Category: News

Evans replaces Tony Khatskevich, who is moving to an advisory role, working with the Allwyn board and CEO Robert Chvátal.

An experienced executive, Evans joins Allwyn after five years as group CTO at Bally’s. Prior to this, he worked in the same position at Gamesys, which was acquired by Bally’s in October 2021.

Earlier in his career, Evans worked in similar roles at Alibaba/Lazada Group and PropertyGuru Singapore. He also spent time as head of development for platform at Betfair.

“I’m delighted to have been appointed as group CTO of Allwyn,” Evans said. “The company’s commitment to social impact is evident across its global footprint. 

“I look forward to helping the team to develop even better lotteries and new game formats through the power of cutting-edge technology and future thinking.”

Allwyn CEO welcomes Evans’ “excellent track record”

Chvátal also welcomed the appointment. He said Evans has an excellent track record of delivering technology solutions across the gaming and IT sector.

“He has exceptional strategic capabilities, proven operational effectiveness and strong experience in our markets.”

In addition, Chvátal took time to thank Khatskevich, who joined the business from Playtech in September 2018.

“He played a pivotal role in establishing a strong technology function for Allwyn,” Chvátal said. “He conceived and led technology initiatives that have helped to drive innovation across the group. 

“I’m very pleased that we will continue to benefit from Tony’s wisdom, knowledge, ideas and warm personality in his new role. He will continue to help us to fulfil our business growth and ambitions.”

Allwyn set for €2.00bn revenue in Q1

The appointment comes after Allwyn this week revealed it expects to post Q1 revenue of more than €2.00bn (£1.70bn/$2.17bn) when it publishes its first quarterly results since becoming the UK’s National Lottery licensee.

Allwyn said gross gaming revenue for the period to 31 March 2024 could reach €2.05bn. The lower range of €2bn is still almost $500m more than the Q1 figure during 2023.

The group acquired UK National Lottery operator Camelot in March 2023 and became the UK National Lottery licensee on 1 February 2024. The acquisition helped Allwyn to achieve a 97.5% surge in revenue in 2023, totalling €7.87bn.

This contribution, both the BGC and HBLB say, will be £5m more than the previous financial year. It will also be the third consecutive year levy contributions have increased. This total is set to surpass the £100m paid in 2022-23 and £97m in 2021-22.

The additional funding means the HBLB has been able to increase prize money contributions by £3.2m to £70.5m.

“The trend that was seen towards the end of 2022-23 has continued,,” HBLB chairman Paul Darling said. “Betting turnover is lower and bookmakers’ profits higher than recent norms. In the light of reports and analysis from the HBLB executive during the year, the board had been anticipating income of around the total that is expected.

“The effect of this financial outturn gives the board additional comfort in its expenditure commitments already made for 2024 and further flexibility when it comes to considering options for 2025.”

BGC CEO hails “extremely welcome” news

BGC CEO and acting chair Michael Dugher praised members for their commitment in 2023-24. He said the record contribution is “extremely welcome news” and demonstrates how regulated betting supports British horseracing.

“Despite a double-digit decline in horserace betting turnover over the past five years – and a double-digit decline in racecourse attendances – this shows that levy contributions and prize money are both up and it once again provides a timely reminder that racing could not survive without the record financial support that is flowing from betting,” Dugher said.

“Our members remain committed to the long-term success of horseracing and the huge economic contribution it makes across the country, especially in rural communities.

“Attention must now turn to how we challenge vested interests, introduce real change and reform the sport, ensuring we reverse the current decline and provide racing with a genuinely long-term sustainable future.”

Industry commitment to horseracing

On this, the BGC is working with the British Horseracing Authority and the government to resolve a settlement on a new voluntary levy to support horseracing.

In addition, the BGC last month raised £15,000 for good causes as part of its Grand National charity betting effort. 

Each year, the BGC invites members of parliament (MPs) to place charity bets on the Grand National showpiece horseracing event. Operators hand over all winnings from these wagers to each MP’s charity of choice.

Other news from the BGC includes a new measure for operators taking part in its voluntary code. This relates to a risk assessment on customers wanting to make a net deposit of over £5,000 per month.

The new Code on Customer Checks will sit alongside the Gambling Commission’s frictionless affordability checks. The official pilot scheme for such checks was announced on 1 May. This is alongside a timeline of implementation for the other proposals included in the first round of Gambling Act review white paper consultations.

“Developed with the Commission and backed by government, this code will operate as a voluntary interim scheme,” the BGC said. 

“It brings consistency across the regulated sector for operators who adopt it. This is until the frictionless financial risk assessments set out in the white paper can be developed, tested and implemented.”

