Month: March 2024

Mark Taffler, commercial director of Hub88, talks to iGB about adaptive technology and how it has transformed aggregators in the industry. With over 150 third party suppliers located in one centralised place, Hub88 is able to distribute a wealth of igaming expertise to all of its 500+ partners.

André Feldman, president of BIG Brazil International Games, visited Loterj president Hazenclever Lopes Cançado on Thursday. While declaring his interest in operating sports betting with Caesars in Brazil, Feldman also requested information on becoming accredited by the Loterj to offer lottery in Rio de Janeiro.

In February 2023, BIG Brazil International Games partnered with Caesars to introduce sports betting in Brazil when legalised. After Bill 3,626/2023 was approved in December, sports betting is expected to be regulated by late 2024.

“Expectations are high,” Feldman said. “We intend to enter the Caesars Sportsbook brand in Brazil, starting in Rio de Janeiro. We are already working on composing all the technical documentation to, in the next few days, officially enter into the Loterj accreditation.”

Cançado added: “We are very happy with the decision of Caesars Group and BIG Brazil to invest in this betting market in the state of Rio de Janeiro.”

Caesars the latest to make Brazil move

Despite sports betting not being legal in Brazil yet, a number of betting companies have made moves into the country.

In February 2023, NeoGames and Intralot do Brasil announced the launch of LotoMinas. That was the first regulated ilottery and online sports betting solution for Brazilian state Minas Gerais’ official lottery, Loteria Mineira.

Loterj became the first state lottery in Brazil to issue a tender for sports betting. It did so in June 2023, awarding a five-year tender to São Paulo-based Rede Loto. This will allow it to offer online sports wagering in the country in preparation of federal regulation.

In September, sportsbook technology provider OpenBet teamed up with Play7.Bet to provide technology to power its retail and online sports betting offering in Brazil.

Sports sponsorships have also been a big feature of operators’ plans in Brazil. For instance, Flutter Entertainment-owned Betfair entered into a partnership with Cruzeiro, a Brazilian football club.

Blaze and Parimatch also announced kit sponsorships of Brazilian football clubs, partnering with Atlético Clube Goianiense and Botafogo respectively.

Brazil’s betting journey

The course to legalised sports betting in Brazil has been an up-and-down journey. However, it does finally look to be in the final phases.

Brazil’s chamber of deputies voted on 21 December to approve Bill 3,626/2023 and regulate sports betting.

igaming was also included in the bill after it was previously removed by the senate.

President Luiz Inacio Lula da Silva signed the bill into law on 30 December. This ratified a new regulatory framework for sports betting and igaming.

Will there be betting in Brazil in 2024?

The winding nature of the journey towards Brazil’s sports betting legalisation has left some a little hesitant over how smooth the final stages of the process will be.

However, Neil Montgomery, founder and managing partner of Brazilian law firm Montgomery & Associados, believes regulation will get over the line by the latter stages of 2024.

“Given the need for the ministry of finance to issue a number of administrative norms further regulating the different topics covered by the Bill of Law, with the same also being put to public consultation before they become effective, it is more likely that Brazil will see a regulated market operating in the second half of 2024,” Montgomery told iGB.

Brazilian regulators still have issues to iron out, however. One such issue is advertising. A potential ban in Brazil on celebrities being used in betting advertising is ready to be included on the senate’s agenda in 2024.

Bill 3,405/2023 seeks to ban celebrities featuring in sports betting advertising. Senator Eduardo Girao, who has long been against gambling in Brazil, presented amendments that would ban anyone considered to have influence being involved in the marketing of gambling.

According to a Casino Nieuws report, Kansspelautoriteit (KSA) has approached operators with a request for information. This includes details of when the sponsorship contracts were signed and their duration, as well as what the agreement includes.

While an advertising ban came into effect in 2023, sponsorships are still currently legal. Programme and event sponsorship is allowed until 1 July of this year while sports sponsorship is allowed until 1 July 2025. New contracts may no longer be concluded since 1 July 2023, because the exception only applies to contracts concluded before that date.

