Month: March 2024

ICE took place at the ExCeL London from 6-8 February and iGB Affiliate 6-9 February at the same venue. Together, the 2024 events drew a record 52,345 unique attendees in total.

Unique attendance at ICE reached an all-time high of 45,050, up 12% from the previous year. Meanwhile, iGB Affiliate attracted 7,295 unique visitors, representing a new record and a 27% increase on 2023’s total.

Visitation figures, which measure the number of person days attendees spent at the ExCeL, topped 100,000 for the first time in the exhibition’s history.

The events recorded visitors from 164 nations worldwide. Excluding host country the UK, Malta had the most visitors at 3,364. The US followed on 1,913 and Bulgaria with 1,659.

“February’s historic editions of ICE and iGB Affiliate were what I would describe as ‘I was there’ events,” Clarion Gaming managing director Stuart Hunter said. “ICE and iGB Affiliate occupied every square millimetre of exhibition and meeting space available at ExCeL London.

“I am hugely grateful to everyone in the industry for creating an experience which was full of energy, excitement and optimism for the future.”

High satisfaction rating for ICE ahead of Barcelona move

Hunter also noted a positive response from those who attended. Independent research has found the event had a satisfaction rating of 96 out of 100. This compares to an average of 50 for all UK-based B2B events.

Hunter said this is encouraging ahead of the event’s move to Barcelona in 2025. Relocation comes after a six-month bidding process, with Barcelona selected from a four-city shortlist ahead of Madrid, Paris and London. 

“While that’s really satisfying, we are very aware that the bar has been set for Barcelona 2025,” Hunter said. “The entire team is confident that we can maintain and improve on what London has delivered. Make no mistake these are hugely exciting times for everyone that’s involved with ICE and iGB Affiliate.”

London will, meanwhile, become the new host city for sister event iGB L!VE. This takes effect from 2025.

“Our exhibitors made a herculean effort to bid farewell to London in style and from all of the feedback received at the show and from subsequent emails and conversations the celebratory mood connected with everyone who was present.”

“Phenomenal” success for iGB Affiliate

ICE’s success was mirrored by iGB Affiliate, with portfolio director Naomi Barton saying this year’s event “re-wrote” the history books. 

“The 7,295 unique visitors was 27% up on 2023 and represented the fourth consecutive year of double digit growth,” Barton said.

“All of the key performance indicators that we apply came out in positive territory with the number of exhibitors and sponsors totalling 250, up 11% year-on-year, occupying a total of 13,647sqm of space, up 16% year-on-year.  

“We are recording best ever satisfaction ratings and the volume of re-bookings for iGB Affiliate in Barcelona is off the scale.

“I don’t believe an iGB event has ever been in such a healthy position. We all look forward to an even brighter future for our market-leading event brands.”

The amendment to Article 68f of Montenegro’s gambling law will see a variety of electronic payment methods, such as ebanking and mobile payments, disabled when it comes to depositing into betting accounts.

The changes now mean bettors in Montenegro have two options should they wish to bet online. Players can enter a betting shop and place a monetary cash wager which then transfers online funds into their accounts. Alternatively, players can pay via card, but only on a terminal in a betting shop.

The provisions have caused agitation in the Montenegrin industry, with gambling companies concerned over the amendment’s impact on business. A petition calling to halt the change received 25,000 signatures, around 8% of the country’s electorate, in just five days.

Jovana Klisić, a representative of Montenegrin trade association Montenegro Bet, has slammed the potential impact on the job security of those working in the gambling sector, stating the country’s gambling industry is “at a crossroads”.

“With the sector directly and indirectly employing almost 2% of the country’s workforce in a 15% unemployment rate environment, any negative impact on this industry could have very harmful and far-reaching consequences,” Klisić says.

“The removal of ebanking and newsagents for deposits, despite their compliance and transparency, not only affects operational efficiency but also jeopardises jobs, echoing the detrimental effects on the broader economy of Montenegro.”

Contradictions with EU laws

Much of the backlash to the amendments comes from the opposition’s view that they conflict with European Union (EU) law. While Montenegro isn’t currently in the EU, recent polls have shown the population to be largely pro-EU. The country is one of the candidates to be adopted into the EU in the coming years.

Klisić outlined five key EU legal provisions that the amendments clash with. These include Article 72 of the Montenegro-EU Stabilisation and Association Agreement. This mandates that countries looking to join the EU align with the union on certain aspects.

The change also contradicts the Payment Services Directive, according to Klisić. The directive seeks to form an integrated market for electronic payments. The provisions additionally conflict with the EU 4 and 5AML Directive, where cash transactions are categorised as high risk.

