Month: May 2024

Codere’s Q1 revenue fell far short of the €363.1m in revenue Codere accumulated in Q1 2023. The group’s adjusted EBITDA for Q1 also fell, dropping 26.6% from €64.4m to €47.3m.

Consolidated net revenues for Q1 stood at €185.9m, again a 12.1% decrease on the €211.5m reported in Q1 2023.

Despite the fall in revenue, however, Codere noted that the group’s cash position had remained largely stable at €104m from €107.5m at the beginning of the period.

Codere highlighted that the group’s adjusted EBITDA in Q1 showed the continuing recovery of the business following the elimination of restrictions in Mexico and Argentina.

In announcing its Q1 earnings, Codere stated the group was making progress in conversations with bondholders towards a “comprehensive recapitalisation”. It hopes this would reduce debt and strengthen the balance sheet. Codere says it hopes to give an update on the process soon.

Challenges in Mexico and Argentina

Codere noted Argentina’s “challenging macroeconomic environment”, as well as the improving situation in regards to elimination of restrictions in both Argentina and Mexico, as two areas that are likely to see Codere’s financial figures improve as 2024 progresses.

Codere pointed to “substantial progress” in the lifting of operating restrictions. As of the end of the Q1 period, Codere had faced one closure and 14 of its halls being partially affected by restrictions in Mexico.

Additionally, the company noted that its adjusted EBITDA figures excluded adjustments from hyper-inflation in Argentina. Notably, Q1 retail revenue which excludes Argentina would have been €226.2m, a 7% increase since Q3 2023.

When excluding Argentina and Mexico, Codere’s Q1 revenue was up 4% when compared to Q1 2023. Additionally, the exclusion of those two markets would have seen adjusted EBITDA rise by 20%.

Codere Online continuing to shine

Codere’s decreases in revenue and adjusted EBITDA come despite Codere Online performing well again in Q1 after a strong 2023.

Codere Online achieved Q1 revenues of €53m, a quarterly record and 34.2% up on the €39.5m generated in the same quarter last year. This was largely thanks to 51.1% year-on-year revenue growth in Mexico from €17.6m to €26.6m. Meanwhile, Codere Online’s home country of Spain also increased 21.2% from €18.4m to €22.3m.

Codere’s online revenue made up 16.9% of the group’s Q1 total, with retail bringing in €260.8m in revenue, down 19.4% on the €323.6m generated in the same quarter last year.

The company noted improved marketing expenditure in Mexico and Spain, with those enhancements helping to expand the active customer base in the two countries by approximately 25.2% from 89.8 million to 112.5 million.

Codere Online’s Q1 adjusted EBITDA stood at €8.8m, over double the €4.3m accumulated in the same quarter last year. Codere Online’s net income for Q1 was €3.4m, up from a net loss of €1.3m in Q1 2023. Again, the company’s cash position remained stable with €38.5m in liquidity.

Codere Online raising expectations

After a strong Q1, Codere Online is raising its expectations for 2024. It has increased its net gaming revenue outlook to €195m-€210m from the €185m-€200m it set earlier this year. It also reiterated its plan to be adjusted EBITDA and cash flow positive for the full year in 2024.

Codere Online chief financial officer Oscar Iglesias believes the company is well-placed to continue on its upwards growth trajectory.

“Once again, top line growth exceeded our expectations in the first quarter, with Mexico continuing to put distance on Spain as our largest market by revenue,” Iglesias said.

“We are particularly excited, however, to see Mexico now also contributing positive adjusted EBITDA for the first time.”

Retail faltering

Despite the impressive showing of Codere Online in Q1, the group’s retail business couldn’t match that success.

Argentina’s economic problems saw Codere’s retail revenue drop 59.1% from €84.7m to €34.6m. Mexico, meanwhile, produced just €54m in retail revenue, again an 11.3% decrease.

Italy was the company’s biggest retail market in Q1, despite its revenue falling 2.6% to €78.3m. Meanwhile, Uruguay was the only retail market to grow over the quarter, with revenues reaching €17.4m, a 4.2% increase.

Codere’s adjusted EBITDA across its retail sector was €38.5m, a decrease of 35.8% from the €60m accumulated in the same quarter last year.

The advertisement posted by the under-25 Wett was seen on X (formerly Twitter) on 12 March 2024. It featured a picture of Wett at Cheltenham racecourse. The complaint questioned whether the ad contravened rules on gambling advertising, as Wett was only 23 years old at the time.

