Posts Tagged ‘gaming’

The Stars Group Buys Sky Betting & Gaming for $4.7 Billion

 The Stars Group Buys Sky Betting & Gaming for $4.7 Billion

The Stars Group announced over the weekend that it has acquired Sky Betting & Gaming (SBG) for $ 4.7 billion in combination cash and stock deal. According to The Stars Group in a press release, the addition of Sky will make the company the largest publicly traded online gambling company.

The Stars Group is clearly best known as an online poker company, as its name comes from its ownership of PokerStars, the world’s largest online poker room, but this purchase balances the company’s numbers quite nicely. The Stars Group says that if Sky, CrownBet and William Hill Australia (the latter two of which were also recently acquired) were counted in the 2017 financials, poker would make up just 37 percent of The Stars Group’s revenue. An almost equal number – 34 percent – would have come from sportsbook, while 26 percent would have been casino.

“The acquisition of Sky Betting & Gaming is a landmark moment in The Stars Group’s history,” said Rafi Ashkenazi, TSG’s Chief Executive Officer, in the press release. “SBG operates one of the world’s fastest growing sportsbooks and is one of the United Kingdom’s leading gaming providers. SBG’s premier sports betting product is the ideal complement to our industry-leading poker platform. The ability to offer two low-cost acquisition channels of this magnitude provides The Stars Group with great growth potential and will significantly increase our ability to create winning moments for our customers.”

“We are delighted to join forces with The Stars Group,” added Richard Flint, Sky Betting & Gaming’s Chief Executive Officer. “We have had a fantastic last few years and would like to thank CVC and Sky for supporting us in becoming a leading online operator in the UK. This transaction allows us to offer our best-in-class products to a truly global audience. We’re excited about our future together.”

The Stars Group outlined the benefits of the acquisition, the first of which we have touched upon:

• Greater revenue diversification and significantly enhanced exposure to sports betting, the world’s largest and fastest growing online gaming segment, as the majority of SBG’s revenues are generated by sports betting.
• An increased presence in regulated markets, particularly within the United Kingdom, the world’s largest regulated online gaming market.
• The development of sports betting as a second low-cost customer acquisition channel, complementing The Stars Group’s core poker business and enabling more effective cross-sell to players across multiple verticals.
• Improved products and technology as a result of the addition of SBG’s innovative casino and sports book offerings, and portfolio of popular mobile apps.
• Identified cost synergies of at least $ 70 million per year.

The Stars Group will pay CVC Capital Partners and Sky plc, the owners of Sky Betting & Gaming, $ 3.6 billion in cash. To make up the other $ 1.1 billion, The Stars Group will pay with 37.9 million newly issued common shares. The value is based on the closing price of The Stars Group stock (NASDAQ: TSG) on April 20th, which was $ 29.30.

The transaction is expected to close in the third quarter of this year and has been unanimously approved by TSG’s Board of Directors.

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New Jersey Online Gaming Industry Breaks Record with Biggest Month in History

 New Jersey Online Gaming Industry Breaks Record with Biggest Month in History

Signaling the vibrancy of its online gaming industry, New Jersey was able to bank its biggest online “win” rate in its history in the month of March 2018.

Over the 31 days of March, New Jersey’s citizens seemed to flock to the offerings from the casino operations in the state. For the month, the five online operations in the state – the Borgata’s poker and casino sites, Caesars’ poker and casino sites, Resorts’ poker and casino sites and the individual casino operations of the Golden Nugget and the Tropicana – pulled in a record $ 25.6 million. That was by far the biggest month in the history of the Garden State’s online gaming industry, beating its previous best by almost $ 4 million (the previous record was $ 21.7 million in March 2017).

Breaking down the numbers from March, it was casino gaming that once again carried the online industry. Of that $ 25.6 million, $ 23.6 million came from the virtual slots, table games and other offerings by the online casinos. Online poker brought in almost $ 2 million ($ 1.996 million) on its own accord, its best performance since August 2017, but it is still having troubles bringing in traffic.

It is thought that the new compact with Delaware and Nevada will assist New Jersey with their numbers regarding online poker, but that is difficult to see. First, the compact is only for two rooms that exist in the Jersey market – WSOP.com and 888Poker.com. The other online poker sites in New Jersey – Borgata/partypoker and Resorts/PokerStars – are not licensed for operations in either Delaware or Nevada, meaning they cannot participate in the new compact. Also problematic is that people who want to participate in the new compacted action will have to download new software and it may be a few months before we see if the new compact is helping the New Jersey industry.

For the poker industry, it was Resorts/PokerStars that was the leader of the pack. Bringing in a neat $ 778,949 for the month, they showed a slight increase over their February 2018 numbers ($ 767,600). Making a nice jump was Borgata/party, who brought in $ 622,620 (compared to $ 590,036 in February), while Caesars pulled up the last place slot with $ 564,797 in revenues. Caesars was also the only online poker operation who showed a decline from February to March ($ 605,315 in February 2018).

