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LeoVegas AB Q2: Quarterly report 1 April – 30 June 2020
“The strong EBITDA growth clearly illustrates the scalability of our business model”
– Gustaf Hagman, Group CEO
second quarter 2020: 1 april–30 june
- Revenue increased by 17% to EUR 110.7 m (94.4). Organic growth in local currencies was 19%.
- EBITDA was EUR 23.0 million (15.1), corresponding to an EBITDA margin of 20.8% (16.0%) and a growth of 53 %.
- The number of depositing customers was 434,453 (350,298), an increase of 24%.
- Earnings per share were EUR 0.14 (0.08) before and after dilution, while adjusted earnings per share were EUR 0.19 (0.11).
Events during the quarter
- LeoVegas completed the migration of 12 brands in the UK to the Group’s proprietary technical platform.
- The LiveCasino.com brand was launched in a number of English-speaking countries.
- At LeoVegas’ Annual General Meeting on 8 May, Anna Frick and Fredrik Rüdén were re-elected as board members. Hélène Westholm, Mathias Hallberg, Carl Larsson, Per Norman and Torsten Söderberg were elected as new board members. Per Norman was elected as Chairman of the Board.
- The effects related to COVID-19 are judged overall to have had a positive impact on NGR during April and May, however, the effect on revenues in Sweden was negative during the quarter.
Events after the end of the quarter
- Preliminary revenue in July amounted to EUR 30.7 m (29.3), representing growth of 5%. The temporary restrictions introduced in Sweden starting on 2 July have had a negative impact on revenue.
- The number of depositing customers increased by 34% in July compared with the same period a year ago, to a new record level for a single month.
- GoGoCasino was launched in Finland. An international rollout of the brand is now continuing.
- LeoVegas has increased its ownership in the e-sports betting operator Pixel.bet to 85%, from 51% previously.
COMMENT FROM GUSTAF HAGMAN – GROUP CEO
SECOND QUARTER 2020
LeoVegas has delivered continued solid growth and profitability during a period of exceptional circumstances in the world around us. Supported by the record-large customer base that we entered the quarter with, together with our ability to quickly adapt to new conditions, the positive trend from the first quarter is continuing.
Revenue during the second quarter amounted to EUR 110.7 m (94.4), representing organic growth of 19%. Net Gaming Revenue (NGR) for casino grew 24% during the period, while for sports betting it decreased by 53% compared with the same period a year ago.
EBITDA amounted to EUR 23.0 m (15.1), corresponding to a margin of 20.8% (16.0%). We thus grew EBITDA by 53%, which shows the scalability in our business model from higher revenue. The sharply improved operating profit has been achieved despite a continued high pace of expansion and increased investments in technology and products.
covid-19
I am very satisfied with how we at LeoVegas are handling the COVID-19 situation so that we can conduct our business without noticeable disruptions, despite challenges such as not being able to meet in our daily work. Our industry, like many other sectors, is experiencing a structural shift from offline to online. Owing to LeoVegas’ online position, appreciated brands and proprietary technical platform, we stand strong in an increasingly digital world.
Markets
We had favourable development in most of our markets during the second quarter. Growth has been driven primarily by a record-large depositing customer base, which grew 24% compared with a year ago. The Rest of Europe region experienced exceptionally high growth, with Italy posting record-strong performance. The effects related to COVID-19 are judged overall to have had a positive impact on NGR during April and May, mainly in the markets that were entirely shut down during the period. In these markets, LeoVegas has taken market shares from the land-based gambling industry. However, the effect on revenue related to COVID-19 is judged to have been negative in Sweden during the quarter.
responsible gaming
During the quarter, several countries implemented measures to reduce the risk for problem gaming in connection with COVID-19. Spain, for example, introduced a temporary ban on gambling advertising. On top of these restrictions, LeoVegas has chosen to implement its own proactive measures to strengthen player protection. Most of the temporary restrictions throughout Europe ended in June, and Spain and the UK, among other countries, have reverted to normal regulations once their respective societies opened up again.
It is therefore remarkable that Sweden, despite massive criticism from most areas, has moved in the opposite direction and introduced new, temporary restrictions, effective 2 July, focused particularly on online casino. There is a large risk that these restrictions, implemented entirely without supporting factual data, are undermining the Swedish regulation system and driving players to companies without Swedish licences, where player protection is non-existent. These restrictions therefore risk being counter-productive and instead contribute to an increase in problem gaming in Sweden.
The independent research consultancy Copenhagen Economics has noted that one consequence of the new restrictions is that the unregulated market for online casino may increase to as much as 50%, which is far from the authorities’ stated goal to limit the unregulated market to 10% at most.
We advocate for balanced and clear regulations for achieving long-term sustainable licensing systems. LeoVegas wants to contribute to this through a broader dialogue and collaboration with the authorities in the countries we are active in.
