Month: March 2024

McPherson takes on the role having served as interim CIO at SkyCity since November last year. 

He re-joined SkyCity after two-and-a-half years as chief technology officer at New Zealand media business, Stuff. McPherson previously worked as ICT portfolio manager at SkyCity between September 2019 and June 2021.

Earlier in his career, McPherson served as CEO of Experieco, head of national design at Spark Digital NZ, and CEO of International Telematics, a business he also co-founded.

“Happy to be back with the SkyCity Entertainment Group family,” McPherson said in a post today (18 March) on LinkedIn.

SkyCity faces civil penalty proceedings

The news comes at a somewhat troubling time for SkyCity. Last month, the New Zealand department of internal affairs announced it is set to file civil penalty proceedings in the country’s high court against the groups/ SkyCity Casino Management (SCML) subsidiary.

The charges relate to SCML’s alleged non-compliance with the New Zealand Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Should the claim be accepted – in whole or partly – by the court, SCML could face a penalty of up to NZ$8.0m (£3.8m/€4.5m/US$4.9m).

Proceedings follow a review of SCML’s compliance. SCML holds the licence for operating SkyCity land-based casinos in Auckland, Hamilton and Queensland. The draft pleadings set out five separate causes of action seen as “significant” compliance issues related to the Act. 

SkyCity said these issues mainly refer to historical matters, some of which were previously self-reported to the department. The operator added that it has been running an anti-money laundering and counter-terrorism financing enhancement programme to address compliance systems and correct historical shortcomings for the past few years. 

Responding to the civil proceedings, SkyCity says it will work with the department to rectify any issues.

Wider concerns for SkyCity

The case is the latest in a line of regulatory issues to befall SkyCity. In September, the New Zealand secretary of the department of internal affairs applied to suspend SkyCity’s casino licence for an estimated 10 days. This was also in relation to the SCML subsidiary, but it is not clear whether this related to the civil proceedings.

Over in Australia, SkyCity is also facing regulatory concerns. In late 2022, the Australian Transaction Reports and Analysis Centre launched federal proceedings against SkyCity over anti-money laundering failings at SkyCity Adelaide.

The operator in May 2023 launched a review into its counter-terrorist financing and anti-money laundering programs. SkyCity in August also made a provision of AU$45m ahead of an assumed civil penalty from Austrac. 

In October, SkyCity announced Michael Ahearne is to step down from his role as chief executive. Ahearne is due to leave the business this month.

The year ended with SkyCity warning adjusted EBITDA could fall in its 2024 financial year. This is despite previously saying it expected an increase.

Total handle for New Hampshire in February was $62.3m (£48.9m/€57.2m), 15.0% down on January’s figure of $73.3m. This is the third month in a row that New Hampshire has seen a decline in sports betting handle.

Online continues to dominate the market, with mobile accounting for $55.9m in handle, 86.9% of the total figure. Retail was responsible for just $6.4m of the handle for New Hampshire in February.

February’s gross gaming revenue (GGR) also fell to $6.6m from January’s $9.8m, again a significant 33.0% month-on-month drop. February’s GGR figure was the lowest in five months since September’s $6.2m.

The decline in the state’s sports betting figures is also having a negative impact on its tax revenues. These fell to another five-month low of just $2.8m, having dropped 36% from January’s $4.5m.

New Hampshire’s concerning year-on-year comparison

While February’s handle did take New Hampshire past $500m in wagers accepted for its financial year, it was also 28.4% behind the same month last year, when $87.0m in bets was accepted in New Hampshire.

February’s GGR of $6.6m is 7.0% short of February 2023’s $7.1m, while the state’s revenue share was also 12% behind the same month last year at $2.9m.

The state’s handle figure of $513.2m in its financial year so far is over $100m behind the same point last year, when New Hampshire had received $623.8m in bets over the first eight months of its 2022 financial year.

The GGR to date is currently $54.1m, 6.8% behind the same point of New Hampshire’s FY2022 total of $58.1m. State tax revenue from sports betting is also lagging behind FY2022 at $23.8m, having already accumulated $26.7m in tax at this point last year.