According to the ASA’s response, Wett said she was unaware of the age restrictions on ads for gambling as promulgated by the CAP Code. She had presumed that being over the age of 18 was sufficient.

The CAP Code outlines rules for certain advertising channels in the UK.

The ASA said that Wett apologised for the breach and she understood the importance of promoting responsible gambling.

ASA “concerned” by lack of communication from Festival Free Bets

However, Festival Free Bets did not respond to the ASA’s enquiries. The body said it was “concerned” by the “lack of response and apparent disregard for the code”.

The ASA subsequently ruled that Festival Free Bets had breached Cap Code rule 1.7. This rule states that any unreasonable delay to the ASA’s enquiries would constitute a breach.

The ASA reminded Festival Free Bets that it has a responsibility to respond quickly to enquiries and asked it to do this in the future.

In its assessment, the ASA reiterated that no one under the age of 25 should be featured in a “significant role” in marketing communications for gambling ads. The exception is marketing communications where a bet is placed directly through a transactional facility, such as an operator’s website, and the subject of the ad is also the subject of the bet.

“Although we acknowledged that Festival Free Bets was not itself a licensed gambling provider, using it would place consumers in a position where they would be interacting with gambling services,” read the ASA’s assessment.

“We therefore considered it would be irresponsible to feature someone who was aged under 25 playing a significant role in their ads.”

Ad ruled as irresponsible

Ultimately, the ASA ruled that Wett was the focus of the ad and therefore played a significant role. The body said that the ad also breached CAP Code rule 1.3, which states that marketing must be conducted responsibly.

The matter was referred to CAP’s compliance team. The ASA told Festival Free Bets that the ad must not appear again and to ensure ads only features individuals over the age of 25.

The ASA has criticised a number of gambling ads in recent months. In March, it ordered LeoVegas to withdraw a radio ad for its BetUK sportsbook. The ad featured Adebayo Akinfenwa, a retired footballer, who the ASA ruled could appeal to children.

Late last year, the ASA investigated a complaint against a Mecca Bingo ad that suggested that gambling can enhance self-esteem. The complaint was ultimately upheld.

Ahead of the upcoming Euro 2024 tournament, last month the ASA reiterated ad guidelines for operators. Operators must not feature individuals under the age of 25 in their advertising, which includes footballers. Ads must also not appeal to those under the age of 18.

Over the last few years, the betting and gaming industry has undergone a significant transformation. We have seen more markets introduce gambling legislation, more products rolled out and a significant pivot towards the online space.  

One of the biggest changes that we have seen is the increasing focus on responsible gambling and player protection practices.

It’s hard to pinpoint just one reason why we are seeing this shift in attitudes from gambling companies. But it would be remiss to think that advances in technology haven’t played a role.

In 2024, gambling is quite literally available at your fingertips. Betting apps are now a common feature on the majority of smartphones. What this means is that players have the ability to bet whenever and wherever they want. More significantly, they have the ability to bet in private.

Previously, bettors would have to visit a physical shop or a land-based casino to wager. This meant you had someone on-premises monitoring whether you were betting within your limits.

On top of this, we’ve seen an explosion in gambling advertising as of late. It is almost impossible to watch TV, listen to the radio or even watch a football match without being bombarded with adverts from igaming companies. This has led to questions being asked on the suitability of such adverts. Certain types of adverts, such as real-time adverts during half-time in football matches, have already been banned in certain jurisdictions.

The pivot towards online has not only led to a substantial increase in the number of people who are engaging in gambling but has also made gambling much more accessible to those exhibiting problem gambling behaviours – as well as underage players and those with affordability concerns.

More progress to be made

As we continue to see an increase in the number of people afflicted by gambling-related harm, it is clear that much more needs to be done when it comes to player protection.

I believe that we as an industry are slowly but surely starting to realise that player protection is much more than a tick-box response to regulations. The customer base and wider society demand a more values-based approach these days.

This need for more player protection measures is only going to continue growing. This is particularly relevant as environmental, social and governance (ESG) matters become a crucial part of businesses wanting to remain competitive. In recent years, we have seen ESG reporting directives come into effect in many jurisdictions. Board directors will soon be held personally liable if they fall short of regulatory requirements.

There has also been an increase in charities that are dedicated to supporting those with lived experience of gambling addiction, both in volume and profile. These charities are working incredibly hard to raise awareness of gambling harms and to reduce the stigma associated with problem gambling.

Many of these charities are also encouraging others to speak up about the impact problem gambling has had on them and their families, employers and friends. This increase in profile has highlighted the need for more responsible gaming.