Klisić says the law change “inadequately addresses” the threat of money laundering. This is because smaller cash transactions can still be used for money laundering purposes.

Montenegro provisions at odds with EU’s e-IDs introduction

While the amendments in Montenegro seek to ban the use of online methods to fund gambling accounts, the EU is instead looking to introduce a standardised electronic identification method called a “European Digital Identity” (e-ID).

The move would oblige EU states to issue an e-ID to citizens. This would allow them to authenticate their identity for online services such as gambling.

Klisić labelled Montenegro’s move to limit electronic payments an “outlier” among global trends.

“Internationally, there’s a clear shift towards reducing cash transactions in favour of electronic payments, as advocated by bodies like Moneyval and FATF (Financial Action Task Force).

“The global financial community is embracing digital solutions for their transparency and efficiency. Montenegro’s move, therefore, not only isolates it from EU practices but also from the global financial community’s direction.”

In 2021, the European Commission urged Montenegro to enhance its efforts to counter money laundering. This change in course away from online payments could lead to the country being placed in a category of countries with a higher risk of money laundering and terrorism financing.

The provisions also clash with the European Banking Authority’s (EBA) call for every EU citizen, as well as those in countries looking to join the EU, to have access to online banking services. Klisić says the amendments to Article 68f contradict the “EU’s stance on modern financial inclusivity”.

“Looking ahead, we see this communication crisis as an opportunity to bring Montenegro’s financial practices in line with EU standards,” Klisić added. “It’s about more than just rectifying a single law.

“It’s about ensuring that Montenegro’s financial and regulatory frameworks are beneficial for a fair and competitive industry.”

The industry’s response

Montenegro Bet has now submitted the petition to the country’s assembly. The trade association has also initiated a constitutional review, highlighting concerns over the unconstitutionality of the amendments.

Additionally, Montenegro Bet is working with international institutions to draw attention to the negative impacts of the law changes. It is also aiming to highlight the contradictions of the amendments with the EU’s directives on the matter.

Klisić is hoping the public support displayed by the petition will lead to the changes being halted.

“This remarkable show of public backing not only underscores the widespread concern but also highlights the risk of significant job losses in our industry, illustrating the potential economic repercussions of such legislative measures,” Klisić continues.

“Our overarching aim is to realign Montenegro’s regulatory framework with both EU and global financial norms, ensuring a just and transparent environment for the industry.”

The Good Law Project is a not-for-profit campaign group. It is representing independent campaigner for gambling reform Will Prochaska and campaigner Annie Ashton in the complaint against GambleAware.

The Good Law Project alleges that GambleAware trustees are not meeting the charity’s aims to offer sufficient gambling harm education. According to the complaint, this has been instigated by GambleAware’s connections to the industry and its “reliance on industry funding”.

But in a statement issued to iGB, Osmond emphasised GambleAware’s role in the industry, stressing that it stands independently.

“We are robustly independent from the gambling industry, having long called for further regulation on gambling advertising and for the implementation of a statutory funding system to hold the gambling industry to account,” said Osmond.

The Good Law Project has requested the Charity Commission to investigate GambleAware for alleged failures to offer unbiased information.

“The Charity Commission must take action and investigate whether GambleAware is breaking charity law by failing in their duties to provide unbiased information – accepting the false narrative that gambling is a problem for individuals instead of a problem with the industry,” reads the press release from the Good Law Project. “And we’re preparing to take legal action if they refuse.”

The Charity Commission confirmed to iGB that it had received a complaint relating to GambleAware. A spokesperson said the Commission was “currently assessing the information available”, to “determine if there is a role for the Commission”.

It added that the Commission’s assessment was ongoing and no findings had yet been made.

Biased information “not acceptable”

The complaint outlines a number of alleged breaches committed by GambleAware. If GambleAware is ruled to have presented biased information to the public, the complaint states that this would contravene a regulatory alert issued to charitable think-tanks by the Charity Commission in December 2018.

According to the alert, research that presents “biased and selective” information to the public is “not acceptable”.

The complaint also calls for a statutory inquiry into GambleAware based on recent parliamentary inquiries. Among those listed is the Online Gambling Harm Inquiry carried out by the Gambling Related Harm APPG in 2020. This inquiry found that GambleAware was not in a position to carry out certain research, education and treatment (RET) functions.

“Our clients consider that the conclusions of recent parliamentary inquiries, in particular, indicate that GambleAware’s ability to advance its objects is now inhibited to such a degree that a statutory inquiry would be justified,” the complaint reads.

