Month: February 2024

Macau withdrew all remaining pandemic travel and quarantine restrictions in January 2023. This meant people could again travel freely to the region and visit its land-based casinos, including the Galaxy Macau.

This relaxation had a major impact on revenue not just on Galaxy but also other operators in the region. Revenue at the Galaxy Macau alone rocketed 274.3% year-on-year in 2023, with gaming revenue here up 312.1%.

There was also growth, if not a little more modest, across other operations in Macau. This was despite increased competition in the region, with chairman Lui Che Woo praising the 2023 performance.

“At GEG, we continue to drive every segment of the business with a particular focus on the mass business and continue to allocate resources to their most efficient use,” Woo said. “Our efforts are reflected in full-year adjusted EBITDA growth. This was despite continuing competition in both Macau and regionally and a number of geo-political and economic issues that impacted consumer sentiment.”

Galaxy building for the future

The past year also saw Galaxy make progress with multiple development projects. 

It opened the 450 all-suite Raffles at Galaxy Macau and premium mass Horizon Club, as well as both the Galaxy International Convention Centre (“GICC”) and Galaxy Arena. The Andaz Macau also fully opened prior to Chinese New Year 2024.

Work remains ongoing with phase four of development for a new integrated resort in Macau. Due to complete by 2027, this includes a new casino, multiple hotel brands, a theatre, retail facilities, non-gaming amenities, landscaping and a water resort deck.

“Non-gaming is focused on attracting a broader range of customers to our resorts, leveraging our existing facilities and growing the overall market,” Woo said. “These efforts will take time and we are doing our best. 

“GEG has opened overseas offices in Tokyo and Seoul in 2023, and will soon be opening another office in Bangkok. The competition for high-value international tourists is significant and we will strive to support this government initiative.”

Mass growth in Macau

Breaking down the 2023 figures, group net gaming revenue at Galaxy increased 315.6% to $23.29bn. Non-gaming revenue hiked 167.0% to $5.40bn and construction material revenue edged up 3.8% to $3.00bn.

Revenue from Galaxy Macau amounted to $27.72bn, well clear of the $7.42bn in 2022 when pandemic restrictions impacted the region. Of this, $22.91bn was gaming revenue, $3.25bn non-gaming and $1.56bn construction materials.

StarWorld Macau revenue also increased 56.9% to $4.64bn, again helped by the removal of Covid-19 measures. Of this total, $4.15bn was attributed to gaming activity, up 339.6%. 

In addition, revenue from the Broadway Macau entertainment and street resort jumped 72.0% to $103m, while City Clubs revenue increased 264.0% to $222m.

Galaxy did not provide a full breakdown of costs, tax and net profit for the year. However, it did reveal that revenue growth helped drive adjusted EBITDA up from a loss of $0.60bn in 2022 to a positive of $10.00bn for 2023.

Galaxy ends 2023 on a high with Q4 growth

As for the final quarter of the year, Galaxy also reported success in Q4. Group revenue for the three-month period reached $10.30bn, up 253.9% year-on-year.

Galaxy Macau revenue climbed 346.6% to $8.19bn in Q4, with StarWorld Macau also rising 410.2% to $1.26bn. Broadway Macau revenue for Q4 jumped 100.0% to $38m and City Clubs 185.0% to $57m.

Adjusted EBITDA for the fourth quarter amounted to $2.81bn, in contrast to the 2022 loss of $163m.

“I would like to thank all our team members who deliver ‘World Class, Asian Heart’ service each and every day and contribute to the success of the group,” Woo said.

This represented 7.8% of Endeavor’s overall revenue for the year, which was $5.96bn.

The year saw Endeavor make a number of moves relating to sports data and tech, spurred on by Endeavor’s acquisition of OpenBet in September 2022 for $800m. In June 2023, OpenBet acquired responsible gambling and AML specialist Neccton. September also saw OpenBet appoint Sam Depoortere to the role of vice president of platform products.

Last month, Endeavor announced that it was to integrate OpenBet and IMG Arena – which it also owns – under the OpenBet banner.

Ariel Emanuel, CEO of Endeavor highlighted the performance of its sports segment amongst Endeavor’s overall results.

