iGaming Wrap-Up of CW 47-48
#iGaming News of the week
0.?????? Kindred Group to quit US market and slash headcount by 300
Kindred Group is pulling out of the US market and plans to completely cease operations in North America by the end of Q2 2024.
Kindred’s US operations are currently loss making. The decision to exit the market was a direct result of the operator’s internal strategic review, which is ongoing and could result in a sale to a third party.
The operator believes that withdrawal from the US will allow it to reallocate resources to core markets where the company already has a proven track record.
“The competitive nature of the market means significant resource is needed to close the gap to market leaders and at our current capacity this is untenable,” said Kindred Group.
Despite optimisation efforts in recent quarters, continued US losses have placed undue pressure on the group’s long-term profitability targets, it said.
Kindred’s Unibet brand is currently active in Arizona, Indiana, New Jersey, Pennsylvania and Virginia, having withdrawn from Iowa in December 2022.
#Breaking News
1.?????? Goldman Sachs downgrades Entain amid online growth concerns
Investment bank and financial services giant Goldman Sachs has downgraded Entain to sell from buy amid concerns over business growth, particularly within its online division.
Entain’s price target has been slashed from 1,450p to 820p, which is 2.9% lower than the closing price yesterday (27 November). Monday’s 844p closing price was also 1.7% less than the 859p it closed at on Friday.
This drop came as Goldman Sachs announced its downgrade of the Ladbrokes and Bwin owner. The reason for this, Goldman Sachs said, was due to Entain having problems with growth during recent months. Goldman Sachs said this is the result of regulatory headwinds, increased competition and market dynamics.
This, it added, has particularly impacted Entain’s online gambling operations. Goldman Sachs has forecast Entain’s pro-forma online growth to be negative in Q4 of 2023 and H1 of 2024. The division, it added, is not expected to return to growth until the second half of next year.
Such is this level of concern that Goldman Sachs is also cutting earnings per share estimates for 2024 and 2025. The bank says this will be approximately 30% lower than previous stated, adding that free cash flow has also deteriorated.
2.?????? Entain to settle HMRC Turkish dispute with + ￡600m payout
The owner of Ladbrokes and Coral has agreed to pay almost ￡600m to settle an investigation into alleged bribery at a business it owned in Turkey.
Entain said it had reached an agreement with HM Revenue and Customs which will make the gambling giant pay a total of ￡585m in the form of a financial penalty and a “disgorgement of profits”.
Under the terms of the agreement, the penalty, which includes an extra ￡20m charitable donation and a contribution of ￡10m towards the costs incurred by HMRC and the Crown Prosecution Service (CPS), will be paid in instalments over four years.
“This legacy matter concerns a business which was sold by a former management team six years ago,” said Barry Gibson, the chair of Entain. “The group has changed immeasurably since these events took place. “We are committed to continuing our journey towards operating only in regulated markets, and are now widely recognised as a best-in-class, responsible operator with the highest levels of corporate governance across all aspects of our business.”
3.?????? Brazil postpones betting vote as Senate is divided on the status of online casino
The final vote needed to approve the launch of Brazil’s federal sports betting marketplace has been postponed.
The plenary of the Federal Senate was scheduled to vote on Bill 3,626/23 today (Wednesday, 29 November). However, last-minute deliberations see senators divided on the inclusion of online games (casino) incorporated in the bill’s text. Bargaining reportedly went down to the wire, but opposition to online casinos maintains that the Bill’s modalities provide no adequate framework to regulate online casino games.
Senators opposed to online casino modalities asked Senator Veneziano Vital do Rêgo, Vice President of the Senate, to postpone the vote. The opposition insists that further inspection are necessary, as Bill 3,626/23 has undergone more than 100 changes since its submission from Congress to the Senate in September for federal review.
4.?????? Q3-2023: Rivalry posts 90% increase in gross profit for Q3
Rivalry generated CAD$8.7m (~￡5m) in total revenue during Q3, a 22% increase over the same time period last year and increased its gross profit by 90% to CAD$4.0m (~￡2.4m), according to its financial report.
Betting handle is also up, rising from CAD$70.3m (~￡40.8m) in Q3 2022 to CAD$105.7m (~￡62.3m), an increase of 50% year-over-year. Rivalry noted that approximately half of the betting handle was generated from the Casino segment of Rivalry. In its press release Rivalry stated that: “Recent casino product launches set the stage for continued growth and increased player wallet share.”