“They also consider that a failure to instigate one – given the high-profile, comprehensive nature of the criticisms of GambleAware – risks seriously damaging the public’s faith in the status of charities and charitable regulation.”

Turn focus to the trustees

Prochaska told iGB that people should direct questions and criticism towards GambleAware’s trustees.

“I think it’s time that we heard from the trustees to see if they believe the charity’s messaging and programmes are really serving the interests of their beneficiaries or serving the interests of their funders,” Prochaska said. “The evidence is overwhelming and they can’t simply ignore it forever.”

Osmond strenuously denied the allegations and called the claims “baseless and highly damaging”.

“As the leading charity working to keep people safe from gambling harm in Great Britain, we strongly refute the allegations made in this letter, which are both baseless and highly damaging,” she said.

In response, Prochaska said the complaint was based on charity law and had been appropriately backed up.

“The complaint that the Good Law Project put together is founded in charity law and evidence has been provided for all its assertions,” he explained. “GambleAware’s claim that it’s ‘baseless’ makes me question whether their trustees have actually read it.”

GambleAware services criticism “stigmatising”

Osmond went on to highlight the support commissioned by GambleAware. She specified the National Gambling Support Network and the National Gambling Helpline as “one of the few lines of defence available to the millions impacted by gambling harms each year”.

“Our public health campaigns, created in collaboration with people who have experienced gambling harm, break down barriers for support and shine a light on the fact gambling harm can affect anyone.”

Ben Howard, chair of GambleAware’s Lived Experience Council, offered his personal experience with the National Gambling Support Network.

“For years I struggled with gambling and I found recovery through the GambleAware-commissioned National Gambling Support Network,” he said. “I know first-hand just how essential and effective these services are and they continue to help thousands of people every year.”

He also disputed contentions of the services being inadequate, stating those claims are harmful and stigmatising for those who need support.

NeoGames noted that it would not be hosting a conference call for its 2023 results in anticipation of its sale to Aristocrat Leisure. Aristocrat agreed to acquire NeoGames in May for a total of $1.20bn. The deal is expected to close before the end of Q2 2024.

Tsachi Maimon, president of NeoGames told iGB that NeoGames and Aristocrat were a “really strong match” and their business offerings complemented each other. In July, NeoGames shareholders voted in favour of the acquisition.

Commenting on the company’s full-year performance, Moti Malul, CEO of NeoGames said the deal is on track for completion.

“We continue to make progress towards completing our merger with Aristocrat Leisure and continue to receive the regulatory approvals required to close,” he said.

“In the meantime, we remain dedicated to elevating the igaming landscape, capitalising on opportunities, and diligently executing on our strategic objectives for the benefit of all stakeholders.”

Also during the year, NeoGames was issued a non-compliance notice by Nasdaq following Lisbeth McNab’s resignation from the board. NeoGames regained compliance in July with the appointment on Steve Capp as an independent non-executive director.

This was also NeoGames’ first full year of operation since its acquisition of Aspire Global, which was completed in June 2022.

Expenses wipe out revenue in 2023

The total revenue plus NeoGames’ share of net profit interest (NPI) revenues totalled $254.5m for the year, up by 21.1%.

Revenue for NeoGames’ ilottery segment hit $57.0m for 2023, moving up slightly by 1.2%. The company’s igaming revenue also rose, levelling off at $134.6m, an increase of 10.2%.

The expenses generated throughout the year more than wiped out the revenue, coming to $218.2m. Distribution expenses remained high, but slipped 1.1% year-on-year to $96.4m. Depreciation and amortisation expenses worked out at $55.9m, a rise of 57.1%.

General and administrative expenses jumped by over $10m to $33.5m. Other expenses consisted of selling and marketing, business combination and development costs.

Though the operational loss was $26.6m, further income softened the blow. Finance expenses were $24.7m, but NeoGames’ share in profits of joint venture – its operating agreement with Pollard Banknote – was $37.3m. This left the pre-tax loss at an improved $14.1m.

Following $4.1m in income tax expense, net loss totalled at $18.2m for 2023. This was just 3.6% less than the $18.9m recorded in full-year 2022. Adjusted EBITDA for the year doubled to $66.5m.

Revenue falters in Q4

Turning to NeoGames’ fourth quarter results, revenue suffered a rapid decline, falling 31.0% to $47.7m. Combined with NeoGames’ share of NPI revenues, this comes out at $64.9m, which would still work out at a fall year-on-year.

