iGaming Weekly Wrap-Up of CW 07-08
#iGaming News of the week
0.??????Premier League to finally agree on betting shirt sponsorship phase-out
Premier League club bosses are likely to settle on betting sponsorships no longer appearing on the front of team shirts. The decision was reported yesterday evening by BBC News as pressure mounts on the Premier League to end its relationship with betting and gambling.?
The government had previously granted Premier League clubs the right to settle its sponsorship terms with gambling operators – a decision that was heavily criticized by cross-party MPs and industry reformists.
The ongoing UK Gambling Review is expected to have no recommendations on betting sponsorship, as Premier League clubs have been ordered to lower the exposure of their betting partnerships significantly.
The Premier League’s entitlement was first reported last summer as an intervention made by PM Boris Johnson related to Gambling reforms, in which the PM wanted clubs to agree on a?‘phased-out approach’ to ending betting shirt sponsorships.
At the time, Premier League clubs were scheduled to hold a vote on whether to agree on a mandatory ban of shirt sponsorships, which would require a majority of 14 clubs to agree on the mandate. The vote was suspended following Johnson’s resignation and the Conservative Party launching its leadership contest.
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#Breaking News
1.??????Penn Entertainment CEO hails Barstool Sports acquisition as purchase price exceeds $550m
Penn Entertainment has today completed the acquisition of Barstool Sports after previously acquiring a 36% stake in the company back in February 2020.
Penn, which operates the Barstool Sportsbook in the US online sports betting market, acquired the remaining interest for approximately $388m, taking the total purchase price to around $550m.
Founded in 2003 as a free sports and gambling newspaper by controversial online personality Dave Portnoy, Barstool has evolved into a leading digital platform of sports, lifestyle, and entertainment content across the US.
With more than 200 million followers on social media, the company creates and delivers sports and comedy content through its extensive network of over 100 shows and podcasts.
The Barstool Sportsbook is currently live in 15 states, with Penn also having launched retail branded Barstool Sportsbooks at its land-based properties across the US.
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2.??????Kambi share price jumps on back of Q4 growth
Kambi Group’s share price was up 16.35% this morning (22 February) after the sports betting supplier reported revenue and net profit growth for the fourth quarter of its 2022 financial year.
The group said it was able to finish 2022 with a “flourish” and despite ongoing uncertainty over the global economic outlook, is in a “fantastic” position to pursue its growth goals in 2023 and beyond.
This came after the supplier last month forecast its operating profit would skyrocket to €150.0m (￡132.2m/$159.6m) by 2027, with revenue expected to be between €300.0m and €500.0m.
At the time, Kambi said the main reason for this growth would be an expected expansion of its total addressable market, especially in the US. Chief executive Kristian Nylén (pictured) reiterated this in his analysis of Q4 and the 2022 full year, saying the business is ready to build towards these targets.
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3.??????Catena Media Q4 results show 15% revenue increase by 15% to $29.1m
Its North American revenue increased by 31% to contribute strongly to these results.
Catena Media has announced its Q4 2022 results, showing a 15% year-over-year revenue incline to $29.1m. This came with a 35% adjusted EBITDA margin in its continuing global operations, as well as a 0.90 leverage ratio.
For its North American operations, it reported a 31% annual revenue increase to $22.8m, of which sports revenue made up $12m (soaring by 81%). The strong performance of its sports section was partially attributed to the successful launch of online sports betting in Maryland, as well as preparations for Ohio’s launch on New Year’s Day 2023.
It also signed a major media partnership with NJ.com, a news outlet in The Garden State that allowed Catena to spread its market outreach and generate new streams of revenue.
Catena also reported a 9% EBITDA rise in its North American operations to reach $12.9m – this represented a local margin growth of 57%. A steady revenue growth of 15% from continuing operations, was reported – with North America heralded as the main growth driver.
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4.??????World Cup helps Better Collective deliver record number of NDCs in Q4 2022
The World Cup helped boost revenues for Better Collective in Q4, with over 580,000 new depositing customers. This smashed the performance of the past eight quarters on that front. The previous best was Q2 of this year, which produced 387,000 new depositors.