The KSA told the operators to provide the information by 29 March 2024. Several people involved confirmed the request to Casino Nieuws.

KSA’s gambling sponsorship request

The report claims that those with sports sponsorships must specify whether the deal is with a team, stadium or other organisation. They must say how the sponsorship is expressed, such as via a shirt sponsorship or stadium display.

With media sponsorship, the regulator asks what type of media it concerns, such as TV or radio. They must also say on how many broadcasts the advertising can be seen.

With event sponsorship, gambling sites must indicate which event is being sponsored, when the event takes plac  and what the advertisement looks like.

KSA also asks whether the contract includes options to approach fans or followers with an expression. In addition, the regulator also asks whether agreements have been made in the contract to prevent the targeting of vulnerable groups.

KSA: Some gambling advertising still legal

The Netherlands government implemented a ban on most forms of gambling advertising back in July. The change prohibited advertising through most media channels. This included television, radio and print, while the rules also banned advertising in public places.

However, the laws still allowed targeted advertising in some contexts. This meant ads within on-demand streaming services, social media, through direct mail and online gaming environments were still permitted.

The Malta Gaming Authority (MGA) said it has decided to cancel the authorisation issued to Rush Gaming with immediate effect. Rush Gaming operates both the Fansbet.com and Onebet.com websites.

MGA did not disclose an explanation as to why Rush Gaming has had its licence cancelled. When announcing the suspension in January, the MGA stated that licences can be suspended if operators breach gambling-specific regulations or laws in Malta.

Rush Gaming has been ordered to notify all players of the cancellation and settle all outstanding fees. The MGA confirmed it can appeal the decision.

Rush Gaming’s B2C gaming licence covers several gambling activities. These include casino, controlled skill games and fixed-odds offerings such as live betting.

Malta clamps down on licensees

MGA had a busy start to the year with online gambling operator Super7Plus becoming the fifth business in two weeks to have its licence cancelled in January.

The start of the year also saw Charles Mizzi take over as CEO. Mizzi replaced Carl Brincat, who stepped down after two years at the helm.

Mizzi joined the MGA from Residency Malta Agency, where he served as its CEO for five years. He also held other senior roles during his career including head of the image and communications unit at BNF Bank.

You think it’s easy being a gaming regulator in the 21st century? Try this one on for size.

Your governor has just shaken up your state’s entire regulatory structure. Consolidating authority has been spread over two agencies and jettisoning entire functions (such as having inspectors on the gaming floor), while at the same time authorizing new forms of digital gaming.

That is the scenario that David Rebuck, a Senior Advisor to Gov. Chris Christie at the time, found himself in when he was appointed Director of the New Jersey Division of Gaming Enforcement 13 years ago. His mandate was to be effective (including being cost-effective), while also being innovative. And, while you’re at it, be fast.

Rebuck retired 29 Feburary. He will be honoured with a Lifetime Achievement Award at the East Coast Gaming Congress conference. This takes place on April 17-18 at Hard Rock Atlantic City.

Rebuck fostered relationship between state, operators

The Casino Control Commission, which had been the state’s primary licensing and regulatory agency since 1977, had already lost more than 30 percent of its staff by the time Rebuck walked in. He would then face far more cuts under the new regulatory regimen. Carrying out such a mandate for reform was not exactly a prescription for popularity. Nor was it guaranteed to succeed.

But Rebuck found a way.

“We set up 10 separate committees within the Division to look at the regulations. This included financial reporting, licensing, oversight of the floor and the revenue certification process,” Rebuck said. Most notably, the regulated entities had seats at the table. “We said to every property: You designate who you want on those committees.”

That core decision fostered a dialogue between the state and the casino industry. It also made clear that gaming operators had a responsibility to make a case as to what they needed. This also meant stating what they could do to meet goals that were jointly established and shared.

“They knew they needed regulation,” Rebuck said. He also noted that all parties recognised the review process would not be static, but needed to be monitored. As a series of revised rules unfolded, “I told them: ‘OK, we will see how they shake out, but next year, we will do it again.’”

