Month: March 2024

This marked another year of revenue decline, with the 2022 total dipping 3.0% compared to 2021.

Veikkaus’ performance in 2023 was backdropped by a number of seismic regulatory changes. In June, the then-newly formed Finnish government confirmed that it would end Finland’s current gambling monopoly system “no later than 2026”. This would be replaced by a new licensing system.

The new process would see Veikkaus split into several different companies, which would form part of the same group.

In September, Veikkaus warned that staff layoffs would be incoming as part of the monopoly’s end and, in November, it confirmed that “about 185-215” employees would lose their jobs. Veikkaus’ Casino Tampere was also shut in December, just under two years after it opened.

Data from mandatory ID

For its 2023 results Veikkaus also made allowances for the effect of the identification process it introduced in May. This mandated all Veikkaus players to register as customers for the purpose of ticket-based games.

The scratchcard version of this mandate came into force on 1 January 2024, meaning that all Veikkaus games now require identification to play.

“Today, all of our games, including all physical scratchcards, are subject to the identification requirement,” said Susanna Saikkonen, vice-president for sustainability at Veikkaus. “This means that we have become a worldwide pioneer in ensuring the responsibility of our gambling operations.”

Saikkonen noted that the data gathered from the ID process helped Veikkaus to further understand player habits including identifying players at risk of gambling harm.

“Using the data, we can analyse our players’ gambling habits and identify the signs of high-risk gambling,” Saikkonen continued. “In 2023, our gambling harm prediction system helped us make over 3,700 calls to at-risk players and we also introduced an automation-based care and communication model for high-risk level customers.”

Figures sliding down in FY23

For Veikkaus Oy – Veikkaus’ parent company – profit for 2023 was €585m, down 14.0% year-on-year. Operating profit for the company was €580.2m, marking a decline of 14.7%. Veikkaus Oy also paid €51.7m in lottery tax, 42.4% more than in 2022.

Veikkaus’ sales revenue fell 3.5% to €1.03bn for the year. This consisted of GGR as well as turnover from other business activities.

Materials and services totalled at €130.3m for the year. Expenses arising from employee benefits hit €98.2m, up 14.8%. Other business expenses totalled at €127.2m, up by 24.9% year-on-year. Meanwhile depreciation and impairment increased by 15.4% to €55.4m.

The €573.6m operating profit was improved slightly by €5.3m in financial income, but affected by €513,834 in finance costs. This left the total profit for the year at €578.4m, as there was no tax recorded for the year.

Declines in both group profit and operating profit were attributed to an increase in lottery tax, Veikkaus investments and one-time cost entries generated by cooperation negotiations. Profit was down by 13.7%, while operating profit fell 14.5%.

Veikkaus noted that in 2023, authenticated gambling made up 90.6% of Veikkaus’ domestic gambling operations. This was up 11.1% yearly. The monopoly had an estimated 2.5 million registered customers by the end of 2023, an increase of 180,000 or 8.0%.

Digital channel success bolsters Veikkaus’ presence

The monopoly highlighted a shift in customer channelisation in 2023, with 54.8% of Veikkaus’ customer gambling activities coming from its digital channel. This was 4.5% higher year-on-year. According to H2 Gambling Capital, Veikkaus made up an estimated 54% of the Finnish digital gambling market in 2023.

In terms of game performance, Veikkaus saw most success in its Eurojackpot and Lotto games. Eurojackpot generated GGR of €151.1m, which was flat compared to 2022, while Lotto GGR fell 8.9% to €136m.

Regina Sippel, chief financial officer at Veikkkaus, praised the company’s performance in its digital channels for 2023.

“Veikkaus’ profits and performance in 2023 were as expected and we can be satisfied with these as a whole,” said Sippel. “The year was particularly successful for our online games and Veikkaus will continue to deepen its development investments in its digital channel.”

The integration between OpenBet and IMG Arena means both businesses now exist under the OpenBet banner. The deal had been in the works for around 18 months before it came to the fore on 1 February, presenting a new competitor in the world of sports betting.

But none of this would have happened without Light & Wonder’s sale of OpenBet to Endeavor for $800m (£623.6m/€731.8m) in September 2022. This saw Endeavor pay $750m cash and 2.3 million in Class A shares worth $50m for OpenBet – $400m under the initial asking price, thanks to Light & Wonder slashing the price by a third.

