Category: News

State Premier Daniel Andrews announced a royal commission that will consider whether Crown Melbourne should be allowed to hold a Victorian licence to operate its flagship casino and entertainment resort, and also consider the suitability of its associates, including owner Crown Resorts Ltd. The Government has also commenced work to establish an independent casino regulator, with Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne commissioning a review to advise on the necessary structural and governance arrangements.

The Victorian government said it has taken advice about the most appropriate way to proceed following the findings of the New South Wales Independent Liquor and Gaming Authority (ILGA) inquiry into the group, which led to the resignation of Crown Resorts chief executive Ken Barton earlier this month.

The royal commission, to be chaired by Raymond Finkelstein QC, will have the power to compel witnesses and documentation. The commission will hand down its recommendations by 1 August 2021, with the Government to legislate to enable the Victorian Gaming and Liquor Regulation Commission (VCGLR) to give effect to any findings.

“This is about making sure that those who hold a casino licence in Victoria uphold the highest standards of probity and integrity – and that they’re accountable for their actions,” said Andrews.

The independent review will occur parallel with the royal commission and will also assess, among other things, requirements for regulation of money laundering and junket operations.

Horne said: “The reports from New South Wales’ ILGA Inquiry were incredibly concerning, which is why we’re establishing a royal commission to get the answers we need about Crown Melbourne.

“The royal commission will establish the facts and the Government and the VCGLR will take any necessary action at the conclusion of the investigation. We will not tolerate illegal behaviour in our gaming industry.”

Barton resigned following a New South Wales inquiry that found Crown Resorts “unsuitable” to operate a casino in Sydney’s Barangaroo region due to evidence of money laundering and insufficient diligence into junkets with alleged criminal ties.

The inquiry said that Crown’s “unjustified belief in itself” and “corporate arrogance” led to a lack of thorough investigation of serious claims against its business and an assumption that the claims must have been deceitful.

This report was triggered when Asian gaming giant Melco agreed to purchase a 19.99% stake in CPH Crown Holdings in May 2019 for approximately AUD$1.76bn (£981.9m/€1.06bn/US$1.19bn). Following allegations in the press, the inquiry set out to determine whether Crown was a suitable licensee.

Although Melco ultimately pulled out of the acquisition, the inquiry continued with its results released at the start of February.

Further resignations, which were announced alongside Crown’s first-half financial results which showed revenue down 62.1%, followed.

Image: Donaldytong under licence Creative Commons Attribution-Share Alike 3.0 Unported

House Bill 2772 has been approved by the chamber’s Republican and Democratic caucuses, while the Senate Commerce Committee has passed Senate Bill 1797 bill.

HB 2772, introduced by Rep Jeff Weninger, and SB 1797, introduced by Senators Thomas Shope and Sonny Borrelli, would both allow Arizonans to bet on professional and college sports at tribal casinos and at sites owned by major league sports teams.

HB 2772 was passed by the House Commerce Committee by a 9-1 margin earlier this month. It has now also received approval from the House Rules Committee, by a 6-2 margin, as well as both the minority and majority caucuses, suggesting it will pass when it sees the House floor.

Read the full story on iGB North America

Senate Bill 77 was introduced by Senators Richard Sears, Christopher Pearson Michael Sirotkin and Richard Westman.

The Department’s proceeds from wagering, after administrative costs, will go to the Vermont General Fund.

Bets will be classed into tiers, with Tier I referring to pre-game bets on final outcomes, Tier II referring to live bets and Tier III referring to other bets such as prop bets. While all three types of bets may be placed online, the bill would give the Department the power to determine which bills are accepted in person.

Read the full story on iGB North America

Casino gaming brought in $1.17bn in revenue, down 83.3% while rooms produced $144m, down 80.3%, and shopping mall revenue declined 49.3% to $269m.

Food and beverage revenue dropped 80.2% to $59m and convention, ferry, retail and other revenue was down 80.0% at $46m.

