Category: News

Yesterday (18 March), XLMedia agreed to buy Sports Betting Dime for £26.0m, in a deal it said would provide the business with a US affiliate sports betting brand and strengthen its presence in the country’s legal wagering market.

XLMedia said that it would fund the majority of the purchase through a series of share offerings, including a core placement of 58,727,398 shares.

These shares were placed at a price of 40 pence each, with both new and existing investors taking part in the oversubscribed offering. The placement conditionally raised gross proceeds of £24.0m, though after also taking into account expenses, net proceeds will be approximately £22.9m.

In addition, certain XLMedia directors and employees agreed to subscribe to 1,272,602 in shares at an issue price of 40 pence each, leading to a further £509,041 in funding

Read the full story on iGB North America.

By Kenneth Williams

On 20 January, Morgan Stanley equity analyst Thomas Allen recanted his 2020 statements regarding investments in the betting industry. Now, Morgan Stanley has revealed its intention to enter the rapidly evolving space. The novel coronavirus (Covid-19) pandemic has had a significant effect on both traditional sports and esports, which, in turn, has impacted secondary industries such as coverage, data analysis and gambling. The move immediately sparked a 2.2% rise in DraftKings’ share price and gains in other publicly owned bookies.

Betting companies have largely gone underappreciated by big investment firms, so why would such a drastic policy change be made now at the start of the new year? The answer lies in the rise of esports and expanded legalisation.

Why switch to being bullish now?

Allen’s benchmarks make it easy to see why Morgan Stanley is chasing betting. In his note he revealed that igaming and sports betting revenues exceeded $3bn in 2020, 50% higher than he expected. Esports is used to massive year-on-year growth, but 2020 was a particularly progressive year.

The loss of traditional sports leagues last year wasn’t a pitfall for everyone. Esports took the reins as the premier subject for gambling. While their sustainability varied, the three largest esports continued to run online throughout the year – Counter-Strike: Global Offensive, League of Legends and Dota 2 gave out millions of dollars in prizes while stadiums sat empty. These games and others will continue to gain both popularity and betting market share in the future, something Morgan Stanley itself is betting on.

A significant portion of the traditional sports betting base even took the opportunity to switch over to esports gambling. Newzoo reports that NBA2K and Madden esports gambling exploded in 2020, growing by more than 35%. The rising prominence of sports simulation esports and their connection to other industries could play a role in Allen’s new investment strategy.

Alongside new betting markets gaining prominence, more and more regions are trying to legalise esports betting. Several world leaders, among them Puerto Rico’s former governor, Wanda Vázquez, and Pakistani Minister for Science and Technology, Fawad Hussain, pointed out the economic boons of legally recognising esports. The financial damage dealt by the pandemic is yet another incentive to regulate new industries.

What esports investors and bookies should know

There are several key takeaways from this policy shift. Firstly, big investment companies are still on the esports train. The hotspot has shifted from team ownership to media rights to real estate, but betting is one of the most reliable industries for growth. Esports adds hundreds of thousands of betting opportunities to sportsbooks every year. That contribution will continue to grow as more gamers become fans and new esports are developed.

Secondly, a number of those hotspots are beginning to cool down. Esports is no stranger to fads, and investors have been quick to jump on previous opportunities in marketing and stadium management. Morgan Stanley’s stance change signals a move towards smoother, more established markets. This is an investment in traditional sports betting too.

Lastly, some of Thomas Allen’s original reasons for avoiding sports betting weren’t still valid six months later. He claimed that the return of in-person betting would stop the online gambling boom, but people still prefer to bet on their own now in February. He also remarked that certain stocks would be overvalued due to legalisation efforts, though those efforts will lead to a bigger market anyway. Now that Morgan Stanley has had time to re-evaluate, they’re betting on esports – intentionally or otherwise.

Image: Alex Proimos via Wikimedia Commmons

Revenue for the month amounted to $4.6m (£3.3m/€3.9m), up from $2.1m in the corresponding month last year, but down 49.5% from $9.1m in January of this year.

