Month: March 2024

Alexandre Tomic, founder of Alea, discusses the importance of APIs in the industry. Alea are building a framework called API governance which provides a “best practice” for igaming operators. Tomic believes the heart of the gaming operation is the gaming API and this is why Alea tells partners: “We are not going to integrate you but, rather, you’re going to integrate us.”

DataCo also holds rights to data from the English Football League (EFL), containing the Championship, League One and League Two, as well as all leagues overseen by the Scottish Professional Football League (SPFL), including the Scottish Premiership.

Genius has now entered into an exclusive period of negotiation with DataCo as it seeks to get the extension over the line. The renewed agreement is still subject to contract and the approval of the leagues and their clubs.

Genius has exclusively supplied low latency data to DataCo from the EPL, EFL and SPFL since 2019. The current deal expires at the end of the 2024-25 season, with the new contract set to last until 2029.

The fresh deal will see Genius Sports continue to distribute data from over 4,000 UK football fixtures per season.

Genius Sports reports mixed FY2023

Genius Sports recorded a 21% revenue increase for its 2023 financial year, reaching $413.0m (£324.5m/€379.3m) and beating its prior guidance of $391m.

The revenue was boosted by improvements in two of Genius’ operating sectors. This was evident in the 31.1% rise in Genius’ Betting Technology, Content & Services segment, which was responsible for $274.2m of the total revenue.

Adjusted EBITDA also more than tripled, shooting up by 238.3% year-on-year to $53.3m. This again surpassed the initial guidance of $41m.

However, despite the hikes in revenue and adjusted EBITDA, Genius Sports still recorded a loss of $85.5m for the year. This was less than half of the $181.6m loss reported the year prior, with Genius lauding “improved underlying performance”.

DataCo extension the latest move for Genius

In 2023, Genius penned a number of data deals with global businesses and federations. For instance, in March its data tracking business Second Spectrum extended its contract with the NBA.

In May, Genius and the Canadian Football League (CFL) launched data collection system CFL LiveStats. The following month saw Genius expand its integrity deal with the German FA. FanDuel and Genius also dually launched their NFL BetVision streaming solution in November.

In January, Genius announced an automated pricing tool called Edge. Factoring in real-time liability, Edge can recalculate odds at a fixture and market-type level for maximum profitability, including bet-builder products.

Genius’ product director Thomas Holland said Edge plans to offer operators an improved pricing tool over current solutions, which only serve to “limit players and minimise losses”.

Group revenue for 2023 was up from $4.23bn in the previous year and in line with guidance. IGT said this was down to growth in its Global Gaming and PlayDigital businesses, although Global Lottery reported a decline.

However, there were some marginal improvements within Global Lottery during the final quarter of 2023. This, coupled with growth in the other segments, ensured a strong end to the year,

“We delivered a strong finish to the year in the fourth quarter, propelling full year 2023 profits to record levels,” IGT CEO Vince Sadusky said. “A compelling array of products and solutions fuelled broad-based momentum in key performance indicators, driving margin improvement across our Global Lottery, Global Gaming and PlayDigital segments.”

New look for IGT as merger confirmed 

Incidentally, the make-up of IGT will soon be rather different following news of a restructure last month. IGT is merging its Global Gaming and PlayDigital divisions with Everi to create a “comprehensive and diverse” global enterprise.

Global Gaming and PlayDigital will be spun off and combine with Everi. IGT shareholders will own around 54% of shares in the combined business and Everi stockholders the remaining 46%. The merger values the enlarged operation at $6.20bn.

Both the IGT and Everi boards have approved the merger, which will close later this year or early 2025. Following the close, Everi will be renamed International Game Technology Inc and trade on the New York Stock Exchange.

“We believe the recent determination to split the business and create separate lottery and gaming pure play companies, each with experienced management teams and simplified business models, better positions each company to service customers and create significant value for stakeholders,” Sadusky said.

Mixed results for 2023

Taking a look at the results for the 12 months to 31 December 2023, the headline figure for IGT is revenue growth. Service revenue dipped 0.4% to $3.35bn but product sales revenue offset this decline, rising 11.2% to $963m.

