Month: August 2023

Tabcorp said it was able to increase its overall revenue market share, while its digital market share remained stable. This came amid several major developments in Australia during the course of the year.

New competition creates “distorted market”

Tabcorp also noted “increased generosity and marketing spend” by competitors during FY23 creating challenges for the operator. These factors, including the launch of an “aggressive” new operator, created a “distorted market”.

However, Tabcorp said it was still able to either increase or maintain market share across key areas in 2023. It also reported a record number of digital active TAB customers at 805,000 for the year.

This is in line with its TAB25 strategy to achieve 30% digital revenue market share by its 2025 financial year.

“These earnings and record active customers highlight the successful completion of the foundation year in the TAB25 transformation strategy,” Tabcorp managing director and CEO Adam Rytenskild said.

“We’ve built this foundation for growth by creating the right products, policy settings and attracting the people needed to transform our business. Our earnings, revenue and active TAB customers have all increased on last year and these strong metrics lay the platform to achieve our TAB25 ambitions.

“Our total revenue market share grew, highlighting the strength of our wagering ecosystem.”

Wagering and media growth pushes revenue up at Tabcorp

Group revenue for the 12 months to 30 June was 2.4% higher year-on-year on a pro forma basis. This was reported as if the demerger of its lottery operations took place at the start of FY22, rather than in June of that fiscal year.

Tabcorp’s wagering and media division generated $2.23bn in revenue, up 2.2% pro forma. Wagering revenue edged up 1.9% to $1.76bn despite a 12.2% drop in digital revenue to $942.7m, due to a decline in the digital wagering market.

In contrast, cash wagering revenue increased 25.1% to $818.4m, with the previous year’s figure impacted by Covid-19 restrictions on retail.

Tabcorp also reported a 3.4% rise in media and international revenue to $469.7m for the year. The operator said this was helped by increased vision export revenue and new digital vision distribution agreements.

Gaming services revenue surpasses $200m

Turning to the Tabcorp gaming services division and revenue here climbed 3.4% year-on-year to $203.6m. Integrity services revenue was 19.0% higher at $117.9m, although other venue services revenue fell 12.4% to $85.7m.

Within this division, Tabcorp said the total number of integrity services monitored electronic gaming machines (EGMs) increased. By the end of the quarter, its network grew from 120,370 in FY22 to 122,210 in the most recent fiscal year.

Tabcorp operates EGMs across New South Wales, Queensland and Northern Territory in Australia.

Pro forma earnings growth

In terms of spending, variable contribution was 2.2% higher at $1.01bn, although operating expenses fell 1.5% to $617.5m. Depreciation and amortisation costs were also 16.0% lower at $240.5m.

This left $150.5m in earnings before interest and tax (EBIT), up 102.8% pro forma. 

After accounting for $32.5m in net interest, $31.0m worth of tax payments and $2.7 from equity accounted investment, net profit after tax (NPAT) stood at $84.3m. This was 76.7% lower than actual NPAT of $362.4m in FY22.

Tabcorp also noted a further $17.8m in significant items, meaning bottom line statutory NPAT for the year hit $66.5m. This was some way off $6.78bn in the previous year, although the FY22 figure included $6.41bn in significant items as a result of the demerger.

EBITDA from continuing operations before significant items amounted to $391.0m. This was 8.4% higher pro forma and also 2.5% higher than last year’s actual figure.

“The results show we have achieved the FY23 goal of laying the foundations to achieve our TAB25 targets,” Rytenskild said.

“We’ve reshaped the business and delivered structural reforms to bring customers market-leading offers, pricing and products that deliver the ultimate customer experience while creating a simpler, more valuable growth business for our shareholders.”

Renshaw to exit as Tabcorp CFO

Alongside the FY23 results, Tabcorp also announced that Daniel Renshaw will step down as chief financial officer at the end of the month. His departure is due to personal reasons.

Damien Johnston will stand in as interim CFO from 1 September while Tabcorp searches for a permanent replacement. Renshaw will be available to support the succession and transition process.

“I really appreciate Dan’s contribution to Tabcorp over a long period of time,” Rytenskild said. “Dan played a key role in the successful demerger of the lotteries and keno business and the successful launch of new Tabcorp. 

