Ohio is currently home to brick-and-mortar casinos and video lottery racinos, plus retail and online sports betting. State Sen. Niraj Antani (R-Miamisburg) says the successful rollout of internet sports gambling demonstrates the state’s ability to properly regulate and safeguard consumers for remote wagering.

As gaming has evolved in our state and we’ve seen massive success with sports betting, it’s now time to legalize iGaming in Ohio,” said Antani. “Many Ohioans don’t have close access to a casino or racino, but should be able to participate in this entertainment option.”

Antani’s Senate Bill 312 hasn’t yet been assigned to a committee for initial review.

The state lawmaker said along with generating new tax revenue, iGaming would crack down on the illegal offshore market that continues to target online casino players in states where such gambling isn’t allowed. Bovada, a leading offshore website that runs unregulated internet casino gambling in the United States, recently withdrew its platform from Ohio after Matt Schuler, the executive director of the Ohio Casino Control Commission, sent a cease-and-desist letter to the company based in Curacao.?

iGaming Would Help State’s Coffers

Currently, just seven states have authorized iGaming — Connecticut, Delaware, Michigan, New Jersey, Rhode Island, Pennsylvania, and West Virginia. A study from London-based gaming regulatory intelligence firm Vixio that Casino.org reported on last month concluded that states without online casinos are leaving a tax windfall of up to $15 billion a year on the table.

Antani wants Ohio to become the nation’s eighth iGaming state and begin reaping the financial tax reward.

Pennsylvania levies a 54% tax on online slots and 16% on online table revenue. Michigan levies a graduated iGaming tax based on total revenue that ranges from 20% to 28%.

While iGaming would certainly grow state revenue, the study commissioners said it isn’t without risk.

“While these dollars would be a game-changer for addressing the state’s childcare crisis or many other worthy endeavors, caution and thoughtful implementation are warranted as iGaming may have adverse effects on Ohio businesses and workers if done poorly or through a rushed process,” the report concluded.

Online Casino Foes, Fellows

There are many opponents to online casino gambling in Ohio. Among them are leaders at Jack Entertainment, the only casino company based in the Buckeye State.

During the Study Commission’s April meeting, Daniel Reinhard, Jack Entertainment’s senior vice president of government affairs, testified that iGaming would hurt brick-and-mortar gaming and lead to job layoffs.

Just like online retail has decimated local retail, iGaming will do the same under any logical scenario,” Reinhard opined. “iGaming will damage Ohio businesses and cost Ohio jobs leading to diminished capital investment and degradation of Ohio’s existing tax base.”

Jack Entertainment operates Jack Cleveland Casino and Jack Thistledown Racino. In contrast, Jack’s competitors, MGM Resorts and Penn Entertainment, expressed support for iGaming.

MGM runs the MGM Northfield Park racino. Penn operates four gaming properties in the state — Hollywood Casino Toledo, Hollywood Casino Columbus, Hollywood Gaming at Dayton Raceway, and Hollywood Gaming at Mahoning Valley Race Course.

Jeff Morris, who heads Penn’s government relations unit, said internet gaming has been a “catalyst for growth” in the states where the company operates internet casinos in partnerships with land-based properties.

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In a note out on Tuesday, analyst Dan Wasiolek initiated coverage of the FanDuel parent with a four-star rating (five is the highest) and a fair value estimate of $250. That implies potential upside of 18.4% from Tuesday’s closing price.

Flutter’s construction of a daily fantasy sports product in July 2009 provided a first-mover lead to take advantage of a 2018 Supreme Court ruling that allowed for legalized sports and iGaming wagering in the US. As a result, Flutter holds a commanding 40% digital revenue share in the US,” wrote Wasiolek.

Flutter owns 95% of FanDuel, which is half of the US online sports betting (OSB) duopoly, with DraftKings (NASDAQ: DKNG) representing the other half. While the two companies are often joined at the hip, their share price performance hasn’t been in lockstep. Year to date, shares of the FanDuel owner are up nearly 18% while DraftKings is lower by 4.54%.

Flutter’s Non-US Operations Help Stock’s Case

The FanDuel brand is one of the most valuable in the gaming industry and highly recognizable to US daily fantasy sports (DFS) participants and sports bettors. Even so, many American bettors and some investors don’t know that Flutter has significant operations outside of this country.

Outside the US, Flutter’s decades of expertise in product development and risk management have also led to top revenue share. “The company holds 29% and 46% online gaming revenue share in its most mature markets of UK and Ireland (26% of 2023 sales) and Australia (12%), respectively,” added Wasiolek.

The analyst pointed out that Flutter has smartly integrated its parlay offerings and tech stack into Sisal since acquiring that firm in 2022, allowing it to increase revenue share in Italy. Italy is an important market for Flutter because it’s the Eurozone’s third-largest economy and Europe’s largest regulated gaming market after the UK.

Flutter Thriving in Multiple Countries

At a time when smaller operators are frequently waving the white flag in the US OSB space, and some midsized players are failing to grab share from FanDuel and DraftKings, Flutter is asserting earnings prowess in this country and others.

It’s doing so in such a way that earnings before interest, taxes, depreciation, and amortization (EBITDA) margins are expanding at an impressive pace.

“The company’s UK and Australian segments still see over 20% EBITDA margins, despite stringent regulation and industry maturation in these regions,” concluded Wasiolek. “ESPN Bet’s aggressive entry into the US market in the past several months has not prevented share gains or expanding EBITDA margins at Flutter’s FanDuel brand.”

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The Connecticut Department of Consumer Protection (DCP) said it fielded numerous complaints from online gamblers regarding DraftKings’ internet casino. The many grievances alleged that Deal or No Deal Banker’s Bonanza was not meeting regulatory conditions or paying out the advertised 95 cents on every dollar wagered.

State gaming officials investigated to determine if the interactive slot title wasn’t programmed correctly. DraftKings was also looking into the matter and discovered that the game’s developer — White Hat Gaming — had accidentally set the game’s payout rate to zero.

DraftKings is the iGaming and retail and online sportsbook partner of Foxwoods and the Mashantucket Pequot Tribal Nation. Rival FanDuel is the iGaming and sports betting partner of the Mohegan Tribe and Mohegan Sun.

The Connecticut Lottery operates retail and online sports betting with Fanatics, but the state’s 2021 gaming expansion did not authorize the lottery to run online casino games.

Isolated Incident

DraftKings said the payout glitch for Deal or No Deal Banker’s Bonanza was limited to its online operations in Connecticut. The company said it returned $23,909 in wagers to players who bet on the game while it was not operating as intended.

The DCP, which regulates gambling in Connecticut, said it additionally fined DraftKings $19,000 for the malfunction. The state gaming agency also took issue with DraftKings failing to inform the regulator in a timely manner about the game’s programming error.

DCP officials said DraftKings became aware of the matter in early August but didn’t notify the state until Aug. 31. White Hat was fined $3,500 for the incident.

Our customers’ satisfaction and the integrity of our products are central to our success. ?We have robust measures to monitor potential payout issues, and we investigate any concerns promptly,” DraftKings said in a statement.

“In the event of a game not functioning as intended, we ensure impacted customers are appropriately refunded,” the company added.

Industry Leader

White Hat Gaming says Deal or No Deal Banker’s Bonanza has a return to player rate of 94.95%. The 5×6 interactive reel has a minimum bet of a penny and a maximum bet of $50.

The online slot is one of more than 300 games offered by the DraftKings online casino in Connecticut. Along with slots, the iGaming platform has interactive table games with live dealers.

Anyone aged 21 and older who is physically located in Connecticut can play the online casino games. The iGaming operation is also accessible from on-property at Foxwoods, meaning guests don’t need to venture down to the physical gaming floor to test their luck.

White Hat games are available in all seven states that have legal iGaming. Along with Connecticut, they are Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia.

The post DraftKings Slapped With $19K Fine in Connecticut for Unwinnable Slot Game appeared first on Casino.org.

iRush Rewards is using a tiered rewards template utilized by traditional casino rewards programs. Those tiers are Gold, Platinum, and Black, and each comes with unique perks. This is the first time Rush Street Interactive has implemented tier credits in its rewards plan and, in addition to those credits, bettors will earn loyalty and bonus store points.

Once a player reaches a Tier Level, they will now retain the benefits for that tier for the rest of the current earning period of six months plus the entire next six-month period (up to one year). For example, if a player reaches the Black Tier on January 12, 2024, they will maintain Black Tier status until December 31, 2024, an extension of benefits players appreciate,” according to a statement.

In North America, the operator offers iGaming and/or sports wagering in Colorado, Delaware, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia, as well as Ontario, Canada.

RSI Loyalty Program Could Enhance Customer Acquisition

Loyalty programs, be they of the airline, casino, or hotel variety, are popular among guests and are widely used in those industries as customer acquisition and retention tools.

“Players now earn points based on the type of casino game they are playing (slots, progressive slots, video poker, or table games). Additionally, sports bettors now earn points for Same Game Parlays (SGPs) based on the number of legs, rather than the single rate previously applied, giving SGP bettors even greater value when they bet with BetRivers,” the Chicago-based operator added in the press release.

Some online gaming companies have leveraged ties to land-based casinos and relationships with other hoteliers to make their loyalty platforms more appealing to bettors.

RSI Adds Clarity to Loyalty Program

Whether it’s a standard casino rewards platform or a frequent flier miles program, customers like knowing what their current status is, and what they need to do to reach the next level.

While many airline and hotel rewards programs are clear on those fronts, some customers have complained that gaming operators, both land-based and internet-based, can be opaque in their rewards programs. RSI is attempting to alleviate that burden.

“The new loyalty interfaces allow players to view and track from a single location their status, points, and advancement towards higher levels and tiers. Additionally, players can see their current benefits and equally as important, the benefits they will be entitled to upon reaching the next tier or level,” concluded the operator in the statement.

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King Gaming’s plan to build a multimillion-dollar HQ with office and residential space, plus two eateries and a landscaped park, was described by local media as the “largest ever single private investment on the Isle of Man.”

But in April, King Gaming’s gambling license was suspended by the island’s regulator, the Gambling Supervision Commission. That’s after police raided the company’s offices and arrested ten staff members as part of an investigation into fraud, money laundering, and immigration violations.

At the same time, the regulator suspended the license of Dalimine Ltd., King’s B2B arm. Then the Isle of Man Financial Services Authority ordered cryptocurrency firm, Soteria Solutions, to cease operations because it shared directors and officers with King and was registered at the same address.

‘Scam Kingpin’ Named

Now, the BBC has revealed that this web of associated companies also included Manx Internet Commerce (MIC), a scam factory targeting Chinese citizens that existed on the island between January 2022 and January 2023.

MIC initially operated out of a room in the Seaview Hotel in Douglas, the Manx capital, before moving to former bank offices on the east side of town.

In late 2013, six people who worked for MIC in Douglas were convicted in China of conducting investment scams on Chinese citizens, having been charged with fraud on their return to their homeland, the BBC reports.

Liang is Chinese born but travels on a Dominican passport. He was not among those prosecuted in China in late 2013, and its unclear whether he was one of those arrested by Manx authorities in April.

“Pig-butchering” refers to a long-term fraud in which the victim is befriended over the internet and gradually lured into making increasing payments into a fraudulent investment scheme, typically using cryptocurrency.