“We sent another record numbers of NDCs to our partners with more than 580,000 during the quarter and around 1.7 million during all of 2022. Around 8% of those were sent on revenue share contracts. This is a truly amazing number building for the future,” said Better Collective CEO Jesper S?gaard. “The quarter was driven by a strong group performance top with exceptional deliveries during the Men’s World Cup and a strong performance in our US business across all our brands. All of this led to the upgrade of organic revenue guidance for 2022 up from 20 to 30% and ended at 34%.”
Over half of that 580,000 stemmed from the World Cup, according to S?gaard.
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5.??????Caesars posts revenue increase, cuts net loss in Q4 2022 as consumer demand remains strong "in all verticals"
Caesars Entertainment has shared its financial report for the fourth quarter and full year of 2022. For Q4, the US casino giant saw net revenues of $2.8 billion, up from $2.6 billion in the same quarter the prior year. The company also managed to cut its net loss from $434 million in the fourth quarter of 2021 to $148 million in Q4 2022.
As for the full year, the business delivered net revenues of $10.8 billion, up from $9.6 billion for the entire year of 2021. Caesars’ net loss was also reduced on a yearly basis, cut from $1 billion in 2021 to $899 million during the last year.
Tom Reeg, CEO of Caesars Entertainment, commented: "Our fourth quarter delivered another set of strong operating results as both our Las Vegas and Regional segments each set a new fourth quarter record for Adjusted EBITDA. Additionally, our Las Vegas segment set a new full-year record for Adjusted EBITDA.”
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6.??????Italian gambling sector told to prepare for “industry reorganisation”
The Italian government has told the gambling sector to get ready for “industry reorganisation in the coming months”. The National Conservative coalition government under prime minister Giorgia Meloni has assigned treasury deputy Italo Volpe to oversee the initiative and “bring stability to the market”.
Volpe will be joined by Sandra Savino from Silvio Berlusconi’s Forza Italia as a new undersecretary to review the gambling sector. The review will be carried out in the context of the 2023 Tax Reform Bill, which reviews federal VAT and income, business and pension taxes.
Volpe told a conference in Rome: “A regulatory intervention in the market must be carried out: it is reasonable to assume that in the tax reform bill, there must also be a chapter dedicated to the gambling sector.”
He said that a new general framework including rules for gambling venues, shop distances, opening times and problem gambling measures would be ready for April. However, he said a more complete six-to-12-month review would be needed to analyse the lack of market competition in the sector.
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7.??????Match-fixing scandals may clear path to Brazilian betting regulation
A breakthrough in Brazil's sports betting impasse may be imminent, with one legal expert suggesting recent match-fixing incidents may have accelerated progress
The Ministry of Justice is to send in a proposal to the government to regulate sports betting, potentially bringing a process that first began in December 2018 to a successful conclusion.
Many had feared the path to regulated sports betting had been blocked by former president Jair Bolsonaro failing to ratify regulations late last year, meaning the government had failed to regulate within the four-year window set out by the 2018 legislation.
This is the latest twist in a more than four-year saga since the country’s legislature voted to legalise both land-based and online sports betting in 2018.
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#US / Canada
8.??????Minnesota Sports Betting Effort Starts With Key Supporters Aligned
A key agreement for legalized Minnesota sports betting is in place, giving renewed hope to the bill’s chances.
Rep. Zack Stephenson introduced a new MN sports betting bill Tuesday, and his proposal includes a letter from the state’s professional sports teams confirming their support for legislation that gives Minnesota tribes control of sports betting. The bill will begin its journey in the Stephenson-chaired House Commerce Committee.
A Stephenson-led bill passed the House in 2022, but it stalled with a Senate effort to add Minnesota horse racing tracks. The bill is largely similar to last year’s legislation and provides the state’s 11 federally recognized tribes sports betting exclusivity, with each receiving an online license.
