Gambling Industry Acquisitions, Mergers and Financial News — Weekly Round-up for December 14, 2018

By Brian Cullingworth, Last updated Dec 14, 2018

Online Boosts November In Italian Market

As retail slows

Italian gambling regulator AAMS released November’s overall market performance this week, detailing a lagging retail sector boosted by online results.

Licensees generated revenues of Euro 148.5 million during the month (Nov 2017: Euro 147 million and Oct 2018: Euro 133.7 million).

Online sportsbetting revenues reached Euro 65.1 million, up 5 percent Y-o-Y in contrast to retail revenues which declined almost 2 percent to Euro 83.4 million.

Year to Date, in terms of revenue, online amounted to Euro 583.7 million, an increase of 25.5 percent, retail reached Euro 791.4 million – up 22 percent, and the total market reached Euro 1.39 billion, also up 22 percent.

PokerStars led the online casino sector during November, claiming a 10.6 percent market share that delivered revenues of Euro 57.2 million, up 14 percent. The Stars Group brand was followed by Lottomatica and Sisal.

It was a close race in the online betting sector with PlanetWin365 leading the pack with 14.95 percent of total online revenue during November, very closely followed by bet365 with 14.66 percent, Snaitech with 11.3 percent, Eurobet with 9.9 percent and Sisal with 7.3 percent.

Pokerstars led a flailing online poker sector. Total cash game revenues were down 10.2 percent while tournament revenues sank 2.9 percent.

Inspired Delivers Double Digit Growth

Net Loss Narrows Significantly Year Over Year

Inspired Entertainment, Inc. (Inspired) has reported double digit growth in revenue and EBITDA for its fiscal year ended September 30, 2018, narrowing net losses significantly year over year to $20.6 million from $49.1 million in 2017.

Full year revenue was up 15.4 percent to $141.4 million, while Adjusted EBITDA increased 32.9 percent year over year to reach $54.1 million.

Revenue growth was achieved across both business segments primarily driven by the continued rollout of terminals in Greece, new customer revenue in Interactive and Virtual Sports, and an increase in revenue from new channels offered to existing customers.

Adjusted EBITDA margin increased to 39.5 percent from 34.7 percent in the prior year, primarily attributed to a more profitable revenue mix, effective business processes, and operating leverage in the cost structure.

Net operating losses were $7.3 million, an improvement over 2017 which amounted to $11.9 million. Net loss was $20.6 million, significantly stronger than 2017’s $49.1 million.

Lorne Weil, Executive Chairman of Inspired:

“While we continue to focus on maintaining that growth, we are also intentionally targeting growth across our businesses in North America. I am optimistic that we can execute on this strategy much as we have done in Greece, where, in less than two years, we have grown the Virtual Sports business exponentially, recently adding another channel of content, and have become the largest supplier of terminals in the marketplace.”

888 Holdings Acquires Remaining Interest In All American Poker Network

888 acquires the remaining 53 percent interest in the All American Poker Network, a joint venture established in 2013, for US $28 million

888 Holdings plc has announced what it characterises as a milestone in its future US growth following the acquisition by its US subsidiary 888 US Inc., of the remaining 53 percent interest in AAPN Holdings LLC that 888 US does not already own, from its joint venture partner Avenue OLG Entertainment LLC and other minority shareholders of AAPN for US $28 million.

The AAPN joint venture was established between Avenue and 888 in March 2013 to launch 888’s B2C brands in the regulated online gaming market in the United States. Since November 2013, the 888poker and 888casino brands have been operating in New Jersey.

The transaction will give 888 independent control of its growth strategy in the US moving forward, a 888 statement advised Tuesday. The strategy includes signing new partnerships and continuing to deploy its proprietary products and technology (both B2B and B2C) in new states as they regulate. Over recent months, 888 has also further strengthened its position in the US by:

• In September launching 888sport in New Jersey alongside its established poker and casino brands, marking the first time that 888 has offered sports betting in the United States and paving the way for the Group to launch 888sport in additional US states as future regulation allows; and
• Signing a landmark sponsorship agreement with the New York Jets of the National Football League (“NFL”), marking the first such agreement between an NFL team and a pure-play online gaming operator.

Itai Frieberger, Chief Executive of 888 commented:

“The acquisition of the remaining stake in AAPN is an important strategic step towards 888 achieving its exciting long-term potential in the US.

“Taking outright ownership of AAPN gives 888 additional operational, technological and commercial flexibility to develop innovative and exciting new partnerships and launch in new states – through both B2B and B2C channels – as and when future regulation allows. “This acquisition places 888 in an even better position to take advantage of the significant growth opportunities in the US and create additional value for our shareholders.

“The AAPN joint venture has been a very successful endeavour for the Group. It has afforded us the flexibility and financial capability to build a position in the regulated US market over the last five years whilst also investing in other global regulated markets. I would like to thank Avenue Capital for being fantastic partners in this venture since 2013.”

The consideration of US $28 million will be satisfied all in cash, with US $10 million being paid to the sellers on or about the date of this announcement and the remainder of US $18 million to be paid by 31 March 2019.

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