Month: February 2024

The purchase includes GGB magazine’s annual publications, Casino Style, Tribal Government Gaming and Progressive Products Preview (P3). The deal also includes GGB’s online assets, totalling more than 26,000 subscribers via GGB News.

The deal will extend iGamingBusiness’ and Clarion Gaming Digital‘s global reach as the North American market enters a crucial phase. Clarion plans to provide its clients with access to a significantly bigger audience through GGB’s range of marketing services products.

Founded in 2002, GGB is a trusted title with a reach beyond sports betting and igaming into commercial and tribal gaming. Given GGB’s extensive US heritage, the deal will broaden Clarion’s ability to provide a comprehensive range of news, analysis and data across North America.

Data and audience development in the works for Clarion

The acquisition is a cornerstone of a wider multimillion pound investment to enhance Clarion Gaming Digital’s data and audience development.

Clarion Gaming is a division of Clarion Events, one of the world’s largest organisers of digital and in-person events.

The gaming division is responsible for organising world leading annual business-to-business events comprising iGB L!VE, iGB Affiliate and ICE. In total, these combined events attract 60,000+ gaming industry professionals from 150 nations.

Commenting on the acquisition, Alex Pratt, managing director of Clarion Gaming, said: “This is a major milestone for our digital business as we unlock the benefits of our investment. We are acquiring a business with deep industry heritage and with it the opportunity to build on their solid foundations in the US.”

Big plans for the US and Canada

Robin Harrison, global content director, B2B, at Clarion Gaming Digital, said the acquisition came amid changes to state regulation, as well as new land-based and online developments across the US and Canada.

He added: “We are delighted to seal this deal, which brings in new industry expertise to the team, expands our reach and consolidates our presence in a crucial region.

“We will build an offering that acts as the final word on key industry developments and GGB’s authority and relationships takes us a step closer to that goal.”

Roger Gros, GGB publisher and CEO of its parent company Casino Connection International LLC, also added: “We have had lengthy discussions with Clarion Gaming Digital in recent years and believe Clarion shares our passion and vision for serving our readership in a way that will maintain the quality of the publications for decades to come.

“As the gaming industry continues to grow in many different ways, our relationship with Clarion will make certain that our pivotal role in the industry remains unchanged and we can continue our important work going forward.”

Clarion Gaming Digital plans to further accelerate its North American expansion by leveraging unique partnerships on offer through the wider Clarion Events portfolio. This includes the DigitalPlay Summit at the Indian Gaming Tradeshow and Convention over 10-11 April 2024.

Revenue was up 36.0% year-on-year at CDI, with the operator reporting increases across all core business areas in 2023.

However, it was its live and historical racing segment where this growth was most apparent. This increase means that the division has surpassed the gaming business to become CDI’s primary source of revenue.

Live and historical racing revenue exceeds $1.00bn

Revenue from live and historical racing rocketed by 70.4% to $1.05bn, a new record for the segment. CDI put this down to Virginia properties acquired during its $2.75bn purchase of Peninsula Pacific Entertainment (P2E) in November 2022. These properties alone added $313.9m in revenue to the segment.

CDI also noted a $41.2m increase in revenue from northern Kentucky, primarily due to the opening of Turfway Park in September 2022. Another $36.4m increase was attributed to properties acquired in the Ellis Park and Chasers deals.

Another $19.2m increase came from growth at Derby City Gaming and the opening of the new Derby City Gaming Downtown in Kentucky in December. In addition, a $16.5m increase was attributed to the Oak Grove property in Southwestern Kentucky,

Gaming growth for CDI

Elsewhere, revenue from the gaming segment climbed 28.1% to $968.6m. CDI said this was helped by the New York and Iowa properties acquired in the P2E transaction, accounting for $230.0m in additional revenue. 

However, gaming growth was partially offset $16.9m drop in revenue in Pennsylvania. This, CDI says, is the result of not renewing its management agreement at Lady Luck.

