Every week, CasinoBeats breaks down the numbers behind some of the industry’s most fascinating stories. Our latest headline reflection features financial results from the likes of Betsson, PENN Entertainment and Gaming Innovation Group, as well as an Australian AML fine.
251.9
Publishing its Q4 and full-year 2023 financial results, Betsson declared a group revenue of €251.9m for the quarter, a 14 per cent uptick year-over-year (Q4 2022: €220.6m) and an organic increase of 36 per cent in comparison to the previous year.
EBITDA for Q4 was €71.9m, up 40 per cent YoY (Q4 2022: €51.1m), with a margin of 28.6 per cent.
Operating income for the quarter was €57m, up 42 per cent YoY (Q4 2022: €40m) with a margin of 22.6 per cent, while net income was €43.3m (Q4 2022: €32.7m).
Q4 operating cash flow was €47.6m (Q4 2022: €75.5m), while net cash was €59.6m (Q4 2022: €65.7m).
For the full year, group revenue rose by 22 per cent to €948.2m (2022: €777.2m) with an organic increase of 40 per cent.
EBITDA improved in 2023 by 52 per cent to €262.7m (2022: €172.4m) with a margin of 27.7 per cent.
Operating income for the full year was €210.5m, up 60 per cent YoY (2022: €131.2m) with a margin of 22.2 per cent. Net income came in at €173m (2022: €114.7m) while operating cash flow was €230.4m (2022: €178.7m).
Reflecting on Q4 and 2023, CEO Pontus Lindwall commented: “Once again, the Group reports the highest levels ever for revenue and operating profit, marking the eighth consecutive quarter of sequential growth.
“The growth rate compared to the fourth quarter of the previous year should be viewed in light of the fact that the comparative period included the World Cup in football.
“Our vision is to offer the best customer experience in the gaming industry and an important feature of this is that we always offer competitive odds and chances for our customers to win. This simply means that sometimes players win a bit more and the sportsbook margin varies from quarter to quarter, depending on the sports results.”
8
SkyCity Entertainment Group has been informed by the New Zealand Department of Internal Affairs that it intends to file civil penalty proceedings against the operator for non-compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act.
The penalty outlines five separate causes of action which allege “significant compliance issues in relation to the act”, mostly related to historical matters, but some refer to previously self-reported non-compliance incidents as well.
If the department’s claim is accepted, SkyCity would be subject to a civil penalty imposed by the court as set out in subpart three of the act, which is assessed as a maximum liability concerning these claims of “NZ$8m in aggregate”.
SkyCity noted that it is “disappointed that it has not met the standard to which it needs to hold itself”, resulting in the penalty filing, and that it wishes to engage constructively with the department to resolve the matters expeditiously.
The company also referred to its AML/CFT enhancement programme that has been in place since late 2021 to “address compliance systems and correct historical shortcomings”, which involves significant investment in people and technology, as well as reviews of its processes and systems to identify areas for improvement.
The operator added that it is “committed to continuing to uplift its processes and systems, particularly with respect to AML/CFT and host responsibility matters”.
41
Catena Media declared a Q4 revenue from continuing operations of €14.5m, down 41 per cent in comparison to the previous year’s €24.5m.
For the full year, revenue stood at €76.7m, a 22 per cent decline year-over-year (2022: €98.6m).
Regarding North America, market headwinds caused revenue to fall by 43 per cent during Q4 to €12.3m, while for the full year, revenue fell by 21 per cent to €67.1m (2022: €84.5m). 85 per cent of Catena’s total group revenue came from North America.
Looking at where Q4 revenue has come from, 80 per cent of the total amount came from cost per acquisition agreements, followed by 17 per cent from revenue share deals and three per cent from fixed agreements
Following a reduction in marketing spend by operators and “stiffer competition”, new depositing customers from continuing operations during the quarter fell by 43 per cent YoY to 32,032 (Q4 2022: 56,040). 84 per cent of NDCs came from CPA deals, followed by 16 per cent from revenue share agreements.
For the full year, NDCs declined by 19 per cent to 184,257 (2022: 228,601).
Q4’s adjusted EBITDA from continuing operations decreased by 88 per cent to €1.5m (Q4 2022: €11.8m), resulting in a margin of 10 per cent (Q4 2022: 48 per cent). Full year adjusted EBITDA came in at €25.4m, down 47 per cent (2022: €48.4m), resulting in a margin of 33 per cent (2022: 49 per cent).
To bolster its operations, Catena has made several technical improvements to provide more value and enhanced user experience through stronger product offerings, improved brand function, positioning and impact, producing a “new level of content personalisation”.
This work is expected to create a “solid platform” and be “revenue-enhancing” from Q2 2024.
In addition, Catena believes that cost optimisation measures will bring high profitability and enable focused debt reduction and strategic investments.
The company will also lower its presence in markets that are unregulated and those with unclear frameworks, as well as transition to more revenue share deals, which it believes will produce higher and more sustainable revenue.
“We are currently implementing a wide-ranging internal investment programme – including large investments in both tech and AI – to fast-track our ambition to be the data- and technology-driven leader of online affiliate marketing in the sports betting and casino gaming space,” noted Catena CEO Michael Daly.
“These projects are significant in the context of our Q4 figures, which were disappointing and with which I am not satisfied. Planned and initiated earlier in 2023, the investments have since been accelerated. They are designed to position us for the future and also to restore the group to a sustainable long-term growth trajectory.”