Despite the decline in Global Lottery, it was still the main revenue source for IGT by some distance. Revenue here totalled $2.53bn, down 2.4%. IGT referenced the sale of its Italian commercial services business as a reason for this fall. Net of this impact revenue would have been 6.0% higher.

Global Gaming revenue climbed 9.1% year-on-year to $1.55bn in 2023. IGT said this was due to “broad-based strength” across key performance indicators for the business.

As for PlayDigital, revenue here was 9.1% higher at $228m for the year, a new record for the division. The group noted the impact of igaming growth across a range of markets as the main driver behind this increase.

Net profit slips 43.3%

Costs-wise, operating expenses for the year were only marginally higher at $3.31bn. The main outgoing for IGT was cost of services, which amounted to $1.63bn.

Non-operating costs climbed 11.7% to $372m, leaving a pre-tax profit of $629m, up 6.8% on 2022. IGT paid $322m in total tax and discounted $151m in profit from non-controlling interests.

As such, net profit for the year hit $156m, down 43.3% from $275m in 2022. However, total adjusted EBITDA reached an all-time high of $1.78bn, up 6.9% from the previous year.

Strong end to 2024 with Q4 growth

Looking to Q4, group revenue was up 3.4% to $1.13bn. Of this $839m came from services and $291m product sales.

Global Lottery revenue in Q4 increased 6.6% to $681m, driven by strong product sales and Italy same-store sales growth. Global Gaming revenue was level at $390m as higher terminal product sales revenue and increased intellectual property revenue were offset by lower systems sales.

PlayDigital revenue dipped 9.2% to $59m due to a one-time benefit related to jackpot expense in the prior year and lower sports betting volumes and hold rates in Rhode Island in 2023.

Operating costs were up 1.2% to $873m although non-operating expenses were reduced by 9.3% to $146m. This resulted in a pre-tax profit of $110m, up 57.1% year-on-year.

IGT paid $83m in tax and took off $35m in profit from non-controlling interests. As such, it was left with a net loss of $7m for Q4, although this was an improvement on the $64m loss from the previous year.

In addition, adjusted EBITDA for the quarter increased by 8.4% to $454m.

“We achieved all of our financial goals in 2023,” IGT chief financial officer Max Chiara said. “Robust cash generation funded incremental investments in the business and shareholder returns, while driving leverage to historically low levels, putting IGT in a strong financial position as we enter 2024. 

“This gives us confidence in further expanding our investment in the business to fund future growth.”

On Monday, Standard General’s non-binding offer, published in a US Securities and Exchange Commission (SEC) 13D filing, has now seen Bally’s share price increase to $14.08, up 33.46% from Friday’s closing price on the NYSE.

The new special committee will evaluate Standard General’s offer to acquire the entirety of of all outstanding shares of common stock beyond the 25% the hedge fund already owns. The Bally’s committee, made up of “independent and disinterested directors”, will also analyse any potential strategic alternatives to the proposal.

In the statement announcing the committee, Bally’s stated there would be “no assurance” on whether the offer will be accepted or any agreement will be executed.

A second Standard General bite at the Bally’s apple

The new offer is the second that Standard General have made a full takeover bid for Bally’s. It previously made an attempt in January 2022, offering to buy the company for $38 a share. The new offer suggests the hedge fund values Bally’s over 50% less than it did two years ago.

The offer letter outlined: “The proposed transaction would be subject to the approval of the board of directors of the company and the negotiation and execution of mutually acceptable definitive transaction documents.”

The $15-per-share offer was at a 41% premium to Bally’s closing price on Friday on the New York Stock Exchange at $10.55. In total, the company holds a market capitalisation of over $600m. After the news of the offer came out, Bally’s share price jumped up 25.24% to $13.30 on Monday. At the time of writing on Tuesday, Bally’s share price is now at $14.08, up 33.46% on Friday’s closing price.

Mixed 2023 for Bally’s

2023 was an up-and-down year for Bally’s, with the drop in price from Standard General’s first offer in 2022 reflecting the company’s continued net loss. Accumulated total operating costs fell 8.7% to $2.34bn during 2023.

After including $289.7m in other expenses, this left a pre-tax loss of $167.6m, a rise on 2022’s figure of $454.5m. However, adjusted EBITDA for 2023 fell 3.9% to $527.3m.

