Month: February 2024

Revenue classed as being from harmful gambling in Q4 stood at 3.1% of all revenue in the quarter. This was lower than 3.3% in both Q3 and Q1 and in line with 3.1% in Q2.

The rate, Kindred said, represented activity across all of its brands during the three months to 31 December. Kindred counts Unibet and 32Red among its online gambling brands.

Player behaviour continues to improve after Kindred intervention

The decline in problem gambling revenue was coupled with a rise in the number of players whose behaviour improved after intervention from Kindred.

During Q4, some 87.4% of customers displayed improved behaviour after Kindred took some form of action. This was the highest quarterly total of 2023, up from 86.7% in Q3, 86.4% in Q2 and 83.0% in Q1.

Kindred said this sustained positive trajectory is testament to the “unwavering” dedication and collective efforts of the group. The operator also said it reflects its ongoing commitment to fostering positive change within the industry.

“Addressing the decline in revenue from harmful gambling requires a long-term view,” Kindred director of communications Alexander Westrell said. “It’s important to note that our Journey towards Zero data has shown a steady decrease since 2020. 

“Since the third quarter of 2021, the healthier gambling behaviour effect after interventions have improved from 64.9% to 87.4%. This progress shows in our transparent reporting and consistent work. It highlights our company-wide commitment and has become a core part of Kindred’s DNA.”

Journey to Zero

Kindred began publishing details of harmful gambling revenue and improvement effect after interventions in February 2021. Updates continue to be released every quarter.

This forms part of Kindred’s ‘Journey to Zero’, where it is seeking on reduce revenue from harmful gambling to 0%. Kindred has hoped to achieve this goal by 2023.

While Kindred was not able to achieve this target, efforts continue to reach the 0% goal.

FDJ eyes Kindred acquisition

The latest figures comes after news broke last month of  last week of La Française des Jeux (FDJ) tabling an offer to acquire Kindred. The proposed offer from French lottery and gaming giant FDJ is valued at SEK27.96bn (£2.11bn/€2.47bn/$2.66bn).

FDJ said the deal would create the second largest operator in Europe’s gaming sector. It added the combination would result in a “European gaming champion” with stronger revenue and earnings growth.

After the offer was announced, Kindred also posted a preliminary set of results for its 2023 financial year. These reveal an expected rise in both revenue and underlying EBITDA during the 12-month period.

The update shows revenue of £1.21bn, which would be 13.3% more than £1.07bn in 2022. In addition, underlying EBITDA for the year is set to hit £204.5m, up 58.3%.

Prague City Council in September 2020 approved a ban on all technical gambling games in the capital. The ban, which includes slot machines, applies to all venues, even if they hold a licence.

The city-wide ban was due to come into full effect in 2024. This meant that venues could continue to offer technical games through to the end of their licences, with the longest of these running to this year. 

Slot machines were still in place and operational in December. However, sources in Prague say machines have been removed from venues since the start of the year. Some were still in place up until the end of January.

iGB reached out to the Gambling Regulation Department and received confirmation that the ban came into full effect on 1 January. This means venues can no longer offer slot machine play legally.

Department director Martin Šabo also noted that authorities actually began enforcing the ban as far back as 2021. However, those venues that held a longer licence have been able to continue running machines in that time. 

Slot machines are still legal and accessible in licensed venues outside Prague.

Online slots still accessible in Prague 

The ban only applies to land-based slots, with online games still available to play in Prague. However, the same decree that led to the machine ban also updates regulations for online gambling.

Previously, online gambling sites without a licence were only classed as illegal if they were specifically targeting Czech players. This has now been updated to any website without a licence that is active and accessible in the country. This change came into effect on 31 December 2023.

However, in the statement to iGB, Šabo said this may not be the end of changes in the Czech Republic. Referring to a review from the Office for the Protection of Economic Competition (ÚOHS), this found the decree is “not entirely in line with the legal regulations concerning competition law”.

“We cannot exclude the possibility that further changes in the operation of gambling activities in Prague may occur in the future due to imposed fines,” Šabo said.

Prague authorities continue to clamp down on illegal operations

Despite full implementation of the ban, some venues have continued to run machines. This has led to customs officials in Prague taking action.

Last month, an investigation uncovered an illegally operated gambling hall in Střížkov in the Prague 9 area of the city. Officers found 16 pieces of technical gaming equipment being operated.

Technical devices with a total value of CK1.6m (£53,659/€62,867/$67,656) crowns were seized, along with machine reset keys and cash. 

Last year, customs officers carried out a total of 76 checks, discovering 14 illegal venues. In total, 45 machines were seized.