Let’s fast forward to 2024, just over one month since the integration was announced. Levin reveals that while OpenBet and IMG Arena’s integration is clearly the result of painstaking detail and preparation, it also represents a natural conclusion.

“OpenBet was acquired a year and a half ago, so we’re really doing what’s natural and was always intended, which was to pull together these two businesses.”

Part of this comes down to the common-sense aspects of the arrangement, such as the business’ placements in the market. “We serve the same end market, which is betting, gaming and operators,” Levin explains.

“So it’s really just being able to develop and evolve to a single proposition and a very simple, straightforward thesis to our customers. We find great value in speaking to the market with one brand and offer product innovation too.”

“The next level”

On the subject of product innovation, OpenBet and IMG Arena look to have a real edge in the market – and it all comes down to their tried-and-tested, symbiotic relationship.

“Our trading system, which is our aggregation platform that takes all the feeds and marketplaces that we create ourselves in partnership with IMG Arena on the OpenBet side, allows us to develop and produce those to market in a seamless fashion.”

Perhaps most importantly, in an ever-competitive market, Levin firmly believes this integrated business will come out on top.

“Really when you look at OpenBet and IMG Arena together, it’s the most complete end-to-end solution that serves the betting market.” This covers anything the betting market could possibly want – live and interactive streaming, betting technology, data events and more.

But how exactly will this happen? For Levin, OpenBet and IMG Arena’s prior long-standing relationship gives this deal a boost. And IMG Arena’s standing in the eyes of leagues and federations, coupled with OpenBet’s betting and safer gambling capabilities, provides a valuable offering for the market.

After all, Endeavor’s purchase of OpenBet came down to having a value-added proposition for what IMG Arena and Endeavour were already doing. Levin poses that the addition of OpenBet had the aim of taking this to “the next level” by capturing the ever-changing, thriving world of betting and gaming.

“Which is again complementary to Endeavor’s overall ethos around media, sports and entertainment.”

Making space in a crowded market

To truly stand out in serving the betting market, it’s tempting to try and re-invent the wheel. Levin rejects this, believing that what OpenBet-IMG Arena offers stands on its own two feet.

“We’ll keep doing what we’re doing already,” he affirms, “and be able to offer value-adding products and solutions to leagues and federations.” But that’s not to say the potential or capability for new products isn’t there.

“I believe there’s more that we can then offer to leagues and federations on the betting side, through some of the betting innovation technology that we can produce, so that we can be viewed as a very attractive option when leagues or federations are making decisions about who their partners should be.”

While Levin admits competition is rife on both sides of the combined business, he says there isn’t much to go up against in terms of end-to-end combined solutions.

“There are competitors individually on the betting technology side of the business and there’s competitors individually on the streaming and data rights side of the business as well,” he continues. “But there’s not really competition when you think about end-to-end on a combined basis.”

In the end, it comes down to having a package that ultimately gives the market what it needs. And, crucially, this correlates with OpenBet’s core beliefs.

“It goes with the overall OpenBet ethos of being open and being able to offer a well-packaged complete solution that is also modular so that we can flexibly serve the marketplace when it makes sense.”

KSA announced that Jansen was to step down after six years at the helm in October last year. Jansen decided not to stand for reappointment as he reached retirement age at the end of 2023.

Groothuizen’s term will begin on 1 July 2024. Currently he is the deputy director general of the Judicial Institutions Service. Previously, he held the role of director general at the Netherlands Institute for Forensic Psychiatry.

He also served as the policy director and director of FEZ in the Ministry of Justice and Security’s administrative department. Groothuizen founded KSA in his role as policy director.

“From 2007 onwards, as policy director, I was responsible, among other things, for the gambling dossier,” explained Groothuizen. “One of my tasks was to establish the Gaming Authority. We succeeded in 2012.”

He added that he is committed to the “challenge” of ensuring safer gambling practices in his new role.

“We had already been working on new legislation for a few years to manage online gambling offerings,” he continued. “It took almost 10 years before the law that was supposed to regulate this actually came into effect. I was long gone by then.

“But I think it is a wonderful challenge at this time to ensure safe gambling in a socially responsible manner and to combat negative consequences, such as gambling addiction.”