‘Killing Pig Plate’

Originating in China, where it’s called “Sha Zhu Pan,” literally translated as “killing pig plate,” there has been an explosion of these types of scam centers across Southeast Asia since 2016, particularly in countries such as the Philippines and Cambodia.

However, it’s uncommon to find such Chinese-facing operations in the West. The Isle of Man is a British Crown Dependency in the Irish Sea with an independent government.

But in recent years, it has also attracted Asian-facing online gambling companies. These operators are lured by the “white-label” system, which allows them to piggyback onto a third-party’s UK gambling license.

In turn, this enables them to sponsor English Premier League soccer teams, an advertising springboard to the Chinese market, where promoting gambling is strictly illegal.

But the emergence of a scam center on the Isle of Man may force the island’s authorities to ask themselves some difficult questions about their licensing regime.

The post King Gaming Ran ‘Pig-Butchering’ Scam Op on Isle of Man appeared first on Casino.org.

The complaint, filed Wednesday in London’s High Court by 20 institutional shareholders, demands $150 million in damages. It claims that Entain failed to properly inform investors of an investigation by the UK tax agency, HMRC, into bribery and corruption at the Turkish subsidiary, Headlong.

Ultimately, Entain would pay one of the biggest fines in UK corporate history, ￡600 million (US$760 million) to resolve the case. Shares in the company have almost halved since May 2023 when it warned shareholders of the impending penalty.

Shady Networks

Entain, then known as GVC Holdings, offloaded Headlong for free in December 2017 ahead of its proposed takeover of British legacy betting group Ladbrokes-Coral.

Online gambling is illegal in Turkey, and the company wanted to rid itself of black-market ops that might give regulators a reason to nix the Ladbrokes deal.

HMRC accused Entain of failing to stop Headlong employees from engaging in bribery. The unit was so poorly overseen that some of its employees were defrauding the parent company by siphoning off money.

Entain, which now owns half of BetMGM, could have been prosecuted under the UK Bribery Act but prosecutors ultimately decided against this because it could have resulted in the company losing licenses across the world, potentially putting thousands of jobs at risk.

Internal Unrest

Should the case proceed to trial, a judge will need to determine the degree to which the Turkish investigation caused Entain’s stock market downturn. There have been many other factors that have damaged its share price over the past few years, including a series of misfiring acquisitions.

Andrew Williams, a partner at Fox Williams, the law firm that filed the complaint, said he hoped the lawsuit would “offer institutional investors the opportunity to recover substantial losses, but more importantly, serve to improve transparency and governance within the UK’s gambling sector, reminding public companies that they need to take their disclosure obligations seriously.”

The post Entain Shareholders Sue Over $760M Turkish Bribery Fine appeared first on Casino.org.

The DGE told the casino operated by MGM Resorts International that a recent audit into BetMGM’s operations determined that the iGaming platform underpaid taxes due to overstating its promotional gaming credits, or PGCs.

Borgata was told it must pay the DGE the $365,161, plus an interest and tax penalty amounting to $33,272. Because this was the second time in 18 months that BetMGM overstated its PGCs, the DGE also concluded that a civil financial penalty was warranted.

$75K Settlement?

DGE Interim Director Mary Jo Flaherty told Borgata and BetMGM that PGCs only qualify for tax exemption when the credits are provided for free online slot machine play. Any associated winnings from the promotional credit must be available for immediate cashing out after the bonus is wagered one time.

In 2023, the DGE found that BetMGM had included promotional credits issued for interactive table games as qualified tax deductions.

In that audit, the DGE discovered that BetMGM overstated its promotional deductions by more than $9.8 million, which resulted in a tax underpayment of more than $787K. BetMGM paid the back tax and $127,345 in interest and penalties.

Flaherty said BetMGM’s second regulatory violation regarding PGCs in a year and a half is a matter the DGE views as “serious.” ?

The fact that this conduct was repeated less than 18 months after the Division warned an additional violation of this type could result in a civil penalty is also to be considered. The Division notes that the underpayment of taxes was remedied quickly in each case, and software fixes were deployed to correct the reporting errors with regard to PGCs,” Flaherty wrote in her action in lieu of complaint letter.

Flaherty said the division accepted Borgata’s offer to pay a civil penalty of $75K to settle the matter. DGE rules permit a civil penalty of up to $100K per violative instance against a casino licensee.?

iGaming Boom

While in-person play in Atlantic City has slowed this summer for the nine brick-and-mortar casinos, iGaming revenue continues to experience record growth.

Through six months, Borgata’s online casino operations ranked third in New Jersey’s iGaming market. The casino’s iGaming partners combined to win $257 million during the six months, with BetMGM accounting for the lion’s share at $132.57 million.

Borgata’s online casino partners additionally include Borgata Casino, Party Casino, Wheel of Fortune Casino, and Stardust Casino.

Borgata’s physical casino floor is the richest in Atlantic City. Between January through June, Borgata’s retail gaming win totaled $351.8 million. Hard Rock was second at $262.2 million.

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The case of Alice Guo became a national sensation after police raided a POGO (Philippine Online Gambling Operator) complex in her town of Bamban in the northern province of Tarlac last February. The business, Zun Yuan Technology, was suspected of involvement in crypto scams, human trafficking, and cybercrime.

Inside, they found hundreds of trafficked workers. They also found Guo’s car. Police also discovered that the land on which the POGO complex was built was partially owned by Guo.

Further investigation into Guo’s background prompted concerns about national security. She claimed to be a natural-born Philippine citizen, the love child of a Chinese father and a Filipina maid. She said she grew up “hidden” and friendless on a pig farm.

Just Who is Alice Guo?

But her wealth, which she previously flaunted, was inconsistent with that of a small-town mayor in a Philippine backwater. Her birth certificate was registered when she was 17 years old, and her fingerprints matched those of a Chinese national named Guo Hua Ping who entered the country as a teenager.

All of this has led to accusations that she is a Chinese asset, which she has denied. The allegations come at a time of increased tension between Manila and Beijing over disputed territories in the South China Sea.

Last month, a warrant was issued for Guo’s arrest after she twice failed to appear at a Senate hearing to answer questions about her citizenship and the inconsistencies surrounding her birth and upbringing.

According to the Philippines’ Bureau of Immigration and the country’s Presidential Anti-Organized Crime Commission (PAOCC), Guo flew to Kuala Lumpur, Malaysia on July 18. Three days later, she hopped on a flight to Singapore. On August 18, she traveled to Batam, Indonesia, via ferry, according to PAOCC.

‘Heads Will Roll’

Her flight raises questions about how a fugitive from justice was able to travel through border checkpoints and whether she was aided in her escape.

President “Bongbong” Marcos announced Wednesday that “heads will roll” as a result of the incident, which he said had “laid bare” the corruption in the judicial system.

The POGOs, composed largely of Chinese nationals, thrived under former president Rodrigo Duterte, who was willing to license and tax the sector as long as it didn’t take bets from Philippine citizens.

More than 4,000 POGO-linked crimes, including kidnapping and murder, were reported from January 2017 to 2023, according to Philippine police.

Last month, President Marcos ordered the industry to be dismantled.

The post Philippines’ Fugitive ‘POGO’ Mayor Flees to Indonesia Amid ‘Chinese Spy’ Claims appeared first on Casino.org.

“It is the largest jackpot in the history of the legalized online casino industry in the United States,” BetMGM,?the iGaming and online sportsbook platform of MGM Resorts International, said in a statement on Tuesday.

The mystery player won “The Big One” jackpot while trying their luck on the Fruit Blaster game.?

Fruit Blaster is a five-reel slot game where winners get various symbols such as oranges, cherries, lemons, and plums.

“BetMGM and one lucky player made iGaming history,” Adam Greenblatt, CEO of BetMGM, said in Tuesday’s announcement.

Jackpot Continued to Grow

“It’s been a summer filled with anticipation watching the progressive jackpot grow quickly to record levels,” Greenblatt added.

The amount in the progressive jackpot reached $4M in February. That was a record for the company.

The amount continued to increase over the following months.

Thrilling, Historic Win

“BetMGM congratulates the winner on this historic jackpot,” Angus Nisbet, vice president of gaming at BetMGM, commented on the payout.

“It’s these — you never know when moments — that make progressive jackpots especially thrilling,” he added in the statement. “In addition to the jackpot, we hope the player enjoys their trip to an MGM Resort in the near future.”

Players can compete for the progressive jackpot by playing online in New Jersey on BetMGM, Borgata, Wheel of Fortune Casino, and Party Casino.

The Big One progressive jackpot on BetMGM in New Jersey was reset after this week’s payout. It was at $1.2M as of Tuesday.

Last year, BetMGM Casino platforms paid out $138M. That represents a 32% jump when compared to jackpots paid in 2022.

Money won by BetMGM Casino players on Entain’s games, such as Bison Fury and MGM Grand Million Megaways, were more than half of the total paid out in 2023.

BetMGM’s online casino games are available to players in Michigan, New Jersey, Pennsylvania, and West Virginia. The platform’s online sportsbook is operational in 22 states plus Washington, DC, and Puerto Rico.

The post BetMGM Winner Hits $6.4M Jackpot, Sets US Online Record appeared first on Casino.org.

The workers, Tamar Ansian, Makhare Patashuri, and Luka Nadiradze, adopted the extreme form of protest on August 12, according to JAMNews, a news outlet covering Eastern Europe’s Caucasus region. The trio have said they won’t eat until the demands of striking workers are met.

More than 4,000 Evolution Georgia employees – around half the workforce – began striking on July 12. Evolution is a B2B casino software provider that specializes in live casino streams. Many of the disgruntled workers are game presenters or croupiers who deal games from behind TV cameras in studios located at the Tbilisi offices.

Difficult Conditions

Employees claim they work for little money in poor working conditions, according to Evo Union, the trade union that organized the strike. They have reported dirty, unhygienic tables and mosquito infestations that have left some employees with severe skin conditions, infections, and allergies. Workers must sit upright for hours in uncomfortable chairs under bright lights and in poor air conditioning, according to the union.

These workers can earn additional monthly bonuses of US$110 to US$145, but bonuses are often lost if they end a shift early because they are unwell, which happens often because of the long hours and allegedly unsanitary conditions. The average hourly wage in Tbilisi is around US$5.50.

The last straw for workers appears to have been the leaking of Facebook conversations between Evolution managers in which some employees were mocked in an overtly racist and sexist manner.

List of Demands

The union has a long list of demands, which includes pay hikes, annual inflation adjustments, more breaks during shifts, a safer working environment, better health benefits, and the right to menstrual leave. It also wants Evolution to incorporate a system that enables players to tip dealers.

Evolution has called the strike “illegal” and warned that it will be forced to “make operational adjustments, including larger-scale layoffs of employees to reduce our presence in Georgia” if the situation is not resolved.

“We have spent six years investing in the country, offering first-time employment to many Georgians, and the situation is highly regrettable both for Evolution as well as for the many working employees who will be affected by these actions,” the company said in an August 1 Facebook post.