The gambling industry needs to demonstrate its moral responsibility to protecting its players. We’ve seen many operators launching their own initiatives in this area. But I think we’d like to know more about the impact these initiatives are having, and concrete statistics on how they have aided player protection.

More collaboration is needed

It would be remiss to say that the gambling industry hasn’t stepped up to the challenge posed by problem gambling. It has. Collectively, operators have introduced several initiatives to flag harmful behaviour and alert players when their gambling behaviour changes. However, I believe that there needs to be more collaboration between operators and a single point of contact where details of vulnerable players can be shared.

Interestingly, we are seeing this sort of collaboration when it comes to identifying suspicious transactions. But we have the opportunity to take this one step further and share information regarding at-risk and self-excluded players.

We also need to make sure that we have measures in place to protect those working within the gambling industry. Statistically, it is these workers that are most likely to be affected by problem gambling.

In my experience, the majority of safer gambling training interventions are focused on customers rather than industry colleagues.

Line managers in the industry could be offered leadership training and coaching which enables them to spot markers of harm relevant to those working in the sector. This might include difficulty staying awake during a shift or being unusually tired, asking colleagues to loan them money, changing mood or behaviour or increased anxiety levels.

Admittedly, these may well be symptoms of other issues. But it is something that should be broached by a line manager, gently and through open questioning and active listening.

What needs to happen next?

I can admit that I am not an expert in supporting colleagues affected by problem gambling. But you don’t need to be an expert to have an initial conversation with someone. This is really important for line managers who know their teams better than anyone. They are the ones most likely to spot changes in behaviour which could indicate a problem. Therefore, they have a unique opportunity to intervene before matters escalate.

In order to achieve this, managers need to feel supported within their organisations and know when they are out of their depth.

Cultural change is not something that is going to happen overnight. Addressing the issues associated with gambling-related harm is going to take some time. But we are seeing positive steps being taken.

Going forward, I think that senior leadership teams should be encouraging a culture of openness and collaboration, as lack of player protection and irresponsible gambling damages the reputation of the industry as a whole.

We do recognise that there is a delicate line for C-Level executives. They also have a responsibility to their shareholders. However, the reality is that the prominence of responsible gaming practices is only going to increase. Those operators and suppliers who become trailblazers in these areas will reap the benefits for their customers, colleagues and shareholders.

Bet-at-home said that it had been affected by the introduction of cross-product and cross-provider monthly betting restrictions in Germany. These took effect in 2022. It also said it had been affected by the mandated reporting of increased deposit limits, which took place in Q2 2023.

Despite this, Falchetto said that the €11.7m revenue was stable in comparison to Q4 2023 and was therefore within normal limits.

“Gross betting and gaming revenue in the first quarter 2024 amounting to €11.7m was lower than in same period of last year, due to the negative impact of regulatory developments in the core market of Germany, however remained stable compared to the previous quarter and is therefore within the expected range for the year 2024,” said Falchetto.

Falchetto added that Bet-at-home would centre its marketing focus on its core markets of Germany and Austria in H1 2024. This is due to the upcoming European Football Championship, which begins in mid-June and will take place in Germany. This explains why marketing expenses are up year-on-year for Q1.

The operator noted that its previously-announced strategic transformation will continue throughout the 2024 financial year. Bet-at-home said that technological development was a focus in Q1, with an ongoing internal focus on introducing a customer loyalty programme based on machine learning.

Net revenue also falters in Q1

Online sports betting accounted for €10.6m in revenue, a drop of 13.0% year-on-year. Conversely, online gaming revenue edged up, rising 4.0% to €1.0m.

Betting fees and gambling levies for Q1 totalled €2.5m. After considering this, and €4,000 in VAT on electronic services, the total net betting and gaming revenue was €9.1m for the quarter. This also marked a decline, falling 10.7% year-on-year.

As mentioned previously, the rise in advertising expenses was notable during the quarter. This increased by 65.7% to €4.5m yearly. Personnel expenses dipped 17.2% to €2.0m. Other operating expenses totalled at €2.5m, with total expenses offset just slightly by €792,000.

EBITDA for the quarter was €744,000, a decline of just over €1m year-on-year. Depreciation and amortisation of €352,000 left the EBIT at €391,000.

Looking ahead to the remainder of 2024, Bet-at-home expects gross gaming and betting revenue to be between €45m and €53m. EBITDA before special items is projected to lie between -€1m and €2.5m.

