NetBet expands Danish market presence through strategic partnership with Hacksaw Gaming

, has decided to retract its advertisements from various locations, including the London transport network. This move comes after a wave of public disapproval over the nature of the ads and criticism directed at London’s mayor, Sadiq Khan, (pictured above on the right), for permitting the ads to be displayed.

As the mayoral election looms, Susan Hall, (pictured above on the left), Khan’s Conservative opponent, has joined forces with a leading clinician and a group of peers to question Transport for London’s (TfL) perplexing decision to approve the campaign. TfL has a history of rejecting promotions featuring artisanal cheese, a poster for a play depicting a Victoria sponge cake, and the Wimbledon tennis tournament’s renowned strawberries and cream, arguing that they encouraged unhealthy eating habits.

However, despite Khan’s 2021 manifesto commitment to prohibit gambling ads on London’s transport network, TfL has continued to accept promotions for bookmakers and online casinos. This is pending an independent review of the relationship between advertising and gambling-related harm.

Recently, on the London Underground, trains, and buses, with slogans like “This carriage is now a casino”. Some black cabs even carried the slogan “Fancy a spin?”. The company stated that the ads “could be interpreted in a different manner to the brand position we aim for”. This decision is believed to be a reaction to criticism of the manner in which the ads endorse online casino games. According to NHS survey data, these games are linked with higher harm rates than most other gambling products. TfL stated that the 888 ads adhered to the advertising regulator’s broadcasting code and its own policies, including the stipulation that the ads should not “trivialise gambling”.

Hall, Khan’s main competitor in the mayoral race, expressed confusion at Khan’s inconsistent stance on what advertisements he permits and bans. She questioned why he would ban ads featuring cheese or strawberries and cream, while appearing indifferent about vaping and gambling ads. Professor Henrietta Bowden-Jones, who supervises the National Problem Gambling Clinic and is acknowledged as one of the UK’s leading experts on addiction, also criticised Khan after seeing one of the ads on the tube.

In a letter to TfL’s commissioner, Andrew Lord, the House of Lords group Peers for Gambling Reform argued that the “aggressive” ads contradicted Khan’s manifesto pledge. The group’s chair, Don Foster, stated that TfL’s position on gambling, compared to junk food ads, was “clearly inconsistent”. TfL’s review of its policy on gambling ads has enabled companies like 888.com, chaired by Labour peer Jonathan Mendelsohn, to launch high-profile campaigns. Over the past two years, gambling firms have spent nearly £1.8 million to advertise on the network.

888.com has been hit with some of the largest fines in the history of the British betting industry, including a £9.4 million penalty in 2022 for multiple failings that resulted in customers incurring massive losses during the height of the Covid crisis.

In 2017, it was fined £7.8 million, then a record penalty, for similar failings. It also owns William Hill, the current record holder for the highest penalty ever issued by the Gambling Commission, a £19.2 million fine imposed in 2023. While TfL accepted 888’s ads, it has previously banned images promoting food considered unhealthy due to its high fat, sugar, or salt content. Ads deemed unacceptable included one featuring artisanal cheese and a promotion for the Wimbledon tennis championships that included strawberries and cream.

In Italy, a significant shift in advertising policy occurred in 2019 when the government implemented a decree of dignity, that would change the landscape of advertising in the country. This decree led to the banning of almost all forms of marketing related to a particular industry. This sweeping ban covered various mediums, from television and radio to print and the internet. The decision was driven by a study that revealed a startling statistic - 3 percent of the country’s population was grappling with harm related to this industry.

Meanwhile, other European nations were also following. Countries like Germany, Spain, Belgium, and the Netherlands were tightening their rules around this industry’s advertising. They recognized the need for new regulations, not just for traditional forms of this industry but also for the emerging digital platforms. These included online platforms, virtual games, and even poker matches.

Across the Atlantic, the United States had a different approach. Each jurisdiction had its own authority and statutes governing this industry. However, there were general rules that applied across state lines.