NJ still has its own gaming test lab

One change that was not made was the elimination of the state’s gaming lab. This was set up at the outset of gaming to test slot machines. It is also responsible for the review and testing of all gaming-related technologies.

Unlike most gaming jurisdictions, New Jersey has never outsourced this function to private labs, and its lab is widely considered to be among the industry’s best. Rebuck and his staff asked gaming operators and suppliers for their views, and the response was that the New Jersey lab had proven to be very responsive. “The Industry said: We don’t have a problem.” Hence, the state continues to operate its own testing lab, and has not plans to change this model.

Rebuck’s greatest challenge came with the implementation of igaming, which has now been in place in New Jersey for more than a decade. “We did not dictate how you (casino operators) did your business plan. Do it any way you want, as long as it meets our regulations.”

Rebuck and his team looked at igaming in Europe, which had been in place for decades, and quickly learned that such a process would not work in New Jersey, in part because it simply opened igaming up to entities far outside of the licensed casino operators, offering something similar to the Amazon model for retail selling.

According to Rebuck, European operators said: “We can flip the switch and we can be live tomorrow. We are not a flip-the-switch state.”

The New Jersey model rather gave authority to offer igaming to the licensed casino operators, a move that also allowed casino operators to reach a new demographic, and convert those digital customers into real-world, brick-and-mortar visitors who would spend money in multiple cash registers. Most notably, the implementation of igaming in New Jersey was accomplished within nine months.

Mentorship a key part of Rebuck’s legacy

That is a critical element of Rebuck’s legacy, but is hardly the only one. He has also served as a mentor to regulators in numerous other states who seek his counsel. “You think Nevada is the gold standard? I don’t,” Rebuck said. “We think New Jersey should be the platinum standard.”

The messages he has sent to fellow regulators includes one that is worth repeating, and cannot be overstated: Effective regulation is the foundation of public confidence in gaming, and has allowed gaming operators to secure financing from banks and from Wall Street, and that confidence has fueled the expansion of gaming throughout the United States.

Rebuck has maintained a tradition of effective leadership at the Division of Gaming Enforcement, following such highly regarded predecessors such as G. Michael Brown, Anthony Parrillo and Tom Auriemma.

David Rebuck’s legacy is a demonstration that the regulation of gaming – an industry that is more intensively regulated than any other – can be accomplished through a combination of a constant dialogue and a never-ending reminder that effective regulation is neither a luxury, nor is it a burden. It is simply a requirement for success.

Michael Pollock recently retired as a managing director of Spectrum Gaming Group, and now holds the emeritus title of senior policy advisor. He is a former New Jersey regulator, and is a co-founder of the East Coast Gaming Congress, the longest-running gaming conference in the United States.

The ADOG opened an application window in February for one tribal and at least one professional sports franchise licence. By law, there are 20 licences available, 10 each tethered to tribal casinos and professional sports venues/franchises.

The ADOG did not announce if it had issued a licence to an entity that would partner with a professional sports franchise, but confirmed to iGB that that it did not receive any applications for the pro franchise license. In a previous licensing round, no pro franchises applied. To date, eight professional sports franchises are licensed, leaving two pro franchise licences unclaimed. Two and a half years after legal sports betting launched in Arizona, it appears there are no other professional franchises in the state that could qualify.

Some tribes still shut out of event wagering

On the tribal side, the 10 available licences are all claimed, leaving at least six tribes without access to sports betting in Arizona. In August, the ADOG awarded a licence to Bet365 in partnership with the Ak-Chin Indian Community, which lost its partner when Fubo Sportsbook shuttered in 2022. Bet365 launched in February.

A year ago, the Fanatics digital platform was available in just a handful of states, but since acquiring PointsBet’s North American operations, it has rebranded or launched coast to coast, and is now available in 16 states, including Michigan, New York, North Carolina, Ohio and Pennsylvania – five of the seven biggest US states that allow legal sports betting.

