iGaming Wrap-Up of CW 49-50
#iGaming News of the week
0.?????? CEO Jette Nygaard-Andersen steps down amid investor pressure
Entain, parent company of Ladbrokes and co-owner of BetMGM, is undergoing shifts in leadership as CEO Jette Nygaard-Andersen steps down amidst mounting pressure from investors and a lackluster stock performance.
In an official statement released on Wednesday, Entain announced that Stella David, presently a non-executive director, will take over as interim CEO this week, filling Nygaard-Andersen's position.
The company's shares, having dipped approximately 37% during Nygaard-Andersen’s nearly three-year tenure, showed a 4.9% surge in London trading following the news.
Despite BetMGM’s revenue growth amid the expanding US sports betting market during Nygaard-Andersen’s tenure, activist investors criticized her for what they deemed poor deal-making decisions.
The company engaged in around ten deals since 2021 under her leadership, aiming to expand its global presence. However, the recent funding strategy for a bid on Polish sports betting firm STS Holding, utilizing an equity sale, was met with severe disapproval from investors, including activist fund Eminence Capital.
#Breaking News
1.?????? DAZN seeks $1bn to continue growth across multiple sports & regions
Bloomberg revealed that DAZN officials have already held conversations with potential investors in order to raise capital as part of a potential investment round, with a $1bn ballpark figure being revealed by an undisclosed source.
This comes as the company – which launched its sports betting and gaming division DAZN Bet in 2022 – is due to release its 2023 financial results, which are expected to reveal narrow losses compared to that of the year prior.
Fresh investment would indicate that DAZN will continue its large-scale growth across multiple sports and regions, in which it has obtained the broadcast rights to the Serie A and UEFA Women’s Champions League in Europe.
The streaming platform has also gained rights for NFL games and the Professional Fighters League (PFL), but has invested heavily into its boxing division, becoming one of the go-to broadcasters to watch the sport.
Despite the size of its portfolio, it is unclear where the company will use the potential $1bn to invest next, having missed out on the domestic rights for the Premier League and the upcoming NBA broadcast deal expected to be highly competitive.
2.?????? Sportradar scores global tennis data and streaming deal with ATP
Sportradar has agreed a global data and streaming rights deal with Tennis Data Innovations (TDI), a joint venture vehicle of the Association of Tennis Professionals (ATP) and ATP Media.
The multi-year deal grants Sportradar data and streaming rights for betting, as well as media data rights. The agreement covers all tennis events on both the ATP Tour and ATP Challenger Tour.
Sportradar said the partnership will focus on driving commercial growth for tennis and also improving fan engagement opportunities. This will include developing new betting and media products.
From this month, Sportradar will use its ATP Service+ suite of solutions to boost engagement with fans by providing value-added products and services. Features in ATP Service+ include augmented streaming, expanded in-play betting markets, video highlights and personalised and targeted betting products.
Sportradar will also work with TDI to create products for media. These, it said, will showcase more in-depth statistical analysis and insights to inform and entertain fans. It will also utilise its OTT solution to stream live coverage of ATP Challenger Tour matches on ATP’s Challenger TV.
3.?????? New gambling bill aims to outlaw online and parallel betting in Macau
Macau’s government has drafted a new legislative bill featuring an explicit ban on online betting, as well as harsher penalties for those conducting illegal gambling activities. The bill also aims to explicitly define and outlaw the practice of so-called parallel betting or side betting. It was announced by Macau’s secretary for administration and justice André Cheong Weng Chon, who is also the spokesman for the government’s top advisory executive council.
If approved, the bill will replace Macau’s current criminal law on illegal gambling, which was established in 1996.
Given that Macau’s current gambling law was introduced before the proliferation of online betting, the new bill proposes an explicit ban on the operation, promotion and organisation of all online gambling activities, regardless of whether the respective IT systems and equipment are installed in Macau.
Another key element of the new bill is to introduce an explicit ban on parallel betting, sometimes called side betting.
Under this system, players can bet a given amount in Macau’s casinos, with the understanding that all bets are in fact of a higher value – for example by multiplying each bet by a factor of 10, or by placing bets in Hong Kong dollars with the understanding that the “real” bet value is in US dollars.
