With casinos across the state closed for much of the month, retail betting revenue came to just $97,915. Retail handle was just $182,701, with a large portion of revenue coming from bets placed in before casinos closed in November.
DraftKings’ sportsbook at Casino Queen in East St Louis was the leader in retail revenue, bringing in more than the state’s total at $106,254 as Rush Street Interactive’s sportsbook at Rivers Casino Des Plaines lost money for the month.
Online revenue came to $23.8m, which was down 40.0% from November. Online players placed bets worth $487.3m, up 12.4%, as players won much more of their online bets.
Under the arrangement, Tripp will support BetMakers with its expansion plans in the Australian B2B wagering sector, with the supplier already engaged with a number of parties in relation to opportunities leveraging its technology and data platform.
Tripp will also work with BetMakers to identify opportunities in the US market, with a focus on those that can leverage the supplier’s anticipated acquisition of Sportech’s tote and digital business.
Last month, an overwhelming majority of Sportech shareholders voted in favour of the deal to sell its global tote business BetMakers for £30.9m.
In relation to the partnership, Tripp will also subscribe for $25m of new shares in BetMakers, resulting in the issue of approximately 35.7m shares.
BetMakers has also received commitments of $50.0m cornerstoned by several existing institutions. The Institutional Placement, which will be undertaken at the same price as the proposed placement to Tripp, is expected to settle on 23 February.
Betmakers said all funds raised will be used to accelerate growth, specifically in pursuing and executing strategic opportunities.
“BetMakers has cemented itself with a compelling proposition in the global racing wagering market; they have built a formidable team with a highly trusted brand and established a global footprint with a large customer base,” Tripp said.
“I am delighted to invest into the company and take on a role to assist in growing the business at scale globally.”
BetMakers chief executive Todd Buckingham added: “We are thrilled to have secured Matt Tripp’s backing, both in the form a significant investment in the Company and also as a key advisor on strategic and transformational deals that he will now pursue.
“Matt has a proven track record over a brilliant career in the online wagering industry and his support for BetMakers is a great vote of confidence in our company.”
Confirmation of Tipp’s investment came after BetMakers also announced that Buckingham signed a three-year extension to his contract.
The renewed contract will mean that Buckingham will remain as chief executive until 30 June 2024.
“Through the support of the board and the world-class team we have at BetMakers I am pleased to be in a position where the next exciting phase of growth can be delivered for the company and its shareholders,” Buckingham said.
BetMakers chairman Nick Chan added: “Todd has delivered outstanding growth and opportunity for the company through his leadership and vision and the board is delighted to have secured his commitment under agreeable terms going forward.”
Casinostugan was given a warning and penalty fee of SEK25m (£2.16m/€2.49m/$3.00m). ComeOn Sweden received a SEK35m penalty fee in addition to its warning, while Hajper Ltd was issued with a warning and sanction fee of SEK50m. Snabbare Ltd paid the largest fee of SEK65m in addition to its warning.
Reviews of a sample customer’s account found that Casinstugan had issued a player with a total SEK21,000 in bonus funds, in addition to free spins for online slots.
ComeOn was also found to have deposited a total of SEK40,000 to a sample player in bonus funds.
A review of one of Hajper’s customer accounts found the player had been given SEK7,400 in bonus funds by the operator, as well as free bets. A second customer received SEK13,500 from Hajper in addition to free spins.
Snabbare Ltd was found to have deposited SEK6,950 to a customer’s account in bonus funds, and to have offered free spins to another player.
According to Spelinspektionen, the size of the penalty fees depends on how serious the regulatory violation is and how long it lasted, as well as operator turnover.
As all violations were similar, the differences in fees paid in this case depended largely on turnover.
According to Swedish regulations, gaming operators may only offer their customers a bonus at their first gaming opportunity, however Spelinspektionen found that these four operators had breached the legislation by offering bonuses on repeated occasions.
The authority also said it believes that by distributing gifts to vulnerable players, the companies have breached their duty of care in relation to those players.
If the warnings prove insufficient, the regulator said serious violations such as this may result in gaming licences being revoked.
Spelinspektionen’s interpretation of anti-bonusing regulations was clarified in June 2019 when Betsson’s NGG Nordic subsidiary and PlayOjo operator SkillOnNet were found to be in violation of the rules.