Revenue for the three months to 31 March was SEK8.0m (£587,944/€685,048). This is 23.1% higher than the SEK6.5m Scout reported in Q1 of last year.

Scout posted growth across both its B2B and B2C segments. This is despite what Jönsson describes as a “significant” reduction in employee costs and other external expenses. 

This came in the wake of a transformation programme, which completed in August last year. While the initiative led to some staff being let go, Scout said this would allow it to become a leaner business and more efficient in delivering services to B2B partners.

Looking back over Q1, Jönsson says Scout is now a more “efficient and effective” business. However, he also raised concerns over a lack of profit, saying Scout must work towards becoming profitable. 

“Q1 2024 has come to end, we have built a more efficient and effective company and are improving in almost all important metrics,” Jönsson said. “But we need to do more to reach profitability. 

“It is also satisfying to see the improved profitability as we have managed to grow both our B2B and B2C revenues despite a significant reduction in employee cost and other external expenses. We are well positioned to reach profitability and to start to generate positive cashflows.

“We aim to solidify our market position and enhance revenue growth by implementing and further develop pricing models that directly reflect the significant benefits we provide to our partners. Our long-term plan for growth also includes focus on tailored developments alongside our product portfolio of different verticals focused on delivering added value for our partners.”

B2B and B2C growth for Scout

Breaking down Q1, B2B revenue increased 20.4% to SEK6.5m. Scout puts this down to a stronger focus on this vertical. This comes in the wake of last summer’s transformation programme. By the end of Q1, Scout had 10 integrated and active B2B partners. 

As for B2C, revenue was up 36.4% year-on-year to SEK1.5m. Scout said this was helped by the optimisation of its sportsbook offering. B2C revenue is booked at the date the transaction takes place for daily fantasy sports or when a bet settles. 

While the transformation programme is more focused on B2B growth, Jönsson says Scout will also focus on its B2C brands.

“We are committed to achieving profitability by meticulously tracking key metrics and KPIs,” he said. “This ensures that our marketing expenditures drive controlled and effective growth. The current activity level on this brand is from an invested and active user base acquired years ago, with little to no marketing efforts covering the first quarter of the year.

“Through a combination of efforts internally and with our partners and based on the number of entries we expect the coming months to be the most engaging of our users in the history of the company.”

Scout slips to net loss

Looking at spending, the early impact of the transformation initiative is clear to see. Total operating expenses are down 34.6% to SEK10.8m. Much of this is down to staff costs halving from SEK9.6m to SEK4.7m.

This left an operating loss of SEK2.8m, an improvement on SEK9.9m in 2023. However, when also taking into account financial items, this is where the situation changed for Scout. This year, it reported a net negative impact of SEK153,000 whereas, last year, this was a gain of SEK17.0m.

As such, pre-tax loss for this year amounted to SEK2.9m, compared to last year’s SEK7.0m profit. Scout did not pay any tax, so bottom line net loss was also SEK2.9m versus the net profit of SEK7.0m in 2023.

“We look forward to continuing to create added value for our partners by utilising our internal account management, development, and operations teams to foster an environment that not only attracts new users but also captivates and retains existing ones through tailored marketing campaigns designed by our teams,” Jönsson said.

Total Detroit casino revenue for April amounted to $109.4m (£86.8m/€101.0m). This is only marginally lower than $109.7m in April 2023 but 11.7% less than $123.9m in March this year.

Of this total, $107.9m came from table games and slots, down 1.6% year-on-year. This was also 11.8% behind March’s total.

The other $1.6m of revenue was generated in qualified adjusted gross receipts (QAGR) from sports betting. This is in contrast to a $14,489 loss in April 2023 and in line with the $1.6m posted in March. 

MGM retains the lead in Detroit

Looking at each commercial casino in Detroit, MGM remains some way out in front in terms of total revenue. During April, MGM held a market share of 46.0%, compared to MotorCity on 30.0% and Hollywood Casino at Greektown with 24.0%.

MGM reported $49.9m in table games and slots revenue in April, down 0.7% on last year. MotorCity also saw revenue here drop 4.5% to $32.7m, although Hollywood Casino posted a 0.6% increase to $25.3m.

As for sports betting, Hollywood Casino continues to lead in this market, posting $578,131 in QAGR. Incidentally, this is significantly lower than $1.4m in April 2023, but growth elsewhere meant overall positive QAGR.

MotorCity reported $516,812 in sports betting QAGR, in contrast to last year’s $1.7m loss. MGM held steady at $475,492, up from $432,195 in the previous year.