4.?????? Brazil: Senate approves regulation of online sports betting, casinos left out of proposal
After several delays, the Brazilian Senate has approved the basic text of Bill 3626/2023, which sets out the rules for the launch of sports betting at the national level. However, the Senate has sent the bill back to the Chamber of Deputies for another vote having made amendments.
The Senate upheld the appeal of Liberal senator Carlos Portinho to remove online casino from the bill. Former rapporteur Adolfo Viana of the PSDB had proposed the addition of igaming to the bill in September. Meanwhile, the Senate also rejected an amendment that would have banned gambling advertising for sports teams and arenas. It also rejected a proposal from senator Tereza Cristina who sought to remove physical betting machines.
As for taxes, the Senate maintained the rates proposed by the Senate Economic Affairs Commission (CAE), which involve a 12 per cent tax rate on sports betting operators and a 15 per cent tax on player prizes. These rates are lower than the 18 per cent and 30 per cent rates put forward by the Ministry of Finance.
5.?????? ESPN Bet captures 6% of Maryland market during opening month
The end goal for Penn Entertainment, ESPN, and the newly launched ESPN Bet is 20% market share. That is not coming overnight, however. In its first month of operation in Maryland, the rebranded app did nab 6.2% of monthly handle with $33.3 million in wagers.
That benchmark already exceeded any month of performance by Barstool Sportsbook during the year it was operational in the state. However, that performance did come with heavy promotional spending. A total of $13 million of the $33.3 million came in the form of promo credit. With so much promotional credit, the sportsbook posted $0 in taxable revenue for the month despite ESPN Bet generating $4.2 million GGR.
The performance by ESPN Bet puts it fourth behind BetMGM but ahead of Caesars Sportsbook for the month. Fanatics Sportsbook rounded out the top five. The state also posted the best hold for the month at 12.5%. No other operator managed double-digt hold for the month. The next-closest competitor was DraftKings at 8.1%.
6.?????? How the gambling landscape may look in Finland in 2024 and beyond
Following the recent big announcement by the Finnish government to restructure its gambling system, many gaming enthusiasts are curious to know what the Finnish gambling landscape may look like in years to come. Will Veikkaus, the state-owned gambling monopoly, loosen its dominance and control and allow more operators to join the market? How will these new reforms affect punters?
In this article, our team of Finnish gambling experts answered these questions and delved into the current state of gambling in the country. We also gaze into the crystal ball to share our view of what we believe the gambling landscape may look like in 2024 and beyond.
7.?????? New York mobile sports wagering handle exceeds $2bn for consecutive months
The New York Gaming Commission has reported its mobile sports wagering figures for November, recording its highest ever figure for mobile sports wagering handle, valued at $2.1bn.
This comes a month after the Empire State alrady became the first state in the US to surpass the $2bn handle mark in October, meaning total mobile sports wagering handle in New York for the current fiscal year has risen above $12bn.
Despite the continued increase in wagering handle, mobile sports wagering gross gaming revenue did decrease in the month of November to $150.9m from $166.3m in October, but it was enough to mean that, for the current fiscal year, gross gaming revenue for mobile sports wagering has surpassed $1bn.
Looking on a more individual basis, the month of November saw FanDuel Sportsbook increase its mobile sports wagering handle from $891.9m in October to $925.4m. Meanwhile, BetMGM recorded a third month in a row in which its mobile sports wagering handle hit over $100m – sitting at $120.6m for November; DraftKings Sportsbook increased its mobile sports wagering handle from $652.3m in October to $732.1m, while Caesars Sportsbook surpassed $200m in its mobile sports wagering handle for the first time in the 2023/2024 current fiscal year.
#US / Canada
8.?????? US ethics committee chair under fire for Evolution stock purchase
The chair of the US House Committee on Ethics has come under fire for purchasing stock in live casino supplier Evolution. Michael Guest has faced criticism on social media and in online news outlets for the purchase, which he made alongside several other tech stocks, including Uber and Dynatrace. All stock purchases were relatively small transactions overall at between $1,000 and $5,000.
However, it is Guest’s position as chair of the Ethics Committee, established by the House of Representatives, which has raised eyebrows.
Evolution is an online slots and live dealer provider which offers its services in many of the world’s regulated and grey markets. iGaming, or online casino, is only legal so far in six US states.
Guest previously found himself in hot water for his stock market trading in 2021, after Business Insider reported he failed to properly disclose purchases according to the rules of the STOCK act.
