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Better Collective increases organic revenue by 29 percent; strong growth across US assets and media partnerships
Interim report January 1 – September 30, 2021
Highlights third quarter 2021
- Group Revenue grew by 148% to 45,413 tEUR (Q3 2020: 18,298 tEUR). Organic revenue growth was 29%. September reached a new monthly revenue record of 20,285 tEUR, equal to 45% of the total quarterly revenue.
- The quarter showed strong underlying growth on all major KPIs, however, revenue was impacted downwards by very low sports win margins in July and August. The sports win margins were negatively affected by larger operators accelerating marketing campaigns (free-bets, retention-bonuses etc.), as well as continued strong NDC performance, where new depositors receive sign-up bonuses.
- The US business performed strongly with Q3 2021 revenue of >5x compared to Q3 2020 revenue. Revenue for September jumped to 8.9 mEUR (>10 mUSD) reflecting a strong start of the high season for US sports and the state of Arizona opening for online sports betting. Strong performance across all US assets including the newly acquired Action Network.
- In Germany, a long-awaited new gambling regulation came into force from July 1. The market development has been in line with our expectations; for Better Collective, September revenue from the German market was on par with the monthly average in H1. Based on the current performance in Germany, revenue for the full year 2021 is expected to exceed prior years 2019 and 2020, respectively, with expected continued revenue growth in 2022.
- Media partnerships continued with strong performance with almost 45,000 NDCs. More media partnerships are expected to be established in various countries.
- Group EBITDA before special items increased 63% to 13,583 tEUR (Q3 2020: 8,326 tEUR). The EBITDA-margin before special items was 30% (Publishing 40% and Paid Media 9%).
- Special Items in Q3 2021 amounted to a cost of 11,588 tEUR vs. an income of 44 tEUR in Q3 2020. It includes an 11,487 tEUR adjustment of the contingent liability related to the 2019 acquisition of Rical LLC, treated as a P/L item under IFRS.
- EBITDA after special items amounted to 1,995 tEUR, a decrease of 6,375 tEUR vs. 8,370 tEUR in Q3 2020.
- Cash Flow from operations before special items was 10,498 tEUR (Q3 2020: 8,359 tEUR), an increase of 26%. The cash conversion was 76%, and was impacted by a significant increase in revenue for September vs. June driving increased trade receivables from Q2 2021. End of Q3, capital reserves stood at 64.1 mEUR including cash of 35.4 mEUR and unused bank credit facilities of 28.7 mEUR.
- New Depositing Customers (NDCs) were >200,000 in the quarter with an implied growth of 110% and a new quarterly record despite July and August being the low season for major sports.
- Better Collective acquired Soccernews.nl and Voetbalwedden.net for total 5.9 mEUR upfront payments plus deferred and earn-out payments of up to 3.75 mEUR, to gain a leading position in the newly regulated Dutch online sports betting market.
- Better Collective resolved on a directed share issue of 6.9 million shares, raising proceeds of 145 mEUR to maintain financial flexibility.
- For the fourth consecutive year, Better Collective topped the prestigious EGR Global’s Power Affiliates 2021 ranking.
Financial highlights first nine months 2021
- In the first nine months of 2021, revenue grew by 128% to 124,257 tEUR (YTD 2020: 54,472 tEUR).
- In the first nine months of 2021, EBITDA before special items increased 64% to 39,439 tEUR (YTD 2020: 24,044 tEUR). The EBITDA-margin before special items was 32%.
- Special Items amounted to a cost of 17,006 tEUR vs. an income of 252 tEUR YTD 2020. It includes an 11,487 tEUR adjustment of the contingent liability related to the 2019 acquisition of Rical LLC, treated as a P/L item under IFRS, in addition to 5,784 tEUR related to M&A transactions, primarily the acquisition of Action Network in May, 2021.
- EBITDA after special items amounted to 22,433 tEUR YTD, a decrease of 1,863 tEUR vs. 24,296 tEUR YTD 2020.
