Tipwin fined in Denmark for AML failings after police investigation

The DKK100,000 ($14,500/€13,400/£11,500) penalty was imposed more than a year after Denmark’s Gambling Authority last June reported Tipwin to the police after identifying violations of the Danish Money Laundering Act.

Tipwin subsequently received a provisional fine of DKK100,000 for breaching two subsections of the Act, which was adopted on 3 July 2023. Spillemyndigheden did not confirm who had issued the fine.

Last June, the regulator accused the business of grossly and negligently violating rules regarding risk assessments, policies and internal controls. Tipwin was also issued with injunctions demanding compliance with rules by September 2022.

Malta-headquartered Tipwin is licensed to offer betting and online casino games in Denmark. It also operates in Germany, Sweden and Austria.

Crackdown on money laundering

Spillemyndigheden has made AML a point of emphasis in recent years. Besides Tipwin, other operators that have faced injunctions for AML reasons in recent months include CasumoCasino Copenhagen and Bet365.

In July 2022, it began an AML crackdown in line with the Ministry of Justice’s new strategy.

Curaçao opens licence application portal

From today (1 September), operators can access licence application forms from the GCB’s new online portal, which also provides information on the licensing process. Downloads and guidance notes are also available.

Submissions of completed applications will commence in November 2023.

The opening of the portal comes as Curaçao prepares for the National Ordinance for Games of Chance (LOK). This law will change how foreign online gambling operators are licensed in Curaçao.

The new licensing process does not reform the National Ordinance on Offshore Games of Hazard – Curaçao’s existing legislation – but adds to it.

The application portal is open to both new operators and holders of existing sublicenses. However, the latter may continue to operate uninterrupted under their current arrangements.

After November, operators that are accepted for a licence will be issued a provisional licence from the regulator. This will be subject to providing audited policies and procedures within six months of its issuance.

Operators that are accepted for a licence will not have to re-apply under the LOK. Their position will be transferred to the new authority.

Application process for new online gaming licences

The LOK is set to be monumental for a market once considered to be passive when it came to regulation. In July 2022, after it was noted that the new, higher licensing standards could see operators withdraw from the jurisdiction, Javier Silvania, Curaçao’s finance minister said he saw “no issue” with the matter.

Curaçao’s current law mandates operators to apply to one of four existing master licensees to receive a sub-licence. Once the LOK comes into force, sub-licensees will have three months to submit a new application with the GCB for a direct operator licence.  

At iGB L!VE in July, Sixiènne Jansen, legal advisor to Curaçao’s ministry of finance detailed how the new licensing regime would work. She also outlined the application process, which consists of three forms. Each of the forms will require relevant supporting documentation.

The first is an online gaming application, in which the applicant will provide projections for business operations and strategic targets. The second is a personal declaration, detailing information about key figures involved in the business. 

A source of funds check will be carried out on any involved person with more than 10% control of the business. The final form consists of corporate and business disclosures.

Ontario: The state of play

With every gold rush comes the prospectors.

In the 16 months following the regulation of the gaming sector in Ontario, gambling operators of all shapes and sizes have thrown the dice to get a slice of the biggest and most dynamic market in North America.

Those involved range from former grey market players trying to make the regulated transition, the big European operators, media brands which have grown a betting wing and land-based companies trying to get in on the action – plus everything in between.

The landscape

Ontario has become an incredibly competitive market, with iGaming Ontario recording 46 companies operating 71 brands as of Q1 2023.

However, one trend to note is its diversity. This is especially striking when compared to the US which, buttressed by restrictive market access requirements, often sees its ring-fenced jurisdictions devolve into a FanDuel-DraftKings duopoly.

the ontario market is more diverse than similar jurisdictions in the us

This is less the case in Ontario.

Bet365 is the market leader, followed closely by theScore Bet operator Penn and Flutter, through its PokerStars and FanDuel brands. A bevy of smaller operators follow, all taking a healthy market share.

This is a province which saw CA$14.0bn in online wagers from 920,000 consumers in Q1, leading to gaming revenue of $545m, making the province North America’s largest single market by revenue.

Grey market transition

The Canadian online gambling market shares many themes with its cousins in the US – but enough is different to mark it definitively as a foreign country.  

