iCasino still main draw for France
France and iCasino regulation, DraftKings-Jackpocket M&A, Q4 results
Hello, on Gaming & Co today:
Main draw: Potential regulation of iCasino is main attraction for stakeholders looking at France.
M&A: DraftKings to acquire lottery messenger specialist Jackpocket for $750m.
Results: FDJ, Betsson, Penn-ESPN Bet, GIG , Catena Media, Better Collective.
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Online casino still the main draw for France
Potential online casino regulation is the main interest for iGaming industry looking at France as current state of play leaves everyone unhappy.
Theory in practice: If Latin America was most often mentioned as the region of focus for both suppliers and operators during ICE last week, when it came to France all the questions and industry chatter focused on whether online casino regulation was a realistic possibility in the medium term. This was perfectly illustrated during the roundtable the French regulator Autorité Nationale des Jeux hosted during the ICE Vox conference.
Single-minded: Outlining France’s regulatory focus will be preventing problem gambling and strengthening its sporting integrity policies in view of the Paris Olympics this summer, it was hard not to sympathise with the ANJ delegation as all the audience questions centred on the impact of a potential regulation of iCasino on the French industry, its suppliers and players.
Eric Sjoden, Senior Advisor International Affairs at ANJ, explained that the different online casino amendments presented to the French parliament over the past 12 months had all been rejected and that iCasino regulation was “unlikely in the near future”.
The vertical is “still prohibited because the 200 land-based casinos” operating in the country “are afraid of (online gaming) cannibalisation”, he said.
International threat: The communes the casinos are based in are highly dependent on the revenues they generate for their budgets and the casino groups are also “worried about big international brands coming in and taking over the online market”.
Asked if online casino regulation would be more likely if it had political or government backing, as was the case for the NFT fantasy betting sub-sector France legislated in 2023, Sjoden replied: “No, it would have to be discussed anyway and the discussion would have to be about the whole sector. The aim of the regulation is to maintain a balance between all the different verticals and stakeholders.”
Balancing act: Maintaining an equilibrium between all the constituent parts of the industry - offline lottery, online horse racing pari mutuel, land-based casinos or fixed odds digital wagering; is the stated aim of French gambling regulation.
Unhappy state of play
For all that, there were numerous questions about the illegal iCasino market in France and the fact that the current situation leaves everyone unhappy: stakeholders want to see the vertical regulated and licensed, the government is losing out on potentially large amounts of tax revenues and thousands of French players visit unregulated sites that operate completely free of any compliance or social responsibility requirements.
Full awareness: Sjoden said the “ANJ is realistic” and fully aware of the size of the illegal online casino market targeting the country.
He added that a study on the rate of problem gambling was being conducted and would be published at the end of the year. The last one, carried out in 2019, estimated that 1.4 million people were at risk and nearly 400,000 were at “pathological levels”.
Ten years after: When it comes to blocking unlicensed sites, Sjoden said ANJ was now able to implement much faster administrative measures for ISP blocks and that it had “blocked more sites in the past 12 months than it had in the previous 10 years”, although he also recognised that blocked sites are very quick to reappear online under different domain names.
ANJ is also working towards blocking payments towards unregulated online gambling sites, but that issue is a lot more complicated than ISP blocking and would be a much lengthier process.
In any case, current illegal iCasinos “would not be the ones getting licensed” should the vertical ever get regulated, added Sjoden.
The authority added that Google France had agreed to block adverts for illegal casinos targeting French players.
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DraftKings goes for cross-sell with Jackpocket acquisition
$750m acquisition by the #2 US sportsbook sees it enter lottery mass market.
Messenger app: DraftKings is set to broaden its footprint in the online gambling space with the acquisition of the lottery messenger service Jackpocket for $750m. The Jackpocket app enables players to purchase US lottery tickets in around 20 states currently.
Crosstown traffic: DraftKings said the deal, 55% of which will be paid in cash and the rest in shares, will enable it to “strengthen its position in sportsbook and iGaming through higher customer lifetime value” by leveraging the cross-selling and “enhanced customer acquisition” features that Jakpocket will bring to the table.
DB building: DraftKings CEO Jason Robins said the transaction will improve its “overall marketing efficiency similar to how our daily fantasy sports database created an advantage for DraftKings in OSB and iGaming”.
DraftKings said it expects Jackpocket to generate between $260m and $340m of incremental revenues and $60m-$100m of EBITDA by 2026, assuming no new states regulate, and $350m-$450m in revenues and $100m-$150m of EBITDA by 2028.
The groups revealed that Jackpocket recorded revenues of $78m in 2023, has forecast $135m for 2024 and its acquisition costs are 80% cheaper than DraftKings’.
DraftKings’ Q4 revenues of $1.2bn and EBITDA of $151m meant it missed forecasts by 2% and 19% respectively. The results were due to customer-friendly sports results, but analysts said top line growth of 44% YoY showed there was “healthy customer engagement, acquisition and a higher parlay mix which led to higher hold”.