Leadership change comes at busy time for Dutch regulation

Groothuizen’s appointment comes after an eventful few weeks for both KSA and the wider Netherlands gambling market.

Earlier this week, measures to improve safer gambling that had been introduced by Franc Weerwind, the Netherlands’ minister of legal protection were submitted to the European Commission and made available for consultation. The amendments were initially announced in December, but this week’s progress means they are one step closer to implementation.

The measures centre around amending articles outlined in the KOA – the Netherlands’ online gambling law – with the aim of making these provisions more airtight and pertinent to preventing gambling harm.

For example, one of the amendments stipulated a contact point for operators. This would mean that an operator must contact a player if they deposit more than €350 per month, €87.50 per week or €12.50 per day. If the person is aged between 18-24, the point is €150 per month, €37.50 per week and €5.35 per day.

Another amendment would require all licensed Dutch operators to display bets, winnings and losses in euros.

“These changes will place additional demands on the licensee and increase their burdens, but the additional demands are necessary to provide better protection for the players and point out the risks of gambling,” reads the draft text.

KSA issued largest ever fine of €19.6m to Gammix Limited

Groothuizen will also be stepping into the role following KSA issuing its largest ever fine – €19.6m (£16.8m/$21.2m) to Gammix Limited last week.

This was the result of two prior investigations into Gammix – one in 2022, where the operator received a warning and one in 2023, where it was ordered to pay €4.4m for not complying with an order to stop operating.

In its latest regulator action, KSA noted that Gammix “has not taken any measures to ban players from the Netherlands”. KSA had closely monitored a number of Gammix-operated sites in 2022 and 2023, which included Rantcasino.com, Betoriginal.com and Nordslot.com.

Gammix hit back against the fine, calling it “outrageous and unsubstantiated” and promising to contest KSA’s ruling.

“The KSA has imposed upon our company a penalty that is both outrageous and unsubstantiated,” said Phil Pearson, director of Gammix.

“Now that we are able to talk openly about the case, we can confirm that we are fighting on all fronts as, to us, this is an extraordinary and unnecessarily heavy-handed action from a regulator that many already regarded as unapproachable.”

Alabama lawmakers passed HB151 and HB152 in February. In its original form, HB151 would have legalised retail and online sports betting – as well as a state lottery and casinos in areas of the state that have bingo-type games. HB152, meanwhile, was to create a state lottery and gaming commission to regulate gambling in the state.

However, HB151 stalled in the Senate, with sports betting and casinos now removed from the bill. The amended HB151 passed by a vote of 22 to 11 on Thursday, reaching the 21 votes required to advance. Meanwhile, bill HB152 also passed.

The bills still include lottery. Additionally, the bills would authorise the governor to negotiate a compact with the Poarch Band of Creek Indians (PBCI) to regulate gaming activities on tribal lands. The PBCI operates the three existing casinos in Alabama.

Senator Greg Albritton believed the changes were necessary and will allow Alabama to gain “control” of the gambling industry.

The legislation will now go to the House of Representatives. Should it advance from there, the electorate would vote in September 2024 to seek final approval for legalisation.

However, if the House doesn’t approve all of the amendments, the bills will instead go to a conference committee in order to find a middle ground.

What the bills include

The bills would authorise pari-mutuel wagering with a tax of between 24% and 32%.

Pari-mutuel wagering would be legal at four racetracks in Alabama, as well as an additional location in Greene County. Two existing bingo halls would also be permitted to offer pari-mutuel wagering.

Additionally, the PBCI would be authorised to have casino-style games and sports wagering, as well as bingo, on tribal lands.

Tax benefits to Alabama

According to the fiscal notes of HB152, the legalisation of lottery could bring in $305.6m (£237.7m/€279.2m) to $379.4m a year in net revenue.

However, the removal of casino would see an estimated $315m-$492.2m in net gaming revenue (NGR) missed out upon. The inclusion of sports betting, meanwhile, would have brought in approximately $15m-$41.5m in NGR.

Representative Chris Blackshear previously stated that expanded gambling could bring in as much as $1.2bn to the state. $300m of that total would come from a compact with the PBCI.

The letter does not indicate when FanDuel might launch its platform citywide, however. 

