iGaming Wrap-Up of CW 31-32 2024
#iGaming News of the week
0.?????? Analysts say “no thanks” to DraftKings’ surcharge idea
US sports betting operators have long been grappling with ways to navigate increasingly high tax rates. But DraftKings' new idea isn't sitting well with bettors or analysts.
DraftKings spurred debated among the wagering community on Thursday (1 August) when it announced plans to implement a gaming surcharge for players in high tax states.
In its Q2 business update, the company said it has “plan to address high tax states”. That is to “roll out a gaming tax surcharge” starting 1 January 2025. This will be applied to winning bets “in any state with a tax rate above 20% that has multiple sports betting operators”. Those criteria currently apply to New York, Illinois, Vermont and Pennsylvania.
DraftKings asserted the surcharge will be “fairly nominal to the customer”. The only example offered was in Illinois. In that market the charge “will amount to a low to mid-single digit percentage of the net winnings a customer would have previously received”.
Analysts at the UK’s Regulus Partners sent a note condemning the surcharge. The advisory said it would “lose market share, damage a brand and undermine credibility in one easy step”.
#Breaking News
1.?????? Brazil publishes final gambling regulations ahead of January launch
Brazil’s Ministry of Finance has published its final set of technical regulations for the country’s licensed gambling market, which is due to launch on 1 January 2025.
As set out in Ordinance SPA/MF No. 1,231/2024 last week on 1 August, under the rules gambling operators will be held liable for non-compliant advertising, which will be subject to certain restrictions. For example, gambling businesses will be liable for any ads created by influencers on their behalf.
New rules were also established to address problem gambling concerns, including requirements for operators to offer betting limits and self-exclusion tools.
Operators will also have an obligation to monitor player behaviour and reach out if they detect signs of harmful gambling.
Under the ordinance, the practice of offering bonuses to new customers will also be banned, but operators will be allowed to conduct actions to encourage player loyalty.
2.?????? Nuvei acquires Pay2All in Brazil igaming market push
Nuvei has announced that it is acquiring Pay2All – a licensed Payment Institution authorised by the Central Bank of Brazil.
Described as a strategic milestone, the deal is expected to enhance Nuvei’s capabilities in the Brazilian market and reinforces its commitment to the Latin American (LatAm) region.
The Payment Institution licence – required to provide transactional services for authorised operators in the newly regulated market of sports betting and online gaming – will enable Nuvei to offer comprehensive payment services in Brazil as an Issuer of Electronic Currency.
These include accepting payments, managing e-wallets and betting accounts, and participating in all of Brazil’s local payment systems, including processing Pagamentos Instantaneos (PIX) transactions.
Philip Fayer, Nuvei Chair and CEO, said: “Securing a Payment Institution licence in Brazil has been a top priority, and will mark another significant milestone in our global expansion strategy.
3.?????? H1 2024: Entain raises full-year guidance as Brazil NGR jumps 28%
Entain shares gained 9% in early morning trading after the company raised its full-year guidance due to stronger-than-expected Q2 results.
Entain reported an 8% constant currency rise in net gaming revenue (NGR), including its 50% share of BetMGM, to ￡2.6bn in H1 2024. Group EBITDA for the half-year reached ￡524m, up 5% compared to H1 2023. The group’s loss after tax was also significantly reduced at ￡47m, compared to ￡502.5m in the prior-year period.
Due to stronger-than-expected Q2 results, Entain now expects its full-year 2024 EBITDA to fall between ￡1.04bn and ￡1.09bn, after revising its previous estimate of a ￡40m reduction from last year’s ￡1.01bn.
”Entain’s H1 results are clear evidence that our hard work improving the group’s operational performance is bearing fruit,” said interim CEO and chair designate Stella David. “Whilst there is more work to do, we are pleased with the progress so far and look forward to building further on these solid foundations in H2 and beyond."
4.?????? Wynn Resorts raring for expansion in ‘most exciting market of the last decade’
Wynn Resorts has underlined ambitious plans for ‘the most exciting emerging market’ after purchasing 155 acres of land on Al Marjan Island.