Meanwhile, TwinSpires revenue edged up 2.0% to $44.9m for the year. This was driven by additional revenue from the purchase of historical horse racing provider Exacta in August. CDI also references the impact of its B2B expansion strategy for United Tote totalisator fees and growth in its retail sports betting business.

An additional $900,000 in revenue came from other activities across CDI, including Arlington International Racecourse. This revenue was 72.7% lower year-on-year.

Higher costs overshadow revenue increase

However, while revenue growth is good news for CDI, the operator also reports a rise in costs. Total operating expenses for 2023 were 27.6% higher at $1.90bn, with the highest increases being across the live and historical racing and gaming segments.

CDI also noted $2.2m in other costs, whereas in the previous year, it posted an additional $287.0m in profit. This was mainly due to gain on the sale of certain assets, something that was not apparent in 2023.

As such, pre-tax profit slipped 7.7% to $561.8m. CDI paid $144.5m in tax, leaving a net profit of $417.3m, down 5.0%. However, in terms of adjusted EBITDA, this increased 39.0% to a new annual high of $1.02bn.

Ending 2023 on a high

As for the final quarter of 2023, there was more good news for CDI. Revenue increased by 16.8% to $561.2m during the three months to 31 December 2023.

Live and historical racing revenue hiked 30.0% to $228.4m. Coincidentally, gaming revenue also totalled $228.4m, with this being 8.3% higher than the previous year. Revenue from the TwinSpires business climbed 11.9% to $104.2m but other revenue fell 71.4% to $200,000.

Operating expenses were reduced by 2.9% to $455.0m, despite higher spending across live and historical racing and gaming. Other expenses amounted to $34.3m, meaning a pre-tax profit of $71.9m, compared to a $3.1m loss in 2022.

CDI paid $14.3m, which left a net profit of $57.6m for Q4, up 5,660.0% from $1.0m in Q4 of the previous year. In addition, adjusted EBITDA increased by 21.3% to $219.1m.

Building for more growth

Alongside the results, CDI also announced details of new facilities that will open in Virginia and Kentucky.

Phase one of The Rose Gaming Resort in Virginia has been approved and is now scheduled to open in September this year. The facility will feature 1,650 historical racing machines, as well as a hotel and food and beverage options. 

The project is expected to cost $460.0m in total, with details of phase two to be announced at a later date.

Meanwhile, CDI has set out plans to also open Owensboro Racing & Gaming in Kentucky in Q1 of 2025. The new facility will house 600 historical racing machines, a retail sportsbook, simulcast wagering and multiple food and beverage offerings.

Projected spend for the development is $100.0m. 

Revenue was higher in all divisions at Bally’s in 2023. While Casino and Resorts remained its primary source of revenue, interactive activities across North American and international markets generated more revenue.

The past year saw several major developments for Bally’s. Early in 2023, Bally’s announced it was cutting 15% of its North American interactive workforce to reduce cut costs. Then came the news that Diamond Sports Group, operator of the Bally’s branded TV sports networks, was close to bankruptcy.

However, as the year progressed, the situation brightened for Bally’s, under the leadership of new CEO Robeson Reeves, who joined in March. 

Stand-out highlights included outsourcing its sports betting tech stack to Kambi and White Hat Gaming. In September, Bally’s also made the move into the UK igaming sector, rolling out Bally’s-branded online casino on Gamesys’ existing Megaways Casino site.

“Significant” land-based opportunities for Bally’s

As for land-based activities, Bally’s opened a temporary land-based casino in Chicago, Illinois in Q3. In addition, a deal with Major League Baseball franchise Oakland Athletics will see its new ballpark built on a portion of Bally’s existing Tropicana Las Vegas property, which closed in April.

On the whole, Reeves was upbeat about the 2023 results. He said growth across its land-based and interactive businesses place Bally’s in a solid position for further growth in 2024. Reeves also picked out developments in New York, where Bally’s hopes to open a new casino.