“2023 was a transformational year for Endeavor as we strengthened our positions in sports and entertainment through many of our industry-leading assets,” said Emanuel. “We remain focused on maximising shareholder value through quarterly dividend payments and our evaluation of strategic alternatives.”

Light & Wonder’s FY23 results – released yesterday – noted that its sale of OpenBet allowed it to re-focus to other business areas.

Segment performance in Q4 and FY23

Speaking on Endeavor’s full-year 2023 earnings call, Jordan Lublin, chief finance officer, attributed the sports data and technology segment’s performance to OpenBet’s performance in its first year with Endeavor.

Lublin also acknowledged growth within IMG Arena’s betting data and streaming products as a catalyst for growth. IMG Arena acquired Leap Gaming in April and won exclusive media rights to 85 of the Confederation of African Football’s territories in December.

Adjusted EBITDA for the year totalled at $62.7m, up 31.1% year-on-year. This represented 5.1% of Endeavor’s total Adjusted EBITDA for the year, which was $1.21bn.

Looking at the fourth quarter performance, the sports data and technology segment generated $113.5m in revenue. This was up by 4.7% yearly. Adjusted EBITDA for the quarter was $20.5m, down slightly from $21.6m in Q4 2022.

Also on Endeavor’s earnings call, Emanuel said that OpenBet and IMG Arena “secured notable wins” throughout the fourth quarter. He named OpenBet’s agreement to power Veikkaus’ sports betting platform as a highlight.

“Finland stands out as a key growth opportunity in the European sports betting landscape,” Emanuel noted. He added that this builds on to OpenBet’s prior 2023 geographic growth – “Greece, Germany, Czech Republic and Canada with Australia and Brazil in focus for 2024.”

Rhode Island recorded $44.8m in sports betting handle for January, a significant decrease on December’s number of $47.9m and the lowest since September. The handle also fell 28.1% behind the same month last year, which was a record.

$34.8m of the handle was wagered online, while the other $13.1m was bet at retail sportsbooks. Of the retail handle, Twin River and Tiverton Casino took $6.4m and $3.6m in bets respectively.

Despite the downturn in handle, it was a good month for sportsbooks, who accumulated a combined revenue of $5m, over a fifth higher than December’s $4.1m and the highest since Rhode Island started its new financial year.

Online accounted for $3.8m of that figure, which is 76% of the total. By facility, Twin River outperformed the Tiverton Casino, generating $845,340 to the latter’s $402,750.

Rhode Island into H2 of its financial year

Rhode Island is now into the second half of its 2024 financial year. In total, handle for the FY2024 stands at $267.2m for the first seven months. At the same point in FY2023, Rhode Island had seen $332.8m in handle, 19.7% higher than FY2024.

Revenue is also down. Rhode Island has generated $23.8m in sportsbook revenue after seven months of this financial year. At the same marker in FY2023, it had accumulated $34.8m in sports betting revenue, again 31.6% higher.

The year-on-year decrease is applicable to lottery, too. Rhode Island’s monthly gross sales in lottery amounted to $25.3m in January, down from $28.6m in December and an even sharper decrease from $29.2m in the same month last year.

The global deal runs for an additional six years to the end of the 2031-32 season. Sportradar will collaborate with Bundesliga International to distribute data and audio-visual products around the world.

Sportradar will remain the official provider of betting and streaming rights for Bundesliga and Bundesliga 2. It also covers other DFL properties such as the German Supercup and relegation playoff matches.

The deal grants Sportradar the rights to sub-license video content from the Bundesliga and Bundesliga 2 to its sportsbook clients. It will also collect and exclusively distribute live match data for betting purposes.

Sportradar will also provide betting and streaming rights for all matches in the WOW Virtual Bundesliga esports offering. In addition, Sportradar will work with DFL to expand the scope of the Sportradar Virtual Sports Bundesliga

The deal also covers education and prevention services. This includes existing bet monitoring through Sportradar’s Universal Fraud Detection System.

Expanding the reach of Bundesliga football

“The Bundesliga has long been regarded globally as a frontrunner when it comes to cutting edge innovation,” Bundesliga International chief marketing officer Peer Naubert said. “Our long-term partnership with Sportradar continues to reflect this. 

“From the start, we have been aligned in pushing the boundaries of technology for the benefit of the fan. This early prolongation, which by the end will take us to more than 25 years of collaboration, is an outcome of the trust and excitement we share for the future.”