Dated 8 March, the letter confirms the OLG has “approved Intralot’s request to select FanDuel as a new subcontractor” for the lottery’s sports wagering platform.

Intralot, which contracts with the District of Columbia, has struggled to put out a competitive product in GambetDC. The platform lost $4 million in 2021.

“OLG and Intralot have evaluated the current platform and believe that FanDuel and its industry leading platform will perform better within the highly competitive DMV region,” OLG executive director Frank Suarez wrote in the letter. “Having a national, market-leading platform will help to quickly improve the player experience and drive significant revenue growth.”

District won’t have to pay operating expenses

When FanDuel takes over, the OLG will no longer be on the hook for operating expenses of $2m to $4m per year, according to the letter. FanDuel will handle payment processing, promotions, marketing, and retailer commissions.

The operator will pay the OLG a $5m “platform conversion fee” within 37 days of signing a contract with Intralot. If OLG extends its contract with Intralot, the city would get a guaranteed $10m in revenue over four years beginning in July 2025. 

In the current situation, GambetDC is available via digital platform and on kiosks at lottery retailers. That platform will disappear in favor of FanDuel’s, and kiosks at 63 lottery retailers will be replaced with FanDuel equipment. 

The new contract means that FanDuel will be available across the DMV, as it is already live in Maryland and Virginia. According to the letter, FanDuel has “approximately 50% market share” in Maryland and Virginia. It has market access in the District via a partnership with the DC United Soccer team and runs a retail sportsbook at Audi Field. 

No competitive bid process

Operators in D.C. are only allowed to offer their digital platforms within a limited zone around their retail partner’s location. BetMGM, for example, has a partnership with the Washington Nationals. Its the platform is available at and around Nationals Field, but geofenced from the rest of the city.

Intralot and GambetDC have been under fire over the last year as the D.C. City Council discussed ways to increase revenue and whether Intralot should be replaced.

Intralot initially got the contract with the OLG as an expansion of its lottery contract, without a competitive bid process. By subcontracting to FanDuel, Intralot again avoided a competitive bid process. 

Since going live in May 2020, GambetDC has paid the District $8.5 million in taxes.

Net gaming revenue for 2023 reached £4.83bn, while group revenue also climbed 11.0% to £4.77bn. Entain noted that revenue was higher across all core business segments.

However, higher spending more than off set this growth, leaving the group with a net loss for the year. This increase was primarily due to the settlement with the UK’s HMRC and Crown Prosecution Service (CPS). This related to its historical activities in Turkey.

Announced in November and finalised in December, the settlement set out that Entain must pay £585.0m. It will also make a charitable donation of £20.0m and contribute £10.0m to CPS and HMRC costs. All these costs were noted in its 2023 results, as were other, additional costs from across the business.

Other expenses impacting Entain in 2023 included increased impairment costs, amortisation of acquired intangible assets and restructuring spending. Grouped together, these expenses pushed Entain to a net loss of close to £1.00bn.

Entain chair: 2023 period of necessary transition

While the net loss makes for grim reading, chairman Barry Gibson is upbeat about long-term growth prospects. Gibson said 2023 was a year of “necessary, but ultimately positive, transition” for Entain.

“We have significantly strengthened the quality of our revenue base, enhanced our board and delivered a resolution to a critical, historic, regulatory issue,” Gibson said. 

“As our transformation continues the newly formed capital allocation committee has commenced a review of Entain’s markets, brands and verticals. The objectives of the review are to help focus the organisation, improve competitive positions and maximise shareholder value.”

This view is shared by interim CEO Stella David, who stepped into the role in December after Jette Nygaard-Andersen resigned. David had been serving as a non-executive director at Entain. She has now been charged with steadying the ship until a permanent replacement is found.

“2023 presented a number of challenges for the group, both industry-wide and Entain-specific,” David said. “I am extremely proud of how our people around the world came together to navigate the business through an eventful and at times difficult year.

“We have started the new financial year with a clear plan to accelerate our operational strategy and are making pleasing progress across a range of initiatives to re-focus our market portfolio, prioritise organic growth, drive our share in the US and expand our margins.”

Gibson also offered a brief update on the new CEO search. He said: “We are making positive progress in our search for a new permanent CEO. In the meantime, Stella is driving the business as it continues to take appropriate actions to deliver changes to drive a better long-term performance.”

