Gambling Industry Acquisitions and Financial News — Weekly Round-up for January 19, 2018

By Brian Cullingworth, Last updated Jan 19, 2018

2017 A Good Year For Italian Sports Betting Operators

Sports bets deliver more than half of Euro 9.9 billion in online wagers

Figures from the Italian news agency Agimeg this week show that 2017 was another bumper year for Italian gambling, with sports betting operators enjoying buoyant business conditions that saw sports betting wagers alone rise to Euro 9.9 billion vs. Euro 7.5 billion in 2016, delivering FY revenue of Euro 1.34 billion – a 44.5 percent year-on-year increase.

In turnover terms, online services delivered around 56 percent of total Italian handle.

December was a particularly good month as stakes rose 287 percent thanks mainly to football and a lower rate of pay-outs for punters. FY online betting revenue was up 59.4 percent to Euro 555.6 million, with Euro 82 million December’s contribution.

Bet365 again dominated sports betting overall with a market share of 31.6 percent, chased by SKS365 and online sister Planetwin365 combined commanding 19.5 percent and Snaitech ranked third with 6.9 percent of turnover.

Online casino vertical revenues in December soared over 25 percent y-o-y to Euro 56.4 million, boosting FY revenues 29.2 percent to Euro 567 million, with Lottomatica leading the market on 9.7 percent, pursued by Sisal (8.5 percent) and PokerStars Casino (8.3 percent).

Online poker presented a gloomier picture in December, with tournament and cash game numbers faltering; tournament revenue fell 0.7 percent to Euro 8.1 million while cash games declined 7.4 percent to Euro 6 million.

That brought FY tournament revenue up 20 percent year-on-year to Euro 83.1 million, but cash games dipped 2 percent to Euro 69.7 million on a FY basis.

PokerStars dominated both cash games and tournament sectors with 44.8 percent and 68.6 percent of the market respectively, with Lottomatica the runner up on tournament (5.3 percent) and cash games (7.3 percent).

Leo Vegas Buys I.P.S. For GBP 65 Million

CEO says acquisition motivated by IPS momentum in growth and profitability

Stockholm-based online gambling group Leo Vegas has celebrated its sixth anniversary by entering into an agreement to acquire rapidly growing UK casino operator Intellectual Property & Software Limited (“IPS”) for GBP 65 million.

The deal includes other related assets from two further companies, including top brands such as, Slotboss, Bet UK and UK Casino.

During the fourth quarter of 2017, IPS generated revenues of GBP 11.7 million and, together with the companies whose assets are also being acquired as part of the transaction, an adjusted EBITDA of GBP 3.8 million, representing an EBITDA margin of 32.6 percent.

Revenue for the fourth quarter of 2017 grew by 49 percent compared with the fourth quarter of 2016. Of IPS’s total revenue, 96 percent comes from the UK and 73 percent via mobile devices. The transaction is scheduled to close late in the first quarter of 2018.

In last year’s acquisition of Royal Panda, LeoVegas secured debt financing of Euro 100 million, with Euro 40 million of this in a Revolving Credit Facility. The facility has a term of three years, and amortisation will begin during the second quarter of 2019 at Euro 10 million per quarter. Interest on the facility is approximately 2 percent.

This loan is now partly being used for the IPS acquisition.

Gustaf Hagman, LeoVegas’ Group CEO, said Friday:

“Since its start LeoVegas has pursued a highly successful global brand strategy. Following the acquisition of Royal Panda, LeoVegas now works with two scalable brands. We believe that in larger markets our global brands, LeoVegas and Royal Panda, can be complemented with a local, multibrand strategy. The UK market is a very large and mature market and that is the reason to work with several brands that attract various types of customers.

“In IPS we see several attractive attributes, and they have tremendous momentum in their growth and profitability. Combined with one of the market’s most effective customer acquisition models, we are now gaining a firm stronghold in the UK with the acquisition of 85 employees with local expertise. With this acquisition, we are adding a company culture with a strong technology and product focus which is a perfect fit with LeoVegas’ to further strengthen the group’s position as a leading GameTech company.”

IPS currently uses a technical platform from Bede Gaming, and in connection with the acquisition LeoVegas has entered into a services agreement with Bede Gaming.