The Canada-based sportsbook highlighted that it had its strongest customer KPIs on a year-to-date basis in the company’s history. The company also announced it will be hosting a virtual investor day which will be held on January 17th, 2024.
Despite a net loss of CAD$5.6m (~￡3.2) for Q3 2023 Rivalry is confident that it will become profitable in the first half of 2024. Earlier this month, the company secured an investment of CAD$14M (~￡8.1m) that is expected to allow Rivalry to pursue its goal of profitability and growth.
5.?????? Q3 2023: Kindred Group dented by 13% dip in sports betting revenue
Kindred Group has reported a 2% year-on-year rise in revenue to ￡283.9m for Q3 2023.
Gross winnings revenue, excluding the operator’s B2B Relax Gaming business, came in flat at 1% growth to ￡274.7m.
Underlying EBITDA climbed 6% to ￡42.6m on an underlying EBITDA margin of 15%, but profit after tax plummeted by 78% to ￡12.6m. Active customers increased by 7% in Q3 to 1,563,762.
Kindred Group Q3: Geographic breakdown
Western Europe provided 62% of overall group revenue, rising 12% to ￡169.7m. This was driven by strong growth of 80% in the Netherlands and 7% in the UK.
Belgium provided a major drag however, dropping 25% due to the continuing impacts of safer gambling measures and deposit limits.
Revenue from the Nordics, meanwhile, fell by 17% to ￡65.3m after a 1% rise in Norway was offset by a 14% decline in Sweden.
6.?????? Maltese PM defends Bill 55 in meeting with Austrian chancellor
Malta’s prime minister Robert Abela has defended the country’s controversial gaming law, the so-called Bill 55, in a meeting with Austrian chancellor Karl Nehammer.
During the meeting with Nehammer (pictured), Abela said that MGA-licensed operators will continue to be protected from “baseless legal challenges”.
He said the aim of the bill was not to protect gambling operators in cases where the law was violated, but rather to “protect against procedures that do not respect the European principle of a free market”.
He added that the government’s priority was to ensure “the integrity and strength” of the Maltese jurisdiction in the gambling sector.
7.?????? Adelson to sell $2bn in Sands stock to buy stake in Cuban’s Dallas Mavericks
Miriam Adelson, the widow of Las Vegas Sands founder Sheldon Adelson, is selling $2.00bn (￡1.57bn/€1.82bn) of stock in the business to help fund the purchase of a majority interest in the Dallas Mavericks, currently owned by Mark Cuban.
The sale represents approximately 10% of Adelson’s total holding in Sands. Some 41,186,161 shares will be made available at $48.56 each, the closing price of Sands’ common shares on 27 November.
At present, the Adelson family holds 427,894,129 shares in Sands, approximately 56.4% of the business. The sale would reduce this to around 46.0% although the Adelson family would keep its majority holding.
The sale will comprise 6,480,883 shares from those personally owned by Adelson and 34,705,279 owned by the Miriam Adelson Trust. Adelson will retain 386,707,968 of Sands shares but the trust will sell its entire holding in the offering.
#US / Canada
8.?????? Regulator Expects Online NC Sports Betting To Miss Super Bowl
North Carolina regulators continue to push forward with their rule-making process, but there is still no date for online NC sports betting to begin.
During a North Carolina State Lottery Commission meeting Wednesday to approve NC sports betting applications, Chairman Ripley Rand said there is still too much work to accomplish to achieve a launch for Super Bowl betting. Earlier this month, regulators said they would not be ready for a launch Jan. 8, the first possible day according to state law.
“Because of the variables, it’s too early to set the start date at this time,” Rand said. “We are committed to get up and running as soon as possible.”
Applications will be available by Monday at the latest and due by December 27. Sports betting must go online by June 14, according to the state’s sports betting law.
领英推荐
9.?????? California Daily Fantasy Sports Industry Faces Potential Crackdown
The future of California daily fantasy sports may be in jeopardy as the largest DFS market joins a growing number of states pondering its legal status.
California Attorney General Rob Bonta is reviewing whether the state’s gambling law prohibits daily fantasy sports, including contests from DraftKings and FanDuel and more scrutinized ones from PrizePicks and Underdog Fantasy.
At around $200 million in annual entry fees, the Golden State is by far the largest DFS market in the country. None of that goes to the state, though, which has left the industry unregulated and untaxed.
