Month: February 2024

As Representative for Nevada’s 1st congressional district and co-chair of the Congressional Gaming Caucus, she is a crucial industry advocate at federal level. 

Tackling the excise tax

Representative Titus is also leading the charge to repeal the 0.25% federal excise tax on sports betting handle. 

The money is deposited into the General Fund, rather than being used to tackle illegal gambling. Why not cut the tax and allow legal businesses to better compete against offshore operators by offering a more attractive product, she asks. 

Listen to the World Series of Politics on Apple Podcasts

GRIT is not the solution

However the Representative is an opponent of the Gambling Addiction Recovery, Investment, and Treatment Act (GRIT Act), which aims to reallocate that tax to treating problem gambling. 

The bill’s sponsors haven’t consulted with the Gaming Caucus, she tells the World Series of Politics, and disregards state legislation which almost always mandates problem gambling funding. 

Listen to the full episode to hear directly from Representative Titus on gaming expansion, tackling the black market and raising player protection standards. 

Emerging and growth markets were discussed on the second day of ICE and, in the Esports Arena, the focus was on Formula 1.

The operator reported widespread growth in 2023, with revenue rising across all properties. However, it was in Macau where Wynn saw the most success, with significant growth at the Wynn Palace and Wynn Macau, following the removal of Covid measures in the region.

Wynn will also be buoyed by revenue growth in the US across both its Las Vegas and Boston businesses, albeit at a much lower rate than in Macau.

In addition, construction work remains ongoing on a new Wynn property in the United Arab Emirates (UAE). The Wynn Al Marjan Island will be located on Al Marjan Island in the Emirate of Ras Al-Khaimah.

“We see tremendous value in our business as evidenced by our buybacks in the quarter and I’m genuinely looking forward to 2024,” CEO Craig Billings said. “The company is more diversified than it’s ever been.

“In Las Vegas, we continue to distance ourselves from peers as the leader in luxury. It’s more evident than ever that we are the go-to spot for the best customers attending citywide events like F1.

“We have a growing business in Macau that is running structurally higher margins than in the past, is much less reliant on the volatile VIP segment and is increasingly well positioned to compete. And importantly, we have a substantial growth opportunity in the UAE that will further diversify our portfolio and expand our brand into new markets.”

Wynn scales back interactive business

While ongoing property revenue growth is good news for Wynn, the same cannot be said for its interactive business. In August last year, the operator announced a major reduction in its online brand WynnBet’s US footprint.

Initially, Wynn said it would cease operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia. New York and Michigan remain under review, while it remains active in Nevada. 

Plans were also in place to continue in Massachusetts. However, chief financial officer Julie Cameron-Doe in a 2023 investor call, Wynn now looks set to exit that market as well.

“We’re continuing to review of New York and Michigan and we’ll stay tuned,” Cameron-Doe said. “We’ll have more information on that in the near future. Everywhere else is pretty much wrapped up now. 

“We’re working on closing down Massachusetts online as well. And wherever we’re able to and where we can interact with anybody else, we’ll make sure that we do the best for our shareholders and monetise the assets that we have in a way that works well with what’s allowed and what’s available out there in the market.”

Making moves in Macau

Breaking down the 2023 results, casino revenue rocketed 127.7% to $3.72bn. Incidentally, this was only marginally lower than total group revenue in 2022 ($3.77bn). Rooms revenue jumped 47.9% to $1.19bn, food and beverage 21.6% to $1.03bn and entertainment, retail and other 25.9% to $599.2m.

Operations in Macau accounted for $3.10bn of all revenue. This was 329.7% more than in the previous year. Wynn Palace drew $1.89m in revenue and the Wynn Macau business $1.21bn.

Elsewhere, Las Vegas revenue climbed 16.3% to $2.48bn, while revenue at Encore Boston Harbor increased 4.2% to $865.8m.

Higher revenue was accompanied by a 47.5% rise in operating costs, which amounted to $5.69bn. Casino was the main outgoing at $2.24bn, while general and administrative costs amounted to $1.07bn.

