Month: January 2024

Revenue for 2023 was 18.3% higher than the $1.98bn generated in Michigan in 2022. It also far exceeds the $1.40bn from the first year of legal betting in 2021.

Reported figures include licensed commercial and tribal igaming operators in Michigan.

Breaking this down, $1.90bn of total revenue came from igaming and $420.4m gross sports betting receipts. Both of these figures were also new annual records, despite total annual sports betting handle remaining steady at $4.60bn.

After accounting for promotional deductions, adjusted gross receipts (AGR) from igaming and sports betting was $1.96bn. This was up 18.8% from the previous year’s total. 

AGR from igaming amounted to $1.73bn, with adjusted gross sports betting receipts hitting $223.5m.

In terms of tax, operators paid $369.8m in total tax. This includes $354.0m in igaming taxes and fees and $15.8m from the sports betting sector. Detroit’s three casinos paid $95.8m in total igaming and sports betting tax, while tribal operators paid $43.1m to governing bodies.

Michigan smashes monthly records in December

Aside from record annual revenue, Michigan ended 2023 on a high with all-time high figures in December.

Total gross online gambling revenue in December hit $181.4m, the highest monthly total to date. This was 20.4% ahead of December 2022 and more than November 2023.  

Growth was driven by the igaming sector, where gross revenue reached a record $181.4m. Gross sports betting receipts also reached a new monthly high of $61.1m during December, with handle also hitting a record $583.0m.

After adjustments, total online gambling AGR was $198.4m, up 29.8% year-on-year. Igaming AGR hit $163.3m and adjusted gross sports betting receipts $35.1m. 

Tax-wise, monthly payments amounted to $36.7m, with $34.1m from igaming and $2.6m sports betting. Detroit casinos paid $9.4m and tribal operators $4.3m.

Detroit casino revenue down in 2023

The online gambling results follow the publication of figures for land-based casino gaming in Michigan. Revenue from the three commercial casinos in Detroit slipped 3.1% year-on-year to $1.24bn in 2023.

Declines were reported across table games and sports betting. Slots revenue was $984.1m, marginally higher than $983.7m in the previous year. However, table games revenue was 12.7% lower at $238.7m and retail sports betting qualified adjusted gross receipts (QAGR) fell 25.7% to $14.0m.

As for December, total market revenue was up by 5.7% to $116.2m. Table and slots revenue climbed 2.9% to $111.4m and sports betting QAGR rocketed 200.0% to $4.8m.

Michigan takes action over illegal operators

In other news, the Michigan Gaming Control Board (MGCB) has sent cease-and-desist letters to three online gaming companies deemed to be operating in the state illegally.

New York-based PredictionStrike Inc, VGW LuckyLand in California and Sweepstakes Limited (Stake.us) of Cyprus were all named by the MGCB. Each has been contacted by the regulator in recent months. 

The MGCB said the operators were offering some form of online gaming in Michigan without licences to do so legally. 

PredictionStrike was flagged for igaming and sports betting, Stake.us for online lottery and VGW for offering games where players wager something of monetary value for the opportunity to win something of monetary value. 

Regulator slams operators for breaking laws

By offering such services, the MGCB said each operator breached certain laws. These include the Lawful Internet Gaming Act, Michigan Gaming Control and Revenue Act and the Michigan Penal Code.

However, the MGCB also noted the operators have since taken steps to prevent Michigan residents from gambling on their websites.

“Gambling regulations are in place for a reason and illegal gambling operations are not welcome in Michigan,” MGCB executive director Henry Williams said. 

“We do not want businesses who skirt the law having access to Michigan citizens and leaving them vulnerable because they are playing on unregulated sites that leave them with no recourse and that siphon funds away from communities because they are not paying taxes like a regulated, legal gambling establishment would.”

The trading update comes as the lottery and gaming company confirmed it had submitted a SEK27.96bn (£2.10bn/€2.45bn/$2.67bn) offer to acquire Kindred Group. The news was reported by the Wall Street Journal over the weekend.

FDJ said it aimed to build a “European gaming champion” with the acquisition, while Kindred CEO Nils Andén said FDJ would help Kindred to “further expand its global footprint”. Kindred’s preliminary 2023 results – which were also released today (22 January) – saw revenue of £1.21bn for full-year 2023.

Looking at FDJ’s trading update, revenue totalled at €2.62bn for 2023. Revenue from its online gaming business grew 18.8%, accounting for 13% of its overall revenue compared to 11% in 2022.

