Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. A huge fine for Crown Resorts in Australia, litigation victories being claimed by Flutter Entertainment and Fox, Dutch regulatory warning over insufficient controls of behaviour and a Department for Education reprimand all feature as we recap a selection of last week’s headlines/
The Department for Education was hit with a reprimand by the UK’s data protection regulator after it was discovered that gambling companies had been permitted access to pupils’ learning records.
The Information Commissioner’s Office issued the warning following what it called a “prolonged misuse of the personal information of up to 28 million children”.
An inspection found that the DfE had granted Trust Systems Software UK, trading as Trustopia, an employment screening firm, access to the database for age verification purposes in helping gambling companies confirm whether customers were over 18.
This data sharing, said the ICO, meant the information was not being used for its original purpose, which is against data protection law.
John Edwards, UK Information Commissioner, stated a £10m fine would have been warranted due to the serious nature of the breach, however, any money gained as such “is returned to government, and so the impact would have been minimal,” it was noted.
Crown Resorts’ Melbourne-based gaming venue received a mammoth A$120m in fines from the Victorian Gambling and Casino Control Commission.
This became the second such action brought against the company by the regulator following the state’s royal commission into the group, with the financial penalty taking the company’s Victorian total to $200m. In May of this year the VGCCC fined Crown $80m over its China Union Pay process.
Coming in the form of two fines for a failure to address responsible service of gambling obligations, the company has accepted the disciplinary action as well as the need to continue working on reforms to address these and other protocols.
In elaborating on the failing, the VGCCC shared that “Crown Melbourne consistently and for many years failed to intervene, when it should have, with those of its customers who were demonstrating the indicator of gambling harm constituted by often gambling for long periods without a break”.
Flutter Entertainment and Fox Corporation each claimed victory after a more than 18 month legal battle was brought to an end by a New York arbitrator.
This related to the pricing of an 18.6 per cent stake in FanDuel, a brand which Flutter owns approximately 95 per cent of, that Fox has won the right to acquire.
However, despite winning the right to purchase a portion of the online casino and sports betting brand, the ruling, which was delivered late last week, has deemed a $3.72bn valuation that is higher than that being sought by Fox.
On April 7, 2021, Fox commenced the proceedings over the pricing dispute, with the group arguing that the potential payment should be based on an implied valuation of $11.2bn that Flutter shelled out to secure a 37.2 per cent stake Fastball a little over four months earlier.
However, the tribunal determined that fair market value is that of $20bn, based on the valuation submissions of both Flutter and FOX.
DraftKings maintained that “there’s a lot to be excited about” amid a potential uplift in online sports betting and igaming through 2023, despite an anticipated Californian setback as American midterms commence.
Jason Robins, Co-Founder, Chair and Chief Executive Officer, addressed a journey through 2023 following a “very strong” third quarter that saw revenue guidance for the full-year raised and profitability goals reiterated.
“Based on the states that reported operator-level handle and GGR data through September, we are capturing GGR share that is at or above our long-term target as industry activity continues to coalesce toward a very limited number of operators,” Robins said.
Adding: “2022 has been a transformative year for DraftKings. We have shifted more attention toward cost controls and our path to profitability.
“We identified over $100m of annual cost savings and has significantly slowed year-over-year fixed cost growth as evidenced by our Q3 results.”
Beleaguered Australian casino group Star Entertainment was hit with a second class action lawsuit after law firm Maurice Blackburn filed proceedings in the Supreme Court of Victoria.
Confirming the action, Star, which signalled an intention to defend the proceedings, noted that the allegations refer to the period between March 29, 2016, and March 16, 2022.
During the time, it is alleged that the company made misleading representations, including about its systems and processes for compliance with anti-money laundering and counter-terrorism financing obligations, that it failed to disclose relevant information it had about those matters to the market, and conducted its affairs contrary to the interests of the members of the group as a whole.
Maurice Blackburn also confirmed that the class action will claim that Star engaged in misleading and deceptive conduct. breached its continuous disclosure obligations. and conducted its affairs contrary to the interests of shareholders as a whole in the period.
PENN Entertainment is “very optimistic about our future” across the interactive segment, a position that is buoyed by its impending full acquisition of Barstool that is to be finalised during the early stages of 2023.
These comments came off the back of the company disclosing “another solid quarter” where the competitive and promotional environment was said to have largely remained stable despite continued economic headwinds.
“Given our strong revenue growth, disciplined approach to marketing and the fact that our interactive segment was profitable in October, we remain confident in our ability to deliver profitability in 2023”, Jay Snowden, Chief Executive Officer and President, said in an Q3 earnings call.
In addition to heaping much praise in “high-growth projects” across the land-based ecosystem, where the company is to continue to reimagine properties to appear to a 21 to 44-year-old segment that has experienced “strong growth,” it is added that “we are very encouraged by the recent performance of our interactive segment”.
The Dutch gambling regulator issued an instruction to a pair of online gaming providers, as well as a reminder to the industry, after violations of the country’s Money Laundering and Terrorist Financing (Prevention) Act (WwFt) were unearthed.
This followed a market-wide preliminary study into compliance obligations that was conducted earlier in the year, following which it was discovered that the two unnamed licence holders did not sufficiently control the gaming behaviour of the players.
After user data was closely examined, it was found that players, including young adults, were able to lose and top up tens of thousands of euros in a short period of time, without the providers having to intervene or investigate.
Among the discoveries was that of a 21-year-old that lost €17,000 between October and December 2021, a 26-year-old who gambled almost €114,000 euros in November 2021, a 23-year-old that lost €87,000 between October 2021 and March 2022 and a 29-year-old that made €27,000 in bets across a two week time frame.