NGG Nordic was ordered to pay a penalty fee of SEK19m, while SkillOnNet was issued with a SEK14m fee. NGG Nordic’s fee was subsequently reduced to SEK14m after Betsson appealed the decision.
An inspection of licensees carried out last autumn found that operators in the jurisdiction must to more to provider responsible information about gambling-related harm, and links to Swedish self-exclusion scheme Spelpaus, on their websites.
As we look to the year ahead, industry experts share their thoughts on the opportunities and challenges facing the industry.
In part three we talk to finance experts. In part one we heard from igaming operators and suppliers, while in part two we covered land-based operators and suppliers. In parts four to eight we will focus on marketing, people, technology and innovation, regulation and social responsibility.
Interviewees
Julian Buhagiar, co-founder, RB Capital Simon Holliday, founder, H2 Gambling Capital Christian Tirabassi, senior partner, Ficom Leisure
Looking back at 2020, what – other than the Covid-19 pandemic – did you feel was transformational for the industry? And how much of a lasting effect do you think the Covid-19 pandemic will have going forward?
Julian buhagiar
Julian Buhagiar: 2020 was so seismic in nature it’s not clear whether sufficient time has passed for us to fully assess how transformative the year was. What’s for sure is that the M&A landscape has been transformed in just under nine months: there has been a rapid shift to virtual (but not yet e) sports, and regulation (even if just in draft stage) has taken a more forceful hold on revenues.
Despite what (pseudo) health officials are desperately trying to reassure us, Covid-19 will not be over in 2021. It’s inevitable that there will be a rise of (increasingly vaccine-resistant) strains that will continue to disrupt the airline, tourism and any other industry that relies on human contact until, just like influenza, society accepts it as the new normal. And gaming will continue to be profoundly affected. For sportsbooks, we’ll continue to see shorter and/or distributed seasons, with a significantly reduced spectator footprint. This will mean more gradual take-ups of soft virtual sports, such as eFIFA, and more gambling-related elements in sportsbooks.
The most lasting effect, however, will be in M&A. Operators and/or providers that have little diversification of revenues will have little choice but to acquire, or be acquired in turn. This is a trend that has really kicked off in 2020 and that I expect to last well through the first half of this decade.
Simon Holliday: Building on the 2019 DraftKings IPO, 2020 saw Wall Street continuing its ascent as the financial centre of the global igaming/sports betting industry, with the GAN, Golden Nugget and NeoGames IPOs, the completion of the DraftKings/SBTech merger and the injection of Apollo Global Management funds into the Great Canadian Gaming Corp, Sazka and the Italian arm of IGT.
In terms of the lasting impact of Covid, globally land-based gambling’s 2020 gross win is expected to be down more than one-third on H2’s pre-Covid-19 expectations. However, even with nearly all of Q2’s sports events cancelled or postponed, total interactive gambling came in about where expected as gains in igaming made up the shortfall. During 2020, online’s share of global gross win was catapulted from just over 13% to in excess of 20%. This is very significant given it is just five years since online’s share reached 10%, having taken the best part of two decades to reach that milestone. H2 expects this momentum to accelerate and for digital to account for the vast majority of growth going forward.
It is now feasible that globally, online gross win could reach as much as or even more than $120bn in the next five years and its share could be as high as 45% by the end of the decade. H2 expects a contraction in revenues from existing land-based outlets, as well as fewer new developments. We think Covid-19 has brought about a permanent change in habits, which together with economic headwinds, digital currency and the development of online technologies/immersive experiences including AI, will all contribute to increasing the shift away from land-based towards online.
Christian Tirabassi: From Ficom Leisure’s strategic advisory and M&A perspective in the Americas, Europe, Africa and India, there has been an acceleration in the consolidation process that has been ongoing for the past few years, additionally expedited by the Covid-19 pandemic. This consolidation creates larger operators exposed to different markets and offering all betting and gaming products.
We expect to see the effect of the Covid-19 pandemic lead to an acceleration of the regulatory processes in different territories that have already been discussing the introduction of a regulatory framework.
What do you feel is going to be a game-changer for the industry in the coming year?
JB: There are a few developing stories, but one trend vectoring at the moment is the rise of casino-based streamers. They are a growing sector, and will likely be the new face of affiliate marketing this decade. Expect to see new brands emerge as individuals and/or teams, and not wholly dissimilar to esports streamers (but with markedly different commissions).
