Esports betting in the United States is a yet to be fully tapped, and with more regulatory progress the total market and opportunity in esports continues to grow.

It’s why at PandaScore, we recently acquired our first license in the lucrative American market, in the esports-friendly state of Colorado. The move is a strong signal of our ambition in the US, but it also sets out our methodology for solving the uncertainty problem that US esports betting currently suffers from.

Supplier licensing should lead the way

The unknowns about what markets and lines can be offered are a key piece of the puzzle in many jurisdictions. Uncertainty around the legislation means operators are tentative to jump in with both feet. At PandaScore, we’re helping operators navigate US esports betting regulation on a state-by-state basis, so they can make business led decisions in markets with right balance of stability and opportunity.

Except for a few states, esports betting regulation is relatively  new: there’s not a great deal of precedent to work from, and its quickly evolving nature means there’s likely more work to be done in the future. We plan to be at the forefront of making sure that esports betting works for the whole ecosystem: operators, suppliers, regulators and the betting public.

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The regulatory framework across the country may be shifting at different paces, but almost all states are going in one direction: expansion.

Esports suppliers have a duty to show operators the way and give them the tools, knowledge and expertise to make the right decision. We don’t believe in going all guns blazing, but entering markets with some certainty around esports in a considered fashion.

We can be more confident that those specific markets are built for esports, with Colorado being PandaScore’s first step for several reasons.

Why Colorado

When deciding which market to enter, we consulted heavily with our customers and whittled it down to states that had the right mix of commercial opportunity, solid regulatory environment and straightforwardness in licensing.

Since regulating esports, Colorado has had a friendly framework for esports. The catalogue for regular betting includes a wide range of esports titles based on approved games and tournaments by the publisher or regulator – which follows some similarities to how traditional sports betting is structured.

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The process itself was simple and clear, with clear terms and commercials that promote investment, entrepreneurship and innovation – all key ingredients for growing new markets and ambitious organisations to build new audiences.

Colorado is the natural next step in PandaScore’s service-minded, client-first approach. There’s already a generation of bettors who are seeking out esports betting products, esports suppliers need to be the source of knowledge and expertise that helps guide and amplify the esports ambitions of their clients.

Service-minded approach, client-led growth

We bring operators into the licensing conversation from the outset, exploring the licenses most valuable to them and then leveraging our lean, efficient operating model to get it done.

We’ve proven we’re serious about the US market, and that we can get a license efficiently, so if an operator desires a specific jurisdiction, we base our decisions on the revenue potential, give them a clear, no-spin picture of the market, and put in the hard work of licensing to provide our services in the US.

Player age verification as a mandatory service

A huge part of that no-spin picture is addressing the concern and risk around player age verification in esports. Compliance is paramount for suppliers and operators alike, so knowing the requirements from state to state is essential.

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PandaScore has been offering player age verification for years and is well established on this front thanks to years of servicing jurisdictions like Australia and Sweden. We already have an API that clients use for peace of mind, and are beefing it up as a standalone service intended to support regulators and governing bodies to ensure compliance, confidence and growth.

Suppliers need to lead from the front for US esports betting to succeed. It’s not just about having the best product – they need to be an expert on relevant regulation, genuinely serve the expansion interests of clients and be a truly safe pair of hands that actively supports and serves operators, bettors and regulators alike.

Author: Oliver Niner, Head of Sales at PandaScore.

Launch provides sports bettors with exciting new content and raises horse racing awareness

SIS Content Services, part of Sports Information Services (SIS) Group, the leading content supplier of 24/7 live betting services, has agreed a landmark deal with long-time operator partner Bet365 to deliver its global horse racing content to bettors in Colorado, bringing fixed-odds horse racing wagering to a licensed sports betting platform for the first time in the United States.

The approval of horse racing fixed-odds wagering on Colorado sportsbooks will aid the sport attracting a wider range of casual bettors, who will be offered the same type of betting as all other sports. It represents positive news for a range of Colorado stakeholders including Bally’s Arapahoe Park and the Colorado Horsemen’s Association as a portion of turnover is directed to Colorado horse racing.

Boasting round-the-clock betting opportunities, SIS Group provides a comprehensive horse racing portfolio of nearly 140 international and domestic racetracks. The upcoming highlights include the Saudi Cup Day on February 24 where top American horses will compete for US$33.5 million in purses and then travel to the Dubai World Cup meeting on March 30th to vie for US$30.5 million in purses. Along with coverage of the world’s richest horse races, year-round racing is available from 14 countries including Ireland, Australia, Chile, Argentina, Uruguay and the United States.

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SIS Group delivers sportsbooks an end-to-end horse racing solution including live-streamed video with betting triggers, race day data and an extensive range of markets and odds prices to provide seamless betting experiences.