Moritz Gloeckler, senior vice-president of rights and strategic projects at Sportradar, also welcomed the new deal.

 “We are the ideal partner to work with the Bundesliga in widening and deepening their fan base through the development of new AV and data-driven products, using the latest technologies such as augmented streaming and AI,” Gloeckler said.

“This agreement aligns with our broader strategy to selectively invest in long term rights across key global sports which enable the continued innovation and enhancement of our offerings for our clients. 

“We look forward to many years of partnering with the Bundesliga to redefine the soccer fan experience.”

Turnover for the six months to 31 November 2023 hit $5.9m (£4.7m/€5.4m). This was 4.8% behind the $6.2m reported in the previous year by Webis, which owns advance-deposit wagering (ADW) operator Watchandwager.com.

Eke and Webis put this drop mainly down to external factors in the second quarter. These, he said, included the cancellation of many US events due to bad weather in the country. On the flip side, Eke said trading was stronger during the summer months.

Turnover decline, coupled with the fact that spending remained level in H1, led to a wider loss for Webis. However, Eke is upbeat about the company’s performance moving into the second half.

“Our principal subsidiary, WatchandWager.com, again had a varied start to the first six months of the financial year,” Eke said. “I remain optimistic that trading will improve in line with expectations, especially as we continue with the roll-out of our new B2C marketing strategy.”

B2C beats market expectations for Webis

Analysing the H1 performance, Webis said its B2C division performed above expectations during the half. However, overall advanced deposit wagering market in the US fell 10.8% year-on-year. Webis said this decline was mainly due to the cost-of-living crisis, as well as the growth of other forms of gaming, primarily online sports betting. 

Despite downward market trends, handle and active players on the platform remained steady. In addition, this sector now contributes over 80% of ADW gross margin. 

As for B2B, Webis said while this remains important to the overall business, the market is “increasingly competitive”. It added that the margin derived from B2B was significantly lower than B2C. 

In another development, Webis renewed and retained its entire portfolio of licences in the US and the Isle of Man.

“We consider our array of licences to continue to be a key asset to the group, in addition to content rights,” Eke said.

Net loss widens to $541,000

Turning to spending in H1, expenses were marginally lower across all areas, including cost of sales at $4.1m and betting duty paid at $48,000. Operating costs were reduced by 0.4% to $2.3m.

However, this was not enough to stop operating loss widening by 90.2% to $464,000 in H1. Webis also noted $77,000 in finance costs, leaving a pre-tax loss of $541,000, compared to $325,000 in the previous year.

Webis did not pay any tax in H1, meaning net loss was also $541,000, again higher than the $325,000 in 2022-23.

Webis identifies areas for growth

Looking ahead, Eke said the Webis board agrees it must focus on four key areas to achieve growth. 

These include growing the B2C business platform in terms of player numbers and handle. This, Eke said, will improve margin for the business. Webis will also work to continue to grow its land-based licences at Cal Expo and potentially in other states. 

Webis will also aim to provide third party services to existing and new entrants in the US. In relation to this, Webis will seek new opportunities in terms of the growing regulated market in the US. 

“The larger operators, and also new entrants to the market, are looking for stable operations to either merge with or to acquire outright,” Eke said on this final point. “This is exactly what WatchandWager offers.

“The key executive has been instructed by the board to pursue these opportunities, if they are of benefit to shareholders. We will keep shareholders fully informed of developments in this area.”

December gross revenue in Arizona amounted to $66.1m (£52.1m/€60.9m). This was up 22.1% from $54.4m in the previous year and also 62.4% ahead of November’s total.

Of this total, $65.2m came from online betting and $625,986 retail sportsbooks. A further $240,604 was generated by limited event wagering (LEW) operators. 

This came off the back of $693.3m in total wagers placed during the month. Total player spend was 21.1% ahead of December 2022 but behind the record $713.6m wagered in November.

Online spend amounted to $685.1m, retail sportsbooks $6.4m and LEW operators $1.8m.

A total of $17.8m in free bets and promotional credits were noted in December. Almost all of this came from online betting.

As such, adjusted gross sports betting revenue for the month amounted to $48.3m, another new record. This was 30.3% higher than December 2022 and 139.4% more than $20.3m in November.