Revenue generated by ilottery totalled $14.4m for the quarter, down by just $100,000. Igaming revenue also floundered, dropping 39.0% to $33.3m.

On a more positive note, total expenses worked out at 23.8% less than in Q4 2022, adding up to $55.4m. However, this still resulted in a heavier loss from operations year-on-year of $7.7m.

As expected, distribution expenses were the highest of the quarter at $25.4m. Depreciation and amortisation costs were $14.2m, while general and administrative expenses hit $9.3m.

Finance expenses at $7.4m hindered the total further. However, NeoGames’ share in joint venture profits brought in $10.6m. This left the pre-tax loss at $4.5m. Income tax of $1.5m brought the net loss for the quarter to $6.0m, further damage of $5.2m.

Adjusted EBITDA was 2.2% higher yearly, at $17.1m.

Malul: NeoGames making progress on strategic goals

Looking back on 2023, Malul praised the strategic progress made by NeoGames and highlighted growth in the company’s segments.

“We are very pleased with the progress we made during the fourth quarter and during the entire year of 2023, progressing our strategic goals and working to complete our merger with Aristocrat Leisure, which we announced last May,” Malul continued.

“We continue to see strong growth across our business lines, as three of our four segments, including ilottery, games, and sports, all demonstrated strong double-digit growth in 2023.”

As for what’s in store for the year ahead, Malul mused on potential growth in the US, but added that efforts will continue on growing NeoGames’ existing partnerships and products.

“We are focused on achieving sustainable growth and remain encouraged by the interest and pipeline in the US market for our igaming offering,” he explained. “As we look ahead, we will maintain our focus on investing in the execution of our recently announced partnerships and product enhancements.”

The IBIA study, The Availability of Sports Betting Products: An Economic and Integrity Analysis, was prepared by H2 Gambling Capital and developed in partnership with bodies in Brazil, Canada, Australia and the Netherlands. It used data from 12 markets where sports betting is regulated.

The research analysed the effects that restrictive and liberal sports betting regulatory markets have on aspects such as consumer protection, regulatory oversight, sports integrity and tax take in both restrictive and liberal sports betting regulatory markets.

The report found a strong correlation between the availability of sports betting products and the proportion of consumers wagering with onshore regulated operators. As a result of that high channelisation towards the legal market, fewer bettors are driven to unlicensed sports betting markets.

Rather than preventing consumers from betting, Khalid Ali, chief executive of IBIA, said the study confirmed that bet restrictions simply drove people to the unregulated market .

“The conclusions are clear. If you want to protect consumers and sports from corrupters, while maximising tax revenues, then allowing a wide range of sports betting products is essential.”

H2 director David Henwood added: “There is much conjecture that one of the main reasons customers use offshore betting sites is because they offer a broader range of product than available onshore. The study findings reinforce that point of view.”

Great Britain leading the way for channelisation

The global sports betting market is forecast to be worth $94bn (£73.5bn/€86bn) in gross win this year, rising to $132bn by 2028, $93bn of which will come from online.

The IBIA research found a strong correlation between markets with looser restrictions and increased channelisation. Great Britain, which permits a wide range of betting products, has a channelling rate (the proportion of gambling stakes placed with licensed operators) of 97%. Italy, which has minimal restrictions on pre-match and in-play betting, was second with a channelisation rate of 93%. By contrast, in markets such as Australia and Germany, where access to sports betting markets is more tightly controlled, the rates were 75% and 60%, respectively.

Tighter restrictions lead to less onshore channelisation

Countries with tighter restrictions on sports betting markets see their channelisation rates fall way behind the likes of Great Britain and Italy.

A particularly interesting market is Ontario, which broke away from Canada’s monopoly model and introduced an online sports betting licencing system in April 2022. While it had an onshore channelisation rate of 69% in 2022, it’s expected to reach 92% by 2024. This is in stark contrast to the rest of Canada, which is forecast to lose $2bn in taxable sports betting gross gaming revenue between 2024 and 2028.

Missing out on tax

Countries with low channelisation rates are failing to maximise the tax revenues gained from driving players towards the licensed market.

The study forecast that full legalisation of in-play online betting in Australia would bring in an extra $1bn in tax revenues over the next five years. Germany would see an extra $400m in tax revenues.

Additionally, the Netherlands would also experience an increase of $118m in tax revenues were it to liberalise access to side markets in football, such as the number of corners or cards.

The study provides useful learnings for policymakers in jurisdictions looking to legalise sports betting.

