Gambling Industry Acquisitions, Mergers and Financial News — Weekly Round-up for October 26, 2018

By Brian Cullingworth, Last updated Oct 26, 2018

Bad News For Webis

WatchandWager parent slumps after $10 million refund and loss of US client

Betting company WatchandWager in the Webis group had bad news for investors Friday, reporting that it has lost a US client and has had to refund $10 million.

The news sent the Webis share price into a downward 25 percent spiral Friday morning after the company issued a statement explaining that following the loss of a major US b2b client (which cannot be identified for reasons of confidentiality), WatchandWager has refunded the client’s player balances amounting to $10 million and has ended the business relationship.

The large refund leaves Webis with just $3.1 million in cash assets, and according to Webis the loss of the business will result in a reduction in margin for the fiscal year ended May 2019 of $800,000.

Webis reported gross profit of $5.3 million in its most recent annual report for the year to May 2017.

WatchandWager has been making good b2b progress in the States, and holds pari-mutuel licences for its ADW business in eight US states, including California and New York. Another Webis division, LLC, operates Cal Expo Harness Racetrack in Sacramento, California.

Taking a positive note. Webis notes that measures to improve business efficiency are in train, and that in addition to new clients WatchandWager has a healthy potential pipeline of companies with which it is in discussions.

“While these initiatives alone are unlikely to replace gross margin in the short-term, the early indications are that the current client base is both wagering successfully and growing in scale,” Webis advises. “This strategy does have the benefit of removing the primary business risk, being that of concentration and over reliance on one single entity.”

Gluck Games And Gamevy Merge

Glück Group will operate via multiple studios, executive team comprises co-founders

Content developers Gamevy and Glück Games have agreed to merge.

The newly merged and named Glück Group follows a long prior relationship in which the two companies collaborated on various projects.

Glück Group will be headed by Gamevy co-founder Paul Dolman-Darrall as chief executive officer, supported by Glück Games’ existing managing director Robert Lenzhofer and an executive team comprising Glück co-founders Arvind Upadhyay and Rafael Razim, and Gamevy co-founders Helen Walton and Dan Rough.

“We’ve been close colleagues and joint partners for what feels like a very long time,” Dolman-Darrall said.

“We know that we have a uniquely talented bunch of designers, developers and marketeers and we believe that good as the success we have seen separately has been, together we will achieve even more.

“It gives us the ability to innovate more in our product development, serve our existing customers better and reach a whole range of new customers as well.”

Greenblatt To Lead Mgm Gvc Joint Venture

Seasoned exec will lead the push in the U.S.

MGM GVC Interactive LLC, a joint venture between MGM Resorts International and GVC Holdings PLC has appointed Adam Greenblatt as Chief Executive Officer.

Greenblatt takes up the position having played a significant role in the creation of MGM GVC Interactive via his previous role as Director Corporate Development & Strategy at GVC Holdings.

The joint venture, established in July 2018, will create a sports betting and online gaming platform in the United States taking advantage of new opportunities created by the U.S. Supreme Court’s decision to overturn the U.S. federal Professional and Amateur Sports Protection Act (PASPA).

In a joint statement, GVC CEO, Kenneth Alexander and Jim Murren, Chairman and Chief Executive Officer of MGM Resorts, said:

“We are pleased to appoint Adam as CEO of the joint venture, who will bring his in-depth knowledge and expertise in on-line gaming and sports betting from both sides of the Atlantic. His determination, experience and vision are exactly what we need to establish a prime position in the rapidly evolving U.S. gaming market.”

Strong Third Quarter From Betsson Ab

Revenue and EBIT both show double digit growth in third quarter

Betsson AB has turned in another strong performance for Q3-2018 and the year to end September, reporting revenue up 21 percent y-o-y, and EBIT rising 57 percent in the quarter, which ran from July to end September..

Third quarter highlights included:

  • Group revenue up 21 percent at SEK 1,426.8 (1,180.6) million, with an organic growth of 16 percent;
  • All regions showed growth in the quarter;
  • Casino revenue grew by 22 percent to SEK 1,066.3 and Sportsbook revenue grew by 23 percent to SEK 338.9 million, with a sportsbook margin of 7.4 (7.1) percent;
  • 1.8 percent of the Group revenue in the third quarter was related to the FIFA World Cup that ended on 15 July 2018;
  • Active players were up 11 percent at 687,390;
  • Operating income (EBIT) rose 57 percent to SEK 340.2 (216.0) million on “better economies of scale”;
  • Operating margin was 23.8 (18.3) percent.

Year to end September numbers included:

  • Group revenue up 15 percent at SEK 3,983.2 (3,460.0) million, with an organic growth of 11 percent;
  • Operating income (EBIT) up 28 percent at SEK 852.3 (663.8) million;
  • Net income up 30 percent at SEK 764.5 (587.6) million, corresponding to SEK 5.52 (4.25) per share;
  • Operating cash flow of SEK 984.0 (667.7) million.

CEO Pontus Lindwall reported that the strongest growth was experienced in Western Europe and Nordics. He observed that improved earnings are a result of the scalability in Betsson’s business, showing that improved products and keeping focus on efficiencies results in higher earnings.

“The increased revenue is achieved by a combination of product improvements and more efficient marketing spend. In the third quarter, re-allocation of marketing investments between different markets, and also in the mix of traditional marketing and affiliate marketing, made it possible to efficiently grow revenue.

“Going forward, we expect marketing investments to increase as online gaming licences are introduced in Sweden. Betsson was one of the first to apply for online gaming licences in Sweden.”

