Aug 29: Exclusive - UKGC makes suicide info request of licensees
UKGC sends request for information on suicides linked to gambling, TwinSpires moves over in Michigan, BetMakers FY, startup focus - 4casters +More
Good morning. On today’s agenda:
The UK Gambling Commission has sent a letter to operators requesting information about recent suicides linked in the press to gambling.
TwinSpires makes way for 888/SI Sportsbook in Michigan.
Our startup focus for this week is 4casters.
UKGC suicides info request
The UK Gambling Commission letter asks for details of any dealings with a list of 10 recent suicides linked in the press to gambling.
In the post: Earnings+More has confirmed that a letter from the UK regulator asking for further details about any interactions with a list of 10 recent suicides linked in the press to gambling was sent to multiple licensees the week before last.
Press links: According to the contents of the letter seen by E+M, the Commission writes that “following a review of press coverage of possible suicides with links to gambling” it is requesting assistance from operators in “identifying more information” in relation to 10 individuals who took their own lives.
The letter then lists their names, adding that “at this stage we simply ask (that) you review your customer database and advise whether you have any records of a customer relationship with any of these individuals”.
“Given the limited nature of the information we have provided,” the letter adds, “you may want to conduct open-source or other checks to cross-reference what you find.”
Request for more information: If an operator were to find any evidence of a customer relationship with any of the 10, the Commission then requests that licensees provide:
Dates of that relationship.
Win/loss total for the lifetime of that relationship.
“Clarification if you were aware of any concerns about Gambling-related harm.”
“Clarification as to whether you were aware that an individual had taken their own life.”
Backgrounder: The issue of gambling and suicide is hugely contentious. A Public Health England (PHE) study published almost a year ago suggested gambling can “increase the likelihood of some people thinking about, attempting or dying from suicide”.
Doubtful stats: A key statistic from that report claimed people with a gambling disorder were 19x more at risk of dying from suicide has, however, been called into question.
In response to a recent Freedom of Information request to the Department of Health, the government has admitted the report mistakenly ascribed the calculation from a Swedish study of pathological gamblers.
Controversial: The effort by lobby groups such as Gambling With Lives to link suicides to gambling comes despite guidance from the Samaritans that “speculation about the ‘trigger’ or cause of a suicide can oversimplify the issue and should be avoided”.
MI licensing moves
888’s SI Sportsbook is reported to have taken over the licensing slot vacated by Churchill Downs’ TwinSpires.com.
Fare thee well, Miss Carousel: Late last week, TwinSpires announced it will be shuttering its operations in Michigan as of September 6. Churchill Downs ran TwinSpires in Michigan through a market access agreement with the Island Resort & Casino owned by the Hannahville Indian Community.
In late July, Churchill Downs said its TwinSpires business saw a 38% rise in adj. EBITDA as it benefited from the winding-back of its online ambitions.
At the time, CEO William Carstanjen said the company was still working on monetizing the market access rights it was vacating.
Enter SI Sportsbook: On Friday, the MIGamingReview website reported that the 888-powered SI Sportsbook offering was now taking customers from Michigan. In its half-year earnings in August 888 said it hoped to be launching in Michigan with the SI Sportsbook in the “coming months”.
888 analyst update
Soft tissue: On Friday, the team at Berenberg reduced its target price suggesting the company’s FY guidance was soft compared with their own estimates. 888’s expectations for H2 to be in line with H1 was disappointing given the second-half tailwinds such as the upcoming World Cup.
Payment plan: They added that the ”equity story” for 888 is “all about” the extent to which 888 can de-lever and say they are “cognisant” of the risks of half-year pro-forma leverage of 5.6x with an “expensive interest burden”.
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BetMakers Technology FY
Revenue rose 371% to A$91.7m and the company made an adj. EBITDA profit of A$2.2m compared to a A$2.88m loss the previous year.
The supplier says the soon-to-launch NTD betting operation led by Matthew Tripp has the potential to generate A$300m for the company in the next 10 years.
NTD TBD: Alongside the arrangement of powering the NTD operation in Australia, BetMakers launched 12 platform partners in Australia in the past 12 months and has a slate of eight further platform deals set to launch in FY23.
Fixer-upper: In May the company launched fixed-odds horse racing betting in New Jersey via a 10-year deal with Monmouth Park.
Mutuel friends: It has also signed a heads-of-agreement to be the exclusive provider of pari-mutuel betting at Caesars’ Nevada properties.
Looking to the year ahead, CEO Todd Buckingham said BetMakers’ business transformation was “robust and independent of any one single contract or strategy”.
Earnings in brief
Holland Casino: Online operations contributed €82.9m to total revenues which rose to €353.4m in H1. EBITDA came in at €40m. Holland Casino made total revenues in 2021 of €304.2m when it was hit by pandemic-related restrictions.
Genting Malaysia: Q2 revenue rose 166% to RM2.18bn YoY while adj. EBITDA soared to RM619.5m from RM45.6m the year previously with the results driven by a five-times rise in revenue at the Resorts World Malaysia property to RM459.1m.
Sky City: H1 Revenue fell 35.6% YoY to NZ$289.8m while EBITDA dropped 86.4% to NZ$20.4m as the business was hit by continued pandemic-related restrictions. Online revenue rose
The authorities in Macau have set a minimum income requirement for the first time in order to achieve guaranteed tax revenues.
