Betclic powers on, questions FDJ-Kindred
Betclic results, casino cannibalisation, results briefs, Holland update, News shorts &Co
Hello, on Gaming&Co today:
Betclic motors on and casts doubt on FDJ-Kindred M&A
Fine young cannibals: offline-online casino cannibalisation debate heats up again
Results briefs: Bet-at-home, NeoGames + Holland update
News shorts &Co
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Betclic Group powers on and raises questions about FDJ-Kindred acquisition
Betclic Group’s parent company FL Entertainment said strong levels of cross-sell from sports-led Betclic sites to iCasino offerings had led to 39% growth in non-OSB revenues.
Playing monopoly (again): However, when asked if he had a view on market share and the proposed takeover of Kindred Group by FDJ, FL Entertainment CEO François Riahi said: “We don’t see that the (lottery and land-based betting) monopoly can buy a company with a large market share in (French) online sports betting without (it) being an issue for the relevant authorities, but that will be for the authorities to see if (the deal) can go through.”
Waiting game: Riahi added that Betclic and FL teams will wait to see what the French authorities have to say about the proposed acquisition over the course of the next nine months.
State of play: One question sent to Riahi via the web came as a comment and noted “with interest that the French state could become a major shareholder in the leading European online casino operator (Kindred Group), while not allowing online casino in France”. Riahi described the comment as “interesting”.
Betclic's revenues grew 19% to €996m and adj. EBITDA rose 24% to €252m in 2023 and Riahi praised the group’s market leadership in France, Portugal and Poland and said the brand was progressing well in Germany, but was a small player in Italy.
Key events in the past 12 months were Betclic’s launch in Africa in the regulated Ivory Coast market and with this year’s African Cup of Nations also taking place there, Riahi said the event had helped make Betclic the number 2 brand in the country.
Health and diversity: He added that the best sign of a healthy online gambling operation was the number of unique active players and these were up +23%, “supported by effective diversification both in terms of products and geographies with casino, poker & turf (horse racing) increasing at double-digit rates”.
Group-wide revenues including FL Entertainment's TV production units were up nearly 14% to €4.5bn and adj. EBITDA was up 15% to €756m as adj. EBITDA margins rose 20bps to 16.7%.
The group has €464m on the balance sheet and its leverage ratio was “stable” at 3.1x. Its TV production unit Banijay refinanced its debt with c85% of debt maturity extended until 2028-2029.
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Fine young cannibals?
Cannibalisation of land-based casino resorts by online portals has been in the headlines recently and fits into broader debates around regulations and how they impact channelisation.
Proxy wars: The recent online-offline casino cannibalisation debate that took place (albeit by proxy) between Deutsche Bank and Eilers & Krejcik in the US was an illustration of how important the topic is to discussions around online casino regulation and is just as relevant to French discussions on the issue.
Quick runthrough: The report was carried out by EKG on behalf of the US online gambling trade body iDEA Growth and surveyed “how the legalization of online casino gambling affects land-based casinos” in the US.
Key findings: It found that online players tended to be younger than their offline counterparts, but operators that have both online and offline offerings “have not observed cannibalization”.
Before and after: Comparing the growth rate of land-based casino before and after iCasino was introduced, the report found that “in all six states (where online is regulated in the US), land-based casino revenue was positively impacted by the introduction of online casinos”.
30% hit: In France, the potential cannibalisation of land-based casinos by digital casino portals is a key issue in the debates around online casino regulation. Debating the topic in the French parliament in Feb23, the gambling regulator ANJ said land-based casinos would suffer a 30% hit to their revenues in the event of online regulation.
In the US, the regulatory set up in the leading iCasino states of New Jersey, Michigan or Pennsylvania requires online operators to partner with offline casinos. That system also applies in Europe in countries like Belgium and Switzerland.
Uneven performances: Looking at Belgium, Philippe Bon, CEO of Casinos de France, the trade body for the land-based sector in the country, told Gaming&Co that there have been disparities in how Belgian land-based casinos have fared since online casino regulation.
