iGaming Wrap-Up of CW 39-40
#Breaking News
1.??????Maltese gaming consultant receives prison sentence in Germany on tax evasion charges
Maltese gaming consultant Iosif Galea, who had been arrested in Italy under German arrest warrant, has been sentenced to 2.5 years in prison by a German court for tax evasion.
Maltese investigative journalist and blogger Manuel Delia first reported that the state court of Frankfurt, Germany, found Galea guilty of evading €1.7m in taxes owed over a period of 32 months between May 2017 and December 2019.
According to the information, Galea, a director of Tipbet-operator Tipin, failed to pay 5% on his income from sports betting, which he owed to the German state.
Tipbet is a Malta-based company licensed by the MGA. The company’s German-facing business is run by Tipin, which operates the website tipbet.de.
Tipin received a German sports betting licence in October 2020 and is also on Germany’s most recent whitelist of approved operators.
While the tax investigation pre-dates Germany’s regulated iGaming market, the German tax authorities have long been of the opinion that iGaming companies active in the German market are required to pay tax in Germany, irrespective of whether they are licensed in Germany.
?2.??????Italy amends fixed-odds rules to allow cash-out on all betting markets
Italy’s Ministry of Economy & Finance (MEF) has drafted a ‘Betting Decree’ to amend rules on fixed-odds betting markets for sporting events.
The amendments, published in last week’s Official Government Gazette (28 October), will impose new changes to improve the offering of licensed bookmakers (online + retail).
Long-awaited changes will allow Italian bookmakers to offer customers cash-out functionalities across all betting markets, which to date have only been available for horseracing events.
“Workarounds for cash-outs through ‘bet insurance’ have been available before, but the new regulations will at least ensure they can be regulated consistently.” noted Italian betting news source AgiPronews.
Italian bookmakers have been further relieved by amendments to the €10,000 winning cap imposed on fixed-odds betting markets, which have garnered a five-fold increase to €50,000.
Amendments to the Betting Decree have stated that bookmakers must offer a minimum bet of €1 on all sporting events offered.
Of further significance, the MEF will allow bookmakers to correct ‘errors in odds’ offered to customers. To date, Italian bookmakers have been forced to accept wagers on incorrect odds, leading to costly market payouts.
?3.???????Gaming CEOs "cautiously optimistic" about future business climate despite economic concerns, AGA survey finds
The American Gaming Association released Tuesday its Gaming Industry Outlook, which shows CEOs in the sector remain positive about the industry’s current business situation. Additionally, many further expressed confidence about future conditions despite persistent concerns about today’s economic environment. However, the association says that, following a period of exceptionally strong growth, economic activity in the industry could ease moderately over the next six months.
The Gaming Industry Outlook is presented in partnership with Fitch Ratings. A majority of executives surveyed indicated that the present business situation is good (68%) or satisfactory (28%), and most (92%) expect these conditions to continue or improve over the next three to six months. More than one-third (38%) indicated they expect future conditions to be better, compared to only 8% that thought conditions would worsen.
AGA President and CEO Bill Miller analyzed these results and stated the industry “remains cautiously optimistic, and has weathered this volatile economy, because of resilient consumer demand.” He added that, looking ahead, future consumer confidence and spending “remain an outstanding question for our continued growth.”
?4.??????Lottery.com fills board seats and appoints CEO
Troubled lottery broker and information portal Lottery.com has stated in an US Securities and Exchange Commission (SEC) filing that on 8 September it had appointed two new directors and a new CEO.
The filing followed a warning by the Nasdaq stock exchange that it must fill the seats by a 5 October deadline in accordance with the exchange’s rules and regulations. The newly appointed include Sohail S. Quraeshi as CEO as well as Vladimir Klechtchev and Amer Rustom as new outside directors. Alongside remaining director Richard Kivel, who will continue as chairman of the board, therefore fulfilling the Nasdaq’s requirements that the company has at least three members of the board.
Quraeshi started his career as a securities analyst, and has worked in banking institutions in the US, Europe, Asia and the Middle East. Currently he is the founder of contact tracing and digital asset management company TSS Vertical and managing director of Singapore-based asset management business Vahoca Pt.
Klechtchev is a Fellow Chartered Accountant with experience in audit, investment banking, risk management, compliance, fraud investigations, project evaluation, consultancy and business advisory services. Rustom co-founded the Platinum group and has ties with many Middle Eastern and North African prominent officials and leaders.?
Lottery.com has been ridden by turmoil the last months, marred by financial irregularities, a board that was in open civil war and multiple class-action lawsuits.
