Month: March 2024

Super Group attributed the drop in profit before tax to non-cash charges of €64.6m. €28.6m of that total came from the January 2023 acquisition of online sports betting and igaming business Digital Gaming Corporation (DGC), which allowed Super Group to enter the US at the start of the year.

The company also highlighted that €42.1m of the drop in profit was down to changes in fair value of option liability and an impairment of goodwill. Super Group also pointed to the 2022 figure’s inclusion of €246.8m in non-cash gains relating to the fair value of warrant and earnout liabilities and related foreign exchange movements.

Operational EBITDA was down from €208.5m in 2022 to €197.3m in 2023. Meanwhile, unrestricted cash was also €12.9m lower at €241.9m, which Super Group again assigned to the DGC acquisition.

Boosted by record revenues

Super Group produced 2023 revenues of €1.4bn, its highest ever annual total. Record Q4 revenues led the way for the Betway operator.

The 2023 revenue total exceeded Super Group’s guidance of €1.35bn, increasing 11% year-on-year from €1.3bn in 2022. Monthly average customers rose 43% from 2.8 million to 4 million.

Neil Menashe, Super Group chief executive, revealed the business is setting its sights on double-digit top-line growth in 2024.

“We have made tremendous strides in 2023 and are delighted to have achieved an all-time revenue record of €1.4 billion, enabling us to comfortably surpass our guidance for the year,” Menashe stated.

“We set record breaking totals for revenue, customer numbers and deposits cementing our position as a growing, cash generative and geographically diverse online sports betting and iGaming operator.”

Chief financial officer Alinda van Wyk added: “To have surpassed our guidance, in the face of multiple headwinds, is indicative of our laser focus on realising cost efficiencies and investing in growth where we can see a clear return.”

Q4 loss for Super Group

Super Group generated €359.9m during Q4, its highest ever in a quarter. It was also a 9% increase on the €329.1m figure from the same quarter last year. Monthly average customers increased by 38% to 4.7 million for Q4.

However, despite the revenue records, Super Group recorded a €44.9m loss before tax during Q4. This was compared to a profit of €21.1m during Q4 2022. Again, Super Group attributed the loss to costs arising from the DGC acquisition.

Meanwhile, operational EBITDA for Q4 stood at €36.2m. This was 14.4% down on Q4 2022’s number operational EBITDA of €42.3m. However, excluding the US, operational EBITDA for Q4 was €54m, up 29% year-on-year.

Igaming success offsets headwinds

As well as Betway, Super Group also owns online casino operator Spin. The company pointed to its online casino offering as a key driver of revenue for the group.

Super Group’s chief executive, lauded the company’s igaming sector, which he said allowed it to overcome a challenging start to the year and sportsbook volatility.

Online casino accounted for 85% of Super Group’s net revenue in Q4 2023, up by 12% on Q4 2022. Online sports betting made up 15% of the company’s net revenue, down from 27% in Q4 2022.

Super Group put the 22% ex-US rise in online casino revenue to €289m down to growth in Africa and Canada, while the 39% decrease in sports betting revenue to €52m was blamed on customer-friendly sports results during October. The closure of the Indian market was deemed to have had a negative impact on both.

In terms of net revenue, Spin was responsible for 45% of Super Group’s Q4 net revenue to Betway’s 55%. This was a 1% change from Q4 2022’s ratio of Spin’s 46% and Betway’s 54%.

Super Group yet to make its mark in the US

After entering the US thanks to its DGC acquisition, Super Group is yet to turn a profit in the country.

The business’ 2023 operational EBITDA of €197.3m was hampered by a US loss of €57.4m, with operational EBITDA ex-US standing at €254.7m for the year.

Despite the loss in the US, Van Wyk kept an optimistic outlook on Super Group’s achievements there, saying: “In the US, the operational EBITDA loss was less than expected for the year and we are actively evaluating all of our options.”

In February 2023, Super Group reached an agreement to sell the non-core B2B division of DGC to Games Global.

The future for Super Group

In its report, Super Group outlined four key strategic objectives it will look to meet in the future. These are to continue making a profit, further invest into future growth, optimise the company’s global footprint and effectively manage its capital structure.