Unlike the States, where the grey market question was definitively solved in 2006 with the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA), Ontario had a thriving offshore segment prior to the market launch on 4 April 2022.

After this date, many of these operators shifted into the white market, which was of course the goal of regulation in the first place. 

PointsBet Canada chief commercial officer Nic Sulsky says that in addition to these old timers making the grey-white transition with significant player data, “a lot of the other prominent operators that launched also came to the table with databases of users”.

PointsBet Canada chief commercial officer Nic Sulsky

Bet365 can likely thank its market leadership in Ontario for the brand recognition and player data it had achieved before regulation. 

Although the transition was not without friction. Aleksandra Sygiel, chief revenue officer of former grey operator Pinnacle Sports, highlights the “schizophrenic” image that moving from grey to white often presented to users. Heightened scrutiny of various regulatory procedures in particular left many bewildered.

“I have an account, why do I have to do it again?” she says, pointing out how increased KYC and AML obligations had the effect of confusing customers.

“We often, both the operators and the regulators, sometimes forget about the customer. It’s a regulation-centric industry.”

One thread of continuity however between the grey and white market is the popularity of online casino.

Dominance of igaming in Ontario

Of Ontario’s total Q1 handle, $11.6bn (83%) resulted from bets on igaming. This can also be seen in terms of revenue, counting for $392m (72%).

Sulsky says, for this reason, PointsBet has devoted significant effort to “evolving” its casino product. As a business with an existing base of sports fans, one important challenge is channelling sports bettors to its igaming offering.

igaming dominates operator revenue in ontario

“We want to make sure that we can offer Canadian sports fans with the best regulated casino product possible from a sports perspective,” he says.

An operator’s sports betting is important because it allows them to funnel consumers to their more profitable igaming offerings.

To compete in this market each operator has a theory of the case and strategy to succeed.

Will product win in the end?

Many operators told iGB that a relentless focus on product was key to standing out in the field.

It’s also well-known that both sports bettors and igaming enthusiasts like to use multiple platforms.

“You would not place your first bet ever in your life with Pinnacle,” says Sygiel. “You would probably have a bet with someone else. We’re fine with that.”

Pinnacle Sports likes to market itself to the discerning sports bettor. The business aims to capitalise on consumers’ lack of loyalty by positioning itself as the site of choice for those that have been around the block a little bit.

The company famously does not offer bonus bets. Instead, the business says it offers the best odds on the markets.

Asit Ganguli, Canadian country manager at Neo.bet, says his company has adopted a strategy similar to Pinnacle – hoping that quality wins out in the long term.

“We’re probably going to be the second or the third app that somebody downloads,” he says. “Our USP would probably be that we want customers to play longer.

Ganguli criticises the way some operators hound consumers after they place a bet, with constant messages and a hard sell.

“We want to take care of the customer,” he adds. “We want to build a long-term relationship.

“That’s not an attitude I generally see in sportsbooks. The churn rate, everybody almost accepts it as part of the industry, but I don’t come from this industry, so I don’t understand why that’s accepted as a model.”

The thesis of media-led gaming

However, product is not the only lever available to operators looking to stand out. TheScore, which was a sports media site long before it was a sportsbook or icasino platform, hopes to capitalise on its connection to sports fans.

“TheScore is a pretty massive brand in Canada,” says SVP of content and marketing Aubrey Levy. “So, under the thesis of media-led gaming, Penn figured let’s launch TheScore in Ontario, lean into our media assets and off we go.”

Levy outlines TheScore’s view: betting is just one component of the overall fan experience.

“And then so far that you’re a fan you consume sports content, sports media and betting is really just an extension of that,” he says.

TheScore believes that being a media business allows it to deliver betting as an extension of the kind of sports content a consumer enjoys. It argues it does so in a way no other operator could just through paid media and partnerships.

“That’s what got us into the game four or five years ago now – and we haven’t looked back,” says Levy.

Using sponsorship to win

But the ownership of a media brand is not the only way a gambling business can connect with sports fans. Sponsorship is the other tool.

“We’ve built a long-tail strategy based around building brand affinity alongside some of the most trusted sports IP properties in the country,” says Sulsky.

“Our battle to create a voice in this market was difficult and what we decided to do was to try and differentiate our brand by really capitalising our boots on the ground.