?5.??????Football Index customers issued 40-day refund notice
In an update from the collapse of Football Index, the Jersey Court has approved an application by the liquidators for the failed gambling platform to allow players with money trapped in the company to claim it back.
A mass email has been sent to those that had money stuck inside the system to reclaim any outstanding balances within 40 days.
Should the 40-day limit expire, customers will have one chance to claim back any balances when the dividends are paid to the creditors – but consumers are being urged to take repayments now rather than waiting for the dividend process to get underway.
Football Index’s trading was halted in March 2020 when the Gambling Commission withdrew its operating licence, leaving millions of pounds of customer money stuck inside the system.
Following that, the company went into administration as authorities investigated the business for operating as a suspected Ponzi scheme. Last year, the Gambling Commission provided a rare update on the investigation and the money intended to be returned to consumers.
?6.??????California sports betting propositions appear to be heading for defeat
Online sports gambling companies, California tribes and card rooms have spent more than $410 million on a pair of dueling ballot measures to legalize sports betting in person and online.
If either side thought Proposition 26 or 27 could win, they placed a bad bet.
A new poll from the UC Berkeley Institute of Governmental Studies, co-sponsored by The Times, shows little chance voters will approve either measure in November.
Likely voters who said they had seen a lot of ads about the propositions were more opposed to the measures than those who had not seen any ads.
“I think it’s the negative advertisements that have kind of been turning voters away,” said Berkeley IGS poll director Mark DiCamillo. “People who haven’t seen the ads are about evenly divided, but people who’ve seen a lot of ads are against it. So, the advertising is not helping.”
Proposition 26 would allow in-person sports betting at tribal casinos and horse racing tracks. It earned only 31% support from likely voters, compared with 42% opposed, according to the Berkeley survey of 6,939 likely California voters.
Proposition 27, which would allow online sports wagering, fared even worse — 27% of likely voters in support and 53% opposed.
?7.??????MaximBet marks second US entry with Indiana sportsbook launch
Carousel Group-operated MaximBet has gone live in a second US state by launching in Indiana. That not only continued to increase the number of Indiana sports betting options for residents but gives bettors in the state a new option to sample.
After its launch in Sept. 2021 in Colorado, Indiana entry marks the first for the online sports betting and casino operator, following multi-year agreements with White Hat Gaming and Kambi.
Through this partnership, MaximBet will power Kambi’s wagering solutions as well as its compliance, risk management and sports integrity solutions.
MaximBet’s expansion has just begun
MaximBet is made up of a sports betting and casino website, MaximBet.com. In Indiana, the access will consist of merely the sports betting segment of that platform as online casino and online poker play remain illegal in the state.
The brand features Maxim’s extensive, integrated network of print, digital and social platforms and events to engage the loyal Maxim community alongside its community of sports bettors.
MaximBet’s rollout in Indiana sets the path for rapid expansion in several additional US markets, including Iowa, New Jersey, Ohio, and Pennsylvania as well as the fairly new Ontario. MaximBet could launch in other states such as Arizona, Tennessee, New York and Illinois.
?8.??????Pontus Lindwall reveals truth about surprise sacking as Betsson CEO
Pontus Lindwall has lifted the lid on his shocking departure from Betsson last year, when he was fired and then reinstalled as CEO – all within the space of a month.
Last September, Lindwall was sacked by then-chairman Patrick Svensk, who said he was looking for the “next generation of international leader” to take over the company.
However, Svensk acted alone and never sought out permission from the board’s leading shareholders, who are an influential group of wealthy families that have been on a journey with Betsson from the very beginning.
The sacking came days after Betsson’s best-ever financial report, and news of Lindwall’s departure led to a rebellion from within the company – as well as externally across the wider industry.
The operator’s biggest shareholders – including Lindwall’s mother Berit – piled the pressure on Svensk, who was soon ousted as chairman while Pontus won back his position as CEO.
Speaking to ex-Mr Green CEO, old friend and former adversary Jesper K?rrbrink during a fireside chat at iGaming NEXT Valletta 2022, Lindwall peeled back the curtain on the whole crazy episode.
“I came back as CEO in 2017, when the company was not doing so well,” said Lindwall. “We put a good team in place, and I started to get the company back on track. We were performing well and in 2021 we had just published our best report ever.
?#US / Canada
9.??????Ontario transition period for unregulated online gambling to end on 31 October 2022
The Alcohol and Gaming Commission of Ontario has set an October 31, 2022, deadline for operators and suppliers to end activities in the unregulated market to avoid jeopardising eligibility for registration.
