Month: February 2024

The study, carried out by the Connecticut Department of Mental Health and Addiction Services, revealed a general ambivalence towards gambling in the state, with 93.5% rating the recreational activity as “not at all” or “not very important”.

Over two-thirds (67.2%) of the over 5,000 residents surveyed believe the risk of gambling harm outweighs the benefits. Meanwhile, 69.2% pointed to addiction as the biggest risk of legalised gambling in Connecticut.

However, 70.8% believe the responsibility for minimalising gambling harms falls between gamblers and providers, while 68.7% have no opinion over the integrity and fairness of how gambling is offered in Connecticut. Just 17.3% are dissatisfied with the Connecticut government’s ability to minimise gambling harms.

Of the positives of legalised gambling, employment and increased government revenue led the way with 21.6% and 20.1% respectively. Also mentioned was financial and employment benefits for tribes (12.7%) and the increased ability for Connecticut to retain money that would otherwise have left the state (13.5%).

Just 1.8% of those surveyed was categorised as a problem gambler, equivalent to approximately 50,000 adults across the state’s population of over 3.6 million residents. 4.9% were considered at-risk, while 62.6% were classified as recreational gamblers.

Connecticut’s igaming success

Connecticut is particularly notable as one of just seven US states to have legalised igaming. The state launched its sports betting and igaming market in October 2021.

Connecticut was consistently breaking gambling revenue figures in 2023. A fresh report, commissioned by iDEA (iDevelopment and Economic Association), has identified that online casinos has a positive impact on land-based casinos.

In fact, the report stated that Connecticut’s land-based market was experiencing a year-on-year decline until online casino launched. Its gross gaming revenue (GGR) then improved 0.34% following online casino going live in the state.

Connecticut was one of six states chosen for the study. The smallest jump in land-based GGR after igaming’s launch was Pennsylvania’s 0.14%. Michigan, meanwhile, saw its land-based casino GGR jump by a significant 4.89%. The study largely discounted the view that igaming cannibalises land-based casinos.

Total handle for January in Maine was $38.1m. This was 13.4% behind $44.0m in December but 1.3% ahead of $37.6m in November, the first month of legal betting.  

As for adjusted gross receipts, the January total was 25.0% ahead of $4.4m in December. It also beat the $4.6m generated in the opening month by 19.6%. 

Sports betting adjusted gross receipts account for voided and cancelled bets, player winnings and a 0.25% federal excise tax. 

In terms of total other tax due to the state, this amounted to $546,099 in January. Maine has a tax on sports betting of 10.0% of adjusted gross receipts.

DraftKings ahead in Maine two-horse race

Maine currently only has two licensed operators that offer sports betting: DraftKings and Caesars. Both have tribal partnerships in place, in line with Bill LD 585, signed by Governor Janet Mills in May 2022.

DraftKings operates in Maine via a partnership with the Passamaquoddy tribe. In January, this partnership generated $4.7m in adjusted gross receipts from $32.1m, accounting for a large share of the market.

The only other approved operator in Maine is Caesars, which is partnered with three of the Wabanaki nations. These include the Houlton band of Maliseet Indians, Mi’kmaq nation and Penobscot nation.

During January, the Caesars partnership reported $743,762 in adjusted gross receipts. This was from a total monthly betting handle of $6.1m. 

Lawmakers propose bills for exclusive tribal gaming rights

In other news, last month it was announced Maine lawmakers will discuss proposals to permit tribes to have exclusive rights for igaming.

Those backing the proposals were hoping to follow a similar route as sports betting. 

The sports bill signed by Mills allows retail and online sports wagering, but internet sports betting can only be run by approved tribes. These tribes can apply for a licence to operate online betting and also partner one online operator each.

During what was another busy year for MGM, group revenue in 2023 amounted to $16.20bn (£12.85bn/€15.12bn). This was 23.7% ahead of the previous year amid growth across two key markets.