MULTIBRAND STRATEGY
During the quarter we launched the new LiveCasino.com brand in a number of English-speaking countries. We see great potential for the brand. The start has been promising, and additional markets are to be expected.
Following the successful launch of GoGoCasino in Sweden last year, an international rollout of the brand is now under way. Finland was the second market to launch, at the start of July.
The successful launches of new brands are in line with the company’s multibrand strategy and show our ability to create new revenue streams while at the same time drawing benefit from the Group’s economies of scale.
comments on third quarter
Revenue for the month of July amounted to EUR 30.7 m (29.3), representing a growth rate of 5%.
Our assessment is that the gaming market has returned to a more normal environment in July, with a natural player shift from casino back to sports betting now that the major sports leagues have restarted. At the same time, the temporary restrictions introduced in Sweden starting on 2 July are having a negative impact on revenue.
The positive trend in our customer base is continuing into the third quarter, and the number of depositing customers increased by 34% in July compared with the same period a year ago, to a new record level for a single month. We will maintain a continued high rate of investment during the third quarter, partly linked to the launch of new brands and market establishments. Our current assessment is therefore that marketing costs will be in line with – or slightly higher than – the level during the second quarter.
We continue to focus on delivering sustainable and profitable growth for our shareholders and on offering an entertaining and safe gaming experience for our customers around the world. LeoVegas’ long-term vision is to be “King of Casino”.
Presentation of the report – today at 09:00 CET
- To participate in the conference call, and thereby be able to ask questions, please call one of the following numbers: SE: +46 (0) 8 50 69 21 80, UK: +44 (0) 20 71 92 80 00, US: +1 63 15 10 74 95, Confirmation code: 222 77 69 or join at the web https://edge.media-server.com/mmc/p/5fggroyh
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crypto betting
Duelbits adds Same Game Parlay for soccer player props and World Cup betting
New SGP lets users combine up to 10 same-match selections plus 10 across multiple events on desktop and mobile.
Duelbits has launched Same Game Parlay (SGP), adding a sportsbook feature that lets players combine multiple player and match markets within a single bet slip. The company said the initial rollout is focused on soccer and World Cup betting and is available on desktop and mobile.
The SGP product supports same-match combinations across player props including goals, shots, shots on target, assists, cards, fouls, tackles and goalkeeper saves, alongside match and team markets such as match winner, goals, corners and shots. Duelbits also said users can build parlays across multiple events where SGP markets are available.
Duelbits positioned the launch as a fix for bet combinations being rejected or marked invalid, saying the feature is powered by a specialist player props and statistics provider to reduce rejected selections and streamline odds updates and settlement. At launch, players can include up to 10 selections within a single event and a further 10 selections across multiple events, with plans to expand those limits in future updates.
Jasper Hoekert, Chief Marketing Officer at Duelbits, said: “Same Game Parlays have become one of the most popular sportsbook products globally, particularly as player prop betting continues to grow across major sports. We saw a clear opportunity to improve the experience available to our players by offering significantly more combinations, reducing invalid bet rejections, and creating a smoother betting journey overall.
“This initial launch is focused on soccer and the World Cup, but it’s only the first step. Our long-term vision is to allow customers to combine virtually any market they want across sports, events and player props, with US sports being the main focus for phase 2. We believe there is a significant gap in the crypto sportsbook market for this type of offering, and we’re excited to continue expanding the product over the coming months.”
The post Duelbits adds Same Game Parlay for soccer player props and World Cup betting appeared first on EE Gaming | Global iGaming & Tech Intelligence Hub.
Austria
Austria Could Force Offshore Operators To Sit Out Market Launch
Debate is raging within the Austrian government about whether to impose a cooling off period and freeze ex-grey market operators out of its upcoming open online casino market, with local operators looking to inflict maximum punishment and legal experts arguing that the proposal would be self-defeating.
Austria is on course for an historic opening of its long monopolized online casino market. Currently, only Casinos Austria, via its brand Win2Day, has the approval of the Austrian government to offer online casino games to the general public.
But for many years, that legal status was ignored by operators based largely out of Malta, who populated a vibrant grey market by leaning on the controversial argument that Austria’s monopoly model is in violation of EU law.
These offshore operators were eventually forced to retreat by a series of high profile court rulings that found Austrian consumers have the right to reclaim any and all losses to an operator without an Austrian licence.
Facing potentially hundreds of millions of euros in compensation claims, grey market providers have largely retreated to Malta, where Bill 55 continues to protect them.
With liberalisation now on the horizon, some forces within the Austrian government and the local gambling industry are insistent that companies which took part in the grey market should not be allowed to simply apply for a licence and wipe the slate clean.
Who’s in favour?