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Flutter’s second-quarter earnings report contained multiple points suggesting FanDuel can maintain and extend its expand its already dominant footprint in the domestic sports betting space. Those include favorable average revenue per monthly active user (ARPMAU) trends. As Eilers & Krejcik Gaming (EKG) points out, FanDuel’s first-quarter ARPMAU was $134 compared to $137 for rival DraftKings, but during the June quarter, the tide turned in favor of FanDuel.

Possible explanations in our view: FanDuel improved its Major League Baseball (MLB) parlay product (it called this out specifically at earnings), plus a relative shift of the player base from daily fantasy sports (where there was a ‘some cannibalization’ in terms of active users) to casino, where monthly unique players (MUPs) were up 30%,” noted EKG. “DraftKings decline, meanwhile, was likely affected by the inclusion of Jackpocket customers into its MUP number and thus the calculation.”

Improvements to the parlay product are notable for any operator, particularly with the imminent arrival of the 2024 football season. Some studies indicate that NFL bettors are planning to wager more frequently this year than in 2023. Parlays have long been part of operators’ toolkits when it comes to spurring more betting, especially during football season.

Long-Term Focus Can Benefit FanDuel

Relative to competitors such as DraftKings and some others, FanDuel has the advantage of being a unit of a larger, mature company. So while competitors are focusing on near-term profit objectives to foster confidence among analysts and investors, FanDuel can focus on long-term objectives.

Owing to the support of a well-heeled parent and its own commendable execution, FanDuel has long been profitable and has used that cash to reinvest in the business, whether it be in customer acquisition, technology, or other areas.

“FanDuel noted payments costs had increased to ~6% of NGR, thanks in part to a faster deposit/withdrawal system that meant customers were transacting more often,” added EKG. “That’s costing FanDuel money, but the product payoff is worth it, per CFO Rob Coldrake, because ‘customers love that feature.’ That type of focus on product has helped FanDuel to five straight no. 1 rankings in our OSB app testing.”

FanDuel Smart to Eschew Surcharge

As was widely expected, FanDuel didn’t follow DraftKings in announcing a surcharge on winning sports wagers in select high-tax states. In fact, when the former didn’t play ball, the latter was forced to reverse course on the controversial issue.

While DraftKings scrapped plans for the surcharge, rivals such as FanDuel that passed on the opportunity may have already won the battle in the court of public opinion and beyond.

“However we believe it was a wise move to avoid the potential backlash from customers and, perhaps more importantly, policymakers, who we suspect would not have looked kindly on any attempts to skirt paying taxes,” concluded EKG.

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Mohammad “Moe” Diab, 48, of Glendale, Calif., and Amy Rountree, 41, of Logan, Utah, pleaded guilty to one count each of bank fraud conspiracy in a federal court in Boston Wednesday. They face up to 30 years in prison.

Diab and Rountree were employees of Allied Wallets, a payment processing company headquartered in Glendale, Calif. The company was owned by one-time billionaire Ahmad “Andy” Khawaja, now a fugitive from justice who US authorities are attempting to extradite from Lithuania.

Transaction Washing

Allied Wallets was involved in a fraudulent practice known as “transaction washing,” where digital transactions for illegal or high-risk merchants are disguised as legitimate payments.

In addition to online gambling transactions, Allied tricked banks and credit companies into processing payments for businesses involved in debt relief, online pharmaceuticals, and payday lending, according to prosecutors.

Diab, Allied’s chief operating officer, and Rountree, its VP of operations, were arrested by federal agents in August 2021, along with another employee, Thomas Wells, 74, of Martin County, Fla. Wells pleaded guilty to wire fraud conspiracy in October 2021 and is awaiting sentencing.

Khawaja Campaign Donations

Khawaja was arrested in Lithuania in September 2020 on an international warrant. US officials asked that he remain in custody pending extradition proceedings, which are ongoing.

According to a June 2023 report by Lithuanian news outlet LRT, Khawaja has been released on bail by Lithuanian authorities. Although he claims to have no money to repay the millions he is accused of acquiring fraudulently, he is currently staying at one of the most luxurious hotels in the Lithuanian capital, Vilnius, per LRT.

In 2016, he held a fundraiser for Hillary Clinton’s failed presidential bid, illegally transferring $3.5 million to the campaign, according to prosecutors. Then, just weeks after the election, he met the newly elected Donald Trump, donating $1 million to his inauguration campaign, per the AP.

In 2020, Khawaja claimed he was being targeted by federal authorities because he had compromising information about Trump.

The post Two Plead Guilty in $150M Allied Wallets Fraud appeared first on Casino.org.

Some analysts remain constructive on the battered regional casino stock. For example, Truist Securities analyst Barry Jonas recently met with Penn management, prompting him to reiterate a “buy” rating and $25 price target. That implies upside of almost 30% from today’s closing print at $19.24.

Takeover chatter pertaining to Penn started in late May when investor the Donerail Group sent a letter to the gaming company’s board of directors encouraging it to sell itself to increase shareholder value. Since then, analysts have consistently said such a transaction is unlikely and it’s probable that Penn is not a willing seller.

LaBerge Hire Could Be Meaningful for Penn

With some industry observers viewing the 2024 football seasons as make-or-break time for ESPN Bet, Penn’s hiring of former Walt Disney (NYSE: DIS) executive Aaron LaBerge as chief technology officer (CTO) could bear fruit.

Though he hasn’t worked in the gaming space before, we believe the benefits of his prior experience far outweigh any online sports betting-specific intricacies (which can be learned), especially with strong support at PENN,” wrote Jonas.

While at Disney, LaBerge played important roles in developing the company’s non-theme park mobile applications, including one for ESPN and another for the sports network’s fantasy sports games.

Jonas added that at a time when Penn’s ESPN Bet is attempting to close the gap with rivals DraftKings and FanDuel, LaBerge could be a valuable addition to the gaming company because while at Disney, he had experience developing tech to address rivalries. Jonas cited the example of Disney vs. Neflix in streaming entertainment.

Netflix “had a 10-year and many-million-subscribers head start, though DIS was able to compete in time as its product became increasingly sophisticated,” noted Jonas.

More ESPN Bet Insight

The bulk of Penn’s earnings and revenue are derived from its land-based casinos, but ESPN Bet has taken center stage in the eyes of many investors. That makes Penn’s planned enhancements to the sports betting app pivotal.

Jonas pointed out that ESPN Bet growth is likely to be gradual, but he applauded the operator’s efforts in catering to both avid and recreational bettors. The analyst added the app is gaining above-average traction with female bettors.

An area to keep an eye on is Penn’s ability to smooth out some issues with Hollywood Casino-branded iGaming platform, which to date hasn’t materially benefited from conversions from ESPN Bet. Jonas said management is highly focused on improving iGaming execution.

The post Penn Entertainment Has ‘Unrecognized Value,’ Says Analyst appeared first on Casino.org.

Should MGM win the permit, which could happen before the end of this year, it would debut the new venture in Brazil in 2025 under its BetMGM brand. The gaming company described the Brazil effort as “BetMGM-branded venture.”

The new BetMGM-branded venture will align MGM Resorts’ industry-leading gaming and entertainment expertise, and proven LeoVegas technology, with Grupo Globo’s superior consumer knowledge in Brazil, and reach of almost 70 million people every day through its multiple vehicles, to create a product with significant scale, resources and access,” according to a statement.

The gaming company added that the Brazil partnership will be able to leverage MGM’s various casino brands while accessing Brazilians that are customers of both MGM and Grupo Globo. Grupo Globo, which turns 100 years old next year, is one of Latin America’s largest media entities. The company makes for a practical sports betting partner in Brazil for any gaming operator because it owns at least half a dozen sports networks in the country.

Why Brazil Sports Betting Matters

Brazil is Latin America’s largest country by population and the region’s biggest economy. Alone, those data points highlight the allure of the market to international gaming companies such as MGM.

Brazil ranks as the sixth-largest country in the world by population, but 20 million represents less than 10% of the population, indicating there’s ample room for gaming companies to broaden the reach of internet casino and sports wagering offerings. Additionally, Brazil doesn’t have brick-and-mortar casinos, meaning more cost-efficient online wagering options dominate the market.

Bottom line: with Europe’s betting markets mature and legislative progress in the US slowing, Brazil is one of the best international opportunities for iGaming and sportsbook operators.

More MGM Brazil Details

The MGM/Grupo Globo venture will be based in Sao Paulo. The media statement didn’t include financial details of the partnership and it didn’t mention which entity will have majority control or if it will be split 50/50.

As of December 2023, 134 companies signaled interest in potentially bidding for sports wagering licenses in Brazil, but there’s chatter that some of those firms, including US-based operators, are merely kicking the tires and taking a wait-and-see approach.

“Brazil is one of the most exciting and vibrant emerging gaming markets in the world, and no one has more exposure and expertise in this market than Grupo Globo,” said MGM CEO Bill Hornbuckle in the statement. “This historic alliance allows us to quickly enter the market with the scale and expertise needed to establish an early foothold as a leading operator and provider of the very best experience to customers across Brazil.”

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Arkansas Edge is seeking permission from the Arkansas Racing Commission (ARC), the state’s gaming and racing regulator, to amend its rules to permit electronic 50/50 raffles. Operating such an online raffle would be costly, as managing an internet sweepstakes would require Arkansas Edge to partner with and utilize a geolocation technology service provider like GeoComply to ensure that only people physically located within the state are participating. There would also be “know your customer” components.

Since Bet Saracen already has geofencing technology and KYC protocols in place to allow anyone aged 21 and older physically located inside Arkansas to place online sports bets, the casino owned and operated by the Quapaw Tribe of Oklahoma says it can run the electronic 50/50 raffle.

Big Catch?

Saracen reps say if Arkansas wishes to allow an online raffle to support the Razorbacks’ NIL program, the state might as well also go ahead and legalize iGaming, including online slot machines and interactive table games. Casino officials have presented regulatory amendments to ARC’s online sports betting rules to allow raffles and iGaming.

Saracen leaders have recommended altering the definition of “interactive gaming” to include “a NIL drawing game conducted through an electronic device or machine to benefit a Name, Image, Likeness collective consistent with the Arkansas Student-Athlete Publicity Rights Act.”

We would have an innovative NIL fundraising strategy that no state has,” Saracen Chief Marketing Officer Carlton Saffa told Best of Arkansas Sports.

“I graduated from the University of Arkansas,” Saffa added. “My wife graduated from the University of Arkansas. My children have no choice. They will attend the University of Arkansas. This is where we need to be focusing.”

As for online slot machines and table games, Saffa said the state authorizing its three brick-and-mortar casinos to operate such interactive gaming would help rid the state of illegal, offshore websites and apps that actively target players in states where iGaming isn’t allowed.

Immediate Pushback

The odds of Arkansas Edge and Bet Saracen teaming up for NIL aren’t exactly good.

To circumvent that concern, Arkansas Edge and Saracen carefully worded its proposed regulatory language to refer to an online 50/50 raffle as a “NIL drawing game.”

Arkansas’ Finance and Administration Secretary Jim Hudson isn’t sold.

We believe the proposed NIL raffle is not authorized under existing Arkansas law and could not be implemented with just a rule change,” Hudson said in a statement.

“It’s also important to note the proposal is part of a broader request to allow casino gaming online. This would represent a major expansion of gaming in Arkansas and should not be rushed into without understanding its impact on our state,” Hudson continued.

