Financial News — Weekly Round-up for September 01, 2017

Italian Online Gambling Market Continues To Prosper

Even in an economic recession the nation’s punters keep betting

The Italian gambling market continued to expand in July despite the nation’s economic difficulties, with official statistics showing that Italian punters continued to bet on all forms of gambling, although online poker cash game revenues dipped by 5.3 percent in the year so far compared with the corresponding period in 2016.

That could change following a recent agreement on player-sharing pools by Italy, France, Portugal and Spain (see previous InfoPowa reports).

The Bloomberg business news agency reported that at $113 billion in 2016, the market has expanded three-fold over the past decade, due mainly to the introduction of online gambling, a wider range of betting options and games, and better safety regulations.

Lottery games remain the most played vertical, followed by slots and table games, but sports betting is also proving popular.

The figures for July 2017 show that licensed bookmakers in Italy enjoyed total sports betting revenue up 4 percent on the preceding month at Euro 86.5 million. Interestingly the SKS365 company overtook rival bet365 to claim the top spot with a mix of retail and online revenues of Euro 11.7 million.

Bet365 languished at sixth on the overall list (but was the top online sports betting performer) with Italian revenue of Euro 7.9 million, well behind overall market leaders SKS365, SNAI (Euro 11.5 million) and Eurobet (Euro 9.8 million).

The total online sports betting revenue count in July was Euro 38.3 million, a rise of just over 11 percent on June 2017.

In purely online terms SKS365 digital subsidiary Planetwin365 chased bet365 with revenues in July of Euro 6.5 million, followed by SNAI and Eurobet, each on Euro 3.3 million.

In the online casino vertical, revenues rose 5 percent month-over-month to Euro 44.9 million, bringing the year-to-date figure to Euro 313 million (up 29 percent y-o-y).

Lottomatica led the sector with a market shatre of 9.73 percent, chased by PokerStars on 9.03 percent; Sisal on 8.22 percent; Eurobet on 6 percent and William Hill on 5.7 percent.

PokerStars was, as expected, the leader in the online poker vertical with a 71 percent lion’s share of the tournament market, where stakes reached Euro 5.9 million – up 23 percent year-on-year. In year-to-date terms online poker tournament stakes in Italy are up 17.4 percent at Euro 49 million.

On the cash game front PokerStars again led the market, but with a lower margin of 45.5 percent, with total cash game revenues from the vertical reaching of Euro 5.1 million.

On a year-to-date basis online poker cash game revenue in Italy is down 5.3 percent year-on-year at Euro 41 million.

Games Developer On A Roll This Year

Yggdrasil ticks all the right boxes in its interim report

Online gambling games developer Yggdrasil, a subsidiary of the Cherry Group, reported a positive Q2 and H1 performance this week, noting the following highlights:

Q21-2017

* Revenues for the quarter increased by 103 percent YoY to SEK 40.4 million (19.9)
* EBITDA for the quarter increased to SEK 18 million (9.8) with a margin of 44 percent
* The number of player transactions (rounds) increased by 84 percent YoY to 801 million
* Mobile gaming has now grown to be 56 percent of total gross game win
* The company Launched for the first time in the Italian regulated market with GVC brands
* Four new games were released: Power Plant, Sunny Shores and Spiña Colada, as well as an exclusive game for Betsson Group: Trolls Bridge
* Yggdrasil Gaming Sweden AB established
* Hired a CTO and CSO for the first time
* 14 new licence agreements were signed with new operators
* Launch of revamped platform iSENSE 2.0+

H1 2017 Highlights

* For the half year, revenues increased by 116 percent to SEK 73.8 million (34.1)
* EBITDA improved significantly by 76 percent and amounted to SEK 31.2 million (17.7) with a margin of 42 percent
* Player transaction (rounds) increased by 99 percent to 1.5 billion rounds
* Released 7 new games
* Signed 24 new operators, including William Hill
* Launch of Yggdrasil Dragons, a business initiative to enter mutually beneficial partnerships with entrepreneurs and gaming businesses
* Andrew Pegler appointed chief commercial officer Gibraltar while Krzysztof Opałka promoted to chief product officer
* Announced the ground-breaking game mechanic Fusion RealmsHeld a successful ICE event with a spectacular stand that stood Yggdrasil apart from the rest of the industry

Notable events after the quarter

* Yggdrasil signed a content agreement with Betfred
* The company’s largest jackpot yet, Euro 5.2 million, dropped on the game Empire Fortune
* Released two new games, Rainbow Ryan and Valley of the Gods

CEO Fredrik Elmqvist said in his report that the company’s growth continued, with Q2 revenues up 103 percent y-o-y at over Euro 40 million for the first time

He revealed that Yggdrasil has been expanding its regulated footprint in recent months, and investments in new markets, including the UK, are now generating revenues. Investment was the focus of the second quarter, he said, pointing to developments in new markets, new games, new product features and new infrastructure, including the establishment of Yggdrasil Gaming Sweden AB.