Brazil, which legalised sports betting in December, is expected to have a liberal market offering a wide range of products. Should the opposite be true, though, around $18bn a year could be wagered with offshore operators, according to the study. That would mean $1bn in lost tax revenue between 2025 and 2028.

IBIA: Football the ‘key driver’ of channelisation

Brazil could benefit from increased channelisation due to the country’s particular affection for football. The sport is estimated to account for 85.2% of Brazil’s gross win in 2024.

Football, which accounts for 56% of the regulated betting market gross win globally, is expected to produce $53bn in GGR from approximately $570bn in turnover during 2024. Online will provide nearly two thirds of this (65%).

The IBIA study found channelisation to be lower in markets that restrict football betting products. Portugal and Germany, which offer only a fifth of the football betting markets available in Italy, fall way behind in terms of channelisation.

Tennis is also a strong performer, particularly in Europe, with the continent accounting for 60% of global tennis GGR. The ITF Tour has been banned in some jurisdictions due to perceived integrity concerns, though the IBIA states a blanket ban is “counterproductive” for channelisation.

The IBIA’s research revealed Portugal would gain an additional $122m in tax revenue were it to align its availability of International Tennis Federation (ITF) products with Spain and Italy.

The strategic review launches today (6 March), with 888 to consider “potential alternatives” that can deliver value for the group.

Partial or full sale of US B2C operations are just some of the alternatives that will be looked at during the review. 888 will also consider a controlled exit of US B2C operations and other possible strategic transactions.

The group notes the review will not impact its existing B2B arrangements in the US.

888 has not set an end date for the strategic review. However, 888 CEO Per Widerström said shareholders could expect an update towards the end of March when it publishes its full-year results for 2023.

“Since commencing my role as CEO I have been focused on ensuring the group is set up to deliver strong value creation in the coming years,” Widerström said. “In the US, the intensity of competition and requirement for scale means huge investment is required to reach profitability.

“The strategic review of our US B2C operations will continue at pace. I look forward to updating shareholders on our plans for the wider group in late March.”

Why is 888 considering offloading US assets?

888 is currently active in four states: Colorado, Michigan, New Jersey and Virginia. However, only one state features the actual 888 brand, with the 888casino live in New Jersey.

A partnership with Authentic Brands Group (ABG) allows it to run sportsbooks and online casinos under the Sports Illustrated brand in other states. These include the SI Sportsbook and SI Casino in Michigan, as well as the SI Sportsbook in Colorado and Virginia.

However, the group says gross profit margin in the US is lower than the group level. This, it adds, reflects “significant” direct costs of operating in the market including duties, market access fees and licence fees. It also notes intense competition from “well-capitalised incumbent participants”.

As such, 888 has determined its current structure will not optimise returns. This ultimately has led to the launch of a strategic review for the US-facing operations.

Parting ways with Sports Illustrated

In line with the strategic review, 888 has also mutually agreed to end its partnership with ABG.

888 agreed to pay $25.0m (£19.7m/€23.0m) to ABG in cash from available resources. The group will pay an extra $25.0m between 2027 and 2029. 

According to 888, this is expected to result in operating cost savings of approximately $6.0m to $7.0m per year in 2024 and 2025.

“Our partnership with Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings,” Widerström said. “A series of record-breaking months for SI Casino has underscored the strength of the SI brand. 

“However, despite these successes, we have concluded that achieving sufficient scale in the US market to generate positive returns within an accelerated timeframe is unlikely.”

888 set to make redundancies 

The review comes on the back of an announcement in January that confirmed 888 will be making redundancies.

Confirming the news to iGB, 888 said the changes will help it achieve long-term plans. 888 did not disclose which departments will be impacted by the redundancies.

This came alongside 888 reporting an 8% drop in revenue for 2023 to £1.71bn. 888 said this was driven primarily by a proactive mix shift away from dotcom markets. This, the group said, impacted revenues by approximately £80m in 2023.

888 did not specifically reference the US in the trading update. However, it did note revenue in its international business declined 16% to £517m.

Positive thoughts for 2024

Despite this uncertain backdrop, 888 retains a “positive” outlook for FY24 revenue. 

In the update, it said consistent growth in active players is driving confidence in strong revenue growth online in both the UK and international segments. 888 also said compliance and safer gambling impacts will begin to annualise in February 2024, leading to a more positive outlook for average revenue per user.

A global cost savings programme launched in December 2023 with the aim of saving £30m. This is being supported by investment in automation and AI-powered data and insights to strengthen core capabilities. Cost savings, 888 says, will also allow for higher marketing spend in 2024.