“We wanted to launch our brand alongside some of the other trusted and beloved iconic sports brands in the country” he says.

curling is watched by 30% of canadians

This also included some left-field thinking involving what some might deem a niche activity – curling.

“Now, curling is not the biggest international sport right now, but curling is a sport that’s watched by over 30% of Canadians,” he explains.

“So, we knew that there was going to be an opportunity to create a direct relationship with the 30% of Canadian sports fans who engage with curling.”

Where next?

With market exits all the rage in the US, it is notable that the Ontario market shows little sign of a similar consolidation.

Perhaps the reason for this has been the continuing development of the market, with revenue each quarter hitting new heights. The $545m reported in Q1 is the fifth quarterly record in a row. 

This is the rock-solid foundation to the size and competitiveness of the Ontario market.

Not every player will win and it is likely that, long term, the market will not be able to sustain its current number of operators.

However, for the moment, it seems they are content to try their luck. 

Fanatics completes PointsBet deal in eight US states

Following regulatory approvals, the deal has now completed in major markets such as New Jersey and Pennsylvania. FBG has also completed in Colorado, Iowa, Kansas, Maryland, Virginia and West Virginia.

PointsBet confirmed that the Fanatics subsidiary has now paid the initial instalment of $175m of the $225m headline purchase price. The price was agreed in June 2023.

From today, customers in each of the eight states will see PointsBet rebranded to “PointsBet, a Fanatics Experience”. The rebrand will complete in Indiana and Illinois in the coming months.

PointsBet USA will continue to operate in Illinois, Indiana, Louisiana, Michigan, New York and Ohio. This will be until Fanatics is able to close on selected states individually.

“We are excited about what we are building at Fanatics Betting and Gaming and this acquisition accelerates our plans,” said Matt King, chief executive of FBG.

“We have a 10-year plan that focuses on the customer and not market share. We are going to acquire customers efficiently, allowing us to return savings to customers by investing in the customer experience at Fanatics Sportsbook and PointsBet, a Fanatics Experience.”

Growth and diversification

The development comes just over two months after PointsBet shareholders approved the $225m deal. This encompassed its US sports wagering and icasino businesses, as well its Banach Technology platform.

It also included a licence to use PointsBet’s proprietary technology platform.

At the start of the NFL season next week, FBG will have brands live in 11 legal sports betting states. PointsBet Casino will be live in four states.

FBG added that PointsBet USA will continue its employment efforts, hiring engineers, customer service personnel and marketing teams. An influx of operating capital will come in from FBG.

Johnny Aitken will continue as the CEO of PointsBet USA.

“This strategic acquisition complements the growth and diversification that Fanatics Betting and Gaming has accomplished over the past two years,” said FBG in a statement. “Fanatics Betting and Gaming will add PointsBet’s online casino platform, which is available in four states, to continue the development of Fanatics’ online casino offerings that is scheduled to launch later this year in the United States.

“In addition, Fanatics Betting and Gaming will begin integrating Banach Technology’s risk management platform and quantitative driven trading models into the Fanatics Sportsbook app that is now available for download on iOS and Android for sports fans in Maryland, Massachusetts, Ohio and Tennessee.”

Sports betting drives China lottery sales surge in July

Ministry of Finance data for July shows that nationwide lottery sales were up 55.9% year-on-year to CNY48.09bn ($6.73bn/€6.20bn/£5.31bn).

Sports lottery sales were up 63.5% to CNY31.03bn, while welfare lottery sales were up 44.3% to CNY17.86bn.

The ministry said the uptick was mainly driven by the growth in sales of instant lottery tickets and what it calls “guessing lottery tickets”, which are bets on sports fixtures.

Increased instant lottery sales

Instant lottery sales in July were up 144.6% year-on-year to CNY11.2bn, with betting now the largest vertical after sales grew 73.6% to CNY18.9bn.

The sales volume of Lotto digital, betting, instant and keno lottery tickets accounted for 31.06%, 38.61%, 22.98% and 7.35% of the total lottery sales respectively.

Lottery sales increased in all provinces across the country compared to July 2022. Guangdong, Jiangsu, Zhejiang and Shandong increased significantly, with year-on-year increases of CNY1.9bn, CNY1.6bn, CNY1.6bn and CNY1.1bn respectively.