- Cash Flow from operations before special items was 37,670 tEUR (YTD 2020: 28,173 tEUR), an increase of 34%. The cash conversion rate before special items was 97%. End of Q3 2021, cash and unused credit facilities amounted to 64.1 mEUR.
- New Depositing Customers exceeded 575,000 in the first nine months of 2021 (growth of 103%).
- Better Collective acquired leading US sports betting media platform, Action Network, for 196 mEUR (240 mUSD), gaining market leadership within sports betting media in the US.
- On May 26, 2021, the Board of Directors resolved on a directed share issue of 6.9 million shares, raising proceeds of 145 mEUR to maintain financial flexibility.
Significant events after the closure of the period
- October revenue reached 16.8 mEUR, with organic growth of 17% and a total growth of 34% vs. last year. The growth is achieved despite an all time low sports win margin in October.
- On November 4, the completion of the acquisition of the remaining 40% of Rotogrinders Network was announced. Since the initial share acquisition Rotogrinders has shown strong performance with expected 2021 revenue more than doubling since 2019, with a 47% compound annual growth rate. Expected 2021 EBITDA is 4.4x higher than 2019, growing at a 109% compound annual growth rate.
- In the state of New York, nine operators were recently awarded sports betting licenses. Projected to become the single largest online betting market in the US, New York presents a big opportunity for Better Collective and for our operator partners now licensed. Betting is expected to commence in January 2022, in time for the Super Bowl.
- Better Collective received an award for its efforts within compliance at the Vixio Global Regulatory Award. At the same show, Better Collective’s subsidiary, Mindway AI, received two awards for its efforts within responsible gambling.
Financial targets
The full-year financial targets for 2021 for the group remain unchanged. Growth in the Publishing business exceeds prior expectations whereas Paid Media sees lower growth than anticipated, which is reflected in an adjustment of the detailed segment targets.
Jesper Søgaard, Co-founder & CEO of Better Collective, commented:
“Q3 was a great quarter closing with an all time high monthly revenue in September. This was partially the result of strong performance across all our US assets, including our recent acquisition, Action Network. September was also the beginning of the high season for US sports, which is expected to fully materialise in the Q4 results. “
Conference call
A telephone conference will be held at 10.00 a.m. CET today by CEO Jesper Søgaard and CFO Flemming Pedersen. The presentation will simultaneously be webcasted, and both the telephone conference and the webcast offer an opportunity to ask questions.
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David Fall Business Development Manager at St8
Gaming Corps and St8 Extend Partnership Reach to the UK and Ontario
Gaming Corps, a publicly traded game development firm located in Sweden, has broadened its collaboration with St8, enlarging the contract to include the markets of the UK and Ontario. The extension enhances a productive partnership between the two firms and bolsters Gaming Corps’ ongoing commitment to expanding distribution via reliable aggregation partners.
With the revised agreement, St8 will disseminate a wide array of Gaming Corps’ offerings across various sectors through its integrated API. This encompasses various slot titles in addition to the company’s growing collection of Crash, Mine, Table, and Plinko games.
Included in the highlighted titles is Bass Rewards, a Smash4Cash
powered game that demonstrates one of Gaming Corps’ most favored mechanics. The launch also features the infernal, machine-driven Gates of Hell Fire and the legendary Anubis vs Horus: Twin Titans, where divine wilds and grand elements merge, both showcasing the studio’s ability to blend striking themes with engaging gameplay design.
St8 is a casino games aggregator that has won awards, assisting operators in simplifying integrations and enhancing growth. Its unified API links operators to numerous game providers across various verticals, simplifying processes and accelerating time to market. Holding licences in crucial regulated areas, St8 enables its partners to grow globally with smooth, fully compliant solutions.
Graham Greensmith, Chief Commercial Officer at Gaming Corps, said: “Extending our agreement with St8 to cover the UK and Ontario is a meaningful step in reinforcing our position in two of the most established gaming markets in the world. By deepening this relationship, we can bring more of our latest and most distinctive content to a wider audience through a partner that understands the operational and compliance demands of highly regulated environments.”
