Month: May 2024

PointsBet’s normalised EBITDA loss for FY24 is now expected to be between AU$4m (£2.1m/€2.4m/US$2.6m) and $6m. Previously, the normalised EBITDA loss was estimated between $9m and $14m for the year. In FY23, the normalised EBITDA loss was $49m for continuing operations.

PointsBet attributed this to ongoing, improved year-to-date trading in the second half of the year. It also highlighted its improved operations and productivity.

Sam Swanell, managing director and CEO of PointsBet, said the positive outlook was particularly impressive due to the sale of PointsBet’s US business in August last year.

“Today’s guidance upgrade is a result of the company’s continued strong trading performance together with improved efficiency and productivity,” said Swanell.

“It is particularly notable to see that the company has been able to continue to deliver such impressive results, while simultaneously undertaking a complex technical and operational migration, separation and re-organisation, with the recent completion of the sale of the US business.”

Fanatics Betting and Gaming (FBG) ultimately acquired PointsBet US for $225.0m, successfully fending off proposals from DraftKings.

FBG initially agreed to acquire PointsBet US for $150.0m in June 2023 – however, DraftKings then submitted an offer worth $195.0m. PointsBet said that it would engage with DraftKings on the proposal, which it dubbed as “superior”.

Further growth

Swanell added that PointsBet is focusing on investing in its core technology offerings and products.

“We continue to invest for further growth, in particular in our core technology and product capabilities and our outsized marketing investment,” he continued. “This is driving our market share growth and setting the company up for further success in FY25 and beyond.”

The sale of PointsBet US has had an ongoing positive impact on PointsBet’s operations. It was lauded as a driver for success for PointsBet’s H1 results. Over H1, net loss was reduced by 79.6% to $36.4m. Statutory revenue for the first half of the year was $117.9m, an increase of 6.7% from H1 2023.

The first half of the year also represented the first EBITDA-positive half for PointsBet, hitting $900,000. This was a significant improvement from the $20.2m loss year-on-year.

Since the deal, FBG has slowly seized control in states PointsBet was already active in. This was completed with a launch in New Jersey earlier this month. The launch means that the Fanatics Sportsbook is now available to 95% of the US online market.

The sportsbook was already available in Arizona, Colorado, Connecticut, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Massachusetts, Michigan, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Vermont, Virginia and West Virginia.

The licence for Entain was approved unanimously by the Nevada Gaming Commission (NGC) on 1 May. The licence was then issued on Thursday 16 May in a second hearing with presentations from Entain’s senior leadership.

This included company chairman, Barry Gibson, interim CEO Stella David and general counsel Simon Zinger.

Nevada is considered one of the US’ most lucrative states for operators. Gambling revenue for 2023 hit an all-time high of $15.52bn, surpassing the previous annual record by 4.6%.

Full licensing approval from Nevada Gaming Commission

Entain, which has a joint partnership with MGM Resorts under the BetMGM brand, previously operated under a two-year licence and, more recently, a three-year licence that expired this month.

Its temporary licences reflected concerns from the NGC in regards to its operations in unregulated markets. This, the NGC, believes is now in the past.

“The company has taken great strides not only to move past some of the historical issues, but to accept responsibility for them and find ways to learn and grow,” said Entain attorney Erica Okerberg.

Entain was first granted its two-year licence in 2019. This was while Entain was still GVC, under its previous leadership. BetMGM initially went live in Nevada in March 2020. Entain was then granted a three-year licence in 2021. The company is now registered with the NGC as a publicly traded corporation without limitation to operate.

During the hearing in May 2024, Entain highlighted its withdrawal from unregulated markets around the world. This totals 140 markets where it previously operated.

“That came at a big price. We lost $100 million in profit by pulling out, but you can’t judge profit against doing the right thing,” Gibson commented.

“My board colleagues supported the proposal. If we’re going to say we have to do the right thing, we have to do the right thing. That meant exiting profitable markets and we’ve done that.”

During its presentation to the NGC, Gibson highlighted that 95% of the group’s operating revenue now comes from regulated markets.

“This is a casebook study on how to put on governance and compliance and ethics issues,” Commissioner Brian Krolicki said during the hearing. “It’s really impressive. I know the opportunities lost are significant.”

