Under the microscope
UK Gambling Commission first in Evolution review, Greentube fine, French horse racing crisis, LiveScore &Co
Good morning, on Gaming & Co today:
UK Gambling Commission’s review of Evolution will be closely watched
Stakeholder lays into PMU, says French horse racing in state of emergency
Greentube cops another penalty in AML breach
Can LiveScore get back on target in 2025?
News shorts: Kambi; New York; Aviatrix-QTech Games
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🇫🇷🚨Event alert 🚨🇫🇷
Gaming&Co will be co-hosting a special France Networking Event at ICE Barcelona in partnership with Gaming in Europe. Politics, online casino regulation, and everything in between - the event will dive into all the key issues and provide highly valuable insights from leading executives in the market.
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📆 When: 21 January, 15:30-17:00
Speakers: Nicolas Béraud, CEO Betclic Group; Diane Mullenex, Partner Pinsent Masons; other speakers TBA.
Fight against black market enters supplier realm
UK regulator in industry first as it reviews Evolution’s licence
End-of-year surprise: Industry stakeholders across Europe were put on alert just before Christmas when the UK Gambling Commission opened up a new front in the fight against black market operators - by looking into the activities of a supplier’s B2B customers. In a statement to the markets, leading live casino supplier Evolution Gaming revealed that UKGC had started a review of its licence because its games were available on unlicensed UK-facing websites.
First-time look: It is the first time a supplier is being ‘officially’ investigated by a regulator. The news comes after the New Jersey Division of Gaming Enforcement closed an investigation in Feb 2024 that cleared Evolution of responsibility for some of its licensees’ activities in illegal markets after an anonymous report claimed its games were available in countries like Syria, Iran and Hong Kong. Evolution has filed a legal case to uncover the authors of the report.
In its findings, the NJDGE said there was “no evidence that Evolution sanctioned, promoted, permitted, or otherwise materially benefitted from its content offered by operators in any market that the NJDGE considers a prohibited jurisdiction”.
Where does responsibility lie? On a broader level, the issue raises the question of how far iGaming suppliers can be held responsible for the activities of their B2B customers. When the anonymous report targeting it came out in 2021, Evolution said it had no knowledge of its clients’ modes of operation or which countries they took bets from.
However, the UK Licence Conditions and Codes of Practice also states: “It is a licence condition of all gambling software licences issued by the Commission that the B2B operator licensed by us undertakes to secure contractually with its B2C operator clients that any British-based player accessing the network/platform does so via a Commission licensed B2C operator.”
Magic number: Under the UK’s licensing conditions, operators are required to disclose when more than 3% of revenue comes from unlicensed markets but suppliers have generally escaped this scrutiny. Evolution is set to publish its FY24 results on 30 January, but has said the UK represents around 3% of its total revenues. It recorded revenues of c€1.5bn in the nine-month period to the end of Sep24.
Public scrutiny
Evolution was forced to announce the Commission’s review because it is publicly listed, yet other substantial but privately held suppliers also provide their products to unregulated operators but are not bound by the same disclosure rules.
Ignorance is bliss: In an interview set to be published by SBC Leaders magazine next week, Evolution said: “We do not control which markets our operator customers operate in. The decision about which markets to target with their services lies with the operators.”
Quick reaction: However, as soon as UK licence review statement came out in December, it said “games on the identified websites not holding a Commission license have been made unavailable from the UK”.
The Gambling Commission declined the opportunity to elaborate on its approach when contacted by Gaming&Co and no timeframe has been issued with regard to announcing the results of its review into Evolution’s licence.
The growth of unlicensed iGaming in Europe’s largest regulated markets has been one of the most important industry trends of recent years. Licensed stakeholders in Germany, Sweden and France have been vocal in their criticism of restrictive regulations, which they say make unlicensed offers even more attractive to players.
As a result, “tackling black market operators is a big focus for the Commission and they are doing some good work,” Simo Dragicevic, co-founder of The Game Safety Institute, told G&C.
Dragicevic advises the UK regulator as a member of its Digital Advisory Panel and added: “UKGC tends to lead the way with a lot of this stuff. There are much bigger black market problems in other jurisdictions. The UK’s channelisation rate is quite high, compared to Germany or France or some Scandinavian countries. This will become an increasingly important regulatory issue.”
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French horse racing in crisis
Historic stakeholder lays into PMU in New Year address
Frenemy: Jean-Pierre Barjon, Chairman of the Société d'encouragement à l'Élevage du Trotteur Français (SETF), the parent company of trotting races in France, has strongly criticised PMU during his New Year's address. In his remarks, published in full in Paris-Turf, Barjon also criticised the government’s plan to tax “an additional €80m, which would be fatal to the industry”, but reserved his strongest criticism for the PMU.