Online betting accounted for $47.5m of adjusted revenue, with retail’s share at $621,286. An additional $240,604 came from LEW operators. 

In terms of tax in Arizona, this amounted to $4.8m for December. This includes $4.7m from online activity, $49,703 retail and $19,248 LEW.

FanDuel leads in online market in Arizona 

Looking at individual operators, FanDuel was the online market leader by some distance in December. For the month, it posted $23.7m in adjusted revenue from $236.3m in total wagers.

DraftKings and Crown Gaming placed second with $13.8m from $228.5m, then BetMGM on $6.1m off an $82.7m handle.

In terms of retail, which only features two operators, DraftKings and Crown Gaming took top spot. The partnership heralded $361,037 in adjusted revenue from $2.7m in bets.

FanDuel, the only other operator active here, posted adjusted revenue of $260,248 from $2.1m in wagers.

As for AEW operators, Turf Paradise led with $106,248 in revenue from $822,412. 

Bet365 enters the market

The latest results come as it was revealed this month that Bet365 has launched online sports betting in Arizona. The operator went live through a partnership with the Ak-Chin Indian community.

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

The launch extends its reach in the US to a ninth state. It is also active in Kentucky, Louisiana, Virginia, Ohio, New Jersey, Iowa, Colorado and Indiana.

Games Global has its hopes aimed high. While it’s firmly established in Europe, it hasn’t been immune to the opportunities presented by the Americas.

This temptation is what led Games Global to acquire Super Group’s B2B division, Digital Gaming Corporation, now known as Games Global USA. The deal was announced almost exactly one year before its completion – which was confirmed on 7 February – and gives Games Global unprecedented access to the US market.

“The US market, as you know, is an attractive market for everyone,” Bugno explains. “It’s still in its infancy when it comes to the gaming side and it’s a lot more advanced when it comes to the sports betting side.

“Of course, there are a number of states that have approved igaming. So it would be ludicrous if we weren’t interested in that market.”

Acquiring Digital Gaming Corporation has given Games Global a one-way ticket into regulated US states, continues Bugno.

“We looked for a path and because we weren’t licensed, the only path in for us was to sell some of our games to someone,” he says. “We didn’t really receive a lot of value by selling, but we sold a lot of games to Digital Gaming Corporation, which was a licensed operator in that market.”

The tactic was to keep a close eye on these games while applications for state licences ticked over. Once those licences were approved and issued to Games Global, the supplier’s acquisition of Digital Gaming Corporation was made final.

“We now have the direct relationship with the operators in the US and we’ll now take our full suite of games and studios to the market there,” said Bugno.

Upwards trajectory in LatAm

If the US presents plenty of opportunities for growth, then the streets of LatAm are practically paved with gold. It helps that Bugno has previous experience in the region, having had responsibility for it during his 11 years at International Games Technology.

Like most other industry execs, the primary LatAm market on Bugno’s mind is Brazil. The country’s chamber of deputies approved Bill 3,626/2023 in December, giving the green light to sports betting and igaming.

“We’re all waiting for the final version of what the regulations are going to be, but everyone is positioning and getting ready for what they will do, including us,” says Bugno. “We have relationships with a number of operators in those markets already today – our games are present.”

Present, but also evolving and growing. Games Global currently has two studios in LatAm – one in Brazil and another in Argentina, with a second studio in each market just approved.

For Bugno, this isn’t just a testament to the opportunity in Brazil and Argentina. “It’s not because they’re the only ones that will supply the market, but it gives us more of an understanding of the local preferences we like to develop,” he explains.

“So we see it as a major growth opportunity for our business going forward.”

Handing control back to players

In the end, Games Global’s American dreams couldn’t come true without having the right portfolio. And Bugno maintains that this isn’t an easy process.

“We don’t build games for the sake of building a game,” he declares. “We really spend a lot of time analysing the data that we receive in terms of player preferences and player performance and game performance, to try and develop games that have got some kind of affinity with the different demographics, with different types of player behaviour.”

It’s about finding something for everyone. The wider the appeal, obviously, the wider the potential player pool. But if those same players don’t feel engaged, they’re not going to stick around.

