iGaming Wrap-Up of CW 20-21
#iGaming News of the week
0.??????Unibet founder Anders Str?m reveals C-level rifts on Kindred’s future
Anders Str?m, the enterprise founder of Kindred Group (formerly Unibet Plc) has detailed rifts between him and the former C-level team of the business led by ousted CEO Henrik Tj?rnstr?m.
In an interview with Swedish business news source Dagens Industri, Str?m – who founded Unibet in 1997 – expressed his dissatisfaction at “being kept in the dark” from key strategic decisions with regards to the company’s US venture and the development of its technology platforms.
The fallout with the executive team is reported to be due to a perceived ‘conflict of interest’ as Str?m maintained shareholding and a board position in Kindred’s long-term technology partner Kambi and was denied voting rights on Kindred’s strategy.
As founder of Unibet, Str?m cited the experience as “painful, as he was denied the opportunity to argue pros and cons” – in which he supports that Kindred continue to work with Kambi, rather than build its proprietary systems.
Asked if he would sell his 19% in Kambi, Str?m rejected the proposition, likening it to selling the horse that will win the Elitloppet (a famous Swedish horse race) three weeks before the race. Of significance, He believes Kambi is significantly undervalued and is confident in its future value.
Str?m, who has reduced his shareholding in Kindred to 2.6% and resigned from the company’s board in 2020, disclosed that he had previously recommended a sale of the business.
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#Breaking News
1.??????Kindred Group CMO and CCO resign
Following the resignations of Kindred Group’s CEO Henrik Tj?rnstrom and CFO Johan Wilsby, two more executives have stepped down.
Kindred CMO, Elen Barber, who has been at the company for 13 years, has resigned alongside CCO Anne-Jaap Snijders; who has also spent a long stint at the company, having been with Kindred for the last nine years.
In the second half of 2022, Kindred initiated a review of its commercial and marketing operations. It considered factors such as adaptation to local commercial requirements, local market regulations and increasing flexibility in its communications to customers.
This process has now been finalised with the full support of the entire executive team. Following its conclusion, Kindred’s current Chief Commercial Officer, Snijders, and CMO, Barber, have both decided to leave Kindred in the Autumn.
“This is as a result of an operational review that has been ongoing for some time, aimed at improving effectiveness within the commercial engine. This has nothing to do with the strategic review initiated by the Board.”
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2.??????Super Group commits to US “marathon” as North America revenue falls 13% in Q1
Betway and Spin operator Super Group grew its revenue by just 1% year-on-year in Q1 2023 as significant losses in several regions were offset by big gains in others.
Total group revenue increased just 1.2% year-on-year to €338.5m, as declines in North America, Latam and Asia-Pacific were slightly more than offset by gains in Africa, the Middle East and Europe.
Total revenue for the Betway brand grew by 6% to €198.3m, while the group’s Spin online casino brand saw revenue decline by 4.9% to €140.2m.
Adjusted EBITDA for the quarter was €30.6m, down 50.2% from €61.5m in the prior year.
The business posted an overall loss for the period of €1.9m, down from a €163.2m loss in Q1 2022, which was negatively impacted by share listing expenses of €126.3m.
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3.??????Playtech rides high on strong Q1 B2B & B2C growth
Gaming software provider Playtech has issued its 2022 full-year report, with strong growth in its B2B segment and its Snaitech business driving a 33% increase in revenue to €1.60bn from the €1.21bn the business achieved the previous year.
On this revenue Playtech reported a further 28% increase in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) from €317.1m in the prior year to €405.6m in 2022. While the business reported an adjusted post-tax profit on this of €160.5 – a 26% increase from the €127.6m it announced last year – the company’s actual profit declined 94% to €40.6m from €686.7m.
The supplier said this was primarily the result of unrealised value gain in derivative financial assets the previous year, which then declined in value in 2022. At €583.2m, this decline in the value of the company’s assets represented the rank majority of the fall in profit.
“2022 was a year of considerable strength for Playtech, in which we delivered record revenues and EBITDA, ahead of market expectations,” he said. “All parts of the business contributed to this performance, with B2B powered by Europe (ex-UK) and the Americas, and B2C’s impressive performance underpinned by Snaitech’s continued strength in the Italian market in both retail and online.