“We’re in the early stages of what will be a lengthy and multifaceted journey towards building a world-class, super-regional casino and entertainment complex in the Bronx at Bally’s Golf Links Ferry Point,” Reeves said.

“Securing the licence is the first step. And should we achieve this milestone, we believe we’ll have a highly attractive and competitive proposal that will allow for numerous pathways to actualise our vision. 

“Our development opportunities in Chicago, Las Vegas and New York include significant optionality and unique long-term growth prospects and we expect to begin converting these development opportunities into value for Bally’s stakeholders, starting in 2024.”

Net loss shortens in 2023

Taking a look at 2023, gaming revenue was 7.9% higher at $1.99bn and non-gaming revenue climbed 11.7% to $457.0m.

Revenue from the land-based casino and resorts business increased by 11.0% to $1.36bn. Meanwhile, international interactive revenue edged up 2.9% to $973.2m. However, it was in North America where Bally’s reported the most interactive growth. Here, revenue jumped 37.8% to $112.6m for the year.

Turning to spending, total operating costs fell 8.7% to $2.34bn for the year. After including $289.7m in other expenses, this left a pre-tax loss of $167.6m, an improvement on $454.5m in 2022.

Bally’s paid $5.0m in tax, meaning it ended the year with a net loss of $172.6m, compared to $425.5m in the previous year. However, adjusted EBITDA for 2023 slipped 3.9% to $527.3m.

Revenue rises 6.1% in Q4

As for the final quarter of the year, revenue in Q4 climbed 6.1% to $611.7m. This includes $503.0m in gaming revenue, up 9.0%, and non-gaming revenue of $108.7m, a drop of 5.6%.

Q4 casino and resorts revenue climbed 7.2% to $342.3m. International interactive revenue was 2.1% higher at $236.0m, and North American interactive revenue up 27.0% to $33.4m.

Revenue growth was accompanied by a decline in spending, with operating expenses falling 11.8% to $909.5m. After also accounting for $113.7m in other costs, pre-tax loss for Q4 was $411.6m, less than $517.4m in 2022.

Bally’s received $148.1m in tax benefits, meaning net loss for the quarter reached $263.5m, an improvement on $487.5m in the previous year. As for adjusted EBITDA, this declined by 11.3% to $129.3m.

Bally’s eyes further growth in 2024

Looking to 2024, Bally’s is upbeat about its growth prospects. Presenting guidance for the full year, Bally’s said revenue is likely to amount to between $2.50bn and $2.70bn.

The operator also expects to generate 2024 adjusted EBITDA in the range of $655.0m to $695.0m.

“The full-year guidance includes the impact of severe winter weather on January results in the casinos and resorts segment followed by stabilisation thus far in February, as well as the impact the closure of the Tropicana Las Vegas will have on our 2024 year-over-year comparisons,” Bally’s said.

“It also includes continued growth in the international interactive business and the launch of igaming in Rhode Island in our North America interactive segment.”

Total gross online gambling revenue, comprising igaming and sports betting, amounted to $229.6m. This was 22.6% ahead of $187.3m in Michigan last January but 5.3% less than December’s $242.5m record for total gambling revenue.

Figures include licensed commercial and tribal igaming operators in Michigan.

Gross igaming revenue was 18.4% higher year-on-year, surpassing the $153.7m reported in January 2023. The total also narrowly beat the existing monthly record of $181.4m set in December.

Turning to sports betting, gross receipts here reached $47.7m. This was 40.7% higher than $33.9m in the same month last year but 21.9% less than December’s $61.1m. As for handle, the $577.4m wagered in January was 21.4% higher than in the previous year.

In terms of adjusted gross receipts (AGR), which account for promotional deductions, this hit $183.0m, up 20.7% year-on-year. Adjusted gross igaming revenue climbed 18.7% to $164.2m, with adjusted gross sports betting receipts also up 5.6% to $18.8m.