Where does Entain operate in the US?

Entain currently operates in the US as BetMGM, a joint venture between Entain and MGM Resorts. The joint-venture began in July 2018. The company generated close to $2.00bn (£1.59bn/€1.86bn) in revenue in 2023. In total, BetMGM is now active in 28 states across the United States.

New launches in 2023 included Ohio, Massachusetts and Kentucky, all of which were online and retail, while it also rolled out online in Puerto Rico. 

Its Q1 2024 figures issued in April 2024, further highlighted its growth. Net gaming revenue in Q1 increased 2%, while the group also reported “strong” growth in customer acquisition, helped by successful Super Bowl and March Madness engagement. It also noted the impact of improving app and product capabilities.

Looking ahead, Entain that said an improved player experience means BetMGM is well positioned to invest for future growth.

The Federal Court of Justice of Germany (BGH) was due to hear whether unregulated operators should have to refund player losses earlier this month. However, the hearing was cancelled because the defendant, an Austria-based sports betting operator, withdrew its appeal.

A decision last week at a regional court on player reimbursement lawsuits has mandated that all German civil courts will be obliged to suspend or submit, including the BGH. The proceeding was led by German law firm Hambach & Hambach.

As a result, online sports betting and online casinos problems relating to EU law will be heard by the ECJ. The European court will then make the final decision on such cases.

The BGH, meanwhile, has been criticised for what some have seen as hesitation to submit a referral to the ECJ. This is because it neither suspended nor submitted during a March ruling in a sports betting case. This risked further future legal confusion as an overarching EU law decision would remain absent until the regional courts’ involvement.

Reimbursement could set dangerous precedent

Hambach & Hambach partner Claus Hambach and senior associate Phillip Beumer believe a ruling to reimburse players could set a troubling precedent in Germany.

“Mass media reports have already picked up on the above note by the Federal Court of Justice,” Hambach & Hambach states. “According to representatives of the ‘player claim industry’, this might now result in a deluge of complaints and court cases.

“This could indeed be possible due to massive advertising and media reports. This reflects that financers seem to be ready to continue financing such claims now even for sports betting losses and not only casino losses.”

Hambach & Hambach is concerned that if players are refunded, it will only serve to further increase black market popularity.

“Germany’s massive black market will even grow further. If players are reimbursed for losses with unlicensed operators, this will only incentivise them to bet with unlicensed operators as the case law basically established betting without a risk of loss.”

Black market problems in Germany

A 2023 University of Leipzig study revealed nearly half of all online gambling in Germany occurs with offshore operators.

The channelisation rate in Germany was found to be just 50.7% in the online space. The study approximated that three-quarters of online revenue is accumulated by the black market. As a result, hundreds of millions in tax is missed out upon by the state.

In response, the German Online Casino Association (DOCV) and the German Sports Betting Association (DSWV) both called on the German gambling regulator (GGL) to encourage players towards onshore operators by making them more attractive to bettors.

Svensson has been leading Raketech as acting CEO since Oskar Mühlbach stepped down as CEO in January.

A co-founder of Raketech, Svensson was previously CEO of the group before stepping aside in 2017. After this, he became chief commercial officer with responsibility for partnerships, mergers and acquisitions, and business integrations.

“I am excited to return to the role of CEO at Raketech,” Svensson said. “I look forward to working with our talented team to build on our strong foundation and drive further innovation and growth. 

“Our focus will remain on delivering exceptional value to our customers, employees, and shareholders.”

Raketech chairman Ulrik Bengtsson also welcomed Svensson’s return as CEO. He said: “We are excited to officially name Johan as our permanent CEO. His deep connection and commitment to Raketech and proven leadership abilities make him the ideal choice to steer the company into its next phase of growth.”

Raketech misses Q1 targets

The appointment comes off the back of Raketech last week publishing its financial results for Q1. Figures show that despite a 20.1% rise in revenue to €19.0m (£16.3m/$20.6m), adjusted EBITDA and net profit fell.

Revenue from sub-affiliation, the part of the business that includes Raketech Network and AffiliationCloud, increased 149.8% to €9.0m. However, affiliation marketing revenue fell 18.5% to €8.8m and revenue from betting tips and subscription income dropped 14.9% to €1.2m.