As regulatory developments in the UAE continue to unfold and progress, Wynn Resorts CEO Craig Billings underlined his excitement for the potential of the region when it comes to gaming, describing it as the most exciting new market in decades.
In terms of regulation, the establishment of the General Commercial Gaming Regulatory Authority has been cited as a significantly positive step when it comes to clarity for operators. Billings added that there is real momentum when it comes to development of the sector, emphasising his belief that the next step will be full licensing for the firm.
“As I have noted before, I believe the UAE is the most exciting new market for our industry in decades and our confidence in the demand and EBITDAR potential of Wynn Al Marjan continues to grow.”
5.?????? India considers simplifying RMG foreign investment rules
India is reportedly considering allowing 100% Foreign Direct Investment (FDI) for real money gaming companies, without official approval.
An Indian government department has proposed allowing companies access to full FDI through the automatic route for online RMG, according to a report by Indian financial newspaper Mint. The proposal would provide relief to the Indian real money gaming sector, which has struggled in recent months under the 28% Goods and Services Tax (GST).
One anonymous official told Mint: “The idea is to make it simpler and easier for Indian start-ups to raise foreign capital in a sector which is seeing high growth.
“There is some ambiguity with respect to FDI under automatic route, which will also be clarified. Allowing up to 100% through the automatic route will help this industry raise capital.”
6.?????? Thailand’s draft regulations set casino licence fees at €129m
Thailand casinos are becoming a reality with the government publishing draft rules for IRs for public comment.
The initial rules set out 30-year licences. Operators will be evaluated every five years, while each renewal period runs for a maximum of 10 years.
Thailand casinos will be overseen by a policy committee and executive committee chaired by the prime minister, Srettha Thavisin, responsible for facilitating the development of regulation and smoothing the process towards launch. Day-to-day regulation will be handled by a new government body, the Comprehensive Entertainment Commission.
Operators must pay an initial 5bn baht (￡110.9m/€129.4m/$141.9m) to acquire their first licence, in addition to a 100,000 baht application fee. Annual fees are priced at 1bn baht, while for operators renewing their licences, they will again have to pay 5bn baht. All renewed licences are also subject to the 1bn baht annual fee, while operators requiring a duplicate licence must pay 100,000 for each copy.
7.?????? Evolution threatens layoffs in Georgia as strike forces studio closure
Tensions have escalated over a strike at Evolution Georgia, with the live casino giant threatening large-scale layoffs to reduce its presence in the country.
The strike began in mid-July following allegations of poor working conditions at Evolution’s office and live gaming studio in Tbilisi, after trade union negotiations failed to reach an agreement.
A Georgian trade union announced that around 5,000 of Evolution Georgia’s 8,000 employees would participate in a strike starting on 12 July.
However, Evolution subsequently said it anticipated that fewer than 500 employees from its Georgia operations would join the strike action.
“We do not expect any significant impact on our operational delivery from the studio,” Carl Linton, Evolution’s head of investor relations, told NEXT.io at the time.
He also stressed that with over 20 studios worldwide, the company was well-positioned to manage operational challenges in any single studio.
#US / Canada
8.?????? Betway US shutdown will cost around $50M, iGaming expansion possible
Super Group executives said on the company’s Q2 earnings call on Wednesday that they expect the cost of pulling Betway’s sports betting operations out of the U.S. market could reach nearly $50 million.
The company announced last month that it would be shutting down Betway’s online sports betting operations in the nine U.S. markets where it holds a wagering license in order to focus on iGaming growth in New Jersey, Pennsylvania and beyond. At the time, Super Group said the decision came after an extensive internal review determined there would be a long pathway toward profitability for its U.S. sports betting business.
On Wednesday, speaking on an earnings call after the company published its Q2 2024 results, Super Group CEO Neal Menashe said that the cost of the U.S. online sports betting exit “should not exceed” €45 million ($49 million). That includes redundancy costs, settlement of existing contracts and a maximum provision for the wind-down of the sportsbook product. The company noted the estimate is subject to change, and an updated number will be provided in the next quarterly update.
9.?????? FanDuel faces TikTok ‘trap and trace’ privacy class action
领英推荐
FanDuel has been accused of violating California privacy laws by using “trap and trace” TikTok software on its website.