Fanatics Sportsbook has up to 180 days to launch its platform, but ADOG said it can launch as soon as it submits all required information and gets go-live approval from the regulator.

Arizona operators set a record for handle in January, according to the sports betting revenue report released on 12 March. The 16 operators live in the state took $706.4m in wagers, had adjusted gross revenue of $46.2m after promo deductions, and paid the state $4.6m in tax.

Total handle in February, across online and retail, was clear of the $194.0m wagered in the same month last year. However, it was 15.3% behind January’s $239.6m in Kansas.

Of this total, $193.9m was bet with online sportsbooks while the remaining $9.1m was spent at retail facilities.

Turning to revenue, this amounted to $3.1m in February, up significantly from just $35,916 in the previous year but 48.3% behind $6.0m in January.

Almost all revenue came from online betting ($3.0m), with just $5,025 being generated by retail sportsbooks. Kansas was also able to generate $305,494 in tax during the month.

DraftKings and Boot Hill take the lead in Kansas

Looking at individual operators, DraftKings and Boot Hill Casino became the new online market leaders in February. The partnership generated $2.0m in revenue from $87.7m in total wagers.

FanDuel and Kansas Star, which led in January, slipped to second with $885,938 from $58.5m wagered. Caesar’s and Kansas Crossing was the only other partnership to generate revenue, posting $198,496 for the month. Kansas Crossing also has online deals with BetMGM and PointsBet.

As for the retail market, DraftKings and Boot Hill was the only partnership to post revenue. However, this only amounted to $5,025 off $612,308 in total wagers.

Year-to-date revenue exceeds $80.0m

As to how February impacted Kansas and its year-to-date performance, total spend in the fiscal year hit $1.61bn. This comprises $1.53bn spent betting online and $73.6m at retail facilities.

As for revenue, this amounted to $80.5m. Revenue from online betting hit $76.0m and retail $4.5m.

Total tax for the period reached $8.0m.

Revenue was higher across all markets for Century in 2023, with operations in the US driving the rise in revenue. Century also expanded its network by completing several acquisitions during the year.

These deals included the remaining 50% in Nevada’s Nugget Casino Resort, purchased from Marnell Gaming in April 2023 for $100.0m. In July, Century also finalised its acquisition of Rocky Gap Casino in Maryland for $56.1m, after striking the deal July 2022.

Aside from M&A activity, Century also continued work on several large construction projects in Missouri. Its new Cape Girardeau hotel is set to open next month, while the Caruthersville casino and hotel is scheduled for completion in late 2024.

Taking into account these new projects, acquisitions and increase in revenue, co-CEOs Erwin Haitzmann and Peter Hoetzinger were positive about Century. Both described 2023 as a “transitional” year for the business that sets it up for growth in 2024 and beyond.

“2023 was a transitional year for Century,” Haitzmann and Hoetzinger said. “We completed two major acquisitions to expand our US portfolio to seven casinos.

“We are excited to look forward to 2025, when our newly acquired casinos are fully integrated into the company and to what we anticipate will be our first year since 2022 with no significant construction or renovation disruptions at our properties.”

US revenue jumps 41.7% in 2023

Breaking down geographical performance in 2023, the US was Century’s main source of revenue by some distance. Revenue in the US increased 41.7% to $380.6m, helped by the acquisition of the two casinos.

North of the border, Century also reported growth in Canada, with revenue here rising 5.3% year-on-year to $75.4m. Century operates four land-based venues across Canada.

Over in Europe, revenue from operations in Poland edged up by 4.3% to $94.1m. This was despite unanticipated licensing delays that resulted in the closure of three casinos in Poland in Q4. 

Century has since secured all three Polish licences, with one casino reopening last month and another scheduled before the end of March. The third casino is due to open at a new location in Q3.

The group also noted $61,000 in other and corporate revenue, down 70.4% year-on-year.

Higher expenses hits bottom line

Turning to spending, total operating expenses in 2023 amounted to $487.3m, an increase of 33.1%. Non-operating costs were also 42.7% higher for the year at $87.9m.