Revenue for February amounted to $461.5m (£362.4m/€423.8m). This was 12.0% ahead of $412.2m in New Jersey last year but 17.5% behind January’s $559.1m total.

Land-based gambling was again the primary source of revenue for New Jersey in February. However, the $211.6m posted was 1.6% behind $215.0m in 2023 and also represented the second consecutive month of decline.

Some $158.9m of all land-based revenue came from slot machines, marginally lower than $159.3m in the previous year. Table games win also slipped 5.3% to $52.7m.

Another month of igaming growth in New Jersey

In contrast to the land-based decline was significant growth within the igaming sector. Here, revenue was 27.9% higher at $182.3m. This was also only just shy of the record $183.3m reported in January.

Slots accounted for $180.0m of all online gaming revenue, a rise of 28.3%. The other $2.3m came from peer-to-peer poker, an increase of 0.4%.

Golden Nugget held its position as the igaming market leader with $51.5m in revenue. Not far behind in second was Resorts Digital on $48.0m, then Borgata with $40.0m.

Sports betting revenue tops $67.6m

Turning to sports wagering and revenue here also increased 23.7% year-on-year to $67.6m. However, this was some way short of the record $170.8m in January despite February featuring the NFL’s end-of-season Super Bowl showpiece.

In terms of handle, New Jersey players wagered a total of $1.08bn in February, up 27.6% on last year. Some $1.04bn was bet online, in addition tp $37.9m at retail sportsbooks across the state.

Meadowlands again claimed top spot in the sports betting market with $35.1m in revenue. The racecourse is partnered with FanDuel, PointsBet and SuperBook for sports wagering.

Elsewhere, DraftKings and Resorts World ranked second in this segment with revenue of $24.2m. Borgata and BetMGM followed in third with $4.5m in monthly revenue.

Year-to-date revenue in New Jersey already past $1.00bn

Looking to the state’s year-to-date performance, revenue for the opening two months hit $1.02bn. This was 20.2% ahead of $849.1m at the same point in 2023.

Land-based revenue was 2.4% lower at $416.3m, but growth elsewhere puts New Jersey on track for what could be a record year.

Online gambling revenue was 23.7% higher at $365.6m, while sports betting revenue hiked 87.7% to $238.3m. 

At this rate, New Jersey could be set for a record year across igaming and sports betting, as well as total market revenue. 

Rebuck exits New Jersey regulator

The monthly figures come after it was confirmed at the end of February that David Rebuck was stepping down as director of the New Jersey Division of Gaming Enforcement (DGE).

Rebuck led the New Jersey regulator for 13 years, the longest-serving director in its history. In total, he served the Garden State for more than 36 years.

Deputy director Mary Jo Flaherty has assumed the role of interim director. Flaherty joined the DGE as deputy attorney general in January 1988, providing legal advice and legislation.

Looking first to igaming, revenue in February hit $3.9m (£3.1m/€3.6m). This was up 254.6% from $1.1m in Delaware last year and, interestingly, 14.7% ahead of January’s $3.4m total.

Video lottery games accounted for $2.8m of all revenue, with online table games at $1.1m for the month. 

Spending-wise, players bet $117.2m online in February, including $68.4m on video lottery and $48.8m on table games. This was up 208.4% year-on-year and also 13.5% ahead of $103.3m in January.

Delaware Park generated the most igaming revenue during the month, posting a total of $2.1m. Harrington Raceway placed second with $1.0m, then Bally’s Dover on $717,119.

Delaware sports betting handle rockets 236.6%

Turning to sports betting, revenue for this sector amounted to $560,449 in February. This was 82.8% ahead of February 2023 but 68.6% behind $1.8m in January.

As for betting handle, this reached $13.8m. The February total was 236.6% clear of the same month last year but 2.8% less than January’s total.

Delaware Park also claimed top spot in the sports betting market with $473,002 in revenue. Placing second was Harrington Raceway with $133,989, then Bally’s Dover at $82,984.

