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  • Florida regulator hits fantasy sports operators with cease and desist orders

The Florida Gaming Control Commission (FGCC) has delivered cease and desist orders to several providers of fantasy sports in the state.

Cease and desist

PrizePicks, Underdog Fantasy and Betr all received letters from the regulator dated 19 September, ordering them to cease operations in the state under the threat of legal action.

“The FGCC has received information that your company may be offering or accepting illegal bets of wagers from Florida residents,” the letters read.

“We have also received information that your company may be promoting and conducting an illegal lottery. This alleged conduct is strictly prohibited in Florida and constitutes criminal activity.”

The letters set out the Florida statutes which the FGCC insists should prohibit the companies from accepting bets on fantasy sports within the state.

In Florida, sports betting may only be carried out under a gaming compact sanctioned by the regulator, it said, while operating without such a compact may constitute a felony offence.

FGCC executive director Louis Trombetta (pictured) told the fantasy operators: “I am hereby demanding you immediately cease and desist offering or accepting bets or wagers from residents of this state on the results of any contests of skill such as sports betting, including, but not limited to, bets or wagers made in connection with fantasy sports.

“Your failure to comply will result in the FGCC taking any and all appropriate action, including referring this matter to the Attorney General’s Office of Statewide Prosecution.”

Market leaders appear untouched

According to NFL-focused online publication Saturday Down South, a FanDuel representative confirmed the operator had not received any communication from the FGCC.

Saturday Down South also suggested that DraftKings had not been handed a cease and desist letter.

As a result, PrizePicks appeared to suggest that the market-leading companies had a hand in the issuing of the cease and desist letters to their competitors.

“Over the past few years our larger competitors have intentionally spread misinformation to regulators across the country. We believe this anti-competitive smear campaign has driven inaccurate understandings of our contests and the laws governing them,” the company said in a statement.

“We are eager to meet with the executive director and commission to discuss our business and our skill-based gaming platform. We are committed to ensuring that our valued members continue the right to play the fantasy sports games they love,” it added.

Evolution and IGT’s share of US online casino GGR slipped this month, while Light & Wonder made small gains as the third largest supplier.

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Former Hard Rock International SVP Kresimir Spajic has been appointed CEO of Betfred USA.

Professional background

Spajic holds several years of experience in the North American gambling sector, in roles including SVP and MD of online gaming and sports betting for Hard Rock, president of iGaming for Great Canadian Entertainment and as an adviser for Apollo Global Management.

He was also a principal consultant for online gaming for both the Borgata Hotel Casino and Rush Street Interactive between 2013 and 2015.

Spajic holds a multidisciplinary graduate degree in management, law, and humanities from the SDA Bocconi School of Management in Italy, University of Neuchâtel in Switzerland and De Montfort University in the UK.

Management commentary

“I’m truly excited to embark on this journey as the CEO of Betfred USA,” Spajic said. 

“I am looking forward to working with our exceptional domestic and global talent and partners. Together, we aim to build a sustainable business in the US by delivering unparalleled value and support to our customers while upholding a strong commitment to responsible gaming.”

Betfred founder Fred Done added: “It’s an important and exciting time for our US business and Kresimir is the ideal person to further push and expand the Betfred brand in America.”

Betfred Group CEO Joanne Whittaker added: “We are delighted with the appointment of Kresimir Spajic. Our team in the US have worked tirelessly to expand our operation and with Kresimir’s vast experience, we have the right person to take our US business to the next level.”

Betfred in the US

Betfred’s online operations are currently live in seven US states; Arizona, Colorado, Iowa, Ohio, Pennsylvania, Virginia and Maryland.

In addition, the business operates retail sportsbooks in Louisiana, Nevada and Washington.

Across all its operations globally, Betfred generated revenue of £723.2m in the year to September 2022, up 37.5% year-on-year.

In its financial results, however, it did not disclose how much of that revenue was generated in US markets.

Fanatics and PointsBet made a splash in the US online sports betting market during week one of the NFL season, according to the latest edition of the US Sports Betting Market Monitor from Eilers & Krejcik Gaming (EKG).

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After the conclusion of the first week of the 2023 NFL season, Kambi has revealed data around betting activity on the event, presented in partnership with iGaming NEXT.

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After cutting the ribbon on its second data centre in West Virginia, Internet Vikings has become the first and only redundant hosting provider in the state focusing on the sports betting and iGaming industry.

Following the news of the opening, iGaming NEXT caught up with Internet Vikings founder and CEO Rickard Vikström to find out more.

iGN: What is redundant hosting and how does it work?

RV: Redundant hosting basically means having two or more servers or server racks so that you can avoid any downtime if something goes wrong with one of the servers.

And in the iGaming industry, you don’t want any downtime. In West Virginia, for example, GGR is just over $100m per month, so that’s more than $100,000 lost per hour if the industry doesn’t work.

In order to protect its revenue and reputation, the regulator here has rules in place that say you have to have two data centres to provide redundancy in web hosting.

iGN: Is that why you’ve chosen to open a second data centre in West Virginia?