In terms of table games and slots taxation, the three Detroit casinos paid $8.7m in gaming taxes to the State of Michigan. The casinos also submitted $12.8m in wagering taxes and development agreement payments to the City of Detroit.

For sports betting, the casinos paid $59,362 in gaming taxes to the state and $72,554 in wagering taxes to Detroit.

Sportradar posted Q1 revenues of €265.9m, up 28.1% on the €207.6m generated in the same quarter last year. Meanwhile, adjusted EBITDA reached €47.2m, a 28.6% increase on the €36.7m accumulated in Q1 2023. Sportradar attributed the adjusted EBITDA increase to revenue growth and enhanced operating efficiency, both of which offset increasing sports rights’ costs.

Sportradar pointed to “broad-based strength” across its product portfolio as the reasons for its revenue growth. Revenues from its betting technology and solutions sector shot up by 34.6% to €218.8m, accounting for 82.3% of Sportradar’s total revenue. Its sports content, technology and solutions segment accounted for the other 17.7%, also seeing its revenue increase 4.7% to €47.1m.

The company’s total liquidity of €494.6m was also 7.6% higher than the €459.6m it had at the end of Q1 2023.

However, Sportradar still posted a Q1 loss, significantly down on the €6.8m in profit generated in the same quarter last year. Sportradar says its loss as a percentage of revenue for Q1 was negligible.

Sportradar chief executive Carsten Koerl remains upbeat over the company’s performance, with adjusted EBITDA margin remaining stable at 18%.

“Fiscal 2024 is off to a great start, building on the strong momentum and progress we made last year,” Koerl said. “This quarter, we saw broad-based strength across our product portfolio including strong client adoption of our ATP and NBA product offerings.”

Increasing costs lead to Sportradar net loss

Sportradar’s loss in the face of revenue and EBITDA growth was largely down to significant increases in costs.

Purchases of services and licences amounted to €65.2m, 34.7% up on the €48.4m total from Q1 2023. Finance costs more than tripled to €18.8m, while foreign currency losses increased 291.9% to €14.5m.

While personnel expenses remained largely flat at €79.6m from €77.5m in Q1 2023, depreciation and amortisation costs totalled €76.9m, a 61.6% increase from €47.6m in the same quarter last year.

Sports right costs were up by €39.8m or 78% year-on-year, reaching €90.9m. Sportradar put this down to its partnership deals with the Association of Tennis Professionals (ATP) and the National Basketball Association (NBA). The company stated its increased sports right costs were in line with 2024 expectations.

Revenue increases

Despite the Q1 loss, Sportradar posted encouraging revenue increases across its sectors thanks to its sports partnerships.

For instance, Sportradar pointed to its data and streaming rights deal with Tennis Data Innovations, a joint venture between the ATP and ATP Media, as reasons for growth in its betting technology and solutions sector. Sportradar also noted its close relationship with the NBA. The company agreed a partnership with BetMGM in October to allow the operator to access NBA tracking data.

Sportradar attributed 46% year-on-year growth in streaming and betting engagement to strong demand for its ATP content. Meanwhile, live data and odds were up 29% in Q1 because of premium pricing for the NBA, as well as new ATP product offerings.

For its sports content, technology and solutions sector, meanwhile, Sportradar highlighted a 6% revenue rise in its marketing and media services, helping to offset flat growth in sports performance.

Increasing US strength boosting Sportradar growth

In terms of markets, a key highlight in Sportradar’s Q1 was increasing strength in its US performance.

Revenue in the US reached €60.5m. This was up 65% from the €39.7m generated in the same quarter of last year. Meanwhile, revenue in its rest of world markets reached €200.4m, a year-on-year 19.4%.

US revenue growth means the market now accounts for 25% of Sportradar’s total revenue, up from 19% in Q1 2023.

Sportradar raising 2024 outlook despite net loss

Though it posted a Q1 net loss, Sportradar is increasing its 2024 annual financial outlook.

Sportradar’s previous guidance set a target of €1.05bn in 2024 revenue, though off the back of its revenue increases in Q1, it has raised its objective to €1.06bn. This will equate to 21% year-on-year growth.

Additionally, Sportradar is now eyeing a 2024 adjusted EBITDA of €202m, up from its previous €200m target. This would again be a 21% year-on-year rise. The company has opted not to raise its adjusted EBITDA margin target, maintaining its approximate 19% objective.

In March, Sportradar’s board of directors approved a share repurchase programme worth €200m. Koerl says the company is in the process of beginning that process.