“Since September 2023, the PMU's commercial activity has suffered a significant decline, which has not yet been halted (...) and it has to be said that the strategy deployed in recent years is not producing the expected results,” he said.
Grievances include “the 2023/25 growth plan, which has not been kept” and led SETF not to vote for a new plan in December. “This is why, with France Galop, we have commissioned several audit missions to gain a better understanding of the situation and build a new future,” added Barjon.
State of emergency: “There is an urgent need for all of us to redefine a genuine ambition for horse racing betting and gaming. This must take the form of an offensive marketing strategy, a better presence of the sales force with customers and points of sale, and, of course, the continued digitisation of betting.”
Greentube hit with £1m fine for CSR and AML failures
Subsidiary of gambling giant Novomatic gets second financial penalty in four years
More failings: The UK Gambling Commission has fined Admiral Casino owner Greentube Alderney £1m after uncovering significant failings in social responsibility and anti-money laundering processes. The Commission’s investigation discovered a number of social responsibility failures, including Admiral Casino failing to implement its own policies ensuring that customer limits were based on sustainable income rather than irregular or one-off sources.
4x4: The operator did not act promptly on red flags and harm indicators, the UKGC said. In one case, a customer with a bank statement showing a negative balance and substantial gambling transactions deposited £4,000 over four months before action was taken.
There were also a series of AML failures, most notably in the identification and potential escalation of money laundering and/or terrorist financing risks.
Too many delays: One customer provided a bank statement showing complex and unusual transactions - including over £100,000 being transferred in and out of the account and a negative closing balance – yet the statement was only scrutinised and escalated four months later.
Meanwhile, evidence suggesting links between customer accounts, such as shared addresses and names, was not escalated in a timely manner. This is the second time Greentube has faced penalties. In 2021, the company paid £685,000 for similar regulatory breaches.
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After a bumpy 2024, what next for LiveScore?
Group delivers betting growth, but media-betting crossover remains a tough sell
Tricky 2024: With plans to become the “number one sports media operator in the world” and expand its sportsbook operations, LiveScore started 2024 in a confident mood. However, with a withdrawal from the Netherlands, multiple rounds of redundancies and a drop in media revenues, questions remain about the company’s path to profitability.
Infinite virtuous loops: LiveScore’s convergence strategy, designed to create an ecosystem across the company’s media and betting products that would drive players from one to another in an infinite virtuous circle, helped deliver solid numbers for LiveScore’s betting brands, with accounts for the 12-month period to the end of March 2024 showing a 46% YoY rise in NGR to nearly £158m. Operating losses were down 18% but still came to £51m.
Balancing act: The accounts highlight the challenge that LiveScore faces in growing the media side of the business, which has traditionally relied on bookmaker advertising. Media revenues were down £500k to £21m, with some advertisers understood to be unhappy with the increased focus on advertising for LiveScore Bet.
Many have tried: While the numbers cast doubt on CEO Sam Sadi’s ambition for LiveScore Group to “become the world’s number one sports media operator”, it also illustrates the challenges media or affiliate firms, which is what LiveScore started out as, have when they seek to operate across media and betting verticals.
The accounts also explain the job cuts made in early 2024, including redundancy for the entire in-house news team, with its output replaced by aggregated third-party content from across the web. In November, LiveScore Bet withdrew from the Netherlands and announced a further 100-plus redundancies across the business.
What next for LiveScore? Expansion of sportsbook operations into new markets remains on the agenda but, with the UK and Ireland continuing to drive the vast majority of the group’s turnover (£139m of the £179m total), targeting growth in those countries is likely to be the short-term focus.
News shorts
Sportsbook supplier Kambi is providing its betting solution to Easygo, the operating arm of Australia-based betting and gaming group Stake.com as part of a new partnership between the two groups in newly regulated Brazil.
The agreement however will not include cryptocurrency bets, where Stake is one of the largest operators in the space. Kambi added that the deal enables Stake to leverage its sportsbook in other regulated markets.
New York is set to announce the award of at least one and maybe all three downstate casino licences by the end of 2025. Currently, 11 applicants are hoping for a favourable decision, their proposals must be officially submitted by the end of June.
The Straight to the Point newsletter said the NY legislature is unlikely to “seriously consider online casinos until the licences are awarded”.
Crash games supplier Aviatrix has signed a distribution agreement that will see QTech Games grow the games’ reach through its licensees in Asia and expand into “growth territories from Africa to LATAM”.
Calendar
Jan 20-22: ICE 2025, Barcelona
Jan 30: Evolution FY24
Contact
Get in touch with Jake Pollard to find out more about Gaming and Co: jake@gamingandco.info