Every week, CasinoBeats breaks down the numbers behind some of the industry’s most fascinating stories. Our latest headline reflection features financial results from Entain, an increase in Portuguese self-exclusions and 888’s strategic review in the US.
40
Entain warned that 2024 EBITDA will likely be impacted by almost £40m due to continued regulatory adjustments in the UK and the Netherlands.
Publishing its financial results, Entain declared net gaming revenue – including its joint venture in BetMGM with MGM Resorts International – of £4.83bn, up 11 per cent when compared to 2022’s £4.35bn.
Excluding US operations, revenue came in at £4.77bn, an 11 per cent uptick year-over-year (2022: £4.3bn).
In 2024, Entain noted that it is trading “in line with expectations” year to date. Brazil is showing “early signs of benefits from the improvements” initiated in 2023, while the BetMGM went live in Nevada and the single account single wallet will be introduced later this year in addition to further product improvements.
In the UK, Entain stated that it was looking forward to the implementation of online slot stake limits and potential uniform safer gambling measures agreement across the market.
While the group expects these changes to be positive in the long run, “continued player disruption” in the short term could occur, but investments could take place in the market to grow market share.
For the Netherlands, Entain stated that proposed tighter deposit limits by the Dutch regulator Kansspelautoriteit from Q2 2024 have the potential to impact 2024 EBITDA.
As a result, the group expects “in aggregate, these dynamics could reduce FY24 EBITDA by approximately £40m”.
215,000
Portugal’s gambling regulator, Serviço de Regulação e Inspeção de Jogos, has reported that online self-exclusion registrants reached 215,000 in the fourth quarter of 2023.
In addition, the regulator noted that while online gaming gross revenue improved year-over-year by over 16 per cent, land-based gaming revenue dropped by almost four per cent.
Publishing data for Q4, the SRIJ declared a 16.4 per cent increase in gross revenue when compared to the previous year, coming in at €227.4m (Q4 2022: €195.3m). Q4’s revenue was also a 5.6 per cent improvement on the previous quarter’s €215.3m.
From the 17 licensed games of chance operators and 13 licensed sportsbooks in Portugal, games of chance revenue stood at €154.5m, up 40.7 per cent YoY (Q4 2022: €109.8m), while sports betting revenue fell by 14.8 per cent to €72.8m (Q4 2022: €85.4m).
Per gaming type, slots had the biggest share of games of chance wagers placed during the quarter at 83 per cent, followed by French roulette at 6.9 per cent, blackjack at 4.7 per cent, dice games at 3.3 per cent, poker at 1.2 per cent and poker tournaments at 0.8 per cent.
For sports betting, the regulator stated that football bets led the way at 74.7 per cent, followed by basketball at 10.8 per cent, tennis at 9.7 per cent and others at 4.8 per cent.
According to the SRIJ, the total number of players during Q4 was 4.1 million, up 15.7 per cent when compared to the same period last year (Q4 2022: 3.6 million), while the number of new player registrations was 319,500, 6.3 per cent more than the same quarter the previous year.
The number of players who self-excluded during the reporting period rose by 41.6 per cent to 215,000 (Q4 2022: 151,800).
21
Belgium has revised regulations within its gambling act to improve player protection, confirming that the legal gambling age will be raised from 18 to 21.
The modifications to the Belgium Gambling Act have been posted in a press release on the Gaming Commission’s website following publication in the Belgium Official Gazette.
Set to come into force on September 1, 2024, the Commission stated that the new laws include:
- prohibition of devices “3.3”
- ban on the cumulation of online licences on the same website
- ban on gifts/bonuses/free games
- ban in principle on advertising games of chance
- age limit of 21 years and refund in case of no control
In addition, the Commission said that it is seeking “the attention of licence holders E to the adjustments required for bingo and reduced-stakes gaming devices operated in Class III gaming establishments, so that the necessary adjustments to these devices can be implemented in a timely manner”.
The new measures are being implemented with the goal of improving the protection of players with licensed Belgian operators.
Raising the legal gambling age limit to 21 will bring sports betting, arcades, and bingo in line with age requirements at land-based casinos that have been in force since 2018.
11.4
Spelinspektionen has declared a slight year-over-year drop in Sweden’s gambling market turnover for the fourth quarter and across the full year of 2023, with the state-owned casino games segment falling the most at 11.4 per cent.
Combining data with the Swedish Tax Agency, the gambling authority reported that gaming companies with a Swedish licence reported a 2023 turnover of SEK 27.1bn (€2.41bn), a 1.2 per cent decline in comparison to the previous year (2022: SEK 27.4bn).