While this will improve long-term profitability, 888 says additional investment means 2024 adjusted EBITDA will be at the low end of consensus range.

Widerström will oversee the changes, having taken over as CEO in October 2023. However, he will be without chief commercial officer Phil Walker, who stepped down in January after just six months in the role.

Other changes at the new-look 888 in recent months include Sean Wilkins joining as chief financial officer. Rik Barker is now serving as chief information technology officer and Ian Gallagher chief product officer. 

Fredrik Ekdahl joined as group general counsel in October and Jeffrey Haas as chief growth officer in January.

“I am confident that we are set to deliver deleveraging and strong shareholder returns in the coming years,” Widerström said in January.

Spending on sports betting in January amounted to $596.7m (£469.5m/€549.4m). This was 9.1% ahead of $547.2m in 2023 but 16.6% short of December’s record $716.4m spend in Colorado.

Of this total, $592.2m was wagered via online sportsbooks and $4.5m retail facilities across the state.

While the year-on-year handle rise was only modest, operators were much more successful in revenue terms. Gross gaming revenue reached $53.5m, some way clear of the $35.5m posted in January 2023.

The January total was also 32.1% higher than the $40.5m reported in December. This was despite players wagering around $120.0m less month-on-month.

Online wagering accounted for $53.3m of all revenue during the month. In contrast, retail contributed just $190,394.

Basketball betting drives growth in Colorado

While many were looking ahead to the NFL’s end-of-season Super Bowl showpiece in early February, it was basketball that proved the most popular with players in Colorado in January.

Some $135.3m was bet in basketball during the month. American football betting amounted to $86.1m, while college basketball wagers totalled $24.6m.

Other stand-out sports in January included tennis with $21.2m in bets, football at $14.0m and ice hockey with $11.9m.

Colorado players won $543.2m from sports betting in January. This includes $538.9m from online wagering and $4.3m retail sportsbooks.

Increased revenue from sports betting also meant a rise in tax contributions to the state. In total, operators paid $4.1m in sport wagering tax, the highest monthly total on record.

Group revenue for 2023 amounted to $356.5m (£280.6m/€328.4m). This was 15.2% higher than the $309.4m reported by PlayAGS in the previous 12-month period.

The supplier posted double-digit percentage growth in each of its three divisions: Electronic Gaming Machines (EGM), Table Products and Interactive. Group spending was higher year-on-year as PlayAGS expanded its operations, but such was the impact of revenue growth that the supplier ended 2023 in the black.

PlayAGS also reported a strong end to 2023, posting record revenue and adjusted EBITDA for all three operating segments. Q4 was also the 11th consecutive quarter of double-digit total revenue as the supplier’s growth strategy continued to pay dividends.

“The strength in our fourth quarter results was broad-based, with all three operating segments setting new quarterly records,” PlayAGS CEO and president David Lopez said. 

“The quality and consistency of our recent financial performance is a true reflection of our incredibly talented and focused team, increasingly deep and diverse product offering across all three segments, and the improving efficiency and effectiveness of our execution.”

EGM continues to lead the way for PlayAGS

Breaking down the results, and beginning with the full-year figures, gaming operations drew the most revenue. Here, revenue climbed 7.3% to $240.2m, while equipment sales revenue was also up 35.9% to $116.34m.

In terms of segmental performance, EGM was again the main source of revenue. For 2023, EGM segment revenue amounted to $327.1m, a rise of 15.0%, driven by an increase in equipment sales.

Table Products revenue also jumped 18.7% year-on-year to $17.7m. Again, this was down to a sharp rise in equipment sales during 2023, with PlayAGS reporting an increase in its overall installed based.

In addition, PlayAGS posted a 15.6% rise in Interactive revenue to $11.8m during the year. This, it says, was helped by the launch of more content throughout the year and the addition of new B2C partners around the world.

Net profit reaches $7.4m

As for spending, operating costs in 2023 were 10.2% higher at $299.1m. Expenses were up in almost all areas, with depreciation and amortisation the main outgoing at $76.9m. Just behind was selling, general and administrative costs at $73.2m.

PlayAGS also reported heavy interest costs, with these amounting to $57.4m for the year. However, revenue growth meant it was still able to report a small pre-tax profit of $1.7m, compared to a $10.3m loss in 2022.

The supplier paid $1.3m in income tax but also benefitted from positive $7.0m foreign currency translation adjustment. As such, it was left with a net profit of $7.4m, in contrast to 2022’s $6.3m loss.

In addition, adjusted EBITDA for 2023 climbed 14.7% to $159.0m, with a margin of 44.6%.