“We have also focused upon the reorganisation of the company to allow us to scale, with our CSO, CPO and CTO functions now restructured to clarify responsibilities and duties,” Elqvist said “This work has been fundamental in highlighting necessary recruitment… where we continue to look for new, talented people.

“During the second quarter, we successfully recruited or contracted 23 people, boosting the Yggdrasil team to 143 by the end of June, with more to follow in the coming months.

“Costs are rising, which is necessary for us [not only] to deliver upon our ambitions, but to be able to deliver an operating profit of more than 15 million SEK for the second quarter.”

Elmqvist concluded by claiming that in the first six months of 2017 the company’s performance has exceeded expectations shows that we remain focused on the bottom line.

The first six months of the year have exceeded expectations, and promised continued focus with new games and features set for launch in the second half of the year.

Austrian Gambling Monopoly To Sell Off International Assets

Spokesman confirms media reports based on leaked confidential document

The Casinos Austria AG group set European media alight Friday when a spokesman confirmed that reports that it was to sell off its considerable and mainly land international interests are true.

The reports originated from a Belgian newspaper which somehow managed to get hold of a confidential document outlining the Austrian gambling monopoly’s plans to generate around Euro 300 million by offloading all its interests outside Austria – at least 35 gambling enterprises across Germany, Denmark, Switzerland, Australia, Belgium, Canada, the Czech Republic, Egypt, Georgia, Hungary and Palestine.

Company spokesman Martin Himmelbauer confirmed the accuracy of the report, saying that the Casinos Austria board of directors were of the view that timing for such a sell-off was right following the international division’s return to profitability.

Casinos Austria showcased an impressive turnaround in H1-2017 in its most recent financial reportage, which included operating profits up 34 percent y-o-y at Euro 5.1 million and a net profit of Euro 1.28 million (H1-2016: loss of Euro 1.17 million).

The improvement was attributed to more successful results from Canadian, Belgian and German subsidiaries following extensive restructuring activity.

The sell-off will enable the group to concentrate its efforts and resources on the Austrian-based business, which includes the Win2Day online division, the online and land sports betting enterprise Tipp3, Austrian Lotteries, and the WinWin chain of video lottery terminal facilities, all benefitting from the Austrian government’s continued exclusion of rivals in the local market.

Late last year the Novomatic gambling group, a major shareholder in Casinos Austria, took a run at acquiring control of the Austrian group in concert with the Czech investors behind Sazka. The attempt foundered when the Austrian Federal Competition Authority belied its title by nixing the proposal.

British Columbia’s Online Operation Shines In Latest Results

PlayNow.com makes a valuable contribution to British Columbia Lottery Corporation’s 2016-17 results

The British Columbia Lottery Corporation‘s online gambling division PlayNow.com has made a valuable contribution to the group’s 2016-17 FY results, generating revenue of Cdn$ 157.6 million, up 16 percent year-on-year.

The improvement was attributed by management to increased online slot activity and content innovation – new content was added during the year following deals with NetEnt and NYX Gaming (see previous InfoPowa reports).

The report reveals that PlayNow’s player base has risen to over 370,000 and counting.

The BCLC may be a little complacent regarding its online gambling operation, however – the report shows that only Cdn $1.6 million was allocated for online capital spend – less than half the amount allocated in the previous year.

The BCLC group as a whole reported net income of Cdn$ 1.34 billion, a y-o-y rise of 2 percent and a new record for the Canadian province. That was on the back of revenue of Cdn$ 3.14 billion, most of it from land casino activity (Cdn$ 1.86 billion) and lotteries which saw a slight decline at Cdn$ 1.13 billion.

New Survey On Global Sports Betting

HTF predicts CAGR od 4.26 percent by 2020

HTF Market Intelligence has released a new 57-page research report titled ‘Global Sports Betting Market 2016-2020′ with detailed analysis, forecast and strategies. The study covers key regions that includes Americas, APAC, EMEA and a list of important players such as Amaya, Bet365, bet-at-home, 888 Holdings, Betfair, Bwin, Unibet-Kindred, William Hill et al.

More than 60 percent of the sports betting done across the world is illegal as governments attempt to maintain a balance between the world economy and social welfare, the report claims. In 2015, more than 90 percent of the sports betting was land-based, but this will decrease with the growing shift of preference toward online and mobile sports betting platforms.