“Demergers and transformations are hard to deliver, and Dan was an important part of our leadership team that ensured a seamless transition for shareholders and a strong foundation year for Tabcorp’s TAB25 transformation strategy. 

“Dan leaves with the balance sheet set up for growth and a reset cost base.”

Renshaw added: “I’m really proud to have been involved in the successful demerger and the creation of new Tabcorp. I’m confident I will leave the business in a strong position and look forward to seeing the growth phase of the company.”

Terms of the non-binding agreement are not yet finalised. However, 2mee expects its shareholders to receive between £6.0m (€7.0m/$7.6m) and £8.0m from the deal. GRG will satisfy this entirely by issuing new GRG shares.

GRG plans to carry out new fundraising to raise further working capital for the business. Once the agreement concludes it will readmit its shares to the London Stock Exchange, giving 2mee a Main Market listing.

2mee’s plans for expansion and fintech

2mee plans to add new talent and specialists and further develop its technology following the deal. It currently works with a number of tier-one online gambling operators such as SkyBet and Sportsbet.io.   

The 2mee platform delivers influencers as on-screen web and app messages. This, it said, helps to amplify, personalise and humanise engagement across the customer journey. 

GRG said 2mee will help the larger business pursue new opportunities within the fintech sector.

The reverse takeover agreement remains subject to due diligence and certain approvals.

Talking up the global influencer market

“Online gambling operators must be heard above the noise being made by their rivals and connect with their audiences in a way that is human and authentic,” 2mee CEO James Riley said. “2mee’s technology allows them to do just that, impacting consumer behaviour at the crucial moment of decision.

“In GRG, we have a group of people that understand the power and capabilities of our technology. They also see how it can change the game for businesses across many sectors when it comes to acquiring and retaining customers. 

GRG chairman Ross Andrews also welcomes the deal. He says: “We are delighted to work with 2mee and its cutting-edge platform that allows brands to deliver humans as messages. 

“The global influencer market is big and will only get bigger. 2mee’s technology allows businesses to capitalise on this and to impact consumers at that crucial moment of decision.”

Irina Rusimova, chief sales officer at Amusnet Interactive, discusses the operator’s latest innovation in slot games – with its portfolio boasting bigger bonuses and more exciting features than ever before. With a goal to release at least two new slots every month and bring out new games, including blackjack and baccarat, it is clear that Amusnet Interactive has big plans for the months ahead.

The DSWV pointed to reports in the press highlighting a 2021 problem gambling prevalence survey suggesting problem gamblers in Germany rose from from 400,000 to 1.4 million, the same year the market was regulated under the 2021 State Treaty on Gambling.

These figures are used to push the narrative that re-regulation led to a spike on gambling harms. However, the DSWV believes “such a conclusion is not readily possible” from the survey data.

Tracking problem gambling in Germany

The DSWV argues the increase in numbers did not reflect an actual rise in problem gambling but instead changes in the methodology tracking prevalence.

In the 10 years prior to 2021, the Federal Centre for Health Education (BZgA) conducted the survey. This generally showed a stable or slight decline in problem gambling numbers.

However, in 2021 a new organisation, the Institute for Interdisciplinary Addiction and Drug Research (ISD), began collecting the data.

A “methodological reboot” of German gambling harm surveys

The study’s authors called it a “methodological reboot” with its new approach of gathering data making it impossible to compare to the prior year’s data.

Changes in the methodology included the use of both online and telephone surveys to build the results in the 2021 report. In comparison, the 2020 study only used phone surveys. In both cases the authors used a combination of mobile and landline.

While the organisation welcomes a data and fact based discussion on this topic, it “must be conclusive and based on verified facts”, DSWV president Mathias Dahms said.

“The evaluation of the State Treaty planned for the end of 2026 must take into account the experience of all stakeholders,” he explained. “Only in this way can the knowledge gained lead to constructive cooperation between all stakeholders for the benefit of customers.

“Player and youth protection works most effectively through successful channeling into the legal market with licensed providers.”

DSWV corrects DHS methodology

It’s not the first time the DSWV has hit back at a misuse of statistics to push an anti-gambling argument.

In June, the lobbying organisation criticised the German addiction association Deutsche Hauptstelle für Suchtfragen (DHS) for citing faulty figures in its 2023 Yearbook of Addiction.

