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by Andrew Tottenham, Managing Director, Tottenham & Co
As most of you may know, the long-awaited decision on whether to cut the maximum bet on Fixed Odds Betting Terminals (FOBTs) has been pushed back again. Some of you, though, may well be asking: what, exactly, are these FOBTs, and why were they allowed in the first place?
Let me try to bring a little clarity to the matter. An FOBT is simply a gaming device with several different games on it, the most popular of which are variants of roulette. Currently, the maximum stake is £100, the maximum pay-out is £500, and a game (or spin) cannot be shorter than 20 seconds. Each retail betting outlet is allowed to operate four of the machines. The roulette game variants account for about 70 percent of gross gaming revenue from this type of machine; total GGR from the approximately 33,000 FOBTs installed in bookmakers' retail outlets in the UK was approximately £1.8 billion in 2017.
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by Luke Haward, CDC Gaming Reports
Gambling Compliance landed a great representative from the gaming world to present the awards at their second Global Regulatory Awards Ceremony in April, that being poker's (and the BBC's, and the Observer's) Victoria Coren Mitchell, who is perhaps most famous for becoming the world's first-ever two-time EPT champion when she took down the EPT Sanremo in 2014. She'd already made history when she won in 2006, becoming the first woman to win an EPT outright. She's clearly an outstanding poker player and sharp across the board, as evidenced by her flashing wit on Have I Got News for You and other shows and her competitive interest in Scrabble. This is to say nothing of her equally sharp and vigorous demeanor at the poker tables, which I've had the pleasure of experiencing several times over the years while playing at the same table.
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Andrew says:
Denmark's Gaming Regulator, Spillemyndigheden, is putting the casino licenses for three of the country's casinos, Vejle, Aarhus, and Odense, out to tender again. In 2016, they put five licenses out to tender, but only renewed two. The three casinos involved are relatively small; each one offers approximately 10 tables and 50 slot machines. When you couple this with an increased tax on GGR, from 45 percent to 75 percent, you can understand why interest might be low.
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Luke says:
Admittedly, this article reads somewhat like a soapbox for gambling affiliates, but it's included here as an indication of some of the reactions we're likely to see once the tighter regulations on the UK gambling industry start to kick in: certainly, cries about the Nanny state and the like are likely to get louder. One interesting argument being made here is that, if the restrictions are too tight on licensed companies, the door might open for shadier operators to gain more players. If consumers themselves are not cautious in scrutinising offers and checking whether an operator is licensed and regulated, the most well-meaning regulations on existing operators won't help protect them. Alongside any improvements in regulation, we must see a broader effort to educate the public on how to help protect themselves when they go online to gamble.
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Luke says:
Novomatic, one of the largest game machine suppliers, announced this past week that, for the very first time, their sales had risen above the €2.5 billion mark. They've had quite a bit of news coverage in recent months, kicking the year off with a bang with the acquisition of Ainsworth Game Technology in January; not content with that, they then scooped up Telarius in February. They also signed a patent cross-license agreement with IGT (who hold the largest slot game feature patent portfolio in the USA) back in March, and just last week announced a deal for content facing the Italian market with Inspired, a deal which will run until 2022. Novomatic are terrifically active in the gaming community, and the speed with which they've been completing acquisitions in recent months has been gobsmacking. There's no sign of their activity abating, at least for now.
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Andrew says: Spanish gambling behemoth CIRSA has been sold to Blackstone. The price was not disclosed, but I have heard as low as €1.6 billion and as high as €2.2 billion. I suspect it is probably towards the lower end. CIRSA's operation is multi-faceted: it manufacturers slot machines, operates casinos, bingo halls and gambling arcades in Spain and South America, and has a VLT business. Blackstone, you may remember, acquired Groupe Joa, the third largest casino group in France, late last year, and so the acquisition of CIRSA represents a further step in their consolidation strategy. You can expect more acquisitions of gambling companies by Blackstone in the future.
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Luke says: John O'Reilly is the new Chief Executive Officer of Great Britain's Rank Group, which holds an impressive portfolio of brands that includes Mecca and Grosvenor Casinos. O'Reilly says he is looking forward to taking Rank "onto its next stage of development" as they look set to expand their digital offerings. He has a strong, decades-long background in the gaming industry, and has managed digital operations at Ladbrokes as well as acting as Managing Director for the relaunch of Coral Interactive online. His appointment is a strong indicator that Rank Group are looking at digital as the future, and it comes at a time when the high street has been hit hard by the Treasury's recent indications that the government will go for the full step-down on fixed odds betting terminal limits, which would bring the maximum wager down to £2. O'Reilly will take up the new role from May 7th.
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Andrew says: Just when you thought it was safe... The decision over the future maximum bet on FOBTs is now in the hands of the government, and there's not much more the bookmakers can do. But the Campaign for Fairer Gambling and the Guardian newspaper have tasted blood, and they're going after the bookies again anyway. This time, it's accusations of using data and artificial intelligence to "keep gamblers hooked."
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Luke says: This report from SBC on the new gaming licenses recently authorized by the Italian gaming authority, the Agenzia delle Dogane e dei Monopoli (ADM), highlights some key names which stand out from the pack. Pinnacle, in particular, is one of the oldest online sports betting brands still in existence and have made their name through offering consistently low margins across their platform. They are keeping up with the times, too, by now offering esports betting as well. SBC notes that the government is still considering some final applications, since as we know the full availability of 120 licenses has not yet been taken up; only 80 or so applications have been made thus far. It's no surprise, therefore, that they're providing some leniency with regard to the official deadline originally set for 19th March.
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Luke says:
This lucid and detailed article from the Prague Post explores the recent restrictions placed upon gambling advertising in Belgium by the Belgian Gaming Commission (BGC), and notes that the current restrictions were in fact drafted by the Belgian national lottery, which has prompted some outcry about conflict of interest. These restrictions include restraints over when gambling may be advertised on television, as well as restricting the type and range of advertising permitted. The article also tackles a conundrum in current Belgian law: many gambling platforms are prohibited from serving Belgian residents if based in foreign climes, but there are no penalties directed at individuals who use such sites. The end result is that sports betting via foreign providers seems to be booming. The concern is that the restrictions on ads may inadvertently encourage Belgians to turn to technically illegal and unlicensed foreign providers, since they don't know about the homegrown alternatives.
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Andrew says: Casinos Austria International, the subsidiary of Casinos Austria that operates all of the non-Austrian casinos in their portfolio, has been taken off the market. It's been up for sale a couple of times in the past, but, with no takers, it's proven to be a difficult sell. Part of the problem is that it is a mixture of management contracts, minority interests and full ownership stakes, which makes it difficult to value. In addition, any deal that involves buying the Cairns casino in Australia will require any new owner to go through a stringent disclosure and investigation in order to get licensed. Given the size of the business, this seems to have put off a few potential buyers.
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Andrew says:
Still in Austria, an agreement has been reached between the Graz-based Grawe Group and the two Czech private equity firms, Emma Capital and KKCG, for the Czechs to buy another block of shares of Casinos Austria, the holding company. This acquisition, if ultimately approved by the Austrian Finance Ministry, will take their holding to 38%. You have to hand it to these tenacious Czechs: they have been trying to acquire Casinos Austria for three years now and have had to overcome all kinds of obstacles in the attempt. Slowly but surely, it is starting to look like they will achieve their ambition.
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