The AGCO began accepting applications for registration in September 2021, in advance of market launch on April 4, 2022, with the AGCO reaffirming an objective of moving the region “as quickly and as seamlessly as possible” into the regulated space.
The AGCO is looking to end the transition period for unregulated igaming operators and suppliers, asserting that it has “provided a reasonable amount of time” to join the regulated space.
In order to enable affected operators and gaming-related suppliers “with sufficient time to comply,” the date of October 31 has been set for these entities to end all activities in the unregulated market.
Issuing a media statement on the updated standards, registrants are reminded that they are “expected to know, understand, and comply with all applicable regulatory requirements, including this standard upon its effective date”.
?10.??Illinois sports betting market growth to continue
Illinois also ranked third nationwide in sports betting handle from January through July 2022, with nearly $5.3 billion bet — behind New York ($9.3 billion) and New Jersey ($6.3 billion).
Gaming revenue in Illinois soared to a record $1.89 billion for the 2022 fiscal year, which ended June 30, according to a report released by the Illinois General Assembly Commission on Government Forecasting and Accountability.
This eclipsed the previous pre-pandemic high of $1.35 billion (set in FY 2019) by a substantial 38.8%, with a big contributor being the $611 million generated from Illinois sports betting — representing a 60.7% increase in adjusted gross receipts (AGR) over the $380 million generated in the previous 12-month period.
The gains reflected in the report came in spite of a summer slowdown that saw Illinois' June handle drop to $628.5 million in June, a 17.8% decline from the previous month. Nevertheless, the June legal sports betting figures were up 32% over June 2021, a YoY increase helped by the end of the state's in-person registration requirement for online sportsbooks in March.
?11.??New York Casino Board adds members as new proposal emerges
All five boroughs now have checked in with a plan to build a Las Vegas-style casino in their corner of New York City.
Staten Island Borough President Vito Fossella is the latest official to make a pitch for one of the three downstate casino licenses that will be under consideration by the New York State Gaming Commission beginning this month. Since two sites, the racinos at Yonkers and Aqueduct, are considered likely license recipients because of advantages in speed to market, most gambling industry observers consider only one license to be truly at large.
“Staten Island is one of the few places that doesn’t have any type of gambling in the downstate area and we just think that this is one of those areas that should be considered a destination point,” Fossella told reporters at a press conference last week, not far from where a free ferry drops off passengers from lower Manhattan. “Just envision a casino here, perhaps a hotel in the likes of the Mohegan Sun where people can come on a day like today and enjoy the views, enjoy the vistas. Just enjoy what’s behind us.”
Among the competing bids are one by Wynn Resorts and Related Companies to build a casino at Hudson Yards in midtown Manhattan; a plan by Coney Island mogul John Catsimatidis to team with Thor Equities to build in the Coney Island section of Brooklyn; a notion by Bronx assemblywoman Amanda Septimo to build in the Hunts Point area of that borough; Mets owner Steven Cohen’s vision of building a casino at Willets Point near Citi Field in Queens; and competing bids by the Shinnecock tribe and Legends Entertainment, partially owned by the Yankees, to build in Long Island.
?12.??Report claims Indiana igaming revenue could hit $469m in year one
A report commissioned by Indiana’s Gaming Commission has estimated that in its first year, online casino gaming could bring in revenue of $469m.
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The projection came as part of a report commissioned by the body, in conjunction with Spectrum Group. It was released today (September 28).
It examined the current legal online gaming market in the US, with focus on New Jersey, Michigan and Pennsylvania in particular, along with an examination of the potential online gaming market in Indiana.
Currently, sports betting is the only type of online gambling allowed in Indiana. It was signed into law in 2019.
However, the Indiana state government commissioned Spectrum Gaming to provide a report on the impact of online casino in the state.
The report projected that revenue could reach $469m in the first year after launch. In its third year of operation, revenue could reach $830m.
It also calculated projected tax revenue. Over the projected three-year timeline, at the highest tax rate estimated (45%), online gaming in Indiana could generate $883m in tax.
The report noted that a 15% tax rate was often seen as a “sweet spot”, but said that Pennsylvania could become the most lucrative online casino state despite a 54% tax on slots..
?13.??Virginia halts sports betting handle decline in August as handle hits $284.7m
Consumers in Virginia wagered $284.7m (￡254.2m/€291.2m) on sports during August, preventing a fifth straight month of handle decline in the US state.
The monthly total was 55.8% higher than $182.7m in August 2021 and also 7.0% up from $266.0m in July of this year, which was the fourth consecutive month in which consumer spending had fallen.