The amendments were published today (22 May) and reiterated by Belgium’s regulator, the Commission des Jeux de Hasard (CJH). The new measures will come into force on 1 June 2024.

Under the new measures, the CJH must meet with licence holder representatives once per year and discuss player protection measures. The regulator must provide a yearly update on these meetings in its annual report.

On the subject of player protection, another amendment will see the phrases ’18 years’ and ‘minors’ replaced with ’21 years’. This amends Article 15/2 of the Gambling Act, which states that the CJH will issue warnings to those who infringe the Act in a way that affects a person under the age of 21. The municipality must also inform the CJH when an F2 licensee is the subject of a police report due to a breach of the law committed against a person under 21 years old.

In March, the CJH announced a different set of amendments to the Gambling Act that will come into force on 1 September 2024. These amendments will raise the minimum gambling age to 21 and ban all gambling advertising.

At the beginning of the year, the Belgian expertise centre for alcohol, illegal drugs, psychoactive medication, gambling and gaming called for the minimum gambling age to be raised to 21.

Register of professionals

Included in the amendments announced today is an order for operators of Class I and Class II establishments, or fixed Class IV establishments, to keep a register of professionals. This register will catalogue those that access games rooms in these establishments for professional reasons. This circumvents checks for these individuals on the Excluded Persons Information System (EPIS) register – Belgium’s self-exclusion roster.

The register itself, as well as images from CCTV, are also added to the list of documents that police officers and CJH officers can request. The CJH must also make leaflets on gambling addiction available to bookstores.

In addition, the CJH will be given more power to establish certain binding protocols, which will be published in the Moniteur Belge. The CJH will also have a legal obligation to provide updates of its list of illegal websites. Updates will be published in the Official Gazette.

Turning back to licence holders, those who want to remain a Class C licence holder must continue to meet the conditions of Articles 41 and 42 of the Gambling Act. Article 41 orders Class C applicants to be in full possession of their civil and political rights, and not hold a criminal record for the five years before application. Article 42 mandates applicants to be entered into the Crossroads Bank for Enterprises as a commercial undertaking.

Physical licences for Class D licence holders will be abolished and replaced with an electronic licence.

CJH dealing with complaints

Under the current law, a mediation service receives and processes requests for extrajudicial settlements for gambling disputes. The new amendments will see these requests become the remit of the CJH.

The CJH must also deal with complaints relating to licence applications and compliance with the Gambling Act, as well as subsequent decrees.

Summarising the amendments, the CJH noted that some of the amendments will come into force at a later date. An amendment that will allow sanctioning for identity theft and the establishment that permits it will take effect on the first day of the 12th month after it is published in the Official Gazette. This will relate only to holders of A, A+, B, B+, F1+ and F2 licences in a fixed class IV gaming establishment.

The EPIS check will also be extended to bookstores. This will be enacted on the 24th month after it is published in the Official Gazette.

Sports betting revenue in Mississippi for April fell short of March’s figure of $3.4m, and was 27.9% down on the same month last year, when $4.3m in revenue was reported.

Total handle for the month was $34.3m. This was a 22.9% decrease on the $44.5m in bets taken in March. However, it was 7.9% ahead of April 2023’s figure of $31.8m.

In terms of where bets were placed, Mississippi’s coastal casinos again led the way, reporting $1.5m in revenue and $23.6m in handle.

Central casinos took $6.6m in bets and generated revenue of $1.2m. Northern casinos, meanwhile, reported handle and revenue of $4.1m and $402,880 respectively.

What sports are they betting on in Mississippi?

With the National Football League (NFL) season having ended in February, basketball and baseball were the most popular sports for betting at Mississippi’s coastal casinos over April.

Baseball narrowly led the way for handle with $8.7m at coastal casinos, also generating $1.3m in revenue. They took $8.6m in basketball bets but reported a $525,117 loss on those wagers.

For central casinos, meanwhile, sports parlay cards led the way with $2.9m in handle to basketball’s $2.3m. Parlay-card revenue was $908,108, with basketball and baseball revenue totaling $220,331 and $48,922 respectively.

Mississippi online sports betting bill dies in committee

On 29 April, a bill for legal online sports betting in Mississippi died in conference committee. HB 774 would have allowed up to 30 online wagering platforms if they were tethered with casinos. A 12% tax rate would also have been set.

However, despite the house approving HB 774 in February, the bill didn’t make it out of senate.

Following the repeal of the Professional and Amateur Sports Protection Act in May 2018, Mississippi became the third US state to launch a form of legal sports betting.

