France iCasino: need for speed vs. careful timing
France iCasino: need for speed vs. careful timing
Timing is key issue for French stakeholders, FDJ, UK, results round up
Good morning, on Gaming &Co today:
Timing of French iCasino regulations remains key issue, with AFJEL wanting to move fast and French casinos wanting to take their time.
Double bubble: FDJ on the up following UK Budget et EC news
UK numbers rise thanks digital slots.
Results round up: Lottomatica, MGM, Rush Street Interactive
News shorts: US sweepstakes battle, Bulgaria.
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Time of the essence as France debates iCasino regulation
Casino trade group wants to take its time while online groups are pressing to move forward.
Push and pull: Discussions on potential formats to regulate online casino in France are raging among gambling stakeholders ahead of the government’s consultation talks planned for next week. The date and time of the talks are not yet known, but timing will be key, especially with the online operators of the country’s online gambling trade body AFJEL keen to pass legislation as part of this year’s budget.
Time is on my side: Indeed, one of the leitmotifs of the coverage is the insistence by the French casinos’ trade group Casinos de France that it will take its time in considering and deliberating all the key issues surrounding the topic after it succeeded in getting the government to withdraw its online casino amendment last weekend.
As CdF CEO Philippe Bon told Gaming&Co this week, “technical solutions are complex and tax revenues will take time” while CdF VP Fabrice Paire told French media the topic should be discussed calmly, without taking hasty decisions and that talk from online operators of reintroducing the amendment as soon as possible in parliament was not realistic.
Budget Minister Laurent Saint-Martin also told French media that it was vital “the government does not make mistakes” when regulating the vertical.
Waiting for proposals: Bon added that CdF was open to potential online casino collaborations with AFJEL members, but had so far not received any proposals from the trade body.
Most favoured model
Within that context, one model that is often mentioned by industry sources would see AFJEL’s online groups operate the digital offerings of land-based casinos.
T&Cs: These would come with stringent conditions, such as a limited (i.e. small) number of licensed operators, high revenue levels generated in France or no illegal iCasino activity in the market in the past five to 10 years.
Rev share: The projects would see a share of the online revenues going to the casinos, according to their size and scale, although a solution to compensate smaller, independent casino groups would also have to be found.
That issue is key for CdF as it says online casino regulation would lead to a 30% drop in activity for land-based casinos and lead to closures and up to 15,000 job losses.
Halloween surprise: News of the online casino amendment 10 days ago caught industry observers by surprise, but with the authorities green lighting it just after Française des Jeux had closed its acquisition of Kindred Group, the more cynical among them could not help draw the conclusion that FDJ had decided the timing.
From arch-enemy to lobbying powerhouse: Speaking of FDJ’s acquisition of Kindred, AFJEL can now benefit from the lottery giant’s lobbying firepower. With the strategic aims of the likes of Betclic or Unibet and its parent FDJ now aligned, the amendment’s proposal of an open model of competition was ideally suited to online operators.
iCasino regulation has long been called for by stakeholders as a vast illegal market has developed since France’s OSB and poker regulations in 2010. As part of any regulatory project, the Autorité Nationale des Jeux will call for enhanced powers to continue going after unlicensed operators and the payment companies that enable the flow of funds in and out of the country.
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UK operators breathe a sigh of relief…
… as does Française des Jeux with positive UK Budget and EC news.
And breathe: The UK’s online operators, along with Française des Jeux, breathed a sigh of relief this week as the government’s budget ruled out tax rises on bookmakers or casino websites despite introducing the biggest tax rises on the county since 1993.
With Kindred Group generating c20% of its revenues from the UK through its flagship sportsbook Unibet, FDJ will have welcomed the news.
I say jump: French analysts said it was an “unexpected positive result”, especially as a rise was expected. FDJ’s share price jumped 7% as a result, Flutter Entertainment was up 5% and Entain rose 9%.
