iGaming Wrap-Up of CW 36-37
#iGaming News of the week
0. FBI investigating cyber incident at MGM Resorts that caused widespread shutdown of IT systems
The FBI is currently conducting an investigation into a "cyber incident" that occurred at MGM Resorts International, resulting in the shutdown of computer systems at company properties across the United States. MGM Resorts has clarified that its resorts remain open.
The FBI has classified the investigation as ongoing, with no additional information available at this time, the Associated Press reported, citing Special Agent Mark Neria, spokesperson for the bureau in Las Vegas.
The company disclosed that the incident commenced on Sunday, leading to the shutdown of "certain systems" in an effort to safeguard data. While not explicitly terming it a cyberattack, MGM Resorts did not specify which systems were impacted.
The effects of this incident were felt in reservations and casino operations across locations including Las Vegas and states such as Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New York, and Ohio.
#Breaking News
1. Caesars hit by cyberattack as loyalty programme data is compromised
US casino giant Caesars Entertainment has confirmed it was the victim of a cyber breach following suspicious activity within its IT network. Earlier this week, Bloomberg suggested Caesars had paid tens of millions of dollars to hackers who broke into the company’s systems and threatened to release company data.
It has now been confirmed that the breach – attributed to a social engineering attack on an outsourced IT support vendor – allowed hackers to access the operator’s loyalty programme database, which included sensitive personal data such as driver licence and social security numbers.
Caesars immediately activated its incident response protocols and brought in cybersecurity experts to aid in the investigation, the company said in a statement on 14 September.
The company has now informed all necessary authorities, including law enforcement agencies and state gaming regulators.
2. Australian government sets sights on credit card betting ban
The Australian government’s hands-on approach to betting regulation continued this week as the Anthony Albanese administration introduced new legislation to parliament.
Payments are under the spotlight in the government’s latest betting crackdown, specifically credit card transactions and the use of digital currencies – it can be assumed the government is targeting crypto under this definition – for online betting.
Australia already has a ban on gambling with credit cards at land-based facilities. The bill would bring online gambling in line with this, effectively placing a blanket ban on all credit card gambling.
“It’s as simple as this: people should not be betting with money they do not have,” the minister for communications, Michelle Rowland MP, said. “The government remains committed to protecting Australians from gambling harms.
3. Changes and challenges as Brazil sports betting and online casino bill gets closer
In a significant decision, Brazil’s lower house has given the green light to a bill aimed at regulating the nation’s sports betting and online casino industry.
This bill, which passed the lower house yesterday (13 September), has undergone some changes (more below) from the provisional measures introduced earlier this year.
The bill is now on its way to the Senate for further consideration. The Senate has a 45-day window to provide feedback on the revised bill, but it’s unlikely that substantial alterations will be made.
This suggests that, unless the Senate strongly opposes it, the bill could soon become law once it receives the presidential signature.
The government has voiced its support for the bill, with Jose Guimaraes, the leader of the lower house, asserting that it represents a crucial step in tackling tax evasion and boosting state revenue.
4. Over 1.1M people opened sportsbook accounts during NFL Week 1
A new report from GeoComply has given both scope and context to just how many Americans were wagering during the first week of NFL action.
The geolocation firm issued a report entitled From the Sidelines to the Mainstream with highlights from Sept. 3 to Sept. 10 along with how those numbers compare to last year.
Over the course of the week, GeoComply processed over 242 million geolocation checks, which was a massive 56% uptick from 2022, which logged 103 million checks.
The start of the 2022 NFL season marked the first time New Yorkers were able to kick off the season with wagering, which propelled it to the top of the list in terms of states by betting volume.
5. Lottery.com regains Nasdaq compliance
Lottery.com, Inc. (NASDAQ: LTRY, LTRYW) ("Lottery.com" or the "Company") announced today that on September 8, 2023, it received formal notice (the "Notification Letter") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that it has evidenced compliance with the minimum bid price requirement set forth in the Nasdaq Listing Rule 5450(a)(1) (the "Minimum Bid Price Requirement") and the filing requirement Listing Rule 5250(c) (the “Periodic Filing Rule”).
As announced on August 24, 2022, the company was notified that its ordinary shares failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by the Minimum Bid Price Requirement. As announced on August 8, 2023, the Company's shareholders overwhelmingly approved a reverse stock split. The Company’s board then voted to approve a 1-for-20 reverse split (the “Split”) which was in the range approved by the shareholders.
6. FanDuel signs deal with Amazon Web Services (AWS)
Amazon Web Services, Inc. (AWS), an Amazon.com, Inc. company (NASDAQ: AMZN), today announced that FanDuel, the leading sports gaming company in the U.S. (LON: FLTR), has selected AWS as its strategic cloud provider, deepening its relationship with the world’s leading cloud to help power the company’s growth into new markets across the U.S. and Canada. FanDuel is leveraging AWS’s proven, secure, and highly performant infrastructure to scale its support of millions of simultaneous players as they place bets, watch live content, and access real-time features.