Players wagered a total of $47.8m on sports during February, which was higher than the $37.6m spent in the same month in 2020, but 29.4% lower than in the amount bet in January.

Coastal casinos again proved the most popular with consumers, as revenue from these facilities reached $2.7m in February, with players spending $34.7m at their retail sportsbooks.

Basketball was the sport of choice for consumers at coastal casinos, with $21.5m spent and casinos turning $1.3m in revenue. Football also proved popular, partly due to the NFL’s Super Bowl in early February, with revenue reaching $251,941 off a handle of $6.0m.

Read the full story on iGB North America.

Bewley joined Sportech after its 2019 acquisition of LOT.TO – an iLottery solutions company which Bewley co-founded.

Bewley said: “I am proud of the progress that the team made during my time with Sportech.

“We managed to navigate through a challenging period, and the fact that the future looks bright for both clients and colleagues, is highly rewarding. I am grateful to have had this experience and wish the company well with its future endeavours.”

Sportech CEO Richard McGuire added: “Julian was instrumental in recognising the need to evolve and drive digital innovation across the group.

“He played a pivotal role in negotiations leading to the announced deal with BetMakers, and I am grateful for what he contributed during his time at Sportech.”

Bewley’s departure follows Sportech agreeing to sell its Global Tote business to BetMakers for a total cash consideration of £30.9m. New York-based investment fund Standard General had previously made two offers to acquire the business, but both a 28.5 pence per share offer and a 32.5 pence per share deal were rejected.

The joint venture will produce greyhound racing content for Entain’s media channels and digital brands, as well as distributing greyhound racing content from Entain, Arena Racing and Independent Greyhound Media Group greyhound tracks.

The media rights deal, which covers Arena Racing’s 16 UK racecourses, starts at the beginning of 2022 and is set to run until 31 December 2029.

Meanwhile, horse racing and greyhound racing rights will both be distributed to UK bookmakers sector by The Racing Partnership, and to international markets by Arena Racing subsidiary Vermantia.

“We are delighted to be partnering with Arena Racing on such a comprehensive long-term deal that will give certainty to both parties for the benefit of both horse racing and greyhound racing, as well as helping them navigate the Covid challenges and emerge stronger when the world gets back to normal,” said Adrian Bower, Entain chief procurement officer.

“This landmark deal supports Entain’s omni-channel strategy for its UK digital brands and emphasises the huge value we place on the horse racing and greyhound racing products.”

The agreement is part of a broader deal, which sees Fox Bet owner Fox Corporation receive digital and media rights to NFL for the next 11 years, up until the 2033 season.

In addition to the authorization of Fox Bet as an official sportsbook operator for the league, Fox Corporation extends its coverage of games and expands its digital rights, the company said.

Fox also extends its rights to continue operating its free-to-play wagering game, Fox Bet Super 6.

The NFL holds a one-time termination right for the deal, which covers the 2030-2033 seasons.

“This long-term agreement ensures that we will continue to deliver the best in football coverage to our viewers while also strengthening and providing optionality to our business,” Fox executive chairman and chief executive Lachlan Murdoch said.

Read the full story on iGB North America.

The Commission said it commenced a review into Football Index parent BetIndex on 20 May, 2020, as a result of concerns about the business.

This review saw an accountant and barrister look into BetIndex’s finances as well as the “complex legal questions over the appropriate regulatory framework”.

However, it said there was no grounds to suspend its licence at this time. It pointed out that the move could have worsened the business’ financial plight, and in turn put more customer funds at risk.

“We know from experience that the suspension of a license can, of itself, trigger or hasten the financial decline of an operator and put customer funds at risk,” the Commission explained.

“That is why we will always consider whether there are steps short of suspension that can still deliver the right regulatory outcomes and address the risks that consumers face without accelerating the financial collapse of a business.”