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4.??????Gambling.com Group reports 36% Q1 revenue rise ahead of Casinos.com launch
Online gaming marketing services provider Gambling.com Group has reported a 36% revenue increase to a record $26.7 million for the first quarter of the year. Net income during the three-month period rose 47% to $6.6 million, while Adjusted EBITDA increased 49% to $10.7 million. The company has now increased its guidance for full-year revenue and Adjusted EBITDA.
Charles Gillespie, CEO and Co-Founder of Gambling.com, said: “Our record first quarter 2023 results exceeded internal forecasts and reflect industry-leading organic revenue growth as well as strong profitability and cash generation. Our performance in the first quarter demonstrates both Gambling.com Group’s successful execution of our North American growth initiatives and our success in generating ongoing attractive growth in more established markets.”
During the quarter, new depositing customers (NDCs) increased 31% from the prior-year period, helping drive year-over-year revenue and EBITDA growth. Gillespie also pointed to “strong growth” in both newer and more established markets, with particular strength in iCasino performance marketing revenue in many of the group’s global markets.
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5.??????Aristocrat revenue reaches AU$3.08bn for H1
Aristocrat Leisure (Aristocrat) has released its H1 financial results for 2023 and reported a 12.2% rise in revenue to AU$3.08bn (US$2.05bn). The supplier reports that this growth was driven by an “outstanding performance” from its North American gaming operations, among other factors.
The company also posted that Anaxi, its online division, also satisfied market commitments by signing agreements with new partners, such as a collaboration with FanDuel and an acquisition of Roxor Gaming. Anaxi also signed a partnership with Penn Interactive last week.
Trevor Croker, CEO and MD of Aristocrat said, “With content agreements signed with partners representing over 55% of the iGaming market in the US, we are comfortably on course to exceed our target of penetrating at least 70% of regulated jurisdictions across North America over the next five years.”
Aristocrat’s EBITDA rose 5.7% to AU$1.03bn, though its EBITDA margin dropped slightly from 35.3% in H1 of 2022 to 33.3% in H1 of 2023. Croker added, “The benefit of our investment to grow and diversify Aristocrat’s revenue base was particularly evident in our ability to deliver solid revenue growth and stable EBITDA.”
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6.??????Auditor resigns at eMerchantPay citing governance concerns
Grant Thornton has resigned as auditor of eMerchantPay, a London based global high-risk acquirer. and wrote:
“In the course of our work, we learned of certain transactions for which we sought supporting information, including management’s evaluation of whether the accounting for them is in accordance with relevant accounting standards and an assessment of risks and compliance with applicable laws and regulations. Following this process, which resulted in an absence of sufficient, appropriate audit evidence, we have been unable to conclude whether the accounting for the transactions is appropriate and whether there has been a breach of applicable laws and regulations.
The nature of the transactions and the absence of supporting evidence have resulted in us becoming concerned about the quality of the Companies’ governance.
Given the significance of these matter, we do not consider it appropriate that we continue to act as the Companies’ auditor.”
Grant Thornton’s resignation, revealed in a document deposited at UK Companies House, will likely delay publication of eMerchantPay’s accounts for the year ending August 2022 and will doubtless also interest regulators.
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7.??????Australia: Offshore gambling could cost country $3bn
A report from Responsible Wagering Australia (RWA) has found that illegal offshore gambling could cost Australians close to $3bn (￡1.60bn/€1.84bn) in lost taxes.
This was revealed in the Australia Offshore Wagering Market Analysis 2023, a report that was developed on behalf of RWA by betting and gaming consultancy H2 Gambling Capital.
H2 estimated that between 2022 and 2027, black market activities could cause a loss of $3.35bn in taxes. Coupled with the estimated grey market tax loss of $3.32bn, this could total a combined $6.67bn potential loss.
RWA said that offshore operators are more appealing to customers as they offer more competitive pricing and do not provide consumer protection rules that are as stringent as those that would be put in place by licensed operators.
Kai Cantwell, CEO of RWA, said that future consideration of reforms in Australia must focus on eradicating the offshore market and removing it as an option for players.