The DSWV pointed out the DHS’ sources consisted of affiliate marketing sites as opposed to academic or government documents.

Stewart will depart at the end of August after serving as chair for what Tab NZ described as a “transformative” two years.

During the latter part of his tenure, Stewart played a key role in securing the new strategic partnership with Entain. Announced in March, Entain is supporting Tab NZ with delivering wagering and broadcast functions in New Zealand. The deal runs for 25 years.

“It’s been a rewarding couple of years on the Tab NZ board,” Stewart said. “More importantly, we’ve delivered a sustainable long-term outcome for our stakeholders through the Entain partnership.

“I have the utmost confidence in the remaining board and management team continuing to build on the Entain partnership for the benefit of our country.”

Tab NZ CEO Nick Roberts paid tribute to the outgoing Stewart. He said: “We have been incredibly lucky to have had access to Mark’s unparalleled experience and unique skillset. 

“His leadership at Tab NZ has changed the lives of tens of thousands of Kiwis, from those in our sporting communities to those whose jobs are reliant on the domestic racing industry.

Modernising gambling in New Zealand

Stove’s appointment as interim chair has been approved by New Zealand’s minister for racing, Kieran McAnulty.

Stove takes on the role having been deputy chair since August 2021, when Stewart began his tenure. She was also previously a member of the Racing Industry Transition Agency Board.

“I am very excited to be picking up the reins as we pay particular focus to working with the government on modernising New Zealand’s gambling settings,” Stove said.

Tab NZ also confirmed another change to its board. Jason Fleming has resigned and taken up the new role of general manager for commercial at Tab NZ.

Bill Birnie, Wendie Harvey and Raewyn Lovett remain on the board alongside Stove. 

Funding boost from Tab NZ-Entain deal

The announcement comes following the successful roll-out of the Entain partnership, which began on 1 June.

In the opening months, Tab NZ said this has delivered a funding boost to the three New Zealand Racing Codes, Sport NZ and the 37 national sporting organisations that have a sports betting agreement with Tab NZ.

Upon announcing the deal earlier in the year, Tab NZ said it entered the partnership due to increasing competition, rising costs, capital constraints and other challenges. These, it said, have impacted its ability to deliver adequate funding to racing and sports.

Entain published an update on the arrangement shortly after it came into effect. This includes that Entain is committed to a minimum annual return of NZ$150m back to Tab NZ, with this set to take place within the first five years of the deal.

Wells has led the Oregon Lottery as interim director since December 2022. His appointment to the full-time position comes with the approval of Oregon governor Tina Kotek.

A long-serving member of the Oregon Lottery team, Wells joined as cybercrime manager in April 2019. He went on to become assistant director for security before his spell as interim Oregon Lottery director.

Prior to this, Wells worked as a special agent for the organised crime section of the Oregon Department of Justice. He was also a task force officer on the FBI’s Cyber Crime Task Force.

In addition, he previously served on the Public Safety Fund Memorial Board, Police Policy Committee and the Board on Public Safety Standards and Training Committee. 

Oregon Lottery needs “experienced leader”

“The Oregon Lottery funds critical state services like education, state parks and veteran services,” Kotek said. “It is imperative that the director is an experienced leader who will champion transparency and accountability. 

“During his time at the Oregon Lottery, Michael has worked closely with staff, the Commission and stakeholders to lead with the highest standards of security and integrity.” 

Wells added: “During my tenure as interim director, I’ve had the privilege of leading an exceptional team dedicated to ensuring the lottery’s ongoing support of its beneficiaries and key programmes across our state.

“I appreciate Governor Kotek’s trust in my leadership. I look forward to leading the work of the Oregon Lottery in funding critical programmes that serve Oregonians.”

The confirmation comes after the Australian Financial Review reported that Entain had “axed more than 50” jobs in its Australia business. The exact number of redundancies has not been confirmed. However, sources who spoke to the newspaper gave 60 and 80 as potential totals.

An Entain spokesperson said the job losses stemmed from Entain’s continued growth in Australia.

“Entain has enjoyed a rapid period of growth in Australia and, like any major technology-led company, we continue to review business operations and tweak our structures to set us up for the next stage of growth,” read the statement.

“Unfortunately, this has led to a small number of redundancies across a range of business units.”