“In light of our strong business fundamentals, we are raising our full year outlook and are commencing purchases under our share repurchase programme,” Koerl explained.

The final day for hotel occupancy will be 14 July. The Mirage’s well-known volcano is set for destruction, though no date has been announced. While HRI is shutting down The Mirage during the rebranding, the hotel tower will remain open, according to 2News Nevada.

Hotel and show reservations beyond 14 July will automatically be cancelled and refunded.

The Mirage first opened in November 1989 and was Steve Wynn’s first project on The Strip. The complex covers 65 acres, and in its current configuration has 3,044 guest rooms. Wynn has not been involved in The Mirage since 2000, when he sold Mirage Resorts to MGM Grand before going on to form Wynn Resorts in 2002. HRI took over the property in 2022. Owned by Florida Seminole Tribe, the complex is the first operated by a tribe on The Strip.

HRI previously pointed to the renovation beginning some time in 2024. Hard Rock’s new hotel tower and other buildings will cover nearly 1.44 million square feet. The new tower will have 600 guest rooms on 37 floors. The existing Mirage hotel tower has 31 floors.

Strip undergoing an evolution

“We’d like to thank the Las Vegas community and team members for warmly welcoming Hard Rock after 34 years at the Mirage,” HRI CEO Jim Allen said via release. “We’d also like to thank the Unions, community leaders, local and state government organizations and the Gaming Commission for their support and fair negotiations over the past year.”

Since purchasing the property in 2022, HRI has jumped into being involved in Las Vegas. Last year, it became a presenting partner of the November 2023 Formula 1 event. As such, it had a 3,000-seat grandstand in front of the hotel. The complex also hosted educational, hospitality and other events to fans.

Shutting down The Mirage will be the latest change to the ever-evolving Strip and environs. The cutting-edge music venue, the Sphere, opened 29 September 2023 one block off The Strip. The Fontainebleau Las Vegas opened last December, and Resorts World opened in 2021.

At the other end of The Strip, the Tropicana closed last month, and there are plans to demolish it, possibly in October. A $1.5bn professional baseball park and a Bally’s casino resort are planned for the site. The ballpark is expected to be completed in 2028, with no timeline yet given for the Bally’s project.

West Flagler and Associates (WFA) filed a writ of certiorari with the Supreme Court in April. In its response to WFA, the DoJ essentially argues that the Florida pari-mutuel’s case has no place before the court.

DoJ attorneys, on behalf of the Department of the Interior (DoI) wrote that the key issue, the validity of the Seminole-Florida 2021 compact, is not a federal issue. They also argued that the compact itself is well within bounds and that the DoI decision to allow it to be “deemed approved” does not violate any laws.

At issue is whether or not the DoI should have approved a compact that gives the Seminoles exclusivity to online sports betting. DoJ lawyers said the Florida sports betting case comes down to three issues:

1. Does the compact violate the Indian Gaming Regulatory Act (IGRA)? 2. Does the compact violate the Unlawful Internet Gaming Enforcement Act (UIGEA)? 3. Does the DOI’s approval violate the equal-protection measures outlined in the Fifth Amendment?

DoJ: The DoI had no grounds to disapprove compact

The DoJ says no to all three and hangs its argument on the idea that “IGRA leaves the substance of a tribal-state compact… to be determined by the tribe and the state”. Further, that the DoI can only disapprove a compact “if it violates IGRA, federal law, or trust obligations to tribes”.

Although the case is in federal court, all parties seem to agree that the case is a states’ rights issue. Florida voters in 2018 passed Amendment 3, which requires any expansion of gaming go to the voters.

But in 2021, Governor Ron DeSantis entered into the compact and then state legislators approved it in a special session. The voters had no say. But federal courts cannot rule on whether or not state law has been violated.

When WFA filed in federal court, it sued DoI secretary Deb Haaland saying she should not have approved the compact. Although the Florida sports betting case involves the Seminole tribe and the state of Florida, neither are party to it. The compact also allows the Seminoles to offer dice and ball games at its retail casinos.

So far, a US District Court found in favour of WFA, saying the DoI reached beyond its limits by approving. But a federal appeals court disagreed. Justice Brett Kavanaugh, however, strongly suggested that the case does not belong in federal court, when SCOTUS denied West Flagler a stay. WFA did file in Florida’s Supreme Court, but last autumn that court declined to hear the case. WFA skipped the step of filing in a lower Florida court. It could still go that route.