“AWS has proven it can provide a secure and reliable infrastructure that helps scale our business quickly into new and existing markets while meeting important regulatory requirements,” said Shane Sweeney, senior vice president, Technology for FanDuel. “This expansion regionally is part of FanDuel’s broader work with AWS, which includes the use of AWS Outposts and Local Zones to help drive our performance.”
7. Can FanDuel , Tribes mend path to legalize California Sports Betting?
FanDuel Sportsbook is attempting to mend fences with California tribes and find a pathway to participating in legal sports betting.
James Siva, vice chairman for the Morongo Band of Mission Indians, told LSR Wednesday that FanDuel Sportsbook indicated its willingness to be a B2B operator in a future legalized CA sports betting landscape.
“FanDuel has been more amenable to reach out to a number of tribes,” Siva, who also serves as chairman for the California Nations Indian Gaming Association, said at the Indian Gaming Association Mid-Year Conference at Foxwoods Resort Casino. “I’ve heard from a number of tribes that they’ve reached out. I haven’t heard much from DraftKings, whether they’ve reached out.”
A FanDuel spokesperson said there was “nothing new to report” prior to Siva’s comments.
#US / Canada
8. Seminoles score new victory in legal fight over Florida sports betting, clearing path for potential re-launch
The Seminole Tribe of Florida scored another victory in its legal fight over offering sports betting in the Sunshine State. On Monday, a federal appeals court denied a request from pari-mutuel owners for a rehearing after a ruling that upheld a multibillion-dollar deal giving the tribe control over sports wagering throughout the state, which could clear the path for Hard Rock Bet to launch in Florida soon.
As per the appellate court rules, this decision becomes effective eight days after being handed down, making September 19 the earliest launch date for Hard Rock Bet's sports betting platform.
The tribe has been eagerly awaiting the opportunity to relaunch in its home state since it went live briefly in 2021. Hard Rock's sports betting platform was live for just over a month before being forced to shut it down due to a court order.
9. Iowa betting revenue down year-on-year in August despite handle jump
Sports wagering revenue in Iowa fell 6.2% year-on-year to $13.5m (£10.8m/€12.6m) during August despite an increase in player spending.
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Revenue in Iowa for August was down from $14.4m in August 2022 but 27.4% ahead of $10.6m in July this year.
Breaking this down, the state attributes $11.6m of monthly revenue to online wagering. The remaining $1.9m came from retail betting in August.
In terms of spending, Iowa consumers wagered a total of $141.2m on sports during August. This was 15.2% more than $12.6m in August last year and 28.7% higher than $109.7m in July 2023.
Online betting wagers amounted to $131.9m, while retail spend reached $9.4m.
10. Indiana sports betting handle level year-on-year at $238m in August
Player spending on sports betting in Indiana remained level year-on-year in August at $238.1m (£191.0m/€222.2m) while revenue dipped slightly.
Monthly handle was in line with the $238.0m reported in August 2022 and 16.8% higher than $203.8m in Indiana in July this year.
Baseball again proved the most popular sport among consumers, attracting $66.8m in bets. Basketball bets totalled $19.8m and football $17.3m, while other sports drew $63.0m in wagers. A further $70.7m was spent on parlay bets.
Taxable adjusted gross revenue in August amounted to $23.5m. This was 7.5% behind the $25.4m posted last year but only marginally less than $23.3m in July 2023.
11. Colorado sports betting handle dips below $300m in July
Player spending on sports betting in Colorado amounted to $281.1m (£224.7m/€261.8m) in July, the first time the state’s handle fell below $300.0m since August 2022.
Colorado’s betting handle was 8.9% higher than $258.4m in July 2022 but 9.5% behind $310.7m in June this year. July was also the fourth consecutive month of month-on-month betting handle decline for Colorado.
Online betting accounted for $279.4m of all wagers placed during the month. In contrast, just $1.7m was spent betting at retail sportsbooks in Colorado.
12. New York revenue falls below $100m in August
New York’s sports betting revenue has fallen below $100m for the first time in 12 months as the quiet sporting calendar continued in the late summer.
Data from the New York State Gaming Commission revealed that sports betting GGR was $98.5m, the lowest figure since July 2022 when the market was still growing. It is just the fourth month since the market opened that revenue was below $100m.
The Commission revealed that operators handled $1.11bn in bets during August, which marked an increase on the $962.1m that bettors wagered in July. Meanwhile, it is also an increase year-over-year, as the August 2022 handle stood at just $872.2m.
Despite the increasing betting activity across the Empire State during August, the hold rate was 8.8%, which was much weaker than the 10.9% recorded in July. This meant that revenue dropped significantly to $98.5m, a decline of 6.3% from the month prior.