Total sports betting revenue hit €3.5m, down 7.5% year-on-year and accounting for 18.4% of all Q1 revenue. However, this was more than offset by casino growth, with revenue up 28.8% to €15.5m, or 81.6% of total revenue.

However, revenue growth was more than offset by an increase in costs, with total operating expenses up 47.5% higher year-on-year at €17.7m. When also including finance-related costs and tax, bottom-line net profit dropped 93.8% to €174,000.

Adjusted EBITDA, meanwhile, fell 17.2% to €5.1m.

In March, the Good Law Project submitted a complaint to the Charity Commission over how GambleAware spreads information. The Good Law Project accuses GambleAware trustees of not meeting the charity’s objectives to offer adequate gambling harm education.

The complaint asserted that GambleAware’s poor performance was down to its connections with the industry and its “reliance on industry funding”.

At the time, Osmond responded in a statement issued to iGB stressing GambleAware was “robustly independent” from the industry.

Now, Osmond has again defended GambleAware and is confident the complaint will not be upheld. It is understood that the Commission’s assessment of whether it needs to intervene is still ongoing.

Osmond said: “Our robust governance and commissioning practices ensure that the industry has no influence over our operations. GambleAware’s independence has been widely recognised by a range of stakeholders including the Government, as evidenced in the Gambling White Paper.

“The complaint lodged to the Charity Commission by the Good Law Project is based on misleading and outdated information. While we are confident that this complaint will not be upheld, we are deeply concerned that inaccurate headlines and misleading newspaper articles may have a damaging impact on our services and the people that rely on them.”

GambleAware concerned over effects of complaint on vulnerable players

While GambleAware has accused the Good Law Project of basing its complaint on inaccurate information, the charity is also apprehensive over the impacts of such claims on at-risk players who may need its services.

“The deeply stigmatised nature of gambling harms often makes it difficult for individuals to reach out for help,” Osmond continued. “Maintaining the credibility and reputation of essential support services is crucial to reaching people before their gambling issues become catastrophic.

“Undermining these services, and the dedicated workers and experts who operate them, risks not only those directly relying on them but also the many indirectly affected by a loved one’s gambling problems.”

GambleAware defends effectiveness of its treatment

GambleAware pointed to the annual National Gambling Support Network statistics to defend its work. The data showed that nine out of 10 vulnerable players who complete their treatment see an “improvement in their condition”.

For those who don’t see their condition improve, 69% of the time it is because they did not complete their treatment.

Additionally, GambleAware pointed to the reach of its website, which has 6.5 million visits a year, as well as its national stigma public health campaign, which reached over 95% of the population.

But ESPN Friday (17 May) linked former Angels infielder David Fletcher and ex-minor leaguer Cody Shultz to the Southern California illegal betting ring. Monday morning, ESPN reported that MLB is opening a betting investigation into Fletcher, now in the Atlanta Braves farm system.

Fletcher reportedly bet with Mathew Bowyer, the same illegal bookmaker Mizuhara used. Fletcher did not bet on baseball, according to ESPN.

His high school friend, Shultz, reportedly did, though, including on Angels games in which Fletcher played. According to ESPN, Schultz is the person identified as “Bookmaker 3” in the Mizuhara complaint.

Major League Baseball has not officially acknowledged an investigation. It previously declined to open one on Ohtani, after the federal government referred to Ohtani as a ‘victim’. The league previously said the federal government had more resources available, so it would wait to see what was uncovered.

MLB: Betting OK, just not on baseball

MLB rules allow players to bet on sports, just not baseball. Sports betting is illegal in California, which means if Fletcher or Schultz did bet with Bowyer, they broke the law. If Fletcher or Schultz bet on baseball, either would face a lifetime ban, per league rules.

MLB’s gambling policy requires a minimum one-year suspension for a player who “operates or works for” an illegal bookmaker. The penalty for betting with an illegal bookie is at the commissioner’s discretion.

Fletcher and Ohtani were teammates from 2018-23, and Fletcher told ESPN that he and Ohtani were “good friends”. During that span, the Angels did not have a winning season, and did not break .500. In 2021, Fletcher signed a $26 million five-extension, but the Angels then traded him to the Braves.

