French trade body AFJEL to fight tax rises
OSB faces 70% taxes, Entain chief resigns, Catena overhaul update, Super Bowl, Allwyn & more
Good morning, on Gaming&Co today:
AFJEL ready to challenge gambling budget amendments in France
CEO Gavin Isaacs resigns from Entain with immediate effect
Catena Media to focus on core areas, Super Bowl SGPs and props save the day
News shorts: Allwyn, EveryMatrix, Joel Leonoff
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AFJEL wants to take on budget tax hikes
President of trade body says rises mean OSB faces 70% taxes on GGR in France
Challenge on course: France’s online gambling trade body AFJEL is hoping to challenge amendments that will lead to significant tax rises for online bookmakers and poker sites as part of the country’s budget. The rises have been earmarked since Nov24 and technically are aimed at enabling France to keep social security spending afloat, but they are also part of the country’s overall plans to reduce debt levels that currently stand at 114% of GDP.
The government included the amendments in last week’s social security budget. While lottery monopoly Française des Jeux will see GGR tax levels rise from 6.6% to 7.6%, for OSB operators the rise will be from 10.5% to 15% of GGR. Tax levels for online poker sites will rise from 0.2% on stakes to 10% of GGR.
Tax raid: Speaking at last month’s Gaming in France Briefing at ICE, Nicolas Béraud, CEO of French market leader Betclic and President of AFJEL, said OSB groups in total are subject to taxes of more than 60%, and with this rise, these will now approach 70% of GGR. The tax revenues from online operators are expected to bring in around €1.6bn.
Return of the JONUM: The committees that were due to analyse online casino regulation are also stalled, with no update on when or if they will start. Meanwhile, legislators are set to start their assessments of JONUM, the fantasy betting products pushed through parliament in 2023.
The country’s 200 land-based casinos are taxed at around 57% of their GGR and will ‘only’ face a rise of around 1% as part of the budget measures.
Reform needed: France is renowned for its high business taxes and speaking at the Gaming in France event in Barcelona, Clément Martin Saint Léon, MD Gaming for Barrière Groupe, said they badly needed reform as they are deeply confusing and cumbersome, with different tranches of taxation applied according to the company size and revenues that are generated.
Trotters trading: In horse racing, the Société d'encouragement à l'Élevage du Trotteur Français (SETF), the company that oversees trotting races in France, said it paid €258m in racing fees and €32m in bonuses to trainers, upping its incentives by €5m as operating profits came to €10m in 2024.
In its new year address, SETF was highly critical of PMU’s running of horse race wagering and said it wanted to set up a steering committee as soon as possible to “analyse the current situation and contribute to the deployment of a concerted recovery plan aimed at halting the trend observed in recent months”.
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Entain CEO Gavin Isaacs steps down after five months
Chair Stella David to take over on interim basis again
Five and out: Entain’s CEO Gavin Isaacs has resigned from his role with immediate effect, the group announced yesterday, as non-executive chair Stella David resumed her role as interim CEO while the group searches for a replacement. The news surprised industry observers as Isaacs had only been in the role since September, but in its statement the group said the decision was mutual.
Tasked with reorganising Entain, Isaacs joined the UK group following a number of senior roles with DraftKings, Aristocrat and Games Global and was on a basic annual salary of £875k per year.
Having already filled in as interim CEO following the departure of Jette Nygaard-Andersen, investors are understood to have been comforted at the news of David once again assuming the role. Independent director Pierre Bouchut will become non-executive chair on an interim basis.
The company publishes FY24 results on 6 March and its EBITDA is expected to be at the top of its £1.04b-£1.09bn guidance.
Catena overhaul continues
Once-leading affiliate focusing on core areas to return to growth
Catena Media said it was continuing to take the necessary actions to return to growth and that in Q4, profitability had improved following the cost-cutting measures that were taken in the middle of the year “to streamline the cost structure” by 33% as it lifted “adj. EBITDA margins from 5% in Q2 to 15% in Q4”.
However, it added that a return to top-line growth was the priority, as “strategic priorities set by management gained traction more slowly than anticipated” in Q4 and revenues were -6% QoQ.
Advanced search: Two Google algorithm updates also created high volatility in its organic search operations for casino. The group said it had spread its resources too thinly in the past and will now focus on “top-performing sites and products”.
It praised its horse racing content partnership with Daily Racing Form for being “built on clear mutual value and aligned incentives” unlike some of its previous media partnerships.
Nothing like the real thing: Its AI-based content generation platform was canned and Catena will recoup €700k of its original investment.
Q4 revenues were down 30% to €10.2m with North America down 28% to c€9m. Adj. EBITDA increased 2% to €1.5m. For 2024, revenues were down 35% to €49.6m with North America also down 35%to c€44m as adj. EBITDA dropped 79% to €5.4m.
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Super Bowl LIX helps bookmakers… just
Sportsbooks breathe a sigh of relief after Q4 results trauma
SGPs to the rescue: This year’s Super Bowl was broadly positive for US sportsbooks. While estimates on amounts bet hit the expected $1.5bn-$1.75bn range, bookmakers didn’t avoid ‘a worst-case scenario’ of a Philadelphia win that covered the spread, which Macquarie said “would result in a -4% hold rate”. However, the “SGP/prop bets were a slight positive for sportsbooks and will result in a positive market hold rate,” the analysts added.
Giv’em props: The Kansas City Chiefs’ Saquon Barkley and Travis Kelce were two of the biggest prop bets and their failure to record a touchdown helped the sportsbooks.
JMP said it estimated player prop bets to make up “50% to 60% of total wagers related to Super Bowl betting” and that “throughout the week, the top 10 props did not materially change until Super Bowl Sunday”.
On the record: Macquarie added that the Super Bowl LIX has “likely set viewership records” since “over 60% of the US population now having access to OSB in addition to strong side stories (Taylor Swift and Trump's involvement), we view Super Bowl LIX as unequivocally positive for the NFL and sportsbooks”.
News shorts
Allwyn has become a Formula 1 sponsor as part of a global multi-year F1 partnership that will begin at the Australian Grand Prix in Melbourne on 14 March. The F1 partnership is a first for Allwyn, which will aim to enhance awareness of its position as a leading multinational lottery operator in the UK, Italy, Austria and Czech Republic.
EveryMatrix said its first US content aggregation deal with betPARX has gone live in New Jersey. The iGaming provider said it is the first supplier to integrate and launch Evolution’s One Stop Shop range of games and in Q1 its SlotMatrix division will become the US operator’s “leading content aggregator and expand its reach to Pennsylvania”.
Paysafe has reached a definitive agreement to sell its direct marketing payment processing business line to KORT Payments, a specialist omnichannel payments provider led by Joel Leonoff, founder and former CEO of Paysafe. Paysafe said the transaction enabled to exit non-strategic verticals.
Calendar
Results: Today: MGM | 14 Feb: DraftKings | 25 Feb: Light & Wonder, Caesars | 27 Feb: PENN Entertainment | 6 March: Banijay-Betclic, FDJ, Entain
Events: 23-25 Feb: SIGMA Eurasia Summit, Dubai | 25-27 Feb: SBC Summit, Rio de Janeiro | 12-13 Mar: NEXT NYC 2025, New York
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