Pagcor Grew Revenues In 2017

FY gross revenue rose 7 percent year-on-year

The state-owned Philippine Amusement and Gaming Corporation (PAGCOR) has reported overall FY 2017 GGR from its gambling interests up 7 percent y-o-y at PHP60 billion (US$1.19 billion) thanks mainly to good results from the land casino sector.

Although the amount did not meet expected targets, it remained an improvement on 2016’s PHP55.06 billion (US$1.09 billion).

The majority of PAGCOR’s 2017 gaming revenue came from its 46 land casino properties, which contributed PHP22.44 billion (US$444.6 million). Licensed casino fees brought in a further PHP19.27 billion (US$382.5 million).

Traditional bingo and e-bingo licensees delivered revenues of PHP9.45 billion (US$187.58 million), and “other gaming licensees” contributed PHP5.50 billion (US$109.17 million).

Internationally licensed operator revenues accounted for just PHP3.14 billion (US$62.32 million).

William Hill To Review Profitability Of Australian Subsidiaries

New taxes and regulations make business more difficult Downunder

In a trading update Monday morning online and land gambling group William Hill plc predicted that its FY 2017 operating profit should be up 11 percent vs. 2016 at around GBP 290 million, driven by growth in the UK and USA, stronger gross win margin and the benefits of its transformation programme.

But the part of the report that made the most headlines was the company’s note that tougher taxation and regulatory requirements in Australia has prompted it to undertake a review of operations by its subsidiaries in that country.

William Hill’s Aussie business faces a threat to profits from a federal government ban on bookmakers offering lines of credit as part of a major crackdown on problem gambling. That has been exacerbated by advertising and promotional restrictions, and at provincial level, the widening application of a 15 percent point-of-consumption tax based on GGR.

“Given the credit betting ban in Australia and the likely introduction of a point of consumption tax in a number of states, it is clear that profitability will increasingly come under pressure and therefore we are undertaking a strategic review of our Australia business,” the William Hill trading update revealed.

The company said that the Australian business was affected by reduced credit betting volumes in the past nine weeks, but noted that overall retail and online gross wins were ahead of expectations and “significantly” ahead of the same period in 2016 thanks to favourable football and horseracing results.

Wagering growth rates slowed but group net revenue was “very strong”, the company reported, adding that gaming growth rates continued to accelerate in online operations but eased in retail. The United States delivered strong double-digit growth, the bookmaker revealed.

“We have delivered a strong result in 2017, reflecting our focus on rejuvenating online, growing the US and building an attractive omni-channel proposition,” said chief executive Phil Bowcock.
“We are excited about the opportunities ahead in 2018 – a World Cup year – with our competitive position reasserted in the UK and with the potential for sports betting to open up in the US.”

Lower Than Anticipated Revenue Growth At Netent

Withdrawals from Australia, Poland and Czech Republic impact fourth quarter results

In a trading update Tuesday online gambling software and games provider NetEnt reported that preliminary revenues and operating profit in the fourth quarter of 2017 amounted to around SEK 419 million, with estimated operating profit of SEK 150 million – both numbers below management expectations.

The company claims the difference between market estimates and the preliminary operating profit is due to lower-than-expected revenue growth.

The update notes that during 2017, NetEnt phased out deliveries of games to operators in Australia, Poland and Czech Republic, and this had a negative effect on revenue growth of around three percentage points. In addition, underlying revenue growth in some of NetEnt’s markets was lower than expected in the quarter.

NetEnt’s business continued to generate a solid cash flow in the quarter and the dividend for 2017 will be at least in line with 2016 year’s level, the company said.

Indian Online And Cruise Gambling Firm Net Profits Soar 300 Percent

Investors show their appreciation by boosting share price 7 percent

The Indian-based Delta Corporation has delighted investors with a 300 percent growth to Rs. 44.7 crore (US$7 million) in net profit during its fiscal third quarter.

Delta operates land casinos and gambling cruises and added online gambling to its interests in July last year when it took over Gaussian Networks Pvt Ltd, operator of online poker operator Adda52 (see previous InfoPowa reports).