Recurring EBITDA growth and M&A activity

FDJ saw a growth in recurring EBITDA in 2023, which it attributed to its digital businesses. Recurring EBITDA stood at €657m for the year, resulting in a margin of 25.1%.

FDJ noted that this would have been 24.3% if not for the reversal of a provision relating to disputes with broker agents and high sports results.

FDJ’s bid for Kindred follows on from a steady year of M&A activity. Following payments related to the acquisitions of ZEturf and Premier Lotteries Ireland, FDJ had a net cash surplus of €671m at the end of December. This was 25.4% less than the €900m generated in full-year 2022.

FDJ’s acquisition of ZEturf took place in October and saw ZEturf valued at €175.0m. The lottery giant agreed to acquire Premier Lotteries Ireland in July for €350m. The deal was finalised in November.

Revenue improves in Q4

For Q4, revenue increased by 13.8% to €747m. This was a 7.1% rise on a like-for-like basis. Lottery revenue grew 7.8% to €531m for the quarter. FDJ said this division benefitted from the launch of EuroDreams in November and the €200m Euromillions super jackpot in December.

FDJ’s competitive sports and online gaming revenue hiked up by 14.9% to €159m during the fourth quarter. On a like-for-like basis, this comes out at a 6.3% rise.

FDJ’s full 2023 results will be published before trading begins on 15 February.

Kindred would align with FDJ

As part of its offer to acquire Kindred, FDJ offered SEK130 in cash for each of Kindred’s Swedish Depository Receipts. Compared to the price of Kindred shares at close of trading on 19 January – SEK104.50 – this is 24.4% higher.

In confirming the deal, Kindred said it had recommended “unanimously” that its shareholders accept FDJ’s offer. The acceptance period for the offer is projected to occur on 20 February and end on 19 November.

FDJ CEO and chair Stéphane Pallez said Kindred would naturally align with FDJ’s strategy.

“Given their respective histories, strategic strengths and core values, FDJ and Kindred are highly complementary,” she said. “The combination will result in a stronger strategic positioning and significant value creation for the benefit of our shareholders and broader stakeholders.”

In September, Sweden’s government (Regeringen) outlined plans to hike the gambling tax rate in the country from 18% to 22% of gross gaming revenue (GGR). If approved, the tax rise will come into effect in Sweden from 1 July 2024.

While Regeringen believes the move could bring in an additional SEK540.0m (£39.3m/€45.5m/$48.4m) in tax revenue each year, the proposals met with strong opposition from the industry, including the ATG.

In a blog, Skarplöth labelled Regeringen’s plans a “shock”, and called for taxes on horse and other sports betting to remain the same, while increasing those on igaming. Skarplöth cited examples of other European countries with differentiated gambling taxes as reasons for the Regeringen to rethink its proposals.

Skarplöth said: “It came as a shock, the proposal for a higher excise tax on gambling companies. The ensuing reaction was a sense of resignation; how would the already hard-pressed horse industry cope with the fact that the contribution from ATG was greatly reduced?

“Shortly afterwards, the will to fight awoke; can there be a way forward that fills the treasury, without jeopardising equestrian sport?

“Strengthened by our research, we have now put quite a lot of energy into demonstrating the advantages of a differentiated gaming tax in Sweden as well. The hope is now that our analysis will move legislators from insight to action.

“It is a good starting point for our proposal; keep the tax on horse betting and sports, but raise it on online casinos.”

ATG vowing to clamp down on illegal gambling in Sweden

The ATG’s proposal for differentiated tax comes in the wake of the state-owned betting business promising to crack down on illegal gambling in Sweden.

In November, the ATG flagged a ten-fold increase on visitor traffic to unlicensed websites since 2019, when legal betting launched in Sweden.

ATG data showed channelisation rates for regulated online gambling in Q3 2023 was between 70% and 82%. While online sports betting had a channelisation rate of 88%, this decreased to 74% for online casino.

ATG estimated the illegal market is worth between SEK3.4bn and SEK6.7bn annually. The ATG also said two groups, Infiniza Limited and North Point Management Ltd, accounted for 60% of illegal gambling visitor traffic in Q3.

Skarplöth voiced his concerns over the figures, declaring the ATG will do what it can to tackle the issue moving forward.

“The results of our quarterly surveys are alarming and indicate that a significant percentage of problem gamblers in Sweden are linked to unlicensed gambling sites,” Skarplöth said.

ATG flourishing in steady Swedish market

GGR from Swedish licence-holders was steady in Q3 at SEK6.7bn, the same as the prior quarter. The largest increase in turnover came from land-based casinos, registering a 30.5% increase year-on-year.