“It is crucial that any future reforms are balanced and prevent Australian players from being driven offshore, where player protections are limited,” said Cantwell.
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#US / Canada
8.??????MA regulator “frustrated” by DraftKings betting violations
DraftKings self-reported itself to the Commission after discovering it offered bets on the tennis UTR pro-series, which is not an approved betting event in the state.
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The MGC’s Investigations and Enforcement Bureau (IEB) looked into the case. The wagering took place over a 12-day period from March 10 to March 22.
During this time, players placed 864 bets on three events for a total handle of $7,867. DraftKings said the reason the error took place was because of a “miscommunication” between its trading and trading compliance teams.
The fault occurred after the operator copied a list of tennis offerings from a different jurisdiction without verifying if the event was approved in Massachusetts.
After discovering the issue, the DraftKings returned stakes to the players who had placed a bet, as well as removed any winnings and returned any losses.
While the Commission acknowledged DraftKings for self-reporting the matter, multiple Commissioners shared concerns over the operator’s conduct.
“I get a little frustrated when I see ‘well we just copied from somebody else, I didn’t check the book in Massachusetts’”, said Commissioner Eileen O’Brian. “I don’t know whether that was benign neglect or whether that was something else.”
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9.??????California Gov. signs into law bill reinstating moratorium on cardroom expansion
California Governor Gavin Newsom on Monday signed Assembly Bill 341 into law. The legislation reinstates a moratorium on cardroom expansion in the Golden State, meaning no new such establishments will be allowed for 20 years. However, existing cardrooms will be able to increase table games modestly over time.
The bipartisan legislation is supported by more than 40 California tribes and cardrooms. The new law reinstates provisions sponsored by the cardroom industry in the 1997 Gambling Control Act, which prohibited California from issuing new cardroom licenses. That moratorium was periodically extended by the state legislature for 25 years before it expired on January 1, 2023.
The new law, which is a rare example of California Indian tribes and cardrooms working together, is retroactive to January 1, thus squashing any plans to take advantage of the opening for cardroom expansion. Assemblymember James Ramos, the only Native American in the California legislature, sponsored the bill, which received near-unanimous support in the legislature.
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10.??Washington DC sports betting handle drops in April
Washington DC’s sports betting handle was $14.5m in April, down 21.2 per cent from $18.4m in April 2022 and down 19.9 per cent from the $18.1m wagered in March this year. Gross gaming revenue was $1.3m, down 7.1 per cent year-on-year and 43.4 per cent from April.
Gambet, run by the DC Lottery and powered by Intralot, led the market with $626,273 in revenue from a $5.7m handle. Caesars Entertainment registered $524,245 in revenue from $4.6m in wagers. BetMGM recorded $138,784 in revenue from $2.5m in bets. FanDuel, which runs a retail sportsbook at Audi Field, took $684,884 in wagers but posted a loss of $25,773.
Grand Central Bar and partner Elys Game Technology generated $60,612 in revenue from a $385,864 handle. Cloakbook, a joint venture between Cloakroom DC and Elys, registered $503 in revenue and an $8,995 handle.
#M&A & Finance
11.??888 offloads Latvian Mr Green and William Hill operations to Paf in €28m sale
888 Holdings has agreed to sell its Latvian operations to Paf Consulting Abp (Paf) for a fee of €28.3m ($30.5m) on a cash-free, debt-free basis.
An initial sum of €24m will be paid in cash upon completion of the transaction, and the balance will be delivered in 2024 upon completion of the 2023 financial year report.
Paf will now own 90% of the company. The Latvian company uses the William Hill and Mr Green brands under local licensing. It will provide brand licensing so that these brands can be used in Latvia for a limited period of time.
Lord Mendelsohn, Executive Chair of 888, said: "We continually review our asset base to ensure that we are only holding assets that both contribute to our long-term strategy and will maximise value for our shareholders.