Other expenses, including interest costs, hit $554.8m, leaving a pre-tax profit of $285.4m, in contrast to 2022’s $700.0m loss. Wynn received $496.8m in tax benefit and noted a $52.2m loss from non-controlling interests.

This resulted in a net profit of $730.0m, compared to a $423.9m loss in the previous year. In addition, adjusted property EBITDAR hiked 191.4% to a record $2.11bn for 2023.

Records also tumble in Q4 at Wynn

As for Q4, Wynn also reported growth and record figures, with revenue increasing 83.3% to $1.84bn. Again, there was growth across each business area, with casino leading the way on $1.07bn,

Revenue from Macau operations amounted to $910.6m in Q4. Of this, $524.4m came from Wynn Palace and $386.2m Wynn Macau. Las Vegas revenue reached $698.6m and Encore Boston Harbor $217.1m.

Turning to costs, operating expenses climbed 63.7% to $1.48bn and other costs amounted to $83.4m. This left a pre-tax profit of $357.7m, up 260.6% year-on-year.

Wynn received $499.4m in tax benefit but also noted a $44.6m accounted for a $44.6m loss from non-controlling interests. As such, net profit stood at $729.2m, up 2,150.6% from 2022.

In addition, adjusted property EBITDAR reached a new quarterly high of $630.4m.

“Every single member of the Wynn team should be incredibly proud of what they achieved together in 2023,” CEO Billings said.

Players in Arizona can now place pre-event and in-game wagers across a range of sports with Bet365. Additional available to players in the Grand Canyon State include same game parlay, cash out and edit bet.

Bet365’s entrance into Arizona follows launches, Kentucky, Louisiana, Virginia, Ohio, New Jersey, Iowa, Colorado and, last month, Indiana. 

The launch comes ahead of this weekend’s Supe Bowl LVIII, the end-of-season showpiece for American football’s NFL.

“Like Bet365, the Arizona sporting scene is Never Ordinary and boasts several professional and college teams, earth-shaking, fan-favourite moments, and exhilarating championship events,” a bet365 spokesperson said. 

“Just in time for the big game, sports fans in the Grand Canyon State can enjoy the Bet365 experience. This include market leading offerings like amazing bet boosts, the fastest In-game product, and same game parlays.”

As a part of its partnership with the Ak-Chin Indian Community, Bet365 will make a $1.0m (£791,664/€927,896) contribution to the tribal organisation. These funds will be used to support local initiatives focused on tribal members.

Ak-Chin Indian Community chairman Robert Miguel welcomed the partnership. He said it will benefit bettors in the state as well as members of the Ak-Chin Indian Community.

“We are excited to partner with Bet365, and appreciate its charitable contribution to the Community and vital services for Ak-Chin Members,” Miguel said. “With Bet365, we will be able to provide our customers a premier experience, no matter whether they visit our sportsbook in-person or online.”

Can Bet365 challenge DraftKings in Arizona?

Bet365 enters Arizona after the state set a new monthly handle record in November. During the month, players spent $713.6m on sports betting, up 3.3% from the previous record set in March 2022.

Some $705.7m was wagered online and $6.1m at retail sportsbooks. A further $1.8m was bet with limited event wagering operators in Arizona.

Revenue, however, was 45.9% lower than $37.5m in November 2022 and 38.5% behind $33.0m in October. Online betting revenue hit $19.9m, retail revenue $338,476 and limited event wagering $96,986.

DraftKings and partner Crown Gaming are the leaders in the online market. In November, the partnership heralded online revenue of $9.7m from $229.4m in wagers.

FanDuel took more bets, processing $249.3m in online wagers, could only post $7.7m in revenue.  The only other online operator to post more than $1.0m in online revenue was Bally Interactive, which hit $1.9m from $91.7m in wagers.

Though only modest growth, Red Rock says the increase in revenue is testament to its wider strategy. This, it says, includes acquiring and opening new properties, with several launching in 2023.