The ATG, meanwhile, had a hugely successful period in the three months to 30 September 2023, with a double-digit rise in operating profit.

Net gaming revenue was up 4.5% to SEK1.35bn from SEK1.29bn last year. The second highest figure for a third quarter in ATG’s history came despite the Swedish market stalling in H1.

Total revenue for the three-month period was at SEK1.53bn, which was up 3.0% year-on-year. The group made an operating profit of SEK497m, up 13.7% year-on-year.

Ghorbel was found guilty of four breaches of the Tennis Anti-Corruption Programme (TACP). The ITIA said this warranted the suspension and a $20,000 (£15,743/€18,365) fine.

The suspension runs from the date of the decision (4 January) to 3 January 2027.

The offences relate to the fixing of matches in 2016 and 2017. Ghorbel, who has a career-high world singles ranking of 479 in 2016, denies all charges.

Specific breaches of the TACP include two related to section D.2.a.i – failure to report a corrupt approach. The ITIA also noted a single breach of section D.1.b, facilitating betting on the outcome of a match, and section D.1.d of contriving the outcome or aspect of a match.

The suspension means Ghorbel cannot play in, coach at or attend tennis events authorised by ITIA members or national associations.

Charges mount up over tennis match-fixing

Ghorbel is the latest tennis player facing sanctions over the criminal case involving a match-fixing syndicate in Belgium, Collaboration between the ITIA and Belgian authorities led to a five-year custodial sentence for syndicate leader Grigor Sargsyan.

The crackdown began following Sargsyan’s conviction in November. This saw an initial 16 players banned in November 2023, as reported by iGB, first on the on 13 November, then on 17 November and on 24 November.

Other recent charges include those filed against French tennis player Leny Mitjana. He was banned for 10 years after being found guilty of corruption and match-fixing offences. 

In total, the ITIA has banned 22 players and officials in the last three months over the same case.

The Unibet operator confirmed a report from the Wall Street Journal on Sunday 21 January, with a takeover offer from FDJ to be announced tomorrow (22 January). 

“[The] strategic review initiated by the board in April 2023 is ongoing and the company continues to evaluate options to deliver shareholder value,” Kindred said. 

“As part of the strategic review process, the board in conjunction with its advisers, has explored a number of options, including a merger or sale of the company.”

This now looks likely to result in an offer for the business, at a time activist investor Corvex Management has been pushing for a sale. This comes after it emerged Kindred’s board had contacted a number of operators and private equity funds about a potential transaction in 2022. 

Among the companies contacted were Entain, 888 and Tipico, as well as Apollo Global and Blackstone. However, this did not result in any interest. 

Sweeping changes at Kindred Group

The strategic review, however, heralded wholesale change. Long-serving chief executive Henrik Tjärnström departed along with almost all of Kindred’s C-level team. The business is currently led by an interim C-suite headed by CEO Nils Andén.

The operator is also withdrawing from the North American market, aiming to exit by Q2 2024 to refocus financial and technology resources on key markets. This was announced alongside a wave of layoffs, with up to 300 jobs to go.

The business is due to announce its full year results for 2023 on 7 February. 

FDJ begins to flex financial muscle

Kindred Group’s prospective new owner La Française des Jeux has recently begun to ramp up expansion efforts, alongside a long-running process of digitising its core lottery and sports betting businesses. 

FDJ now runs the Irish National Lottery following a €350m deal to acquire Premier Lotteries Ireland which closed in Q4 2023. This deal followed the €175m acquisition of horse race betting operator ZeTurf, to diversify its online business beyond lottery, poker and sports. 

France’s lottery monopoly holder reported revenue of €1.88bn for the first nine months of 2023, with sports betting and igaming’s contribution growing 9.3% to €360m. 

A deal for Kindred, which operates across a range of European markets and the UK, further expands its geographic footprint, as well as providing the business with a proprietary sports betting platform. 

More to follow…

SoftSwiss did not disclose the financial details of the purchase, nor the size of the stake it has acquired. However, it did say the deal strengthens its product portfolio and allows it to serve more markets.

Turfsport offers software solutions across sports betting, horse racing and lotto. The provider currently works with more than 40 operators in South Africa.

SoftSwiss co-CEO Andrey Starovoitov said the acquisition provides a fast and efficient way for the business to enter new markets.

“With this agreement, SoftSwiss takes a significant step forward in its extensive expansion into South Africa and the African continent,” said Starovoitov. “I believe this region is becoming the next focal point globally, following Latin America. 

“We look forward to enhancing our product portfolio and continuing our commitment to providing high-end solutions to our partners.”