9.?????? FanDuel lobbied to remove AML requirements in New York
FanDuel’s lobby efforts against responsible gaming rules in New York have been drawn into question following a Guardian report into its activities.
The US operator tried to lobby the New York State Gaming Commission to remove several of its problem gaming and anti-money laundering protections, according to documents dated 18 October. Among these, FanDuel argued to regulators that state anti-money laundering requirements should be eliminated altogether. It also suggested removing the requirement for an annual compliance statement.
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Other lobbying efforts included an objection to a proposed rule that would limit the use of keyword “attract persons…who are or may be problem gamblers.”
10.?? DraftKings to defend class action lawsuit from “Big Tobacco” litigators
The US law professor who masterminded the litigation strategy that led to a $206bn settlement from Big Tobacco is backing a class-action lawsuit against sports betting operator DraftKings over an “unfair and deceptive” promotional offer.
The lawsuit, filed in the Massachusetts Superior Court on Friday, alleged that the US company, which operates the second most popular sports betting app, “knowingly and unfairly designed” a $1,000 sign-up bonus with the aim of misleading new customers into joining the platform to “maximize” the money wagered. Two Massachusetts residents are plaintiffs in the class action.
The case is funded by the Public Health Advocacy Institute (PHAI), a Boston-based advocacy group chaired by Professor Richard Daynard, who spearheaded litigation against the tobacco industry in the 1980s. DraftKings’ Boston headquarters are located a mile from Northeastern University, where Daynard teaches.
The class action comes on the heels of a 2018 Supreme Court ruling liberalising the industry. Massachusetts legalised online sports betting this year, bringing the number of US states that have done so to 27. The market is expected to generate $8.5bn in gross revenues this year in the US, according to Eilers & Krejcik Gaming.
11.?? Seminole Tribe to file amicus brief in Florida betting case
The Seminole Tribe of Florida will file an amicus brief in support of Ron DeSantis in the state’s Supreme Court sports betting case. The Florida Supreme Court granted the request on Friday, meaning the tribe at the heart of West Flagler’s dispute with the state will be able to make its voice heard in the proceedings.
An amicus curiae brief – literally “friend of the court” brief – is a legal filing in which a party not directly involved in a case files a document offering additional insight or expertise.
The case concerns the Seminole Tribe’s compact with the state of Florida, and whether the governor and legislature had the power to approve it.
Among other measures, the compact granted the tribe the exclusive rights to offer online sports betting in the state through a “hub-and-spoke” model.
12.?? Kentucky sportsbooks took $340M in wagers during first two months
The Kentucky Horse Racing Commission released its first revenue report, giving some insight into how operators are faring in the Bluegrass State.
Across September and October, Kentucky sportsbooks took almost $341 million in bets at retail and online sportsbooks in the state. For most of September, only retail wagering was available. Those books collected $9 million in bets, a number that dipped in October to $8.1 million.
On the online front, the handful of days online sports betting was live in September produced $36.8 million in bets. That number jumped tremendously during the first full month of operation. October’s handle amounted to $286.8 million.
As in most other states, FanDuel and DraftKings dominated the action. FanDuel generated $116 million in handle while DraftKings put up $109.5 million. Bet365 was a distant third with $28.6 million in bets. BetMGM and Caesars Sportsbooks were nearly even with $12.8 million in handle each. Fanatics posted $4.4 million in bets, with the dormant Barstool Sportsbook bringing up the rear with $2.7 million in wagers.
13.?? Colorado the latest to reach $1 Billion in operator gross revenue
Colorado became the 10th state to surpass $1 billion in operator gross sports wagering revenue in the post-PASPA era Tuesday after the state’s Department of Revenue reported winnings totaling more than $46.9 million for October.
It took the Centennial State 42 months to reach the benchmark, having launched sports betting during the COVID-19 pandemic in May 2020. October’s gross revenue ranks second all-time, trailing only the $51.3 million attained in September of last year.
October’s handle also ranked No. 2 overall, as operators accepted $554.9 million worth of wagers. There was plenty of action via mobile betting apps, which accounted for all but $4.4 million of the handle.
It was the second straight month and eighth time overall Colorado cleared $550 million in wagers, with all eight occurrences in the last 22 months. Only the $573.7 million in bets accepted in January 2022 ranks higher.