The complaint, filed on 30 July in the US District Court for the Central District of California, alleges that FanDuel installed software created by TikTok on its website to identify and track visitors.
This software allegedly uses a process called “fingerprinting” to collect data about otherwise anonymous website visitors and match it with existing data TikTok has accumulated about millions of Americans.
The complaint said the FanDuel website instantly sends communications to TikTok when a user lands or clicks on a page.
According to the lawsuit, the TikTok software begins collecting information as soon as a user lands on FanDuel’s website, even before they can interact with any cookie consent banners.
The lawsuit said: “[Users] are never informed that the website is collaborating with the Chinese government to obtain their phone number and other identifying information.”
10.?? Bet365 ordered to pay $500,000 to NJ bettors after odds failures
Operator bet365 has been ordered to pay bettors in New Jersey, US, over US$500,000 on 199 wagers after it was found to be altering odds on sporting events without informing the state regulator.
The New Jersey Division of Gaming Enforcement (DGE) said a routine audit in April 2022 found the operator “unilaterally revised odds” for a “significant number of wagers” it had accepted.
The DGE said bet365 claimed the odds during 13 sporting events were “incorrect” and had been posted in an “obvious error.” Bet365 added that the move was allowed under House Rules, which state that “human or technical error or issues outside our control” are permissible reasons for changing odds.
However, the DGE noted the “caveat” that bet365 “was prohibited from voiding any wager without prior Division approval.”
11.?? Rush Street says BetRivers NY will not implement wagering surcharges
The decision by DraftKings to start implementing a surcharge on winning wagers in high-tax markets has created a ton of controversy. However, during the DraftKings earnings call, CEO Jason Robins was convinced they might be the first company to do this but that they would not be the last.
However, one competitor has already come out and made it clear that a surcharge is not an option for them.
“As we put our customers first, it was an easy decision for us,” said Rush Street Interactive CEO Richard Schwartz.
“RSI remains committed to maintaining its leadership position in the industry by continuously prioritizing the needs and preferences of its players. We believe that RSI’s focus on customer satisfaction, coupled with its innovative rewards and loyalty programs, sets a benchmark for excellence in the online gaming industry,” he added.
12.?? Sands' Long Island casino project takes step forward with 42-year Nassau Coliseum lease approval
Las Vegas Sands's plan to build a $6 billion casino and resort complex on Long Island took a major step forward after a vote on Monday. Sands has been greenlighted to manage the Nassau Coliseum and its surrounding area, known as the Nassau Hub, in a 42-year lease agreement.
The legislature was not specifically considering the proposed casino plan when it voted, as the company still needs to obtain a state license to conduct gaming. The permits might be granted next year, with 11 bidders vying for three licenses in the downstate area. However, the vote is a necessary step toward getting additional approvals.
Tension built inside the Nassau County legislative chambers all day, but lawmakers ultimately voted to transfer the 72-acre Nassau Coliseum property to Las Vegas Sands, which is expected to protect current jobs there, CBS reported.? A second vote made the Nassau County Legislature the lead agency for an environmental review, which is expected to take six to eight months. While the project still has many hurdles to overcome before it can become a reality, this vote begins the process.
13.?? EBITDA Down, DraftKings Plans US$1 Billion Share Repurchase In Q2
DraftKings has published its financial results for Q2 2024, announcing a US$100 million-plus reduction in annual Adjusted EBITDA guidance and a US$1 billion (￡783.8m) share repurchase.
Revising its Full Year 2024 Adjusted EBITDA guidance to a range of US$340 million to US$420 million (￡266.5m-￡329.2m)–down from the previous range of US$460 million to US$540 million (￡360.56m-￡431.1m)–, the company also raised its 2024 Revenue Guidance midpoint to US$5.15 billion (￡4.03bn).
DraftKings had revenue of US$1.104 billion (￡862.21m) during Q2, ending June 30, a 26 percent increase over the second quarter of 2023.
“We very efficiently acquired many more new customers than we expected and saw continued healthy existing customer engagement in the second quarter,” claimed DraftKings Co-founder and CEO Jason Robins.