Adjusted gross gaming revenue, which is defined as total bets minus winnings, bonuses and promotions and other authorised deductions, was also up by 260.9% from $8.7m in August 2021 to $31.4m this year.
This figure, the Virginia Lottery said, was also 46.7% more than $21.4m in July this year.
Consumers in Virginia won $247.7m from sports betting during the month, while $1.1m in bonuses and promotions were issued to players. In addition, the Virginia Lottery accounted for a further $4.24m in other deductions.
?14.??Nevada gaming revenue slips in August
Nevada’s gambling revenue topped $1.20bn (￡1.09bn/€1.23bn) in August, up by 3.5% year-on-year.
However, this was down 8.1% from July.
As usual, slots made up a majority of the revenue, at $847m in August. This was just 0.8% more than in July, but down by 3.8% year-on-year.
More than half of the slots revenue was from multi denomination slots, which accounted for $446m – up by 17.3% from August 2021. Penny slots followed, making up $294m.
The third highest revenue generator was dollar slots at $60m, which fell by 4.0% from July.
For table, counter and card games, the total revenue was $361m, down 24.1% month-on-month. Conversely, this was a rise of 6.0% yearly. Much of this was generated from the card game twenty one, which accounted for $100m of the total- a decrease of 18.8% from the previous month.
Baccarat accounted for $96m of the total revenue, rising 3.8% yearly. Meanwhile, craps set in at third place, generating $39m.
For the three months ended August 31, revenue totaled $3.80bn, up by just 2.5%.
#M&A & Finance
15.??Endeavour finalises $800m buyout of OpenBet from Light & Wonder
The sale of Light & Wonder’s (L&W) sportsbook business OpenBet has been finalised, as Endeavour Group Holdings takes control of the brand for $800m.
Terms of the contract will see Endeavour pay $750m in cash, subject to customary adjustments, in addition to 2.3m shares of Class A common stock.
L&W states that it is poised to ‘unlock tremendous value’ following the divestment, securing a new position in the cross-platform global games market.
The firm has highlighted the fact that it ‘rapidly delivered on key commitments’ throughout the transaction, with further funds available to drive down group debt and adjust its balance sheet.
Matt Wilson, L&W interim CEO, said: “With the completion of the divestiture and our now streamlined organisation, Light & Wonder is well positioned to execute on our growth strategy with a singular focus on building great games fully cross-platform.
“With our R&D engine and world-class talent at our core, we have an unparalleled ability to leverage our leading industry positions, evergreen franchises and unmatched platforms to drive sustainable differentiation and significant value.
?16.??Playtika completes $600m share repurchase
Israel-based social casino business Playtika has completed a $600m (￡525.8m/€603.1m) share repurchasing scheme.
Playtika offered to pay $11.58 per share, which is above the price the social gaming business has traded at for the majority of the month, to acquire 51.8 million shares. This is around 12.6% of Playtika’s issued share capital.
As is typical for share repurchases, the shares will be cancelled immediately.
Upon the announcement, Playtika’s share price rose sharply, opening today (4 October) at the purchase price of $11.58. This was up 16.4% from closing on Monday. It then declined from there, but remains notably above the previous day’s closing price at $10.80 at the time of writing.
This rise has helped to offset declines that occurred earlier in the year.
Since Playtika’s $1.67bn initial public offering (IPO) in January 2021, the company has lost a large amount of its share value. Since the stock price peak in February of that year at $33.81, the share price has steadily declined to a low of $9.39 on 30 September, a 72% fall.
#Legal & Regulation:
17.??UK: Collins denies Gambling Commission criticised health review
Responding to a question in Parliament, Collins denied the Gambling Commission had criticised the review as unreliable.
UK. Damian Collins, the UK Department for Digital, Culture, Media and Sport minister responsible for gambling has denied that the Gambling Commission has criticised Public Health England’s cost estimates for gambling harm.
The Conservative MP Andrew Bridgen has asked in a parliamentary questions session “on what date” the regulator had told the DCMS that the findings of the cost estimate were “unreliable”. However, Collins said that the regulator “has given the department no formal advice or notification relating to the cost estimates in Public Health England’s evidence review on gambling-related harm.
He added: “Protecting people from gambling harms remains a priority for the government and the Gambling Commission, and we will be led by the best evidence to ensure the right protections are in place.”
The PHE review published last year calculated the annual economic costs of gambling harm at ￡1.27bn. It calculated the social impact of suicide to be the largest cost at ￡620m, basing the calculation on an average of 409 people taking their own lives each year due to problem gambling.