DoI didn’t sign off on compact

When Florida lawmakers entered into and ultimately approved the compact, they handed the Seminoles a monopoly on digital wagering. The Seminoles launched their Hard Rock Bet platform on 7 November 2023. The launch was unexpected and came one month before it began rolling out in-person sports betting, craps, roulette and other new games.

The compact deems any wager placed in Florida to be on Indian land, if it flows through a tribal server. Lawmakers also amended state law to allow online wagers off Indian land, if they flow through a tribal server. Taken together, those decisions mean that the tribe is acting within current state law by offering digital sports betting.

That said, lawmakers circumvented Amendment 3, according to WFA. Should WFA go back to state court, that amendment will surely play a key role.

When it comes to the federal questions, the DoJ wrote that the DoI had to allow the compact to become “deemed approved”. Haaland did not sign off on the compact.

Rather, she allowed 45 days to pass after it was submitted, at which point it became “deemed approved”. In that scenario, the DoJ wrote, the compact is in force, but “only to the extent that the compact is consistent with the provisions of IGRA”.

But IGRA only governs gaming on tribal land. The DoJ argues that the compact is “consistent” with IGRA. The “court likewise correctly determined that IGRA leaves fully intact the state’s ‘capacious’ regulatory power outside Indian territory”, wrote DoJ lawyers.

Did DoJ find loophole in Florida sports betting case?

Under IGRA, a gaming compact may also address issues “related” to other topics and “any other subjects that are directly related to the operation of gaming activities”. Digital sports betting could arguably be considered “related to the operation of gaming activities”.

And if a state is allowed “capacious” – which can mean extended or broad – power outside Indian Country, then the argument could be considered valid.

The DoJ cited the Michigan v Bay Mills Indian Community decision, writing: “If a state can authorise a tribe to conduct gaming operations on non-Indian lands under state law, the state can also authorise the tribe’s gaming activities that are related to gaming activities on Indian lands.”

With regard to UIGEA, the federal government wrote that the appeals court didn’t think there was a violation. Further, a UIGEA violation was never the issue as “the issue was whether or not the DoI should have approved” the compact. And on the subject of equal protection, the DoJ argues that WFA’s argument was based on “two flawed premises” making it irrelevant.

Another DoJ argument is the contention that the Supreme Court “sits as a court of review, not first view”. Because WFA wrote that its concerns were not previously addressed, justices need not consider them. The court’s “traditional rule .. precludes a grant of certiorari… when the ‘question presented was no pressed or passed upon below’”.

There is no timeline on which the Supreme Court must determine whether or not it will take the Florida sports betting case. Traditionally, the Supreme Court hears 100-150 cases per year of the more than 7,000 filed.

For the three months to 31 March, revenue at Flutter hit $3.40bn. This is comfortably ahead of Q1 2023, with Flutter reporting growth across almost all markets, with the exception of Australia.

Key highlights in Q1 include Flutter’s FanDuel brand strengthening its position within the US market. Revenue in the US exceeded $1.41bn, helped by igaming gross gaming revenue (GGR) share hitting a new high of 27%.

UK and Ireland revenue was also higher year-on-year despite a strong comparable period in 2023. In addition, Flutter reported an increase in International business revenue, driven by the growth of Sisal in Italy.

While further declines were seen in Australia, Flutter on the whole had plenty to be positive about in terms of revenue in Q1. CEO Peter Jackson hailed an “excellent” performance by the group during his analysis of the quarter.

“We have had an excellent start to the year,” Jackson said. “In the US, FanDuel’s top line momentum is translating into strong growth in US adjusted EBITDA and market share gains. We are focused on continuing to expand our player base, market share and embedding future profits within our business through disciplined investment. 

“Outside of the US, our focus on delivering the best products for our players is driving good momentum in key markets such as the UK where the launch of Super Sub on Paddy Power has been our most successful product launch to date. Also in Italy, where we have been taking online sports betting and igaming market share during Q1 and reached an all-time record in April.”

Land of more opportunity for Flutter 

Breaking down revenue performance in Q1, the only place to start is in the US, which now accounts for over 40.0% of group revenue.

FanDuel has started the year strongly, with the highlight being a record igaming GGR share of 27%. Flutter said this was helped by its focus on direct casino players and customer experiences, as well as the addition of new games and content to FanDuel Casino.

As for sports betting, online NGR market share also increased to 52%. During Q1, FanDuel went live in both Vermont and North Carolina, increasing its overall customer base and reach in the process.