Record Q4 sets up PlayAGS for further growth

Turning to Q4 and PlayAGS reported several new quarterly records. Group revenue for the three-month period was 15.2% higher at $94.2m, an all-time high for the supplier.

Gaming operations revenue edged up 3.8% to $59.6m, while equipment sales revenue was also 42.4% higher at $94.2m.

Revenue also reached new record highs in each of the supplier’s core segments. For EGMs, revenue climbed 14.1% to $86.0m, Table Products revenue was 24.1% higher at $4.8m and Interactive revenue increased 34.4% to $3.4m.

Group operating costs were up 14.4% to $78.1m, while interest expenses reached $15.1m. As such, pre-tax profit for the quarter reached $1.1m, down 31.3% from $1.6m at the same point in 2022.

PlayAGS paid $1.0m in income tax but noted a $2.2m positive impact from foreign currency translation adjustment. This left it with a net profit of $2.2m, a drop of 42.1% from the previous year.

However, adjusted EBITDA was 14.7% higher at $42.8m, with margin reaching 45.4%.

Revenue for the 12 months to 31 December 2023 hit $241.1m (£189.5m/€221.7m). This is some way clear of the $163.3m reported by Full House in the previous year.

Highlights in 2023 included the opening of American Place, currently a temporary facility in Illinois. The venue opened in February just one year after Full House secured a licence in the state. Plans are in place to open a permanent venue for American Place. However, Full House has secured approvals to operate the temporary facility until August 2027.

“After several years of construction, we are entering a new phase for our company,” Lee said. “American Place celebrated its one-year anniversary a few weeks ago As expected, it continues to ramp up its operations. 

“In December, American Place reached a new monthly gaming revenue record of $8.2m. It subsequently set a new monthly all-time record for revenues in February 2024, despite it being a short month. We expect American Place’s gaming revenues to continue to grow in 2024.”

Full House opens new Colorado casino

Right at the end of 2023, Full House also opened its new Chamonix Casino Hotel in Colorado. The casino welcomed its first visitors on 27 December, meaning it did not have much of an impact on the full-year results. 

However, Lee says the venue will help drive growth in 2024 and beyond.

“By design, it was a soft opening, with the casino, meeting rooms and approximately 40% of the property’s guest rooms initially open,” Lee said. “Over the past few weeks, we have continued the rollout of the property’s amenities, including completion of the destination’s remaining hotel rooms and its parking garage. 

“Chamonix was designed to be the most beautiful casino in the state of Colorado and we look forward to the completion of all of its amenities over the next few months.”

Widespread growth in 2023

Taking a closer look at the 2023 figures, Full House reported growth across all core areas. 

Casino was the main source of income, with revenue rising by 55.3% to $176.9m. Food and beverage revenue was 28.3% higher at $34.0m and hotel revenue climbed 4.4% to $9.4m. Revenue from other operations, including contracted sports wagering, increased 52.2% to $20.7m.

As for segmental performance, Full House’s operations in the Midwest & South generated $192.4m, up 60.4%. American Place contributed $77.0m to this total in 2023.

Revenue from West activities was marginally lower at $35.9m. This was put down to the temporary loss of on-site parking and hotel rooms at Bronco Billy’s to accommodate the construction of the neighbouring Chamonix. Now Chamonix is open, Bronco Billy’s is benefiting from its integration with Chamonix, including a new parking garage and guest rooms.

Contracted sports betting revenue for 2023 was 78.1% higher at $12.8m. This was helped by the launch of an Illinois sports skin in August and the launch of a replacement operator in Colorado in March. Full House also noted the impact of accelerated revenues related to two other sports wagering agreements with operators that ceased operations in Q3.

Higher costs lead to wider net loss

In terms of spending, total operating costs were 60.8% higher at $242.2m, with expenses up across the board. The main outgoing for Full House was selling, general and administrative at $85.7m, up 43.6%.

Full House also noted $23.0m in interest expense which, coupled with its higher operating costs, left a pre-tax loss of $23.8m, compared to $14.8m in 2022.

The operator paid $1.1m in tax, resulting in a net loss of $24.9m, wider than $14.8m in the previous year. However, adjusted EBITDA for the year was 51.4% higher at $48.6m.

Similar story for Full House in Q4

Turning to the final quarter of the year, revenue in Q4 was 66.2% higher at $60.0m. Casino was again the main source of revenue at $45.3m, with revenue from food and beverage at $8.6m, hotel $2.4m and contracted sports wagering $3.7m.