1.4
PENN Entertainment declared a Q4 revenue of $1.4bn, down in comparison to Q4 2022’s $1.59bn. For the full year 2023, revenue stood at $6.36bn, a slight decline when compared to 2022’s $6.4bn.
Gaming revenue for the quarter stood at $1.04bn (Q4 2022: $1.27bn) and at $4.9bn for the full year (2022: $5.2bn).
Q4 net income came in at a loss of $358.8m (Q4 2022: $20.8m) and a $491.4m loss for the full year (2022: $221.7m).
Adjusted EBITDAR for the operator in Q4 was $112.5m (Q4 2022: $468.3m). For the full year, adjusted EBITDAR was $1.51bn (2022: $1.94bn).
PENN President and CEO Jay Snowden commented: “PENN delivered another quarter of solid property level performance while continuing to invest in our high growth digital business, which we believe will create significant long-term shareholder value.”
Property revenue across PENN’s portfolio in Q4 came in at $1.37bn, a narrow drop YoY (Q4 2022: $1.38bn). For the full year, property revenue was $5.7bn, down slightly in comparison to the previous year (2022: $5.75bn).
Per property region in the quarter, Northeast revenue led the way with $662.9m (Q4 2022: $667.1m), followed by Midwest with $290.6m (Q4 2022: $282m), South with $285.1m (Q4 2022: $304.4m) and West with $133.7m (Q4 2022: $130.7m).
Adjusted EBITDAR for properties in Q4 stood at $476.4m (Q4 2022: $487.1m) with a margin of 34.7 per cent. For 2023, property adjusted EBITDAR was $2.03bn (2022: $2.11bn).
“Property level performance this quarter benefited from strong customer demand trends, mild weather, and our focus on customer experiences and operational excellence,” added Snowden.
“Notably, 10 properties spread across our portfolio achieved their highest ever fourth quarter revenue, demonstrating the benefits of our geographic diversity and unique omni-channel strategy.”
22
Witnessing robust performance across 2023’s fourth quarter, MGM Resorts posted consolidated net revenue of $4.4bn, up 22 per cent year-over-year (Q4 2022: $3.6bn).
Casino revenue during the quarter rose to $2.2bn (Q4 2022: $1.5bn), followed by rooms at $1bn (Q4 2022: $897.9m), food and beverage at $727.9m (Q4 2022: $710.6m) and entertainment, retail and other at $422m (Q4 2022: $421.7m).
Operating income for the quarter was $419m, an increase on the operating loss of $2m in the prior year quarter due to a net revenue uptick and a “decrease in amortization expense of $1.2bn relating to the MGM Grand Paradise gaming subconcession, partially offset by a $1.1bn gain on the disposition of The Mirage in the prior year quarter”.
Net income came in at $313m (Q4 2022: $284m) while consolidated adjusted EBITDAR was $1.2bn.
For the full year, MGM Resorts reported consolidated net revenue of $16.2bn, up 23 per cent YoY (2022: $13.1bn), with casino revenue coming in at $8.1bn (2022: $5.7bn), rooms at $3.5bn (2022: $3.1bn), food and beverage at $2.9bn (2022: $2.6bn) and entertainment, retail and other at $1.6bn (2022: $1.7bn).
2023 net revenue rose “due primarily to an increase in revenue at MGM China and an increase in non-gaming revenues at Las Vegas Strip Resorts, partially offset by a decrease in casino revenue at our Regional Operations”.
Reflecting on the Q4 and 2023, MGM Resorts CEO and President Bill Hornbuckle stated: “Our Las Vegas Strip Resorts and MGM China set new all-time records for full year and fourth quarter Adjusted Property EBITDAR.”
“Our premium positioning and offerings in Las Vegas enable us to capture incremental profit during major events such as the inaugural Formula One race and our first Super Bowl. 2024 is off to a winning start with the launch of our Marriott relationship as well as opportunities to increase our convention room nights and international mix.”
37
Gaming Innovation Group made progress with splitting its platform and media units into standalone businesses in 2024, as it recorded ‘all-time high’ Q4 2023 revenues of €35.6m, up 37 per cent on the Q4 2022 results of €26m.
Continuing momentum in what was a successful run of growth for GiG, the group achieved FY2023 revenues of €126m, up 41 per cent on 2022 comparative results of €91m, with the firm’s adjusted EBITDA standing at €61m (FY2022: €34m).
An elevated commercial prospect was enhanced for GiG Media as its business was enhanced by the acquisition of Kafe Rocks, boosting the group’s online casino media and lead generation business for North and South American markets.
As cited by Chair, Petter Nylander: “The finalisation of the KaFe Rocks acquisition in December 2023 aligns strongly with our ambition to maintain our position as the leading casino affiliate in the industry.
“We are confident in the quality of the acquired assets and see significant potential for growth, particularly in the North American and LatAm markets.”
Nylander concluded on a positive period for the group: “We remain committed to our strategic objectives, including the planned split of the company into two separate entities, GiG Media and Platform & Sportsbook. This strategic move will unlock new growth opportunities and maximise value for our shareholders.
“As we approach the split in 2024, we are confident in setting new long-term financial targets for both GiG Media and Platform & Sportsbook. With our strong performance, diversified earnings, and robust growth prospects, we are well-positioned for success in the years to come.”