“We try different styles of mechanics, different bonuses, different visual experiences,” he says. “We really try to give players an experience and I think that’s what players look for these days.

“It’s not simply sitting in front of a screen. It’s about some form of engagement.”

A key element of this is keeping a laser-focus on player trends. While Bugno doesn’t note anything out of the ordinary in player trends currently, he highlights a significant rise in interest for crash games.

And why? Because of the implied control for players.

“There’s nothing that I would say is revolutionary [in player trends], but let’s say there are some new segments of games that are coming,” he explains. “In the last couple of years, crash games as an example, has become a segment with a lot of growth.

“And you ask yourself, why? Well, it gives you choice. I’ll take a risk. I’ll cash out now. It’s a degree of skill or control, that I can make the choice of when. And I think that’s an attractive element.”

The CRM element

So Games Global has the reach, the portfolio and the potential for further success in its pocket. But is this all a customer needs to choose to play with Games Global?

As with most suppliers, customer relationship management (CRM) has to come into play. For Bugno, this means presenting Games Global to customers in a way that results in a mutually beneficial relationship.

“We’ve said to the customers, we’re not here to sell you games,” Bugno explains. “We are an outcome of their success.

“Our games are a tool, but only one tool. And if we give you the right tools and the right support and the right content, you are going to grow. If you grow, we grow. So it’s about really helping the customers drive revenue.”

You give and you get. This could be what has driven Bugno’s 2024 ambitions – so far, jackpots have formed a large part of the strategy for the year ahead. Games Global has just launched a new range of jackpots called King Millions, with another jackpot brand and a series of offers following soon.

“Playing is a form of entertainment,” Bugno concludes. “People want to be able to be engaged in a style of game that allows them to enjoy the experience. And that’s what we try and do.”

Daly’s resignation is effective immediately. Pierre Cadena, who is currently vice-president of corporate strategy at Catena, will assume the role of interim CEO.

As per the exit agreement, Daly will remain available to Catena during a transition period. Catena intends to launch a recruitment process to appoint a new CEO immediately.

“Under Michael Daly’s leadership, Catena has become an active player in North America and, with the actions taken during the strategic review, we have significantly reduced our debt and streamlined the organisation,” Catena chairman Göran Blomberg said.

“With the company facing lower growth, we have started to implement a number of growth initiatives. As we embark on this crucial stage, we are seeking new leadership to drive these initiatives and move Catena into its next chapter.”

Daly joined Catena in April 2018 as general manager for the US. He went on to serve as general manager for the Americas and president for North America, before becoming CEO in March 2021.

Prior to his time with Catena, Daly worked as an industry consultant and also had a spell as executive vice-president for North America at GAN.

Earlier in his career, he served as vice-president of online gaming for SHFL Entertainment. He also worked in several senior roles with Bally Technologies and spent time with Shuffle Master.

Disappointing 2023 for Catena

Daly’s exit comes just two weeks after Catena published a disappointing set of results for the 2023 financial year. The group registered a sharp decline in revenue. 

However, perhaps of most concern is a drop in US revenue, which declined 21% to €67.1m (£57.4m/$72.8m). Given that 80% of all revenue at Catena now comes from the US, with the group active in 27 North America jurisdictions, this could prove problematic moving forward.

There was more bad news for Catena in terms of new depositing customers from continuing operations. This amounted to 184,257, down 19%, although slightly cushioned by not-as-bad figures in Q1 and Q2.

In terms of its EBITDA, this also made for tough reading. Adjusted EBITDA from continuing operations fell by 47% to €25.4m, corresponding to an adjusted EBITDA margin of 33.0%.

What’s more, shortly after the results were released on 13 February, Catena’s share price plummeted. On the day, the price fell 10%, but in terms of year-on-year comparison, its share price was down 75% at the time.

Daly walks after calls for resignation 

While Daly did not hint at a possible departure at the time, there were some murmurings about a possible exit.

STS founder Mateusz Juroszek called for the Catena management to resign on the day. He went further by suggesting its assets should be sold on the market. 

“What a story in how to destroy a business,” Juroszek added in a LinkedIn post.

However, Daly initially stood firm, highlighting Catena’s latest series of investments, planned as a result of the strategic review launched in 2022. He said these would reinvent the group’s core technological focus.