Bon said that when the vertical regulated, “land-based casinos’ GGR fell initially, (and) they recovered (the revenue) online. But some also recovered some of that growth because they had clever marketing strategies to attract online customers to their establishments”.
Link me up: With regard to France however, he added that if online casino became regulated without the land-based tie up, such a trend would not be possible. “Boosting land-based casinos with online (casinos) only works if there is a strong link between online and land-based,” he said.
Stone of destiny: “This is why we are campaigning for our JADE project (to regulate iCasino via offline-online partnerships), to avoid a disaster for both casinos and (the) territories (the regions in which they are based), and if possible to bring in additional customers, by finally allowing French casinos to enter the digital age,” he added.
The topic will no doubt resurface in France in the coming months as land-based and online stakeholders continue to call for iCasino regulation. Returning to the US and for a different take on the issue, Deutsche Bank was clear in one of its recent industry updates.
In reference to the EKG report, the DB team commented that while some observers “appear to (be) doing mathematical acrobatics to arrive at a certain conclusion, we believe the data speaks for itself”.
“While it may not be what some want to hear,” the analysts added, “in one paragraph and one chart, we have shown, for some time, and show here again, that iCasino is in fact having an impact on B&M casinos.”
DB added the “underperformance” of land-based casinos in New Jersey, Philadelphia and Michigan, the three states “that actually matter” as they “generate >90% of 2023 iCasino GGR, is so clear that we struggle to see how, but not necessarily why, one could reach a different conclusion”. In the past year and relative to 2019, the performance of B&M casinos in iCasino states is +0.6% compared with +11.7% for B&M-only states.
The issue fits into broader debates around whether bad regulations push players towards illegal operators and will no doubt reappear, along with issues like the different age groups online and offline casinos attract, in France in the coming months.
But with PMU joining AFJEL this week, stakeholders appear to be gearing up for some serious lobbying.
Results in brief
The iLottery-iCasino-OSB supplier NeoGames said was its acquisition by Aristocrat will complete in May as Q4 revenues fell 21% to $64.9m due to an accounting change related to new commercial terms for its Aspire Core OSB contracts. while adj. EBITDA was flat at $18m.
Betclic’s DACH-focused bookmaker Bet-at-home’s revenues were down 14% to €36m and its EBITDA dropped 62% to €800k, which the group said was due to the betting limits sets by the regulations in its core German market. The company said for 2023 revenues would come in at €45m-€53m and adj. EBITDA at -€1m and +€2.5m.
Holland update: No more exclusive licences?
Proposals to introduce cross-operator deposit limits would not be introduced before 2025 and a regional ruling has called into question monopoly licences, Gaming in Holland reports.
Slow motion: A motion from the country’s Lower House called for their introduction before the summer, but Minister for Legal Protection Franc Weerwind said even if they were technically feasible, they would only be introduced in 2025 at the earliest.
Meanwhile a ruling by the regional East Brabant District Court on land-based licences issued on an exclusive basis could have far-reaching implications.
In a case brought forward by JVH Gaming, the court said the Dutch Remote Gambling Act called into question the legal justification for only granting these land-based licenses on a monopoly basis.
The country’s gambling regulator KSA has imposed a record €19.6m fine on Gammix for offering online gambling without a license in the country. Gammix was ordered to leave the Dutch market in June 2022 but carried on operating and was fined €4.4m in March 2023.
News shorts
Giving a run through of EGBA’s activities in 20203, EGBA Secretary General Mareen Haijer said one of the biggest positives that could happen in 2024 was if France regulated online casino.
Betsson has launched its flagship brand in Italy, having already operated its StarCasinò brand in the market for the past 10 years.
Calendar
Mar 12: IGT
Mar 20: Sportradar, Kindred RG day
Mar 26: Flutter, Bragg Gaming
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