Those lobbying the hardest for a cooling off period are Austrian incumbents.
“One day you’re offering illegal services and the next day you get a license – that’s absurd,” a spokesperson for Casinos Austria told the Kronen Zeitung newspaper.
They are joined by German-headquartered gambling giant Novomatic, which operates a number of land-based venues in Austria under the brand Admiral.
Having sat on the sidelines of the online market for many years, Admiral is incensed by the idea that it could be competing on day one of a new market with operators who did not take the same approach.
The three parties that form Austria’s coalition government are still debating the issues, according to reports.
The only major practical example of a true “cooling off” period occured in the Netherlands, where an 18-month prohibition was in place that prevented many companies from entering the market when it opened in 2021.
At the time, Kindred reported that being forced to sit out market launch had cost it $16.2m a month, wiping out effectively 50 percent of the group’s EBITDA.
Kindred, which has since transformed into FDJ United following an acquisition by the French lottery giant, subsequently regained its strong Dutch position following the end of the cooling off window.
Likely to cool
At least one Austrian legal expert believes that there is a good chance that some form of cooling off, or an equivalent punishment, will be enacted as part of the new law.
“At the moment, it is likely that some form of cooling-off period will be introduced, perhaps by introducing sanctions that apply prior to licensing, but the details are yet to be determined,” said Nicholas Aquilina, a partner at Brandl Talos law firm.
“Whether a cooling-off period will be introduced and how restrictive measures will be will have a substantial impact on the success of the long-overdue opening of Austria’s online gambling market,” he added.
The time pressures referenced by Aquilina relate to the expiry of Win2Day’s exclusive licence, which is set to run out in October 2027. The government intends to establish its new online gambling regime well ahead of that date, so that new licences can be issued in time.
Any attempt to extend Win2Day’s monopoly could run into challenges with EU tender laws and the other highly unpalatable option is to leave the nation in limbo with no legal providers at all.
Complications
Despite how the debate has been framed by some parties, the reality will not be as simple as either allowing ex-grey market offenders into the new Austrian online casino marketplace free of consequence or forcing them to spend time in the sin bin.
There is broad political agreement that any international operator looking to obtain a licence in Austria must pay back taxes owed on its former activity in order to be granted approval.
Operators will also need to settle any outstanding player refund claims, something which could cost companies huge sums and may ultimately keep some of them out of the market for good.
There are thought to be thousands of pending refunds, which operators have largely been refusing to pay while they take refuge behind Malta’s Bill 55.
Against that backdrop, lawyers Christian Rapani and Felix Hohenthanner argue that the penalties for returning to Austria will likely be harsh enough.
“A further exclusion of two to three years on top of that would, in our view, work against the reform’s own central objective. The operators currently holding the largest share of Austrian play are exactly the ones a cooling-off period would shut out. If they cannot offer a licensed product for two to three years, their customers, it is highly likely, will not migrate to the licensed providers,” they told EEGaming.
Ultimately, the two lawyers said, the push for a cooling off period is more about protecting the vested interests in Austria’s casino market than an attempt to keep gamblers safe.
“Our impression is that the proposal is supported essentially only by the land-based operators and by the single provider that already holds a licence in Austria, in other words by those who benefit from keeping new entrants out. We therefore see it less as a genuine player-protection measure than as a last attempt to preserve existing market positions,” they said.
The post Austria Could Force Offshore Operators To Sit Out Market Launch appeared first on EE Gaming | Global iGaming & Tech Intelligence Hub.
Africa
African iGaming Alliance names SPRIBE a Platinum Supplier Member
The African iGaming Alliance (AiA) has signed a strategic partnership with iGaming supplier SPRIBE, with SPRIBE joining the pan-African industry association as a Platinum Supplier Member.
AiA said the partnership will focus on regulatory engagement, industry research, responsible gaming initiatives, policy advocacy and stakeholder engagement aimed at strengthening regulated gaming markets across African jurisdictions.
According to AiA, the collaboration will also support efforts to promote effective regulation, combat illegal gambling, improve market channelisation and encourage evidence-based policymaking.
Peter Emolemo Kesitilwe, Chief Executive Officer of the African iGaming Alliance (AiA), said:
“SPRIBE’s decision to join the African iGaming Alliance as a Platinum Supplier Member represents a significant endorsement of our vision for a sustainable and well-regulated African gaming industry. As one of the industry’s leading technology innovators, SPRIBE brings valuable expertise, insight, and global experience that will strengthen our efforts to support regulators, governments, operators, and other stakeholders across the continent. We look forward to working closely together to promote responsible gaming, regulatory best practice, and long-term industry sustainability.”
The post African iGaming Alliance names SPRIBE a Platinum Supplier Member appeared first on EE Gaming | Global iGaming & Tech Intelligence Hub.
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