In terms of 2024 guidance excluding the US, Super Group is aiming to increase total revenue by 10%, reaching €1.6bn for the year. The business hopes to raise net revenue by 12%.

The company is eyeing adjusted EBITDA of €280m, with an adjusted EBITDA margin of 18%. It expects to do this by heavily investing into marketing, while also optimising its costs and technology.

For the US, the company is currently assessing a range of options. Quite what this means remains to be seen, though Super Group says that its 2024 adjusted EBITDA loss in the country is not expected to exceed 2023’s figure of €57.4m.

Ohio Casino Control Commission (OCCC) data showed revenue of $113.1m for the state’s operators during the month to 31 January 2024. While this was down 46% compared to the same month in 2023, it was up 30% on the previous month, December 2023.

With Ohio’s sports betting market launching in January 2023, this is the first month to enable year-on-year comparisons. That first month of operations saw $210.5m generated by the state’s sportsbooks. However, revenue was as low as $87.3m in December 2023.

Almost all the revenue came from online and mobile, totalling $110.6m, with just $2.5m from retail.

FanDuel, based at Belterra Park, accounted for more than half of revenue as it generated $53.0m. DraftKings, based out of Hollywood Toledo, was the only other operator to contribute more than $10m. It brought in $34.0m in January.

Handle drops following player props ruling

Handle was down considerably compared to last January. Bettors wagered $810.4m in January 2024, which was down 26% compared to $1.1bn in the prior period. Handle was also down by 2.3% compared to December 2023. January was the first month since a ban was announced on player props involving college student-athletes. The OCCC said college player props accounted for 1.5% of the money bet on sports last year.

Ohio’s operators paid out $691.8m in winnings in January, with $40.0m written off as promotions. Some $792.1m of handle came from online with $18.4m from retail.

When broken down by operator, FanDuel was the top sportsbook in the state during January at $282.7m in handle. DraftKings amassed $254.2m, with ESPN BET on $59.8m and Bet365 on $50.0m.

Ohio’s dip in handle but growth in revenue shadows the results posted by Washington DC earlier this week. However, New Jersey posted record revenue and handle during January.

Ohio casinos continue decline

Meanwhile, Ohio’s four casinos reported $75.2m in gross gaming revenue for the month. This number represents a 12.6% year-over-year decline and an 18% month-over-month decline.

Ohio casinos reported their lowest monthly revenue total in nearly three years. The $67.6m in February 2021 was the only monthly report with worse results.

Ohio is home to seven racinos that offer video lottery terminals (VLTs) and four casinos that offer slot machines and live dealer table games. The $100.8m won by video lottery terminals (VLT) represented a 9% decline from January 2023, when the properties won $110.8m.

Jack Cleveland Casino had the highest revenue of all Ohio casinos, with $21.2m. This came despite reporting only $11.5m in slot machine revenue, the lowest in the state.

The deal will provide LaLiga with the services of ProhiBet, the prohibited betting solution launched in February 2023. ProhiBet is a joint venture between US Integrity and Odds On Compliance.

US Integrity offers wagering monitoring services to sporting stakeholders, analysing datasets to identify suspicious betting behaviour. Odds On Compliance, meanwhile, is a compliance technology and consultation firm in sports betting and gaming.

LaLiga will benefit from analytical insights that will aim to ensure Spain’s top two football leagues are played in a fair manner. Suspicious betting activity will be detected with “nefarious” behaviour acted upon thanks to monitoring alerts.

Javier Tebas, LaLiga’s president, said: “This partnership with US Integrity represents a significant milestone in our efforts to safeguard integrity and transparency in professional football.”

US Integrity chief executive and co-founder Matthew Holt added: “We’re incredibly excited to expand our international efforts and to work with LaLiga to better align our alerting processes for their future matches on a global scale.”

LaLiga the latest sporting body to utilise ProhiBet

LaLiga has joined a number of other global professional sports leagues in strengthening its betting compliance with US Integrity’s ProhiBet.

In August 2023, the National Collegiate Athletic Association’s Big 12 Conference became one of the first sports properties to start using ProhiBet.

The Ultimate Fighting Championship (UFC), a mixed martial arts organisation, linked up with ProhiBet the following month. The aim is to prohibit UFC individuals such as athletes and coaches from placing bets on the organisation’s events.