Simon Holliday
SH: Technology, via the development of a “smart integrated gambling market”, could create a digital environment where an optimal experience may be offered to the most sophisticated players, while providing an early warning system for the vulnerable. Such a digital ecosystem, which would address player protection, sports betting integrity and market security all under one roof, would result in less player leakage to black markets. The reform of UK gambling regulation in the early part of 2021 could provide the perfect springboard for this to start to become a reality across Europe initially.
CT: The key element that will change is the number of jurisdictions that will introduce sustainable regulations. We have seen this happening in the US with the introduction of sports betting. The same would happen if and when mainly India and Asian countries regulate betting and gaming, allowing the emergence of extremely large regulated markets. Another key element will be the real effect of the esports phenomena in relation to betting.
On the other hand, what do you feel could disrupt the sector or slow progress?
JB: Regulation, or the threat of it anyway at the moment. Witness what’s happening in Germany and the Netherlands, with steering committees and transition dates seemingly pushed back on a regular basis. It will eventually happen, however, and that inevitable delay to transition places significant uncertainties on the operators, platforms, affiliates and payment solutions that depend on it. This kind of hard-left, pause, hard-left again is of significant detriment to an already oversaturated industry that is in desperate need of an overhaul, but of the right kind. And that seems hard to come by at the moment.
SH: Post Covid-19 government budget deficits are expected to provide the catalyst for more markets to legalise sports betting/igaming in the US. However, in an age of increasing risk aversion the temptation to advance too far too fast could ultimately prove a headwind.
Christian Tirabassi
CT: In regulated markets the disruption could be a tax increase leading to non-sustainable levels or undermining the current proven regulatory framework (e.g. limitation of licensing, changes in the licensing process, etc.).
Slowing down the implementation of regulation in countries that have already started the discussion could lead to slow progress, as well as the limitations on growth opportunities (like advertising bans) and further cancellations of betting events worldwide.
Do you foresee a wave of new M&A activity in 2021 in the latest wave of consolidation? Where do you think this will be focused?
JB: Yes, and it’s already happening. Given the relatively high availability of cheap capital at the hands of investors, the US is buying up a lot of (what it considers to be) cheap European assets under special purpose acquisition vehicles. This trend will continue to increase this year and for the foreseeable future, as it allows US investors to tap into publicly traded funds without any initial fanfare (or investor speculation). The immediate effect will be a rapid acquisition of independently functioning companies by (sometimes faceless) US holding companies, which will gradually drive up asking prices in Europe over the next one to two years.
SH: Already we have seen Caesars Entertainment’s acquisition of William Hill clear some major hurdles and the potential Flutter US business/Fox Bet spin-offs will create separate pure play US market stocks. The emergence of Apollo Global is a major catalyst for disruption, and despite not resulting in a deal, the recent MGM-Entain discussions will likely fuel further investment interest and a further shuffling of the cards. We expect this to continue to generate attention in the sector going forward in a buoyant M&A market predominately financed out of Wall Street.
CT: We are experiencing an acceleration of M&A activities, both for B2C operators and B2B providers. For B2C operators the focus will be on: 1) acquisitions or mergers in order to consolidate a position, for growth of market share and/or product integration; 2) M&A activities to enter new jurisdictions, mainly regulated markets or those that are about to be regulated. For example, we expect an increased number of M&A activity from international operators in order to enter the Indian market; and 3) an omnichannel strategy, where online operators are looking to integrate with land-based distribution. Conversely land-based operators looking to offer online, especially after the experience during the lockdown.
We are experiencing a consolidation of the global B2B providers, where they are continuously looking to integrate additional products, platforms and games, in order to represent the largest possible portfolio of the operators, as well as owning unique products related to specific markets.
Total revenue for the six months to 31 December 2020 amounted to AUS$2.87bn (£1.06bn/€1.85bn/US$2.23bn), down 1.5% from $2.91bn in the same period in 2019.
Lotteries and keno remained Tabcorp’s primary source of income, with revenue here reaching $1.61bn, which was 1.6% higher than in the first half of the 2019-20 financial year, despite the impact of Covid-19.