This is an extract of the ICE365 Macau report, Clarion Gaming’s first in-depth analysis of the Special Administrative Region, supported by insights and contributions from local experts. Scroll down to read the full report, or to download your free copy.

The Special Administrative Region (SAR) of Macau covers around 32.9 square kilometres of land and is home to approximately 680,000 inhabitants. Gambling has been permitted in the territory since 1849, while it was under Portuguese rule, but it only began to emerge as a key gambling destination from 1962 onwards, once Sociedade de Turismo e Diversões de Macau (STDM) was granted a monopoly.

This heralded an influx of traffic from Hong Kong, among other places. But it was not until 2002, when STDM’s monopoly ended and the likes of Las Vegas Sands, Wynn Resorts and MGM Resorts International moved in, that Macau began to surpass Las Vegas as the world’s leading gambling destination.

Surpassing Las Vegas

It was 2007 when Macau’s gaming revenue first surpassed that of Las Vegas, and the gulf between the two locations has grown ever since. By 2019, Macau’s revenue stood at MOP292.46bn (£25.82bn/€30.08bn/$36.60bn). In the same year, Nevada and Las Vegas reported gaming revenue of $12.03bn.

The two locations are very different. In Vegas, gambling is complemented by a host of other amenities and entertainment options, to the point that gaming is only one of a number of revenue streams. Research by the University of Nevada Las Vegas suggested that gaming made up 34.4% of Las Vegas Strip revenue in 2019.

Macau, on the other hand, is dominated by gaming. The industry accounted for 50.9% of Macau’s gross domestic profit in 2019 and, within that, non-gaming revenue totalled MOP33.74bn, or 10.4% of total industry revenue.

So when its casinos were forced to shut, and travel from the Chinese mainland restricted until September last year, it had a huge impact. Revenue was down 79.3% to MOP60.44bn ($7.56bn) in 2020 as a result, meaning that Nevada, with full-year gaming revenue of $7.87bn, actually surpassed Macau.

Unlike Nevada, which posted its first monthly total of more than $1bn in April this year, Macau’s recovery from the pandemic has been slower. Yet confidence in Macau’s long-term prospects does appear to be significantly higher. Its licensees have a solid financial footing, properties are not having to rapidly hire new staff and it has a huge Chinese market just a ferry ride away.

Gambling dependency

That being said, its dependence on gaming remains a potential problem. Last April the SAR’s chief executive Ho Iat Seng warned that the shutdown caused by Covid-19 highlighted Macau’s over-dependence on gambling.

“With the outbreak of the novel coronavirus, the gaming and tourism industries registered significant declines, with profound impact on industries connected to these areas,” Ho said. “This demonstrates, once again, the vulnerability and the enormous risks of the Macau economy’s excessive dependence on gaming and tourism industries.

“The healthy and stable development of the gambling and tourism sector will continue for a certain period of time and will be the basis of the continued stability of the economy of Macau. Nevertheless, if the monolithism of the industrial structure remains unchanged, it will inhibit the sustainable development of Macao’s economy.”

Operators’ gaming concessions are due to expire in 2022. Potential updates on how Ho’s administration plans to tackle the renewal process may even come this year.

This means the onus is on the industry to show how it will look to diversify and expand the range of services and products it offers both today and for the future. Anything approaching a Vegas-style revenue split seems to be more of a pipe dream, however.

The following report aims to cover all of these elements in detail, explaining why Macau has developed into such a key industry hub. It will explore who visits and how it will develop in future. My thanks to Alidad Tash, Chris Wieners and Annie Siara for their valuable contributions.

Senate Bill 386 was filed last week, seeking to regulate online sports wagering in Georgia. It has moved through the senate quickly and was approved yesterday by a vote of 35-15.

However, this was not before senators added the amendment, which requires the support of 38 senators for the bill to pass. The amendment allows proceeds of betting to be directed to other purposes including needs-based scholarships.

Following senate approval, the sports betting bill now progresses to the Georgia house of representatives for further discussion.

What is in the Georgia sports betting bill?

Key language in SB386 includes that the bill would cover online sports wagering. Players would need to be at least 21 to bet and physically located inside Georgia.

The Georgia Lottery Corporation would assume responsibility for regulating the market. This would include distributing licences for online betting, which would run for five years.

Several licence types would be made available, with the main one being a Type 1 licence for online betting. Operators would need to pay $100,000 (£78,445/€91,925) to apply and a $1.0m annual renewal fee.

Type 1 licence holders could partner one approved services provider. These providers would need to secure a services licence, which would cost $10,000 and have a $100,000 yearly renewal fee.