Per vertical, Casino Cosmopol state-owned casino games saw the biggest turnover decrease over the year, falling by 11.4 per cent to SEK 475m (2022: SEK 536m). State-run lotteries and slot machines also dropped, falling 3.6 per cent to SEK 5.6bn (2022: SEK 5.8bn).
Commercial online gaming and betting turnover fell by 0.7 per cent to SEK 17bn (2022: SEK 17.1bn), games for public purposes and national lotteries stood at SEK 3.6bn (2022: SEK 3.5bn), community games and hall bingo was SEK 199m (2022: SEK 182m) and land-based commercial gaming came in at SEK 225m (2022: SEK 220m).
During Q4, Spelinspektionen noted that overall Swedish market turnover stood at SEK 7.1bn, down by 3.2 per cent when compared to the same period in 2022 (Q4 2022: 7.3bn).
Spelinspektionen added that at the end of Q4, just over 104,000 people were registered with the country’s self-exclusion service Spelpaus, a five per cent increase when compared to the same quarter the previous year.
19.7
Gammix Limited has revealed its intention to appeal the €19.7m fine the firm received in the Netherlands by the region’s gaming authority Kansspelautoriteit.
The group described the penalty as ‘outrageous and unsubstantiated’ as it claimed that the fine was brought about following “falsified data, extreme inaccuracy and highly suspect mathematics”.
The KSA stated that via rantcasino, betoriginal, bluvegas, cashimashi, goslot, nordslot, vegadream and scatters, Gammix offers illegal online gambling games to players in the Netherlands, which the company disputes.
Phil Pearson, Director of Gammix Limited, stated: “The KSA has imposed upon our company a penalty that is both outrageous and unsubstantiated. Now that we are able to talk openly about the case, we can confirm that we are fighting on all fronts as, to us, this is an extraordinary and unnecessarily heavy-handed action from a regulator that many already regarded as unapproachable.
“When we received the first notice of a possible penalty, we reached out to them to say we have blocks in place. We also asked for any information they had that was material to the investigation, to ensure we remained in compliance with all guidelines – a request they appeared to ignore. Our lawyers also approached the regulator, in writing, to gain more information, but again no response was forthcoming.
Pearson concluded: “This fine is an absolute joke, and we will contest this in every possible way, at every possible turn. We will only rest once this outrageous penalty has been rescinded and we have received the apology we deserve.”
888
888 has announced that it will be conducting a strategic review of its US B2C operations, as the group has concluded that “achieving sufficient scale in the US market to generate positive returns within an accelerated time frame is unlikely”.
As part of this strategic process, 888 will consider all potential alternatives that can deliver value for the business, including the sale – in whole or in part – of the group’s US B2C business, the controlled exit of US B2C operations or other possible strategic transactions.
888 is active in four US states – SI Sportsbook and SI Casino in Michigan, SI Sportsbook in Colorado and Virginia, as well as 888casino in New Jersey.
The group is conducting a US operation strategic review because of a “lower than the group level” gross profit margin in the US due to “significant direct costs of operating in the market including duties, market access fees and licence fees”, as well as “intense competition from well-capitalised incumbent participants”.
888 noted that it does not believe that its current structure will optimise returns.
In addition, as a result of the strategic review and the above evaluation, the group will be mutually parting ways and ending its partnership with Authentic Brands Group, which had granted 888 the exclusive use of the Sports Illustrated brand for online betting and gaming.
As part of the termination, 888 has agreed to a $25m fee, to be paid in cash from available resources, as well as an additional $25m between 2027 and 2029.
The group stated that the termination of the Authentic Brands Group deal is expected to result in approximately $6m to $7m operating cost savings per year in 2024 and 2025.
Per Widerström, CEO of 888, commented: “Since commencing my role as CEO I have been focused on ensuring the group is set up to deliver strong value creation in the coming years. In the US, the intensity of competition and requirement for scale means huge investment is required to reach profitability.
“Our partnership with Authentic has consistently driven strong demand for the SI brand across both consumer experiences and product offerings. A series of record-breaking months for SI Casino has underscored the strength of the SI brand.
“However, despite these successes, we have concluded that achieving sufficient scale in the US market to generate positive returns within an accelerated time frame is unlikely.
“The strategic review of our US B2C operations will continue at pace, and I look forward to updating shareholders on our plans for the wider group in late March.”