Melco Resorts & Entertainment has announced its strategic plan to primarily focus on the Indian and Sri Lankan market with its casino venture in Sri Lanka. The company projects that the annual gaming revenues could soar up to US$250 million.

The Government of Sri Lanka has awarded This allows Melco to design and manage the casino and a portion of the hotel rooms at Sri Lanka’s US$1 billion Cinnamon Life Integrated Resort. The casino is slated to start operations in mid-2025.

During the company’s Q1 2024 earnings call, Lawrence Ho, Melco Chairman and CEO, shared his vision of Sri Lanka emerging as the Macau of Asia. He believes that by leveraging Sri Lanka, being the nearest gaming jurisdiction to India, can provide a unique gaming experience.

Geoff Davis, Melco Executive Vice President and CFO, added that India is undoubtedly the most intriguing feeder market with immense potential. While there is a certain level of domestic spending, the company’s objective will be to cater to those feeder markets in India and the wider region.

Davis anticipates that international play will eventually make up two-thirds of the company’s Sri Lankan revenues, with GGR comfortably in the US$200 million to $250 million range annually.

Melco has plans to invest US$125 million to design the casino, which Ho described as a “small bet for a potentially huge opportunity.”

The company, in collaboration with local partner John Keells, is significantly raising the bar to a world-class standard with this integrated resort and the casino they’re designing. While it’s a bit early to provide specific returns, the company is expecting returns that are very attractive and shareholder-friendly, that will also enhance shareholder value and probably offer returns that would be challenging to achieve in most mature markets.

This strategic move by Melco is seen as an excellent method to tap into a market with enormous potential in a capital-efficient manner.

Comparative study of Sri Lanka and Macau

Sri Lanka’s Flourishing Gaming Industry: Sri Lanka’s gaming industry, especially the online gaming sector, has been witnessing substantial growth in recent times. The surge in mobile gaming is attributed to the popularity of smartphones and affordable mobile data plans. The government is actively working towards establishing a regulatory framework for the online gaming industry. However, the industry faces a significant challenge due to the low internet penetration rate in Sri Lanka. Despite these challenges, the rising disposable income in Sri Lanka has led to an increase in spending on leisure activities, thereby driving demand for online games.

Macau’s Thriving Gaming Industry: On the other hand, Macau, often referred to as the “Las Vegas of Asia,” is the only region in China where gambling is legal. The gaming industry in Macau is one of the most vital industries, providing over 54,000 job opportunities. Macau’s gaming industry generated 19.3 billion patacas (US$2.37 billion) in its first monthly tally of gross gaming revenue (GGR) in 2024.

Comparative Analysis: While Sri Lanka’s gaming industry is still in its growth phase with a focus on online gaming, Macau’s gaming industry is more mature and primarily centered around physical casinos. Both markets possess their unique strengths and opportunities. It will indeed be intriguing to observe how these industries evolve in the future.

In the third quarter of the fiscal year 2024 (ASX:BET), experienced a significant market shift. The company’s shares fell by approximately 11 percent, a change primarily driven by a 4.1 percent year-on-year decrease in revenue. The revenue for this quarter, ending on 31st March 2024, amounted to A$22.3 million (€13.7 million), a drop from A$23.3 million in Q3 FY23.

BetMakers attributed this decline to the soft conditions in the Australian wagering market, which accounts for about 25% of its income. The quarter was particularly challenging for Australian operators due to the competitive landscape, regulatory changes, and tax-related issues in Australia.

BetMakers’ revenue model is intricately tied to its customers’ performance, given its revenue share agreements with approximately 30 different wagering platforms. The company’s underlying EBITDA for the quarter was a loss of A$2.5 million, an improvement from the A$4.1 million loss in Q3 FY23. Despite the loss, the company registered positive net operating cash flows of A$1 million.