The revenue total would have been higher had it not been for a $129,526 loss from retailers running sports betting. 

Total income for the 12 months to 31 December 2023 was 7.0% higher than ZAR11.3m in the previous year. Sun International said the results reflect the “resilience” of its omni-channel portfolio and “disciplined” execution strategy.

Looking across the business, there are mixed results for Sun International. While income was higher in some segments, this was not the case for other areas of the group. Stand-out highlights include a record performance by SunBet and a 14.8% hike in income from its Sun City casino.

In contrast, there were declines across several of its casino properties, with slots operations having been impacted by “load shedding”.

However, it was a good year for the group, which in December expanded its portfolio with the acquisition of Peermont. The deal, which includes the flagship Emperors Palace resort and online brand PalaceBet, is worth ZAR7.30bn. Sun says the purchase may close before the end of the year.

“The performance reflects the quality of its operating businesses, the resilience of its omni-channel portfolio and disciplined execution on strategy which continues to drive shareholder value,” Sun said.

“We are executing effectively on our omni-channel strategy and are focused on extracting further operational efficiencies as we look to protect and grow our income and margins.”

Positive signs for Sun International in 2024

The group added that while the wider economy and load shedding is placing pressure on its urban casinos, trading levels at the start of 2024 have improved. Again, it noted the success of SunBet.

“Our limited pay-out machines operations are demonstrating continued resilience,” Sun said. “SunBet is achieving significant income growth and is exceeding key performance indicators. This strong momentum is expected to continue with another substantial increase this year as the business expands rapidly. 

“Our resort and hotel properties have continued to perform exceptionally well, and we anticipate another good year from them in 2024. Overall, we are seeing positive growth in both income and adjusted EBITDA.”

Sports betting and tables growth offsets slots decline

Breaking down the 2023 results, gaming was the main source of income at ZAR9.29bn, up 3.2%. 

Slots remained the main source of income at ZAR5.51bn, but this was 2.8% lower than the previous year. However, tables income was up 5.9% to ZAR1.59bm and income from the Sun Slots and SunBet brands also jumped 1.9% to ZAR2.19bn.

As for other revenue from non-gaming operations, this increased 21.7% to ZAR2.81bn. Sun said rooms revenue was up 32.6% to ZAR1.13bn, food and beverage revenue 14.9% to ZAR986m and other revenue 13.7% to ZAR591m.

In terms of individual operations, GrandWest casino drew the most income at ZAR1.88bn, a 3.0% increase. Sun City followed on ZAR1.87bn then Sun Time Square at ZAR1.51bn.

Other stand-out figures for Sun include the record ZAR733m generated by SunBet. The Sun Slots brand also had a good year with ZAR1.47bn in income, though this was 2.7% down from 2022’s total.

Net profit up 62.1% in 2023

Turning to spending, costs were higher across several areas for Sun. The main outgoing for 2023 was employee expenses at ZAR2.31bn, up 7.6% year-on-year. Levies and VAT on casino income also increased 2.6% to ZAR2.20bn.

However, this did not stop Sun posting an improved operating profit, with this rising 2.5% to ZAR2.50bn for the year. Even after including other, finance-related costs, pre-tax profit was 29.4% higher at ZAR1.77bn.

Sun paid ZAR555m in total tax and also accounted for ZAR79m in negative foreign currency translation and ZAR22m related to fair value on listed shares. As such, this resulted in a total comprehensive net profit of ZAR1.30bn for 2023, up 62.1% from the previous year.

In addition, group adjusted EBITDA for the year was 2.4% higher at ZAR3.40bn.

“Our balance sheet remains strong and positions us to continue delivering industry leading cash returns to shareholders,” Sun said. “While we anticipate that the proposed acquisition of Peermont may be concluded this year, we do not expect it to have a significant impact on our 2024 financial performance. 

“In the meantime, we will be focused on comprehensive integration planning and positioning the combined group to deliver earnings and cash flow accretion with comfortable levels of gearing immediately post completion.