The casino revenue of $1.17bn came as turnover fell 81.3% to $19.67bn, down 81.3%. This was made up of $12.1bn in VIP chip turnover, $4.65bn in non-VIP chip turnover and $2.92bn in slot turnover.

Breaking revenue down by resort, the Venetian Macau remained Sands China’s top property, though revenue dropped 79.0% to $738m.

The Londoner Macau – formerly Sands Cotai Central – saw revenue plummet 85.5% to $297m. The Parisian Macau, meanwhile, saw revenue drop 84.3% to $259m.

The Plaza Macau was Sands China’s most resilient resort, but revenue still dropped 69.8% to $265m. Sands Macau revenue was down 80.8% to $120m. Ferry and other operations revenue was down 84.6% to $21m.

The decline in revenue was similar to the decline seen across the Macau gaming market, with GGR down 79.3% for the year.

Sands China’s expenses also declined rapidly, by 55.2% to $2.93bn.

This included $625m in gaming taxes, down 81.7%, and $1.05bn in employee benefits, 19.7% less than 2019, as well as $684m in depreciation and amortisation costs and $544m in other expenses.

After a net interest expense of $268m, Sands China’s pre-tax loss was $1.51bn, compared to a $2.03bn in 2019. After $16m in tax expenses, the operator’s loss was $1.52bn, which again compared to a $2.03bn 2019 profit.

While 2020 was a difficult year for the operator, chief executive Robert Goldstein expressed confidence that gaming in the region would recover strongly.

“While the pandemic and related travel restrictions negatively impacted the market in 2020, we firmly believe the Macao market will recover and will benefit in the future from the meaningful infrastructure investments being made in Macao and throughout the Greater Bay Area,” Goldstein said.

Goldstein also honoured Las Vegas Sands founder Sheldon Adelson, who died last month at the age of 87. 

“Mr. Adelson was a visionary,” Golstein said. “He pioneered the development of the Cotai Strip in Macao, leading the company and the team he created in the rapid and market-leading development of a critical mass of world-class integrated resorts in Macao.

“Mr. Adelson’s commitment to pushing forward with diversification and investment in non-gaming amenities in Macao was unwavering, as was his belief in a strong, healthy and cordial US-China relationship, based on mutual respect.

“The company, with the full and wholehearted support of the board and the Adelson family, will continue to honor Mr. Adelson’s vision and commitments, including through additional investments that will contribute to the diversification of Macao, while building upon his legacy.”

Las Vegas Sands also announced the combined group’s revenue last month. Revenue fell 73.7% to $3.61bn while the operator made a $2.18bn loss.

Gambling venues across Great Britain have not been able to open since lockdown began on 5 January, though many facilities had been closed much longer due to regional restrictions imposed under the tiered system that preceded lockdown.

Prime Minister Boris Johnson is due to outline England’s exit from lockdown on 22 February, including setting out how and when non-essential retail and other businesses will be permitted to reopen.

BGC chief executive Michael Dugher (pictured) has called on the government to ensure a “level playing field” when lockdown ends, saying gambling venues should be allowed to open alongside other, similar businesses.  

“As the vaccine roll out continues and the country begins to emerge from lockdown, it is important that businesses are able to plan effectively for reopening,” Dugher said.

“Ministers must be clear from the outset what the next few months will look like and there should be a consistent approach across the sectors.

“Betting shops must be allowed to reopen alongside other non-essential retail. Last summer, when most betting shops were able to open, they showed that they have best-in-class anti-Covid measures compared to any other part of the high street to protect customers and staff.

“Likewise, casinos are eager to help Britain get back on its feet. The night-time economy has taken a hammering during the pandemic and draconian restrictions, including the 10pm curfew, have made a difficult situation more desperate for many businesses.”

Dugher added that any further delay to reopening gambling venues could lead to further job losses in an industry that employs more than 44,000 people and contributed £3.2bn (€3.70bn/$4.49bn) in taxes during the 2019-20 financial year.