This was the first quarter to include online revenue from the acquisition, boosting Delta’s existing online gaming operations to Rs. 28.4 crore in Q3, compared to Rs.24.1 in the previous quarter.

Total group revenue grew 56.6 percent year-on-year to Rs 162.2 crore, whilst EBITDA rose a total of 119.5 percent to Rs. 68.7 crore, and after-tax profit rose to Rs447 million.

Shares in Delta Corp grew 7 percent intraday on Tuesday as investors showed their appreciation.

Chinese Welfare Lottery Sales Up 5.1 Percent In 2017

Lottery raised more than 62 billion yuan for public welfare funds last year

China’s state-run Welfare Lottery sales topped 217 billion yuan (US$ 33 billion) in 2017, an increase of 5.1 percent year on year, according to a statement from the Welfare Lottery Distribution and Management Centre this week.
The lottery raised more than 62 billion yuan for public welfare funds last year, tghe Centre revealed.

GVC Holdings Issues Update On Proposed Acquisition Of Ladbrokes Coral

Shareholders to receive full details early or mid February 2018

GVC Holdings plc has issued an update on progress in its proposed acquisition of Ladbrokes Coral plc, advising:

* The Scheme Document, which will contain further information about the acquisition and notices convening the Court Meeting and the Ladbrokes Coral General Meeting, is expected to be published and sent to Ladbrokes Coral Shareholders in early or mid-February 2018;

* On the date of publication of the Scheme Document, Ladbrokes Coral will issue a further announcement containing a trading update in respect of the year ended 31 December 2017.

* It is currently expected that the acquisition will be completed during late Q1 or early Q2 2018. In the light of this, it is expected that Ladbrokes Coral will defer the publication of its full year results for the year ended 31 December 2017 until late April 2018.

* It is expected that, upon the acquisition completing, the admission of Ladbrokes Coral Shares to the premium listing segment of the Official List will be cancelled and Ladbrokes Coral will be reregistered as a private limited company. If the Acquisition completes prior to the publication of Ladbrokes Coral’s full year results it is likely that their publication will be further deferred as permitted by the Act.

* It is also expected that the timetable for holding Ladbrokes Coral’s 2018 annual general meeting will be deferred accordingly. A further announcement in relation to this will be made in due course.

Revenues Looking Better At French Gambling Group

PMU reports first revenue increase in seven years

The French online and land gambling group Pari Mutuel Urbain (PMU) has posted its first positive year-on-year annual revenue increase since 2011, reporting provisional operating revenue of Euro 9.92 billion in Full Year 2017 – a rise of 2 percent over the preceding year.

French turnover on racing rose 0.9 percent, but sports turnover declined due to a paucity of international football events.

The company’s international division reported revenues up 10 percent.

Interim CEO Alain Resplandy-Bernard, said:

“The implementation of the PMU’s strategic plan is beginning to bear results and in 2017 the PMU returned to the path of growth. Our objective in 2018 is to continue growth across all sectors of the business and to permanently cross back over the threshold of Euro 800 million in net profit.”

He added that PMU employees are ready to meet the challenge and ensure sustainable growth for the business.

Brian Cullingworth

Infopowa news was a staple of Casinomeister’s news from 2000 until 2019. Brian Cullingworth was the main writer, contributor, and was one of the most knowledgeable persons I have ever known involved in the online casino industry.

We first met in January 2001 at the ICE in London where I observed him going booth to booth interviewing online casino, software, and licensing jurisdiction representatives. Brian was also heavily involved with our forum as “Jetset“, he was involved as an informal consultant to eCOGRA, the OPA, and was a player advocate who assisted countless aggrieved players with his connections to industry folks. He also published “Casino Cautions” via Infopowa news for quite a number of years. These can be found in our news archives.

His passing in February 2019 was a dark day for us. He will be forever missed.

CasinoMeister heart Top 5 casinos


325% Slots Bonus on 1st, 2nd and 3rd Deposit

3Dice Casino

110% up to $110 Welcome Bonus


300% Slots Bonus up to $3,000 on 1st, 2nd and 3rd Deposits

Roaring 21 Casino

400% up to $4,000 + 100 Free Spins Welcome Bonus Package