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In a note to clients, Jefferies analyst David Katz called the operator’s August 1 surcharge announcement a “head fake.” When it delivered second-quarter results on August 1, DraftKings said it planned to roll out a surcharge on winning sports wagers in Illinois, New York, Pennsylvania, and Vermont to offset exposure to those states’ high tax rates.

That move was widely panned in both the investment and sports wagering communities, and it was dropped Tuesday when FanDuel parent Flutter Entertainment (NYSE: FLUT) said it wouldn’t play along.

Our view had evolved to consider the notion that the initiative was intended to spark debate and awareness rather than actually recoup margins,” observed Katz.

Katz reiterated a “buy” rating on DraftKings with a $54 price target, which implies upside of more than 68% from Wednesday’s closing price.

Analysts Defend DraftKings Following Surcharge Misstep

In a late Tuesday announcement highlighting its decision to scrap the surcharge plan, DraftKings said the move was the result of listening to its customers.

In his report, Katz acknowledged that some shareholders may have viewed the DraftKings surcharge plan as premature, particularly in Illinois and New York, which could consider iGaming legislation. It’s believed that in those states, online casinos could be the compromise between lawmakers and gaming companies contending with high sports betting taxes.

Truist Securities analyst Barry Jonas said DraftKings dropping the surcharge could remove some uncertainty that’s recently plagued the stock. He reiterated a “buy” rating and a $50 price target.

“The reversal should remove some uncertainty around execution risks, but also raises the question of how DKNG can offset the impact and/or if guidance needs to be tweaked,” wrote Jonas.

Mixed Views on DraftKings Among Institutional Investors

With 13F reporting season here, market participants are getting a sense of how professional investors view DraftKings. Despite several recent public relations missteps and the fact that the stock is down year to date, the institutional investor situation with DraftKings is decent.

However, Soros Fund Management, LLC, the family office founded by billionaire financier George Soros, added a modest DraftKings stake in the second quarter and overall institutional ownership of the stock remains at the highest levels since the operator’s 2020 debut as a standalone public company.

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London-based regulatory intelligence firm Vixio was recently commissioned by Light & Wonder, a global leader in the development and manufacturing of gambling products and services, to study the possible tax revenue implications of more states legalizing iGaming. Currently, only seven states permit online casino gambling: Connecticut, Delaware, Michigan, New Jersey, Rhode Island, Pennsylvania, and West Virginia.

“States and local governments could conservatively generate approximately $9 billion to $15 billion in annual tax revenue from legal internet gaming,” the Vixio report summarized.

iGaming Tops Sports Betting?

Sports betting is a small-margin business, something that’s not the case for online casino operators where win rates for interactive slots and table games are considerably higher than what oddsmakers reap.

Further proof that iGaming delivers states much more tax revenue than sports betting is that the six metered online casino gambling states last year included three of the smaller states in terms of population. West Virginia ranks No. 39, Rhode Island No. 44, and Delaware No. 45 in population.

Vixio determined that iGaming operators generate greater revenue per capita in more populated states, specifically Michigan, New Jersey, and Pennsylvania. Should more populated, affluent states like Maryland, Massachusetts, New York, and California legalize iGaming, those jurisdictions would be expected to exceed per capita GGR generation than the current markets.

It is likely that larger, wealthier states that may authorize iGaming in the future would over-perform compared to the blended average revenue per adult figure used for the purposes of this report,” the Vixio summary read.

Combined iGaming GGR from the six states last year reached a record $6.17 billion, up almost 23% year over year.

New Jersey, Michigan, and Pennsylvania accounted for more than 90% of the revenue. New Jersey and Michigan iGaming operators won about $1.92 billion while Pennsylvania online casinos won $1.74 billion.

Biggest Beneficiaries

Several states have mulled iGaming legalization in recent years, including several that Vixio believes would outperform the current online casino states in terms of annual tax income.

Of course, there are many opponents to online casino gambling. iGaming adversaries typically cite societal concerns, including elevated problem gambling and the possibility of underage people being able to access online casino sites. ?

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In its new “Gambling Disorder Treatment Outcomes” report, the Tennessee-based provider of mental health services noted that clients faced symptoms such as major depression/suicidal tendencies and obsessive-compulsive behavior stemming from problematic betting habits, and that men were significantly more vulnerable to those feelings than women. Kindbridge further pointed out that 33% of male bettors felt severely depressed compared to 12% of women betters feeling the same way. Nearly 76% of those surveyed were men.

Kindbridge observed that a 12-week regimen of telehealth services proved highly effective in reducing some of the worst psychological issues faced by those with compulsive wagering patterns.

The average score decreased significantly from 8.9 (mild depression) to 3.1 (minimal to no depressive symptoms) over four assessments conducted over a 12 week period, achieving a 65.2% reduction, surpassing the standard industry benchmark of a 50% reduction in scores,” according to the healthcare provider.

Kindbridge, which is the largest operator of mental health networks with an emphasis on problem betting, added that those stuck with the 12-week telehealth treatment option experienced a 76.5% drop in anxiety stemming from wagering.

Many Bettors Want Help

At a time when there’s increasing evidence that online sports betting, which isn’t the only source of compulsive wagering, is weighing on personal finances, there are some encouraging signs. Kindbridge noted that many of its clients dealing with over-the-top betting issues are ready for treatment.

“An increase in individuals arriving with a 10/10 rating on the readiness to change scale has been observed, attributed to the direct connection with Self-Exclusion programs offered by casino operators. These individuals access treatment at a critical time when they are most ready to engage, and a large portion of them follow through with the program,” observed Kindbridge.

Kindbridge has relationships with some of the largest online betting companies, including BetMGM and DraftKings, that allow clients who are worried about their habits to reach out to the mental health provider through those wagering platforms.

Examining Comorbidities of Problem Betting

Conventional wisdom has long held that two of the primary comorbidities of compulsive wagering are high levels of alcohol consumption and tobacco addiction. While 25% of clients examined by Kindbridge acknowledged concerning drinking patterns, and another 24% said they’re frequent tobacco users, those aren’t the top comorbidities associated with problem betting.

Kindbridge noted that major depression (47%) and obsessive-compulsive disorder (47%) are the top comorbidities associated with out-of-control betting. Those were followed by hyperactivity (42%) and insomnia (42%).

Along with those four, generalized anxiety disorder, social phobias, and high levels of irritability ranked higher as compulsive betting comorbidities than alcohol and tobacco use. Fortunately, there’s hope for bettors looking to regain control, and telehealth treatment can help.

“Significant improvements were evident after just 8 weeks of treatment, with exceptionally positive results at the 12-week mark,” concluded Kindbridge. “These outcomes validate the effectiveness of teletherapy in addressing both gambling behaviors and associated mental health conditions. Continued support and resource allocation are essential to sustain recovery and enhance the quality of life for individuals affected by gambling disorders. Future reports will include data specific to gambling harm symptoms as it becomes available.”

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The Spanish sportsbook operator, which went public on Dec. 1, 2021 following a combination with blank-check firm DD3 Acquisition Corp. II, is up 170% year-to-date. That’s easily the best showing among US-listed gaming stocks that are the product of SPAC deals, a group including DraftKings (NASDAQ: DKNG), Rush Street Interactive (NYSE: RSI), and Super Group (NYSE: SGHC).

Within and outside of the gaming industry, there are myriad examples of blank-check deals gone bad, but there were benefits for Codere Online in that form of going public.

We raised over $100 million net of fees which allowed to fund a very ambitious marketing plan over the subsequent two years,” noted Guillermo Lancha Jiminez, Codere Online’s head of investor relations. “By being able to invest meaningfully in our markets, we were able to our consolidated revenues by nearly 50% in 2022, our first year post de-SPAC, followed by 40% growth in 2023.”

Codere Online, founded in 2014, is a unit of Codere Group — the only listed Spanish company in the gaming industry. The online operator is the first internet gaming entity from Latin America to publicly trade in the US.

Codere Online Could Be Hidden Gem

Combine its market value of $368.50 million (as of late US trading hours Monday) with the fact that it doesn’t operate in the US and it’s not a stretch to say Codere Online may be overlooked relative to other sports wagering equities.

Unlike US iGaming and sports betting companies that typically rush to enter every state possible, Codere Online took a pragmatic approach to Latin America by focusing on Mexico, not rushing into other countries simply for the sake adding new markets.

“We put other markets like Argentina, Colombia or Panama, where we currently don’t have a winning formula, on standby while we continued to focus in our core markets,” added Jiminez.

Coder Online Fast to Reach Profitability

One of the primary drags on shares of de-SPACed companies, gaming and otherwise, is that those firms often try investors’ patience by taking awhile to become profitable. That wasn’t the case with Codere as it took the operator just two years to reach profitability, underscoring the benefit of not doing business in the high-priced US market.

Jiminez said the company remains focused rapid growth while not risking its free cash flow and earnings before interest, taxes, depreciation, amortization (EBITDA) positions.

“We have achieved relevant positions in these markets that we plan to defend and as we start to generate cash over the coming months, we will remain attentive to any opportunities that can help us maximize the value for our shareholders,” he concluded.

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Credential stuffing is where a cybercriminal acquires log-in credentials that have typically been stolen during large-scale corporate data breaches and then sold on the Dark Web. Working on the premise that people often use the same user ID and passwords on multiple websites, a hacker can use the stolen credentials to gain access to accounts.

State-owned PlayNow, which is operated and regulated by the BCLC, is British Columbia’s only legal gambling platform. In a Thursday news release, the organization suggested that users change their passwords “as a precautionary measure.” It emphasized that the passwords had been stolen from other companies’ websites and only a small percentage of PlayNow players were likely to be affected.

‘Deeply Concerning’

“This is a deeply concerning incident and a cautionary tale for everyone with multiple online accounts,” BCLC president and CEO Pat Davis said in the release. “Our investigation remains ongoing, and we have found no evidence that our systems have been compromised, or that player login information was stolen from our systems.”

The BCLC said it had already notified impacted players, and their accounts had been locked because of suspicious activity. Its investigation into the matter is ongoing.

Integrity and security are at the core of our business and our games,” Davis added. “We are committed to continuing our ongoing evaluation and enhancement of PlayNow security controls to maintain the safety of our players’ information going forward.”

Cyberattacks against online gambling operators are almost as old as the industry itself, although credential-stuffing is a growing concern.

DraftKings Hack

In November 2022, more than $600K was stolen from around 1,600 DraftKings accounts, causing shares in the company to fall 5% on the Nasdaq. The sportsbook had only recently launched in many US state markets, and investors feared the attack would spark a drop-off in consumer confidence.

In February 2023, federal agents arrested a Wisconsin teenager, Joseph Garrison, then 18, for his role in the attacks.

Garrison, who was sentenced to 18 months in prison in January 2004, had files containing nearly 40 million pairs of usernames and passwords on his computer and once boasted that “fraud is fun” to a co-conspirator, prosecutors said.

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During the second quarter earnings call, Eric Hession, president of sports and online gaming at Caesars, said the company’s acquisition of WynnBet’s online operations in Michigan was completed in June.

The acquisition provides Caesars with additional market access for iGaming and online sports betting in the state through a partnership with the Sault Ste. Marie Tribe of Chippewa Indians. The tribe owns five casinos on Michigan’s Upper Peninsula.