Record customers drive online growth

Breaking down the 2023 figures and Entain says that, overall, the group performed in line with expectations. 

The UK remains its core market with £1.95bn of all revenue. Italy revenue hit £517.4m and Australia and New Zealand £515.1m. A further £1.44bn came from the rest of Europe and £339.9m the rest of world.

Segment-wise and starting with its online business, net gaming revenue was 12.3% higher at £3.43bn. Gaming revenue was 16.6% higher at £1.84bn and sports betting revenue climbed 6.0% to £1.53bn. In addition, B2B net gaming revenue almost doubled to £57.9m.

Entain reported underlying momentum in several key markets but regulatory headwinds in the UK and Germany, coupled with weaker trading in Australia and Brazil, slowed revenue growth for the online segment.

As for growth areas for the online business, Entain highlighted success with the CrystalBet brand in Georgia and expansion in the Baltics. It also noted the impact of new acquisition on its Central and Eastern Europe (CEE) business, including STS in Poland and Croatia’s SuperSport.

Entain was also helped by is newly acquired New Zealand business and the impact of its new partnership with Tab NZ in the country. 

Such was growth in the online business that total customers for the segment jumped 23.0% year-on-year to a record high.

Retail recovery continues after pandemic impact

Turning to retail and there was more good news for Entain, with net gaming revenue rising 8.5% to £1.39bn. Sports betting revenue in this segment was up 15.3% to £813.0m, while machines revenue edged up 0.2% to £573.7m.

Entain noted growth across several key markets for retail. UK revenue was up 2.0% UK, with strong performance across both sports and gaming, while there was also growth in Italy, Croatia, Belgium and Ireland. 

Newly acquired retail businesses in both Poland and New Zealand also added £40.4m in net gaming revenue to the total for 2023.

“Our retail businesses continue to show the strength of their offer and customer appeal,” Entain said.

No stopping the BetMGM train

Entain also referenced the performance of BetMGM, its joint venture with MGM Resorts International. 

BetMGM published its 2023 results last month, with these revealing that revenue in 2023 fell just short of $2.00bn. Entain holds a 50% share in the BetMGM business, with this contributing to the overall revenue figure for 2023.

As noted in BetMGM’s results last month, key highlights from 2023 include securing a 14.0% share in sports betting and igaming markets where BetMGM operates. The business also posted positive EBITDA for the first time in H2 of 2023.

However, there was something of a blip for Entain, with MGM choosing to roll out BetMGM in the UK without Entain. MGM instead partnered with LeoVegas for the launch, with the brand going live in August.

Counting the cost of regulatory settlement 

Looking to spending in 2023, operating and marketing costs were 12.0% higher at £1.27bn in total. Depreciation and amortisation was also higher at £301.5m, but it was the section entitled “Separately disclosed items” that hit Entain the most.

Included here was the £585.0m HMRC settlement fee along with £289.0m in impairment costs and £254.6m for the amortisation of acquired intangibles. Restructuring costs hit £49.7m and there was also £71.8m in movement in fair value of contingent consideration.

After also accounting for £197.9m in net finance costs, Entain was left with a pre-tax loss of £842.6m, compared to a £102.9m profit in 2022. Entain paid £36.1m in tax and included a £57.8m loss from discontinued operations.

As such, net loss for the year after discontinued operations stood at £936.5m, in contrast to the previous year’s £19.5m profit. However, there was some relief for Entain, with group EBITDA edging up 1.5% to £1.01bn.

“We are entirely focused on operational excellence and outstanding execution and, as a result, are confident that we are on a pathway to delivering future growth,” interim CEO David said.

“We remain confident that our continued focused execution will drive organic growth into 2025 and beyond.” 

Group revenue for 2023 amounted to €46.2m, down from €53.5m in the previous year. Bet-at-home flagged several developments, both within the business and the wider market, as the main reasons for this decline. 

Core causes include cross-product and cross-provider monthly wagering limits in Germany, introduced in mid-2022. The operator also noted a regulatory obligation to report increased deposit limits from the Q2 of 2023.