Turfsport eyes international growth with Softswiss

Turfsport CEO Christian Neuberger also praised the acquisition deal. He said working with SoftSwiss will allow Turfsport to access more opportunities on an international scale.

“Turfsport was looking for an international partner that would complement our strong brand in South Africa,” Neuberger said. “We are absolutely delighted to have found the ideal partner in Softswiss and its dynamic and fast-growing team. 

“Both companies look forward to delivering innovative product enhancements and services, giving our customers the competitive edge to grow and succeed in an increasingly dynamic market. 

“We are all truly excited about the winning combination of Turfsport’s local and Softswiss’ international expertise and the prospects for this duo in the South African and African markets.”

SoftSwiss added that it will share more information about the acquisition and South Africa market at ICE 2024. The provider will be based on Stand N8-231 at the event, which runs from 6-8 February at ExCeL London. 

The 2023 figure was 9.3% higher than the existing record of $5.21bn, which was set during 2022. Combined revenue in Pennsylvania includes slot machines, table games, sports wagering, igaming, video gaming terminals (VGTs) and fantasy contests.

Physical slots continued to lead the way in terms of revenue in Pennsylvania, with revenue here rising 3.1% to $2.46bn. However, land-based table games revenue slipped 1.9% to $971.7m.

Is igaming closing the gap on land-based gambling in Pennsylvania?

Elsewhere, revenue from igaming in 2023 hit $1.74bn, beating the previous record set in 2022 by 27.7%. The Pennsylvania Gaming Control Board (PGCB) did not publish a full breakdown of revenue per game type for this market. 

However, the PGCB did reveal data on individual igaming operators. As was the case in 2022, Hollywood Casino at Penn National led the way with $712.4m in igaming revenue. 

Valley Forge Casino Resort placed second in this sector with $392.7m in revenue. Following in third was Rivers Casino Philadelphia, posting revenue of $340.3m.

Igaming revenue in Pennsylvania has continued to grow exponentially since the regulated market launched in 2019. The state first surpassed the $1.00bn record milestone in 2021; should trends continue, it may well exceed $2.00bn in 2024.

Sports betting handle reaches record $7.68bn

Turning to sports betting, revenue hit an all-time high of $458.6m, surpassing the existing record in 2022 by 14.3%. Pennsylvania launched its legal sports wagering market in 2018.

As for handle, player spending on sports betting amounted to $7.68bn. This was 6.0% up from the previous record of $7.25bn reported in 2022.

Valley Forge Casino Resort and FanDuel remain the leaders in this market, posting $233.6m in revenue. Hollywood Casino at the Meadows and DraftKings were second with $121.1m, then Hollywood Casino Morgantown and BetMGM with $21.0m.

In terms of other revenue, the PGCB reported a 2.0% drop on VLT revenue to $41.2m in 2023. Fantasy sports contest revenue also declined 10.0% to $20.1m. 

Pennsylvania sets monthly revenue record in December

Aside from setting several records in the full year, revenue also hit an all-time monthly high in December. 

Total market revenue hit $534.2m, beating the previous record of $515.3m set in March 2023. This was also 12.5% higher than $475.0m in December 2022 and 20.1% up from $444.5m in November 2023.

Retail slots drew the most revenue, with the $207.8m generated being 4.9% higher than in 2022. Land-based table games revenue also edged up 1.6% to $82.9m.

Igaming revenue jumped 22.7% year-on-year to $165.1m. This figure includes $116.9m in online slots revenue, $45.8m from table games and $2.4m poker.

Hollywood Casino at Penn National placed first here with $61.0m in igaming revenue. Valley Forge Casino Resort were second on $41.3m, then Rivers Casino Philadelphia with $31.3m.

As for sports betting, revenue was up 32.7% to $72.5m, including $67.2m from online and $5.3m retail. Handle also increased by 22.6% to $925.6m.

Valley Forge Casino Resort and FanDuel led the way with revenue of $39.2m. Hollywood Casino at the Meadows and DraftKings were second with $19.2m, then Hollywood Casino Morgantown and BetMGM on $3.7m.

VLT revenue edged up 3.1% to $3.4m but fantasy sports revenue fell 11.3% to $2.5m.

Hayward takes on the role having served as UK and Ireland commercial director at Betfair since August 2019. 

A long-serving member of the Betfair team, Hayward joined the business in September 2008 as a commercial graduate. He has worked in a host of roles, working his way up the business to hold several director positions. 

Hayward also had a stint as integration director at the wider Paddy Power Betfair business before taking on his recent commercial role at Betfair.