The Horseshoe brand was founded by legendary gambler and poker player Benny Binion in 1951. Binion also founded the World Series of Poker and held the annual tournament at his Binion’s Horseshoe in downtown Las Vegas from 1970 through 2004.

Caesars, then Harrah’s Entertainment, acquired the Horseshoe brand in 2004 as part of its $9 billion acquisition of Caesars Entertainment, Inc.

Horseshoe Won’t Be a Ringer

Hession says the Horseshoe online casino will deploy sometime next month in Michigan. The iGaming brand will expand to other states where Caesars has licenses to operate online sportsbooks and/or casino gaming in the coming months.

Hession explained that the Horseshoe’s online operations will complement Caesars Palace and Caesars Sportsbook but won’t be expected to overtake the more widely known brands.

“I would tamper expectations. Horseshoe is a great band, but Caesars is an even better brand,” Hession said. “Caesars is the flagship brand and it’s got a year’s lead over the Horseshoe.”

I would expect the Horseshoe to perform very strongly, but I don’t think it will command the market share that Caesars has,” Hession explained.

WynnBet’s online business in Michigan certainly did not. Through six months of 2024, WynnBet iGaming revenue totaled just $16.8 million. The state’s top three online casinos — BetMGM, FanDuel, and DraftKings — respectively won $302.5 million, $296.7 million, and $219.5 million during that same time.

WynnBet’s online sportsbook also lagged the leaders with revenue of less than $10K through six months, though the book ceased operations in March. In 2023, however, the WynnBet online sportsbook generated revenue of just $1.4 million while FanDuel won $127.4 million and DraftKings took $54.3 million off bettors.

Horseshoe Expansion

Caesars returned the Horseshoe brand to Las Vegas and the Strip for the first time in 2022 after rebranding Bally’s. The company continues to bring heightened awareness to the Horseshoe, with the latest development being the Michigan iGaming news.

Tom Reeg, Caesars CEO, said momentum in online gaming remains strong.

“Expect that the Horseshoe brand, our second brand in iCasino, can help us build on the gains that we’ve had since we rolled out Caesars Palace Online [in August 2023].”

Caesars is licensed in four of the seven states where online casinos are allowed. Caesars is operational in Michigan, New Jersey, Pennsylvania, and West Virginia.

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In a post on X (formerly Twitter) that Hellmuth stated was “NOT investment advice,” he did not mention Rush Street Interactive’s decision to halt its affiliate platform. Rather, he expressed concern about macroeconomic conditions and broader market valuations.

Today I sold all of my shares (165,000 shares) of $rsi stock at $10 a share. I still believe in @RSInteractive_, but I’m afraid of macro economics conditions. The SandP 500 seems overvalued to me: boats rise and fall w the level of the water, stocks rise and fall w the market,” opined Hellmuth.

In 2020, Hellmuth invested $300,000 in special purpose acquisition company (SPAC) dMY Technology Group Inc., which that year merged with RSI, paving the way for the gaming company to go public. Based on that claim and his assertion that he sold 165,000 shares at $10 apiece equaling $1.65 million, Hellmuth’s RSI investment grew more than fivefold.

Perhaps Regrettable Timing in Hellmuth Sale of RSI Stock

There’s no denying that Hellmuth’s returns on Rush Street Interactive shares are enviable and selling a stock that’s returned 161.36% in a year is an arguably prudent move, but it’s possible that the 17-time World Series of Poker (WSOP) bracelet winner could have realized even more gains on RSI.

Late Wednesday, RSI reported second-quarter results while revising its 2024 sales forecast and its EBITDA guidance to $64 million to $72 million. That sent the stock higher by almost 10% in after-hours trading, as of this writing. Should the stock close at $11 on Thursday, that would represent $165,000 in missed profits for Hellmuth, though that’s pennies for someone whose career poker earnings are north of $30 million.

“RSI expects revenue for the full year ending December 31, 2024 to be between $860 and $900 million, increasing the midpoint by $45 million compared to the prior guidance. At the midpoint of the range, revenue of $880 million represents 27% year-over-year growth when compared to $691 million of revenue for 2023,” according to a statement issued by the Chicago-based gaming company.

Inside Rush Street Affiliate Decision

While Hellmuth didn’t overtly say that his decision to dump RSI stock was sparked by the operator’s decision to halt its affiliate program, the timing of the sale led to related speculation.

Yesterday, RSI emailed affiliates in Arizona, Colorado, Illinois, Indiana, Louisiana, Maryland, Ohio, and Virginia to tell them that the affiliate program will end on Aug. 31. No reason was given for that decision and the gaming company told affiliates they must strike all RSI advertisments and tracking links from their sites by that day.

Under the affiliate model, websites produce content related to iGaming, poker, and sports betting with links to various gaming companies’ mobile apps and sites, earning commissions for referred bettors.

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The iGaming news comes from New Zealand’s Minister of Internal Affairs, Hon. Brooke van Velden, who confirmed this week that a regulatory framework to issue online gaming licenses will be incorporated by early 2026. Only a limited number of licenses will be available, and operators must pass suitability checks, pay taxes on their gross gaming revenue proceeds, provide consumer protections, and ensure responsible play.

The ultimate goal of the expansion of gambling to the internet is to provide New Zealanders who wish to gamble from the comforts of their homes a safe online gambling environment — something offshore websites do not provide, van Velden said.

Licensing is how we regulate most forms of gambling domestically. This is not intended to increase the amount of gambling New Zealanders do but to ensure operators meet requirements for consumer protection and harm minimization, as well as paying tax,” the minister explained.

New Zealand is home to less than 5.5 million people but each year welcomes millions of tourists who play a significant role in propping up the country’s economy. ?

Gaming Licensee Supports iGaming

SkyCity Entertainment Group holds New Zealand’s lone land-based casino license. The company owns and operates gaming resorts in Auckland, Hamilton, and Queenstown. TAB New Zealand maintains a monopoly on sports and parimutuel wagering.

All forms of gambling in New Zealand are controlled by van Velden’s Internal Affairs Department.

SkyCity’s casinos in New Zealand last year generated retail gross gaming revenue of approximately NZ$387.2 million (US$229.5 million). Its properties added nearly US$111 million in nongaming revenue. Auckland has almost 1,900 slots and 150 tables, while Hamilton offers 339 slots and 23 tables, and Queenstown has 86 slots and 12 tables.

Following van Velden’s announcement that the central government is developing a legal environment to allow online casinos, SkyCity issued a statement in support.

The SkyCity Entertainment Group remains supportive of the regulation of online casino gaming in New Zealand with an emphasis on strong host responsibility and delivering community benefits in New Zealand,” a company release read.

SkyCity presumably has strong odds of landing one of the forthcoming iGaming concessions.

In her statement titled, “Regulation Online Casinos Approach,” van Velden said the licenses would be auctioned off. The permits would be valid for three years, assuming the operator maintains regulatory compliance.

Consumer Safeguards

Unlike in the United States where online sports betting and casino gambling have flooded television breaks with advertisements, van Velden says New Zealand will take a different approach. The minister explained that licensed online gambling operators would be permitted to advertise “with strict limits” but would be prohibited from entering into sponsorship deals with sports teams, television networks, stadiums, etc.

Only people aged 18 and older would be allowed access to gamble online. Licensed operators would gain privileges to run online slot machines and table games, but not sports betting or lottery products.

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The move, which has long been mooted in Boston, will “allow the lottery to keep pace with its competition and reach a new audience,” according to Massachusetts State Lottery Commission Chair Deborah Goldberg. A portion of the revenues from the online lottery will, by law, go toward supporting the state’s early education and care programs.

The “competition” Goldberg refers to is sports betting, which Massachusetts legalized in August 2022. Lottery officials have in the past expressed concern that the state’s new online sports betting market will eat into lottery revenues.

Equal Footing

Lottery Executive Director Mark Bracken told MassLive Monday that transferring the lottery online and introducing new products like instant-win tickets will place it on an equal footing with sportsbook operators.

While the age requirement for retail lottery games will remain 18, players will have to be at least 21 to play online, as is the legal age for sports betting.

The Massachusetts Lottery’s fears of cannibalization from sports betting have proved to be unfounded thus far. In 2023, the first year it experienced competition from online sportsbooks, the lottery posted a record profit of $1.17 billion on revenues of over $6 billion. The online platform is expected to pull in another $100 million a year.

Supplier Sought

Bay Staters will have to wait a while before the online service is up and running. The lottery first needs to launch a procurement process to find a supplier. The good news is that the MA Lottery app and Mass Lottery website were built with the capability to accommodate a future online lottery, and they already have 350K registered, age-verified players.

Bracken estimates that the whole process will take about 16 months, which means the platform should be ready to go live before the end of next year.

Bracken also addressed concerns that the online lottery would eat into land-based retailer revenue. He explained that there are plans for a player rewards system that would drive online players to brick-and-mortar stores. Although the finer points still need to be worked out, he added he believes an online lottery could increase footfall in land-based stores.

“It’s really a win-win for everyone,” he assured MassLive.

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Peru authorized new online gaming regulations last November. The country is the third in the region in which Rush Street Interactive has entered following Colombia in 2018 and Mexico in 2022. It’s estimated that online sports betting drives an annual handle of $1 billion in Peru, and with the government’s favorable 12% tax rate, it could be a compelling market for operators such as RSI.

Notably, RSI has become the first operator to be fully licensed under the Peru’s new regulatory regime demonstrating its ability to meet rigorous compliance standards and aligning with the company’s strategy of entering regulated markets with strong growth and profitability potential,” according to a statement issued by the Chicago-based gaming company.

Rush Street Interactive was the first US-based operator to establish itself in Mexico — Latin America’s second-largest economy — and the RushBet brand is now among the leaders by market share in Colombia.

LatAm May Not Be Appreciated in RSI Investment Thesis

With the stock up 127.39% year to date, it’s hard to complain about RSI’s performance, but much of the upside has been fueled by the operator’s profit and revenue growth, as well as speculation that the company remains a prime takeover target.

By establishing itself in the region, RSI could eventually tap into other markets there, including Argentina and Brazil — the latter of which is the region’s biggest economy and home to its largest population. Specific to Peru, that country is home to more than 34 million people, meaning it would be the second-largest state behind only California.

“The Peru launch enables RSI to optimize its Latin American operations by sharing resources, including marketing assets and customer service teams, across multiple countries. This approach is expected to drive operational efficiencies and expand long-term growth in the region,” RSI added in the press release.

Why Peru Matters to RSI

As noted above, Peru offers RSI several advantages that may not yet be fully appreciated by the industry or the investing public. Those include a favorable tax percentage, strong regulatory guidelines, and a sizable population.

“This launch is not just about entering a new market; it’s about building on our vision to create an engaging, unique online gaming experience across the Americas,” said RSI CEO Richard Schwartz in a statement.

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Artyom Missyura, 25, a math tutor, lived with the victims and his sister in their apartment in a residential complex in the city, and had run up large debts to online gambling sites, according to Russian media reports.

Food Laced with Poison

Missyura began poisoning his relatives in January, according to prosecutors. He did this by adding a substance daily to their food and water, authorities believe, although they have not named the substance. This continued until June when his mother and stepfather were hospitalized.