2023 saw a number of major developments for Bally’s. In January, the company announced it was cutting 15% of its North American interactive workforce in order to reduce costs. Following that, there was news that Diamond Sports Group, operator of the Bally’s branded TV sports networks, was nearing bankruptcy.

However, as 2023 went on, Bally’s outlook brightened after the March appointment of new chief executive Robeson Reeves.

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

“Passing igaming legislation is hard!”

Ain’t that the truth. Gambling stakeholders and lawmakers enter every new legislative season full of enthusiasm and hope, yet nearly six years after the Professional and Amateur Sports Protection Act was overturned by the US Supreme Court, seven US jurisdictions are currently offering legal online casino compared to 31 offering online sports betting and 40 offering legal wagering overall.

And the 2024 legislative season has, so far, been disappointing from a legalisation standpoint. No US state is close to legalising online wagering, though bills remain alive (though languishing in committee) in several states, including Georgia, Minnesota, and Mississippi. Hopes for online gambling bills are dimming by the day.

The canned answers for what makes legalising online casino so hard are many and varied. Fear of addiction. Concerns that online casino will cannibalise brick-and-mortar venues. The belief states don’t need the money just yet.

But there very well may be a reason that the idea of online casino isn’t gaining traction. It’s one that has nothing to do with what’s going inside of state houses across the country.

Is there any upside for smaller players?

“I don’t think it’s really a legislative issue at this point,” Howard Glaser, global head of government affairs and legislative counsel at Light & Wonder (pictured below), tells iGB. “It’s really a question of the market dynamics, and increasingly, if you are a land-based casino not named MGM or Caesars, you may think you won’t see a lot of upside to online gambling because of a belief that you cannot compete.

“Then you have the domination of DraftKings and FanDuel with 80% of market share (in both digital sports betting and casino). So, if you are a mid-sized or regional player, you have to ask yourself ‘What is my role or am I going to be left out?’”

Craig Billings, the CEO of Wynn Resorts, which just happens to be one of the “mid-sized or regional players” has a similar take, which he shared on LinkedIn late last week.

Billings wrote that the focus on online casino expansion has been centered on total addressable market (TAM) and taxes, which he called a “narrow focus”. There is, Billings argues, much at stake for individual operators, who must place more value on their own market share, not TAM.

“There are almost 1,000 commercial and tribal casinos in the US,” Billings wrote. “How many of them can actually avail themselves of the often-touted benefits of an “omni-channel” strategy? 100? 150? The properties that might actually be able to compete with the digital native online gaming providers are those that are owned by the large national gaming operators. What about everyone else?”

Unity could be powerful

Glaser suggests that “everyone else” should band together to create a juggernaut that can compete. As it stands, the tech companies – DraftKings, FanDuel, and now Fanatics Betting & Gaming – dominate the online casino and sports betting spaces.

Caesars Entertainment, MGM, and PENN Entertainment have measurable, but not competitive market share. Companies such as Bally’s, bet365, SuperBook, and Tipico are also in game, as are unbranded commercial and tribal casinos across the country. While those companies may not need massive market share to define their success, they do need skin in the game.

“The reason we are not seeing strong political support across the country is that not all regional players think they can be involved,” Glaser says. “They need to figure out how to be in. Their fragmentation is the reason they don’t see an easy path to getting in.”

Glaser thinks that unity – among land-based casinos in a state, whether tribal or commercial – will be the ultimate key to passing online casino bills.

“If they decide they want to have a uniform product, they would have instant power,” Glaser explains.

“They would share platform, product, and revenue. That’s the obvious gaping hole in the market […] the fear that regional and tribal players have that they are going to be frozen out of the marketplace. But that is not a forever situation.”

Labor unions are another concern

Billings also offered some other potential potholes on the road to legalisation. He wrote that labour unions could play a critical role in defining what online casino looks like in any state.

Successful online casino operations employ only a fraction of the number of employees that successful land-based casinos employ. And ultimately, those not at the top of the online gaming heap will thin out their ranks. Unions, in turn, will push back.