For the year to 30 July 2023, lottery sales were up 51.2% to CNY322.8bn. Welfare lottery sales were up 23.4% to CNY107.7bn while sports lottery sales were up 70.5% to CNY215.1bn.

Macau revenue reaches record heights for 2023 in August

Revenue has ticked up steadily throughout the year, increasing every month with the exception of May to June, when revenue fell by 2.3% and January to February, when revenue fell by 10.8%

Year-on-year revenue comparisons in Macau have been extraordinarily high throughout 2023, as the special administrative region recovers from the Covid-19 pandemic. For August, revenue was up by 685.4% yearly.

While this was one of the higher year-on-year increases during the year, it was decidedly lower than the 4,082.9% rise seen in July.

Revenue in Macau now stands at MOP114.01bn cumulatively for the first eight months of the year, up by 295.1% yearly.

Success all-round in August

The month saw Macau-based casinos post positive second quarter results. Melco reported a 220.0% revenue rise for Q2, while Wynn Resorts posted an increase of both revenue and profit for the period.

Meanwhile, at Galaxy, revenue shot up 257.0% year-on-year. SJM Holdings continued this trend by posting its first six-month stretch of positive earnings before interest, tax, depreciation and amortisation (EBITDA) since 2019.

Melco, Wynn Resorts, Galaxy and SJM were four of the six operators to receive concessions from the Macau government late last year.

DOI blasts West Flagler over Florida sports betting rehearing request

In a 25-page response, the DOI criticised the en-banc hearing request by two Florida pari-mutuel betting operators, after the businesses lost their case in the DC Circuit Court challenging the Seminole Tribe’s compact with the State of Florida.

The compact, through its “hub and spoke” model, grants Seminole the exclusive right to offer online sports betting in the Sunshine State. The tribe plans to launch the offering through its Hard Rock Bet brand.

the original ruling cleared the compact’s “hub and spoke” model from federal objections

 ‘Rehearing is unwarranted

The department pushed back against the “erroneous assertions” of the pari-mutuels. It argued the compact does not legalise the placing of bets. As evidence, it highlighted that the court’s decision does not prevent the plaintiffs from challenging the compact in the state courts.

A “rehearing is unwarranted”, concluded the DOI.

The DC Circuit now will decide whether to grant West Flager’s request for an en-banc rehearing. This would involve the entire DC Circuit bench of judges ruling on the case. This is opposed to the original panel of three that heard the case.

However, as outlined by experts on iGB’s World Series of Politics podcast, both routes have potential obstacles that would complicate further litigation.

En-banc rehearing rare event

Successful en-banc petitions are rare in the DC Circuit, with only a small number of successful cases in recent years. If it fails, litigators will have the option of trying in the state courts or appealing up to the US Supreme Court.

The DOI emphasised this, pointing to case law saying courts should grant such petitions “only in the rarest of circumstances”.

“This case does not present that rare circumstance,” said the DOI.

The latest twist in Florida betting case

The state and the tribe agreed the original compact in April 2021. Governor Ron DeSantis signed the compact into law the following month. The DOI must approve any compact, which it did once it took no action after the requisite 45-day notice period.

The compact cleared the Seminoles to offer roulette and craps games at their casinos. The Seminoles on the other hand could launch online sports betting through servers on tribal land.

In September 2021, West Flagler challenged the compact in federal court. This legal challenge proved successful, with the US District Court in the District of Columbia ruling the compact’s online provisions violated the Indian Gaming Regulatory Act (IGRA).

This was done, the judge argued, by effectively expanding gaming beyond tribal lands and that, as such, the DOI had no authority to authorise the compact.

Grupo Codere posts €164m loss following Argentina, Mexico closures

In a trading update for the three months to 30 June 2023, Codere revealed the scale of the damage attributed to two of its biggest markets.

During the period it was forced to close 17 games rooms in Mexico and Argentina due to alleged regulatory non-compliance, although six of those have since reopened.

Despite the magnitude of the Q2 loss, the Madrid-headquartered group played down the long-term impact of the accounting impairment.

“This deterioration has no impact on the company’s liquidity situation and is a mere accounting adjustment to recognise said situation in the financial statements at the end of the first half of the year,” it explained in a statement.

Despite the challenges in Argentina and Mexico, Codere saw operating revenue grow 5% year-on-year to €334.6m.