Mizuhara to change plea in June

Fletcher previously told ESPN that he was at the poker game where Mizuhara met Bowyer but denied introducing the two. Mizuhara plans to plead guilty for stealing nearly $17m from Ohtani to pay off gambling debts incurred with Bowyer.

He pled “not guilty” last week, but a change-of-plea hearing is set for 4 June. Mizuhara is charged with bank fraud and signing a fraudulent tax return. The maximum penalties for his crimes are 33 years in prison and $1.25m in fines.

The federal betting investigation stemming from the Nix gambling ring is wide reaching. Former Dodger Yaiel Puig and ex-Chicago Bull Scottie Pippen have been in ensnared. LeBron James’ manager also bet with the Nix ring.

Fletcher and Schultz grew up in Orange County, the same county Bowyer and Mizuhara live in. He played college baseball at Loyola Marymount in Los Angeles, and the Angels drafted him in the sixth round in 2015. He made his MLB debut 13 June 2018.

Fletcher played five games for the Braves this season, 16 April-25 April. He went 2-for-8 and was sent back to Triple A Gwinnet.

NY casino process: Let’s get a move on!

New York state Senator Joe Addabbo and Assemblyman Gary Pretlow dropped a bill that would speed up the current NY casino timeline. Regulators earlier this year said they would award licenses for three downstate casinos by 31 December 2025. The bill would require bids to be filed by 31 July and the New York State Gaming Commission to award licenses by 31 March 2025. The bill outlines 17 areas applicants must address from capital expenditure to proposed partnerships to workforce training, demographic plan, and “harmony.”

The New York Post reported that a shortened timeline could help out certain parties and hurt others. Addabbo’s district borders Aqueduct, which is the location for the Resorts World bid. Pretlow’s district is near the Yonkers race track.

On the flip side, Steve Cohen’s Citi Field NY casino proposal would benefit from a longer runway. That project needs legislative action to move forward. Any project would mean new jobs and a new revenue stream for the state.

“I’ve been trying to get the process moving,” Pretlow told the Post. “It’s taking too long. We’re leaving $2bn on the table.”

NCAA: 1 in 3 high-profile athletes harassed over betting

An NCAA report released Friday (17 May) revealed that one in three high-profile athletes received abusive messages from someone with a betting interest. Of 54,000 flagged “online abuse and threats,” 1% were betting related and directed at men’s and women’s basketball players. The NCAA contracted with Signify Group for the study during March Madness. The company examined 1,000 student-athletes, 280 coaches, 120 officials and 64 teams.

According to the study, in “sports with a high volume of betting,” 15-25% of abuse is betting related. In addition, women’s basketball players are three times more likely to be threatened than their male counterparts.

New in New Mexico

Caesars Sportsbook opened three locations in New Mexico for in-person betting, the company announced Monday (20 May). Bets are now being accepted at Route 66 Casino Hotel and Casino Xpress west of Albuquerque and Dancing Eagle Casino east of Grants. Caesars gained market access through Laguna Development, the commercial arm of the Pueblo of Laguna tribe.

New Mexico does not allow digital sports betting, and its tribes have exclusivity for gaming.

Virginia governor says no to games of skill

A bill that would have legalized games of skill was among 48 vetoed by Virginia Governor Glenn Youngkin Friday (17 May). The games, which are not regulated in the state, have been garnering attention in Pennsylvania and other states. Youngkin wrote that the state must “proceed with a robust set of safeguards.” He added that it was “regrettable” that the legislature did not adopt his suggestions, and that he’s open to continued discussion.

The American Gaming Association released a statement in favor of Youngkin’s veto. The move “will protect communities from illegal gambling machines and uphold not only the original ban passed by the General Assembly in 2020 but subsequent judicial determinations in Virginia’s courts,” CEO Bill Miller said.

In other news …

The Chicago Tribune made its final press run at the Freedom Center. The newspaper will move its print runs to a suburban location as construction of the Bally’s Casino Complex is set to begin.

Iowa’s Q Casino and Resort will debut its renovated casino floor beginning 24 May. Grand opening ceremonies will last through Memorial Day weekend, and will feature live music and giveaways.

Wisconsin’s Potawatomi Tribe is developing an on-site mobile app that should be ready for use in early 2025. The tribe opened its retail sportsbook earlier this month.