Among the newcomers to the Red Rock portfolio is the Durango, which opened its doors in Nevada in December. Also new in 2023 was the Wildfire Fremont in downtown Las Vegas, which launched in February.

Aside from this, Red Rock continues to make improvements to its other properties, including Palace Station in Nevada. While costs associated with these enhancements inevitably impact bottom line, Red Rock says they support its long-term growth efforts.

“In addition to showing strong financial results, 2023 was a year in which we continued to validate our long-term growth strategy across the Las Vegas Valley,” Red Rock chief financial officer Stephen Cootey said. 

“The successful openings of the Durango and Wildfire Fremont properties not only validates our long-term growth strategy within the Las Vegas Valley, it also demonstrates the power of our own development pipeline and real estate bank.

“Not only do we expand our physical footprint across the Valley in 2023, we continue to execute on our core strategy of reinvesting in our existing properties to deliver fresh and relevant amenities to our guests.”

However, looking to 2024, while confidence is high, Cootey warned of challenging year-over-year comparisons. He also noted ongoing disruption at the Palace Station due to ongoing work at the property.

Net profit down despite revenue growth at Red Rock

Taking a closer look at the 2023 results, casino activity was by far the main source of revenue for Red Rock. Casino revenue for the year amounted to $1.13bn, up 0.5%.

Elsewhere, food and beverage revenue increased 10.8% to $313.6m, room revenue 11.3% to $183.1m and other revenue 8.4% to $94.4m. An additional $807,000 in revenue was drawn from management fees.

As for costs, total operating expenses were 5.7% higher at $1.17bn. Some $374.5m of this was attributed to selling, general and administrative activities and $294.0m casino costs.

Red Rock noted $3.1m in earnings from joint ventures but also a further $181.0m in interest costs. As such, pre-tax profit hit $380.8m, down 12.4% year-on-year.

Tax payments totalled $43.0m and Red Rock also discounted $161.8m of income from non-controlling interests, resulting in a net profit of $176.0m, down 14.4% from 2022. However, there was some good news as adjusted EBITDA edged up 0.3% to $746.0m.

Similar story in Q4

Turning to the final quarter of 2023, the figures made for similar reading. Revenue and adjusted EBITDA both increased year-on-year but net profit declined.

Q4 revenue was 8.7% higher at $462.7m. Casino revenue for the quarter reached $301.7m, food and beverage $85.1m, rooms $52.2m, other revenue $23.5m and management fees $205,000.

Costs-wise, operating expenses were 42.6% higher at $290.8m. Interest costs amounted to $48.7m while Red Rock noted $802,000 in earnings from joint ventures.

Pre-tax profit reached $124.0m, down 31.9% from the previous year. Red Rock paid $15.1m in tax and also discounted $52.6m in income from non-controlling interests. This left a net profit of $56.3m, down 38.7%, but adjusted EBITDA was 3.6% higher at $201.3m.

The trio pledged to begin revealing responsible gambling activities in autumn of 2022. Kindred, Svenska Spel and ATG submit data to Swedish regulator Spelinspektionen every six months.

The latest data set covers the six months to 31 December 2023 and is the third update to have been published, following H2 of 2022 and H1 for last year.

Data covers the percentage of players contacted due to risky gambling; effect of contacting players; how many reduced problem gambling habits; and the percentage of players who stopped gambling.

Kindred sees improvement in Swedish behaviour after contact

During H2, Kindred said it contacted 0.5% of all customers in Sweden about their behaviour. 

Of those players it communicated with, 78.2% reduced their gambling, an improvement on 75.1% in H1.

Kindred also said 78.6% of players it contacted lowered their average deposits during the six-month period. Some 2.2% of players contacted self-excluded from gambling for less than six months and 1.6% more than six months.

This week, Kindred also published its harmful gambling revenue share for Q4. Across the group, 3.1% of revenue came from harmful gambling down from 3.3% in Q3.