In February, the Professional Fighters League (PFL) partnered with ProhiBet in the hopes of enhancing its betting regulatory measures.

Sportradar report shows football leads suspicious activity

On Monday, Sportradar released its annual Integrity Report for 2023, revealing it had detected 1,329 suspicious matches during 2023.

Of the 1,329 figure, football had by far the most with 880 detections, 66.2% of the total and 675 more than basketball in second.

Europe had the most significant rise in suspicious football matches, up by 15% year-on-year. Europe also led the way for number of suspicious matches across all sports with 667. This was 32 more than in 2022, the second highest year-on-year jump in detections behind Asia’s 60.

Bally’s customers will be allowed to play slots and table games in the state via desktop or an iOS mobile app. About 170 slot games will be available initially to players who are at least 21 years old and have an online or mobile account with Bally’s.

The public launch of the online gaming product follows a four-day technical trial that started on Friday.

Live table games supplier Stakelogic is supporting the launch with its live dealer and table games software and studio technology.

Competitive industry for Rhode Island

Senate president Dominick Ruggerio said that “igaming will ensure that Rhode Island remains at the forefront of the competitive gaming industry.”

Rhode Island became the seventh US state to pass the required legislation on 22 June 2023. Signed into law by state governor Dan McKee, Senate Bill 948 effectively extended Bally’s land-based casino monopoly into igaming.

However, despite the competitive element – igaming in the state will in effect be a monopoly. In 2021, state legislators voted to approve a law that provided Bally’s and its IGT gaming supplier a 20-year no-bid contract to run both the land-based casinos in the state: Bally’s Twin Rivers Lincoln Casino Resort and Bally’s Tiverton Casino & Hotel.

The law extends the current Bally’s monopoly over casinos in the state to igaming, meaning that the company’s online arm Gamesys would be the sole operator active in the state. The business operates under a number of brands including Virgin Casino, Tropicana Casino and Rainbow Riches Casino.

The law imposes a 50% tax on online slot revenue with the remainder divided between Bally’s and IGT. Meanwhile table games are to face a lesser 18% revenue tax.

To support the igaming launch, Bally’s constructed a 4,000-square-foot Live Dealer Table Games studio at Twin Rivers.

Rhode Island regulation

Igaming is to be regulated in the state by the Rhode Island Division of the Lottery. The division currently oversees the two Bally’s casinos in the state. The activity will therefore be under the purview of the organisation’s director, Mark Furcolo.

The text of the law empowers the director to develop “reasonable” rules and regulations for igaming in the state.

The law states that geolocation technology will be used to ensure that a player is physically in the state. However, it also outlines certain circumstances when a player is permitted to bet out of state. The law allows this to take place when the RI Division of the Lottery has entered into a reciprocal agreement with another state regulator.

Falling figures for sports betting

Given Rhode Island’s monthly earnings reports for sports betting, the launch could be timely. Rhode Island recorded $44.8m in sports betting handle for January, down from $47.9m in December and the lowest since September. Handle also fell 28.1% in comparison with the same month last year.

Rhode Island is now into the second half of its 2024 financial year. In total, handle has declined from $332.8m to $267.2m year-on-year for the first seven months of the financial year.

Last month, Bally’s said growth within its interactive igaming business helped drive revenue up by 8.6% to $2.45bn in 2023. Interactive revenue in North America alone rocketed by 37.8% to $112.6m for the year, as igaming continues to grow in popularity.

Igaming is currently only legal in six states aside from Rhode Island. These are New Jersey, Delaware, West Virginia, Pennsylvania, Michigan and Connecticut.

The EGBA-endorsed move would oblige states in the European Union (EU) to issue an e-ID to citizens. This would allow them to authenticate their identity for online services. e-IDs will be optional for citizens and businesses.

EGBA labelled the European Parliament’s approval on Monday a “significant milestone” in providing a safer and more inclusive online environment for citizens in the EU. There were 335 votes in favour, 190 opposing the new regulations and 31 abstentions.

e-IDs will mean citizens no longer have to resort to commercial providers to verify their online identification, which has caused privacy and security concerns in the past.

The hope is e-IDs will reduce the risk of fraud and identity theft, enhancing security for the EU’s citizens.