At a loss to find a diagnosis, doctors suspected foul play and told the victims to speak to the police who suggested installing video cameras inside the apartment. That’s when they learned the shocking truth.

Missyura, who appears to have walked straight out of a Dostoyevsky novel, confessed to the poisonings during police interviews. He admitted he planned to inherit and then sell off his parents’ apartment to pay off his gambling debts.

Additional Crimes?

Missyura has been charged with attempted murder, but Russian police are now investigating the suspicious death of one of his friends. That person died shortly after drinking juice provided by Missyura.

Police are also looking into the death of the suspect’s grandmother. Missyura borrowed around half a million rubles (US$5.7K) from her before she died last April at the age of 69. He didn’t repay the debt, according to Moscow-area news station MSK1.

Meanwhile, Missyura’s ex-girlfriend ended up in hospital with serious kidney problems. When she was eventually discharged, she discovered he had taken out a loan of 600K rubles (US7K) in her name.

Her brother also fell sick after Missyura served him a crab salad, according to MSK1.

“He had one destructive passion – money. A crazy passion,” a friend told Russian media. “He was caught stealing, and he would answer honestly: ‘When I see other people’s money, it seems to me that it is mine.’”

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The operator added that based on gross gaming revenue (GGR) share for iGaming and online sports betting in the US and Ontario, Canada, its North American market share was 13% for the January through June period. There were some signs of momentum for the gaming company in the second quarter as net revenue increased 9% on a year-over-year basis and 3% from the first quarter. Second-quarter iGaming and sports betting net revenue surged 18% and 16%, respectively.

Those increases highlight accrued benefits from the July 2023 purchase of Angstrom Sports by Entain Plc (OTC: GMVHY).

Our online sportsbook players have been enjoying Angstrom-enabled product capabilities since the start of the baseball season, and we look forward to players enjoying this across our wider sports offering leading into the NFL season,” said BetMGM CEO Adam Greenblatt in a statement.

Angstrom is a data and analytics provider that leverages predictive modeling to create complex pricing and forecasting capabilities. Entain owns half of BetMGM, which is one of the largest US online sportsbook operators. MGM Resorts International (NYSE: MGM) controls the other 50%.

BetMGM Shows Some Progress, But Competition Still Fierce

In the first half of 2024, BetMGM posted an earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $123 million, but Greenblatt noted the operator exceed its customer acquisition and retention goals during the period.

BetMGM has found some momentum in iGaming where its North American market share is 22% and online casino could be a contributing factor in the operator’s expectations that revenue growth will be higher in the second half of this year and into 2025. BetMGM has an advantage in iGaming because some studies suggest that iGaming is complementary to casino operators’ land-based venues. MGM has one of the largest portfolios of US casinos and one of the biggest rewards programs.

Still, internet casinos are permitted in just six states — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia — indicating that more legislative action is needed in the years ahead to drive growth in this form of wagering.

BetMGM Calls 2024 ‘Year of Investment’

As the operator previously stated, BetMGM views 2024 as a year of investment.

“Coupled with an improving sportsbook offering, and building on BetMGM’s iGaming strength which already delivers over $400 million?contribution annually, expectation of greater than planned marketing investment in iGaming in 2H this year,” according to the statement.

While forecasting second half EBITDA that will be comparable to what was seen in the first six months, the gaming company said additional investments are expected to be funded by bank debt. BetMGM said it remains confident it can reach $500 million in EBITDA “in the coming years.”

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Bally’s Dover Casino & Resort this month announced that its slot machines, table games, and sportsbook are resuming 24/7 operations. The announcement came after Delaware Park Casino brought back around-the-clock gaming in January.

Bally’s previously closed between the hours of 4 am and 8 am Monday through Thursday morning. The casino was open 24 hours on the weekends.

We are thrilled to bring back the convenience and flexibility with our 24/7 operating hours,” said Bally’s Dover General Manager Nicholas Polcino. “This change reflects our dedication to enhancing the guest experience and meeting the needs of our diverse and vibrant community.”

Polcino told Delaware Online that the change of hours comes after the casino managed to hire 100 new employees, many of whom are trained in dealing cards. The Bally’s boss says table games will operate based on demand during the early morning hours.

Harrington Raceway & Casino, the third and only other casino in Delaware, is open 8 am to 4 am Monday through Friday and 24 hours on the weekends.

iGaming Growth?

The Delaware Lottery last August announced BetRivers as its new iGaming and sportsbook partner. The partnership came as a result of 888 Holdings dissolving its relationship with the state lottery after more than a decade.

Along with online gaming and in-person sports betting rights at the state’s three casinos, the BetRivers deal included an online sportsbook, something that was not provided to 888. Since taking over the Delaware Lottery’s iGaming, retail/online sports betting activities, BetRivers has seen a rush of new account registrations primarily because of the online sportsbook expansion. That’s translated to much higher monthly iGaming and sports betting proceeds.

For the first time in the history of the Delaware iGaming market, in June, monthly gross gaming revenue from interactive slots and tables exceeded $5M.

Each of Delaware’s three casinos benefits from iGaming and sports betting. BetRivers directs 56% of the online win to the state’s General Fund. The remaining 44% is split between BetRivers and the casino that originated the online play through its website/app.?

iGaming Benefits

iGaming studies have claimed that online casinos complement brick-and-mortar play. A study commissioned by the Sports Betting Alliance and its members DraftKings, FanDuel, BetMGM, and Fanatics, unveiled in March that in-person casino revenue generally increases upon the deployment of legal, regulated iGaming.

The report summarized that land-based casino revenue in New Jersey, Delaware, Pennsylvania, West Virginia, Michigan, and Connecticut benefited from the introduction of online casino gambling. The researchers said land-based casino revenue increased about 4% after iGaming began.

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UC San Diego researchers studied five years of data for more than 700K gamblers from 32 states. They compared 18 states that changed their online gambling laws to 14 states that did not during that period, and found that the expansion of gambling to the internet disproportionately affected lower-income households.

Our data show that online gambling legalization leads to more irresponsible gambling spending among lower-income consumers than among higher-income gamblers,” said Kenneth Wilbur, professor of marketing and analytics at the Rady School and co-author of the study.

Wilbur said irresponsible gambling was defined as spending a high proportion of one’s income. Someone risking 10% or more of their take-home pay, for example, would meet the classification.

Benefits Come With Risks

There are currently 30 states with regulated online sportsbooks available for consumers of gambling age who are physically located within their borders. Seven of those states additionally permit iGaming, or online slot machines and table games.

Online sports betting and internet casinos have created new tax streams for state governments, though iGaming is a much more robust tax generator compared to the small-margin business of sports betting. The added tax money from both verticals comes with societal costs, Wilbur’s team found.

Wilbur said of the 700K online gamblers studied through player reports anonymized by operators, 96% lost money.

“Only 4% made money from online betting,” Wilbur explained. “That is by design. Online gambling platforms often ban or throttle frequent winners’ accounts. There is no right to gamble.”

While many state lawmakers claim it’s wealthier players who create the bulk of the iGaming and online sportsbook revenue, as they bet and lose more, Wilbur’s researchers deduced that lower-income players tend to bet more when they lose, a practice known as chasing losses. Avoiding the temptation to chase losses is a pillar of responsible gambling.

Our analysis shows that online gambling legalization leads to far more problematic gambling among lower-income gamblers than among higher-income gamblers,” Wilbur reported. “These findings emphasize the high financial risk associated with online gambling.”

In nearly every US sports betting state and jurisdiction that has authorized online casino games, handle, or the amount bet, increased each year during the five years studied.

Casino Caution

Wilbur said the goal of the study was to conduct an analysis that would be useful for state lawmakers considering online gambling bills. He said that a paramount concern should be that while iGaming and online sports betting unquestionably increases tax revenue, those who experience the most gambling problems are likely to be the smaller-scale, lower-income gamblers.”

The late Sheldon Adelson of the Las Vegas Sands empire, the world’s richest casino magnate at the time of his January 2021 death, famously said in 2013 that online gambling is “fool’s gold” and that states shouldn’t allow someone to “click your mouse and lose your house.” ?

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The POGO (Philippine Offshore Gaming Operator) sector is largely dominated by Chinese nationals. It thrived under former president Rodrigo Duterte, who was content to license and tax the POGOs provided they didn’t take bets from Philippine citizens. Instead, they target China, where all forms of online gambling are illegal.

Crime and Espionage

There’s been increasing anxiety about the industry in the Philippines. Many POGOs been found to have trafficked workers to toil in hidden scam centers as virtual slaves. And, at a time of heightened tensions between Manila and Beijing over disputed territories in the South China Sea, there are concerns the POGOs represent a potential threat to national security.

The ban comes amid an ongoing Senate investigation into the industry and links to organized crime. The investigation has focused on the identity and activities of Alice Guo, a small-town mayor who has been accused of being a Chinese spy involved in human trafficking via her connections to a local POGO.

Disguising as legitimate entities, their operations have ventured into illicit areas furthest from gaming, such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture – even murder. The grave abuse and disrespect to our system of laws must stop,” Marcos told lawmakers to a standing ovation during his annual State of the Nation address.

There are?46 licensed POGOs in the Philippines and maybe as many as 400 unlicensed outfits, according to government estimates. On Tuesday, the gaming regulator, PAGCOR, said it would begin annulling licenses. Marcos said he wants a complete shutdown of the sector by the end of the year.

The POGOs are estimated to employ 40K people directly and indirectly. The regulated industry generates an estimated 166.5bn pesos (US$2.9bn) of revenue a year.

Workers Rescued

In March, more than 800 Filipinos, Chinese, and other nationals were rescued from a scam center posing as a POGO about 70 miles north of Manila.

Over 4,000 POGO-linked crimes — including kidnapping and murder — were reported between 2017 and 2023, according to police data.

Incredibly, police have also uncovered underground hospitals based inside POGO compounds. These are used to treat trafficked workers and to?provide cosmetic alterations to fugitives to help them evade capture, according to authorities.

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In a note to clients on Wednesday, analyst Chad Beynon forecast 34% year-over-year (YoY) online wagering growth in the June quarter for the North American market. That estimate is the aggregate of Macquarie’s forecast calling for 39% growth in online sports betting in the April through June period, and a 27% year-over-year jump in iGaming GGR.

With flattish online sports betting (OSB) market hold, we view +39% YoY volume, to lead to slight market beats. Moreover, we expect North America Online GGR growth of +34% YoY, comprising OSB +39% (+23% SS) and iGaming +27% YoY,” wrote Beynon.

In the second quarter, DraftKings garnered 38% of the domestic OSB handle, besting rival FanDuel at 36.5%, according to JMP Securities. Macquarie rates DraftKings “outperform” with a price target of $52, down from $54. That new price objective implies upside of 35.5% from Wednesday’s close.

Bullish Outlook on North American Online Betting

The gaming industry’s second-quarter reporting season starts in earnest later this month with a slew of reports, including DraftKings and Genius, slated for early August. Some operators and technology providers could deliver insight regarding second-half and longer-ranging trends.

For the current quarter, Beynon estimates North American OSB handle growth of 20% and 30% year-over-year online betting GGR growth for the entirety of 2024. That growth rate is poised to dip to 11% next year before swelling back to 27% in 2026. The analyst said that the 2025 forecast assumes minimal new markets.