Research analysts at HTF forecast the global sports betting market will grow at a CAGR of 4.26 percent during the period 2016-2020.

The report covers the present scenario and the growth prospects of the global sports betting market for 2016-2020. To calculate the market size, the report considers the revenue generated from land-based sports betting, and online sports betting, and examines obstacles to development and market trends.

Wild Crypto E-Gaming Blockchain Platform Launches $5 Million I.C.O.

Backers sought for international lottery and eGaming platform built upon blockchain technology

Wild Crypto, developers of what they claim is a revolutionary international lottery and eGaming platform built upon blockchain technology, is to launch an initial coin offering (ICO) with the aim of raising 15,000 Ether Tokens – worth around $5 million – to take its product to market.

The ICO begins at 08:00 GMT on Tuesday, 5th September, and will offer investors WILD Tokens – the gaming currency to be used on the new platform – at a discounted rate of 2000:1, 2000 WILD Tokens to 1 Ether.

Once the platform launches, WILD Tokens will be exchanged at 100:1 against Ether, offering investors a potential 20x investment opportunity.

The platform, which is 95 percent complete, is designed to disrupt the $260 billion lottery and associated games market, for which only 4 percent is currently online, according to the World Lottery Association.

By publishing results of games to the blockchain, users can guarantee an open and honest experience, and players will also be able to cash-out in Ether or to a Bitcoin backed debit card.

Wild Crypto has assembled a team of industry experts, led by founder Frank Pira, to oversee the development. The team also includes Twelve40 CEO Andrew Jarrett and Qi Group CEO Kiri Cavill.

Regulated lottery specialist Twelve40 supplies the certified back-end game technology for the new platform, and the product will be the first of its kind to be regulated via Jersey and Curacao licences.

Frank Pira, founder of Wild Crypto, said: “Using the ethereum blockchain to build a next generation lottery and gaming platform has the potential to revolutionise this industry, so we are thrilled to announce an ICO to bring Wild Crypto to market.

“Wild Crypto is backed by a world-class team of gaming and blockchain experts, and we already have the technology, the regulatory approvals and the payment systems in place.

“This ICO will enable us to raise the funds to deliver on our promise, while those who subscribe will enjoy a discount on the WILD Tokens that will be used on the platform.”

Ainsworth Tech Profits Fall

Australian land and online gambling supplier blames weak first half performance

Ainsworth Game Technology Limited’s full year results to end June 2017 were released this week, showing a 32 percent year-on-year drop in profits which Management blamed on a weak first half performance, but noted that recovery was experienced in the second half.

Profit after tax for the full year was A$37.9 million, a decline from the previous fiscal year’s A$55.7 million, whilst EBITDA fell 27 percent to A$70.3 million.

Mitigating the first half weakness, pre-tax profit in the second half was better than expected at A$42.2 million, a 178 percent rise over the same period in the previous year.

Total FY revenue fell 1 percent to A$282.1 million, with strong growth in international markets offsetting weaker performance in the domestic market.

CEO Danny Gladstone reported that the improved second half reflected the competitiveness of the company’s broader product offering, investments in technology, sales and marketing, and the strength of Ainsworth’s international footprint.

The company revealed growth in profit in its Latin American business, with profits up 11 percent, whilst in North America, the recently launched Pac Man licensed product is showed strong growth, and the now fully integrated Nova Technologies is driving further success.

However North American revenues fell 9 percent year-on-year to A$101.4 million, while profits declined 10 percent at A$44.7 million.

Domestic revenue fell 9 percent to A$74.1 million, down from A$81.5 million in the prior-year period, and profit dipped 17 percent in the year.

Ainsworth Management predicted that its strategic investments in real money gambling and social casino platform technology will provide further opportunities for growth, and revealed that in the company’s new financial year it will expand into new online markets through Novomatic’s Greentube online platform, as well as exploring new licensed opportunities in Latin America.

Court Award Boosts Mybet Results In H1-2017

But revenues sank 28.5 percent in the period

Online sports betting and casno group MyBet Holdings continued to battle in H1-2017, but received a welcome boost in the form of a Euro 11.8 million German High Court award from its long-running litigation against Westdeutsche Lotterie, which was successfully concluded in May this year.

That enabled the operator to offset weak betting results and blocked online services in the Greek market, retire a Euro 4 million credit facility, report a Euro 7 million EBIT and a Euro 4 million profit, and hold a positive cash balance.

Operationally, Mybet reported revenues down 28.5 percent at Euro 17.1 million (H1-2016: Euro 24 million).