An additional key benefit of e-IDs is lower costs for businesses. This is particularly important for gambling operators who will be able to use a standardised verification system across the EU rather than differing commercial databases in each country.

Maarten Haijer, secretary general of EGBA, said: “We welcome the European Parliament’s approval of a unified digital identity framework and are confident that the use of the new e-ID in our sector will lead to a more seamless and trustworthy online experience for players and help to reduce costs and administration for gambling operators.”

Will e-IDs catch on?

The EGBA has long been keen on the introduction of e-IDs, citing their potential to “revolutionise” how EU citizens access online.

The assoication has supported the proposals since the framework for a new EU online identification system was initially proposed in 2021.

The European Commission is setting a target for 80% of EU citizens to be using the technology by 2030. The EGBA has also highlighted the need for high participation in order for e-IDs to work. They will not be mandatory for gambling companies.

Following the European Parliament’s approval, the e-ID law will need to be formally endorsed by the EU’s council of ministers. Should it pass that stage, e-IDs should be adopted by the summer of this year.

EGBA’s aims to make European gambling safer

A 2023 report revealed that EGBA members had sent 45.5 million safer gambling messages to customers in 2022. This represented a 20% increase. 48% of those messages were personalised, sent directly to customers showing concerning gambling behaviour.

Haijer stated the report showed positive signs of how EBGA is looking to address problem gambling. EGBA’s members include the likes of Flutter, Kindred and Betsson.

In December 2022, EGBA submitted a proposal to develop a common European standard for markers of harm for online gambling. This would make it clearer for harmful gambling activities to be identified by removing the “significant differences” in how markers are defined and monitored.

Earlier that year, EGBA established a new expert group that would counteract new cybersecurity threats to gambling. The group allows EGBA members to exchange information on cyber threats so that future attacks can be avoided.

The lawsuit accuses Evolution of engaging in securities fraud or “other unlawful business practices”, with the motion deadline set for 25 March. Pomerantz is seeking to establish whether there was any wrongdoing from Evolution during the class period of 14 February 2019 to 25 October 2023.

The suit lists several incidents that occurred during the class period that had an impact on Evolution’s share prices.

These include a January 2022 report by Analyst Generation Limited, which was made available to certain investors. Resulting media coverage stated the report outlined two key allegations – that a portion of Evolution’s revenue “could be at risk due to future regulatory clampdowns” and that Evolution had been “exposed to revenues from what we believe to be illegal gambling activities”.

After the report’s release, Evolution’s American Depository Shares (ADS) dropped by 14.68% across the following three trading sessions.

Pomerantz also noted Evolution’s Q3 results and subsequent earnings call in October 2023, in which the company highlighted delays to the opening of new studios and stagnation in revenues for some sectors. In response to the news, Evolution’s ADS price fell by 7.61%.

Evolution has not yet published a comment on the accusations.

Separate lawsuit accuses Evolution of misleading investors

In January, Federman & Sherwood filed another lawsuit against Evolution in the United States District Court for the Eastern District of Pennsylvania. The suit is accusing the company of deceiving investors in relation to its growth trajectory and compliance.

That suit stretches over the same class period as Pomerantz’s, alleging Evolution made untrue or misleading statements in regards to its growth potential, customer compliance, the company’s compliance and the effect of non-compliance on revenue.

In February, the New Jersey Division of Gaming Enforcement (NJDGE) announced it had dropped another case against Evolution. This was following the conclusion of an investigation into potential misconduct dating back to November 2021.

Allegations were made that Evolution products were made available in countries that were under US trade sanctions. However, the NJDGE decided not to take any action, dropping the case.

Evolution’s 2023 net profit tops €1bn

Despite some regulatory concerns, revenue growth in Evolution’s live sector ensured the business reached net 2023 profit of €1.07bn (£913.5m/$1.16bn).

Revenue was up 23.5% year-on-year to €1.80bn, with live casino responsible for 84.7% of this total at €1.52bn.

Despite its live casino growth, chief executive Martin Carlesund recently highlighted concerns over Evolution’s ability to keep pace with demand. Carlesund stated Evolution would look to open new games studios to help meet the rise in interest.

“We have increased the pace of our studio expansions in the fourth quarter and expect to continue into 2024,” Carlesund said. “We launched a new studio in Bulgaria and have initiated the project to build a second studio in Colombia.”

