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State of the Union: DraftKings, PA, IGT and more

Insight | Analysis

This week’s State of the Union, in partnership with Segev LLP, covers DraftKings’  results for the final quarter before its merger with SBTech closed, as well as Q1 results from IGT and Full House Resorts and Pennsylvania’s monthly figures.

DraftKings losses widen further in Q1 despite revenue growth

DraftKings and SBTech both saw revenue grow in the first quarter of 2020, but combined losses widened to $74.0m in the pair’s last full quarter before their merger closed.

The businesses officially merged in April, trading on the Nasdaq exchange under the DraftKings name, after agreeing the combination in December 2019.

DraftKings and SBTech generated combined revenue of $113.5m for the three months to 31 March, up from $90.0m in Q1 2019.

Pennsylvania sees igaming revenue surge in April

Pennsylvania’s online gaming revenue almost doubled to $43.1m in April, and with all casinos closed during the month, the vertical accounted for 93.4% of the state’s gambling revenue for the month.

Total revenue declined sharply to $46.1m, representing an 83.8% year-on-year decline, with land-based slot and table games revenue wiped out by the shut-down from March 17. Last year slots in bricks-and-mortar venues contributed $200.4m to the state total, with a further $77.4m coming from table games.

Online gaming – which only launched in July 2019 – accounted for $43.1m of the total. This represented a 77.5% increase on March’s igaming revenue of $24.3m.

Covid-19 impairment charges see IGT post Q1 loss

International Game Technology (IGT)’s revenue declined 17.9% to $940.2m in the first quarter of 2020, while a $296m impairment charge related to the effects of the novel coronavirus (Covid-19) saw the supplier post a loss for the period.

Of IGT’s $940m in revenue for the three months to 31 March, $783m came from services, down 21.0%. A further $157m of revenue came from product sales, up 2.0% year-on-year.

Of its main verticals, lottery was the largest driver of revenue, bringing in $444m, down 17% year-on-year. Of this figure, $412m came from lottery services, down 20%, while $32m came from lottery product sales, up 76%.

Full House slips to Q1 loss after Covid-19 revenue hit

Full House Resorts became the latest land-based operator to see its bottom line heavily impacted by novel coronavirus (Covid-19), as Q1 revenue fell 24.7% to $30.9m and the operator slipped to a loss.

Casino gaming made up the majority of revenue for Full House in the three months to 31 March, at $20.8m. However, this was down 26.6% year-on-year.

Food and beverage revenue, meanwhile, fell 19.3% to $7.0m while hotel revenue was down 27.4% at $2.0m.

Century partners bet365 for online sports betting in Colorado

US casino operator Century Casinos has agreed a deal for online gambling giant bet365 to become its online sports betting partner in the state of Colorado.

Under the 10-year agreement, Century will operate an internet and mobile sports betting application under the bet365 brand, subject to bet365 securing regulatory approval to launch in the state.

MI begins accepting online supplier licence applications

Michigan’s Gaming Control Board (MGCB) has opened the process to accept online gaming supplier licence applications ahead of the state’s igaming roll-out.

The forms and related information can be found on the Board’s website in a new section dedicated to online gaming and fantasy sports.

IGT seals Colorado betting deal with Ed & Shirley’s

International Game Technology (IGT) is to expand its presence in Colorado’s regulated sports betting market through a partnership with Ed & Shirley’s, operator of the Wild Card Saloon and Sasquatch Casino in Black Hawk.

Each venue will roll out the supplier’s PlaySports kiosks and deploy its betting platform and mobile solutions to offer a range of retail and online wagering options.

Tribal and commercial casino reopenings continue

A number of major commercial and tribal casinos operators have announced that they will begin to reopen some of their facilities across the US, following a period of temporary closure due to the novel coronavirus (Covid-19) pandemic.

Certain states are now permitting casinos to reopen, provided that they abide by new measures to help combat the spread of the virus, including operating with limited capacity and promoting social distancing throughout their facilities.

AGA appeals for reform of jackpot tax reporting threshold

The American Gaming Association (AGA) has urged the US government to raise the slot jackpot reporting threshold, which requires machines to be temporarily taken out of production while large jackpot winners complete a tax reporting form.

The threshold is currently set at $1,200, above which a player must complete the W2-G form, as has been the case since it was introduced in 1977.

PA Gaming Control Board set outs protocols to reopen casinos

The Pennsylvania Gaming Control Board (PGCB) has published new measures designed to allow casinos in the state to safely reopen following the shut-down enforced due to novel coronavirus (Covid-19).

The guidelines set out the minimum requirements that must be fulfilled before the PGCB will allow a casino to recommence activities.

IBIA & TIU warn of increased integrity threat amid Covid-19

The International Betting Integrity Association (IBIA) and the Tennis Integrity Unit (TIU) have warned all stakeholders in the sport of the increased risk of matches being targeted by fixers.

Each body is therefore urging increased vigilance as competitive action returns, especially as this is likely to happen gradually, through local and national competitions organised on an ad hoc basis.

Evolution seals strategic partnership with Golden Nugget

Live dealer specialist Evolution Gaming has struck a strategic agreement with Golden Nugget that will see it expand the range of games provided to the US casino operator.

Golden Nugget was the first operator in New Jersey to launch live dealer games in 2016, in partnership with Ezugi, a supplier acquired by Evolution in November 2018.

Virginia’s Danville selects Caesars as preferred casino partner

The city of Danville in Virginia is in negotiations with Caesars Entertainment to serve as its preferred casino gaming operator, after the state passed legislation to allow construction of its first land-based venues in April.

That bill, House Bill 4, allows for the construction of up to five bricks and mortar facilities in the state, setting a $15m license fee for operators. Licensees would be taxed on a sliding scale, set at 18% for gross revenue up to $200m, rising to 30% for revenue above $400m.

Louisiana casinos to reopen with 25% occupancy

Casinos across Louisiana will be permitted to reopen from today May 18 after the state’s Governor, John Bel Edwards, lifted a number of restrictions related to the novel coronavirus (Covid-19) pandemic.

Edwards last week said that Louisiana would enter Phase One of its ‘Roadmap to a Resilient Louisiana’ on May 15, permitting a number of businesses to reopen after they were forced to temporary close due to the outbreak.

Jackpocket launches mobile lottery app in Oregon

Mobile lottery app Jackpocket has launched in Oregon, allowing consumers in the state to play lottery jackpot games from home.

Players can download the Jackpocket app to their mobile device to place ticket orders for games such as Powerball, Mega Millions, Pick 4 and Oregon’s Game Megabucks.

LV casinos partner hospital to coordinate Covid-19 testing

Las Vegas casinos have partnered the University Medical Center of Southern Nevada (UMC), the Culinary Health Fund and the Las Vegas Convention Center to test all gaming employees for the novel coronavirus (Covid-19) before they return to work.

MGM Resorts, Caesars Entertainment and Boyd Gaming are among the casino operators taking part in the scheme.