There is no timeline for California’s investigation. Over the past year, though, the AG’s opinions have taken between nine months to a year from start to finish.
Game of chance or game of skill?
The investigation, first reported by Gambling Compliance, comes at the request of State Sen. Scott Wilk (R), who wrote a letter to the AG in October asking for it.
10.?? Missouri Sports Betting Ballot Proposal Ready For Signature Gathering
Missouri’s Secretary of State Jay Ashcroft has signed off on language for a legal sports betting ballot measure.
According to reports, the measure supported by the state’s professional sports teams is now ready for the petition stage. Organizers of the measure must now choose one of eight versions that they must put before voters as they look to collect the required 170,000 signatures in order to place sports betting on the ballot.
The coalition filed eight proposed ballot questions which vary slightly in language and details. However, all eight versions propose a 10% tax on wagers and call for the creation of a $5 million problem gambling fund.
If approved, the ballot measure would allow the state’s professional sports teams and Missouri’s 13 casinos to offer both retail and online sports betting.
11.?? New York Weekly Mobile Handle Falls Just Short Of $530 Million
The New York State Gaming Commission reported weekly mobile sports wagering handle totaling close to $529.5 million for the week ending Nov. 19, the second-highest total in 97 weeks since mobile betting became available at the start of last year.
Though the $572.6 million for the week ending Jan. 23 of last year remains the standard, last week’s total marked the second time in four weeks that Empire State operators accepted more than one-half billion dollars worth of wagers. The convergence of the NFL, NBA, NHL, and both college football and basketball has proven to be a busy time for New York’s betting apps, whose combined handle the past five weeks has exceeded $2.45 billion.
The lofty handle did not lead to a top-ranking revenue, however, as the nine sportsbooks combined to claim $40.7 million in revenue, which includes WynnBET paying out more than $166,000 above its $2.9 million in wagers accepted. The overall hold was 7.7%, which was the highest of any of the three weeks handle has surpassed $500 million.
Operator revenue has topped $40 million in four of the last six weeks of wagering, a run that started with the all-time record haul of $62 million for the week ending Oct. 15. Handle was up 16.6% compared to the previous week, but the hold being two full percentage points lower contributed to revenues declining 7.4%.
#M&A & Finance
12.?? Entain investors told that MGM has eyes only on BetMGM
US casino giant MGM Resorts will not be making a bid for the whole of Entain as the pressure from activist investors on the UK group’s CEO Jette Nygaard-Andersen shows few signs of easing following last week’s Financial Times reports of shareholders moving against her.
According to sources close to the group, the US casino giant is “not interested” in bidding for the whole of the UK group and instead will swoop for the outstanding 50% of the BetMGM joint venture that Entain holds when the UK group is eventually sold.
Nygaard-Andersen was appointed in January 2021 after Shay Segev’s surprise move to DAZN and while Entain was in the midst of negotiations over a potential sale to MGM. That a sale to MGM did not happen at the time does not mean the US group will not put another offer forward, but only for the 50% of the BetMGM joint venture that Entain holds.
Since then, a number of issues have led to a souring of relations between the two parties: the failed MGM bid and ongoing BetMGM ownership issue, the recent launch of BetMGM in the UK, while before that the UK group launched bwin and Sports Interaction in Ontario in direct competition with BetMGM. Those relations are understood to be beyond repair.
13.?? PIN-UP Global adds PIN-UP.INVESTMENTS to its global gaming ecosystem
The international ecosystem PIN-UP Global, representing a set of businesses in various segments of the gaming industry, has launched a new business line named PIN-UP.INVESTMENTS.
PIN-UP.INVESTMENTS was created to stimulate the development of technologies and products for the gambling market and related industries by providing financial and expert resources, high-value industry contacts, the opportunity to enter new markets and integrate into the ecosystem.
PIN-UP.INVESTMENTS invests in projects and products in gambling, traffic, software development, customer service, payment systems, advertising platforms, arbitrage teams, artificial intelligence based products.
INVESTMENTS provides funding, training and consulting opportunities through in-house ecosystem experts, practice on PIN-UP product and business model testing, accelerated product growth and entry into new markets, access to a network of industry contacts, strategic planning support and possible integration into the ecosystem.
14.?? DraftKings VC fund backs Picklebet in AU$15m financing round
Picklebet has raised AU$15m (€9.04m) in a Series A financing round that attracted investment from DraftKings.