However, it appears wagering will remain only available in land-based casinos and on-site mobile for the near future, despite three of the four states bordering Mississippi offering online betting.

Local reports in Australia yesterday (20 May) said Hard Rock was part of a group seeking to invest in Star. The Australian Financial Review suggested Star land-based casinos would rebrand all under the Hard Rock name should the deal proceed.

Responding to the reports, Star said it had received “inbound interest” from several external parties over potential transactions. However, it also said the nature of this is unsolicited, preliminary and non-binding, with no approach resulting in substantive discussions.

Star also referred to links with Hard Rock, saying it had not received a proposal directly from the group. It did, however, claim one consortium featuring the Hard Rock Hotels & Resorts Pacific regional division of Hard Rock had shown interest.

Hard Rock has now issued its own response to the reports, denying any interest in a possible deal. The group also said it did not authorise the use of its brand in connection with any third-party proposal.

“We want to make it clear that Hard Rock International is not involved in, nor has it authorised, any discussions, activities or negotiations on its behalf in connection with a proposed bid for Star,” Hard Rock said.

“Hard Rock International has similarly not authorised the use of the Hard Rock brand in connection with any proposed bid for Star by any third party.”

Hard Rock could pursue legal action over matter

Going further in its response, Hard Rock said it takes any misuse of its brand “seriously” and it could consider taking legal action over the issue.

“Our brand is built on a legacy of integrity, excellence and a commitment to our guests, partners and team members worldwide,” Hard Rock said. “Any misuse of the Hard Rock name in unauthorised business dealings is taken very seriously. 

“We are currently investigating this matter and will pursue all necessary legal actions to protect our brand and reputation.

“We urge stakeholders and the public to rely only on official communications from Hard Rock International for accurate information regarding our business activities and partnerships.”

Star acknowledged the statement and issued its own response. It outlined that it has not engaged in substantive discussions with the consortium in respect of its proposal.

“The company today notes the statement issued by Hard Rock International which clarifies that Hard Rock International is not involved in, nor has it authorised, any discussions, activities or negotiations on its behalf in connection with a proposal for Star,” it said.

“Star will keep shareholders informed in accordance with its continuous disclosure obligations.”

M&A elsewhere for Hard Rock

While Hard Rock is seemingly not interested in making a move for Star, it has been active in terms of M&A in recent months. 

In March, the Hard Rock Digital arm struck a deal to acquire certain US-facing B2C assets from 888. However, details of which assets Hard Rock will purchase have not been disclosed.

888, which only launched its strategic review several weeks prior to this, says it expects the deal to complete in phases. It is aiming to finalise the sale by Q4 this year.

Uncertain times for Star as Bell Two Inquiry launches

Possible investment in Star would have been welcome relief for the group, which has been under the cosh in recent times.

In February, the second Bell inquiry launched, focusing on Star’s activities in New South Wales (NSW) and fallout of the first Bell report. There is also a focus on the culture at Star and whether it has the finances to support Star Casino.

There was positive news out of Star last week that linked to the Bell Two inquiry. Authorities in Queensland announced a further delay to Star’s planned licence suspension in the state.

Star was sanctioned in Queensland in December 2022 over a series of failings. The operator was slapped with a fine of AU$100.0m (£52.4m/€61.3m/US$66.6m) and informed its licence would be suspended.

Star was given an initial 12 months to resolve issues 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.

However, this deadline has now been extended again to 20 December of this year. This is due to Queensland authorities wanting to see the second Bell Inquiry before making a decision on the licence.

Changes at the top for Star

The uncertainty does not stop there for Star. In recent months, the group has seen several senior personnel leave the business, with replacements yet to be announced.

Group CEO and managing Robbie Cooke left in March, as did chief financial officer Christina Katsibouba. Meanwhile, Jessica Mellor is stepping down as CEO of Star Gold Coast. 

In addition, David Foster announced his departure as executive chair. Incidentally, Foster had taken on additional duties following Cooke’s exit as CEO.

Alongside this, Star last month published a trading update for Q3. This showed a net loss of $6.8m, an improvement on the $49.7m loss in the previous Q3.

Revenue in Q3 fell 4.6% to €419.2m, while normalised EBITDA dropped 11.5% to $37.9m.

The Entain board’s Capital Allocation Committee launched the review in January, looking at its portfolio of markets, brands and verticals. This, Entain said, was with the objective of maximising shareholder value and reflecting the operational progress of the business.

Talk of potential brand sales intensified in March when the Financial Times reported that Entain had hired Wall Street firm Moelis to advise on asset sales. This came just a week after Entain posted a net loss of £936.5m (€1.10bn/$1.19bn) in its 2023 full-year.