However, after Football Index said it would take its platform offline to restructure and relaunch the business, the regulator ultimately took the step of suspending its licence.

This came in the wake of the operator making significant changes to its payout system, claiming that its previous dividend structure was unsustainable.

The Commission said it only turns to suspension as a last resort, as outlined by British legislation.

“We were satisfied that on 11 March suspension was the only regulatory option left available to us.”

It added that it has also received assurances that player funds won’t be used to pay other debts, though it pointed out that courts may have a final say in this area. There have been widespread concerns that customers may lose money held in their Football Index accounts.

This has prompted Leigh Day Solicitors to announce that it is considering representing these customers in a group claim against the operator. This action is being supported by gambling reform campaign group Clean Up Gambling.

Leigh Day said these players had been “misled by the platform and failed by the Gambling Commission”.

However, the Commission said that BetIndex holds customer winnings in a trust account. It has been given assurances by the operator’s solicitors that payments have been suspended to allow customers’ entitlements to be calculated.

It did add that the courts would have final say over how BetIndex funds are distributed and so these assurances may not be guarantees.

“The assurance the Commission has is that the funds in the trust account will not be distributed to any creditor other than customers,” it explained. “However, its ability to distribute immediately to customers, and if so which customers, is likely to be subject to the directions of the court rather than the Commission.”

While player account funds are held in the trust account, Football Index’s terms and conditions said that funds invested in players on the platform have no such protection, as these were considered sums at risk.

Earlier this week, Neil McArthur stepped down as chief executive of the Commission, with immediate effect. A Commission spokesperson told iGB his decision to leave was not related to Football Index.

Spillemyndigheden initially ordered the websites in question to halt operations in the country, but after they failed to do so, the regulator took the case to court.

During the hearing on 2 March, Spillemyndigheden was able to prove that all of the websites had been offering games in Denmark without a licence, and were therefore in breach of national regulations.

The court upheld the regulator’s decision and Spillemyndigheden has now begun the process of blocking the websites, thought the case could be subject to appeal.

Detailing the sites that had been blocked, the regulator split the brands into five groups: online casino; online casino and lottery; online casino and online betting; online casino, lottery and online betting; and skin betting.

Some 23 skin betting websites were ruled to be in breach of Danish regulations, including four sites operating under the Csgetto brand and four sites using the GGdrop name.

A further 22 sites offered online casino, including Easybet.com, Slotjoint.com and KingBillyCasino.com, while four sites operated online casino and lottery games.

A total of four sites including Dafabet and Justbet.co were also dedicated to online casino and online betting, while the other two – DF Bet and Casino Oziris – sites ran online casino, lottery and online betting.

“One of our most important tasks is to protect players from illegal gambling, at the same time, we must ensure that the providers who are licensed to offer games in Denmark can run their business under orderly conditions,” Spillemyndigheden director Anders Dorph said.

“The record high number clearly shows that there is a need for the targeted effort, and we will therefore maintain the increased focus in the future.”

The case represents the highest single incidence of blocking since the regulator began blocking illegal websites in 2012. To date, including the latest batch of sites, it has now blocked a total of 145 domains.

The app and desktop product will offer a wider betting platform for players in Tennessee, allowing them to place bets on major professional and collegiate sports worldwide in addition to horse racing.

Read the full story on iGB North America.

Kontomerkos will officially move aside from the role on March 31, with current chief operating officer Ray Pineault to step in as interim chief executive, subject to regulatory approvals.

Kontomerkos joined MGE in September 2011 as chief financial officer, remaining in the role until October 2017, after which he went on to serve as CEO.

“During his tenure with the organisation, first as CFO and more recently as CEO, Mario played a critical role in the growth and success of the organisation,” Mohegan Tribe chairman James Gessner, Jr. said.

“We thank Mario for his many years of service to the Tribe and MGE, more recently navigating the company successfully through the ongoing global pandemic as well as a major refinancing earlier this year.”

Read the full story on iGB North America.