RV: Yes, until now the regulator hasn’t been able to enforce its rule on redundancy because there haven’t been any other data centres.

The reason this all started was that a big operator came to us last spring saying they had taken a board decision that they needed to have redundancy in each state where they operate. West Virginia is a crucial state for them and nobody else was able to provide what they needed.

That’s why we then spoke to the regulator, found the data centre and started building. This project has been in the works for a year and a half, so it’s a massive thing for us and for the state of West Virginia.

iGN: What was the process of building the new data centre like?

RV: Of course, whenever you undertake a massive project like this, everything that can go wrong usually does, and then you have to find a solution for it. 

We worked together with the lottery and with CityNet (the owner of the building and data centre) to make sure that everything fell into place. 

Then we had to build up everything in terms of security, to follow all the requirements that the regulator had. They put all of their requirements into a long list and said: ‘these are all the things you need to solve before we can approve it.’ And we finally got the letter of approval last week.

iGN: How did you settle on CityNet as your partner for setting up the data centre?

RV: I was in West Virginia a year ago scouting out data centres, looking at different facilities and evaluating their security, because I knew what I needed to build to meet the requirements of the regulator.

We are really happy with the choice of CityNet, they have been a great partner in this. It was a lot of work to figure out from here in Sweden how to build a data centre in Charleston, West Virginia. It’s tricky!

iGN: How big is your team in the US and are you continuing to expand there?

RV: We’re always expanding, but we don’t actually have that many people on the ground in the US. We’ve been running a lot of things from our offices in Sweden, Ukraine and Malta, alongside our other colleagues across Europe. 

So we don’t necessarily need someone on the ground in the US, and it’s only an eight hour flight from Stockholm to the East Coast. 

We set up our first US customer in Q2 2021, and since then we’ve been scaling from nothing to where we are now, with 70% of our business currently coming from the US. Today, more than 90% of our new customers are coming from the US.

iGN: What advantage does Internet Vikings have over its competition?

RV: As with any up-and-coming company, we’re quicker, smaller and more agile than our competition.

Our main competitor is also scattered across the globe and focused on other areas, whereas we are able to focus more closely on the US and the gaming industry.

iGN: Who are your main clients in the US market?

RV: We target a lot of industry suppliers such as online slot developers – because there’s a lot of them, and a lot are going into the US right now.

There’s just so many of them, and the reason they need us is that if you look at Europe, it’s so easy to set up a slots supplier under a UKGC or an MGA licence, and as a result there are 10x the amount of games available in Europe compared to the US.

In the US, the states are much more protective of their state revenue and taxes, whereas in Europe, for example the regulator in Sweden doesn’t care whether your servers are hosted in the Netherlands or Malta because we have free trade across the EU.

iGN: How long does it take for you to generate a return on your investments in the US?

RV: Usually, it takes years. With this data centre in West Virginia, it will take us some years to turn to profit.

But the reason we’ve done it is that one of the big operators asked us to. Otherwise, we wouldn’t have started because it has cost us several hundred thousand euros.

I think that’s also the reason there are so few competitors in this space, because you need to be so organised in the US with all the licensing and documentation, and that’s a big challenge compared to the European market.

iGN: Do you think we will see further iGaming rollouts into new states in the near future?

RV: Right now, it’s like a lottery. There has been a lot of talk about New Hampshire, where iGaming legislation almost passed, but I would say today with the election coming up next year, I don’t think that much will happen.

It will probably come in 2025, if at all. Because also, there’s a lot of states that have sports betting, and over the next 12 months there will likely be a handful of new sports betting states.

When they get used to the tax revenue from sports betting in a few years time, they will look towards iGaming. So, it will take time, but I think we’ll see a bigger push in 2025 than in 2024.

UK bookmaker bet365 is set to enter its sixth US state when Kentucky launches its regulated online gambling market in September.

Kentucky is set to launch retail sports betting on 7 September, while online betting will follow on three weeks later on 28 September.

Customers will be able to pre-register with online sportsbooks from 28 August.

So far, eight sportsbooks have been pre-approved for licences by the Kentucky Horse Racing Commission.

In addition to bet365, the approved operators are FanDuel, DraftKings, BetMGM, Caesars, Circa, Fanatics and Penn Entertainment.

Each of the operators is partnered with one of Kentucky’s racetracks, which are permitted to partner with up to three different sportsbook operators.

Both DraftKings and Circa, for example, are partnered with the Cumberland Run racetrack.

Bet365 prepares for launch

In order to secure its licence, bet365 is partnered with Sandy’s Gaming and Racing, a $75m quarter horse racetrack and entertainment facility currently under construction, which is expected to open this autumn.

Sandy’s is also partnered with MGM Resorts International and Entain joint venture, BetMGM.

The racetrack itself is a joint venture between horse racing real estate development and operations group Revolutionary Racing Kentucky and the Eastern Band of Cherokee Indians.

“We are thrilled to partner with Sandy’s Racing & Gaming,” said a spokesperson for bet365.