An additional supplier licence would be offered at $2,000, plus a $20,00 renewal cost.

A total of 16 Type 1 licences would be made available in Georgia, with eight tethered to professional sports organisations. A further seven standalone licences would be offered, in addition to one linked to the Georgia Lottery. 

As for tax, Type 1 licence holders would pay at a rate of 20% of adjusted gross income from online sports betting in Georgia. This tax would be payable on a monthly basis.

The bill would become effective as soon as it is signed off by the state’s governor. 

What else is happening in the Peach State?

SB 386 is not the only online sports betting bill to emerge this year. Last month, another bill was recommitted to the senate.

Senate Bill 172 was submitted in Georgia in February last year by state senator Bill Cowsert but ultimately failed. The bill is now back and is largely unchanged, with its goal still being to legalise sports betting.

The bill differs to SB386 in that it would allow for online and retail betting. There is not a limit on the number of licences that would be offered, with several licence types being proposed. 

There is no specific information on tax rate. However, the bill outlines an annual privilege tax would be imposed on adjusted gross income derived from online sports betting.

This consists of 25% of the adjusted gross income from parlay bets, proposition bets and live betting wagers and 20% of adjusted gross income from all other sports betting wagers.

Should the bill pass, it would become effective from 1 January 2025. However, unlike SB386, it is yet to clear the senate stage. 

Rules in the country state Dutch operators cannot offer cashback bonuses, whereby players get part of their losses back. However, KSA research identified similar bonus offers linked to losses that compensate players in other ways.

During the research period, the KSA found three operators to be offering such bonuses. One was issued a formal warning for funding a cashback bonus, while two others were contacted over loss-based bonuses.

The KSA said such bonuses contribute to players taking more risks. These include consumers playing with higher stakes as they know some of this will be recouped after they have run out of funds. 

As such, KSA has amended language in its regulations to state “bonus based on loss”. This means that any bonus linking to gambling losses is a breach of market rules.

“This also encourages excessive participation,” KSA chairman René Jansen said. “Players bet higher, take more risks and play more often, with all its consequences. 

“At KSA, the interests of players are central. A safe gambling market and the prevention of gambling problems are high on our agenda. 

“To protect players even better, we immediately clarify the definition as a basis for strict supervision. Any bonus that is in any way linked to a loss is prohibited.”

Clamping down on banned bonus offers

KSA launched its investigation last summer after being alerted to breaches of bonus rules. At the time, it said the bonuses are covered by advert laws and cannot encourage “excessive” gambling.

This research came in the wake of an earlier instruction from KSA in November 2022. This ordered all Dutch igaming licensees to stop offering cashback bonuses.

As reported by CasinoNieuws, KSA sent a letter to all Dutch igaming licensees making clear cashback bonuses are banned as they can encourage “excessive participation”. Licensees were given one week to confirm they were not offering such bonuses.

Ultimately, the stance on such bonuses is aimed at preventing problem gambling behaviour. In December, Dutch minister for legal protection, Franc Weerwind, revealed new measures to help protect players.

These include providers being required to contact players who have set a deposit limit of €350 (£299/$381). Operators should inform such players of the risks of gambling in such high amounts.

Other proposals involve exhibiting financial amounts in euros and pushing for further research on overarching gaming limits.

Allwyn took control of the National Lottery yesterday (1 February) after the fourth licence came into effect. Scientific Games said it has been working with Allwyn to prepare for the handover of responsibilities. 

The strategic initiatives see Scientific Games focus on growing the National Lottery responsibly and minimising environmental impact.

These include the opening of Scientific Games’ new scratchcard logistics facility in the UK to serve National Lottery retailers. The Warrington-based facility features Scientific Games’ SciTrak for the ordering and sorting of scratchcards.

According to Scientific Games, this is the first of many scheduled deliverables planned for its partnership with Allwyn. Other initiatives include the conversion of the National Lottery’s technology to Scientific Games’ ‘Symhony’ enterprise gaming system. This also covers more than 40,000 retail terminals. 

In addition, Scientific Games will provide a new digital platform and a range of instant win games. These are being developed by SG Studios and partner studios worldwide via the SG Content Hub and Partner Programme.

Scientific Games and Allwyn target responsible growth

“We commend Allwyn on its vision for growing the National Lottery and substantially increasing returns to National Lottery-funded projects as a result,” Scientific Games’ president of international and strategic accounts, Michael Conforti, said.

“We’ve long-awaited this moment, made possible through a close, working partnership. Together, we’ve proven our ability to navigate challenges necessary to begin delivering sustainable and responsible growth to the UK National Lottery on time and across channels.