Total revenue was comfortably higher than $462.7m in April last year. However, the figure fell 3.0% short of the $526.6m reported in New Jersey in March this year.

Beginning with land-based casino, this remains the primary source of gambling revenue in the Garden State. However, the $216.8m generated in April is 6.3% behind $231.5m last year.

Physical slot machine revenue declined by 6.4% to $158.8m while land-based table games revenue also fell 6.1% to $58.1m.

Further igaming success for New Jersey

Turning to the igaming sector, the situation is very different. Revenue from all igaming in April hit $187.9m, up 18.2% year-on-year. This means igaming was only $28.9m behind the long-established land-based segment in April.

Some $185.6m of all igaming revenue was attributed to online slot games, with revenue here rising 18.5% to $185.6m. However, revenue from peer-to-peer poker slipped 0.5% to $2.3m.

As for individual operators. Golden Nugget leapt from third place to take top spot in New Jersey in April. Posting igaming revenue of $53.1m, this is 27.5% ahead of the previous year.

Resorts Digital retained second place with $47.5m, up 13.9% year-on-year. Borgata, which was top in March, followed in third on $44.1m, a rise of 2.2%. 

Sports betting revenue almost doubles to $106.2m

Looking now to the sports betting market, revenue here jumped by 46.9% year-on-year to $106.2m. This is also 74.1% ahead of $61.0m in March this year.

The year-on-year revenue rise was helped by a 12.6% increase in handle, with this reaching $1.044bn in April. Player spend on online sports betting hit $1.01bn and retail sportsbooks $34.7m.

Meadowlands remains the runaway leader in the New Jersey sports betting market, posting $73.2m in revenue, up 92.2% on 2023. Meadowlands works with Flutter Entertainment-owned FanDuel.

Resorts Digital and partner DraftKings placed a distant second with $18.9m in revenue, down 6.6%. Borgata and BetMGM took third on $5.2m, a drop of 21.6%.

New Jersey gambling revenue surpasses $2.00bn in four months

As for the year-to-date, total gambling revenue in New Jersey hit $2.06bn in the four months to the end of April. This is 14.4% more than in the same period last year.

Land-based revenue was down 1.6% at $872.9m, with declines across both slots and table games.

Igaming revenue was 21.1% higher at $750.7m, driven by a 21.5% rise in slots revenue to $741.3m. In contrast, peer-to-peer poker revenue declined 3.7% to $9.4m

As for sports betting, the four-month total hit $434.2m. This is up 48.6% from $292.3m in 2023, with players spending a total of $5.17bn in the process.

Star was sanctioned in Queensland in December 2022 over a series of failings in the state. The operator was slapped with a fine of AU$100.0m (£52.6m/€61.4m/US$66.7m) and informed its licence would be suspended.

This came in the wake of an investigation into operations at Star Gold Coast and Treasury Brisbane. The inquiry ruled Star was found “unsuitable” to hold a licence in Queensland.

Initially, Star was given 12 months to resolve issues flagged by investigators and prove it was suitable for a licence. The 1 December 2023 deadline was pushed back to 31 May this year after Star submitted a draft remediation plan to address issues. This includes commitments to approximately 640 milestones across 15 workstreams, implemented over a multi-year period.

However, just two weeks before the rearranged deadline, this has now been extended again. The potential licence suspension will now not come into effect until 20 December this year. Queensland’s attorney-general, Yvette D’Ath MP, has approved the extension.

The decision to extend the deadline for a second time comes in the wake of the Second Bell inquiry launching in February. While this is focusing on Star’s activities in New South Wales (NSW), authorities in Queensland say they want to see the results before making a decision on Star.

The term of a special manager appointment for the Star Gold Coast and Treasury Brisbane casinos remains unchanged. This is currently due to end on 8 December this year.

What did Star do wrong in Queensland?

Incidentally, many failings in Queensland were similar to those flagged by Adam Bell SC’s report into Star in NSW. Here, Star was also found unsuitable to hold a licence. 

Primary issues include Star’s “concerted effort” to deliberately mislead banks and regulators on the purpose of China UnionPay transactions. This, authorities say, is in contravention of Chinese capital flight laws.