It seems unlikely that online gambling will gain much traction until the core issues outlined are, if not solved, at least addressed. But the issue is a topic in state houses across the country, whether or not bills are moving forward.

Fanatics Betting and Gaming head of government affairs Brandt Iden – author of the opening quote – says that the industry must also focus on education.

“We go to talk about igaming and they think we are talking about video games,” he said during a panel at iGaming Next in New York 6 March. “I start with [using the phrase] ‘internet casino’. You have to call this what it is, otherwise you have lawmakers that don’t know what you’re talking about. And then you have to lead with consumer protections.”

Maryland and Maine this year’s last igaming hopes?

Iden, the former Michigan representative who successfully got legal sports betting and igaming passed as a package in 2019, and Shawn Fluharty, the West Virginia delegate who did the same in 2018, often find themselves at the forefront of the conversation.

Neither is sure online casino will gain traction much of anywhere in 2024. Lawmakers in Maryland are at least making a Herculean effort that includes a town-hall meeting to take an in-depth look at the current proposal on 15 March at Morgan State. It marks one of, if not the first, public education sessions around online casino not inside a capital building anywhere in the US.

The only other state in which legal online casino is actively being discussed is Maine. There the state’s four tribes were gifted online gambling in a comprehensive gambling bill that Gov. Janet Mills signed in May 2022.

The current iteration of the framework proposal would give the tribes exclusivity, like they have for sports betting. The state’s two brick-and-mortar casinos run by Churchill Downs, and PENN Entertainment, would be banned from offering digital gaming. The key bill in that package is in the state’s Joint Standing Committee on Veterans and Legal Affairs, but doesn’t have a hearing date.

Online casino is a tax cash cow

At the start of 2024, there was hope that multiple states – Illinois, Indiana, Maryland, New Hampshire, and New York – might legalise igaming. But two months into the legislative season, those hopes have been mostly crushed. While Bally’s launched its Rhode Island online casino platform last week, four-plus years after debuting online sports betting, there is little else to celebrate.

On the face of it, legal igaming seems like a slam dunk. The tax revenue available to states through online casino versus sports betting is staggering. In Connecticut, in 2023, digital casino tax revenue was $60.2m, compared to $19.5m for online sports betting, according to databases maintained by US Bets and Sports Handle.

In the biggest state with legal online casino and sports betting, Pennsylvania took in $490.4m in casino gaming tax revenue in 2023, as compared to $155.9m in wagering tax revenue. And in West Virginia, which legalised both in 2018, the comparison is even more stunning – digital casino tax revenue was five times online sports betting revenue.

The fact that it is an election year may be relevant in some situations. Legalising online casino – or sports betting, for that matter – likely doesn’t move the needle with voters compared to other issues. But if constituents, whether they be individuals or corporations, want something, politicians respond.

“There was a rush to pass sports betting,” Fluharty said in New York last week. “And I feel like lawmakers thought there would be a domino effect and there was in some states. But what do lawmakers want? To get reelected, so if they feel like the people they rep want it, they will do it.”

But if those people don’t want it – or aren’t sure – expect the logjam to continue.

We’re deep into legislative sessions across the US but Brandt Iden and Brendan Busssmann are here to run you through the states to watch in the World Series of Politics!

Whether it’s Georgia going to the voters or Minnesota taking its sweet time, we’ve got all the latest happenings in US regulation ready to review.

With just over two weeks remaining in the legislative session, and more than five weeks after the Senate passed SB 386, a statewide mobile sports betting bill got its first hearing in the Georgia House Tuesday.

There was no vote in the House Higher Education Committee, and there could be more discussion later this week, though the committee chairman said a vote is not imminent.

Several representatives from daily fantasy companies testified that they’d like their contests added to the bill and multiple representatives from faith-based and anti-gambling groups testified in opposition.

The bill would allow for 16 online sports betting licences, including eight that would be tethered to professional sports franchises or organisations in the state.

A further seven freestanding licences would be up for grabs, and one licence earmarked for the Georgia Lottery, which would also serve as regulator. The bill differs slightly from previous proposals, and does include a Senate amendment that would send the final decision to the voters.

All of Georgia’s major professional sports teams plus the Augusta Country Club, PGA Tour, and Atlanta Motor Speedway/NASCAR would all be eligible for licenses.