“We’re back this year and intend to finish the job,” Stephenson said during a press conference Tuesday. “I commend the hard work [the tribes and sports teams] put in to reach an agreement.”
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In the past, Minnesota gaming tribes blocked sports betting legislative efforts, as they hold exclusive casino gaming rights in the state. Last year, the tribes dropped long-standing opposition to gaming expansion and supported to Stephenson’s bill throughout hearings.
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9.??????North Carolina online sports betting legislation set to be introduced in the coming days
North Carolina lawmakers are slated to introduce online sports betting legislation in the coming days, setting up the potential for another major legalization market.
North Carolina has been one of the most sought-after remaining online sports betting hopefuls since a mobile proposal narrowly fell last year. Retail sportsbooks are permitted at tribal casinos in the state but a statewide mobile market would be far more consequential.
If mobile betting is passed, it would likely make up more than 95% of the state’s total handle.
Speaking to North Carolina media outlets last week, Democratic Gov. Roy Cooper said he believed the bill would pass. This echoed similar sentiment from Republican supporters of the bill in the GOP-controlled legislature, according to the Raliegh-based News & Observer.
If passed, North Carolina’s online sports betting market would be similar to neighboring Virginia’s.
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10.??Georgia sports betting bill sent to full Senate vote after passing committe by 8-1 vote
Georgia is now one step closer to legalizing sports betting after the state’s Senate Economic Development Committee approved Senate Bill 57 by an 8-1 vote, sending the legislation to a full vote.
Under the plan, the Georgia Lottery Corporation would oversee the legal sports betting infrastructure, adding the vertical to the list of games already authorized by the creation of the state lottery in 1992.
Through this plan, Georgia would not have to amend its constitution to legalize sports betting, as it could become law without any vote from the general public, instead requiring a simple majority from both the state Senate and House.
The proposed bill would legalize betting both online and at in-person kiosks, which could be deployed at a variety of businesses, including sports venues.
The bill’s chief sponsor, Senator Billy Hickman, said 20% of the adjusted gross income raised by sports betting would go to the Georgia Lottery to benefit education. He also claims sports betting could generate $300 million to $400 million annually for the state, and create $1 billion in state economic impact, as well as 8,500 jobs.
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11.??Mississippi sports betting revenue and handle decline in January
Sports wagering revenue and handle in Mississippi both declined year-on-year in January, amid ongoing efforts to legalize online betting in the state.
Player spending for the month amounted to $57.2m, down 14.0% from $66.5m in the same month last year and also 23.1% behind the $74.4m wagered in December 2022.
Turning to revenue, this reached $5.1m during January, representing a 21.5% decline from $6.5m in the corresponding month in 2022 and a 54.9% drop from $11.3m in the final month of last year.
Coastal casinos were again the month successful venues in Mississippi, generating $3.4m in revenue from $37.0m in wagers in January.
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12.??Pennsylvania maintains momentum with revenue off to strong start
The momentum enjoyed by the Pennsylvania gambling ecosystem through the past year has continued into 2023, with January posting a further state-wide increase.
After toasting the success of another record year during the past month, the region’s Gaming Control Board has disclosed that revenue from slot machine, table games, sports wagering, igaming, video gaming terminals and fantasy contests closed the first month of the year at $464.48m. This represents an 18.15 per cent uptick year-on-year from $393.14m.
Total tax revenue generated collectively through all forms of gaming and fantasy contests was $188.32m during January.
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13.??Michigan breaks online gaming revenue record for a fourth consecutive month in January
The Michigan Gaming Control Board announced on Tuesday that trade and tribal operators reported Total January revenue from iGaming and online sports betting of $187.3 million, down 7.1% compared to the December results. However, the state has booked report gross online gambling revenue for the fourth straight month.
iGaming’s gross revenue for January was a record $153.7 million. The previous monthly record of $152.8 million was set in December 2022. Internet gaming gross revenue increased a modest 0.6% compared to December revenue. In the meantime, Sports betting gross revenue was $33.6 million compared to $48.8 million reported in December, down 31.1%.