On the casino front, the Golden Nugget was the big winner. In fact, the Golden Nugget vastly outpaced their opposition in drawing in $ 8.65 million for the month of March. This handily beat their competitors at the Borgata, who brought in $ 3.96 million. Caesars attempted to keep pace with the Borgata, pulling in a $ 3.84 million “win,” while the Tropicana’s online casino popped into the mix with $ 3.69 million in revenues. Resorts earned the least of the five operations, taking in “only” $ 3.455 million from its online casino operations.

In existence for just over four years (November 2013), the state’s online gaming (casino and poker) industry has been growing consistently since its inception. In its first full month, the New Jersey online gaming industry drew in over $ 7.3 million, with $ 2.8 million of that coming from online poker. In each year since then, the numbers have only increased, although the disparity between casino gaming and poker has grown significantly.

In 2014, the New Jersey online gaming industry pulled in about $ 125 million, far short of what then-Governor Chris Christie estimated, but still a good start for what was, at that point, an industry in its infancy. 2015 saw those revenues tick upwards to $ 148 million and 2016 was even better, falling just short of $ 200 million with its $ 196.7 million. 2017, of course, blew past 2016 in bringing in $ 245.6 million.

The explosion in online casino gaming has been driven by the casino side and not online poker, however. In fact, online poker has lost ground over the four years of the New Jersey industry, with online casino gaming increasing by 15.6% from 2016 to 2017 to offset the losses of online poker (down 7.82% in year-to-year comparison). With two new casinos joining in in the coming year – the Hard Rock Atlantic City and Ocean Resort Casino – it is highly likely that there will be more records fall over the next few months. Whether poker is a part of those records remains to be seen.

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UK Regulator Settles on Agreement with Gaming Operators Over Unfair Deposit Bonus Practices

 UK Regulator Settles on Agreement with Gaming Operators Over Unfair Deposit Bonus Practices

The United Kingdom’s Competition and Markets Authority [CMA] announced last week that three online gambling operators who were under investigation for unfair promotional practices have agreed to change said practices to make them more consumer-friendly. The three operators – Ladbrokes, William Hill, and PT Entertainment – have all signed documents laying out what will now be expected of them.

The issue at hand has to do with deposit bonuses and how they are promoted and marketed. Anyone who has played online poker or tried their hand at online casino games in the past decade and a half (at least) is familiar with the banner ads: “Deposit $ 100 Get $ 100 Free!” or “25% Deposit Match up to $ 1,000!”

Of course, it is not as simple as that. There are playthrough requirements, withdrawal restrictions, and more. And that’s where the CMA’s problem with the gaming operators lies. When it launched an investigation last June, the CMA was concerned that “people often don’t get the deal they are expecting as the promotions come with an array of terms and conditions that are often confusing and unclear and, in some cases, may be unfair.”

The press release at the time continued:

Customers might have to play hundreds of times before they are allowed to withdraw any money, so they don’t have the choice to quit while they’re ahead and walk away with their winnings when they want to.

Even when players haven’t signed up for a promotion, there are concerns that some operators are stopping customers taking money out of their accounts. The CMA has been told by customers that some firms have minimum withdrawal amounts far bigger than the original deposit, or place hurdles in the way of them withdrawing their money.

“We know online gambling is always going to be risky, but firms must also play fair. People should get the deal they’re expecting if they sign up to a promotion, and be able to walk away with their money when they want to,” CMA Senior Director for Consumer Enforcement Nisha Arora said.

“Sadly, we have heard this isn’t always the case. New customers are being enticed by tempting promotions only to find the dice are loaded against them. And players can find a whole host of hurdles in their way when they want to withdraw their money.”

The bottom line of the agreement with the operators is that all playthrough requirements – the amount of gambling that is required to earn a bonus – must be very clear and easy to access before a player signs up and while the person is playing. Additionally, players must be able to cash out their original deposit whenever they would like.

The CMA’s summary of the rules is as follows:

• Players won’t be required to play multiple times before they can withdraw their own money
• Gambling firms must ensure that any restrictions on gameplay are made clear to players, and cannot rely on vague terms to confiscate players’ money
• Gambling firms must not oblige players to take part in publicity

UK Gambling Commission Executive Director, Sarah Gardner, chimed in:

We back the action taken by the CMA today. Gambling firms must treat their customers fairly and not attach unreasonable terms and conditions to their promotions and offers.

We expect all Gambling Commission licensed businesses to immediately review the promotions and sign up deals they offer customers and take whatever steps they need to take, to the same timescales agreed by the three operators, to ensure they comply.

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Online Poker Bill Passes New York Senate Gaming Committee

 Online Poker Bill Passes New York Senate Gaming Committee

If at first you don’t succeed…you know how it goes. Such is the case in the New York state legislature, where for the third consecutive year, a bill which would legalize and regulate online poker has made it through the Senate Racing, Gaming, and Wagering Committee. S3898 passed easily by a 10-1 vote and now moves on to the Senate Finance Committee.