Six years after the Professional and Amateur Sports Protection Act was struck down by the US Supreme Court and 35+ US jurisdictions now offer some form of live sports betting, Georgia is the biggest state seriously considering a wagering proposal this year.

Next step: ‘Marry’ constitutional amendment, framework

Bill sponsor Sen. Clint Dixon (pictured) told committee members that betting on college sports would be available, that the tax rate would be set at 20%, and that accounts could “only be funded with cash”. The application fee for licenses would be $100,000 and there would be a $1m annual renewal fee.

Tuesday’s hearing was more informational than anything else, as Dixon walked committee members through questions about the addition of the constitutional amendment, about whether or not daily fantasy sports were included in the bill, and about how the state would spend tax funds from sports betting.

Committee chair Chuck Martin was clear in saying that the proposal was the one that passed the Senate and that Tuesday’s plan was “to sound the Senator’s changes to the enabling legislation”.

Martin said the Senate amendment that would add the constitutional amendment to the proposal doesn’t line up with the current proposal. It would be up to the House “marry” both pieces of legislation before a floor vote, he added.

Could DFS be added to Georgia sports betting bill?

With regard to fantasy sports, a bill that would have legalised it died in the House 1 March. Several delegates suggested they would like to see the sports betting bill amended to include DFS.

Fantasy operator PrizePicks is headquartered in Atlanta, and Dixon said he would be open to amending the bill to include fantasy sports.

PrizePicks director of government affairs Stuart Wilkinson spoke in support of adding DFS to the bill, saying he’d shared what he hopes could be model legislation used not just in Georgia, but in other US states. Wilkinson also said that legalising and regulating fantasy sports betting could bring in additional tax revenue beyond what is projected for sports betting.

Kayla Lott, on behalf of the Coalition for Fantasy Sports (representing PrizePicks, Underdog, and Betr), also asked that fantasy sports be included in the bill.

Faith-based and social groups argued against the bill, with Citizen Impact’s Paul Smith saying that it is “bad for Georgia and bad for Georgia families”.

Dr. John Kent, who said he was testifying on behalf of his 13 grandchildren shared the slogans “Lose your tots to online slots” and “Click your mouse, lose your house”.

On balance those opposed fear the social cost of legal wagering will outweigh the financial gain for the state.

As an example, Brianne Doura-Schawohl on behalf of the Campaign for Fairer Gambling shared a New Jersey study that claims while the state brought in $385m in gambling taxes, the social cost from welfare payments, homelessness, and criminal justice, was $350m.

With regard to how tax funds would be spent, the bill currently splits proceeds between the lottery and educational initiatives. There was some discussion about further refining which educational programs specifically would be funded.

A political football?

The Georgia General Assembly is set to adjourn 28 March. Georgia lawmakers have a history of discussing a gambling expansion and then failing to act or using it as a political football.

In 2021, lawmakers had consensus for a statewide mobile betting bill. At the last minute, the Democrats pulled their votes after the state’s Republicans passed a controversial voting rights bill.

In 2023 and 2022, there was no consensus, as well as vocal opposition from the anti-gambling lobby.

The February total was 20.4% higher than the $1.47bn bet in New York in the same month in 2023. However, it was 9.7% behind January’s $1.96bn and the lowest monthly amount since $1.76bn was spent in September 2023.

As for gross gaming revenue, this increased by 21.3% year-on-year to $131.4m, up from $108.3m in 2023. The February total was 37.9% less than $211.5m in January and also the lowest since $98.5m in August last year.

Flutter Entertainment-owned FanDuel remains the market leader in New York. For February, it reported $63.4m in revenue from $720.1m, both of which were higher than any other operator.

Following in second was long-time rival DraftKings with $53.4m in revenue from $607.9m in bets. 

Caesars was next in third, posting $6.7m in revenue and a $160.7m handle for the month. Rush Street Interactive followed with revenue of $3.0m from $46.9m in total bets.

Fanatics replaces PointsBet

The only other operator to post in excess of $1.0m in revenue was Fanatics. For February, Fanatics generated $2.9m in revenue in New York off $82.9m in bets.