As for tax, licensed operators paid $31.3m in taxes and payments to the State of Michigan during January. This includes $30.0m in igaming taxes and fee, as well as $1.3m for sports betting,.

In addition, some $8.5m was paid in wagering taxes and municipal services fees to the City of Detroit. This comprised $7.9m in igaming payments and $614,400 in sports betting tax and fees.

Tribal operators also reported making $3.6m in payments to governing bodies in January.

Detroit casino revenue falls in January

The increase in online gambling revenue is in contrast to the decline in the Detroit land-based sector.

Last week, it was revealed Detroit’s three casinos recorded $94.4m in monthly revenue, a year-on-year drop of 8.8%. This was also 18.8% lower than December’s monthly total.

Some $93.9m came from table games and slots, while $500,221 was generated by retail sports betting.

In terms of market share, MGM held 48% in January. MotorCity held 30%, while Hollywood Casino at Greektown took up 22%. 

Ipsos, working with GambleAware, surveyed 4,170 people aged 18 and 75 to harness public opinion on affordability checks. These checks are one of several proposals to come out of the government’s white paper, published in April last year.

It is proposed players who lose £1,000 within 24 hours, or £2,000 over 90 days, would be subject to checks. Operators would also perform “passive” checks on players with a net loss beyond £125 each month or £500 per year.

The proposals have caused much debate in the industry, with arguments for and against such checks. GambleAware has declared its support for such checks and has now published research suggesting the public also backs the proposal.

Of those surveyed, 61% would support “light touch” financial vulnerability checks to identify customers who may be particularly vulnerable. Some 57% also backed “enhanced” checks to be conducted at unusually high loss levels where the risks are greater.

Those experiencing problem gambling have a stronger reaction to the checks. Some 58% in this group support enhanced checks and 54% light touch checks. Furthermore, most adults expect operators to take action or make contact if a consumer fails these checks. 

GambleAware CEO: proactive measures required

“As we continue to see a steady rise in demand for support and treatment services, we are urging the government to ensure there are no missed opportunities when it comes to the instruction of robust preventative measures to tackle this rapidly growing public health issue,” GambleAware CEO Zoë Osmond said.

“It’s imperative that proactive measures are taken to address the root causes of gambling harm. This includes comprehensive education programmes and awareness-raising campaigns, stronger regulations to protect vulnerable populations and sufficient funding for treatment and support services. 

“By prioritising preventative action and ensuring the industry take some responsibility for protecting individuals against unaffordable losses, we can mitigate the detrimental impact of problem gambling on individuals and society as a whole.”

Uncertainty remains over apparent support for checks

However, the study also flagged an element of uncertainty of the proposed checks. There is concern and scepticism over the privacy and effectiveness of checks, with some saying they could be seen as an invasion of privacy. Others flagged worries that people will find a way around these checks.

There is also uncertainty as to the appropriate loss threshold for the checks. Approximately two in five adults were unsure what amount the threshold should be to trigger the checks, irrespective of any timeframe within which the financial checks will be implemented

In relation to this, only a small number of adults say they would be impacted by the checks, based on their gambling over the past 12 months. Only 10% said light touch checks would apply to them, with this dropping to 5% for enhanced checks.

In addition, around one third of those who gambled in the last 12 months said they do not gamble online. This means their gambling would not be flagged by the new, online-focused checks.

Wider concerns

These concerns mirror some of those flagged in a special article by iGB last month. 

Among the other issues raised by those opposed to the plans are how the proposed loss limits are not realistic. Some have flagged how the current loss amounts are minimal for many punters and it would not be fair to subject them to checks.

There are also worries about carrying out mass checks around major sports events. Some say it is not realistic to expect operators to conduct in-depth checks when so many bettors are active.