Las Vegas remains the primary source of revenue for MGM, with revenue here rising 4.8% year-on-year. This was helped by the acquisition of The Cosmopolitan in May 2022 and the impact of major events in the city, including the inaugural Formula One race in November.

However, MGM China reported the most growth during 2023. MGM put this down to the removal of all Covid-19 restrictions, with these having impacted its performance in 2022.

MGM noted some decline in its Regional Operations business, but this was more than offset by growth in the “management and other operations” segment. This includes BetMGM, the joint venture with Entain, which hit full-year targets and expanded outside the US by going live in the UK. Last week, BetMGM also struck up a partnership with X.

CEO Hornbuckle hails resilience of MGM

Speaking on an investor call, MGM CEO Bill Hornbuckle was full of praise for the business. He said its ability to achieve record results despite having to contend with several challenges, including the cyber-attack on its systems in September, underscored its “resilience”.

“Seven of our domestic properties set individual records for adjusted property EBITDAR for the full year,” Hornbuckle said. “These outstanding accomplishments underscore the resilience and the agility of our team in navigating a complex operating year.

“The strength and resiliency of the Las Vegas market has been particularly impressive. In Macau, we ended 2023 with an all-time record adjusted EBITDAR for the quarter and the full year. Our robust market share was comfortably in the mid-teens and continued its upward trend in January.

“In digital, BetMGM made its full-year 2023 targets in both net revenue and second-half profitability. In 2024, we will soon be live in 29 markets with the launch of North Carolina next month.”

Viva Las Vegas and making moves in Macau

Breaking down the 2024 performance, casino activity was by far the main source of revenue at $8.09bn. Rooms revenue hit $3.50bn, food and beverage $2.89bn and entertainment, retail and other $1.64bn. A further $45.7m was noted in reimbursed cash.

Las Vegas Strip revenue topped $8.80bn for the year, up 4.8% from 2022 on the back of a busy year in Nevada. The results included a full year of operations at The Cosmopolitan but not The Mirage, which was sold to Hard Rock International in December 2022.

Regional operations revenue slipped 3.8% to $3.67bn for the year. This was partly impacted by the sale of operations at Gold Strike Tunica Resort in Mississippi to CNE Gaming Holdings in February. 

As for China, MGM noted significant growth in Macau, with revenue rocketing 368.1% to $3.15bn. MGM is now operating normally in the region again after being subject to Covid-19 restrictions for several years.

Elsewhere, management and other operations revenue climbed 125.9% to $541.2m. This was helped with the UK launch of BetMGM, with MGM choosing to partner with LeoVegas on the project. Despite BetMGM being a joint venture with Entain, the UK expansion does not include any input from Entain.

Operating profit rises 31.4%

In terms of operating costs, spending increased 23.2% to $14.21bn in 2023. General and administrative costs were the main outgoing at $4.70bn, ahead of casino spend at $4.32bn. This pushed operating profit up 31.4% to $1.89bn.

An additional $418.7m was reported in non-operating costs, leaving a pre-tax profit of $1.47bn, up 62.9% year-on-year. MGM paid $157.8m in tax and discounted $172.7m in profit from non-controlling interests.

As such, it ended 2023 with a net profit of $1.14bn. This was 22.5% lower than $1.47bn in 2022, although the previous year included income from the Mirage sale.

It was also noted that full year adjusted EBITDAR at MGM amounted to $4.59bn.

MGM ends 2023 on a high

As for the final quarter of 2023, revenue in Q4 was up 21.8% to $4.38bn. Las Vegas revenue increased 3.2% to $2.37bn and China 462.4% to $982.5m. Revenue from management and other operations was 15.8% higher at $149.1m, but regional operations revenue declined 11.9% to $873.4m.

Operating costs were up 11.5% to $3.96bn, while MGM posted an operating profit of $419.3m, in contrast to a $1.9m loss in Q4 of 2022. Non-operating expenses hit $99.3m

Pre-tax profit reached $320.1m, compared to the previous year’s $34.1m loss. MGM also received $59.5m in tax benefit but discounted $66.2m in profit from non-controlling interests.