14.?? Indiana Sports Betting Handle Hits Record $513 Million In November
The Indiana Gaming Commission reported a record monthly sports wagering handle of $513.7 million for November on Tuesday, but the betting public rose up to limit operators to their lowest hold in 21 months.
It was the second time the Hoosier State surpassed one-half billion dollars worth of wagers, with the previous record of $500.1 million set in January 2022. The recently launched ESPN BET played a part in landing the new record, as its $27.5 million worth of accepted wagers — more than 5.3% of the overall amount — was an all-time high for PENN Entertainment in Indiana.
Mobile handle reached an all-time high of $496.8 million, and while the IGC does not release revenue totals by sport category, bettors wagered a record $169.8 million on parlays, accounting for 33.1% of the total handle. Indiana bettors have generated $1.17 billion in parlay handle this year, which is within $3.9 million of the full-year 2022 total.
15.?? Tennessee passes $500m handle for first time in November
Tennessee reported $515.5m (￡412.0m/€477.8m) in gross handle for November, the state’s Sports Wagering Advisory Council announced on Monday (11 December).
It is the first time handle has passed $500m in a month since sports betting went live in Tennessee in November 2020.
The 16.2% increase was a marked improvement from the 6.2% rise recorded in October. It fell short of the 72.9% month-to-month growth seen in September, although that coincided with the NFL and college football seasons getting underway.
Gross wagers also surpassed $500m for the first time, receiving $517.1m for the month. This is up 17.7% from November last year, while it is a 41.4% increase on November 2021.
#M&A & Finance
16.?? EEG suspends dividend payment amid company restructure
Esports Entertainment Group (EEG) has “temporarily suspended” dividend payments on its Series A Preferred Stock.
The decision to halt the dividend, the next payment being due in December, comes after a difficult Q1 report which saw revenue fall 72.0% compared to the same period in 2022.
Esports Entertainment also reported its net loss had widened to $4.8m from $4.2m the previous year, despite the impact of wide-ranging cost-cutting measures.
However, CEO Alex Igelman said the suspension resulted from the company’s long-term strategy, as opposed to a cash shortfall. As such, Igelman said the company believed “we can effectively reinvest the capital in the business in order to drive the greatest return on capital for shareholders.
“This is an exciting time for Esports Entertainment, as we execute on our turnaround strategy and position the company for long-term success.
#Legal & Regulation:
17.?? Cura?ao cuts cost of annual licence fee in latest regulatory reveal
Javier Silvania, Cura?ao's minister of finance has announced the fees that must be paid to obtain licences under both the current law and the incoming National Ordinance for Games of Chance (LOK).
Under the current law, licences are not split into B2B and B2C – instead, B2B and B2C are classified as just one licence type. For this single licence type, the application fee sits at zero. The annual fee is ANG36,000 (￡15,958/€18,623/$20,090), while the monthly fee is ANG7,000. Up to 40 domains are included in the licence.
Under the incoming LOK draft for B2C licences, the licence application fee will be ANG9,000, plus one-off due diligence fees between ANG250 and ANG500 per person. The amount of due diligence paid is dependent on each person’s role.
The annual fee is ANG48,000, while the monthly fee is ANG4,000. A total of ANG500 per annum must be paid per domain. There are an unlimited number of domains under B2C licences.
18.?? GamCare: Overlap between crypto investment & gambling harm
A high-profile UK problem gambling treatment charity has drawn parallels between cryptocurrency investment and betting and the harm, financial and otherwise, this can cause.
GamCare had commissioned a research project by YouGov to examine investments made by the UK public, with a survey of 4,200 adults finding that 40% lost money on cryptocurrency in comparison to 34% who made financial gain.
Making comparisons to gambling, GamCare also cited that people experiencing harmful gambling are more likely to own cryptocurrency than the general population. The quantitative difference was shown in statistics of 51% against 11%.
“For many consumers, cryptocurrency purchases are a way to diversify their investment portfolio,” said Raminta Diliso, GamCare Financial Harm Manager.
“However, what we have seen on the National Gambling Helpline over the past few years is that serious harm can occur if it goes too far and it’s not always the get-rich-quick opportunity some people may think it is.
Navigating through the ever-changing landscape of the iGaming industry is like sailing the vast ocean ??. As Steve Jobs once said - The people who are crazy enough to think they can change the world, are the ones who do. Let's continue to innovate and lead the way in responsible gaming. ??? #Innovation #Leadership #ResponsibleGaming