It was also impacted by the migration of customers from its own .com and .de platforms to the new system of EveryMatrix. Bet-at-home outsourced its German-licensed .de offering to EveryMatrix in February 2023, with the process completing in October.

The drop in group revenue had a knock-on effect on net gaming revenue. Both betting fees and gaming levies and VAT were lower year-on-year. Net gaming revenue was also down by 14.1% to €36.1m.

Bet-at-home eyes “lean and cost-efficient” structure

While the drop in revenue is a disappointment, Bet-at-home says it was expected given the developments in 2023. 

The confirmed revenue figure is also in line with restated guidance in October. Originally, the group set a revenue target of €50.0m for the year, but this was lowered to between €44.0m and €48.0m. The actual €46.2m total is at the midpoint of this range.

However, accompanying a reduction in revenue was a drop in spending across several areas. Advertising expenses increased 25.0% to €17.0m but personnel costs were down 35.6% and other operating spend fell 22.2%. This, Bet-at-home says, was partly due to the outsourcing and forms part of its long-term strategic plans to become a leaner business.

“The reduction in internal complexity and resource requirements associated with the increased outsourcing has resulted in lower IT costs and positively impacted the group’s financial performance,” Bet-at-home said. 

“This strategic reorientation will continue to form the basis for a lean and cost-efficient organisational structure in the future.”

Amortisation and depreciation was also 27.3% lower at €1.6m while finance costs were only up marginally to €595,000. This resulted in a pre-tax loss of €1.4m, which is around double the €690,000 loss posted in 2022.

Bet-at-home paid €74,000 in tax, leaving a €1.5m net loss for the year from its continuing operations, in contrast to an €11.9m profit in 2022. However, it was noted that the 2022 figures included €11.3m from discontinued operations, without which profit would have stood at just €551,000.

As for EBITDA for the full year, this dropped 61.7% to €807,000. 

Mixed outlook for 2024

Casting an eye towards 2024 and its expectations for the year, Bet-at-home said a strategic transformation of the group will continue. 

The group committed to continuous investment in the internal data platform and spoke of a focus of in-house development. It also plans to work with EveryMatrix on its online casino and sports betting products.

As for expansion plans, Bet-at-home intends to use widespread awareness of its brand in its core Germany and Austria markets to improve its market position. This will include targeted marketing measures, with a focus on this summer’s Uefa Euro 2024, which takes place in Germany.

With expectations high as to the impact of the tournament, Bet-at-home is confident of some growth in 2024. It has forecast gross revenue of between €45.0m and €53.0m, with EBITDA set to range from a loss of €1.0m to a positive of €2.5m.

Revenue reached $691.2m (£542.7m/€634.3m), up 16.7% from $592.2m at RSI in the previous year. This was also at the upper range of $630.0m to $700.1m guidance issued by Rush Street in early 2023.

While the business remained at a net loss for the full year, the $18.3m loss was far lower than $38.6m in 2022. In addition, adjusted EBITDA came in at a positive for the year, beyond RSI’s hopes of just a positive second half.

“[I’m proud of] what we’ve accomplished this year and how we’ve set ourselves up for success for years to come,” RSI CEO Richard Schwartz said. “We exceeded the high end of our revenue guidance for the year and achieved EBITDA profitability far ahead of our targets.

“We initially set out to be profitable for the second half of 2023. As a result of our focused efforts, we delivered better results and were profitable for the full year. We ended the year with a record-setting quarter and have starting 2024 with strong momentum.

“Our investments and know-how in creating differentiated and high-quality user experiences are paying off as we simultaneously achieved our growth and profitability targets with increased contribution from all geographies from both icasino and sports and from both our newer and more mature markets.”

Talking up prospects of online casino expansion in US

Schwartz also spoke about the potential for further markets to legalise and launch online casino. The US is near the start of its 2024 legislative session, with Schwartz saying Rush Street is monitoring several markets, including some in Canada, for possible developments.

“While we are not laying off the legislative outcomes, some of the states that we are watching include New York, Maryland, Illinois, as well as provinces in Canada, most notably Alberta,” Schwartz said. 

Further south and Schwartz said Rush Street continues to make progress in Latin America. It has a presence in several markets including Colombia and Mexico, while plans are in place to also go live in Peru.