?18.??KSA: Dutch market stable at H1 €569.7m – but advertising concerns remain
After a period of rapid growth following the KOA Act enactment last year, the Dutch market has begun to stabilise and mature, according to the Dutch Gaming Authority, Kansspelautoriteit (KSA).
In an update published today, the KSA stated that total revenue from January to July 2022 stood at €569.7m, whilst Q1 revenues were recorded at €240m and Q2 at €246m.
Additionally, based on the monthly average revenue remaining ‘stable’ at?€81.4m, the KSA expects a continued growth trend of 13% to 15%, depending on sports schedules.
Licencing – regulated market on track
When the KOA Act was first implemented on 1 October 2021, the total number of licenced operators in the Netherlands was 10, with some prominent operators such as Betsson LeoVegas awaiting re-licencing under the new regime.
Over the past year, the KSA has issued a total of 22 ‘permits’ covering sports betting, horse racing and online casino to a total of 14 operators, with the authority predicting that ‘the number of licence holders is likely to increase’.
There still remains a threat to the regulated sector from unlicensed, illegal operators, however. A report from the Netherlands Online Gambling Association (NOGA) was cited by the KSA in support of this.
Specifically, the report found that 15% of players responded saying they had played with an illegal player, although the vast majority (85%) ‘played exclusively with legal providers’ – the channelization rate at this time, according to the KSA, was also 85%.
?19.??Spelinspektionen to hold meeting on B2B licence developments
The Swedish Gambling Inspectorate, Spelinspektionen, has provided an update on the development of a B2B licensing framework in the country.
On the morning of the 5th of October, the regulator revealed that it plans to hold an information meeting in Stockholm on 7 December for Swedish gaming stakeholders, provided that lawmakers make a decision regarding B2B gaming software licences.
The “Strengthened gambling regulation” Bill is currently under consideration by the Riksdag parliament, which would make amendments to the national Gambling Act going into force from 1 July 2023.
These amendments would introduce ‘licensing requirements for gambling software’ into the current gambling framework, providing greater guidelines and oversight of B2B operations.
Under current proposals, the application fee for B2B licences would be SEK 120,000 (€11,000/￡9,600), whilst an increase in the renewal fee has also been proposed from SEK 300,000 to SEK 600,000 (€55,300/￡48,100).
20.??Racing Post launches new full coverage app
Racing Post has announced the launch of its new app, made available for free on iOS and Android systems.
The app will provide audiences with daily coverage and unparalleled expert insights on all horseracing developments, fixtures and events.
Upgraded features include a new odds comparison tool, data-led tips and exclusive app-only content from renowned racing experts Tom Segal and Paul Kealy.
Tom Kerr, Racing Post Editor, said: “Since the Racing Post was founded in 1986, we have been dedicated to helping racing fans and punters stay ahead of the field with the best independent racing data and insight available.
“The release of our new app is the latest chapter in this journey and gives us a cutting-edge platform that will ensure we can serve our customers better than ever. With customisable racecards and results, live video, integrated betting, expert tips and our industry-leading news and features, the app offers everything racing bettors need in one place.“
The development of the Racing Post’s new app was led by parent company Spotlight Sports Group, who wanted to deliver racing audiences a ‘one-stop-solution’ to engage with the sport.
Technical enhancements see the Racing Post app upgraded with new live video provisions and data APIs to index race results faster.?
?21.??Barstool in-house tech migration set for football season 2023
Barstool Sportsbook is set to migrate to its in-house tech platform by next year’s football season, the company’s current tech provider announced in a statement today.
The new transition timeline by Q3 2023 will allow Barstool to have its own online sports betting platform live by most if not all of the lucrative football season. The company expects to transition away to its own tech for retail books by 2024, per a press release.
Barstool parent company Penn Entertainment announced last year it would transition away from Kambi, its primary tech provider since July 2019. Kambi-powered Barstool sportsbooks are live online in 15 states, 13 of which include online wagering.
“Kambi has been a topflight supplier to Penn in our digital evolution,” Penn CEO Jay Snowden said in a statement. “Kambi’s well-proven, high-quality technology and services have empowered Penn as we pursued our differentiated sports betting strategy, and I’m pleased to have secured our partnership to ensure a seamless transition for both companies.”
Kambi will stay on for future state launches before the transition. Barstool’s online sportsbook is expected to go live in Ohio, Maryland and Massachusetts, among other potential states, before next year’s football season.
The agreement provides for ongoing revenue share payments related to online and retail sports betting services for as long as it provides its services, Kambi said in a statement. The European tech provider will also receive one-time fees of $12.5m for early termination and $15m for transition services.