“There will be no let-up in our commitment to safety, but we need the economy to open up again – not least if we are to revive the country’s tax take and fund vital public services like the NHS,” Dugher said.

“But the thousands of people employed in betting shops and casinos deserve nothing less than a level playing field, so that everyone gets the same opportunities to recover.”

Based out of San Diego, California, Magrisi will lead Zitro’s business development efforts in the US, leading the supplier’s expansion strategy in the country.

Magrisi takes on the new role having most recently served as vice president of sales at Gaming Arts for the past three years, prior to which he held a number of other senior executive positions in the gaming industry.

“Building on the world-wide success of our video slots, we will offer our partners and their players a variety of exciting new cabinets and an expansive portfolio of new game concepts that will truly change the game,” Magrisi said.

Zitro chief executive Sebastián Salat added: “By adding Mike to our team we assure that we carry on with our ambitious expansion plans.

“I am confident that Mike brings the know-how and the passion to execute on our strategy and bring our incredible games to operators and players in the US.”

Read the full story on iGB North America.

The IPO is valued at PLN1.67bn (£322.6m/€372.0m/$451.4m) and is also said to be the largest IPO for a gaming sector company in the history of the WSE.

Huuuge raised approximately PLN565.0m in gross proceeds from the offering, which the developer said will be used for potential acquisitions and also to fund its long-term future growth plans.

Plans for the IPO were first announced in January, while Huuuge this month set out details regarding the pricing of the offering. It also announced in January that it intends to use more than 90% of the PLN565m it raised through the sale of new shares to pursue acquisitions of other social gaming studios.

The offer price was set at PLN50 per share, with this implying that the market capitalisation of the developer upon listing would be PLN4.2bn.

Following the offering, significant shareholders of Huuuge are its founder and chief executive, Anton Gauffin, who now holds, indirectly through Big Bets OÜ, shares representing 30.68% of total shares.

The Raine Group also holds shares representing 12.96% of the total votes.

In terms of other investment, the IPO attracted interest from investors in more than 20 countries around the world.

“From now on we are not only an international company but also a public one, which in turn makes us even more global as we make our brand accessible around the world and investors everywhere have the opportunity to share in our success,” Gauffin said.

“We are pleased that there was such a strong demand for the company’s shares on the part of leading Polish and international financial institutions as well as retail investors in Poland.”

Based on a revenue share model, the agreement will run for at least four years, with a target launch date for the casino in the third quarter of this year.

GiG did not go into further detail about the igaming operator, but did confirm it is a privately owned business that owns a number of online casino brands.

The operator was also one of the first to secure a local Schleswig-Holstein licence in Germany.

“Our new partner has a team of proven, industry veterans driving its business, who currently operate several successful brands facing multiple markets,” GiG chief executive Richard Brown said. “It’s fantastic that they have chosen our platform for their new, German-facing casino brand.

“We are pleased to provide our GiG Core platform to them in advance of the German regulations, which complements our current offering to other noteworthy brands.”

Statutory revenue for the six months through to 31 December 2020 amounted to $741.4m, down from $1.05bn in the corresponding period in the previous year.

This decline was primarily due to enforced casino property closures and on-site restrictions as a result of Covid-19. These measures included customer capacity limits, social distancing requirements and the closure of both state and national borders to limit the spread of the virus.

Star also published details of its normalised results for the period, with revenue amounting to $733.1m, down 35.2% on the previous year.

Normalised results reflect underlying performance, removing win rate volatility for international VIP customers. Star said the closure of international borders saw VIP turnover fall 97.0% to €654.0m in H1, meaning the difference between normalised and statutory results for the half was low.

Gross normalised revenue in Sydney was down 51% year-on-year to $390.0m, but remained Star’s core market. Star’s operations in Sydney were disrupted more than elsewhere, due to the region being subject to more restrictions than elsewhere in the country.

The Star Sydney closed on 23 March last year and did not reopen until 1 June to 500 members only. This was increased to 5,000 customers from 1 July, but cut to 1,800 a few weeks later due to a rise in local Covid-19 cases.