However, there’s room for surprise, particularly on the iGaming front. Next year could be active on the iGaming legislation front, particularly with recent momentum in Ohio to potentially authorize online casinos.

DraftKings, Genius Sports Offer GARP

At a time when many growth equities, particularly mega-cap names with artificial intelligence (AI) exposure, are richly valued, Beynon says DraftKings and Genius have the makings of growth at a reasonable price (GARP) names.

“We think the sell-off is overdone as we expect as we expect <5% impact to EBITDA in ’25 (if at all), and see 2Q earnings as a potential catalyst if investors are reassured of this, despite a lower ’24 guide, in our view,” concluded the Macquarie analyst.

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The nine properties in New Jersey’s casino beach town experienced stagnant in-person play so far this year.

James Plousis, chair of the New Jersey Casino Control Commission, said Atlantic City continues to increase its marketability with new entertainment and amenities.

Visitation has been on the rise thanks in part to diverse and plentiful in-person entertainment opportunities being offered in Atlantic City and across the region,” Plousis said in prepared remarks to Casino.org. “Free family-friendly attractions in Atlantic City this summer include fireworks every Saturday, Boardwalk concerts at least two nights weekly, and weekday recitals of Boardwalk Hall’s famous organ — the world’s largest musical instrument.”

Retail slot win from January through June totaled $998.29 million, a year-over-year decrease of 0.3%, or $3.2 million. Table revenue climbed 1%, or $3.64 million, to $357.8 million.

Hard Rock Gains?

MGM Resorts’ Borgata has long been Atlantic City’s top GGR generator, but Hard Rock continues to cut into the luxury market.

Hard Rock was one of only three Atlantic City casinos to experience year-over-year GGR gains during the first half of 2024. The Boardwalk property generated GGR of $262.22 million from in-person players, a 12% jump from 2023, or $27.9 million.

Borgata saw legacy slot and table win slide more than 1% to $351.84 million, a difference of approximately $4.64 million.

Ocean Casino’s half-year GGR from its physical casino climbed almost 5% to $199.16 million to rank third. Golden Nugget was the only other casino to experience year-over-year in-person GGR gains — up 4% to nearly $75 million.

After Ocean, Tropicana was fourth with $107.83 million, a decline of 6%. Harrah’s was a close fifth at $107.56 million, a 13% drop. Caesars was sixth at $103.43 million, down 1%, while Resorts was seventh at $77.5 million, flat from a year ago.

Golden Nugget was eighth and Bally’s finished last at $71.56 million. Despite recent renovations, Bally’s saw in-person play slow by 3%.

iGaming Growth Continues

New Jersey’s gaming industry continues to grow with online casino gambling and sports betting.

Through six months, iGaming GGR was up over 21% to $1.12 billion. Oddsmakers kept $573 million of the bets wagered, a 30% year-over-year surge.

Total statewide gaming revenue was a little more than $3 billion, a 12% gain, or a difference of nearly $331.5 million.

The $3 billion in GGR marked the state gaming industry’s best mark through six months since 2013. However, the casinos share much of the online casino and sportsbook money with their third-party partners like DraftKings and FanDuel, meaning not all revenue is the same for the nine resorts.

In-person gaming does not occur in a vacuum. Patrons visiting Atlantic City are also likely to spend money on things beyond the casino floor, and their presence in the city directly and indirectly supports a variety of businesses and thousands of jobs,” said Jane Bokunewicz, director of the Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism (LIGHT) at Stockton University.

“As we look forward to the rest of the summer, it will be important to monitor year-over-year revenues for brick-and-mortar operations,” Bokunewicz added.

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Ohio Reps. Jay Edwards (R-Athens), Jeff LaRe (R-Violet), and Cindy Abrams (R-Hamilton) were three of the eight state lawmakers appointed to the Study Commission on the Future of Gaming in Ohio. Edwards co-chaired the study panel with Sen. Nathan Manning (R-Lorain).

The study commission held four meetings on February 20, March 19, March 20, and April 11 during which time the state’s gaming interests provided testimony on whether the state should or shouldn’t expand gambling to the internet. Currently, only online sports betting is allowed.

The Ohio legislative session runs through the end of the year.

Online Gaming Support

The three House Republicans wrote the General Assembly that the state should expand commercial casinos and lottery gaming to the internet in a regulated environment. Edwards, LaRe, and Abrams acknowledged in their letter some pushback from the state’s current brick-and-mortar casinos, most notably from Jack Entertainment, which operates two gaming properties in the Cleveland metro area, but believe such expansion is warranted.

While we understand their hesitation to expand due to an uncertain impact, we believe that iLottery and iGaming could be a net benefit to the state of Ohio. Looking at other states that have implemented either or both iLottery and iGaming, we see significant increases to tax revenues generated with greater participation but also that in-person sales continued to increase,” the Republicans wrote.

Currently, only seven states permit online slot machines and table games: New Jersey, Pennsylvania, Michigan, Delaware, West Virginia, Connecticut, and Rhode Island. The three lawmakers cited ongoing iGaming gross gaming revenue increases in those states while in-person play grows, albeit at a slower rate.

The representatives said that while they support iGaming, any implementation “must not come at a cost” to the state’s current casinos and racinos that employ thousands of Ohioans. ?

Online lottery sales and/or instant gameplays are offered in just nine states: Georgia, Illinois, Kentucky, Michigan, New Hampshire, North Dakota, North Carolina, Pennsylvania, and Virginia. Washington, DC, allows iLottery, too.

The Ohio Republicans supportive of iLottery say allowing online gameplay has only supplemented lottery sales and increased revenue for the programs they benefit.

“The reality is that many other states are moving in this direction and Ohioans are already using the illicit market. Lawmakers should accept that it is very likely that these expansions are only a matter of time and move forward in the best interest of the State of Ohio. As technology evolves and society progresses, so too should our laws,” Sweeney wrote.

Panel Not Unified

Other lawmakers serving on the Study Commission on the Future of Gaming in Ohio weren’t so sure iGaming and iLottery are needed, at least at this juncture. Manning said Ohio “must proceed with caution” in discussing such gambling, as the verticals “potentially have more addictive qualities.”

State Sen. William DeMora (D-Columbus) also opposed online gaming and lottery play. Along with addiction worries, DeMora opined that iGaming and iLottery would negatively hurt business as retail facilities.

“The casino gaming industry employs hundreds of people with good, union jobs. We cannot risk the position of these critical institutions by making them irrelevant, with Ohioans who want to gamble turning to their phones instead of supporting brick-and-mortar stores,” DeMora wrote.

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The deal signals there’s still a strong appetite for iGaming assets and technology despite the fact that no new states have approved that form of wagering this year. Six states allow it. Relativity Acquisition is a Las Vegas-based special purpose acquisition company (SPAC) that was originally formed with the intention of affecting a deal in the cannabis space, but the blank-check firm told investors it would be flexible about exactly where it would find an acquisition partner. The combination with Mazaii could prove prescient.

The company supplies its advanced gaming content and technology to prominent brands within the sector, enhancing their platforms and player experiences. Through strategic acquisitions, Mazaii Corp expands its market reach and strengthens its product offerings across key regions, including Europe, North America, Latin America, and Asia,” according to a statement.

The transaction is expected to be completed in the second half of this year.

Mazaii Could Find Enthusiastic Investor Audience

Mazaii could be at the right place at the right time in terms of broadening its investor base and accessing public markets because there’s been no shortage of coverage pertaining to the long-term internet casino opportunity set.

Buttoning down superior technology is essential to operators’ efforts to fully capitalize on the internet casino opportunity set. Analysts and operators are enthusiastic about the outlook for internet casinos because there’s a long runway for state-level legalization. It’s also a higher margin business than sports betting, and bettors are often stickier and spend more money than they do on sports wagering.

Montreal-based Mazzaii and Relativity Acquisition expect to provide more details on the combination in the months ahead.

SPAC Resurgence? Maybe. Maybe Not.

Several years ago, the gaming industry was fertile territory for SPAC deals, but that well dried up as the broader market soured on companies that came public via mergers with blank-check firms. Most of the stocks, gaming and otherwise, performed poorly upon becoming standalone publicly traded firms.

Following a slew of gaming SPAC transactions in 2021, many of the blank-check firms that were looking for merger partners in the industry threw in the towel as interest rates surged and stocks fell into a bear market in 2022. SPACs generally have two years to execute business combinations, including mergers, and if that doesn’t happen, the firms can seek extensions or liquidate and return capital to investors.

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Citing unidentified sources, the Off Shore Gaming Association (OSGA) noted that a deal for the BetRivers owner could be reached as soon as September, but specific suitors were not mentioned. Media reports surfaced in March that the Illinois-based gaming company reached out to multiple rivals about a possible acquisition. DraftKings (NASDAQ: DKNG) was the only member of that group identified by name.

While the US sports betting space is now a de facto duopoly controlled by FanDuel and DraftKings, Rush Street Interactive could be one of the more compelling takeover targets in the space for suitors looking to bolster market share. In the first quarter, not only was the sporsbook operator positive on the basis of earnings before interest, taxes, depreciation, and amortization (EBITDA), but its revenue surged 34% while its net loss plunged to $2.2 million from $24.5 million a year earlier.

Why Rush Street Interactive Could Be Target

The list of possible prospective buyers, excluding or including DraftKings, could be extensive because the rumored target offers an attractive foothold in the iGaming industry.

However, some analysts have expressed doubt that RSI is a takeover target although in May 2023 CEO Richard Schwartz told analysts and investors he’d be open to having mergers and acquisitions discussions.

It is clear that the price tag has likely increased. Shares of RSI are up 98% year-to-date and the company’s market capitalization was $2 billion as of the close of US markets on July 12, indicating a buyer would likely have to offer more than that to get RSI to the bargaining table.

Assessing Potential RSI Suitors Beyond DraftKings

DraftKings making a run at RSI would be sensible because the former has proven acquisitive and has its eyes set on iGaming expansion. However, DraftKings hasn’t confirmed it’s interested in RSI and some analysts believe DraftKings will eschew acquisitions over the near-term.

The OSGA report mentioned “smaller companies who would love to increase their presence” as potential buyers of RSI, but no operators were mentioned by name. The report also suggested that European betting behemoth bet365 could be interested, but that company has not confirmed any discussions with Rush Street Interactive.

HG Vora – a hedge fund with a reputation for pushing for change at gaming companies – is RSI’s largest investor, controlling 8.79% of the shares. Institutional investors own 28.81% of the shares while insiders control 8.08%, according to GuruFocus data.

RSI operates under the BetRivers and PlaySugarHouse brands, and is currently available with mobile or retail businesses in Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, Virginia, and West Virginia. The firm also offers sports wagering in Ontario, Canada.

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They believe the hospitals are being used to treat POGO workers who can’t use regular health services because they’re in the country illegally, or may have been trafficked to the Philippines to work. Authorities also suspect the operations are providing cosmetic alterations to help fugitives evade capture.

During a raid in May on the underground medical facility in Pasay City, police found hair transplant tools, dental implants, and skin-whitening drips.