Star also sought out individuals linked to criminal organisations and encouraged them to gamble. This was against the advice of police commissioners.

Investigators also identified social responsibility failings and deficiencies related to anti-money laundering and combating terrorism financing practices. In addition, concerns were raised over Star and its historic dealings with junket operators.

Second Bell inquiry: what will it cover?

As for the situation in NSW, findings from the second Bell inquiry are due to be filed by the end of May. 

Investigators are considering the fallout of the first Bell report. One year after this was made public, a report into Star Sydney’s progress found the casino had implemented 22 of 30 recommended measures from the Bell report.

There is also an additional focus on the culture at Star. This covers risk management culture and Star’s management and reporting lines. In addition, the inquiry is examining whether Star has been able to obtain the financial resources needed to support The Star Casino.

Philip Crawford, chief commissioner of the NSW Independent Casino Commission, said the second report will provide the information needed to make an important decision for Star, its employees, its stakeholders and the wider community.

Tricky times for Star 

Against this backdrop of uncertainty, Star has been dealt a series of other blows with several senior staff leaving the business.

In mid-March, it was announced that Robbie Cooke was standing down as group CEO and managing director. Christina Katsibouba will also exit as chief financial officer. The double departure came just weeks after Star said a leadership change is in its best interests. 

The exodus continued in April when Jessica Mellor stepped down as CEO of Star Gold Coast. A few weeks later, David Foster left his role as executive chair, with Anne Ward named as his immediate replacement. Foster had taken on additional duties following Cooke’s exit as CEO.

Among the departures, Star also published a trading update for Q3, with this showing a net loss of $6.8m. This, however, was an improvement on the $49.7m loss posted in the same quarter last year.

Other stand-out figures in Q3 include revenue dipping 4.6% to €419.2m, while normalised EBITDA dropped 11.5% to $37.9m.

The A-League footballers, who have not been named, all play for a team located in south-west Sydney. The players have been bailed and will appear in court soon to hear more on the corruption charges.   

In a statement confirming the news, the NSW police force says the arrests were made following an investigation by the organised crime squad. The investigation is into alleged betting corruption under Strike Force Beaconview.

Established in December, Strike Force Beaconview is focusing on yellow card manipulation. The State Crime Command’s Organised Crime Squad is being assisted by Great Britain’s Gambling Commission.

Investigators found a senior player was allegedly taking instructions from a man to organise for yellow cards to occur during certain games in exchange for profit. The man in question is believed to be located offshore in South America.

According to investigators, the number of yellow cards were allegedly manipulated during games played on 24 November 2023 and 9 December 2023. Failed attempts also allegedly took place in games on 20 April and 4 May this year.

After extensive inquiries, strike force detectives today (17 May) executed a search warrant in South Coogee near Sydney. Here, a 33-year-old man was arrested and taken to a local police station. 

He was later charged with two counts of engaging in conduct that corrupts a betting outcome of an event. Additional charges focused on facilitating conduct that corrupts betting outcome of event and participation in a criminal group. The man has been bailed to appear at Downing Centre Local Court on 24 June.

Further arrests over A-League corruption

Simultaneously, strike force detectives executed three other search warrants in Parramatta, West Hoxton, and Emu Plains.

In Parramatta, detectives arrested a 27-year-old man and took him to a local police station. Here, he was charged with engaging in conduct that corrupts betting outcome of event and participating in a criminal group. He has since been bailed to appear in Downing Centre Local Court on 27 June.

The final arrest took place West Hoxton, where a 32-year-old man was taken to a nearby police station. He was also charged with engaging in conduct that corrupts a betting outcome of an event and participating in a criminal group.

The man was granted conditional bail to appear in Campbelltown Local Court on 30 May.

Further details of the case have not been revealed. However, Australian Professional Leagues (APL) has confirmed the arrests, saying it will work with law enforcement to support them with the matter.

“The APL is aware of the arrests of three A-League players by NSW police as a result of international law enforcement coordination focussed on betting corruption related to alleged yellow card manipulation in games,” the APL said.

“The work to protect the integrity of our game must be unwavering and we are liaising closely with all relevant agencies on this matter. Given the ongoing nature of the investigation and police enquiries we are unable to comment further at this time.”