In addition, some parties have raised concerns about how these checks could push players to unlicensed sites.  As these websites are not regulated, they are not subject to checks, meaning players can continue to gamble without having to undergo checks. However, these same sites also do not offer the same protection as licensed operators.

Discussions over the proposed affordability checks continue.

Macau’s gaming industry took a huge hit during the pandemic with extremely tight restrictions grinding the market to a halt.

However, the removal of travel restrictions in early 2023 has sparked an impressive response from the industry. Fitch estimates that mass-market baccarat has recovered to pre-pandemic levels, particularly in the premium mass market that Wynn targets.

Mass-market baccarat in 2023 was 91% of 2019’s numbers, with Q4 2023 exceeding Q4 2019. Visitation and airline capacity are still below 2019’s figures, too, suggesting the industry could see even further revenue growth in the near future.

Wynn’s Macau operations accounted for $910.6m (£718.5m/€838.9m) in Q4. Of that figure, $524.4m came from Wynn Palace in what was another impressive quarter, with mass-market revenue and property EBITDAR margins for Q3/2023 already above 2019.

Fitch noted Wynn Macau’s slower rebound with the property increasingly targeting the premium mass market rather than the VIP sector.

Wynn’s financial improvement

Fitch is predicting Wynn’s EBITDAR leverage to improve from just below 7x in 2023 to low-5x by 2025. Fitch says continued growth in Las Vegas and Macau will help with this, with a rise in EBITDA and partial debt reduction.

The operator is also expected to be free cash flow (FCF) positive over the forecast horizon. Wynn is in a strong liquidity position with $2.8bn in cash, $792m in short-term investments and $737m of availability on the Wynn Resorts Finance LLC (WRF) revolver.

Fitch is predicting Wynn’s credit position to further improve despite ongoing material projects in the likes of Las Vegas and the United Arab Emirates. A potential casino in New York could also be on the cards.

Wynn’s Macau success in face of US roll-back

Last year, Wynn announced it would be significantly diminishing its operations in the US. It exited Massachusetts last week having already ceased operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia.

Penn Entertainment also agreed to acquire Wynn Interactive Holdings’ New York sports betting licences last week, clearing the way for Penn to launch ESPN Bet in the state in 2024.

Wynn operations are still active in Nevada, though, with Las Vegas revenue climbing 16.3% to $2.48bn in 2023.

Commenting on Wynn’s Las Vegas operations, chief executive Craig Billings said: “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.”

Caesars and Evolution will partner in establishing studios across a number of US states, including one in Caesars’ New Jersey-based Tropicana Casino. The Tropicana studio will be Evolution’s third live casino studio in Atlantic City.

Evolution and Caesars will also join forces on launching additional studio space within Evolution’s Pennsylvania and Michigan studios. Caesars players will have access to Evolution’s live casino games from its brands, including NetEnt and Red Tiger.

In the announcement, Evolution chief executive for North America Jacob Claesson said: “Caesars’ expansion in the market is remarkable and noteworthy. We’re impressed by Caesars’ dedication and look forward to collaborating with them as they continue to expand their branded studio presence.”

Matthew Sunderland, Caesars Digital’s senior vice-president and chief igaming officer, added: “Elevated live dealer experiences are an area of opportunity and something online casino players are continuing to show an affinity for.

“With this in mind, partnering on a deeper level with Evolution, the market leader in live casino offerings, made a lot of sense.”

Responding to rise in demand

Caesars’ deal with Evolution should help it respond to its current issue of demand outstripping supply in its live casino sector.

Caesars generated $1.6bn in casino revenue for Q4, taking it to $6.4bn for its 2023 financial year. Its move with Evolution will help to boost those revenue figures even further, combatting the flattening in growth evident in Q4.

The Evolution partnership will satisfy Caesars’ urgent need for new studios in order to meet the growing demand for its live casino sector, with both companies seeing the benefits across North America.