“In fact, our research has shown that our RushBet brand is already widely recognised in Peru,” Schwartz said. “As our timing becomes clearer on the Peru launch, we will share more details. Notwithstanding, we expect to launch later this year.

“As we look ahead, we are excited about the future. There is no shortage of near and long-term opportunities in our universe.”

Net loss halved in 2023

Inevitably, the increase in revenue and expansion of activities led to a rise in costs. However, total operating costs were only 3.6% higher at $742.8m for the year. 

Rush Street did benefit from $2.8m in finance-related income, which left the group with a pre-tax loss of $48.8m, compared to $125.4m in 2022.

Income tax payments totalled $11.2m, leaving a net loss of $60.1m, an improvement on $134.3m in the previous year. However, $41.8m was discounted as being attributable to non-controlling interests.

As such, total net loss reached $18.3m, less than half the $38.6m loss posted in the previous year. In addition, adjusted EBITDA improved from a loss of $91.8m to a positive of $8.2m.

Rush Street close to the lack after record Q4

Turning to Rush Street’s record Q4, revenue was 17.2% higher at $193.9m, an all-time-high for the group. 

Operating costs crept up 1.8% to $197.4m although Rush Street was able to report $1.3m in finance income. As such, pre-tax loss reached $5.5m, a significant improvement on the $31.1m loss in 2022.

The group paid $3.3m in tax and discounted $3.7m in loss attributable to non-controlling interests. As such, total net loss was reduced from $9.0m to $1.7m, while adjusted EBITDA came in at positive $11.5m, compared to the previous year’s $17.3m loss.

High hopes for 2024

Looking ahead to 2024, Rush Street expects to build on this success and post further growth.

Setting out guidance, revenue is set to come in between $770.0m and $830.0m, with the midpoint of $800.0m being approximately 16.0% ahead of 2023’s total.

Rush Street is also introducing adjusted EBITDA guidance for the full-year 2024. This, it said, will likely be between $35.0m and $45.0m, with the midpoint being some 390.0% ahead of 2023.

“With a substantial cash balance and no debt, our financial wherewithal provides us the luxury of being able to continue executing on our long-term strategy and investing appropriately in new markets,” Schwartz said. 

Austrac ordered an audit of Bet365 in 2022, when it assessed its compliance with the AML/CTF Act 2006. The consideration of that audit has led Austrac to deem further investigation into Bet365’s affairs as necessary.

Austrac reserves the right to take action where non-compliance is found. The government-run financial intelligence agency has fines and other regulatory powers at its disposal.

“Corporate bookmakers must have robust systems in place to ensure they can manage and mitigate risks associated with money laundering and terrorism financing,” said Brendan Thomas, Austrac chief executive.

“Businesses without adequate processes in place to manage those risks leave themselves vulnerable to exploitation by criminals.”

Bet365 in potential hot water with Austrac

Bet365 could become the latest betting company to be fined for non-compliance in Australia. Austrac reached an agreement with Crown Resorts in July 2023 for a financial penalty over AML breaches.

Australia’s federal court ordered Crown to pay a penalty of AU$450m (£232.9m/€272.5m/$296.9m) for “serious and systemic” AML and CTF failings at the operator’s Crown Melbourne and Crown Perth casinos. This is to be paid over two years, with Crown since admitting the breaches.

Examples of the high-risk activites included Crown continuing a business relationship with a major casino junket operator until 2021, despite being aware of allegations the operator was connected to organised crime.

Entain, meanwhile, has also been under Austrac investigation since September 2022 for AML/CTF concerns, with that case yet to be resolved. Austrac stated the probe into Entain could lead to other bookmakers coming under the spotlight.

Austrac also launched federal court proceedings against Star Entertainment Group and SkyCity Adelaide in 2022. These were both for breaches of AML and CTF laws. The two companies are waiting for the outcome of their respective cases.

In August, SkyCity made a provision of AU$45m ahead of an assumed civil penalty from Austrac.

Bet365 posts FY2022-23 loss

Despite posting an 18.9% increase in sports betting and gaming revenue to £3.39bn during its 2022-23 financial year, Bet365 still reported a £61.2m loss. This came after the operator generated £42.8m in profit the year prior.