As such, it ended Q4 with a net profit of $313.5m, up 10.4% on last year. In addition, MGM said adjusted EBITDAR for the quarter reached $1.19bn.

“I want to thank all of our dedicated employees who consistently strive to deliver on world-class service to our guests,” Hornbuckle said.

Making progress in New York and Osaka

Hornbuckle also referenced ongoing efforts by MGM to launch in both New York and Osaka in Japan.

In November, MGM unveiled its vision to transform its Empire City Casino in New York into a full-scale commercial casino. Other planned amenities include a BetMGM Sportsbook and Lounge betting facility, restaurants and an entertainment venue.

However, the project hinges on MGM securing one of the three full commercial casino licences currently available in New York. The timeline for these licences will be announced in the coming months, with the bidding process having launched earlier this year. 

The request for proposal process is underway, with Hornbuckle hoping for approval before the end of the year.

“We anticipate submitting our full application to the government by the middle of this year with a decision expected shortly thereafter,” Hornbuckle said. “We’re hopeful that by the end of 2024, something is awarded. But we don’t know any more, unfortunately.

Meanwhile, certification for building an integrated casino resort in Osaka was finalised in late September. MGM is working with Orix Corporation, with Japan’s ministry of land, infrastructure, transport and tourism having already approved the project. Hornbuckle said MGM is on track to commence early construction efforts in 2025, with the aim of opening in 2030. 

The decision to split came in early 2023, with GiG launching a strategic review in February. This will see the GiG Media affiliate and Platform & Sportsbook divisions become separate entities.

GiG Media includes all media offerings such as affiliate lead generation services. Platform & Sportsbook covers technical igaming platforms including Sportnco, acquired in April 2022, and front-end development and other managed services.

Over the course of 2023, GiG has been working to prepare for the split. This includes making a series of senior appointments, with Richard Carter to lead the Platform & Sportsbook business as CEO and Jonas Warrer GiG Media.

Amid this, GiG in September announced the exit of Richard Brown as CEO. This was ahead of schedule, with Brown having been due to remain at GiG until the end of 2023. He took over as CEO Glitnor Group in January.

GiG remains committed to M&A strategy 

As for other recent developments, GiG in November announced the acquisition of KaFe Rocks. GiG said this would accelerate its market presence in the North American market. This followed its purchase of AskGamblers back in January 2023.

Amid all this, GiG reported a strong set of results for 2023, with both revenue and net profit higher year-on-year. As such, chairman Petter Nylander was full of praise for the group, talking up its growth potential for 2024 and beyond.

“Looking ahead, we remain committed to our strategic objectives, including the planned split of the company into two separate entities,” Nylander said. “This strategic move will unlock new growth opportunities and maximise value for our shareholders.

“As we approach the split in 2024, we are confident in setting new long-term financial targets for both GiG Media and Platform & Sportsbook. With our strong performance, diversified earnings and robust growth prospects, we are well-positioned for success in the years to come.”

GiG splits revenue report for 2023

Looking at the results for 2023, consolidated group revenue hit €126.m (£108.1m/$136.0m), up 40.8% year-on-year. However, due to the planned split, GiG says Platform & Sportsbook is reported here as a discontinued operation.

As such, consolidated revenue for the year was 44.4% higher at €89.1m, all of which came from GiG Media. Growth here was helped by a rise in publishing revenue, which increased throughout the year, while first-time depositors were also up in 2023 by 34.0%.

In terms of revenue from Platform & Sportsbook, this amounted to €37.8m, up 33.6%. This was helped, GiG says, by the Sportnco acquisition in the previous year. GiG now works with partners across 29 markets through its Platform & Sportsbook division.