“With more technology and products being deployed over the course of the licence, this is going to be a very exciting time for The National Lottery, its retailers, players and beneficiaries.”

Allwyn UK CEO Andria Vidler reflected these comments, setting out the operator’s vision for the National Lottery.

“Our ambition is to offer more games, attract more players, inject more entertainment, create more winners and raise even more money for National Lottery-funded projects,” Vidler said.

“Powering that ambition is a significant investment in our technology and operations as we modernise to secure The National Lottery’s future sustainability.”

“Returns to Good Causes”

Marking yesterday’s handover, the Gambling Commission set out more details of the fourth licence. 

New initiatives include an Incentive Mechanism. Here, all National Lottery products will now make “Returns to Good Causes” at the same level. In addition, Allwyn will only see profits rise if good causes returns go up.

“The fourth licence by design will mean more of every pound spent on the National Lottery will go to good causes while still making sure it is safe to play,” Commission executive director Andrew Rhodes said. 

In his new role, Collinge will support GiG’s strategic commercial initiatives. He will focus on the Platform and Sportsbook arm, which will be formed when GiG splits its business. 

Collinge joins GiG after more than seven years as group director at Blueprint Gaming. Prior to this, Collinge was executive sales director at Playnation, where he helped initiate a management buyout of Palatine

Earlier in his career, Collinge spent nine years working in various roles at Inspired. These included spells as gaming product and entertainment manager and national account manager.

“Joining GiG at this time was too exciting an opportunity to pass up, given the enormous potential of the business,” Collinge said. “I have been highly impressed with the new X-Suite of products and the plans that the executive team have in place for the future.”

Richard Carter, CEO for Platform and Sportsbook at GiG, also welcomed the appointment. He said this will strengthen the division ahead of the planned split.

“We have made some excellent hires over the past few months and Ryan is another fantastic addition to our senior team,” Carter said. “His arrival will further help propel GiG forward to significantly scale revenue and acquire accomplished new partners.

“With an exceptional reputation and strong background in igaming, I’m certain his high-level knowledge of the industry and strategic approach will be invaluable to GiG during this rapid period of growth. He will help to deliver on the opportunities that lie ahead.”

GiG set to split

GiG chose to pursue a split after launching a strategic review in February last year. The idea of splitting the business was the main focus of the review. 

The split involves the GiG Media affiliate arm and Platform & Sportsbook divisions becoming separate entities.

The Media business includes all GiG media offerings such as GiG’s affiliate lead generation services. Platform and Sportsbook covers technical igaming platforms, as well as its front-end development and other managed services.

GiG has been on something of a hiring spree since the announcement, bringing in various new team members. These include Carter, who was named Platform and Sportsbook CEO in August 2023.

Other recent additions include Andrew Cochrane joining as its chief business officer for the division and Matthew Saxon as chief technology officer.

Regulus’ take comes after Evolution announced on Thursday that its revenue growth had pushed net profit past €1bn (£853.5m/$1.1bn). It attributed this to growth across its live and RNG sectors.

However, while live casino revenue rocketed 28.1% to €1.52bn due to increased commission, RNG only climbed 2.6% to €275.3m. The fourth quarter also saw RNG revenue fall 3.7% to €69.8m.

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.

“Strategically Evolution’s RNG performance is now disappointing to the point of embarrassing, in our view,” Regulus said. “NetEnt was badly run, commercially over-priced and offers largely legacy content.

“Turnaround would have required a significant investment in product development and bravery on pricing which no amount of experience in Live infrastructure could be used as a guide. Put simply, Evolution was the wrong buyer for NetEnt, in our view.”

Due to Evolution’s size and its subsequent role as somewhat of a bellwether in the RNG market, Regulus believes any struggles could have a wider negative impact on the industry.

“Tough questions need to be asked about what value the division is adding to the group and to the sector under Evolution’s ownership,” Regulus continued. “In the longer-term, industry growth will suffer if Evolution continues to set too high a price for content (both asset values and commercially) and then fails to deliver segment growth.”

Evolution: Mixed success all over the globe

Evolution’s geographic growth was described as “encouragingly” spread out by Regulus, which also stated that Evolution remained “clearly the best live infrastructure provider”. However, Regulus also warned that there is reason to be concerned over the future, with a volatile Asian market and stagnation in Europe due to regulatory pressure.

The lack of regulation in the US also continues to be a barrier to growth, with igaming currently legal in just seven states. While North America has “high quality earnings”, it also has little chance of growing further without political support.