Spinning the rumour mill

Rumours surrounding sackings at Entain have been swirling for some time.

Last month, Andrea King – a former marketing manager at Entain and marketing and sales executive at Entain-owned PartyPoker – wrote on LinkedIn that “mass redundancies” had occurred at both Entain and PartyPoker, affecting up to 80% of employees.

“A few days ago I heard the devastating news of mass redundancy at PartyPoker and Entain,” she wrote. “The figure that I have heard is up to 80% redundancy across the company.”

At the time, an Entain spokesperson told iGB that Entain is “constantly evolving”, choosing not to directly address the rumours.

“As a global business that continues to grow organically and through M&A we are constantly evolving to ensure that we are positioned as strongly as possible to capture the significant opportunities in front of us, as well as ensuring we continue to deliver the best offer to our customers.”

Under the deal, US Integrity will provide the Big 12 with monitoring software and tools to prevent indiduals from engaging in prohibited sports wagering.

Big 12 officials and institutions will have access to ProhiBet. This allows sports properties and sportsbook operators to ensure student-athletes, coaches, staff and officials are compliant with betting regulations.

The conference said the new partnership forms part of a two-fold approach to strengthen its oversight over sports betting. Big 12 is also intensifying its control over the distribution of Big 12 data

“Big 12 is thrilled to partner with US Integrity as a continuation of its commitment to sports betting compliance,” Big 12 commissioner Brett Yormark said. “Given the current landscape of sports betting in our industry, it’s more important than ever to double down on ensuring sport integrity across our conference.”

ProhiBet was came about earlier this year as part of a new joint venture between US Integrity and Odds On Compliance. The bettor solution targets the sports betting industry allowing for monitoring compliance with state-by-state regulatory requirements in the US.

ProhiBet managing director Matt Heap adds: “It is thrilling to partner with the Big 12. The combination of ProhiBet’s state-of-the-art encrypted data transfer system and the Big 12’s dedication to upholding the integrity of sports will undoubtedly enhance the transparency and trustworthiness of collegiate sports betting activities.”

Iowa State athletes charged in betting investigation

The new partnership comes amid controversy over Iowa State, a Big 12 university, and the actions of its athletes.

In May, the University of Iowa reported 26 athletes across five sports were suspected of betting on sports. Betting on sports is against National Collegiate Athletics Association (NCAA) rules. 

An initial round of charges were came on 1 August as part of an Iowa Division of Criminal Investigation’s (DCI) probe. Some seven individuals face charges. 

Four more Iowa State football players now also face charges for tampering with records. Among those was Iowa State running back Jirehl Brock.

Bjorn Krantz will leave the business on 1 October after 18 months as its CEO. He joined in January 2020 as division head for publishing and also spent time as chief of global marketing operations. 

Experienced industry executive Curwen will take on the CEO role after two and a half years as chief online officer at OPAP.

Prior to this, Curwen was CEO of Golden Rock Studios and had a spell as chief gaming officer at Superbet.

Curwen also spent almost six years working for William Hill, serving in senior positions such as chief gaming product officer. In addition, he had spells with RandomGamesLimited UK and Ladbrokes.

“The board is thrilled to announce that James Curwen has agreed to join us as the new CEO of Yggdrasil,” the provider’s chairman, Itai Frieberger, said. “We believe he possesses the skills and experience to elevate the business to new heights.”

Frieberger also paid tribute to the outgoing Krantz. He said: “On behalf of the board, I want to express our gratitude to Bjorn for his hard work and dedication over the last four years at Yggdrasil.”

Krantz added: “Since day one, my work with Yggdrasil has been focused on transformation and, as the company now enters the next phase of its global developments, it’s time for me to hand over the reins. 

“James Curwen is an industry veteran; he will bring invaluable experience and leadership to the company as it enters the next phase of driving sustainable, profitable growth. It’s his time to lead.”

Business consolidation at Yggdrasil

The appointment comes after Yggdrasil in June announced a change in its business structure. 

The provider is consolidating its Product and Programmes and Studio verticals into a single unit. This will now operate under the “Gaming” banner.

Yggdrasil said this will help increase company transparency, streamline processes and offer numerous operational benefits. 

This, it added, could lead to improved product roadmap quality and development process assurance, more agile content delivery, increased cross-company knowledge sharing and a focus on player and operator needs.