Caesars also announces Michigan tribal deal

It’s been a busy week for Caesars, with its Caesars Entertainment sector also announcing a deal to acquire WynnBet’s Michigan igaming business.

Caesars revealed a long-term extension of its agreement with the Sault Ste. Marie tribe of Chippewa Indians. That deal will give Caesars access to the igaming market in Michigan.

Caesars gains access to the Sault tribe’s igaming skins, allowing it to operate additional brands in Michigan. Existing WynnBet customers will be transitioned to Caesars’ Michigan igaming platform.

Sunderland commented: “As we continue to grow our igaming franchise, the assumption of WynnBet’s igaming operations in Michigan allows us to tap into a significant market and customer base, providing a crucial step forward in growing our digital products and offering players more ways to play.”

The move comes as part of WynnBet’s roll-back in the US. It exited Massachusetts last week having already ceased operations in Arizona, Colorado, Indiana, Louisiana, New Jersey, Tennessee, Virginia and West Virginia. Penn Entertainment agreed to acquire its New York sports betting licences, while WynnBet is still active in Nevada.

Mixed 2023 results for Caesars

Caesars reported a 6.5% year-on-year rise in revenue for 2023, largely driven by growth in its digital division.

Revenue was higher across all divisions, with group revenue hitting $11.53bn (£9.12bn/€10.66bn). This growth also helped the group return to a net profit.

However, Caesars’s Q4 saw only 0.1% in revenue growth. That stagnation to end the year is perhaps an indicator of what is to come.

While down from the $0.66 loss per share in Q4 2022, Caesars still recorded a GAAP loss of $0.34 per share in the final quarter of 2023. Gross margin was also down 2.8% from Q4 FY2022.

The previously impressive momentum of the company has taken a hit. Caesars’ FY2022 and FY2023 failed to live up to the strong growth seen in the two years prior.

At the close of the market on Tuesday, Caesars Entertainment was trading at $41.65 per share in response to the company’s Q4 and full FY2023 results. This was down 2.02% on the previous day’s close.

ATG says it was able to overcome wider challenges facing the industry to report growth in 2023. These include increased prices, interest rates and the recession, with these all hitting customers’ wallets.

While these issues did impact the business throughout the year, ATG was still able to grow. Total group revenue was marginally lower at SEK6.04bn but net gaming revenue increased 0.9% to SEK5.27bn.

ATG CEO Hasse Lord Skarplöth (pictured) paid tribute to the results, saying that they reflect its growing business. He adds that this is underlined by ATG’s customer base, which remains level at approximately 1.3 million players.

“I feel proud of the 2023 figures,” Skarplöth said. “ATG had growth when the total gambling market landed at plus or minus zero. 

“All this during a year when there is great concern in our world over high prices, interest rates and recession, which affect our customers. gaming wallets. In tough times, it is gratifying to see that our 1.3 million customers are still with us.”

Casino and sports betting growth offset horse racing decline

Breaking down ATG’s performance by each division, horse racing was again by far the main source of revenue at SEK3.91bn. However, this was 3.0% lower than in the previous year. 

In contrast, sports betting revenue increased 11.0% year-on-year to SEK722m for 2023. In addition, casino revenue climbed 20.0%. 

Away from net gaming revenue, agency revenue slipped 11.1% to SEK208m, while other revenue also fell 4.5% to SEK558m.

Turning to costs, gaming tax was lower at SEK1.06bn but personnel costs climbed 11.2% to SEK588m. Other expenses were down 6.0% to SEK2.36bn, as were depreciation and write-downs intangible and tangible fixed assets costs, falling 3.6% to SEK315m.

ATG also noted SEK46m in additional financial income, leaving a pre-tax profit of SEK1.83bn, up 7.3%. The operator paid SEK380m in tax, resulting in a net profit of SEK1.45bn, up 7.5% year-on-year.