Direct costs were 4.1% higher at £516.6m, with administrative expenses also up by 42.2% to £2.93bn. Operating loss for the year amounted to £37.3m, compared to a £15.4m profit in 2021-22. A further £62.6m loss was noted in fair value on investments. However, this was slightly rebuffed by £27.2m in interest income.

However, Bet365 noted the increased spending set the company up to produce higher revenues during the year. The operator is growing its presence in North America, launching in a number of US states, as well as Ontario in Canada where it is the market leader.

Ed Birkin, senior analyst at H2 Gambling Capital, believed Bet365’s increased outlay could end up paying dividends, stating: “I would expect Bet365 to be very much competing with the Tier 2 operators such as BetMGM and ESPN Bet in terms of sports betting. I view the US as a big opportunity for the group.”

Gross gaming revenue (GGR) rose by 228.5% to $21.20bn. This consisted of $17.87bn in non-rolling GGR, $1.55bn in rolling GGR as well as $1.77bn in electronic game GGR.

The NGR was the result of removing $1.14bn in commissions and incentives from the GGR. The NGR was generated by SJM Resorts, a subsidiary of SJM Holdings. It represented a 229.3% rise compared to full-year 2022, when the NGR was $6.0bn.

SJM Holdings experienced a difficult year in 2022, compounded by the closure of seven casinos in December 2022. These consisted of five “satellite” casinos – third-party promoted casinos – and two self-promoted casinos.

In its 2023 report, SJM noted that it operated nine satellite casinos as of 31 December 2023. These include Casino Casa Real, Casino Landmark, Casino Emperor Palace and Casino Grandview.

The year also represented the first full year of operation for SJM Resorts’ gaming concession contract, which took effect on 1 January 2023. The concessions were awarded by the Macau government in November 2022 and came about following the passage of a 2021 Macau gaming bill.

SJM Resorts was issued a concession alongside MGM Resorts International, Galaxy Entertainment, Las Vegas Sands, Melco Resorts and Wynn Resorts. Each concession runs for a period of 10 years.

Under “non-current assets” in its full-year report, SJM Holdings marked $2.29bn in gaming concession right.

Property revenue up and net loss diminishes

SJM’s Grand Lisboa Palace Resort generated $3.67bn in revenue for 2023, representing a 434.2% rise. Revenue at Grand Lisboa was $5.74bn for the year.

SJM combined its rundown of Jai Alai Hotel and Sofitel at Ponte 16, reporting $4.70bn in revenue. GGR from SJM’s satellite casinos was $8.64bn.

Overall net revenue – which consists of gaming, hotel, catering. retail, leasing and related services – was $21.62bn for the year, an increase of 223.7% yearly. SJM accounted for $8.48bn in special gaming tax and special levy, a notable increase compared to $2.68bn in 2022.

Income from hotel, catering, retail leasing and related services was $1.56bn for the year.

Turning to expenses, operating and administrative costs proved the highest, totalling at $8.82bn, up 4.2% yearly. Marketing and promotional expenses were $3.82bn, while finance costs hit $1.93bn.

After considering further costs, SJM’s pre-tax loss for the year was $1.83bn, a far cry from the $7.78bn loss recorded in 2022. Tax of $36.1m brought the loss for the year to $1.87bn, $5.97bn less than in 2022.

Adjusted EBITDA was $1.72bn for 2023, a marked improvement from the $3.09bn loss yearly.

Looking ahead to 2024

SJM noted that Macau’s preliminary visitation data for early 2024 indicates that recovery is set to continue for the special administrative region – “back to levels comparable to 2019, the last pre-pandemic year”.

The data showed that visitors for Lunar New Year worked out at a daily average of 169,725, 163% higher compared to 2022.

“Should these trends continue, the effects would be positive on SJM’s operations,” read the report.

The operator also referred to Macau’s overall 2023 GGR total, which was MOP180bn, as a “stipulated triggering event”. This, it said, caused SJM to “increase its non-gaming investment obligations by 20%, or MOP2.4bn, to a total of MOP14.4bn during the life of the gaming concession”.

Daisy Ho, chair of SJM Holdings Limited and managing director of SJM Resorts, said the company’s results, particularly revenue, represented a positive step in its recovery process.

“SJM Holdings’ results for 2023 show substantial recovery in gaming and non-gaming revenues from the pandemic years,” she said.