The figure also represents a 1.1% decline in revenue on an annual basis.
#M&A & Finance
13. H1 2023: Record half for Gaming Realms alms as content licensing drives 36% growth
Mobile games developer Gaming Realms has reported a 36% year-on-year rise in revenue to £11.5m for H1 2023.
Content licensing provided the bulk of H1 revenue at £8.8m, up 37% annually, while brand licensing revenue contributed £1m amid a 222% rise from an admittedly low base of £0.3m.Social revenue declined by 2% to £1.8m, however.
Adjusted EBITDA climbed 37% to £4.8m for the period, representing an adjusted EBITDA margin of 41%. This period marked a record performance for the group in terms of revenue and EBITDA, driven by the content licensing business after 12 consecutive half years of growth.
#Legal & Regulation:
14. KSA to probe potential cashback bonus violations
The Dutch Gambling Authority, Kansspelautoriteit (KSA), is leading a market-wide investigation into Dutch operators based on reports of cashback bonus use.
While cashback bonuses are commonly seen across many international online gambling markets, the Netherlands’ legal framework on online gambling – which was introduced in October 2021 through the KOA Act – states that any provision of cashback bonuses by operators in the country is banned by law.
According to the KSA: “In the Netherlands, bonuses are classified as an advertising activity, and according to the law, advertisements may not encourage immoderate gaming behaviour.
“In the opinion of the KSA, this is the case with cashback bonuses. They contribute to taking more risks and lowering the threshold for gambling, for example by playing with higher stakes or playing more often.”
15. Spelinspektionen submits 2024 lottery reforms to EC
Spelinspektionen, Sweden’s Gambling Inspectorate, has submitted its proposed commercial and technical rule changes on state lotteries and lotteries for charitable purposes to the European Commission (EC).
The changes, filed as “The Lottery Inspectorate’s general advice on state lotteries and lotteries for charitable purposes,” will necessitate updates to Sweden’s Gambling Act and a subsequent review by the EC’s Chamber of Commerce.
Consequently, new amendments have been applied to Sweden’s Gambling Act to refine the definition of lottery product/types such as ‘electronic lotteries’, ‘instant win’, ‘POS services’, and ‘charitable draws’.
Regarding lottery operations, state lotteries and charitable lotteries must possess record-keeping capabilities to document procedures of sold and redeemed tickets from customers.
As the gambling authority, Spelinspektionen must be informed about maintenance inspections of POS lottery machines and retail systems.
16. Swedish gambling body supports plan for increased AML penalties
The Swedish Ministry of Finance has announced plans to change to the Money Laundering Act to equalise penalties across high-risk Swedish industries. The changes will mean that AML violations must be treated equally from April 1, 2024. The move will increase the size of any penalties against Swedish gambling operators.
The gambling trade association Branschföreningen för Onlinespel (BOS) has welcomed plans to equalise AML fines across sectors in Sweden provided that gambling revenue specifics are recognised. Its response comes as the Ministry of Finance said it hoped the move would resolve legal disputes over the Swedish gambling regulator Spelinspektionen’s issuing of “proportionate fines” for AML infringements.
Licensees including Genesis Global and AB TRAV have challenged Spelinspektionen’s calculation of fees based on turnover instead of GGR. The Gambling Act stipulates that fines can be up to twice the profit made from the violations, but penalty violations related to AML are treated differently than standard violations.
17. Chile accepts Berner resolutions for new gambling regime
The government of Chile has accepted resolutions for the launch of regulated online gambling proposed forward by the Chamber of Deputies Economic Commission. The 15 new articles define the online gambling activities to be licensed and those to be prohibited.
Drafted by economic undersecretary Heidi Berner with the assistance of Vivien Villagrán, the superintendent of Gaming Casinos Chile (SCJ), the articles are part of the legislative framework for Bill 035/2022, which will legalise online gambling and sports betting.
Since the bill was authorised in March, government departments have been working on policy provisions. The new articles set out the context for the prosecution of criminal activity connected to online gambling, introducing criminal penalties for the violation of online gambling regulations.
#Tech:
18. Genius Sports ports signs deal with Snap Inc. chat for new NFL lenses
Genius Sports Limited (“Genius Sports”) (NYSE:GENI) has struck a new partnership with Snap Inc. (“Snap”) to power immersive augmented reality (“AR”) fan experiences via Snapchat Lenses. Genius Sports will help to power the next wave of Snapchat Lenses through NFL Official League Data, providing millions of fans with phone-based, highly shareable content. Genius Sports is also the exclusive distributor of the NFL Official League Data and Next Gen Stats (“NGS”) feeds to global media and betting markets.
“With over 250 million Snapchatters engaging with AR on our platform every day, we're thrilled for Genius Sports to bring real-time data to our Lenses to make them even more immersive.”