David Fall, Business Development Manager at St8, added: “Our partnership with Gaming Corps has already delivered strong results. Their mix of creative slot themes and innovative game formats fits perfectly with our goal of offering diverse, high-quality content through a single, streamlined integration.”
The post Gaming Corps and St8 Extend Partnership Reach to the UK and Ontario appeared first on Eastern European Gaming | Global iGaming & Tech Intelligence Hub.
Finland
Data-Driven Analysis of Finnish Gamblers’ Preferences and Behavior
Grasping Finnish players’ preferences regarding gameplay, including their methods and locations, is essential for both policy-makers and operators considering market entry. The comprehensive surveys by the Finnish Institute for Health and Welfare (conducted every four years) reveal the trends that the new licensing system will face. In this document, we showcase important results from the 2023 Gambling Population Study and additional data, with charts and tables for better understanding.
General Decrease in Participation: The involvement in gambling activities has been declining in Finland. As mentioned, the percentage of adults (15–74) who participated in gambling over the last year decreased from 78% in 2019 to 70% in 2023.
Although fewer individuals are currently gambling, those who still engage may be focusing their efforts (the overall spending hasn’t decreased proportionately with participation, suggesting that the intensity among the remaining gamblers remains consistent). Moreover, the risk profile has not advanced as anticipated – the decrease in casual gamblers has not yet resulted in a proportional decline in problem gamblers.
Lotteries undoubtedly prevail – more than half of the population participates in Lotto or similar draw games each year. This is a reliable foundation: lottery participation is high but occurs infrequently (many join in sporadically when the jackpot is large). Scratch cards attract a wide range of demographics due to their straightforwardness. Conversely, approximately one out of every six Finns engages with the slot machines found in stores, indicating that these typically attract a dedicated group of players who gamble frequently (resulting in significant losses) instead of appealing to a broad audience.
Combined, sports and horse betting attract approximately 15% of individuals. This may be less than what some anticipate due to the enthusiasm Finns have for sports, but it indicates that the Veikkaus sports betting options (which were somewhat restricted in competitiveness and variety of odds) did not attract a large segment of the population. This is precisely where new operators could grow the market by providing greater diversity (in-play betting, additional leagues, improved odds), potentially boosting that participation after 2027.
Poker and other niche games are limited; Finland experienced a poker surge in the 2000s (featuring international figures like Patrik Antonius), but poker has since become a marginal pursuit.
Finnish Gambler Preferences and Behavior (Data-Driven Insights)
Understanding what Finnish players like to play – and how, and where – is crucial for both policy and operators planning entry. The Finnish Institute for Health and Welfare’s extensive surveys (conducted every 4 years) shed light on the patterns that the new licensing regime will confront. Here, we present key findings from the 2023 Gambling Population Study and other data, accompanied by charts and tables for clarity.
Overall Participation Decline: Gambling participation has been trending downward in Finland. As noted, the share of adults (15–74) who gambled in the past year dropped from 78% in 2019 to 70% in 2023.
While fewer people gamble now, those who do might be concentrating their activity (the total spending hasn’t dropped commensurately with participation, indicating intensity among remaining players stayed similar). Additionally, the risk profile has not improved as hoped – the reduction in casual gamblers hasn’t yet translated to fewer problem gamblers proportionally.
Lotteries clearly dominate – over half the population plays Lotto or related draw games annually. This is a stable cornerstone: lottery play has high participation but low frequency (many play occasionally when jackpot is big). Scratch cards also enjoy broad appeal across demographics for their simplicity. In contrast, only about one in six Finns plays the slot machines that are in shops, reflecting that these tend to have a devoted user base that plays often (and incurring a large share of losses) rather than mass appeal.