“Leveraging off our current momentum and proven leadership, we are confident our strategy will continue to yield exceptional results.”

Two days before the crossover deadline – on a Saturday – the House voted 92-43 to pass a bill that would send the decision about whether or not to legalise icasino to the voters in November.

The Senate now has less than a month to pass the bill. The general assembly is set to adjourn April 8. On 15 March House leadership revealed a $1.3bn (£1.2bn/€1.3bn) budget plan that relies on tax revenue from legal internet gambling to fund future education and transportation costs, according to the Associated Press.

All eyes in the industry have been on Maryland. Many believe the state has the best shot at passing an online casino bill this year. The only other state still considering legalising is Maine. At the start of the legislative season, there was hope that several states – including Illinois and New York – would legalise.

Lawmakers and stakeholders have found it difficult to pass such bills this session and in the past. These regions range from lack of education about exactly what “online gaming” is to the idea that regional players believe they won’t benefit.

As Maryland’s online casino bill made its way through the House, it went through myriad changes. The industry will see some of these as negatives, meaning it will lobby against the changes as the bill travels through the Senate.

Online casino bill has three levels of licensing

By the time HB 1319 reached third reading 16 March, Atterbeary had added an amendment that would increase the number of available licences. The amendment also banned the use of credit cards to fund accounts and added guidelines around diversity, equity, and inclusion.

The bill calls for a minimum tax rate of 55% on electronic games. Tax rates in the seven legal states range from 18-57%. Live-dealer games would be taxed at 20%.

Operators would pay an initial $1m fee for a five-year licence, with a renewal equal to 1% of average annual profit for the preceding three years. Tax revenue would be earmarked for the Blueprint for Maryland’s Future. This includes sending some money to counties that host brick-and-mortar casinos, horse racetracks, and small, minority, and women-owned businesses.

One percent of taxes collected would go to problem and responsible gambling programs.

The bill sets up three levels of licensing, and “social equity partners” play a key role in the structure. Social equity partners are primarily defined as people or groups of people who live or lived in an “economically disadvantaged area” for at least five of the last 10 years.

Such people also must either have attended a public school in an economically disadvantaged area for at least five years. They also must have completed at least two years at a four-year Maryland college where a minimum of 40% of students were eligible for Pell Grants, or have a personal net worth below a standard to be set by the lottery commission, which will be the regulator.

Who could apply for a licence?

The state’s six existing casinos can apply for online gambling licences, but must be at least 5% owned (directly or indirectly, according to the bill) by a social equity partner. A casino can get a second, and in some cases, third licence if at least 33% owned by a social equity partner.

Seven “Class B” licences are also available to the four OTBs and two bingo halls that are already licensed for online sports betting. This is in addition to the Black-owned media company Urban One.

Finally, at least five, and up to 18 stand-alone digital gambling licences would be available through a competitive bid process. The first round of bidding would be reserved for social equity applicants.

When lawmakers legalised online sports betting in 2020, regulators implemented the most stringent minority-related participation guidelines in the US. This slowed the regulatory process. The lottery needed two years to be able to promulgate rules and for operators to meet the standards. That timeline made Maryland one of the slowest US jurisdictions to get from legal to live online.

Only Arkansas and Puerto Rico took longer. It takes the average regulator about six months to get a new market online.

On 16 March, five additional amendments were offered, but the only one that passed deals with live dealers and unionization. Among the failed amendments:

Requiring that a consumer fund an account in personRequiring two-factor identification every time a player logs into an accountCapping individual bets at $5 and capping consumers at betting $100 in one 24-hour period.

Regardless of what is in the online casino bill, some remain opposed. WJZ News reported last week that casino-worker labor unions and Republican lawmakers gathered late last week in opposition due to fear of lost jobs.

The raid took place on 28 February and details have now been made available. Police say the den was operating in an industrial unit in the Splott area of the Welsh capital city.

Two males were arrested on suspicion of money laundering and offences related to the Gambling Act. Police seized all gambling paraphernalia including six poker tables, a spinning prize wheel, poker coins and chips, and flat screen televisions.