“It is hard to see how Europe sustains double-digit growth,” Regulus added. “The Asian market is still growing strongly and represented 67% of reported Q4 group growth, but the lack of regulatory and client visibility makes it hard to see as high quality revenue implied in the price, in our view.

“North America is clearly maturing quickly without further US state openings and Evolution is likely to see much stronger competition for this market.”

The analyst considers LatAm an area of growth for Evolution, however, labelling the region “arguably the single most attractive geography” for the group.

Regulus’ future view

Regulus pointed to Evolution’s growing reliance on its top clients, proposing that 1xBet was the company’s top customer with an implied live revenue footprint of over $2bn. Flutter and Entain were suggested to be among the next top four customers, with these groups growing by 36% thanks to organic and merger-and-acquisition-led consolidation.

The reverse was true for the long-tail, however, with 100 customers added, taking it to 800 in total and suggesting a flat year-on-year performance by operator.

As Regulus stated, Evolution’s “sheer scale” means its success or failure has a palpable overall impact on the industry.

In response to its slowing growth, Regulus says Evolution cannot simply buy its way out of trouble, explaining: “Without elusive RNG turnaround we struggle to see how this adds up to high quality double digit growth.

“If Evolution tries to buy its way out of slowing growth while its valuation is still high, this could cause material supply-chain issues given failing RNG operational execution to date, in our view.”

The December handle beat the existing record of $608.5m in November 2023 by 17.7%. It was also 38.3% higher than the $518.1m bet in Colorado in December of the previous year.

Some $712.0m of all wagers placed in December were via the internet. Retail venues took just $4.5m in bets in comparison.

Revenue down year-on-year 

As for gross gaming revenue, this amounted to $40.5m for December, 41.6% more than the $28.6m generated in November.

However, despite taking far more bets than in December 2022, this was not reflected in year-on-year revenue comparison. Revenue was actually 0.1% less than the $40.9m in the previous year.

Online wagering accounted for almost all monthly revenue, with retail’s contribution at just $63,546.

As the National Football League season neared its conclusion, American football was again the most popular sport to bet on. Players placed $193.1m during the month.

Basketball drew $171.4m in bets and college football $45.8m. Parlay and combinations in the month totalled $204.2m.

As for tax, this amounted to $3.7m during December, while players won $675.9m, including $671.5m online.

Colorado welcomes newcomers

December saw the launch of another sportsbook in Colorado in the form of Fanatics. The operator replaced PointsBet in the state following its acquisition of the latter’s US business.

Also set to launch in Colorado is Betr. The microbetting operator this month secured market access deals in Colorado, Pennsylvania and Kentucky.

Betr’s online sportsbook agreement in Colorado is with Boulter Developments. However, this hinges on licence approval from the Colorado Division of Gaming. 

Additionally, Boulter Developments has taken an equity interest in Betr.

Total net win for Q2 was AU$59.5m, up 3% on the previous year. PointsBet put this down to continued improvements in promotions efficiency, with marketing expense 33% lower than the previous year.

Having gone live in Ontario when the market launched in April 2022, PointsBet reported a total net win of $10.5m in Canada, again a record quarter.

Total handle across all operations was AU$976.4m, down 4% on the previous year. Gross win also fell to AU$94.4m from Q2 FY23’s figure of AU$97m.

Igaming saw significant growth, with a net win of AU$6.4m, up 119% from the previous Q2’s AU$2.9m. This was attributed to its integration of the platform provider Strive, which it says will “increase game and promotional offerings”.

In its report, PointsBet pointed to Strive’s key benefits. These include “enhanced acquisition of casino-first customers”, which will deliver higher gross win margins.

Changes at PointsBet

In December, PointsBet appointed Alister Lui as its new group chief financial officer, replacing the outgoing Andrew Mellor. Lui will assume the role on 29 February.

Lui’s appointment came after the Fanatics Betting and Gaming (FBG) arm of Fanatics Holdings launched its sportsbook in Colorado, taking it a step closer to completing the acquisition of PointsBet US.

FBG agreed a deal worth $225.0m (£178.4m/€208.1m) in June to acquire the US operations of PointsBet. FBG was approved to acquire PointsBet US in eight states in September, before also completing the acquisition of its operations in New York, Wyoming and Colorado.

It had initially agreed a deal worth $150m in May, although a rival bid of $195m from DraftKings forced Fanatics to increase its offer. PointsBet shareholders approved the higher offer in June and Fanatics has started to take over its operations in the US following the approval.

In November, chief executive Sam Swanell revealed the company was on course to deliver financial growth in FY25. Technology is set to be at the core of that growth, powering its and Fanatics’ platforms.