Tabcorp noted an increase in sales across all base lottery and keno games in H1, helped by the refresh of both the Set for Life and Saturday Lotto games. The share of turnover attributed to digital increased to 32.1% for lottery and 17.1% for keno.
Elsewhere, wagering and media revenue edged up 0.8% from $1.18bn in 2019-20 to $1.19bn in the most recent period, with digital growth helping to offset declines in retail.
Tabcorp said this modest increase was due to a 34.0% increase in digital revenue and 43% rise in digital turnover, with retail having been hampered by closures due to Covid-19.
However, despite growth within these two core business areas, Tabcorp noted a major decline in gaming service revenue, which more than halved from $149.0m to $73.0m. Again, Tabcorp put this down to the impact of Covid-19, with some states having been forced to close venues in line with restrictions.
Tabcorp noted the impact of closures in Victoria in particular, with the state accounting for 30% of all gaming services revenue. Greater Melbourne venues were not able to reopen until November, whereas facilities in other states began to reopen from June.
“We are experiencing a strong recovery following the recent market challenges,” Tabcorp chief executive and managing director David Attenborough said. “The Covid-19 pandemic continued to impact Tabcorp’s group earnings in 1H21, with the retail closures and restrictions, especially in Victoria, having a material impact.
“However, we are pleased with the way our teams and partners responded to the substantial operational challenges the pandemic presented. Covid-19 has clearly demonstrated the importance of serving customers with a seamless, multi-channel experience. Investments made to modernise our digital offering in recent years drove significant benefits.”
Variable contribution – revenue minus variable costs – was down 7.1% year-on-year to $957.0m, but operating expenses were reduced by 8.3% to $397.0m, mainly due to the suspension of certain activities.
Earnings before interest, tax, depreciation and amortisation (EBITDA) before significant items fell 6.2% to $560.0m, while after accounting for depreciation and amortisation, earnings before interest, tax and significant items declined 7.9% to $372.0m.
Tabcorp accumulated $82.0m in interest during the first half and paid $83.0m in income tax, leaving a net profit before significant items of $207.0m, down 3.3% from 2019-20.
The operator also noted $22.0m in significant items, comprising amended tax treatment of the MAX CMS licence ($69.0m), Racing Queensland arrangements
($11.0m), Tatts Group combination implementation costs ($8.0m) and restructure costs ($3.0m), with these partly offset by the profit on sale of Jumbo ($69.0m).
As such, Tabcorp ended H1 with $185.0m in statutory net profit after tax and significant items, down 7.0% from $199.0m in the first half of 2019-20.
“After taking actions to reduce costs, preserve cash and strengthen the balance sheet over the past 12 months, Tabcorp is emerging from Covid-19 challenges in a stronger financial position,” Attenborough said.
Attenborough also noted that as a result of these actions, Tabcorp has been able to resume paying dividends to shareholders. Eligible shareholders will receive an interim dividend of 7.5 cents per share fully franked, which is in line with the previously announced revised dividend payout policy.
Publication of the first half results comes after Tabcorp earlier this month said it had received “a number of unsolicited approaches and proposals” to acquire its wagering and media arm, with Entain among those to have put forward an offer.
Tabcorp said it had not received a firm bid for the business, but noted that any sale would leave it to focus only on its lotteries and gaming services divisions.
In its 2019-20 financial year, Tabcorp’s wagering and media business brought in AUD$2.08bn and EBITDA of $371m.
“We have expanded theScore Bet to three new markets in the last six months, significantly increasing our footprint,” theScore founder and chief executive John Levy said.
The KSA used reports from both H2 Gambling Capital and Regulus Partners in order to estimate the size of the entire Dutch online gambling market.
By 2024, three years after legal online gaming is set to launch, Regulus predicts a combined licensed and unlicensed market size of €827m when excluding bonuses. H2, on the other hand, predicts a market worth €1.08bn including bonuses.
This difference in bonuses “almost entirely” captures the difference between the figures, the KSA said.
Looking just at the legal market, H2 predicted revenue of €757m for 2024, while Regulus did not split regulated revenue from the offshore total.
This meant that roughly 70% of revenue would be channeled into the legal offering, below the KSA’s target of 80% at this point in time.
H2 noted that tax rates were one “major obstacle” to Dutch channelisation, with online gambling set to be taxed at 29%, more than Sweden’s 18% or Denmark’s 20%.
