Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. Today, we revisit a UK Gambling Commission fine as well as a key appointment, Flutter Entertainment issuing a Supreme Court appeal, and financial reports.
The UK Gambling Commission issued a £5.85m fine for social responsibility and anti-money laundering failures at Rank Group subsidiary Daub Alderney, but the operator is not at all happy with the process.
The regulator is playing hardball with Rank as it is adamant that gambling operators will face the full consequences of regulatory failures, even if breaches occurred prior to ownership, as was the case here. However it appears that Rank believes that there are both equity and public policy issues raised by this outcome and will be seeking an appeal to the First-Tier Tribunal.
Daub Alderney, the licensed arm of the Stride Gaming business that Rank Group acquired two years ago, runs aspers.com, kittybingo.com, luckypantsbingo.com, luckyvip.com, magicalvegas.com, regalwins.com and spinandwin.com. Along with the fine, the Gambling Commission has also issued a formal warning for the failures which occurred between January 2019 and March 2020.
The regulator said that social responsibility failings included neglecting to put into effect policies and procedures for customer interaction where it has concerns that a customer’s activity may indicate problem gambling.
Flutter Entertainment petitioned the US Supreme Court to appeal “monstrous damages” handed out to its PokerStars entity in a reinstated $870m ruling in Kentucky.
The group is questioning whether “an award of statutory damages violates due process when it exceeds by a factor of more than 30 any conceivable harm,” as well as if “the Excessive Fines Clause prohibits a state from punishing a defendant by imposing a penalty 50 times in excess of the defendant’s revenue earned from the prohibited conduct”.
Flutter says that if “left uncorrected” the decision will “invite states to pursue novel claims in state court for the combined value of injuries supposedly suffered by their citizens”.
The case relates to legal proceedings originally brought by the Commonwealth against certain subsidiaries of The Stars Group in 2010, prior to its combination with Flutter.
Culture Secretary Oliver Dowden confirmed the appointment of Marcus Boyle as the next chair of the Gambling Commission for a term of five years, saying that the move will provide a “fresh impetus” for the regulator ahead of the Gambling Act review white paper.
Boyle, whose appointment will take effect from September 5, 2021, takes over from Bill Moyes, who has occupied the role since 2017, as is lauded as boasting “extensive change management experience across both public and private sector bodies”.
Most recently, he led the development and implementation of a major programme of reform at a public sector body, driving change based on his robust financial management and governance capabilities.
He has also been an equity partner for two leading global professional services firms including most recently at Deloitte, where he served as a board member, chief strategy officer and chief operating officer. He is also chair of the British American Drama Academy.
Ireland’s betting sector has agreed to introduce a “comprehensive set of industry commitments” after the Irish Bookmakers’ Association published its code of practise for safer gambling.
The code, adopted by all IBA members and the majority of licensed online companies operating a sportsbook or casino in Ireland, is lauded as being “ground-breaking in its reach”, and will be fully operational during this year.
Operators are committing to the removal of credit cards as a payment method both online and in Ireland’s retail outlets. This change is already in place for some operators, and others will make the necessary technological changes within their business as soon as is possible, by no later than the end of the year.
The industry will also introduce a restriction on TV advertising on live sport before 9pm. This removal of advertising will involve live sporting events and will run from five minutes before the event until five minutes after, and will not include horseracing or greyhound racing.
New marketing standards will be applied to Ireland’s sports sponsorships, with operators not allowed to display their logo or name on any commercial merchandising which is designed for use by children. Operators will also ensure team sponsorship messaging includes safer gambling messaging where possible.
Crown Resorts confirmed that it is no longer in discussions with Oaktree regarding a revised proposal tabled in June, as the Australian gaming and hospitality group detailed the impacts of regulatory and COVID-19 challenges for the year ending June 30, 2021.
Amendments made to its initial proposal, which was put to the company in April, would have seen the group buy back a portion, or all, of the group’s shares held by James Packer’s Consolidated Press Holdings.
Under the proposal, Oaktree outlined a A$3.1bn facility consisting of two tranches, firstly that of a A$2bn private term loan, and a A$1.1bn loan convertible into new shares to be issued by Crown at a strike price of A$13 each.
This comes as the casino operator reported a net loss for the year of A$261.6m compared to a profit of $79.5m one year earlier, which itself represented a year-on-year slide of 80.2 per cent.
888 anticipates that revenue and adjusted EBITDA across the full year will be slightly ahead of its prior expectations, as the online gambling group reaffirmed that it remains “well positioned to deliver further strategic progress” through 2021.
The comments came as the company reflected on its performance during the first half of the year ending June 30, 2021, which secured a 39.4 per cent revenue increase to $528.4m (2020: $379.1m), buoyed by a 40.9 per cent B2C uptick to $509.1m (2020: $361.3m).
This growth reflects the group’s continued momentum across several regulated markets during the period, as well as a strong showing across both gaming and betting which surged 35.2 per cent and 82.3 per cent to $428.8m (2020: $317.2m) and $80.3m (2020: $44.1m), respectively.
B2B revenue increased 8.3 per cent to $19.3m (2020: $17.8m), with 888 citing good progress across its bingo network.