Upon announcing the move, Yggdrasil also named Mark McGinley, previously CEO of FunFair Games, as chief gaming officer.

McGinley has worked across B2C and B2B gaming for more than 25 years, most recently at Funfair after a spell as director of games studios for Entain.

Temporary licences cover up to one year of operation in Kentucky, with holders to be continuously reviewed during the period. Licences were approved for sports wagering operators and service providers at a meeting yesterday (22 August).

Kentucky is due to launch regulated retail sports wagering on 7 September, with online to follow on 28 September. Pre-registration for online accounts will open next week.

The initial seven online operators that applied earlier this month all secured a service provider licence. Bet365, BetMGM, Caesars, Circa, DraftKings, FanDuel and Penn Sports Interactive all picked up licences. 

Fanatics, which did not appear on the original list, was also approved to launch online sports betting in Kentucky. In addition, the KHRC issued a service provider licence to Kambi, although the provider was only cleared for retail operations.

Kentucky racetracks snap up betting licences

Licences were also approved for a number of racetracks and their satellite facilities in Kentucky.

Successful applicants include Churchill Downs and Derby City Gaming, both Louisville; Ellis Park in Henderson; The Mint Gaming Hall Cumberland Run in Corbin and The Mint Gaming Hall Cumberland in Williamsburg.

Other approved sports wagering operators are Newport Racing and Gaming in Newport; Oak Grove Gaming and Racing in Oak Grove; The Red Mile in Lexington and Turfway Park in Florence.

In addition, sports wagering operator licences were awarded to three new facilities that are opening soon. These include Derby City Gaming in Louisville; Ellis Park in Owensboro; and Sandy’s Gaming and Racing in Ashland.

Online operators partner with land-based venues

The meeting also revealed details of partnerships between online operators and land-based venues in Kentucky. Each racetrack is able to also partner with up to three online operators.

Both Bet365 and BetMGM will offer mobile betting in partnership with Sandy’s Racing and Gaming. BetMGM will also run retail wagering.

Caesars will offer retail and mobile betting with The Red Mile, while Betfair will run mobile-only betting with Turfway Park. Penn Sports Interactive, soon to rebrand as ESPN Bet, will work with Ellis Park to offer mobile betting. Elsewhere, Circa also struck a mobile-only partnership with Cumberland Run.

DraftKings has partnered with Cumberland Run in Corbin for retail and both Cumberland Run and The Mint in Cumberland for mobile betting. In addition, Kambi will provide retail-only betting services for Churchill Downs’ Ellis Park, Turfway Park and Oak Grove.

“The countdown continues as we move closer to sports wagering with retail locations opening in just 15 days,” Kentucky governor Andy Beshear said. “Thank you to the KHRC commissioners for their dedication to getting this done right and getting it done in time for the opening of the NFL season.”

KHRC chairman Jonathan Rabinowitz added: “We are excited to open sports wagering on our target date as we continue working through this careful process dedicated to wagering integrity and protecting bettors in the state of Kentucky.”

KHRC approves Sports Wagering Advisory Council

In other news, the KHRC approved a new Sports Wagering Advisory Council that will advise the commission on sports betting.

Appointed members include Kentucky Public Protection cabinet secretary Ray Perry, KHRC deputy executive director Waqas Ahmed and KHRC commissioners William May, Tiffany Daniels and James Edwin Worley.

Jonathan Blue will serve as an at-large member, as will Joyce Merritt, who will also act as the council’s chairperson.

Online tax set higher than retail rate

Legal sports betting has been made possible after Beshear signed off on House Bill 551 in April.

The bill makes nine Kentucky racetracks eligible to offer on-site retail betting. After including permitted online partnerships, this left 27 licences up for grabs in Kentucky. 

Online tax rate is 14.25% of gross gambling revenue and retail 9.75%. A licence will cost a racetrack $500,000 and an online operator $50,000 to partner.

However, the bill does not contain any tribal provisions. Neither of the state’s two tribes – the Southern Cherokee Nation of Kentucky and the Ridgetop Shawnee Tribe of Indians – are recognised by the US Department of Interior. 

As such, they do not qualify for state gaming compacts under the federal enabling law for tribal gaming the 1988 Indian Gaming Regulatory Act.