CEO Markus Peuler said that for now the company confirms its FY forecast of revenue between Euro 44.5 and 47 million, EBIT between Euro 4.5 and 5.5 million and liquidity by the end of the year to be between Euro 1 and 2 million.

However, he cautioned:

“To achieve our forecast we have to be able to reactivate our online casino in Greece in the second half of the year and obtain a good customer acceptance of the new platform. Currently the Greek casino is not available yet and the football season has just started.

“So we cannot conduct a final assessment of the platform yet, especially in the sports betting segment. As a consequence there is currently no reason for changing the forecast, but we will monitor the further development of the business very closely.”

Peuler added that additional momentum could arise from Mybet’s new B2B business with betting shops in Austria and the new sponsorship of the Bundesliga football club Borussia Mönchengladbach (see previous InfoPowa reports).

Online Division Boosts Ladbrokes Coral First Half Results

Strong online growth as digital revenues rise 17 percent year-on-year

Online and land gambling group Ladbrokes Coral has posted its H1-2017 results, showcasing good growth in the online division, where digital revenues rose 17 percent year-on-year to GBP 374.5 million.

The company reported an overall rise in H1 operating profit of 7 percent to GBP 158.8 million, thanks largely to a strong online performance as retail operations lagged, falling 6 percent to GBP 697.2 million.

Overall group revenue rose one percentage point to GBP 1.19 million.

Group profit after tax is down at GBP 19.4 million (H1-2016: GBP 20.7 million)

Group EBITDA up at GBP 211 million (H1-2016: GBP 89.8 million.)

Commenting on the H1 results, Ladbrokes Coral CEO Jim Mullen said:

“Ladbrokes Coral continues to make good operational and financial progress. We entered the year with ambitious targets for the first half to substantially complete the integration of our teams and migrate UK Digital to a single platform. We delivered on both fronts and at the same time kept the business moving forward.

“It is pleasing to report strong Digital growth, ongoing momentum in Australia, and in spite of adverse sporting results, market share gains in Italy. UK Retail performance is in line with our expectations given the planned commercial decisions on UK racing media rights and Ladbrokes’ horse racing margin, both of which will protect the profitability of our shop estate well into the future.

“The synergies from our recent merger [will] step-up substantially in the second half to deliver a full year saving of GBP 45 million.”

Ladbrokes increased its interim dividend for the six months to the end of June to 2p from 1p in 2016.

Intralot Improves In H1-2017

Management says results are a “turning point” for the company

Intralot management has characterised the first half results of the company as a turning point in their report on the year to June 30 2017, highlighting revenues up 15.1 percent at Euro 733.2 million, and gross profit up 6.5 percent year-on-year at Euro 127 million.

EBITDA came in at Euro 92.2 million – a 2.6 percent y-o-y increase, albeit at a lower margin oif 12.6 percent. Pre-tax earnings were rose 31 percent at Euro 26.6 million.

The company reported that net debt in H1 is Euro 21,6 million greater at Euro 516.8 million following the Eurobet acquisition and software investments.

CEO Antonios Kerastaris said the positive results represent a turning point in the company’s development and financial performance, adding:

“Continued double-digit revenue growth and profitability improvements are directly linked to reforms implemented in the previous year and more specifically to our M&A and partnership strategy.

“The company’s ability to renew in a competitive market such as the United States, on top of its historical renewal track record, creates fresh confidence for the extension of all contracts maturing in the next year.”

Strong Half Year From Fortuna Entertainment

Good growth reported in both sports betting and gaming divisions

Eastern Europe-facing online and land gambling firm Fortuna Entertainment has reported a half year of robust revenue growth in both sports betting and gaming divisions, highlighting:

* Group revenues up 40.9 percent y-o-y at Euro 720 million;

* Gross win up 20 percent at Euro 100 million;

* Net profits od Euro 2.5 million;

* Group EBITDA down 22 percent at Euro 7.6 million;

* Hattrick Sports and Fortbet Romania acquisition and integration expenses of Euro 135 million and Euro 47 million respectively;

Chief executive officer Per Widerström, reported:

“During the first half of the year, the volume of bets accepted by the Group continued to grow rapidly compared to the same period the previous year. This strong growth was the result of solid performances in all traditional markets where Fortuna operates.

“The recently acquired Hattrick Sports Group Ltd., operating in Romania, Croatia and other countries, also contributed. Our operating profitability, as measured by EBITDA, was mainly influenced by the one-off costs associated with our expansion across the CEE region, coupled with integration into the Group of recently acquired business operations,”