He also drew attention to its cost reduction programme of around €4m to “optimise group operations” following recent divestments. These included offloading UK and Australian online sports brands to Moneta Communications in August 2023.

This level of restructure, Daly said, takes time to have an impact, with the now-former CEO calling for patience.

“A strategic reboot on the scale that we have undertaken can take time and test the patience of employees and shareholders,” he said earlier in the month.

However, with his departure now confirmed, it appears this patience, be it his own or that of the Catena board, has run out.

Looking to achieve its mission of “safe gaming”, the KSA says it will increase its protection of vulnerable players in the Netherlands by looking to prevent addiction. The country took measures to do this in 2023, including the introduction of a ban on most forms of advertising.

The KSA is also looking to combat illegal online offerings, aiming for at least 90% of players to gamble with legal providers in the Netherlands. In a December article for iGB, Yield Sec chief executive Ismail Vali noted how the KSA’s current approach appeared to lack clear success in actual enforcement terms.

The KSA is vowing to further support partners, including the police and tax authorities, on investigations in the physical domain. The regulator hopes this will lead to less “undermining” between different organisations.

The KSA’s final area of emphasis is on compliance with data provision. The KSA wants data to be provided in a “timely, complete and correct manner”. This will then make it easier for the KSA to swiftly identify any potential wrongdoing.

Growing focus on problem gambling in the Netherlands

Earlier this month, a motion to completely prohibit gambling advertising in the Netherlands was submitted by Derk Boswijk of the Christian Democratic Appeal (CDA) party. While the move to go further than the 2023 ban on untargeted advertising ultimately failed, its proposal was the latest indicator of the rising concern over gambling harms in the Netherlands.

In December, the Netherlands minister for legal protection, Franc Weerwind, announced measures he hoped would protect players from problem gambling.

Weerwind’s measures included providers being required to contact players who have set a deposit limit of €350 (£303/$386). Operators should inform such players of the risks of gambling in such high amounts.

The KSA’s consultations for an update to the Responsible Gaming Policy Rules ended in early February. The aim is to publish the new rules in April.

In October, Weerwind also announced a multi-year digital resilience campaign programme to combat fraud associated with online gambling.

The industry has hit back against some of Weerwind’s proposals though. Peter-Paul de Goeij, chairman of the Dutch Online Gambling Association (NOGA), warned Weerwind that his plans could lead to gambling being seen as “unattractive”.

Helma Lodders, chairman of the Licensed Dutch Online Gaming Providers (VNLOK), highlighted two areas of Weerwind’s letter that need examination.

“Firstly, that imposed measures are actually effective in keeping the number of problem players as small as possible,” Lodders explained.

“Secondly, that the legal offer remains sufficiently attractive for the vast majority of players who participate in a responsible manner. The latter is important to prevent them from returning to the illegal supply.”

Gross gaming revenue in Q4 was 0.6% higher than in the same period in 2022. The total was also up 3.6% from the amount generated in Spain during the third quarter of the year.

Breaking this down, casino was the primary source of revenue by some distance during Q4.

Total revenue from this segment was €171.3m, representing 54.3% of all market revenue in Spain. Growth in the casino market was helped by a 25.9% rise in slots revenue and 15.3% increase in live roulette revenue. 

Elsewhere, sports betting revenue hit €114.7m, accounting for 36.4% of total revenue and poker €25.4m, or 8.1% of overall revenue. For poker, tournaments had a negative variation rate of 0.5% and poker cash 7.0%.

A further €3.8m in revenue came from bingo activity, some 1.2% of all revenue, and contests €50,000. 

Total deposits up 9.4% in Q4

In terms of player spending, consumers deposited a total of €1.04bn in their online gambling accounts in Q4. This was 9.4% higher than during the same period in 2022.

The monthly average of active game accounts was 1,269,585, a year-on-year increase of 6.8%. However, the monthly average for new game accounts slipped 2.3% to 129,207.

Turning to operator marketing activity, total spend in Q4 amounted to €113.0m, up 5.3% from 2022. Of this, €53.0m was spent on promotions, €45.2m advertising, €14.0m affiliation and €750,000 sponsorship.

By the end of Q4, some 78 licensed operators were active in Spain. These include 49 offering casino games, 43 sports betting, nine poker, three bingo and two contests.