“In light of that, we are pleased to announce a US$1 billion inaugural share repurchase authorisation, which reflects our confidence in the company’s attractive long-term outlook and healthy balance sheet.” Added DraftKings CFO Alan Ellingson.
#M&A & Finance
14.?? Super Group posts ‘strongest quarter ever’ and details US igaming plans
Super Group’s CEO Neal Menashe has called the second quarter of 2024 the operator’s “strongest quarter ever” with revenue reaching an all-time quarterly record. CFO Alinda van Wyk noted that the Betway and Spin parent company “achieved new quarterly records for the ex-US business” across total revenue and adjusted EBITDA, adding that ex-US adjusted EBITDA guidance for the full year has been raised.
Super Group also provided additional information on its exit plan for its US sportsbook product, which the company announced last month, as well as its maintenance direction for igaming operations in the market.
Publishing its financial results, Super Group declared revenue of €414.7m, an all-time quarterly record as well as a 9% increase year-over-year (Q2 2023: €380.8m). In constant currency, revenue rose by 11% YoY to €422.5m.
15.?? Light & Wonder Q2 report: Consolidated revenue up 12%
Light & Wonder has announced its Q2 2024 revenue, with consolidated revenue growth of 12%.
Gaming revenue saw an increase of 14% year-on-year, to a sum of $539m. The main drive was a 32% increase in gaming machine sales and its gaming operations unit expansion in North America. SciPlay revenue increased 8% year-on-year to $205m, driven by its social casino business. IGaming revenue, which saw particular momentum in North America, also saw an increase of 6% year-on-year to $74m.
Light & Wonder President and CEO Matt Wilson stated that he was pleased with the company’s continued momentum.
“Light & Wonder continues to capitalise on opportunities underpinned by our scale and diversified product offerings as demonstrated through the growth momentum across the business. We saw strong progress in the gaming business as the expansion of units in the North American installed base reached an inflection point,” he said.
16.?? Zeal H1 report: Customers up 70%, revenue totals €76.8m
A sharp rise in registered customers drove revenue up 40% year-on-year at Zeal Network in H1, with the operator reporting significant growth across both its core lottery and recently established games segment.
Group revenue amounted to €76.8m (￡66.1m/$83.9m) in H1. This is comfortably clear of the €54.8m reported by Zeal in the opening six months of 2023.
Revenue growth, Zeal said, was primarily down to a 70% rise in registered customers in the first half. In total, across lottery and games, Zeal welcomed 592,000 new players in Germany, with much of this driven by large jackpots within its lottery business.
“The very strong development of revenue and EBITDA reflects our excellent operating performance,” Zeal CFO Sebastian Bielski said. “We are particularly pleased that we have been able to acquire over half a million new customers since the beginning of the year.
#Legal & Regulation:
17.?? SkyCity confirms temporary closure dates for Auckland casino
SkyCity Entertainment Group will close its land-based casino in the New Zealand city of Auckland from 9-13 September in line with a licence suspension settlement in the country.
Last month, SkyCity reached an agreement with New Zealand’s department of internal affairs (DIA) to settle the case related to its Auckland facility. It was agreed that the gaming area of the venue would close for five consecutive days.
Today (2 August), SkyCity confirmed that this period of closure would take place next month and only applies to the gaming area and food and beverage outlets in this section. All other areas of the SkyCity Auckland precinct will remain open.
The case dates back to February 2022 when a SkyCity Auckland customer filed a complaint with the DIA. This was in reference to a failure to comply with responsible gambling requirements between August 2017 and February 2021.
#Tech:
18.?? Entain launches Betcha betting platform
Entain has announced the introduction of a new betting platform in New Zealand called Betcha.
This new platform is aimed at younger demographics in the region and has been launched as a direct response to the increasing threat of offshore betting operators.
Betcha will be run by Tab and Entain, though Betcha will be different from Tab as it won’t provide bettors with tote betting on racing, only fixed odds, while each will be run as two separate platforms, with current Tab customers needing to register a new account in order to use the Betcha platform.
Entain agreed to a partnership with Tab New Zealand in March of last year in what was a 25-year deal that was approved by New Zealand’s Minister for Racing in the May of 2023. Through this deal, Entain would take over the majority of Tab New Zealand’s day-to-day operations.