Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. Financial updates, Caesars’ optimism at Vegas Grand Prix and New York prospects, EEG’s Bethard sale and crackdowns in the US states of Washington and Michigan all feature in our recap of a selection of the latest headlines.
Esports Entertainment Group is to sell its Bethard brand in a €9.5m transaction that comes less than two years after praising “another great addition” alongside an agreement to purchase the business.
Although EEG did not disclose the purchasing party, it was noted that the aforementioned price comprises €1.65m of cash proceeds payable at closing, as well as an additional €6.5m attributed to its release from payment of its contingent consideration liability from the Bethard acquisition.
The purchaser of the online casino and sports betting business will also assume liabilities of approximately €1.2m, with the terms also permitting a cash holdback of €150,000, which may be retained by the purchaser should liabilities exceed agreed upon amounts.
Closing of the divestment is anticipated to occur during the two-week period following the signing of the purchase agreement, subject to customary closing conditions, which was dated February 14, 2023.
Star Entertainment witnessed plummeting finances during the six months ending December 31, 2022, as the cost of a series of regulatory reviews weighed heavily on the company.
After being found unsuitable to hold a casino licence in New South Wales and Queensland, Star was subsequently hit with a pair of A$100m penalty packages as well as further remediation orders.
Furthermore, the operator is also the subject of enforcement action from Australia’s financial watchdog AUSTRAC, and currently counts four class action lawsuits being levelled against the group.
Citing these array of penalties, costs associated with the regulatory reviews and contribution towards the Bell review in NSW, in addition to the impairment of Sydney property assets, the firm has seen net loss through the aforementioned six month period plunge to A$1.26bn.
Caesars Entertainment CEO Tom Reeg has stated that he fully expects the upcoming Formula One Las Vegas Grand Prix in November to drive ‘Super Bowl-level activity’ for the operator in the city.
Speaking on an earnings call for its fourth quarter results, Reeg also noted that he expects digital operations to positively contribute to adjusted EBITDA in 2023, and he gave an update on the operator’s New York casino project.
“We continue to believe we’ve got the project that will open the quickest. We’ll start paying New York, the tax is the quickest. It’s in an area that doesn’t need zoning approval,” he said.
“Obviously, it is already tourist-focused but I can assure you, we are not going to be the one that wins because we built the biggest housing development outside of our casino.
“We’re going to win this on the merits of the property and how quickly we can get open and how well it fits into the local environment. If it becomes an arm’s race of who is going to spend the most money, we won’t win.”
A bill that could have legalised online casino operations in the US state of Indiana failed to receive a vote in the committee phase.
Last month, Representative Ethan Manning filed legislation – HB 1536 – in the Indiana House of Representatives which would have allowed for both online casinos and poker sites and regulated online lottery under the Hoosier Lottery in the state.
The bill was waiting for a hearing in the Public Policy Committee. However, the legislation failed to receive a vote before the state’s House committee report deadline of 21 February.
Tabcorp is looking to increase its online market share to 30 per cent within two years after the group posted better than anticipated numbers during the six months ending December 31, 2023.
As local media reported shots being fired at the long-term prospects of rivals such as Betr, Adam Rytenskild, MD and CEO, is looking to take a larger digital slice than the 25.1 per cent reported through H1 2022.
This figure, it was noted, represents the first time since 2019 that Tabcorp has held its digital revenue market share.
Catena Media once again basked in the delight of a strong North American performance, as a heightened sports showing, driven by the men’s football World Cup, offset a drop-off in the group’s casino segment.
As a strategic review concluded with a €45m sale of AskGamblers and associated brands to Gaming Innovation Group, revenue through the year’s final quarter dropped one percentage point to €31.53m (2021: €31.92m). For the full-year a slight uplift to €137.92m (2021: €136.11m) was felt.
These figures were significantly swelled by a strong showing across North America, where revenue rose 31 per cent and 24 per cent during the final quarter of 2022 and full-year to close at €21.46m (2021: €16.41m) and €84.4m (2021: €67.85m).
This was aligned to a robust performance in Maryland, which legalised licensed online sports betting in November, a strong World Cup, contributions from recently opened markets in New York, Louisiana, Ontario and Kansas, and a favourable run-up period prior to the launch of legal sports betting in Ohio on 1 January 2023.
The momentum enjoyed by the Pennsylvania gambling ecosystem through the past year continued into 2023, with January posting a further state-wide increase.
After toasting the success of another record year during the past month, the region’s Gaming Control Board disclosed that revenue from slot machines, table games, sports wagering, igaming, video gaming terminals and fantasy contests closed the first month of the year at $464.48m. This represents an 18.15 per cent uptick year-on-year from $393.14m.
Total tax revenue generated collectively through all forms of gaming and fantasy contests was $188.32m during January.
Agents from the Washington State Gambling Commission arrested an individual after a total of $300,000 was found to be missing following a routine inspection.
This saw those acting on behalf of the state regulator arrest Sara Lee Moon at the Veterans of Foreign Wars Post on theft charges, before she was later booked into county jail on four counts of first degree theft.
One year ago, the agents of the WSGC, which also reiterated a mission to “protect the public by ensuring that gambling is legal and honest,” conducted a routine inspection of gambling records at the VFW post that is located in the Washington state city of Prosser.
As a result, it was discovered that over $300,000 of funds were missing from gambling and bar accounts, which subsequently sparked the WSGC into beginning a criminal investigation into the VFW.
Investigators in the state of Michigan continued to crackdown on illegal gambling operations after seizing further cash and equipment following a latest raid.
This saw 36 machines, including computers used as slot-style gaming machines, freestanding slot-style gaming machines, table-mounted devices and a coin pusher offering, as well as more than $23,000 in cash confiscated from an alleged illegal operation in Delta Township.
Galaxy Entertainment Group once again reiterated confidence in the future performance of Macau despite encountering a series of struggles through the past year.
Echoing sentiments issued throughout the entirety of the past year, Dr Lui Che Woo, Chair of the operator, made the comments as part of a market overview that accompanied the publication of the group’s latest financial statement.
“Macau, like the rest of the world, continued to experience the impact of COVID-19 throughout 2022, with sporadic outbreaks in mainland China, Macau and Hong Kong and the subsequent travel and quarantine restrictions impacting visitor arrivals,” he explained.
“I am pleased to report that in early 2023 all the travel restrictions were lifted and Macau is well positioned to welcome mainland and international visitors in 2023.
“We are pleased with the reopening of borders in early 2023. Macau has experienced solid demand and associated revenue and we were particularly encouraged by the performance over the Chinese new year golden week. We are hopeful for a sustainable recovery and remain cautiously optimistic.”