“If you bring all these things together, you can create an entirely new person out of those,” Winston John Casio, a spokesman for the Presidential Anti-Organized Crime Commission (PAOCC), told reporters Monday.

What’s a POGO?

POGO stands for Philippine Offshore Gaming Operator. The industry is largely dominated by Chinese nationals and thrived under the tenure of former president Rodrigo Duterte, who licensed and taxed the industry provided it agreed not to target Philippine citizens. Instead, it focuses on China, where all forms of online gambling are illegal.

Duterte’s successor, President Bongbong Marcos, has vowed to crack down on the POGOs, many of which have been found to have trafficked workers to toil in scam centers as virtual slaves.

In June, 150 Chinese nationals were rescued after police raided a POGO compound in Porac, Pampanga province, where they also uncovered torture devices

More than 4,000 POGO-linked crimes, including kidnapping and murder, were reported from January 2017 to the first half of last year, according to police data.

“The president does not want the Philippines to be painted as a ‘scam hub’ and has given us a directive to go after scam farms because of how they have been targeting large numbers of people from all over the world,” Casio said.

New Faces

Police are now trying to determine whether the underground hospitals are linked to reports of fugitives changing their appearance to avoid detection.

In December 2022, immigration officials arrested a suspected member of the Chinese Mafia, Andy Chen, who had links to human trafficking and the POGO industry. The Immigration Bureau reported that Chen had undergone cosmetic surgery in an attempt to conceal his true identity.

Casino said two additional underground hospitals exist in the Metro Manila area, which are bigger than the Pasay City facility. He believes “a good number” of such operations may exist across the country.

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Morningstar senior equity analyst Dan Wasiolek notes the group has been hit by headwinds including “angst over US sports and iGaming market competition and regulatory changes, as well as decelerating growth in US physical casinos after their strong demand recovery in 2021-23.” However, he added that some value is emerging among the six domestic gaming stocks covered by the research firm.

Perhaps surprisingly, Wasiolek views DraftKings (NASDAQ: DKNG) — a stock almost universally seen as richly valued — and Penn Entertainment (NASDAQ: PENN) — a potential value trap owing to its 19% 12-month slide — as among the gaming stocks that are now attractively valued. Despite the aforementioned issues, the longer ranging outlook for iGaming and online sports betting is constructive and that could be to the benefit of DraftKings, Penn, and select competitors.

A combination of new users, consumers spending more on these activities, and an increasing number of states permitting sports betting and iGaming has Wasiolek predicting strong sales growth. He anticipates industry revenue growth of 19% in 2024, 24% in 2025, 13% in 2026, and 27% in 2027,” according to Morningstar.

The research firm noted that over the past six quarters, US commercial gaming revenue has averaged growth of 9.3%, or more than quadruple the rate of GDP growth in this country.

Outlook for OSB, iGaming Growth Supports Some Gaming Stocks

Currently, some form of sports wagering is permitted in 38 states and Washington, DC. That covers about two-thirds of the US adult population. The big kahunas of California and Texas aren’t on that list, Florida doesn’t have a competitive market, and Georgia disappointed on the legislative front this year.

“Texas is among the states with potential approval, and it represents 8%-9% of the country’s adult population, leading the industry’s revenue growth forecast to around $23 billion in 2027 from $11 billion in 2023,” added Morningstar.

Wasiolek has a similarly bullish outlook on iGaming expansion as the analyst sees the amount of states permitting that form of wagering ballooning to 10 to 15 at some next year from the current seven. States are “incentivized by the potential for incremental tax revenue from the activity,” noted Wasiolek.

If that expansion occurs, Morningstar’s revenue estimate could jump to $12 billion in 2027 from $6 billion last year.

DraftKings, Penn Could Add Sports Betting Market Share

In the domestic online sports betting space, a clear duopoly comprised of Flutter Entertainment’s (NYSE: FLUT) FanDuel and DraftKings has emerged. Wasiolek sees DraftKings adding market share and eventually stabilizing in the high 20s on a percentage basis? up from the mid-20s last year. Morningstar has fair value estimate of $49 on that gaming stock, implying upside of 33.3% from today’s close.

The analyst also forecast added market share for Penn’s ESPN Bet, though not at the double-digit percentage some experts believe is necessary to move the needle. Morningstar’s fair value estimate of $22 on Penn implies upside of 10%.

“We estimate Penn’s US Sports and iGaming share to increase to 6% by 2025, versus 4% in 2023, and hold within that range through 2027, driven by its ESPNBet launch in November 2023,” concluded Wasiolek. “Penn’s capital expenditures dropped to 2.6% in the first quarter compared to 10.9% in the previous quarter, driven by the launch of ESPNBet. Sports and iGaming will account for 16% of its 2024 sales.”

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On Friday, July 7, William Anthony Parker, 34, was found guilty of aggravated online casino fraud by the District Court of Central Finland, according to Yle, the Finnish public broadcaster. Parker was able to infiltrate the casinos’ systems by exploiting a security vulnerability to “obtain a financial benefit for himself.”

The report didn’t say exactly how he went about this. However, a Yle article from May that focused on the investigation suggested that he had distorted the results of games in his favor. He did this while using legal software that is intended for use as a cybersecurity tool.

Lone Wolf

The crimes took place between April and May 2023 in Vantaa, a city in southern Finland, although Parker is a resident of the UK. Prosecutors believe he acted alone. He was arrested in central Finland in January of this year and initially charged with gross data breach and financial fraud.

Assets found in his possession at the time of his arrest were frozen by court order during the preliminary investigation. These included more than €9K (US$9.7K) in cash as well as 100 gold coins, according to prosecutors.

Prosecutors had sought a prison sentence of more than three years for Parker. The court’s verdict in the case isn’t final, meaning that the ruling is still subject to appeal, Yle reported.

Major Breaches

The case highlights how cybercriminals are using increasingly sophisticated methods to target both online and land-based casinos. In September 2023, hackers stole around $41 million worth of cryptocurrency from crypto gambling site Stake.com.

It was a “sophisticated breach” that exploited a service that the casino uses to authorize crypto transactions, according to Stake.com founder Edward Craven.

The FBI has attributed the attack to North Korea and its infamous state-sponsored cybercrime unit, the Lazarus Group.?

In the same month as the Lazarus attack, land-based casino giants Caesars and MGM Resorts were hit by ransomware attacks organized by a hacking group called “Scattered Spider.”

MGM refused to pay out and saw disruption to its operations that lasted for days, causing an estimated $100 million in damage. Caesars paid a ransom of around $15 million to have normal services restored.

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In a note to clients today, Stifel analyst Jeffrey Stantial rated DraftKings a “buy’ with a $50 price target, implying upside of 34.8% from today’s closing price while noting the stock is a top pick for the second half of 2024. He pointed out that headwinds such as the recently implemented tax hike in Illinois are priced into the shares.

We see well-discussed headwinds to 2Q24/2024E Consensus (IL tax hike; Jackpocket drag) as de-risked following recent revisions, with healthy core growth drivers (evidenced by recent state reported GGR trends) posing potential upside to reset buyside expectations,” wrote the analyst.

Illinois approved a graduated tax rate on online sports betting operators, forcing the largest sportsbooks in the state to pay higher percentages. Under the plan, which into effect on July 1, Illinois now has the second-highest sports betting taxes in the country and the rate applied to big operators such as DraftKings and FanDuel parent Flutter Entertainment (NYSE: FLUT) likely more than doubled.

Focus on DraftKings Free Cash Flow, Says Stifel

Based on prior reporting patterns, it’s estimated that DraftKings will deliver second-quarter results on Aug. 1. One of the big issues analysts and investors will be monitoring is free cash flow.

DraftKings is about four years removed from becoming a standalone publicly traded company, meaning it’s still a young firm. However, there’s increasing chatter among sell-side analysts that with free cash flow inflecting at the gaming company, return of capital to shareholders could be announced over the near term. Stantial sees that as a possibility.

“DKNG’s forthcoming capital allocation update (and likely initial return of capital) should also signal confidence in out-year FCF generation. All-told, we see a compelling setup heading into 2H24, and recommend investors own into DKNG’s Q2 print,” noted the Stifel analyst.

The analyst said a share buyback would likely be DraftKings’ preferred avenue of returning capital to investors and that the operator is unlikely to pursue large-scale mergers and acquisitions and international expansion over the near-term.

State Data Encouraging for DraftKings

While 2024 has been and will likely end to be a dud in terms of state-level expansion of online sports betting and iGaming, that factor is likely priced into sports betting equities. Specific to DraftKings, there is encouraging news in the form of rising market share in some states.

“We continue to see likely upside bias to DraftKings’ core value drivers — in particular user acquisition & monetization. Per state-reported data (see exhibits 1-6), U.S. same-state online sports betting handle growth accelerated to +24%/+29% year-over-year in April/May (vs. +17% Q1) with DKNG gaining market share sequentially in both months (though early June data suggests some reversion),” added Stantial.

The analyst also noted that many new DraftKings clients are likely casual bettors – a demographic prone to lottery-style wagering and thus higher holds for operators.

The post DraftKings Named Top Gaming Idea for Second Half by Stifel appeared first on Casino.org.

In a new report to clients, BTIG analyst Clark Lampen initiated coverage of the casino giant with a “buy” rating and a $52 price target, which implies upside of 20.14% from today’s closing price of $43.28. The analyst believes it’s possible the stock could build on recent momentum with the assistance of upward earnings and revenue estimates.

Likewise, MGM remains one of the most dedicated buyers of its own shares of any company in the US. Since 2021, the operator has pared its shares outstanding tally by 36% due to multiple share buyback plans.

Vegas, Digital Opps Could Boost MGM Stock

BTIG’s Lampen sounded a constructive tone on MGM’s digital operations and its Las Vegas Strip footprint. MGM is the largest operator in the US casino center.

With Vegas implied at ~8x ’24 earnings before interest, taxes, depreciation, and amortization (EBITDA) within our sum-of-the-parts (or ~5x when lease liabilities are capitalized at 8x cash rent, rather than full BS liability), the current fundamental story doesn’t seem appropriately discounted, and we’d expect the multiple to expand as Vegas concerns fade and numbers move higher,” observed the analyst.

Lampen also noted MGM’s digital business is an unfolding story that may not be getting the credit it deserves among market participants. Last week, the company said its LeoVegas will acquire the US operations of Tipico Sportsbook in a move aimed at bolstering its tech stack.

The analyst called MGM’s digital operations a marquee driver of “growing delta between BTIG’s estimates” and consensus forecasts stretching out over several years.

Asset Sales Possible

In addition to the possibility of a dividend MGM China dividend and the parent company’s domestic shareholder return efforts, Lampen added it’s possible that the stock could be sparked by the sale(s) of regional casinos.

In March, rumors surfaced that MGM was mulling the sale of MGM Northfield Park, a racino near Cleveland, and its eponymous casino hotel in Springfield, Mass. The operator has yet to publicly confirm it’s considering divesting those or any of its regional casinos nor did Lampen mention specific properties the operator could sell.

While it’s possible MGM is evaluating sales of some of its regional casinos, the current interest rate environment is hard on prospective buyers that need financing, meaning the most desirable suitors are those that can execute transactions with minimal need for additional capital. That diminishes the pool of would-be buyers for regional casinos.

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