Higher costs fail to dent profit hike

Breaking down other figures for 2023, GiG did this based on consolidated revenue, covering just its GiG Media business. Again, GiG said this was in line with preparations for the proposed split.

Based on consolidated revenue, operating expenses were 50.9% higher at €48.9m. Costs for depreciation and amortisation and amortisation of acquired assets were also up, as were financial expenses.  

This left a pre-tax profit of €16.7m, down 15.2%. GiG paid €3.3m in tax, meaning a $13.4m net profit from continuing operations, down 29.1%. Adjusted EBITDA for this business was 36.4% higher at €40.1m.

However, GiG also accounted for a €2.4m profit from assets held for distribution – Platform & Sportsbook. Last year, this generated a €13.2m loss. 

When also including a €736,000 loss from discontinued operations and €669,000 negative difference from foreign currency translations, GiG was left with a comprehensive net profit of €14.5m. This, it says, was 383.3% ahead of €3.0m in 2022.

Mixed results in Q4 for GiG

Looking at the final quarter of the year, consolidated group revenue was 36.3% higher at €35.6m. Excluding Platform & Sportsbook, consolidated revenue was still up by 48.9% to €26.5m.

For GiG Media, where, again, all consolidated revenue came from, first-time depositors hit an all-time quarterly high of 137,600. Paid media represented 27% of all GiG Media revenue in Q4, revenue share agreements 60%, cost per acquisition 8% and listing fees and other services 33%.

As for Platform & Sportsbook, revenue was 11.0% higher at €9.1m for the quarter. GiG says 82% of operator gross gaming revenue came from locally regulated or soon to be regulated markets. Of all revenue, 61% came from Europe, 13% North America, 20% Latin America and 6% rest of the world.

However, accompanying this revenue increase was a 68.5% jump in operating expenses to €15.0m. Financial expenses were also higher, although slightly offset by depreciation and amortisation and amortisation of acquired assets.

This left a pre-tax profit of €2.2m, down 63.9% from Q4 of 2022. After paying €1.8m in tax, profit based on these figures was down 92.6% to €402,000. Adjusted EBITDA, however, was 29.2% higher at €11.5m.

Figures did not improve when including Platform & Sportsbook. Loss for the assets held for distribution totalled €4.3m while GiG also reported a €555,000 negative impact from the exchange differences on translation of foreign operations.

As such, this left GiG with a comprehensive net loss for Q4 of €4.6m, in contrast to the €108,000 profit in 2022.

CEO remains upbeat on Q4 Media earnings

Despite the mixed bag during Q4, Warrer said GiG Media was presenting a hat trick – “all-time high revenue, all-time high player intake, and all-time high EBITDA” – for the quarter during the company’s earnings call.

However, he admitted that it was a “very unusual” quarter for the business, “with split-related and one-off costs” bleeding into the results.

Commenting on GiG Media’s international performance, Warrer said GiG has a “sustained belief” in Europe and the Americas. This is despite player intake in GiG’s Paid division falling 28% year-on-year, which Warrer attributed to the Fifa World Cup taking place in 2022.

“With the FIFA world cup, Latin America – especially last year – was a very attractive market to attract players in,” he said. He added that GiG’s acquisition of KaFe Rocks “supports expansion in North America and LatAm”.

The CEO also outlined six key growth pillars for GiG Media, focusing on opportunities for growth and diversification. Regarding the second pillar – centred on M&A – Warrer confirmed that GiG is “looking into” other international partnerships, “as we can see it is a way to grow material revenue”.

He added that the migration of single-market websites to GiG Media’s platform during Q4 had improved “the quality of offerings across the portfolio”.

Looking at Platform and Sportsbook, Carter said the business’s revenue increase during Q4 “was all organically driven”. As for the business’s integration and sales, Carter revealed that GiG has “very strong visibility” that it’ll “be able to launch at least another three brands before the end of this quarter.”

In terms of the year ahead, Carter added that in 2024, “the market will start to get a strong visibility as to where this business is going”.