The round was led by growth stage investment firm Discerning Capital. Manifest Investment Partners also participated in the round, as did Double Eagle Acquisition CEO Jeff Sagansky. An investment was also made by Drive by DraftKings, a venture capital fund investing in sports technology and entertainment businesses.
In addition to DraftKings, the fund also counts venture capitalists General Catalyst, Accomplice and Boston Seed Capital among its founding partners.
Picklebet is an Australian sport betting start-up that offers B2C esports, sports and race betting.
It also features international media division Pickle Studios, which produces sports betting and esports content.
15.?? Lottomatica plans €500m notes sale to fund SKS365 takeover
The Italian gambling company Lottomatica Group has announced that it plans to issue and sell notes worth €500m to put towards the funding of its €639m acquisition of SKS365 Malta Holdings. The issue consists of floating rate senior secured notes due 2030 and 7.125 per cent senior secured notes due 2028. The split will be communicated at completion of the offering.
The notes will be issued on or around the completion date of the SKS365 deal, which? Lottomatica hopes to complete the acquisition in the first half of 2024 subject to antitrust and regulatory approval. Lottomatica has also received new commitments for revolving credit under an existing agreement. This gives it an aggregate principal amount of €50m, contingent on the acquisition.
Lottomatica is to acquire 100 per cent of the shares of the operator, which has around 1,000 retail sports betting points of sale and a strong online presence in Italy. SKS365 brands include PlanetWin365 and PlanetPay365. It has forecast EBITDA of €74m for the current financial year, with almost three-quarters of that from online. Lottomatica said that the acquisition will contribute to its long-term growth strategy, boosting its position in Italy
It hopes to make cost synergies of €60m and revenue synergies of at least €5m by 2026. The deal remains subject to anti-trust and regulatory approvals but is expected to complete in the first half of 2024. Playtech had previously been in negotiations to buy the operator.
#Legal & Regulation:
16.?? Entain: GGL must address German gambling’s black market exposure
Entain Plc has backed the findings of the ‘Schnabl Study‘ highlighting the significant presence of black-market operators targeting Germany’s Fourth Interstate Market (GlüNeuRStv).
Published by the trade bodies of DSWV (sports betting) and DOCV (online casino), the study conducted by Prof. Gunther Schnabl of the University of Leipzig, found that ‘around half of the online gaming activity in Germany takes place on illegal platforms’. Since the implementation of GlüNeuRStv rules on 1 July 2021, German consumers are believed to have flocked towards unlicensed EU (28.9%) and offshore (19.9%) operators.
Entain, which operates the German ‘top-three’ online sportsbook Bwin among its European portfolio, states that current GlüNeuRStv protections are overly restrictive, making legal gaming offers less attractive and driving consumers towards the black market.
The statement was made by Grainne Hurst, Entain’s Group Director of Corporate Affairs, speaking to the German news source GamesundBusiness.de: “Against this background, Entain calls for German gambling regulations to be consistently geared towards player protection in the future and to strengthen legal offers on the market. Their attractiveness is currently being severely limited by regulatory requirements, which is leading to users turning to black market offers.”
17.?? Danish regulator hands out two fines for unlicensed operator ads
The Danish gambling authority Spillemyndigheden has issued two fines totalling DKK 100,000 (￡11,612) over the online advertising of operators that didn’t hold a licence in the country.
Spillemyndigheden has stated that the person fined, who was not named, was the owner of two websites which “specifically referred to websites where players were able to play, even if they have self-excluded” by the regulator’s self-exclusion register ROFUS.
The regulator also noted that this is the first time a fine has been issued in a case “where specific reference was made to how players registered in ROFUS may play”.
Spillemyndigheden reported the person to the police earlier this year as it is not permitted to target advertising to the Danish public for sites without a licence.
#Tech:
18.?? iGaming Ontario seeks partner for central self-exclusion system
iGaming Ontario is to launch a request for proposals (RFP) to develop a centralised self-exclusion solution in the Canadian province.
The RFP seeks a solution allowing players to self-exclude from all Ontario-regulated igaming operators in a single registration process. iGaming Ontario, which regulates online gambling in the province, plans to launch the RGP in early 2024.
The winning bid will be expected to develop and implement a system that integrates with all operator systems. This should also support players’ self-exclusion registration, renewal and reinstatement.
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