FDJ sets sights on being a European iGaming champion
Solid as a rock: CEO Stéphane Pallez said "FDJ achieved solid growth and results” in 2023 and “the proposed acquisition of Kindred would create a European champion and significant value creation for all stakeholders” as lottery “fundamentals” enabled FDJ to record a 6.5% jump in FY23 revenues to €2.6bn.
Kindred spirits: Having bid €2.6bn for Unibet’s parent company Kindred Group in January, the group said the offer will open to consultation on 20 February for a nine-month period and completion of the bid will be subject to regulatory approval. These will revolve around competition issues in France.
Digital dynamics: FDJ’s digital divisions were “in a good dynamic”, with revenues up 11% and NGR +19%. They generated 13% (c€338m) of the group’s NGR, a position that is “supported by (FDJ’s) presence across all gaming verticals”, it added. Kindred Q4 revenues meanwhile were up 2% to £313m with EBITDA up 45% to £57m.
FDJ set itself a 5% growth target for online GGR in 2024, which could rise to +8% when including revenues from its international and payments divisions.
Its overall GGR figure was €6.7bn, the group contributed €4.3bn to France’s public finances. Group EBITDA was up 11% to €657m and EBITDA margins hit 25% in 2023.
Penn feels cost of ESPN Bet launch
Penn Entertainment recorded adj. EBITDA losses of $334m in Q4 due to the launch of ESPN Bet in mid-November while online revenues came in at just $32m vs. market estimates of $210m.
The group said the losses were caused by the higher-than-expected number of customers taking up ESPN Bet’s promotions.
Online losses are set to reach $380m-$420m this year while market share has recently dropped to 7%, far from the double-digit share the group is aiming for.
Betsson drives on with iCasino
Casino drive: As Betsson revenues jumped 14% to €252m thanks to online casino growing 25% to €183m and EBITDA shot up 40% to €72m in Q4, CEO Pontus Lindwall said “the activity is there and we’re optimistic” about the future, despite betting margins being hit due to many favourites winning during the period.
Betsson is already active in Argentina and Peru and Lindwall said the company will continue to focus on Latin America and developing brand presence through new partnerships, notably in Brazil. “We’re quite successful in signing partnerships and creating good traction for our marketing efforts,” he said.
In Belgium, Lindwall said the group’s betFIRST brand had partnered with Middelkerke Casino, which is part of Groupe Partouche to whom Betsson also provides iCasino products, to launch a new online casino in Belgium. “The launch will be in the first half of 2025 and will complete our offering. We have great expectations for it,” he said.
Media and platform highs for GIG
Record breakers: The media, platform and betting solutions provider said Q423 marked “the twelfth consecutive quarter of record-breaking revenue” as it recorded all-time high Q4 revenues of €35.6m, a 37% YoY increase and underlying EBITDA rose 32% to €14.2m.
GIG Media CEO Jonas Warrer said the addition of the casino affiliate AskGamblers had brought “unprecedented success” as revenues rose 49% to €26.5m and EBITDA was up 29% to €11.5m.
Warrer said the acquisition of Kafe Rocks would consolidate the group’s leadership position in the US online casino space. Brazil will also be a focus, but the industry was “also growing in the ‘old markets’ of Europe”, he added.
GIG Platform & Sportsbook revenues were up 11% to €9m in Q4, adj. EBITDA was down 39% to €1m due to technology investments and bringing in a new sales team. CEO Richard Carter said the unit has doubled its sales pipeline from Q3 to Q4 and these will come through in the next 12-18 months.
Catena changes lead to “weak” Q3 for Catena
US-focused affiliate Catena Media said Q3 had been “weak” and the group was aiming to return to profitability in H224 as a set of “extensive investments” in tech and AI led to a 41% drop in Q3 revenues to €14.5m.
The shift from CPA to a revenue share model was the main reason for the decrease and North America, which generates 85% of the group’s revenues, was down 43% YoY to €12.3m while adj. EBITDA dropped 88% to €1.5m.
Multi-year transition: Daly said the transition to a rev share model would be “a multi-quarter process” and some operators were more favourable to it than others.
Better Collective forges ahead
Better Collective’s pre-release of its FY23 results showed the group recorded revenues of €327m, ahead of its €315m-€325m forecast and adj. EBITDA of €111m, firmly within the €105m-€115m target range.
The results were 11% and 17% ahead of revenue (€290m-€300m) and adj. EBITDA (€90m-€100m) forecasts and Better Collective maintained its North American focus by closing its €176m acquisition of the sports media group Playmaker Capital last week.
Calendar
Feb 20: Caesars Entertainment
Feb 21: Raketech, Kambi
Feb 22: Acroud, Better Collective
Contact
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