“The most growth will be driven by bringing on new customers.”

FlyFish CEO Ray Brash speaks of the importance of providing secure and personalised payment solutions that fit with a partner’s business ambitions. From global regulation requirements to supporting multicurrency provision, Brash outlines how FlyFish are ensuring partners expand their reach in the igaming industry.

Sega Sammy Creation (SSC), an affiliate of Sega Sammy, agreed to acquire GAN in November last year. The deal is valued at $107.6m (£85.8m/€100.6m).

The deal is subject to several closing conditions, including approval from GAN shareholders. A vote took place yesterday at a meeting (13 February), with over 95% of votes in favour of the deal. 

Shareholders also approved compensation that may be paid or become payable to GAN’s named executive officers in connection with the merger.

Having cleared this hurdle, the deal must still satisfy other conditions to proceed. Should it satisfy these requirements, the acquisition is expected to close in late 2024 or early 2025.

GAN brand to remain

If the acquisition goes ahead, GAN will merge with SSC’s new special purpose company. GAN will be the surviving corporation after this merger.

Upon completion, GAN will cease to be a publicly-traded company. Its ordinary shares will delist from the Nasdaq Capital Market and also deregister.

As to why Sega Sammy is acquiring GAN, the group said it will help to expand its gaming business. Sega Sammy already operates an integrated resort through Paradise City in Japan, while it supplies gaming equipment and content through its SSC.

Much of this expansion, Sega Sammy says, will focus on the US igaming market. The group says it has identified “promising” growth opportunities in the US, with more states legalising igaming.

As legalised igaming becomes more widespread, Sega Sammy says existing operators will expand. With new operators also set to enter the US, it says acquiring GAN will allow it to directly capitalise on this expansion.

Strategic decision from GAN

The acquisition comes in the wake of a strategic review that GAN launched in Q1 last year. GAN said it was looking at strategic alternatives to improve value for shareholders. 

An update in September said GAN was considering all options. These included sales of parts of or the entire business, with GAN several parties had declared an interest.

In the same update, GAN announced the exit of long-serving CEO Dermot Smurfit after over 21 years at the helm. Non-executive chairman Seamus McGill was appointed interim CEO.

Sega Sammy: an expanding portfolio

GAN is the latest acquisition for Sega Sammy as it continue to grow its business following the merger of Sega and Sammy Corporation.

In August, the business purchased Rovio Entertainment, the developer behind the Angry Birds franchise, for €706.0m.

Sega Sammy opened talks over the Rovio purchase earlier in the year but faced competition from other parties. These included Playtika, which lodged several offers for the business, but later pulled out of discussions.

It’s easy to think the industry has a firm grasp on how it will be improved by the white paper’s proposals. For one, the 260-page government document was fairly detailed. And where it lacked in detail, it made up for in proposals few saw coming – like the appointment of a gambling ombudsman – which kept the conversation alight. 

It’s obvious that the Commission has a lot of work to do, to hold up its end of the bargain. But in order for the white paper to be delivered successfully, the industry also must be prepared to keep its nose to the grindstone, says Miller. 

“There’s a huge number of things that they’ll [the industry] need to deliver through the white paper,” he explains. “We talk a lot about what the Gambling Commission needs to deliver, and it’s a massive amount, but there’s an enormous list of things that the industry is going to have to deliver as well.” 

He says the Commission has tried to make this a smooth process where possible, being “very open” about what the industry can expect coming up. And this is paying off, he remarks.

“We try to share timetables as early as possible and it does feel now that lots of people are putting in the same direction, being really focused on delivering what government’s set out.” 

Beyond affordability checks 

But no amount of preparation and clarity can stave off the inevitable criticisms that come with a review of this breadth. Even before the white paper’s consultation process kicked off last July, rumblings emerged on its most controversial aspect – affordability checks, also known as financial risk checks. 

But the consultation topics aren’t the only important aspects of the white paper’s implementation process.