Upon concluding the review, the committee listed several major findings. Among these is to consider “strategic alternatives” for Crystalbet, which was acquired in part by Entain’s predecessor GVC in 2018. Entain purchased the remaining 49% stake in the brand in 2021.

“The committee concluded that the brand is non-core to the group,” Entain said. “As such, strategic alternatives for this business will be considered, including interest already received from potential acquirers.” Entain did not disclose the identity of any interested parties.

What else is in the Entain review?

Alongside the possible Crystalbet sale, the committee also published several other conclusions from the strategic review. 

These include that Entain has the “appropriate” portfolio of diversified strategic assets, brands, capabilities and geographic footprint to ensure it is well positioned to deliver high-quality, long-term growth.

The committee also noted Entain’s future potential. It referenced a “significant upside” of focusing on returning to organic revenue growth, expanding margins and winning in the US.

In addition, the committee labelled the group’s balance sheet and leverage position as “robust”. This was strengthened by the extension of a revolving credit facility and term loan repricing and add-ons.

Analysing progress in key markets

As part of the review, the committee also analysed the situation in the group’s key markets. This includes operational progress made by Entain towards its strategic objectives.

On this, Entain still expects to return to growth in the UK later this year. This comes amid the “levelling of the regulatory playing field” with the new voluntary industry code on player safer gambling checks and the new £2 online slot limit that comes into effect in September.

Elsewhere in Europe, findings suggest Entain CEE (Central and Eastern Europe) is performing well. The committee noted outlook for online casino liberalisation in Poland in particular, saying this increasingly encouraging.

As for the US, the committee says that the delivery of the product roadmap for BetMGM is progressing well. It notes the recent launch of new markets for both Major League Baseball and the National Basketball Association as key developments.

Also in the US, Entain recently secured approval from the Nevada Gaming Commission for a full licence in the state. This licence covers all Entain applications and certain subsidiaries without limitation.

In addition, the committee says Entain is returning to strong double-digit revenue growth in Brazil during Q2. This, it adds, is being driven by the actions taken to improve customer acquisition and retention accelerating our performance.

On a wider scale, the committee praised the impact of Project Romer: a plan to reach an online EBITDA margin of 28% by 2026 and 30% by 2028. To make this happen, Entain plans to simplify the group to improve operational leverage and drive cost efficiencies. This will include making cross cost savings of £100m by 2025.

Still work to do for Entain

Reflecting on the findings, Entain chair Barry Gibson said he is “pleased” with the progress the group has been making. However, he adds there is still work for Entain to do to improve its overall performance.

“While we still have more work to do to improve our operational performance, the board is pleased with the progress Entain is making so far in 2024 in line with our strategy,” Gibson said.

“The group has the core strengths, brands and products to be competitive across markets. We continue to be a global leader in betting and gaming. The board looks forward to updating the market further on progress at the interim results in August.”

It was also noted that the committee will continue to regularly review strategic progress and consider options to maximise shareholder value. This, Entain says, includes ongoing oversight of all significant aspects of capital commitments.

Does Entain need to sell?

Circling back to the stand-out finding of the review and the possibility of selling Crystalbet. Does Entain really need to let go of the brand?

Firstly, it is hard to ignore the heavy loss Entain posted in 2023. The £936.5m figure posted in the full-year results far overshadows the 11.0% rise in revenue to £4.77bn, which, itself, was helped by the acquisition of new brands.

However, this M&A activity obviously incurred additional costs for Entain. One of the major deals struck in 2023 was the acquisition of Polish-facing STS, which incidentally incited a shareholder revolt from Eminence Capital.

Add in the HMRC and CPS settlement that was finally signed off in December, at a cost of £585.0m, and it is clear to see why Entain is considering offloading assets to recoup some expenses.

In its March report, the Financial Times said assets not directly integrated into the Entain’s platform will be given priority for sale. In total, these accounted for close to a third of net gaming revenues in the first half of last year.

Crystalbet is one such brand. Other businesses that also meet this criterion, and in turn may also face the chop in the future, include Dutch-based BetCity, purchased for £398m in 2023, Ladbrokes Australia and Baltics-facing Enlabs.

The sale of such brands would also fit in with Entain’s lasting focus on growing across core markets, including the UK and US.

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In February, the DIA announced it would file high court proceedings against SkyCity and its SkyCity Casino Management (SCML) subsidiary. This relates to alleged non-compliance with the country’s Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

Draft pleadings set out five separate causes of action seen as “significant” compliance issues related to the Act. However, SkyCity said they mainly refer to historical matters and that some incidents were previously self-reported to the DIA.