The raid is part of Operation Henhouse, a month-long intensification period against fraud in Wales. The Tarian Regional Organised Crime Unit (ROCU) conducted the raid in partnership with the Gambling Commission, HMRC and Cardiff City Council Licensing. 

In total, there have been six arrests plus seven warrants. In addition, more than 10 Cease and Desist notices were issued to individuals committing fraud and money laundering offences.

Ongoing police effort to prevent fraud 

“Fraud has become the most commonly recorded crime in England and Wales,” said Detective Sergeant Emma Brown, of Tarian’s Proactive Economic Crime Team (PECT). “It is often committed in conjunction with other serious offences, such as money laundering.

“Over the course of the Henhouse intensification period, we have arrested individuals under suspicion of Fraud by False Representation and money laundering. This is together with executing warrants in respect of the distribution of illegal TV Firesticks.

“Our engagement teams have also delivered cybercrime and fraud awareness inputs to community groups, colleges and universities, and businesses. This will help prevent people from becoming victims of fraud.”

Gambling Commission executive director of operations Kay Roberts praised the efforts of police. Robert said the Commission will continue to work with law enforcement to tackle illegal gambling.

“We are committed to tackling illegal gambling activity across the UK,” Robert said. “We will continue working closely with law enforcement and partner agencies to achieve this.”

February also marked the 12th month of live digital sports betting, and the state regulator reported $5.98bn in online bets taken since launch 10 March 2023.

During February, eight digital platforms were live. But heading into March, those in the state now have six choices, after Betr and WynnBET shuttered their Bay State platforms.

The Massachusetts Gaming Commission last week announced that it expects Bally Bet to be live by the end of June. BetMGM, Caesars Sportsbooks, DraftKings, ESPN Bet, Fanatics Betting & Gaming, and FanDuel remain live.

For February, Massachusetts’ three brick-and-mortar and eight online sportsbooks reported $52.55m in adjusted gross gaming revenue (GGR) and paid the state $10.5m in taxes. Since the state’s three brick-and-mortar sportsbooks went live 31 January 2023, operators have paid the state $118.6m in tax revenue.

Ten percent hold was barely out of reach

Numbers across the board were down in February – the first month since September without a full slate of NFL games – and operators were just shy of hitting a 10% hold.

The 9.93% hold was down compared to January’s 11.2% win rate. Digital operators had a hold of 10.03% for February while physical sportsbooks didn’t fare as well, with an average 6.2% hold.

Of total handle, online platforms took $530.3m in wagers in February and the retail sportsbooks took $12.2m. Digital operators are taxed at 20% of GGR and brick-and-mortar sportsbooks are taxed at 15%.

On the digital side, DraftKings continued to be the market leader, taking $269.8m in wagers with an 11.7% hold. The next closest operator was FanDuel at $158.9m and 9.1% hold. BetMGM was a distant third, taking $34.7m in bets and a 9.8% hold. Of the sportsbooks still operating in Massachusetts, Caesars had the lowest hold at 3.8% on handle of $18.3m.

WynnBET, which stopped taking bets 12 February, lost $196m on a -5.34% hold. The company will continue to operate the Encore Boston Harbor physical sportsbook. Betr, which shuttered in Massashusetts 16 February, showed a $5,044 profit on $86,865 in wagers and a 5.8% hold. The company does not have a physical location in Massachusetts.

On the retail side, Plainridge Park had the highest handle, with players wagering $5.6m at its southern Massachusetts location near the Rhode Island border. MGM Springfield had the highest hold of any operator at 15.6% on $1.6m in handle. Despite the low handle, MGM Springfield was second among retail casinos in GGR and taxes paid to the state.

ATG’s report estimated channelisation rates for gaming to be between 69%-82% in Sweden during Q4. This falls well behind the Swedish’s government’s target of 90% channelisation to legal operators.

The channelisation rate has fallen since the third quarter of 2023. ATG believes there is little sign of the trend being halted.