Threshold: Under the new licensing regime which comes into force next year the authorities have set minimum income requirements per year of $866k+ per gaming table and $37k+ per gaming machine with operators having to make up for any shortfall.
Cap: The number of gaming tables will also be capped for the first time at 6k with machines capped at 12k.
Analyst view: JP Morgan suggested the totals for the minimum income were a “very low bar” even under a very gradual recovery scenario.
BetDEX Monaco development
In a Linkedin posting, BetDEX said the Monaco Protocol is “rapidly decentralizing ownership and governance”.
The decentralized sports-betting platform effort launched last year by Nigel Eccles, the former founder of FanDuel, has revealed an open-source technology platform called the Monaco Protocol which it says will power the BetDEX exchange beta and also its “mainnet” exchange.
The shares week
Major shareholder IAC ups its stake in MGM Resorts.
Buying spree: MGM Resorts confirmed on Friday that Barry Diller’s IAC had accumulated a further $41.7m of shares, taking its stake to 16.5%. The suggestion is that IAC is taking advantage of the weakness in the MGM share price since the turn of the year, down over 26% YTD.
👀MGM Resorts’ share price since Jan 1
The week ahead
Gambling.com is the last of the larger affiliates to report quarterly revenues later on Monday. Recall the group reported 544% revenue growth from the region in Q1. Guidance for FY22 is revenue to be between $71-76m while Adj. EBITDA should be in the range of $22-27.
PointsBet will hold its Q4 investor call overnight Thursday a month after publishing a Q4 trading update when it said gross win rose 24% YoY to A$122m while US gross win up 30% to A$41.9m
What we’re saying: Look out for the E+M podcast on Thursday morning as we return to the airwaves to discuss industry matters.
Startup focus - 4casters
Who, what, where, when: 4casters is a Chicago-based betting exchange software provider launched by Zack Panos and Adam Winiecke while still studying at the University of Illinois. The exchange was originally designed as a smart contract betting platform on the Ethereum platform but has since pivoted to a B2B exchange software provider in 2020.
Funding backgrounder: 4casters was a part of Jump Labs' first crypto incubator at the University of Illinois in 2018. Currently, the company is profitable and not raising outside funding.
So what's new: Panos says 4casters’ licensing partners are growing rapidly, with their matched volume growing by three times over the past six months. “Currently, we are expanding the API functionality to give more features to market makers, developing a third-party party seeding tool that can be used on any exchange, and generally preparing for football and the World Cup,” he says.
While Panos says 4casters aspires to bring a licensed exchange to the US, he does not believe a betting exchange can thrive under the current regulatory environment.
“Instead, we are using this time to gain real operating experience, expand our product, and remain capital efficient,” he adds. “Rather than sit on the sidelines waiting, we chose to launch our product and start building a brand.”
The longer pitch: 4casters is an OTC betting exchange software provider designed for the peer-to-peer betting industry. Because of low liquidity and high spreads, major players in sports betting bet privately with each other on messengers such as Telegram and Signal, says Panos.
“4casters augments this private P2P betting experience by providing a platform that efficiently tracks balances between these bettors and displays their orders in a simple and intuitive betting exchange,” Panos adds.
Value add: Panos says the company is working with major liquidity providers and building tools that “provide value to the sharpest bettors”.
“Our business model is one of the first in this space to be predicated on providing value for winning gamblers. We see ourselves as the future of sports betting.
Chart of the week
Peak practice: When will the number of big-budget scripted shows hit an all-time high?
New York w/e Aug21: GGR was up 15.7% WoW to $24.3m on handle that rose 1.5% to $200.1m. FanDuel continued to lead with 49.4% of GGR followed by DraftKings with 27% and Caesars on 12.3%.
Delaware Jul22: Online casino revenue increased 58% YoY and 12% MoM to $1.25m while sports-betting revenue was down 27.5% YoY but up 80% MoM to $383.2K. Handle stood at $2.7m, the state’s lowest monthly total in 2022.
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The Nevada Gaming Commission has voted in favor of FanDuel extending its partnership with Boyd to offer sports betting at the Fremont Hotel & Casino property in Downtown Las Vegas.
Kindred Group has been fined C$48k by the Alcohol and Gaming Commission of Ontario for advertising “generous” welcome offers for its Unibet sportsbook.
Monetization platform Tallysight has announced a deal with Vox Media’s SB Nation to provide content creation to help service Vox Media’s partnership with DraftKings.
Sports Interaction, the online sportsbook acquired by Entain as part of its £174m buyout of Avid Gaming, has been granted a license to operate in Ontario.
DraftKings’ Golden Nugget Online Gaming has entered Kansas via a market access agreement with the Boot Hill Casino & Resort.
PA Betting Services will distribute horse racing data from the Hong Kong Jockey Club to the Tote UK website.
What we’re reading
Hop on: A brief history of the school bus.
Now you see it, now you don’t: USA Today first ignited speculation over an Amazon bid for EA Sports before swiftly taking down the story after rival publications shot it down.
Aug 29: Gambling.com
Sep 1: PointsBet FY, Codere Q2
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