Revenue of €63.3m from Mexico was down 3.1% compared to Q1 2023, but up 14.3% year-on-year. In Argentina the decline was more pronounced, with revenue of €75.6m – down 13.1% on Q1 and 12.0% year-on-year.

Revenue from its Spanish business was up 9.2% to €45.9m. Italian revenue of €69.3m was flat, which Codere put down to restrictions imposed in the Lazio region.

Retail was at €297.3m, while Codere’s online business was up 37.5% year-on-year to €37.4m.

Positive operating cash flow in Codere Q2

The group’s adjusted EBITDA stood at €51m, which was down 1.7% year-on-year because of the issues in Argentina and Mexico. The adjusted EBITDA margin was at 15.3%, which was one percentage point less than in 2022.

Operating expenses were up 6.3% to €266.7m, with growth of more than 14% in personnel and cost of goods sold.

Codere’s cash position at the end of the period amounted to €110m. Some €65m of this was attributable to the retail business and €45m to Codere Online.

The group said in a statement: “Despite the adverse circumstances that the group has had to face in this second quarter of the year, the EBITDA obtained and the good management of working capital have allowed it to generate a positive operating cash flow amounting to €21m during the quarter, compared to the €6m obtained in the same period of the previous year, with cash destruction in this period being 38% lower than in 2022.”

Group sees boardroom changes

The quarter saw a series of boardroom changes, including the appointment of new chief executive Gonzaga Higuero in July.

Since November 2021, Codere has been under new management after the company’s creditors took over. Control of the business was transferred to a new holding company named Codere New Topco SA, which was owned by a consortium of Codere’s former bond-holders.  

Meanwhile, the online division of the business was spun out via a SPAC merger that closed weeks after Codere New Topco was formed. 

Boom Entertainment acquires NBC Sports’ predictions app

The New York-headquartered game developer and technology provider will now take full control of the free-to-play app having acted as NBC Sports’ development and operating partner on the product since its launch in 2019.

NBC Sports Predictor has welcomed nearly two million sign-ups over the last four years, with tens of millions of predictions played.

The product will be re-branded Predictor, with plans to launch several new game formats before the end of the year. No financial details were given concerning the acquisition.

“NBC Sports Predictor has been a significant part of Boom’s story since its launch,” said Stephen A Murphy, Boom’s co-founder and chief executive. “This was the first product we built that attracted millions of sports fans and we are honoured to become stewards of the product and introduce new ways to play for sports fans.

“Over the last several years, NBC Sports Predictor had been a key asset for NBC Sports as it utilised the product to increase audience engagement. NBC Sports and Boom Entertainment will continue to look for ways to collaborate in future gaming initiatives.”

Boom closed a $15m funding round in 2021 that included Sands Capital, Robert Kraft and leading gambling operators. At the time it said the cash would be used to accelerate its expansion into real-money products.

Last year, Boom launched casino and sports betting product divisions and appointed Zack Messer as its new chief financial officer.

John Bryant takes over as Flutter chair

Bryant, whose appointment was announced in April, officially succeeded predecessor Gary McGann today (1 September). The Australian national has also become chair of the nomination committee and is a non-executive director.

The group, whose brands include FanDuel and Paddy Power, describes the former Kellogg Company chief executive’s strengths as extensive experience leading a global consumer goods company and significant expertise in financial, operational and strategic leadership.

“I would like to thank Gary for his excellent stewardship of the Flutter board during his tenure as chair and previously as non-executive director,” Bryant said. “His expertise, professionalism and commitment are greatly appreciated and, on behalf of the board, I wish Gary well in the future.”

Bryant is currently a non-executive director of Compass Group plc, Ball Corporation and Coca-Cola European Partners. He spent 20 years at Kellogg Company between 1998-2018, acting across a series of senior roles including CEO and chair.

Commenting in April, Flutter CEO Peter Jackson, said: “I am very much looking forward to working with John. His experience will be invaluable as Flutter continues to execute its growth strategy.”

Strong US performance

Earlier this month, Flutter revealed its US business reached a “profitability inflection point” during H1 2023, with CEO Peter Jackson describing the period as “pivotal”.

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 up 71.0% to £1.79bn, of which 98% came from the FanDuel brand, while adjusted EBITDA turned from a £132m loss to a plus of £49m.