operators if they offer gambling in Ukrainian territory occupied by hostile foreign powers.

Uncertain future for KRAIL

However, the future of KRAIL as the gambling regulator for Ukraine remains up in the air. Ukrainian deputy prime minister, Mykhailo Fedorov, in May submitted draft law proposing that KRAIL be dissolved and replaced with a new executive body.

Fedrorov, also minister for digital transformation, referenced the regulator’s ongoing failure to issue gambling licences in a timely manner.

KRAIL operates as a collegial body consisting of a chairman and six members. Meetings are only valid if five members are present, which is necessary for a licence application.

However, after the country’s invasion by armed forces of Russia, president Volodymyr Zelenskyy signed the decree “On the introduction of martial law in Ukraine”. Some members of the Commission were mobilised into military service as a result.

This made it impossible to continue KRAIL meetings and caused delays to a large amount of the normal work undertaken by the regulator. This includes the issuance of licences.