Betclic drives Banijay Group in Q1
Betclic's strong Q1, France gambling mediator, Gambling.com &Co
Hello, on Gaming & Co today:
Betclic drives Banijay Group during Q1 as it readies for major summer of sport.
France’s gambling mediator urges operators to do more to prevent excessive gambling.
Affiliates: Gambling.com hit by Google update, Better Collective acquires AceOdds
News shorts: Holland tax rise, Sportradar
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Betclic drives Banijay Group’s 2024 EBITDA raise
Growth driver: Strong growth from Betclic enabled its parent company Banijay Group to record a 10% rise in revenue in Q1 to €1bn and issue a raised EBITDA growth guidance from high single digits to low teens for 2024.
The group’s CEO Francois Riahi said this was due mainly to the strong outlook for OSB and iCasino, where revenues were up 31% to €321m during the quarter, as the group prepares for Euro 2024, the Copa America and the Paris Olympics In the coming months.
Home advantage: Riahi added that even though the Olympics will “not be on the same scale as the Euros from a betting perspective”, the fact that they are in Betclic’s home market will help.
At group level, adj. EBITDA increased 11.2% to €164m and margins rose 30bps to 16.4% on the back of a strong launch in the Ivory Coast and the country winning this year’s African Cup of Nations.
OSB revenues were up 26% while online casino, poker and horse racing betting increased 53% and revenues from regulated markets had risen to 99% from 92% in the past two years.
Rebrand: The company’s renaming to Banijay Group from FL Entertainment means the TV production and live experience units are now called Banijay Entertainment and Banijay Live, while Betclic and Bet-at-home will operate under the Banijay Gaming banner.
Restricted access: Banijay Gaming however will not have the access to the same finance facilities as the TV production and live units and Riahi said the group had no plans to do so in the near term. At period end the group had €434m in cash reserves and its leverage ratio was 3.1x.
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France: operators must do more to “prevent excessive gambling”
Mediator says operators must do more on prevention, but also points to players wrongly flagged as excessive gamblers.
Prevention better than cure: France’s gambling mediator issued its annual report this week and urged operators to do more to prevent cases of excessive gambling. As part of four key recommendations, Denys Millet, an honorary magistrate and France’s gambling mediator, said that currently French operators are “almost systematically” delaying or rejecting account suspension measures.
Millet urged them to implement the measures “as soon as the player does not respond to prevention messages, avoids any attempt to contact them or changes his gambling behaviour by increasing his deposits and bets, reflecting a clear loss of control that exposes him to heavy losses”.
This would make it possible to engage in a discussion with the gambler to provide better support and identify and support excessive or pathological gamblers.
The report also noted that “the number of referrals concerning addiction issues remains low in relation to the number of problem gamblers” and that there had been an increase in the number of complaints linked to account closures of players who don’t consider themselves to be problem gamblers.
Due an update: The last report on excessive gambling in France was published in 2019, an updated report is due for publication at the end of the year.
The other three key recommendations focused on:
Refunding players’ accounts in cases of suspected fraud: Suspicions about the authenticity of the documents produced by a player (proof of address, ID card and bank documents) can justify account closure if there is a risk of fraud, but operators should not confiscate players’ deposits unilaterally and must provide “factual reasons for their decision”.
Closures are allowed if a report of suspicious activity is made to France’s financial tracking unit TRACFIN or if the operator can prove that the bets were placed illegally.
Operators' terms and conditions: The mediator said operators were within their rights to cancel bets if these were placed on the same selection within a short period of time (i.e. six or seven bets in 10-minute bursts), but must be careful not to abuse “potestative” terms, when these are dependent on only one party (i.e. the operator), in particular when this applies to winning bets.
Informing players of account closures due to inactivity: Operators are obliged to close player accounts if they have been inactive for 12 months, but should inform them of the closure after 11 months so that players can either decide to play or close their account free of charge.
By the numbers: The mediator processed 1,523 player requests for intervention in 2023. The figures represented a YoY increase of 11%, with 91% focused on issues related to disagreement between bettors and their bookmakers.
The report revealed that 752 requests were declared inadmissible, with the mediator processing 754 cases and the average processing time was 31 days, “well below the maximum of 90 days” set by France's Consumer Code, while 30% of the requests received partial or total satisfaction.
