Paris clubs shut as Budget chaos continues
French government subsidising 60% of salaries, ANJ reviews promos, Bet365, Flutter
Good morning, on Gaming & Co today:
Paris’s gaming clubs closed on 31 Dec, staff fear for future as political uncertainty persists
ANJ asks France’s leading brands to reduce marketing
US sports results impact Flutter, rise in revenue for Bet365
News shorts: Brazil, Allwyn, Ukraine
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Paris gaming clubs shut amid ongoing political uncertainty
France’s online casino regulatory work is likely to continue, but indecision linked to the country’s politics abounds
Partial unemployment: With Paris’s gaming clubs forced to close on 31 December due to Michel Barnier’s government being brought down over MPs’ rejection of the country’s 2025 Budget, the establishments’ employees are currently “partially unemployed” and the government has agreed to pay them 60% of their salaries.
Unsure future: The larger operators have agreed to contribute the remaining 40% of their staff’s wages for a few more months, but the near-term future for the clubs remains deeply uncertain.
The French government returns to official duty on 13 January and the clubs, which generated €120m in GGR during the past 12 months and €10m in taxes to local budgets and €40m for the state, are hoping that a new Budget can be voted through in Q1.
Hands tied: Sébastien Leclercq, CEO of Circus Casino France, told French media that the Ministries of the Interior and Labour had been “receptive” to the clubs’ needs and “tried to help” as much as they could, but without the legal framework provided by the Budget they were unable to do more.
In the meantime, the clubs will continue to feel the unforeseen impact of the political chaos that has enveloped France since President Macron’s decision to call elections in the summer.
Chaos not over: The next set of parliamentary elections is scheduled for July 2025, if Macron dissolves parliament, but another confidence vote could be called before then if his opponents get enough support and, should centrist PM François Bayrou’s government lose it, the French president could be forced to form a third government in barely a year.
Regarding the online casino regulatory project, working groups focused on consumer protection, the public health aspects of legalisation and the potential economic impact of iCasino on France’s land-based casinos are expected to continue meeting. However, until a Budget is agreed and voted through, the uncertainty will continue.
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ANJ asks leading brands to reduce advertising
Move comes as part of annual review of 2025 marketing budgets
Lower spend wanted: France’s Autorité Nationale des Jeux (ANJ) has asked the country’s four largest gaming operators to reduce their promotional spend as part of efforts to minimise consumers' exposure to gambling products and reduce the possibility of problem gambling cases arising. ANJ’s move is part of its annual review of operators’ marketing and promotional plans for the next 12 months.
Although it did not name the companies, by market share they are Betclic, Winamax, FDJ/Unibet and PMU.
Big event boost: With Euro 2024 and the Olympic Games helping operators boost the number of player accounts by 13%, ANJ said the gaming groups will seek to consolidate their respective player base with “increasingly sophisticated targeting strategies”.
This year’s promotional budgets will be up 11% to €695m, including both marketing and bonuses and accounting for inflation, said ANJ.
Digital media will scoop 45% of the amount, with traditional media getting 32%. Financial incentives and rewards are up 11% and represent nearly 59% of the overall budget. Sports sponsorship is set to grow strongly at +23%, said ANJ.
The regulator said the majority of its recommendations for 2024 had been followed, including efforts to moderate promotional and marketing budgets, which were down 8% in 2024. The use of digital media platforms to advertise had stabilised, partnerships with influencers that have large underage audiences had ended and bonusing was down 3%.
US sporting results hit Flutter’s 2024 performance
Favourites win: Punter-friendly US sporting results continued throughout Q4 as market leader and FanDuel parent group Flutter announced that revenues for 2024 will be around $370m lower than expected at approximately $5.78bn (vs. guidance of $6.05bn-$6.25bn).
Sports results have impacted US bookmakers’ fortunes throughout Q4, Flutter’s share price has dropped 10% in the past month, and JMP said the news at least removed “uncertainty around numbers”.
However, “the first several weeks of the year, including the NFL playoffs, will be optically important, not only for Flutter but also for the industry, as investors look for confidence that 2025 estimates are intact,” it added.
The trend should see US customers start Q1 “with more funds in their wallets” and FanDuel should benefit from NCAA games and an easy Super Bowl compared to last year’s.
For 2024, US adj. EBITDA is set to come in at around $505m, or c$205m lower than expected than the $670m-$750m range forecast. Outside the US, good momentum in the UK and Ireland continued thanks to favourable sports results in the English Premier League.
Back to black for Bet365
UK giant returns to profitability but analysts cast doubt as group “runs out of in-play growth”
Back to black: Bet365 returned to profit on the back of a 9% rise in revenue, however analysts suggested the results were “disappointing” and warned the days of the Stoke-based operator being a “cash machine” may be over.
In newly filed accounts covering the 53 weeks to March 31 2024, Bet365 said revenue rose to just under £3.7bn vs. 2023’s £3.4bn, driven by strong performance in sports betting, augmented by an extra week of trading and expansion into the US.
Having suffered an operating loss of £24.5m in 2023 as it invested in US expansion, operating profit rose to £396m, while profit before tax was £626.6m, vs. a £60.2m loss in 2023.
Making headlines: The salary drawn by CEO Denise Coates always attracts headlines. It dropped to 57% on 2023’s £220.7m to ‘just’ £94.7m in 2024, with dividends likely to make her overall package around £150m vs. £270m in 2023.
So a positive year then? Not necessarily, said Regulus Partners. Given inflation levels and double-digit growth in most online gambling markets “it is hard to call these topline results anything more than disappointing”, the analysts said.
They added that Bet365 has “run out of in-play growth” and warned about challenges ahead in both the US and Brazil.
“Whether a management team famous for its operational effectiveness chooses a different strategy to deliver growth (multi-brand, M&A, etc) or whether the UK’s most successful online family business will remain a cash machine remains to be seen,” it concluded.
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News shorts
Brazil launched its regulated betting and gaming market on 1 January against a backdrop of a Senate inquiry and a court case against the Rio state lottery.
The Ministry of Finance approved 68 operators for launch day, while simultaneously ordering the Telecoms Ministry to block 1,812 illegal gambling domains.
Meanwhile, the Senate will investigate the economic and sporting integrity risks associated with the new market, and the Rio Lottery has launched an appeal against a Supreme Court decision that stops Rio-licensed operators from taking part in the new regime.
UK lottery operator Allwyn has acquired its second stake in a leading gaming company with the €217m acquisition of 51% of Novibet parent Logflex MT Holding adding to a previous investment in Kaizen Gaming, the parent of the Betano betting brand.
The Novibet founding management team will remain in charge after the acquisition and benefit from a €110m performance-based earnout.
Novibet is an Athens-based operator with over 1,000 employees ranging across Greece, Brazil, Ireland, Italy, Mexico, Chile, Ecuador, Canada and Malta.
Blackstone-owned Grupo CIRSA has completed the acquisition of a 68% stake in CasinoPortugal.pt. Reports suggest Blackstone is planning a €1bn IPO of CIRSA on the Madrid stock exchange.
Ukraine President Volodymyr Zelenskyy has signed a law that dissolves the old gaming regulator and replaces it with one that will have the authority to introduce new time and money limits on gambling.
Calendar
Jan 20-22: ICE 2025, Barcelona
Jan 30: Evolution FY24
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