“Renowned as the best same game parlay experience and fastest in-play product in the industry, we’re looking forward to bringing the bet365 brand to the Bluegrass State.”

Revolutionary Racing CEO Prentice Salter added: “This is an incredibly exciting time to be a sports fan in Kentucky.

“Bet365 is a trusted, safe and fun way to place wagers on sports and we are proud to partner with them and offer this option to fans across the Bluegrass State.”

Bet365 is expected to deliver bespoke promotions to new and eligible customers in the state, and will allow bettors to live stream sports events while offering its usual roster of features including in-play betting, same game parlays and early payouts.

In June, bet365 marked its fifth US state launch with its entry into the Iowa market. The operator is also live in Colorado, New Jersey, Ohio and Virginia.

Esports-focused betting operator Rivalry has launched same game parlay (SGP) functionality for a number of different esports markets.

Product launch

The operator announced the launch today (23 August), as it introduced new functionality allowing bettors to combine multiple bets within a single esports match.

The new product feature, which will be referred to as ‘Same Game Combos’ on Rivalry’s platform, is available for top-flight matches across League of Legends, Counter Strike and Dota 2.

It has been made available with immediate effect to all Rivalry customers globally.

The product “will tap into what has quickly become one of the most popular ways to bet globally and is the wager of choice for casual users seeking the experience of a small wager that can return a large payout,” Rivalry said.

The product is made possible through data feeds provided to Rivalry by esports data specialist PandaScore.

Same Game Combos will feature customer branding and animations “to further elevate the entertainment value on Rivalry,” with unique visuals and interactive elements tailored to Gen Z and Millennial customers, the operator announced in a press release.

Management commentary

“Finding success among Millennial and Gen Z customers means being first to introduce new sports wagering experiences at the edge of technical and product innovation where this audience lives,” said Rivalry co-founder and CEO Steven Salz.

“Same Game Combos brings one of the most popular bets on the board to an audience of deeply engaged esports fans while extending Rivalry’s position at the vanguard of betting entertainment.”

Rivalry director of product design David King added: “It’s important to add depth to our products and more options for our users.

“We are building for an under-30 demographic that have high expectations for the entertainment products they consume.

“Delivering on that level of entertainment, while creating a meaningful user experience, adds material value to the Rivalry platform.”

Rivalry’s esports success

Rivalry has made a name for itself in the esports betting sector in recent years.

While many other companies have tried and failed to generate significant revenue from esports betting, the operator derived more than 90% of its 2022 sportsbook handle from the vertical.

Rivalry’s full-year revenue was C$26.6m in 2022 amid year-on-year growth of 140%.

In October, the operator recorded its first profitable month, but went on to declare a C$31.1m net loss for the full year.

In April, Rivalry announced a new financing round worth up to C$10m, led by global bookmaker Pinnacle.

Better Collective remains on the lookout for acquisition opportunities after posting the financial results from its best ever Q2. 

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Better Collective celebrated its best ever Q2 in 2023, as revenue rose 39% to €78.1m.

Earnings breakdown

The business pointed out that the revenue increase gave it an organic year-on-year growth rate (excluding businesses acquired after Q2 2022) of 29%.

Of the total, €46m was recurring revenue, an increase of 67% year-on-year.

Breaking down the figures by region, €55.2m or 70.6% of the total came from the Europe and Rest of World segment, up 32.3% year-on-year.

The remaining €22.9m came from North America, as the region showed a year-on-year growth rate of 59.9%.

Better Collective generated EBITDA before special items of €29m, up 135% year-on-year, at an EBITDA margin of 37%.

Cash flow from operations before special items during the quarter came to €34m, up some 55%, while the business held capital reserves of €78m including €65m of cash as of the end of the quarter.

New depositing customers (NDCs) totalled more than 500,000 in Q2, implying a year-on-year growth rate of 32%.

Better Collective added that 87% of those NDCs had been sent to operators on revenue share contracts.

The busines added that Skycon, the digital display advertising company it acquired in April 2023, had “already delivered strong performance after swift onboarding.”

Management commentary

“Q2 turned out to be an exceptional quarter with strong growth building on the momentum generated in previous quarters,” said Better Collective co-founder & CEO, Jesper Søgaard.

“This was driven by a great performance across the group, highlighting the Americas and our media partnerships as key factors.

“Driven by successful acquisitions and a strong team to execute on our strategy, I am pleased with the progress we are making towards our vision to become the leading digital sports media group.

“In North America we have continued our investments despite tougher market conditions and I am proud to see that we are now reaping the benefits as operational earnings have moved from negative last year to a 33% margin during this low season quarter,” Søgaard concluded.

Financial targets upgrade

Previously in June, Better Collective had upgraded its financial targets for the full-year 2023.

Revenue is expected to fall between €315m and €325m for the year, up from a previously issued guidance range between €305m and €315m.

EBITDA before special items for the full year is expected to total between €105m and €115m, up from previous guidance of €95m to €105m.

Following the end of the reporting period, Better Collective said July trading showed revenue of €23m, implying a year-on-year growth rate of 39% for the month.