The improvement in EBITDA was a result of ongoing reductions in operating costs, which decreased by 8.2 percent quarter-over-quarter. BetMakers intends to implement further cost reductions in the current quarter. The first nine months of FY24 saw a revenue of A$73.7 million, marking a 5.3 percent increase from the same period in the previous year.

The third quarter was a period of significant change for BetMakers. The company signed new agreements with PA Betting Services, , and Gaming Innovation Group (GIG).

Post the quarter, BetMakers announced a binding agreement to acquire the assets of Racelab Global, an international supplier of racing wagering products and technologies. This acquisition, costing a total of A$1.5 million, added leading race form, preview, and statistics technology to BetMakers’ ecosystem, along with proprietary fixed odds pricing technology.

BetMakers is also set to receive early termination fees from Australian operator Betr, which will no longer require the supplier’s services after being acquired by another brand, BlueBet. BetMakers received an initial A$3.75 million from Betr in March, with further payments of A$2.25 million due by June and an additional amount between A$1.5 million and A$2 million to be paid by September.

BetMakers’ executive chair, Matt Davey, emphasized the company’s strategy of enhanced operating discipline, focusing on higher margin, capital light revenue growth, and profitability. He expressed confidence in the company’s progress and the pipeline of new growth opportunities. CEO Jake Henson echoed these sentiments, highlighting the benefits of their transformation program and the potential opportunities that position BetMakers for an exciting future.

Italian gaming and has reported a 4 percent year-on-year revenue rise to €440.1 million in Q1 2024. This revenue was generated on the back of €1.01 billion in total Gross Gaming Revenue (GGR) during the quarter, marking a modest 1 percent increase compared to the same period in 2023. The company now holds a 21.6 percent share of the Italian online gambling market.

However, the company’s adjusted EBITDA for the quarter stood at €149.5 million, reflecting a 4 percent decrease from Q1 2023. This drop came about as the operator’s adjusted EBITDA margin fell to 34 percent, down from 36.9 percent in the same period of 2023. that Q1 2024 revenue grew 11 percent compared to Q1 2023 at a normalised payout rate, driven by the overall increase in productivity of the network.

The normalised payout calculates Lottomatica’s Q1 earnings on the premise of a sports betting payout rate of 79.7 percent in retail locations and 86.4 percent from betting online. This method of calculation provides a more accurate representation of the company’s earnings, taking into account the variability in payout rates.

The online segment of Lottomatica’s business surpassed expectations, with revenue increasing 21 percent year-on-year to €150.4 million in Q1 2024. However, the sports franchise segment reported a 15 percent year-on-year decrease to €94.4 million due to “unfavourable payouts” in the first quarter. Despite this, Lottomatica’s gaming franchise generated a 4 percent year-on-year revenue increase to €195.3 million.

In terms of volume, the online sector also surpassed expectations, experiencing annual growth of 36 percent as total bets reached €5.06 billion. This is a significant achievement, considering that Lottomatica recorded €8.73 billion in total betting volume for the quarter, marking a 20 percent increase compared to the previous year.

Lottomatica Group CEO Guglielmo Angelozzi stated, “In the first quarter of 2024 we have continued our path of organic growth, also supported by solid market tailwinds, with revenues and EBITDA achieving double digit growth year-on-year (at normalised payout)”. This statement reflects the company’s successful growth strategy and its ability to leverage market trends to its advantage.

The company completed the acquisition of SKS365 in April 2024. This acquisition is expected to contribute significantly to the company’s performance in the coming months. The company now predicts revenue for full-year 2024 to come in between €2.02 billion and €2.07 billion, with adjusted EBITDA of between €680 million and €700 million. This forecast includes eight months of contribution from SKS365, with estimated full-year adjusted EBITDA for the business of approximately €80 million.

Lottomatica’s Q1 2024 performance presents a mixed picture. While the company has managed to achieve revenue growth and expand its market share, the dip in EBITDA and the decrease in the sports franchise segment’s revenue are areas of concern. However, the successful acquisition of SKS365 and the strong performance of the online segment provide a positive outlook for the future.