There was significant movement with the bill last year, as it not only made it out of the Racing, Gaming, and Wagering Committee, but also the Finance Committee and then passed a vote of the full Senate in mid-June. Despite having half the year to get through the Assembly, it never even made it out of committee there. And it’s not even that it lost a vote; the Assembly really just didn’t bother with it.

One would think that it would move fairly quickly this time, as it is the same bill as last year. It was introduced around this time in 2017, getting through the first committee and reported to Finance in mid-February. Now, I don’t know what Senate schedules look like and there are certainly more pressing issues in Albany, New York than online poker, but it wouldn’t be difficult to envision lawmakers shuttling S3898 through the process in a hurry to get it over to the Assembly with as much time left in the year as possible.

Most of the bill is standard fare, but shortly before the full Senate vote last year, the dreaded “bad actor” clause was added. This type of clause, which has been seen in other online poker legislation, punishes operators who continued to accept U.S. players after the Unlawful Internet Gambling Enforcement Act was passed in 2006. Some bad actor clauses outright ban these operators, while others delay their licensing application or assess fines.

The bad actor clause in the New York legislation says that, among others, this factor may be looked like by the New York Gaming Commission when evaluating the suitability of an applicant:

(f) Whether the applicant:

(i) has at any time, either directly, or through another person whom it owned, in whole or in significant part, or controlled:

(A) knowingly and willfully accepted or made available wagers on interactive gaming (including poker) from persons located in the United States after December thirty-first, two thousand six, unless such wager were affirmatively authorized by law of the United States or of each state in which persons making such wagers were located; or

(B) knowingly facilitated or otherwise provided services with respect to interactive gaming (including poker) involving persons located in the United States for a person described in clause (A) of this subparagraph and acted with knowledge of the fact that such wagers or interactive gaming involved persons located in the United States; or

(ii) has purchased or acquired, directly or indirectly, in whole or in significant part, a person described in subparagraph (i) of this paragraph or will use that person or a covered asset in connection with interactive gaming licensed pursuant to this article.

It does not appear that this bad actor clause is of the strictest variety, as it does not say that such an operator would be automatically deemed ineligible to receive an online gaming license. Rather, an operators actions after the UIGEA should be considered by the Commission.

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Penn National Gaming to Acquire Pinnacle Entertainment for $2.8 Billion

 Penn National Gaming to Acquire Pinnacle Entertainment for $2.8 Billion

Penn National Gaming announced Monday that it has agreed to acquire Pinnacle Entertainment for $ 2.8 billion in combined cash and stock. Pinnacle shareholders will receive $ 20 per share of Pinnacle plus 0.42 shares of Penn National stock for each Pinnacle share they own. The implied price per share is $ 32.47, a 36 premium for Pinnacle based on the company’s closing price on October 4th.

Penn National CEO Timothy Wilmott did some of the usual corporate cheerleading-speak in a press release:

The combined company will benefit from enhanced scale, additional growth opportunities and best-in-class operations, creating a more efficient integrated gaming company. Going forward, we will have the financial and operational flexibility to further execute on our strategic objectives, while maintaining our track record of industry-leading profit margins and generating significant cash flow to reduce leverage over time. We look forward to welcoming Pinnacle’s talented employees to our team and to further enhancing our status as North America’s leading regional gaming operator.

Anthony Sanfilippo, Chariman and CEO of Pinnacle, also had some things to say:

Pinnacle shareholders will receive immediate value from the cash consideration, as well as participation in the longer-term growth of Penn National that we expect will occur from the integration of two great companies into a more efficient, larger-scale gaming entertainment platform. We are also pleased that Boyd Gaming will be acquiring our Ameristar properties in St. Charles and Kansas City, along with Belterra Casino Resort and Belterra Park. We look forward to working closely with Penn National and Boyd to seamlessly transition the Pinnacle businesses to their respective new owners.

As Sanfilippo mentioned, Boyd Gaming – mostly notable the owner of the Orleans, Gold Coast, and Fremont casinos in Las Vegas – is buying four of Pinnacle’s casinos in the deal. The purchase will be made from Penn National after the initial acquisition is completed. Boyd Gaming will pay $ 575 million in cash for the properties.

Both Penn National and Pinnacle Entertainment are “regional” gaming companies, focusing on smaller casinos, mostly in places other than Las Vegas and Atlantic City. That doesn’t mean none of their properties are in gaming hotbeds. Penn National owns the Tropicana in Las Vegas as well as the M Resort in Henderson, Nevada. Its casinos mostly concentrate in Mississippi and the Midwest; Hollywood Casino is one of Penn National’s main brands.

Going into the deal, Pinnacle owned sixteen casino properties in the U.S., though of course four of those will be going to Boyd Gaming. Pinnacle also focuses on the Midwest, Mississippi, and Louisiana. It is (was, I guess) the owner of the Ameristar casino chain.

The boards of both companies have already approved the deal, but it still needs approval from shareholders and gaming authorities. Assuming all goes as planned, the transaction is expected to close in the second half of 2018.

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