RNG (random number generator) gaming revenue climbed 2.6% to €275.3m during 2023. However, the sector’s revenue fell 3.7% to €69.8m in Q4. In response, a Regulus Partners analyst slammed Evolution’s strategic performance in RNG gaming, labelling it “embarrassing”.

Tucker assumes the role at Aristocrat, the gaming content and technology provider, following Jo’s resignation. Tucker begins her tenure today having already received the necessary regulatory pre-approval for her appointment.

Tucker joined Sydney, Australia-headquartered Aristocrat in October 2021 and is currently the group deputy chief legal officer. The company secretary is directly accountable to the board, through the chairman, for all governance matters that relate to the board’s proper functioning.

Jo became company secretary in June 2021 and had held the role of associate general counsel since 2018. Prior to joining Aristocrat, Jo worked at NBN Co Limited, Newcastle Permanent Building Society and law firm Allens Linklaters.

During her tenure, Jo assisted the group in its acquisition of Roxor in early 2023. Aristocrat is also in the process of taking over NeoGames, with a $1.20bn deal struck in May last year. That deal is expected to complete before the end of H1 2024.

An Aristocrat statement read: “The board thanks Ms Jo for her contribution to Aristocrat and congratulates Ms Tucker on her appointment.”

Revenue rises 13% at Aristocrat in 2023

The appointment comes after Aristocrat posted a 13.0% rise in revenue for its 2023 financial year. Published in November, the results show revenue for the year amounted to AU$6.30bn (£3.23bn/€3.78bn/US$4.09bn).

Figures reveal widespread success in the gaming and technology business, with EBITDA and certain measurements of profitability rising.

For the group, net profit after tax and before amortisation of acquired intangibles was 46.7% higher at $1.54bn. In addition, normalised EBITDA amounted to $2.11bn, up 33.2% from the previous year.

The project, which will include the construction of a completely new grandstand, will be complete in 2026. The majority of work will be concluded during the first quarter of 2026 with the building ready later that year.

Governor Hochul said the new 275,000 sq ft grandstand will offer “the modern amenities and hospitality offerings fans now expect”. New York Racing Association (NYRA), which will oversee construction, has now released a series of renderings ahead of commencement.

New renderings of the transformed belmont park have been released

The demolition of the current Belmont Park grandstand/clubhouse is slated to begin in March and will continue through early July. This summer’s Belmont Stakes Racing Festival will be held at Saratoga to allow for uninterrupted construction at Belmont Park.

New York authorities said the multi-year project will generate $1bn in construction-related economic benefits and create 3,700 construction-related jobs. The New York authorities are providing the NYRA with a $455m loan to fund the project. Following the return of racing in 2026, activities at the new facility will generate $155m in annual economic output. Some $10m in new state and local tax revenue per year will also be generated.

“The redevelopment of Belmont Park is a critical investment in one of New York’s most historic sporting venues,” Governor Hochul said. “The new facility will support year-round racing, thousands of new jobs for Long Islanders and provide an enhanced experience for customers attending the iconic Belmont Stakes for generations to come.”

A view of the transformed Belmont Park

Belmont Park hopeful of hosting Breeders’ Cup

NYRA has developed a plan that will allow for the Belmont Stakes to return in June 2026 prior to the full opening of the new building in September 2026. Although a venue for the 2026 Breeders’ Cup World Championships has yet to be determined, the new Belmont Park will be complete and ready to host the 2026 Breeders’ Cup should the opportunity arise. The Breeders’ Cup has announced its commitment to add Belmont to its list of host venues following NYRA’s modernisation of the facility.

The new grandstand, which is being designed by Populous, will increase the amount of unstructured green space available to fans. The overall footprint of the building is reduced from its current 1.25 million sq foot.

While the venue will have the same 50,000-person capacity, the layout has been adjusted to accommodate flexible seasonal attendance.

NYRA president and CEO David O’Rourke said: “The transformation of Belmont Park will secure the future of thoroughbred racing. It will create thousands of jobs and drive tourism to Long Island and the region for decades to come. NYRA is committed to building a world-class destination that will set the global standard for a racing facility. We thank Governor Hochul for the opportunity to completely re-imagine Belmont.”

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