Sports betting and horse betting combined reach around 15% of people. This might be lower than some might expect given Finns’ sports fervor, but it suggests the Veikkaus sports betting offerings (which were somewhat limited in odds competitiveness and variety) did not entice a huge portion of the public. This is exactly where new operators might expand the market by offering more variety (in-play betting, more leagues, better odds), possibly increasing that participation post-2027.
Poker and other niche games are small; Finland had a poker boom in the 2000s (with international successes like Patrik Antonius), but poker is now a minor activity.
Online vs Offline Play: A very important trend is the migration to online:
- In 2007, only 11% of Finns had gambled online. By 2015, it was 29%. By 2019, 36%. And in 2023, 44% gambled online.
- Meanwhile, land-based play (e.g. physical slot machines, retail lotto) dropped. The COVID-19 pandemic accelerated this shift: Veikkaus saw increased online registrations when casinos and slot halls were closed.
- Veikkaus’s own split: roughly 45% of its revenue in 2022 came from the digital channel. We can expect that to exceed 50% by 2027, meaning the majority of Finnish gambling spend will be online.
The implication is that the new licensing mainly addresses where the growth and action already is – online. Land-based venues (except those physical slots) are marginal aside from the flagship casinos.
Offshore Gambling Patterns: Approximately 7% of the population gambled on non-monopoly platforms (i.e., Paf or foreign sites) in 2023. This overall percentage hasn’t grown recently, but the composition might have: Paf’s share increased slightly, meaning perhaps foreign dot.com sites stayed around 4–5% of people. It’s useful to know who these offshore gamblers are. THL’s survey reveals:
- They skew heavily male – 12% of men vs only a few percent of women used offshore sites.
- They are younger – 15% of 18–29 year-olds gambled offshore, compared to virtually 0% of over-65s. There was even an uptick in the 45–59 age group since 2019 (from a low base), but the core remains young males.
- They favor fast online games and sports: likely online slots, live casino, sports betting on international leagues, eSports, etc.
Understanding this, new licensees will target particularly these demographics – offering the products and experiences that drew them offshore, but now under Finnish regulation.
Channelization Baseline: The channelization rate is typically described as the proportion of overall gambling income allocated to regulated (legal) options. Before the reform, Finland’s online channelization was estimated to be approximately 80–85%, with Veikkaus and Paf covering that portion and 15–20% directed towards foreign websites. For land-based, it was almost 100% (as illegal physical gambling is minimal). The total gambling channelization could have been around 90%. The government intends to push online channelization nearer to about 95%. Accomplishing this involves transitioning a significant portion of the 250k offshore users to local platforms and ideally stopping new players from operating without regulation.
Money Movements and Spending Trends: Finnish gamblers, on average, did not raise their expenditure from 2019 to 2023, despite the decline in players. THL data indicates that average expenditure among gamblers remained unchanged; this suggests that the overall market GGR was either steady or slightly decreased. Veikkaus’s yearly GGR fell from approximately €1.7bn in 2019 to around €1.1bn in 2022 (partially because of COVID and machine removals), and a portion of that decline might have shifted to offshore or simply indicate reduced gambling overall. The updated licensing could reclaim some of the lost expenditure (by introducing new offerings such as live betting that attract inactive bettors) or it might undermine Veikkaus’s current income if few new participants join.
A notable statistic: In 2023, 2.2% of bettors represented 50% of the total gambling spending in Finland. This emphasizes the imbalance – a small percentage of high-stakes players account for most of the losses (and probably, most problem gamblers belong to that group). This is typical in gambling markets but highlights why Finland is cautious: if rivalry drives firms to pursue high rollers aggressively, it may worsen conditions for that at-risk 2.2%. Conversely, through centralized self-exclusion and imposed restrictions, the system seeks to reduce the risks for those individuals.