Google update impacts Gambling.com Q1s
Group confident of outlook but acknowledges short term hit of web giant’s latest update.
Impact update: Google’s ‘site reputation abuse’ update will mean Gambling.com will not drive as much revenue and EBITDA from its media partnerships as expected, but CEO Charles Gillespie expressed confidence that the group would continue growing at double-digit pace as he discussed Q1 results with analysts.
Quick recap: Google’s update came out in the past month and cancels the SEO exposure of newspapers’ betting-themed pages that are published as part of content agreements with affiliate groups, but where the content is not written by the newspapers’ journalists. This impacts groups like Gambling.com or Better Collective that run performance marketing betting-related pages for newspaper publishers.
The company acknowledged the c$10m revenue and c$4m EBITDA impact of the update as it lowered its 2024 revenue guidance to $118m-$122m from $129m-$133m, while adj. EBITDA guidance came in at $40-$44m from the $44m-$48m range it issued in March.
Legacy competition: Gillespie noted that the figures represented 14% YoY growth and said the update had had a positive impact on the group's own publishing assets such as Gambling.com or Rotowire, which were benefiting “from less competition in the search engine results pages” from media partners such as McClatchy and Gannett in the US or The Independent in the UK.
Everyone feels the hit: He added that media partnerships had “been a net positive”, but their EBITDA contributions would be diminished. “The changes you will see will be the same across the board for all companies who have such deals,” he added.
The company will continue to aim for a medium term EBITDA target of $100m. Asked how confident he was of reaching that goal in light of Google’s update, Gillespie said that with midpoint 2024 guidance of $42m, “we would only need to continue to grow organically at a lowest CAGR of mid-teens”, to which it can add “some extra scale” through M&A to reach the goal mid-term.
Widening the angle: The “aperture of what we are considering” for M&A had also widened as a result of the update, Gillespie added, and the group was “no longer only looking at SEO-driven gambling affiliate businesses” as potential targets.
“The way you should think about this is we run a precision machine,” he added. “And when something changes like this, we need to recalibrate that machine. That takes a little bit of time, but once we do, we will get better clarity and it will be a positive long term development.”
Revenues were up 9% to $29.2m in Q1 but adj. EBITDA was down $500k to $10.1m. During the period, the group delivered 107k NDCs, launched in North Carolina, agreed a new $50m credit facility and completed the acquisition of Freebets.
Better Collective snaps up Ace Odds
Staying with affiliates, Better Collective has acquired Ace Odds for £36m/€42m to both “strengthen its foothold in the UK” and expand its reach internationally.
AceOdds is a “multi-language sports betting brand” that produces betting tools, odds, reviews and streaming schedules and BC said its “local expertise aligns perfectly with AceOdds’s vision of expanding its influence outside the UK”.
Ian Bowden, Senior Director UK & Ireland at Better Collective, said "this strategic acquisition brings us a robust owned and operated sports betting media brand in the UK market, poised for global scalability”.
Of the total transaction amount, €40m will be paid for in cash and the rest in shares. The price implies a 4x EBITDA multiple based on the last 12 months.
BC also upgraded its 2024 revenue guidance to €395m-€425m from €390m-€420m and its EBITDA guidance to €130m-€140m from €125m-€135m, implying a 17%-26% growth rate.
News shorts
Dutch coalition set to increase taxes: The governing coalition in the Netherlands is set to increase the tax rate on dot nl operators from 30% to 37.8%, the rise is expected to bring in an extra €202m in tax revenues to the country’s treasury, reports the Dutch news outlet CasinoNieuws.
The country’s governing coalition had originally set itself a target of €400m in extra gambling tax revenues but last month VAN Kansspelen, the trade association for the arcade sector, said even a 1% increase would be disastrous for its members, while the online trade body NOGA said increasing gambling taxes will endanger the legal market.
Sports betting data provider Sportradar’s Q1 revenues exceeded forecasts by 7% at $266m and its adj. EBITDA was 25% ahead of forecasts at $47.2m. The group’s betting solutions division recorded a 35% increase in revenue to $219m, while its sports content units were up 5% to $47m. CEO Carsten Koerl said the group’s ATP and NBA partnerships had provided major boosts during the period.
Calendar
May 21/22: Better Collective
Jun 6: Gaming in Holland
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