Fanatics is the latest brand to launch in New York, officially going live in the Empire State on 1 March. The launch marks another latest phase of Fanatics’ acquisition of PointsBet US.

As for New York’s other operators, BallyBet posted revenue of $724,041 and a $9.7m handle. BetMGM generated $580,224 off $129.7m and Resorts World $544,361 from $8.3m.

Wynn Interactive again propped up the state’s market with $162,800 in revenue off a $7.1m handle.

The February figures mean total spend for the New York financial year to date amounted to $17.80bn, up 8.6% from $16.40bn at the same point in the previous year.

Revenue for the 11 months to the end of February totalled $1.61bn, an increase of 10.5%.

New York generates most US sports betting tax

The monthly results come after a study published last month showed New York contributes more than 37% of the total tax revenue generated from sports betting in the US.

The Quarterly Survey of State and Local Tax Revenue (QTAX) found that sports betting accumulated national tax and gross receipts of just under $506m in Q3. This was up 20.5% from Q3 2022 but down from $571.5m in Q2 2023. 

New York dominated the tax generated via sports betting. Its $188.5m was nearly five times higher than Indiana’s $38.6m in second. No state has a higher tax on gross gambling revenue than New York’s 51%.

Ohio and Illinois were third and fourth with $32.9m and $32.4m respectively. Pennsylvania rounded out the top five with $28.8m.

The Tar Heel State confirmed its launch date in January. Online sports betting will go live at noon EST in North Carolina, with retail set to follow in due course.

Governor Roy Cooper signed House Bill 347 into law in June 2023, paving the way for legal betting. However, the bill also came with a series of requirements, set out in a timeline for implementation.

This included publishing regulations before 8 January 2024 and operators accepting wagers prior to 14 June 2024. The state met these last month, with operators to begin taking bets well ahead of June’s deadline. Operators were also given a deadline of 26 January to submit their internal controls before the market opened.

Who is launching in North Carolina?

Earlier this month, the North Carolina State Lottery Commission awarded eight interactive sports wagering licences to operators. Several heavy hitters were named among the initial round of successful applicants.

So far, FanDuel, Caesars Entertainment, DraftKings, Fanatics, Bet365, BetMGM, ESPN Bet and Underdog have secured licences. All eight operators have confirmed they will launch today, including FanDuel, which launched sign-up promotional offers for new customers.

Also going live today is DraftKings, confirming the news late last week. Launching in North Carolina means DraftKings will be active in 27 states across the US, as well as Ontario in Canada.

“The Tar Heel State is home to a passionate fanbase and some of the most iconic college basketball programmes of all time, making this an exciting time to introduce legalised online sports betting,” DraftKings North America president Matt Kalish said.

“We’re proud to be working alongside Nascar as our market access partner and look forward to enhancing the fan experience across North Carolina with a fun, safe and seamless sports betting product.”

Partnerships pave the way for betting

Operators wanting to offer sports betting in the state must partner a sports team, league or venue within North Carolina. All those issued a licence have secured such a deal, including DraftKings with Nascar.

BetMGM is working with the Charlotte Motor Speedway and ESPN Bet golf’s PGA Tour and its Wells Fargo Championship, which is held in the state. 

Fanatics Betting and Gaming has partnered the NHL’s Carolina Hurricanes. Fanatics will be the team’s official sports betting partner. Bet365 signed a partnership deal with the NBA team the Charlotte Hornets in November 2023. 

In addition, Underdog has expanded its position as a paid fantasy sports operator via a partnership with McConnell Golf.

Supplier deals also confirmed ahead of North Carolina launch

Aside from operator licences, approvals have also been confirmed for sports wagering supplier licences. Successful applicants include GeoComply, SBTech and Sportradar.

The latter of these, Sportradar, confirmed its licence last week. The permit is valid for five years and allows it to deliver sports data to approved operators in North Carolina.

Sportradar now holds 56 licences, or equivalent, in North America across US states, territories, tribes and Canada.

Gabsys sportsbook offers over fifty sports and 600,000 events each year, so how does the team retain accuracy while abiding by so many licensing requirements on a global scale? Aris Gabrielyan, chief operating officer, discusses how Gabsys stays at the forefront of the live betting industry.