Similar story in Q4 for ATG

As for Q4, total revenue was 2.8% higher at SEK1.60bn. Net gaming revenue was up 3.7% to SEK1.39bn, agency income fell6.9% to SEK54m, while other revenue was level at SEK156m.

Personnel costs were up 8.4% to SEK155m but both gaming tax and other expenses were lower in Q4. Financial income totalled SEK17m, resulting in a pre-tax profit of SEK563m, a rise of 23.2%.

ATG paid SEK341m in tax and noted an SEK2m positive impact from foreign exchange. This left a net profit for Q4 of SEK224m, a rise of 67.2%. 

ATG retains concerns over proposed tax rise

However, amid the backdrop of this growth, Skarplöth remains wary over proposed new tax laws in Sweden. 

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

Skarplöth previously hit out at the plans, describing the proposed rise as a “shock”. Now, he is warning the increase would not only hit ATG “hard”, but the entire Swedish horse industry.

“On an annual basis, it would be about SEK200m disappearing from an already hard-tested horse industry,” Skarplöth said. “Our proposal is that the tax on betting is kept at 18% and the tax on commercial online gambling (casino and poker) increased to 26%.

“The state would receive more money than in its own proposal and also puts public health in focus. We will continue to put full force into our influence work until the government makes a decision.”

Revenue at Kambi reached €173.3m (£148.3m/$187.3m) in 2023, up 4.4% from the previous year. This was despite losing a major client halfway through the year. Penn Entertainment in July terminated its agreement with Kambi and began using its own proprietary technology.

However, while revenue was higher, the news was not so good elsewhere for Kambi. Net profit was lower year-on-year, with both EBITDA and EBITDA falling, while costs were higher.

Reflecting on the year, Nylén raised concerns over the provider’s financial performance. Incidentally, Nylén last month announced his resignation as CEO. He is due to stand down later this year when a replacement is found.

“As I look back on the year, I have two overriding takeaways, the first being I’m not satisfied with our financial performance. This performance was impacted by lower than anticipated revenue from Shape Games, smaller than expected revenue contributions from two of our largest partners and Bally’s measured approach to marketing its sportsbook thus far.”

However, it was not all negative noise from Nylén. He praised Kambi’s strategic progress and how certain developments have helped set the business up for future growth. 

A brighter future?

“My second reflection is we made good progress in building the foundations that will ultimately lead to a much-improved financial performance in the future,” Nylén said. “This gives me confidence we’re on the right path for the long-term.

“These foundations include the numerous partner signings and renewals made last year, headlined by the partnerships with Bally’s Corporation, LiveScore Group and Svenska Spel, which we expect to deliver a meaningful revenue contribution from H2 2024. 

“We also continue to work on our modularisation capability and believe with Abios, Shape Games and now Tzeract, the positive commercial conversations we’re having with regards our strong product portfolio will increasingly bear fruit during the year ahead.”

Rising costs and reduced profit at Kambi

Looking at the full-year results at Kambi, revenue growth is good news, especially in the wake of Penn Entertainment’s termination. However, as Nylén notes, there are areas of concern.

Spending-wise, operating expenses were 13.7% higher at €116.7m. Staffing costs and other operating expenses increased, although data supplier costs were slightly lower. 

Elsewhere, amortisation on capitalised development costs grew to €24.2m, depreciation was higher at €7.2m and amortisation on acquired assets climbed to $5.2m. This meant total expenses for the year increased 16.8% to €153.3m.

Increased spending meant profit before tax fell 40.5% to €20.0m. After also accounting for €5.1m in tax payments, Kambi was left with a net profit of €14.9m, down 43.8%.

In addition, EBITDA dropped 10.7% to €56.6m, with margin reducing from 38.2% to 32.7%.

Revenue down in Q4

Turning to Q4, Kambi reported a fall across revenue, EBITDA and net profit. Beginning with revenue, this was 23.4% lower at €44.3m.