Regional Variations: Participation in gambling was previously more common in rural regions and among Finnish speakers of Swedish (historically linked to trotting bets in countryside communities and the use of Paf within the Swedish Åland community). The reform is nationwide in scope, but there’s one oddity: Åland’s Paf is exclusive to Åland and oversees all gambling activities there. Åland residents (approximately 30,000 individuals) will probably continue using Paf as normal – they are not the primary focus of new licenses, which will be aimed at the mainland. Mainland Finnish players utilizing Paf can continue their gameplay on Paf (should Paf secure a license) or explore different platforms.
Attitudinal Shifts: From 2019 to 2023, the Finnish public’s views towards gambling became more critical in certain areas. In 2023, most people (61%) believed that there are “too many chances to gamble” in Finland, reflecting the historical presence of slot machines. Additionally, 90% expressed that gambling ought not to be promoted. These perspectives likely compelled Veikkaus to reduce visible betting and prompted the government to guarantee that the new competitive market doesn’t lead to an abundance of new gambling venues everywhere. Interestingly, under the new legislation, Finland preserved physical slot machines within the monopoly specifically to facilitate ongoing reduction and regulation of those without new firms installing machines.
However, a small majority (58%) also concurred that individuals should have the right to gamble at any time they choose – reflecting support for personal liberty as well. Approximately 20% believe that gambling provides overall advantages to society (probably referring to the funds for beneficial purposes).
From those somewhat conflicting views, one can infer Finns are okay with gambling existing but want it contained and tempered. The challenge for new operators will be to gain acceptance by demonstrating they are operating responsibly and contributing positively (through tax and perhaps sponsorship of sports or charities, albeit carefully). They must avoid high-profile missteps (like ads that clearly target youth or a spike in problem gambling cases tied to their brand) that would turn public sentiment further against gambling expansion.
In Appendix C, we include additional tables from THL’s 2023 study, such as the breakdown of gambling participation by age and gender, and the long-term trend of online vs offline play. These provide deeper insight (for example, the sharp decline in under-18 gambling after strict ID checks, or the increase in exclusive online play vs mixed online/offline play).
To summarize the key gambler preferences relevant to 2027:
- Finns love lotteries – that stays with Veikkaus (no change).
- Finns enjoy convenience and anonymity of quick games (scratch cards, slots) – but those will be highly regulated and not heavily expanded in availability despite more online slots.
- The growth opportunity and competition battleground will be in online sports betting and casino, particularly for men under 50. Currently their needs were partially unmet; soon they will have many legal options.
- There is a substantial group of heavy gamblers who use multiple products and contributed most revenue – how they shift their play (stay with Veikkaus out of habit, or try new platforms for better offers) will significantly impact market shares and channelization.
- Responsible Gambling tools will be ubiquitous, so Finnish players will experience more intervention and friction (e.g., setting limits, seeing regular reminders) on any licensed site than they might have on offshore sites. The hope is they accept this as the new normal and do not find it a reason to return to unregulated operators that might still offer unbridled play.
This data-centric understanding will inform the scenarios and industry strategies discussed later in the primer.
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Dynabit Gaming
Uptowin + Dynabit Gaming: Powering Social Play with Hold-and-Win Mechanics
We’re thrilled to reveal our new collaboration with UPTOWIN, one of the quickest expanding social platforms.
Vitalii Zarubin, CPO at UPTOWIN platform: “Founded in 2024, Dynabit Gaming has quickly built a strong presence in online social casino content. Its growing catalogue includes slot games with popular Hold & Win bonus mechanics, which enhance win potential and player engagement to deliver high-quality entertainment to our players.”
Vika Prudnyk, Chief Commercial Officer at Dynabit Gaming: “Social & sweeps market holds major significance for us, making it a pleasure to partner with such a respected market leader. Through direct integration with the UPTOWIN platform, Dynabit’s portfolio will now be available to UPTOWIN’s social operator network.”
We are excited about creating a robust and fruitful collaboration.
The post Uptowin + Dynabit Gaming: Powering Social Play with Hold-and-Win Mechanics appeared first on Eastern European Gaming | Global iGaming & Tech Intelligence Hub.
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