As such, pre-tax loss reached $23.8m, in contrast to a $6.0m profit in 2022. Century received $5.3m in tax benefits but also noted a $9.7m loss from non-controlling assets.

This left an overall net loss of $28.2m, compared to an $8.0m profit during the previous year. However, there was better news in terms of EBITDAR, which increased 10.4% to $114.0m in 2023.

Similar story in Q4

As for the final quarter of the year, the results made for similar reading. Revenue increased by 38.5% to $143.8m. 

Again, Century reported solid year-on-year growth across the US (up 36.6%) and Canada (up 51.4%). However, the same could not be said for Poland, where the licensing issues and subsequent closures meant revenue fell 71.1%. In addition, Century reported a drop of $3.3m from corporate and other activities.

Spending-wise, operating costs increased 44.0% to $131.2m, while non-operating expenses were also up 52.4% to $25.0m. This led to a pre-tax loss of $12.4m, compared to $2.6m in 2022.

Century received $4.0m in income tax benefits but also accounted for a $2.4m loss from its non-controlling assets. As such, this left an overall net loss of $10.8m, more than double $4.0m in the previous year and in line with forecasts made last month.

However, as was the case with the full year, there was better news with EBITDAR. This was 17.1% higher at $25.4m.

Revenue in the three months to 31 January 2024 was 9.3% higher than in Q1 of the previous year. Golden Matrix also said that its cash flow from operations was positive for the ninth consecutive quarter.

This will come as a boost to Golden Matrix which, despite record revenue, reported a net loss in its 2023 full year.

CEO Brian Goodman hailed the Q1 performance, saying he was “exceptionally pleased” with the figures. Aside from revenue growth, he picked out other key figures, including EBITDA growth.

“We achieved positive GAAP earnings and adjusted EBITDA of almost $1.2m,” Goodman said. “We set multiple records, delivering our highest ever quarterly results for revenue, total assets, shareholder equity and cash-on-hand.

“The company is well-positioned for continued growth within its B2B and B2C divisions.”

Update on MeridianBet acquisition 

Goodman also made reference to the pending acquisition of MeridianBet. Golden Matrix agreed to buy MeridianBet in January of 2023, in a deal worth approximately $300.0m.

Initially, Golden Matrix said the deal would close during H1 of 2023. However, Golden Matrix in July last year made several amendments to the deal, pushing the closing date back to Q4 of 2023.

Further amendments were made in October, pushing the closing date back again, this time to Q1 of 2024. Golden Matrix in January said this was still the case, but the deal is yet to go through. 

Goodman said the company is making “significant progress” on the acquisition. A special meeting is scheduled for 19 March, where Golden Matrix shareholders are scheduled to vote on the deal.

“We continue to make significant progress towards closing the pending MeridianBet acquisition,” Goodman said. “We look forward to working to boost top-line growth and profitability once these two world class businesses have been combined.”

Golden Matrix in the black despite higher costs

Taking a closer look at the figures for Q1, B2C operations accounted for $7.2m of all revenue. The company’s B2C operations comprise the RKings and Mexico-facing Mexplay brands.

As for B2B activity, revenue reached $4.6m during Q1. Golden Matrix said 808 unique casino operations are supported by its B2B gaming platforms, with the total number of registered users across these partners standing at 8.3 million.

In terms of spending, cost of goods sold during the quarter were up 2.4% to $8.5m. Total operating expenses also increased 10.7% to $3.1m.

Golden Matrix also noted $57,481 in other income, leaving a pre-tax profit of $336,685, in contrast to a $297,835 loss in the previous year. 

The operator paid $262,180 in tax but also accounted for $197,891 of positive foreign currency translation adjustments. As such, it ended Q1 with a net profit of $272,396, compared to a $291,262 loss in Q1 of 2023.

In addition, adjusted EBITDA for the quarter increased 33.8% to $1.2m.

“We are exceptionally pleased with the company’s performance in Q1 to kick-off the new fiscal year,” Goodman said.