ATG figures suggest reduced impact of contact

Elsewhere, ATG said it reached out to 1.5% of Swedish players in H2, compared to 1.9% in the first half. However, of those contacted, 56.4% reduced their gambling, which was less than 57.3% in H1.

ATG also noted that less players chose to lower deposits. From those who were spoken to, 59.9% cut back on deposits, the lowest figure to date and the second period of decline. The first data set in H2 2022 showed 64.9% of contacted players reduced their average deposits and 61.1% in H1 of last year.

As for self-exclusions, 1.5% of contacted players took themselves away from gambling for at least six months. Some 2.3% opted for a longer period of self-exclusion.

Almost half of Svenska Spel players reduce deposits 

Finally, Svenska Spel said it reached out to 1.9% of Swedish customers in the reporting period. Of those it spoke with, 74.8% reduced their gambling, with 49.7% lowering their average deposits.

Svenska Spel also said 9.4% of contacted players self-excluded for at least six months, with 3.7’% opting for longer.

The operator also published a breakdown of two core business areas: Sports & Casino and Tur. More players were contacted within the Sports & Casino segment (4.9%), with 75.6% reducing gambling and 49.6% lowering average deposits. 

As for the Tur business, only 0.4% of players were spoken to about the behaviour. Of these customers, 70.5% cut back on gambling and 49.9% reduced their average deposits.

Robert Montgomery, CEO of First Maximilian Associates and Steven Myers, Managing Director of Praxis Consulting talks to ICE VOX about how why the gaming industry needs to get ahead in environmental, social, and corporate governance (ESG) to boost results and performance around the world.

Under the deal, Evolution will purchase the entire issued share capital in Livespins. The agreement also includes an earn-out payment based on Livespins’ performance by 2026.

Evolution said the acquisition fits into its ‘Product Leap’ strategy, adding that Livespins will strengthen its online gaming portfolio with a new social category. Livespins allows operators to offer customers the chance to bet with their favourite streamers, influencers or brand ambassadors.

Livespins will continue as its own brand within the Evolution group. It will run alongside the Evolution, NetEnt, Red Tiger, Ezugi, Big Time Gaming,No Limit City and DigiWheel brands.

Evolution expects to complete the purchase in the second quarter, subject to certain closing conditions.

Evolution CEO: acquisition a “unique” proposition

“Livespins is a unique proposition that has shown solid engagement metrics and adoption by players and one we believe will be a great addition to the Evolution portfolio,” Evolution CEO Martin Carlesund said. 

“Over the years, we have garnered a reputation for identifying new and interesting technology which is why I’m thrilled that we have reached an agreement with Livespins.”

Livespins CEO Chris Scicluna added: “This is an unprecedented milestone for Livespins. We couldn’t be happier to be joining the Evolution Group. 

“We are still in the start-up phase of our business and to attract the attention of Evolution, is incredibly rewarding. It also is a reflection of all the hard work that our team has poured into this concept since we launched and the unwavering belief this product would revolutionise the industry.”

Net profit passes €1bn at Evolution in 2023

The acquisition comes on the back of Evolution publishing its 2023 results last week. These show growth across both its live and random number generator (RNG), with net profit up 27.0% to €1.07bn as result.

Revenue was 23.5% higher year-on-year. Live casino led the way with revenue up 28.1% to €1.52bn due to increased commission income from both new and existing customers. RNG revenue also climbed 2.6% to €275.3m.

However, Regulus Partners questioned the group’s RNG strategic performance, describing it as “embarrassing”. Regulus believes Evolution is still “failing to execute” its RNG strategy, reserving particular criticism for its acquisition of NetEnt and its work with it since.

Meanwhile, Evolution is also facing a class action lawsuit. This alleges the supplier deceived investors over its growth trajectory and compliance.

The suit represents entities that purchased Evolution shares between 14 February 2019 and 25 October 2023. It alleges Evolution made untrue or misleading statements over growth potential, customer compliance, compliance and the effect of non-compliance on revenue during this timeframe.

As such, the suit is aiming to recover damages from all investors that purchased securities within the class action period.

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