Capacity was increased to 10,000 on 7 December, but reduced to just 1,800 again on 21 December. The 10,000 limit came back in on 12 February this year, with customers no longer required to wars masks.

Elsewhere, in Queensland, gross revenue on the Gold Coast dropped 48% year-on-year to $172.0m, but gross revenue in Brisbane only fell by 3% to $180.0m.

Properties in Brisbane and on the Gold Coast did not face as many fluctuations in operating restrictions as Star Sydney, with the rules having similar throughout the year. The casinos closed on 23 March and reopened to 2,500 customers from 3 July, with this capacity limit increased to 5,000 on 17 November.

“Comprehensive actions to mitigate the impact of Covid-19 were implemented, safeguarding staff and customers, securing debt covenant waivers and amendments, and preserving cash,” Star managing director and chief executive Matt Baker said.

“The properties reacted expediently to the many changes to operating conditions throughout the period.”

In terms of costs for the first half, Covid-19 restrictions meant that spending was down across the board. Staff costs were cut by 34.9% to $217.6m, while cost of sales also fell 47.5% to $27.0m. Property costs were lowered to $27.4m, while advertising and promotion spend fell to $23.5m. 

Statutory earnings before interest, tax, depreciation and amortisation (EBITDA) was 4.2% lower at $741.4m – or down 26.6% to $225.7m on a normalised basis.

After accounting for $31.2m in net finance costs, statutory profit before tax was $75.8m, down 31.0% from last year. Star paid $24.6m in tax, leaving a statutory net profit of $51.2m, down 33.1% year-on-year, while normalised net profit was 50.0% lower at $63.2m.

However, Star also noted a negative impact of $10.8m in regards to change in fair value of cash flow hedges taken to equity. As such, statutory compressive net profit for the period amounted to $40.4m, a drop of 47.3% on H1 of the previous year.

“The Star’s business is fundamentally strong,” Baker said. “The long-term value uplift from investments in our network of integrated resorts and continuing operational improvements to drive visitation and earnings remains significant.”

Star chairman John O’Neill added: “The group continued executing its growth strategy despite the extraordinary challenges and significant impacts of Covid-19.

“The fundamental earnings prospects for the Star’s domestic business remain unchanged. They are underpinned by valuable long-term licences in compelling locations and the continued transformation of our properties into globally competitive entertainment destinations.”

Collins joined News UK in November 2019, where he oversaw a portfolio including bingo brand Sun Bingo, racing affiliate Sun Racing and fantasy sports product Dream Team.

Collins said that while he enjoyed his time at News UK, he wanted to return to the start-up space.

He has previously been involved with two high-profile gaming businesses. He was a co-founder of Foxy Bingo operator Cashcade, that was sold to PartyGaming in a £95.9m deal in 2009. Following the acquisition he ran an investment fund for the operator.

Collins, along with many of the Cashcade team, then went on to establish Gaming Realms, where he worked until 2019.

“I have thoroughly enjoyed my time at News UK,” Collins said. “It’s been a pleasure to work with such a talented team to develop some of the most popular gaming products in the UK environment – from Dream Team to Sun Bingo.

“That said, my roots – and my heart – lay in the start-up space, and the lure of the new opportunities there was just too strong.”

Scott Taunton, chief executive of News UK’s Wireless brand, said Collins had delivered strong results for News UK’s betting and gaming arm.

“I’d like to take this opportunity to thank Simon for his hard work and entrepreneurialism over the last year,” Taunton said. “Simon has led the betting and gaming team during an important phase, focusing on new product development alongside driving strong revenues in this space.”

Collins will be replaced as managing director of betting and gaming by Jo Bucci, currently general manager of The Sun.

Bucci has served as The Sun’s general manager since 2019 and was previously Wireless’ chief operating officer.

She also has gambling industry experience, as managing director of The People’s Postcode Lottery for 11 years.

During this time, she also spent 19 months as chair of The Lotteries Council.