Providers will try to (partly) pass on the gambling tax to the players,” the KSA said. “This makes the legal range of games less attractive.
“Currently, illegal providers pay no gambling tax in the Netherlands. This gives price-conscious players an incentive to play with an illegal provider.”
While Regulus did not break down channelisation in terms of revenue, the KSA said it made an “implicit prediction” that 90% of players would move to the regulated market. This, it added was contingent on advertising regulations not being too restrictive.
The KSA also noted that channelisation could be influenced by different factors, depending on the vertical being considered.
For example, poker players may be most inclined to play on sites with strong liquidity, whereas sports bettors may look for the best prices, and casino players may look for bonuses.
The regulator noted that Regulus had higher predicted revenue for the entire market for 2021 at €544m compared to H2’s €513m projection.
However, H2 predicted a faster-growing market. For 2020, it estimated revenue of €416m compared to Regulus’ €394m.
“This shows that there is (and will remain) uncertainty about the exact figures, especially for the illegal part of the market,” it said.
Online gambling in the Netherlands is expected to launch on 1 October, after its launch has been delayed three times. Earlier this month, the Government submitted the country’s secondary gambling regulations to the country’s official gazette.
Falzon bring significant financial expertise in gaming to the company, Bragg said, as well as experience in listing on the Nasdaq, which is one of the supplier’s objectives for 2021.
She currently holds the role of operational CFO of NetEnt and chief financial officer of Red Tiger Gaming, and previously held the positions of group CFO at Evoke Gaming and group financial controller of King.
“We’re very pleased to have Lara join our championship team – she brings tremendous industry experience,” said Adam Arviv, chief executive of Bragg Gaming.
“Her financial experience in the gaming sector is unmatched in the industry and will be very valuable as we continue our global growth strategy.”
Falzon added: “I’m thrilled to join the team at such an exciting time in Bragg’s evolution. Bragg continues to outperform on their expansion goals and I’m happy to contribute my expertise to the mission.”
Bragg said it would ramp up investment in its technology, regulatory and compliance, and business development teams to ensure it could capitalise on new US and Canadian revenue streams.
Falzon was named one of iGB’s Most Influential Women in November last year, following her key role in the M&A activity which saw NetEnt acquired by Evolution.
Under the deal, 500.com will issue 44,353,435 new Class A ordinary shares – representing around 10% of its overall share capital – to Blockchain Alliance in exchange for all of its shares.
The deal is expected to close by 15 April, 2021.
BTC.com, Blockchain Alliance’s flagship product, offers cryptocurrency mining pool services and cryptocurrency wallets, as well as information about cryptocurrencies.
In addition to the initial payment of shares, if the BTC.com mining pool business records a net operating profit in the fiscal year ending December 31, 2021, 500.com will issue further shares, up to a maximum of 22,176,718 if the profit totals $20m or more.
However, if the business makes a loss during the year, 500.com may repurchase shares in the initial payment for a price of just $0.00005 each. The amount of shares available to be repurchased depends on the size of the loss, with a maximum of 10% of the shares for a loss of $10m or more.
Yang has experience in the cryptocurrency industry, having previously led the construction and operation of the Loto Interactive’s major data centre, which mainly handled cryptocurrency mining.
500.com announced it would acquire a majority stake in Loto Interactive later in January, increasing its share in the company from 33.7% to 54.2% in a deal worth around HK$105m (£9.9m/€11.2m/$13.5m).
500.com’s share price has skyrocketed since the announcement of the acquisition. After closing at a price of $20.00 on Monday, 500.com opened at $33.35 today, a 66.8% increase. Its shares are currently trading at $30.43.
Genius is now supplying WynnBET with its LiveData and LiveTrading services, powering in-game betting experiences across the three states in which the operator is licensed — New Jersey, Colorado and Michigan.
The new partnership will include Genius’ official data content for hundreds of sporting events, including the English Premier League, other major global football leagues and Euroleague Basketball. It also includes the 2021 NASCAR Cup Series, of which WynnBET is an authorised gaming operator.
Jack Davison, chief commercial officer at Genius, said: “Along with its broad market-access and nationally-recognisable brand name, Genius is an ideal partner to enhance WynnBET’s expanding online sportsbook and in-game betting offering.”