What’s the EC ever done for us? The lottery group enjoyed further positive news as the European Commission said it will have to pay ‘just’ €97m on top of the €380m it has already paid for the 25-year exclusive rights to operate France’s national lottery. There had been fears the figure could be in the hundreds of millions of euros.
Unfair aid: The payment was part of FDJ’s 2019 privatisation. Following the listing, online operators filed a lawsuit with Brussels claiming FDJ had been given unfair state aid and had underpaid for the rights.
FDJ’s nine-month revenues to the end of September this year were up 12% to €2bn, with lottery activities generating €1.5bn of the total.
UK gross win up 11% thanks to online slots
Slots driving: The UK gambling market generated GGR of £1.3bn in Q3, an 11% YoY rise driven by a 16% increase in online slots activity, as stakes across all verticals rose 12% to £25bn, the latest data from the UK Gambling Commission shows.
The Q3 figures were just short of the previous quarter’s £1.46bn and slots generated a record £680m, but GGR per session fell from £4.20 to £4.13.
Slots sessions were longer, with the number of sessions lasting more than an hour increasing 9% to 10 million. However the average session length was stable at 17 minutes.
Online GGR rose 6% to £453m and the number of bets dropped 10%, but there monthly active account numbers were up 9%. Retail betting GGR was down 1% to £533m and the total number of bets placed over the counter decreased 6% to 134 million, but self-service betting terminals usage levels were up 9%.
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Results round up: Lottomatica, MGM, RSI
Lottomatica’s €640m acquisition of bookmaker SKS365 last year and its integration of the brand in April helped it boost its online revenues by 52% to €543m.
The group said it now enjoys 30% share of Italy’s online gambling market as revenues increased 19% to €1.4bn from Jan-Sept while adj. EBITDA was up 25% to €483m. The group issued FY24 guidance of €2bn in revenues and €700m-€730m in adj. EBITDA.
MGM Resorts’ Q3 net revenues of $2.4bn were a company record but adj. property EBITDAR was 2% lower than Street forecasts at $1.2bn. Analysts at Jefferies said the company's share of loss in BetMGM, its joint venture with Entain, was just $3.2m and “well-above our estimated loss of $24.7m”, while Macquarie said the group “is well positioned to execute on digital growth”.
Improvements are expected from Entain’s tech stack and the group is scheduled to launch with major Brazilian media conglomerate Grupo Globo in January.
On the analyst call, CEO Bill Hornbuckle confirmed the Formula 1 Grand Prix held in Las Vegas will impact FY24 EBITDA by c$30m the group was “looking at the same number” in 2025.
B2B and B2C operator Rush Street Interactive booked another strong quarter and CEO Richard Schwartz said RSI was monitoring “really exciting opportunities in Latin America” and expansion in Canada, with the province of Alberta “coming online, hopefully in later next year”.
Revenues were up 37% YoY to $232m and adj. EBITDA reached $23m vs. $4m last year. RSI also upped FY24 adj. EBITDA guidance by 24% to $82m-$86m and announced a $50m share buyback scheme.
News shorts
Indian gaming interests and regulated sportsbooks in the US have joined forces to push out sweepstakes and fantasy betting operators. Indian Gaming Association conference chair Victor Rocha’s latest webinar on sweepstakes and DFS featured Chris Cylke, the American Gaming Association’s senior vice president of government relations. Cylke told listeners that sweepstakes’ legal standing was “murky” and too risky for AGA members.
In response, the Social and Promotional Gaming Association, the trade body that represents a number of sweepstakes companies, said “social casinos with sweepstakes prizing are legal in most states” and “entries can never be purchased – just like any other “enter for free” or “no purchase necessary sweepstakes offered by regional, national, and international brands.”
Bulgaria introduced tough gambling advertising restrictions in May and operators are feeling the hit. Some such as Betfair and Betway have already left the market while others are weighing up their options.
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Get in touch with Jake Pollard to find out more about Gaming and Co: jake@gamingandco.info