ATG found visitor traffic to unlicensed operators has increased tenfold since 2019. The research also highlights that out of 20 unlicensed sites with the highest Q4 visitor traffic, 19 shared the same platform providers as licensed operators.

Additionally, of the 20 black-market sites included in the report, none were on the Swedish regulator Spelinspektionen’s banned list.

“It is a very worrying development and our investigation shows that more still needs to be done to keep the unlicensed companies away,” ATG chief executive Hasse Lord Skarplöth stated. “Unlicensed gambling is the biggest threat to the Swedish gambling market and the vulnerable target group with gambling problems.”

ATG requests help from Sweden banks

Of the 20 unlicensed sites with the most Q4 traffic, seven of them offered direct deposit and withdrawal from a Swedish bank account. Black market players can use the identity verification company BankID with payments business Krofort.

Skarplöth has called upon banks in Sweden to halt such transactions, instead driving them towards the legal market.

“In the light of our report, it is absurd that the Swedish Gambling Authority and banks impose high anti-money laundering requirements on us licensed gambling companies while at the same time watching unlicensed gambling companies,” Skarplöth declared.

Europe’s black-market problem

While some European countries excel in channelisation, Germany and France are among those struggling with the black market.

A 2023 study from the University of Leipzig found that nearly half of all online gambling in Germany takes place with unlicensed operators.

The research estimated that three-quarters of online revenue in Germany is generated by the black market. As a result, hundreds of millions of euros in tax revenue are missed out on.

At a conference in October, it was said that Germany’s licensed operators are under more pressure from the black market than ever before.

In France, meanwhile, the country’s gambling regulator l’Autorité Nationale des Jeux (ANJ) estimated the illegal gambling market in the nation to be worth up to €1.5bn (£1.28bn/$1.62bn). This would account for more than 10% of the total wagered across the country each year.

The study, carried out by PwC, approximated the gross gaming revenue generated by illegal gambling is between €748m and €1.5bn. This would be responsible for between 5% and 11% of France’s total gambling market, which was worth a record €12.9bn in 2022.

ATG records rise in FY2023 net profit

Despite the concerns over channelisation rates in Sweden, ATG reported a 7.5% year-on-year rise in net profits to SEK1.45bn (£111.2m/€129.9m/$140.9m) for its 2023 financial year.

While total group revenue was marginally lower at SEK6.04bn, net gaming revenue edged up 0.9% to SEK5.27bn.

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

Italy’s Autorità per le Garanzie nelle Comunicazioni (Agcom) has imposed a fine of €1.35m on X’s owner, Twitter International Unlimited Company. X was found to have violated the 2019 so-called “dignity decree”. This prohibits any form of advertising, sponsorship or communication presenting promotional content relating to games or betting.

Agcom found nine violations from verified X accounts that advertised sites that offer gaming and betting activities with cash winnings. The fact the accounts had a blue check made X liable for their activities, Agcom said.

The authority added that it has now issued an access inhibition order for two of the accounts that are still active on the platform. Agcom has also adopted an inhibition order for all further illicit content uploaded. This came after notification of the notice of dispute by the nine accounts.

Agcom targets social media platforms

The decision comes just weeks after Facebook and Instagram owner Meta was hit by a €5.58m penalty for gambling advertising. Agcom discovered promotional content for gaming and betting on 18 social media profiles. This included five on Instagram and 13 on Facebook. The regulator also found 32 sponsored video and image posts aimed at promoting or advertising online gaming and betting activities.

The authority has also issued penalties to Google, Twitch and YouTube. Google was issued a fine of €700,000 for violating the ban in August 2022. The fine related to ads that appeared on Top Ads’ Spike YouTube channels, but Agcom did not mention which gambling operators or products were being advertised.

The wide-reaching ad ban in Italy, imposed in 2019, has been a particular source of difficulty for football clubs. Many of these had previously partnered with gambling operators. While partnerships focused on other markets – such as Asia – are still permitted, clubs and football bodies have called for the ban to be relaxed due to the loss of income.