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by Andrew Tottenham, Managing Director, Tottenham & Co
The once-fragmented - and, hence, competitive - gaming sector has seen an increasing number of mergers and acquisitions in recent years, and the velocity has only increased in the last twelve months.
The fever for consolidation started quietly a few years ago, in 2011, with BWin and Party Gaming's merger, a move that left 888.com with nobody to dance with. GVC then went on a bit of a buying spree, acquiring one company after another, with each transaction more audacious than the last. Bookmakers began merging, as well: in 2015, Paddy Power merged with their arch enemy, betting exchange operator Betfair, and Ladbrokes joined up with Gala Corals in November of the following year, a move which created Ladbrokes Coral, who were then subsequently themselves acquired by GVC. I think it may have been Ralph Topping, the former CEO of bookmaker William Hill, who once said of Betfair that "they come across like choirboys, but really they are the Devil."
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by Luke Haward, CDC Gaming Reports
Given the seismic shakeup going on in the United States this week with regards to sports betting, it seems a fine time to take a detailed look at the state of sports betting in Europe and consider how our friends over the pond might learn from both our expertise and our mistakes in that field. In this article, we'll scrutinize the current state of sports betting across Europe, looking at some of the best and worst of the industry. We'll consider some of the most interesting technological and service-based innovations within sports betting and look at some of the biggest challenges which the sheer existence of the industry brings about - such as the infamous problem of match fixing - and what institutions and bookkeepers across Europe have tried to do about such problems.
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Luke says:
Technavio has just published their most recent market research report on the UK's gambling market. The full report features their usual hefty $1K price tag, but the summary makes for interesting reading in itself. Technavio highlights the importance of AI implementation in this report, arguing that while AI has been a key feature for some years now, the means of implementation is radically changing. They cite the emergence of AI-controlled live dealers as a key example of this change. It seems AI is becoming a more important feature of user experience in gaming interfaces, rather than just an important part of the back end and of the algorithms underlying random number generation or odds creation. Furthermore, they highlight its increased import in analysing customer data, something we're seeing more of in third-party services offering B2B analysis. I expect what we'll also see, in time, are punters somehow attempting to use AI to beat the house.
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Luke says:
Melco Resorts & Entertainment have announced a groundbreaking ceremony to take place June 4th for their new casino in Cyprus, as reported here in the local press. They are also due to open a temporary facility this summer, long before the resort itself will be ready. That's still set for 2021, when the City of Dreams Mediterranean will be opening its doors to the public. Melco Chief Executive Officer Lawrence Ho says that he expects the work to cost approximately €550 million, and to create 4,000 jobs during construction and 4,500 when fully operational, as well as adding a whopping 4% to Cyprus' GDP. This behemoth of a casino is certainly a major undertaking, and it's hard to dispute its status as the biggest thing going on in casino terms across the whole continent of Europe.
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Luke says:
Nigel Harvey, head of Anti-Money Laundering at Genting UK, was handed the prestigious Head of Anti-Money Laundering / MLRO of the Year award for land-based operations at this year's Gambling Compliance Global Regulatory Awards. The judges stated that he went beyond what is legally required and was very motivated in his work. While money laundering is thankfully somewhat more under control here in the UK than in some of our European neighbours, it's not to say it's a non-issue either. A recent Gambling Commission study found that, in many cases, staff were not trained to file AML reports properly and failed to be proactive in identifying or dealing with suspected problem gambling cases, in some cases even identifying staff members who made cardinal errors, such as encouraging losers to chase losses. Clearly a lot of work remains to be done in both of these areas. It's good to see a high-profile casino brand scooping the award and bringing more awareness to the issues.
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Andrew says: The answer we have been waiting for is here, and it is £2. The UK Government has bowed to pressure from the anti-gambling lobby and officially reduced the maximum stake for FOBTs to £2 from £100. For bookmakers, who have been enjoying a share price premium from the SCOTUS decision, this is likely to be catastrophic for their retail division. The Campaign for Fairer Gambling, who fuelled and coordinated the opposition to anything other than a £2 maximum, conducted an excellent campaign - even if I did not agree with it - which showed the Association of British Bookmakers as being arrogant and out of touch with public opinion. Within the full decision, there are also some implied threats to the online gambling sector - higher taxes and possible requirements for player tracking, and time limits for B2 machines, which are found in casinos. I doubt this ends here.
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Luke says: In truth, Pinnacle's UKGC license application had been treading water for months, in what must have been a frustrating holding position. As SBC reports in this brief article, it seems the firm's main focus in the short term is going to be their new business-to-business sportsbook platform, Pinnacle Solution, in which they offer to help other operators with their technological wizardry. Apparently, a good deal of it centres around the use of the hugely popular (and hugely powerful) R open-source programming language, which allows knowledgeable users to elegantly calculate complex data science problems. Given the big news from over the Atlantic this week, it seems highly likely that securing a UK license has just been bumped even further down the list of priorities for Pinnacle. After all, once upon a time almost two/thirds of their player base was playing from the USA, and I'm sure many US players old and new would be keen to get back on their books.
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Andrew says: Groupe Partouche is suing the French authorities for violating the requirement for secrecy and defamation following a raid of their casino in Cannes and the arrest of the casino's president and general manager. The raid followed an investigation into the poker games at the casino and led to accusations that the casino knowingly allowed people to bet with chips that were worth much less than the value actually being staked.
Groupe Partouche claims that a photographer accompanied the police who carried out the raid, and that the head of the casino regulator was interviewed about the raid on French radio station France Bleu Azur a few days later. Under French law, criminal investigations must be carried out in secret, meaning that the cameraman - so Groupe Partouche is claiming - must have had forewarning from the police. French law also states that the only person permitted to speak publicly about an ongoing investigation is the prosecutor leading the investigation. In the days following the investigation, Groupe Partouche's market value dropped almost 20%, a loss of about €65 million. The company is demanding "full compensation". The full story, in French, here.
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Luke says: Another chapter in the loot boxes saga, as Belgium has now also ruled them to be in violation of existing gaming legislation, in the wake of a similar decision in the Netherlands. Three specific games were found to be in violation: Overwatch, Counterstrike and FIFA 18, all three of which are immediately being withdrawn from sale in Belgium. In a statement, Belgian Minister of Justice Koen Geens expressed particular concern about children playing these games. EA Games, the publisher of all three titles, has as expected issued a strongly worded response, stating that they do not believe their games constitute gambling and that they take their responsibilities as a games provider seriously. Their claim to 'welcome the dialogue' with Minister of Justice Geens could be characterised as, essentially, a very politely and politically correct way of saying that this conversation is not over. Nobody expected them to just roll over, did they? Of course not. It's in the game!
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