"As a business, our relatively limited exposure in the Baltic region means that the region is not one of our core or growth markets where we prioritise our investments.”
https://www.gamblinginsider.com/news/21185/888-agrees-to-sell-latvian-operations-to-paf-in-283m-deal
#Legal & Regulation:
12.??Skill on Net to pay ￡305k in latest UKGC social responsibility ruling
Online gambling firm Skill On Net Limited will pay ￡305,150 after a Commission investigation revealed social responsibility and anti-money laundering failures.
The operator – which runs 50 websites – will pay the money as part of a settlement with the Commission. All ￡305,150 will go to socially responsible causes.
The Commission found the relevant risk assessment failed to:
·????????Appropriately consider payments received from unknown or un-associated third parties of the customer
·????????Appropriately consider organised crime groups and mule accounts
·????????Take into account and adequately consider information on the risks of ML and TF made available to them by the Commission.
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13.??Flutter slapped with ￡490k fine for marketing to self-excluded UK customers
The licence holder of Paddy Power Betfair has been charged ￡490,000 by the UK Gambling Commission (UKGC) in the regulator’s second enforcement action of this week.
PPB Counterparty Services Limited, which trades as the Paddy Power and Betfair sports betting brands, was the subject of UKGC enforcement for sending promotional push notifications to devices linked with self-excluded customers.
Customers either directly self-excluded with PPB or via the GAMSTOP sector-wide exclusion scheme were sent offers for enhanced odds on a Premier League match on 21 November 2021.
Kay Roberts, UKGC Executive Director of Operations, said: “Although there is no evidence the marketing was intentional, nor that all the people with apps saw the notification or that self-excluded customers were allowed to gamble, we take such breaches seriously.
“We would advise all operators to learn from the operator’s failures and ensure their systems are robust enough to always prevent self-excluded customers from being sent promotional material.”
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14.??Denmark reports double-digit decline in 2022 online sports betting revenue
Gross gaming revenue (GGR) in Denmark fell by 2.8% in 2022, according to figures published by the Danish Gambling Authority (DGA). Meanwhile the lotteries vertical, which is the largest market segment by GGR, fell by 8.2% to DKK3.38bn, while the online casino and betting verticals suffered similar fates, falling by 4.2% and 10.8%, respectively.
In its ‘Gambling Market in Numbers 2022’ report, the regulator breaks down several key figures to give a snapshot of the country’s market over the course of last year.
In 2022, the total GGR generated in the Danish gambling market was DKK10.1bn, down 2.8% from DKK10.4bn in 2021 and even further behind the DKK10.8bn generated in both 2018 and 2019.
Breaking those figures down by vertical, the gaming machine and land-based casino sectors were the only two areas which saw increases in the amount of GGR generated year-on-year, as they increased by 36.9% and 47.9%, respectively.
15.??Evolution unveils “most expensive” game ever with official launch of Funky Time
Evolution has unveiled its biggest new game show since Crazy Time with the launch of 1970s-inspired and disco-themed Funky Time. The title has gone live this week after being unveiled at ICE London in February, where CPO Todd Haushalter promised a “more volatile” playing experience with the potential for higher payouts.
The online game with live presenter is designed to celebrate the iconic disco era with a retro club dancefloor and funky beats, while players can accumulate multipliers in all phases of the game.
“When I first saw the DigiWheel, a big vertical revolving wheel with an electronic LED centre, I knew there was a great game show to be built around it.
“Then the team and I started brainstorming what that game could be, and we knew we were onto something very special with Funky Time,” he added.
Nearly 100 people were involved in the development of the game, which has been described as the “most expensive and complex game” ever created by the company.
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16.??Bet365’s Hillside rolls out new Platform Innovation Hub
The Hillside Technology business of Bet365 has announced the launch of a new Platform Innovation Hub to develop new technologies.
The department will explore new technologies and identify whether they can contribute to the Bet365 platform. The hub will collaborate with technology teams to establish ways in which processes can be integrated across its departments.
Platform Innovation will provide insight, guidance, tools and benchmarks. It will also connect people across the organisation and provide a space to experiment with new technologies and approaches.
The new hub will launch with a team of technology specialists recruited from both inside and outside of the Bet365 business.
“The strength of our product and the creativity of the people who engineer it, has ensured we’ve continued to lead the market,” head of Platform Innovation, Alan Reed, said.