SkyCity also said, since late 2021, it has been running an anti-money laundering and counter-terrorism financing enhancement programme. This is to address compliance systems and correct the historical shortcomings. This includes investment in people and technology, as well as reviews of processes and systems to identify areas for improvement.

SkyCity set for NZ$4.16m penalty

Taking all this into account, SkyCity has been able to reach a settlement with the DIA over the matter. Part of this included admitted to breaching it obligations set out under the Act. 

Failures took place between February 2018 and March 2023. The DIA flagged issues covering its AML and CFT risk assessment and compliance programme, as well as the monitoring of accounts and transactions, conducting enhanced customer due diligence and terminating existing business relationships when required.

The DIA, however, noted there is no evidence to suggest SkyCity was directly involved in money laundering or terrorism financing.

On reaching the settlement, parties will recommend to the high court that proceedings can move to a penalty hearing. Here, a penalty amount will be determined. They will jointly submit a penalty of NZ$4.16m (£2.00m/€2.34m/US$2.54m), although final determination is for the court.

“This agreement is an impactful outcome” AML/CFT group director at the DIA, Mike Stone, said. “We have achieved our desired result without the extended duration and cost of court proceedings.

“While we consider these regulatory breaches to be serious, we are pleased that SkyCity was able to admit to the breaches and acknowledged responsibility for what were significant failings.”

Taking action over failures in New Zealand

Stone also recognised the work SkyCity has done in the wake of these issues in terms of addressing the failures.

“It is encouraging to see the work SkyCity has already done to lift its performance in this area and its public commitment to continue to improve,” Stone said. “We will be working closely with SkyCity in the future in relation to its ongoing compliance obligations.”

Such efforts include refreshing the SkyCity board, recruiting new directors with specialist risk experience and establishing a dedicated risk and compliance committee. SkyCity has also increased internal audit capabilities and external audit scrutiny and appointed a group chief risk officer.

Looking at wider changes, SkyCity says it is now applying higher standards of due diligence on customers as appropriate. It is also increasing capacity across its financial crime, risk and compliance and host responsibility teams.

SkyCity adds that work is ongoing, with several initiatives set to further improve operations. These include a pledge to implement mandatory carded play across all New Zealand by mid-2025.

“Over the past few years, considerable progress has been made towards upgrading our AML and CTF systems,” SkyCity executive chair Julian Cook said. “This does not lessen the seriousness with which we take these breaches and we are disappointed that SkyCity is in this position.

“As a casino operator, we play a key role in combatting money laundering and terrorism financing and we take that responsibility seriously. On behalf of the board and management team, I accept and apologise for these long-standing failings.

“We have fallen short of the standard we should hold ourselves to, alongside failing to meet the expectations of our regulators, customers, shareholders and communities we are part of. We are committed to, and have begun, delivering the level of change that is required to meet.”

SkyCity also settles non-compliance case in Australia

The New Zealand settlement comes just days after SkyCity also announced a similar agreement in Australia.

Agreed with the Australian Transaction Reports and Analysis Centre (Austrac), SkyCity is set to pay AU$67.0m over historical AML/CTF failures in the country. The proposal is with the Federal Court of Australia, with SkyCity and Austrac putting forward separate submissions for approval at a hearing on 7 June.

The case came to light in December 2022 but concerns actually date back several years. An industry-wide compliance campaign began in September 2019, with SkyCity notified of alleged wrongdoing in June 2021.

At the time, Austrac said SkyCity Adelaide demonstrated a pattern of “serious and systemic non-compliance” with national AML and CTF laws. 

Issues include failing to appropriately assess the money laundering and terrorism financing risks. SkyCity also did not include risk-based systems and controls in AML/CTF programmes, nor establish a proper framework for board and senior staff oversight for these projects.

Other concerns include not creating an appropriate monitoring programme for transactions and identifying suspicious activity. Austrac also said SkyCity lacked an appropriate enhanced customer due diligence programme to carry out additional checks on higher risk customers.

As is the case in New Zealand, SkyCity accepted the findings and agreed to the penalty. The group set aside $45.0m in anticipation of a civil penalty, but the final amount is substantially higher.

New-look leadership for SkyCity

Against this backdrop, SkyCity has been making changes to its senior management team.

In April, SkyCity announced experienced gambling executive Jason Walbridge as its new CEO with effect from July. Walbridge is replacing Michael Ahearne, who recently left the group.

Elsewhere, Julie Amey has resigned as chief financial officer. Amey will continue as CFO for a further six months, officially stepping down on 25 September.

In addition, SkyCity in March named Andrew McPherson as chief information officer. He had been serving in the role on an interim basis since November.