Operating expenses were down 10.5% to €27.3m. Amortisation on capitalised development costs and depreciation increased but amortisation on acquired assets was down. As such, total Q4 costs fell 5.4% to €37.1m.

This left a pre-tax profit of €7.2m, down 61.1% from €18.5m in the previous year. Kambi paid €1.9m in tax, resulting in a net profit of €5.5m, a drop of 63.4%. 

Meanwhile, EBITDA for Q4 was 37.7% lower at €37.7%, with margin falling from 47.2% to 38.5%.

Where does Kambi go from here?

Looking ahead to 2024, Kambi has forecast revenue of between €170.0m and €180.0m in what it expects to be a “transitional” year for the group.

On this, Kambi says ongoing revenue will be impacted by Penn’s online migration and the delayed regulation of the Brazilian market, where it anticipates it will gradually gain market share. 

On the flip side, it will be helped by recently renewed contracts with Kindred and other partners. Kambi expects revenue from recent partner signings to materialise towards the end of the year. This will be in addition to organic growth from existing partners.

“The outlook in certain markets has not been as promising as previously anticipated, particularly in California where 2028 now appears to be a more realistic timeline for regulation,” Nylén said. 

“In Brazil, we welcome the long-awaited regulation of the country’s sports betting market, but are also mindful that the transition to a fully licensed framework is unlikely before Q3 2024 and that new operators will face tough competition entering what is already a mature grey market with established sports betting brands.”

Looking further ahead, Kambi anticipates a brighter future. In January 2023, Kambi set a revenue target of between €330.0m and €500.0m by 2027. This, it said, remains its long-term goal.

“Our resilience, strategic progress and commitment to product excellence have set us up well for the future and, as we move forward, we do so with great optimism for the journey ahead,” Nylén said.

Under the deal, BeyondPlay will become part of FanDuel Casino, the igaming division of FanDuel. Financial terms of the agreement have not been disclosed.

Founded in 2021, B2B technology venture, BeyondPlay provides igaming software with a focus on player engagement. It works with operators across various markets and holds licences in key jurisdictions such as the UK, Malta and Sweden.

Its current offering includes two flagship products. The first is a jackpot management system with customisable jackpot campaigns and the second a multiplayer software allowing users to play the same casino game sessions and pool their stakes.

“As a founder, witnessing the journey of our start-up from its humble beginnings to becoming part of the world’s leading online sports betting and igaming company is an incredibly gratifying experience,” BeyondPlay CEO Karolina Pelc said.

“This acquisition validates the hard work and dedication of our team and the vision behind our products. We are excited to join forces with FanDuel Casino to amplify the impact of our technology on a global scale.”

FanDuel Casino managing director Asaf Noifeld added: “I’m absolutely delighted with the acquisition of BeyondPlay. Our US strategy is about investing to win and continuously improving our igaming proposition for our customers is a key part of that. 

“This acquisition further strengthens FanDuel Casino’s leading customer experience, by adding BeyondPlay’s best-in-class jackpots and multiplayer technology. We’re also excited to welcome their experienced team to FanDuel.

“We look forward to working together to continue to grow our rising share of the US igaming market.”

Investor backing for BeyondPlay

Since launching back in 2021, BeyondPlay has secured the support of several investors and entrepreneurs, as well as partnered with various games studios.

Last April, BeyondPlay raised €5.0m (£4.3m/$5.4m) in an oversubscribed funding round led by Bettor Capital. Further backing came from Tigrim Capital and Winforton Investments, complementing reinvestment from existing shareholders.

The round also drew investment from industry professionals including Sportingbet founder Mark Blandford and Alea founder and chief executive Alexandre Tomic.

Bettor Capital, an investment platform focused on the real-money igaming market, has been a supporter of BeyondPlay for some time. In February last year, LeoVegas sold its 25% share in BeyondPlay to Bettor Capital for €1.9m.

BeyondPlay was previously known as SharedPlay before changing its name.