“Outside of the formal consultation responses themselves, we’ve had really good conversations with industry and other stakeholders,” explains Miller. “We’ve commissioned additional research around consumers to really understand their views and experiences of things. I think we’re in a really good place on consultations, but obviously there will be lots more work to come around.” 

So far, Miller says the Commission is “really pleased” with the engagement it has had from stakeholders. But with the regulator now knee-deep in the second tranche of consultations, when will these proposals be see the light of day?

Soon, says Miller – with a careful piloting stage in place, of course.

“We should be, over the coming weeks, getting more information about what the next steps are on a lot of those [consultation] issues, particularly around financial risk checks, and that we’ll be moving to pilot those to really understand what works well and what doesn’t.”

Omnipotent black market threat

Of course, white paper or no white paper, Great Britain’s black market thrums on. The Commission’s role in combatting the black market is complex, Miller poses, but comes down to three main aspects.

“The first is making use of our existing powers and approach,” says Miller. “So we continue, for example, to use cease and desist letters where we identify illegal websites and that’s had some success.”

The second strand relates to a Commission-specific white paper policy – the promise of additional powers to shut down illegal gambling offerings.

“The white paper gave a really clear commitment that we would be given additional powers to be able to seek to shut down illegal websites through the internet service providers,” Miller continues. 

“We were really pleased that, actually, space was found for those provisions in legislation that was already going through parliament. We hope that within a recent period of time we’ll be able to get those additional powers, which will strengthen what we can do.” 

Last but not least, strand three accounts for the bigger picture. Miller stipulates that the Commission has been working to bring European and North American regulators together, with a black market focus. But work has also been ongoing with some of the world’s largest technology companies, as part of a tactic to obliterate illegal gambling sites from all angles. 

“We’ve worked with the likes of Google and Facebook to try and reduce the visibility of illegal websites, to try and ensure that they don’t appear in people’s feeds and things like that.” 

Driving up standards

And this is only enhanced by the Commission’s work with international regulators. “When we’re trying to engage with those big technology companies that have a massive international presence, standing side by side with other regulators adds to our voice.” 

For Europe explicitly, Miller maintains that there is a positive working relationship between regulators on the continent, which is aided by centring the black market threat. 

“When I talk to European colleagues, everyone has the same focus on addressing the black market. I think this more collaborative, joined-up approach is going to really pay dividends because frankly it is one of those areas where we can more easily collaborate.”

And having one common enemy is a way to coalesce markets that, otherwise, have their own individual worries and concerns.

“There are other areas, say around safer gambling, where there are naturally different approaches in different countries,” Miller continues. “But when it comes to an illegal gambling black market, it feels like we’re pretty united on that.”

A mountainous year ahead 

Clearly, the Commission has a packed year ahead. Miller says the white paper – and its many proposals – will act as a channel for change throughout 2024. 

“The pace of delivering the white paper will continue to ramp up and that’s probably going to be the main vehicle in the UK where you’ll see continuous improvements to the way the consumers are protected.” 

“I think that the white paper provisions are so expansive that, actually, there’s not going to be much bandwidth for people to do much more than that,” Miller continues, re-emphasising a message he delivered days after the white paper’s release. 

But amid all this talk about the white paper, Miller has a critical message for the industry – do not forget yourself. 

“We constantly remind gambling companies that although the white paper is a huge piece of work, it can be quite distracting at times,” Miller concludes. “They shouldn’t lose sight of the existing regulatory requirements that are on them.

“We are continuing to hold them to account for meeting our regulatory expectations and our rules. If they don’t, we will continue to take action for that and I think that all continues to drive up standards in the industry.”

Thomas Graf, CEO of Greentube GmbH and co-shareholder of Novomatic discusses what ICE moving to Barcelona means for the industry heavyweight after more than 20 years in London. From a prolific online space with Greentube to multiple land-based subsidiaries across Europe, growth is on the horizon – and even the biggest stand might become bigger.

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