“The launch of fixed-odds horse racing betting on Colorado sportsbooks puts horse racing on equal footing with other sports and hopefully attracts a new fan base and revenue for our racetrack partners,” the Vice-President for SIS Content Services, Michele Fischer, said. “This is a great first step in expanding the horse racing audience and I commend the Colorado horse racing stakeholders, Colorado Division of Gaming and Bet365 for their vision and support. Horse racing provides sportsbooks with exciting year-round 24/7 content throughout the world. It will take time in the United States but I expect that more sports wagering operators and states will include horse racing on their sports catalogs.”

“We are thrilled to be able to put horse racing on Colorado sportsbooks for fixed-odds wagering,” the Operations and Racing Executive Director for Bally’s Arapahoe Park, Shannon Ruston, said. “Working with SIS Group, we crafted a commercial framework that benefits local racing while giving sportsbooks access to thousands of races. Our belief is that this development will secure a better future not only for Bally’s Arapahoe Park but also for the racing ecosystem as a whole in Colorado.”

“We are committed to ensuring that horse racing in Colorado is economically viable for the participating owners and trainers, who are the backbone of the sport,” the President of the Colorado Horsemen’s Association, Kim Oliver, said. “Fixed-odds betting will produce a new revenue stream and exposure for horse racing. This launch represents a pivotal moment for our group.”

“The introduction of fixed-odds horse racing betting is sure to have a positive impact in Colorado,” read a statement from Bet365. “We have seen the popularity of fixed-odds betting in horse racing in other markets and, as sports betting becomes more ingrained across the United States, it will certainly provide a boost to engagement.”

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Century Casinos Incorporated. (Nasdaq Capital Market: CNTY) has provided preliminary financial results for its fiscal fourth quarter ended December 31, 2023, and an update on the company’s projects.

• Approximately $171 million in cash and cash equivalents as of December 31, 2023 (compared to $102 million at December 2022)
• Approximately $140 million – $145 million in net operating revenues (compared to $104 million in fourth quarter 2022)
• Approximately ($10) million – ($14) million in net loss attributable to Century Casinos Incorporated shareholders (compared to ($4) million in fourth quarter 2022)
• Approximately $24 million – $26 million in Adjusted EBITDAR * (compared to $22 million in fourth quarter 2022)

As reported in the company’s third-quarter filings, the $30 million revolving facility with Goldman Sachs Bank USA (Goldman) that the company borrowed in July of 2023 in connection with the Rocky Gap acquisition was repaid on September 21, 2023. The full amount of the revolving facility is currently available for the company to borrow.

The company has agreed to buy back $3.5 million of its term loan with Goldman at 97% of the cost of the debt. The transaction is expected to occur in February of 2024.

In Poland, the company was granted licenses for the two casinos that it had closed in October of 2023 due to the expiration of the casino licenses. The anticipated reopening of the casinos is the end of February of 2024 for the casino in Bielsko-Biala and in mid-March of 2024 for the casino in Katowice. In November of 2023, the company closed its Wroclaw casino due to the expiration of the casino license. The company was granted a new license for Wroclaw in December of 2023 and anticipates reopening the casino in a new location in mid-2024.

In Missouri, the construction projects of the hotel in Cape Girardeau (to be called the The Riverview) and the new land-based casino and hotel in Caruthersville continue to be on time and on budget. The company anticipates opening the hotel in Cape Girardeau the first week of April of 2024 and the land-based casino and hotel in Caruthersville by the end of 2024. The Caruthersville project is being financed by VICI Properties Incorporated (VICI) inclusive of approximately $19 million of cash on hand that was previously funded by VICI but has not yet been spent on the project and is included in the company’s consolidated balance sheet as of December 31, 2023.

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“We expect 2024 to be a transitional year for the company as we continue to integrate the Nugget and Rocky Gap operations into our portfolio and complete our two large construction projects in Missouri,” the Co-Chief Executive Officers for Century Casinos Incorporated, Erwin Haitzmann and Peter Hoetzinger, said. “We estimate our company-wide capital expenditures excluding the Caruthersville project that we are financing through VICI to be approximately $46 million in 2024. We look forward to 2025 when we can see everything we are working towards in 2023 and 2024 coming to fruition without the disruptions we are currently experiencing.

“We feel comfortable with our cash position and capex plan and we continue to look for every opportunity to reduce operating costs going forward to maximize earnings and cash flow. In addition, we are evaluating ways to reduce our non-operating costs going forward.”