“The Betfair dream continues,” Hayward said in a LinkedIn post. “The excitement and enjoyment is as big now as it was for me on day one back in 2008. The culture and the team are such a privilege to be part of and every day continues to be a thrilling education. 

“With that, I’m thrilled to announce that I have been appointed managing director at Betfair for Flutter UK & Ireland. I’m excited to get going and looking forward to the opportunity.”

Betfair parent Flutter reports £9.51m revenue in 2023

Confirmation of the new appointment came as Flutter posted a trading update for its 2023 financial year. Revenue was up 25% year-on-year to £9.51bn (€11.11bn/$12.05bn).

Flutter says this is primarily due to growth in the US. For 2023, revenue from US-facing FanDuel jumped 38% to £3.06bn, accounting for 37.9% of all annual revenue.

UK and Ireland revenue was also up 15% to £2.46bn and international revenue increased by 36% to £2.29bn. However, Flutter continues to struggle in Australia, where revenue slipped 8% to £1.17bn.

Flutter secures MaxBet stake

It was also confirmed this week that Flutter completed its acquisition of a majority stake in MaxBet. Flutter agreed to purchase the stake in the Serbian sports wagering and gaming operator for €141m in September 2023.

Flutter said MaxBet brings a wealth of expertise and experience to the group. It added that the brand will improve the experience of customers across the Balkans region.

Flint exits Flutter board

In other news this month, Flutter revealed Richard Flint will not seek re-election to its board of directors.

Flint is expected to step down from the board at the conclusion of Flutter’s AGM in May. He joined the board in March 2020 following the merger of Flutter and The Stars Group (TSG).

Previously, he served as executive chair of Sky Betting & Gaming, until October 2019. He was also CEO for 10 years until the company was acquired by TSG in 2018.

Super7Plus has been operating its Super7.plus website under the Malta licence. However, the MGA has now ordered the operator to cease all activities being run via this permit.

The operator has been ordered to settle all outstanding fees due to the regulator. This must be done within five days of the cancellation notice, which was issued on 17 January.

Super7Plus must also allow players to access their accounts to withdraw remaining funds. In addition, it must provide evidence of these refunds to the MGA via a transaction reports.

Other demands include removing reference to the now-cancelled Malta licence from all its websites.

Super7Plus has been given the option to appeal against decision. 

Super7Plus cancellation follows Winners Malta Operations and Genesis Global

The MGA is seemingly clamping down on operators that breach rules, with this being the fifth cancellation in two weeks. However, little is being made public behind the decisions to take this course of action.

This was the case with Super7Plus, with the MGA not disclosing its reasons.

Little was also said in relation to the regulator cancelling Winners Malta Operations’ licence this week. The ruling was announced this week but came into effect on 11 January.

Winners Malta Operations was given a similar set of steps to follow after cancellation. 

Also this week, the MGA cancelled Genesis Global’s B2C gaming licence after an initial suspension in January last year. The operator had been running 23 websites using the licence including Vegasoo.com, Sloty.com, Casinojoy.com and Genesiscasino.com.

Last week also saw Rush Gaming’s licence being suspended. The operator runs both the Fansbet.com and Onebet.com websites. In addition, Betago had its licence cancelled last week. 

The December handle surpassed the previous record of $71.9m, set in October of 2023. It was also 38.1% higher than the $53.8m wagered in Oregon in December 2022.

American football was the biggest draw for bettors, attracting $23.1m in wagers. Basketball bets hit $16.5m, football $3.3m and ice hockey $2.0m.

As for bet type, $48.1m of total wagers were single bets, with the remaining $25.1m parlay wagers.

December revenue hits $9.7m

As for gross gaming revenue from betting, this amounted to $9.7m in December, another new record for Oregon.

The monthly figure beat the existing record of $8.5m in October 2023 by 14.1%. It is also up 70.2% from $5.7m in December 2022. 

Breaking this down, $3.5m of revenue came from American football bets, $2.9m basketball and $605,891 football. Parlay bets generated $5.7m in revenue and single wagers $4.0m.

DraftKings continues solo in Oregon.

All bets in Oregon are through DraftKings, the sole sports betting operator in the state.

The operator replaced the Oregon Lottery’s Scoreboard online sportsbook in January 2022, with the latter phasing out in 2022. DraftKings is now the only sportsbook where players can place legal bets.

The migration from SBtech-powered Scoreboard was unanimously approved by the Oregon Lottery Commission in August 2021. This was made possible by DraftKings’ acquisition of SBTech, agreed in December 2019.

The Oregon Lottery has been operating its Scoreboard platform since October 2019 when the state opened its legal market.