Gross gaming revenue was 7.7% higher year-on-year at OPAP in 2023. The group said this was driven by “strong” online growth alongside a “solid’ retail performance.

Lottery remained the primary source of revenue for OPAP in 2023, although it was also the area of least growth. Online casino reported the highest increase, with revenue here rising 26.2%.

There were some challenges for OPAP in 2023. One bump in the road came in the form of a €24.5m fine from the Hellenic Gaming Commission. Issued in October, this was in reference to OPAP abusing its position in the Greek market. 

However, reflecting on 2023, CEO Jan Karas was hugely positive. He hailed OPAP’s ongoing business strategy and its impact on operations. 

Karas also noted the impact of a strong fourth quarter, during which revenue also reached an all-time high. The group put this down to a continuous focus on digitalisation, with its online casino business again posting the highest percentage of growth.

“OPAP concluded 2023 with the strongest Q4 ever and achieved record revenues,” Karas said. “This development clearly reflects the consistent and effective implementation of our business strategy throughout the year, as well as our ability to pursue and achieve ambitious goals.

“In Q4, both our retail and online business posted solid growth, driven by our continuous focus on digitalisation. As a result of last quarter’s positive financial and operating performance, recurring EBITDA outperformed our latest outlook.”

Lottery leads the way for OPAP

Breaking down OPAP’s financial performance in 2023, lottery again drew the most revenue at €730.0m. This was 2.9% higher than the previous year on the back of solid KINO results for the year.

Sports betting revenue increased 6.9% to €645.5m following strong performances by both its Powerspin and virtual products. OPAP also noted the success of its online sports wagering offering.

Turning to video lottery terminals (VLTs), revenue increased 8.2% to €344.5m. In addition, instant and passives revenue was 7.4% higher in 2023 at €115.9m.

However, the area of most growth for OPAP was online casino, with revenue here up 26.2% to €251.8m. OPAP said this increase was driven by higher player engagement levels, with particular success in Q4.

Net profit slips 30.5%

In terms of spending, gaming revenue expenses were the main outgoing at €583.4m, up 9.1%. Payroll costs were up 8.6% to €91.8m, marketing spend climbed 10.4% to €123.4m and other operating expenses increased 17.5% to €198.5m.

Depreciation and amortisation costs hit €133.6m while net finance costs hit €20.1m. This left a pre-tax profit of €570.1m, down 21.2% year-on-year.

OPAP paid €156.0m in tax, resulting in an annual net profit of €408.3m, down 31.1% from 2022. In addition, EBITDA dipped 0.8% to €730.0m.

Finishing 2023 strong with record Q4

Looking to Q4, group revenue was 7.5% higher at €581.2m. Lottery revenue edged up 1.9% to €197.6m, sports betting revenue grew 12.4% to €180.9m, VLTs revenue increased 3.0% to €96.2m and online casino revenue jumped 25.7% to €76.3m. However, there was a 5.2% drop in instant and passives revenue to €30.2m.

Spending-wise, gaming revenue related expenses increased 6.7% to €163.0m, while payroll costs were up 0.8% to €23.7m. Marketing spend was reduced by 9.5% to €38.7m but other operating expenses were 9.7% higher at €52.1m.

OPAP did not publish a full breakdown of additional finance information for Q4. However, it did note that net profit was 67.2% lower year-on-year at €100.6m. This decline was due to a one-off profit in Q4 of 2022, which included a €181.3m profit from the disposal of Betano.

However, there was better news in terms of EBITDA, which increased 3.7% to €210.2m.

In addition, OPAP also published preliminary guidance for 2024. The group said revenue will likely be between €2.15bn and €2.20bn for the year, the midpoint of which would represent a 4.2% increase. EBITDA is set to range between €750.0m and €770.0m, with the middle of this being 4.1% higher.

“Looking ahead, in line with our Fast Forward business strategy, we remain committed to further upgrading our proposition, securing sound growth and profitability, rewarding our shareholders and delivering on our sustainability and social responsibility objectives,” Karas said.