Midwest & South revenue, which also includes the Silver Slipper Casino and Hotel and Rising Star Casino Resort, jumped 78.8% to $49.1m. This was again put down to the opening of American Place.

West revenue climbed 14.0% to $8.6m. Along with Bronco Billy’s and the Chamonix Casino, this segment also covers the Grand Lodge Casino and Stockman’s Casino. As for contracted sports betting, revenue rocketed 109.1% in Q4 to $2.3m, on the back of the Illinois skin launch.

Costs-wise, operating expenses were up 65.9% at $65.2m and net interest costs hit $6.7m, leaving a pre-tax loss of $11.8m, compared to $7.0m in 2022.

Full House noted $697,000 in tax payments, which meant it ended Q4 with a net loss of $12.5m, wider than last year’s $7.0m. Adjusted EBITDA, however, jumped 87.2% to $7.3m.

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

The Media Technology, Content and Services segment generated $91.6m in revenue, up by 10.8%. However, revenue dipped by 4.0% in Genius’ Sports Technology and Services segment, totalling $47.1m.

Aggregated, the notable performance of Genius’ Betting Technology, Content & Services segment ensured total revenue exceeded Genius’s prior guidance of $391m.

Mixed fortunes for FY23

Despite EBITDA almost tripling; the company’s net loss is still evidently a concern to the market.

At the time of writing, Genius’ share price was trading down by -3.26% on the New York Stock Exchange (NYSE).

Mark Locke, co-founder and CEO of Genius, remarked that the business is well positioned to implement its strategy for the year ahead.

“We are excited to report our eighth consecutive quarter of financial results above expectations, while demonstrating the increasing profitability of our business model and our ability to consistently execute on our strategic objectives,” said Locke.

“The business is now better positioned than ever to benefit from multiple structural growth drivers across the digital sports ecosystem, and we’re excited to continue our momentum into 2024.”

The year was eventful for Genius, with the company signing a number of data deals with global businesses and federations. 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 and extend its data rights deal with the Premier League.

FanDuel and Genius dually launched their NFL BetVision streaming solution in November.

Net loss halves in FY23

Cost of revenue for Genius’ FY23 increased by 1.7% to $343.9m. This left the gross profit at $69m – a $66.1m rise compared to full-year 2022.

Genius’ highest operating expense for FY23 came from general and administrative costs. These added up to $85.1m, a decline of 30.6% yearly. Sales and market expenses hit $29.4m, and research and development costs were $26.0m. Transaction expenses of $2.4m brought the total operating expense to $143.1m for 2023, down by 22.9%.

This brought the loss from operations to $74.1m for FY23. Compared to the loss recorded in FY22, this was a 59.4% improvement.

Total other expense consisted of business functions such as $11.2m in loss on abandonment of assets and $291,000 in loss on disposal of assets. Total other expense came to $9.2m, bringing the pre-tax loss for the year to $83.3m.

Following $5.3m in income tax benefit and $3.1m in gain from equity method investment, the total net loss for the year was $85.5m, less than half the $181.6m net loss recorded in full-year 2022. Genius said the 2023 loss was due to “improved underlying performance”.

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

For full-year 2024 Genius has projected revenue of $480m, which would represent a rise of 16.2%. Adjusted EBITDA is expected to hit $75m, which projects a 40.7% increase yearly. The company also expects positive cash flow in 2024.

Q4 revenue up 20.7% yearly

Turning to Q4, revenue spiked 20.7% to $127.1m. As expected, this was mostly held up by Genius’ Betting Technology, Content and Services segment, which brought in revenue of $86.7m. Media Technology, Content and Services generated $28.5m in revenue, up by 11.3%, while Sports Technology and Services saw a 15.8% dip to $11.9m.

Cost of revenue for the quarter was $115.6m, leaving the gross profit at $10.5m. Looking at operating expenses, general and administrative costs remained the highest of the quarter at $27.0m, despite dipping by 17.6%.

Operating expenses totalled $44.9m for the quarter. This resulted in a loss from operations of $34.3m. The other expense total was greatly minimised year-on-year, coming out at a $5.2m loss – $77.7m less than in Q4 2022.

The pre-tax loss of $39.6m was affected by $423,000 in income tax benefit and $749,000 in gain from equity method investment. After considering these, the net loss came to $38.4m, representing a 69.8% improvement on Q4 2022.

Adjusted EBITDA for the quarter was $11.9m, a sharp increase year-on-year from $2.6m. Genius projected group revenue for Q4 2024 to be $156m and adjusted EBITDA for the quarter to be $25m.