Lindwall noted that subsidiary Corona Ltd has been fined Euro 300,000 by the Dutch gaming authorities (KSA), but has appealed tghe penalty because Betsson views the Netherlands as an important market long-term and has ambitions to channel Dutch customers into the licenced system when the market re-regulates.

“We continue to execute on the “back on track” plan which includes a number of product and technology improvements, additional efficiencies and focus on core markets. The fourth quarter has begun with daily revenues higher than the average daily revenue for the full fourth quarter last year,” the chief executive concluded.

Evolution Gaming Reports Strong Third Quarter Results

Revenue and EBITDA both on the rise

Live dealer technology and games provider Evolution Gaming has reported a strong Q3-2018 performance with revenues up 41 percent y-o-y at Euro 64.3 million, and EBITDA improvement of 28 percent to Euro 28 million on marin of 44 percent.

Profit for the period rose from Euro 16.8 million to Euro 21.2 million.

On a YTD (January to end September) basis operating revenue increased year-on-year by 37 percent to Euro 175.2 million, with EBITDA up 31 percent at Euro 76.1 million on margin of 43 percent, and profit of Euro 57.9 million ( up from Euro 44.1 million).

CEO Martin Carlesund reported that the quarter delivered continued high product demand and growth.

“The margin was impacted by a faster-than-expected growth in the number of tables,” he said. “We had approximately 500 tables live at the end of the quarter and we expect continued high expansion going forward. We further expect the margin to improve somewhat in the fourth quarter, while the full year number will be in the lower end of our earlier expectations.”

Revenues Ease At Svenska Spel In Q3-2018

Vegas VLTs fail to impress

Sweden‘s state-run gambling monopoly Svenska Spel has reported mediocre Q3-2018 results as it approaches a more liberalised online gambling market early next year, posting a 2.3 percent drop in net revenues year-on-year in the quarter to SEK 2.1 billion.

Management attributed the decline mainly to a SEK 56 million, or 20 percent, decrease in the firm’s Vegas VLT’s,

The revenue decline dragged down profits by 2.2 percent y-o-y to SEK 1.1 billion on a 23.1 percent margin.

The report commented on the SEK 29 million expense of new European Union privacy requirements (GDPR) and costs associated with the transformation necessary for the new liberalised market set for opening early next year.

Online sales in Q3 were star performers, rising 22 percent y-o-y, with mobile sales comprising 42 percent. Digital sales accounted for nearly 32 percent of group revenue, up from 25 percent in Q3 2017.

Marie Loob, chief executive officer of the company, said that Svenska Spel remained strong despite strong competitive pressure.

“As the whole of Sweden’s gaming company, we look forward to finally playing on equal terms to the new gaming market after the turn of the year, and to offer games that we and our customers have missed for a long time,” she said.

The company invested SEK 30 million to extend its agreement with the Research Council and continued to support Sweden’s only professor of gaming addiction at Lund University, until 2022.

Loob concluded: “I am proud that approximately five million customers, or 52 percent of the Swedish people, are positive to Svenska Spel. But there is a clear downward trend in the whole game industry’s reputation.

“Our most important industry-wide challenge is to work to enhance image and reputation. Here everyone has to take their responsibility.”

Netent In Online Gambling Content Deal With Penn National Gaming

Games and developer’s first Pennsylvanian contract

Swedish online gambling games and software developer NetEnt announced Thursday that it has signed a content agreement with Penn Online Entertainment, LLC, a subsidiary of Penn National Gaming’s Penn Interactive Ventures, for the new regulated online casino market in Pennsylvania (USA).

NetEnt is preparing for the new regulated market in Pennsylvania and has entered into an agreement to deliver its online casino games to operators in the US state.

“This deal marks NetEnt’s first customer signing for Pennsylvania and is an important step in our growth strategy in North America, said Erik Nyman, managing director NetEnt Americas LLC.

“We are pleased to offer NetEnt’s portfolio of online games to our customers and look forward to partnering with NetEnt to launch online gaming in Pennsylvania” Chris Sheffield, managing director of Penn Interactive Ventures and Sr. Vice President of Penn National Gaming added.

The Swedish giant has additionally posted its Q3-2018 numbers and YTD January-end September results, highlighting:

  • Revenues for the third quarter up 10 percent atg SEK 449 (405) million;
  • EBITDA of SEK 227 (195) million, a margin of 50.6 (48.1) percent;
  • Operating profit (EBIT) up 11 percent at SEK 172 (155) million, a margin of 38.3 (38.3) percent;
  • Profit after tax of SEK 155 (142) million;
  • Nine (8) new customer agreements signed, and 14 (10) new customers’ casinos launched;
  • Games launched with British Columbia Lottery Corporation in Canada and Norsk Tipping in Norway;
  • Beta launch of NetEnt’s affiliate business;
  • First customer launched on regulated market in Lithuania;
  • Games launched with Hard Rock in New Jersey;

For the first nine months of 2018 ending September 2018, the company reported:

  • Revenues of SEK 1,317 (1,211) million;
  • EBITDA of SEK 612 (545) million, a margin of 46.5 (45.0) percent;
  • Operating profit (EBIT) of SEK 455 (429) million, a margin of 34.6 (35.4) percent;
  • Profit after tax of SEK 441 (393) million;
  • 23 (29) new customer agreements signed, and 29 (24) new customers’ casinos launched.

NetEnt CEO Therese Hillman reported:

“The third quarter was marked by a strong start thanks to the successful release of the game Jumanji. We continue to make efforts to lower overhead costs and to optimize the organization for commercial drive and increased pace of output, and I see room for improvement next year in several areas. Our net cash position provides us with financial flexibility and allows for continued solid cash returns to shareholders.”

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