Preliminary Results:

Our audited consolidated financial statements for the year ended December 31, 2023, are not yet available; however, certain of our estimated preliminary unaudited financial results for the three months ended December 31, 2023, are set forth above and in the reconciliations below. With respect to certain presented results, we have provided ranges rather than specific amounts because these results are preliminary estimates and subject to change. These results are based on the information available to us as of the date of this release. Our actual results may vary from the estimated preliminary results presented in this release, including due to the completion of our financial closing and other operational procedures, final adjustments and other developments that may arise between now and the time the company releases its financial results for the fourth quarter and year ended December 31, 2023, which is currently scheduled for March 14, 2024. These estimates should not be viewed as a substitute for our full interim or annual financial statements prepared in accordance with United States generally accepted accounting principles (GAAP). Further, our preliminary estimated results are not necessarily indicative of the results to be expected for any future period. Accordingly, undue reliance should not be placed on this preliminary data.

Supplemental Information:

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* Adjusted EBITDAR. We define Adjusted EBITDAR as net earnings (loss) attributable to Century Casinos Incorporated shareholders before interest expense (income) (including interest expense related to the company’s triple net lease with VICI (the ‘master lease’)), net, income taxes (benefit), depreciation, amortization, non-controlling interests net earnings (losses) and transactions, pre-opening expenses, acquisition costs, non-cash stock-based compensation charges, asset impairment costs, loss (gain) on disposition of fixed assets, discontinued operations, (gain) loss on foreign currency transactions, cost recovery income and other, gain on business combination and certain other one-time transactions. The ‘master lease’ is accounted for as a financing obligation. As such, a portion of the periodic payment under the ‘master lease’ is recognized as interest expense with the remainder of the payment impacting the financing obligation using the effective interest method. Intercompany transactions consisting primarily of management and royalty fees and interest, along with their related tax effects, are excluded from the presentation of net earnings (loss) attributable to Century Casinos Incorporated shareholders and Adjusted EBITDAR reported for each segment. Not all of the aforementioned items occur in each reporting period but have been included in the definition based on historical activity. These adjustments have no effect on the consolidated results as reported under GAAP.

Adjusted EBITDAR is used outside of our financial statements solely as a valuation metric and is not considered a measure of performance recognized under GAAP. Adjusted EBITDAR is an additional metric used by analysts in valuing gaming companies subject to triple net leases such as our ‘master lease’ since it eliminates the effects of variability in leasing methods and capital structures. This metric is included as supplemental disclosure because (i) we believe Adjusted EBITDAR is used by gaming operator analysts and investors to determine the equity value of gaming operators and (ii) financial analysts refer to Adjusted EBITDAR when valuing our business. We believe Adjusted EBITDAR is useful for equity valuation purposes because (i) its calculation isolates the effects of financing real estate and (ii) using a multiple of Adjusted EBITDAR to calculate enterprise value allows for an adjustment to the balance sheet to recognize estimated liabilities arising from operating leases related to real estate.

Adjusted EBITDAR should not be construed as an alternative to net earnings (loss) attributable to Century Casinos Incorporated shareholders, the most directly comparable GAAP measure, as indicators of our performance. In addition, Adjusted EBITDAR as used by us may not be defined in the same manner as other companies in our industry, and, as a result, may not be comparable to similarly titled non-GAAP financial measures of other companies. Consolidated Adjusted EBITDAR should not be viewed as a measure of overall operating performance or considered in isolation or as an alternative to net earnings (loss) attributable to Century Casinos Incorporated shareholders because it excludes the rent expense associated with our ‘master lease’ and several other items.

A reconciliation of the estimated net loss attributable to Century Casinos Incorporated shareholders to estimated Adjusted EBITDAR is presented below.

		(Unaudited) For the three months ended Advertisement
		December 31, 2023						December 31, 2022
in millions			Low Estimate			High Estimate Advertisement			Actuals
Net loss attributable to Century Casinos, Inc. shareholders		$	(13.6)		$ Advertisement	(9.8)		$	(4.0)
Interest expense (income), net			25.5 Advertisement			24.5			17.0
Income tax benefit			(5.0)			(3.0) Advertisement			0.5
Depreciation and amortization			12.0			11.0			6.8 Advertisement
Net earnings attributable to non-controlling interests			3.0			2.0			0.9
Non-cash stock-based compensation Advertisement			1.0			0.8			0.7
Loss (gain) on foreign currency transactions, cost recovery income and other			0.4 Advertisement			0.2			(0.7)
Loss on disposition of fixed assets			0.3			0.1 Advertisement			0.1
Acquisition costs			0.4			0.2			0.4 Advertisement
Adjusted EBITDAR		$	24.0		$	26.0 Advertisement		$	21.7

The company estimates that approximately $15 million of interest expense for the three months ended December 31, 2023, relates to rent on the ‘master lease’.