“Consistent with our long-term strategy, we are investing behind the excellent returns being generated from our player promotions and marketing spend, with projected paybacks on customers acquired in the quarter in line with historic trends,” Flutter said.

Total new sportsbook and casino player volumes were lower in the quarter. This, Flutter said, is due to a full quarter of significant Ohio acquisition volumes last year. However, new players acquired in states that launched before 2022 was 12% higher than last year.

NYSE listing edges closer

Speaking about the US, Jackson also referenced a major development that took place after the quarter had ended. Earlier this month, 98% of Flutter shareholders approved plans to relocate Flutter’s primary listing to the New York Stock Exchange (NYSE).

The move from London to the NYSE is due to completed by the end of May. Flutter said the move reflects its growth trajectory and the “changing dynamics of global markets”. 

Jackson confirmed the listing remains on track to go ahead by the end of the month.

“We believe a US primary listing is the natural home for the group,” Jackson said. “We look forward to this becoming effective on 31 May. 

“With a greater proportion of the group’s future profits expected to be generated in the US, we have moved our operational headquarters to New York reflecting the importance of the US sports betting and igaming market to our business.”

Growth outside the US in Q1

As for activity outside the US, it was largely positive news for Flutter. When excluding all US activity, revenue from businesses outside the US totalled $1.99bn, up 7.6% year-on-year.

In the UK and Ireland, revenue climbed 17.0% to $861m. This was helped by a rise in average monthly players (AMPs), despite the previous year benefitting from a “halo” effect after the 2022 Fifa World Cup

Flutter said igaming growth was particularly strong in Q1, driven by product improvements, with over 100 new games launching. In sportsbook, the group said it leveraged its Flutter Edge offering and also rolled out its new Super Sub feature on Paddy Power, the latter of which swaps a substitute player into a parlay bet. More than 80% of football customers engaged with the product in March.

As for the International business, revenue was up 4.9% to $797m. Flutter notes particular success with Sisal in Italy. The brand saw all-time record levels of AMPs, with this up 22.0% year-on-year in March alone. Flutter says this is an ongoing effect of launching the new Sisal in Q3 of last year.

Elsewhere, a redesigned app with more personalised content helped deliver market share gains in Georgia and Armenia. There was also good momentum in Spain and Brazil, helped by a continued focus on localisation, while Flutter also launched Junglee Poker in India, with encouraging levels of early player engagement.

The only negative in terms of revenue is Australia, where revenue fell 6.3% to $329m. This reflects an ongoing trend in the region, with Flutter having also seen declines in the 2023 full-year.

Australia AMPs were in line year-on-year and sportsbook net revenue margin increased on the back of more favourable sports results. This mostly offset the impact of the softer racing market environment noted in the FY23 results.

Counting the cost of growth

While expansion and subsequent revenue growth is good news for Flutter, accompanying this is a rise in expenses. 

Cost of sales jumped 16.4% to $1.79bn while almost all operating expenses were higher. The only exception is sales and marketing which, at $881m, was level but remains the main operating outgoing for Flutter.

The group also notes $174m in other, finance-related costs, as well as $112m in interest expense. As such, pre-tax profit for Q1 hit $162m, only slightly wider than $152m last year.

Flutter paid $15m in tax, whereas last year it received $41m in total benefits. This left a net loss of $177m, compared to $11m in 2023. 

However, other factors meant an even wider comprehensive net loss. The primary issue for Flutter was a $185m loss on translation of the net assets of foreign currency denominated entities. 

The group also noted a $21m loss on net investment hedges, a $14m loss on fair value of cash flow hedges transferred to its income statement and a $10m loss from non-controlling interests.

All this meant comprehensive net loss for Q1 amounted to $375m, in contrast to a $54m net profit in 2023. Last year’s figure was helped by significant foreign currency gains.

However, there was better news in terms of adjusted EBITDA, which improved by 46.0% to $514m. When excluding the US, this amount hit $488m, up 20.2% year-on-year.

What to expect in the full-year

Looking ahead, Flutter also provided a short update on its expectations for the full-year. 

At present, it remains “confident” in guidance ranges issued along with its FY23 results published in March. This is despite unfavourable US sports results in late March.

In the US, Flutter expects revenue to be at a range midpoint of $6.00bn, which would be 36.3% higher year-on-year. Adjusted EBITDA midpoint remains at $710m, up 206.1% on 2023’s total.

As for outside the US, total revenue had an estimated midpoint of $7.85bn, an increase of 6.3%, with adjusted EBITDA on track for a midpoint of $1.73bn, up 5.4%.