The combined total adjusted gross revenue from internet gaming and adjusted gross revenue from internet sports betting for January was $156.17 milliondown 7.2% from December revenue of $168.23 million.
#M&A & Finance
14.??Esports Entertainment Group to offload Bethard and pay down debt with 50% of sale proceeds
Esports Entertainment Group (EEG) has entered into a share purchase agreement to sell its Bethard business for total consideration of €9.5m.
Bethard is an operator of online casino and sportsbook brands licensed in both Malta and Sweden. The total purchase consideration was determined to be around €9.5m, with €1.65m payable to EEG in cash upon closing.
A further €6.5m is attributed to EEG’s release from payment of its contingent consideration liability relating to its acquisition of Bethard in 2021.
EEG acquired the business from parent company Gameday Group for €16m in cash, plus consideration equal to 12% of the brand’s NGR for the following two years.
Now, Bethard’s buyer will also assume liabilities of around €1.2m, while the terms of the sale allow for a cash holdback of €150,000 which may be retained by the buyer should liabilities exceed the amounts agreed upon in the purchase agreement.
#Legal & Regulation:
15.??Winning Post: Gambling Commission needs to explain another fine mess
Ahead of the government publishing definitive industry reforms, Regulus Partners points to mounting criticism of the UK Gambling Commission (UKGC) that has failed to explain its tougher regulatory approach…
With a White Paper on legislative reform allegedly in the offing, now would seem to be an inopportune time for the UK Gambling Commission (UKGC) to slip into crisis. In recent months, the regulator has faced a withering storm of criticism from the horseracing media and a lengthening list of Parliamentarians over the imposition of low-level affordability checks on bettors (see below for our estimates on the impact on betting on racing in the UK).
As concerns have grown about the deleterious effects of ‘affordability-by-coercion‘, the shortcomings of the Commission’s ‘never explain; never apologise’ protocol has been cruelly exposed. Forced into belated engagement, its CEO, Andrew Rhodes, now appears intent on abdicating all responsibility for the effects of his own organisation’s policy and enforcement actions. So far, this has only deepened the confusion, with licensees and licensing lawyers left unsure whether lines of compliance are drawn by the soft-speaking of Rhodes or the big-stick of his enforcement officers.
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16.??Stuart Andrew to become sixth Gambling Minister since review began
Stuart Andrew MP is expected to be confirmed as the latest minister to take the gambling brief at the UK government’s Department of Culture, Media and Sport (DCMS). He’ll be the sixth minister to hold the position since the government began a protracted review of gambling legislation back in 2020.
Andrew takes the position after Paul Scully moved to the new Department for Science, Innovation and Technology (DSIT) in a restructuring that saw Lucy Frazer put in charge of a slimmed-down DCMS. Conservative MP for Pudsey, Horsforth and Aireborough in West Yorkshire since 2010, Andrew’s first junior ministerial position was as parliamentary under-secretary of state for Wales under the then prime Minister Theresa May.
He later worked as under-secretary for defence procurement before serving as vice-chamberlain of the household, reporting on House of Commons matters to the late Queen Elizabeth II, minister of state for housing, treasurer of the household and minister of state for prisons and probation, all under Boris Johnson.
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17.??Belgium moves to ban gambling advertising from 1 July 2023
Belgium’s cabinet has approved a comprehensive ban on gambling advertising that will roll out in stages over the next five years.
As of 1 July 2023, gambling advertising on TV, radio, classifieds, and video advertising will be prohibited. This will be followed by a ban on gambling advertising in football stadiums from 1 January 2025.
Under this ban, shirt sponsorship will be allowed, but only with the logo and name of the sponsor, without a slogan and not on the front.
The final phase of the ban will come into effect on 1 January 2028, when a total ban on gambling advertising will be implemented, including on shirts.
Belgium’s Minister of Justice, Vincent Van Quickenborne, welcomed the decision, saying it was an important step in promoting responsible gambling and protecting vulnerable individuals from the dangers of problem gambling.