Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. An Australian inquiry into Entain, the race for gaming concessions in Macau, another potential yearly revenue record in the US and Kindred’s strategic direction all feature as we recap a selection of last week’s headlines.
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Australia’s Star Entertainment Group was found to be deemed unsuitable to hold its casino licence within New South Wales after Adam Bell delivered a damning report following an extensive inquiry into the company.
“Many governance, risk management and cultural failings” were reported as being discovered, with Star, which had placed a trading halt on its shares earlier in the week, found to have treated the state regulator “with disdain” and having delivered “deceptive” communications in the past.
Subsequently the NSW Independent Casino Commission issued the firm with a show cause and is considering its options for disciplinary action, which could include a licence cessation or hefty fine. The Star has 14 days to respond.
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All six current Macau operators detailed applications for one of the autonomous region’s fresh gaming concessions, with Inside Asian Gaming also confirming that a seventh party entered the fray.
Wynn Macau was the first to signal its application for one of six available ten year concessions, followed by the remaining five current holders of MGM China, SJM Holdings, Las Vegas Sands, Melco Resorts and Entertainment and Galaxy Entertainment.
However, local media report that in the closing hours before the Macao SAR Government ended the application process, a group named GMM, which is linked to Genting Group Chair and CEO Lim Kok Thay, also threw its name into the hat.
The awarding of a new 10-year gaming concession contract would permit the operation of games of chance or other games in casinos in Macau, commencing on January, 1 2023.
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US commercial gaming is set to surge to yet more records through 2022 despite the macroeconomic environment and budget concerns across the country, reported the American Gaming Association.
This came as revenue through July increased 2.8 per cent year-on-year to $5.06bn, which in turn represented a third highest monthly performance and fourth in the last five to crack the $5bn barrier. For the year-to-date, revenue rose 15.5 per cent to $34.27bn.
Sequentially, July revenue jumped eight per cent driven by an 8.6 per cent increase in land-based gaming from June, with sports betting and igaming also up 7.9 per cent and 1.2 per cent, respectively.
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Kindred outlined its long-term strategic direction and priorities for the coming years, which includes taking a 15 per cent market share in the Netherlands by the close of 2022.
Developing a strong position in the region, which it noted is “expected to grow significantly in the coming years,” complements a further aim of taking additional share across the wider European continent as well as Australia.
Alongside this, a series of 2025 financial expectations were also outlined, with Kindred anticipating reaching £1.6bn at the close of that year. This would represent a 27 per cent increase from 2021’s £1.259bn.
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Australia’s financial watchdog commenced enforcement action against Entain to assess if the sports betting and gaming group has complied with anti-money laundering and counter terrorism financial laws.
AUSTRAC said that this follows “an extensive supervisory campaign” that assessed entities within the corporate bookmakers sector.
Furthermore, it was added that the supervisory campaign, which will focus on whether Entain has complied with AML/CTF obligations, could lead to further areas of focus in this sector.
The financial regulator also noted that it has a range of regulatory tools and enforcement powers available, stating that it “will not hesitate to take action where suspected non-compliance is identified”.
Entain’s Australian business operates online under the Ladbrokes, Bookmaker and Betstar brands, with the firm also acquiring Neds International in 2018 for an initial A$68m. In 2021, the firm also looked at further strengthening its position via a possible takeover of Tabcorp’s TAB betting division.
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Hard Rock International and Seminole Gaming pulled the trigger on a widespread $100m investment that will deliver pay rises for over half of the pair’s US workforce.
These increases apply to US employees, including new hires, at company owned casino, hotel and café locations across 95 job classifications, with cooks, housekeepers, security, public space, call centre staff and more said to be among the greatest impacted.
The new starting wages range between $18 and $21 an hour, which, it said, is more than two and a half times the Federal, and exceeds each US state, minimum wage. In some cases, starting wages are up over 60 percent.
The aforementioned $100m outlay in team members forms part of an ongoing effort to honour and appreciate its workforce, which has recently included paying frontline employees bonuses during the pandemic and other expanded benefits.
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Metropolitan Gaming offloaded its South African casino interests in a move that the firm said is reflective of a focused strategy to invest and develop facilities across primary markets.
After purchasing 11 venues across the United Kingdom, Egypt and South Africa from Caesars Entertainment in August 2021, the casino and entertainment firm added the Park Lane Club London in June 2022 in what was reported as “an excellent addition”.
This latest development has seen the sale of its interest in Emerald Resort and Casino, which is located in the South African city of Vanderbijlpark, be made to a consortium controlled by Tsogo Sun.
This divestment, said Metropolitan, will allow an enhanced focus to be placed on its “core markets” of the UK and Egypt, where it is looking to build its brand through acquisition and investment.
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International Game Technology, through its IGT Lottery subsidiary, completed the €700m divestment of its Italian proximity payment business to PostePay.
This negotiated sale price represented an enterprise value of €630m and approximately €70m of net unrestricted cash. It is estimated that €140m in unrestricted cash is said to be held at closing.
The gaming firm noted that this increase in unrestricted cash is primarily attributable to timing of vendor payments and operating cash flows generated since December 31, 2021.
The business being sold generated in the region of €228m in gross revenues and approximately €40m in EBITDA through 2021, with IGT adding that the price reflects “a valuation multiple in line with the most recent Italian transactions in the proximity payments sector”.
