Gaming Report: Caesars Entertainment Slapped With Record Fine by UKGC, partypoker Goes Live in Italy & More

The world might be on lockdown, but there have been a lot of developments in the gaming sector lately.

The world’s biggest casino and gambling firm, Caesars Entertainment, has landed itself in a soup. Even after reporting record revenues through January and February this year, the company was slapped with an unprecedented fine of £13 million ($15.75 million) by the U.K. Gambling Commission. The company was pulled up by the UKGC for several infractions at its live venues across the country pertaining to money laundering and social responsibility failures.

Italy might be one of the worst affected countries in the COVID-19 pandemic, but there is some good news for poker players in the country. Global poker site, partypoker has obtained the gaming license to resume operations in the country. The poker brand had exited the Italian market four years back, but now its back and will be aiming to maximize the increased potential at this time of crisis, given the spurt in online traffic.

Meanwhile, in Germany, the process for sports betting licensing has come to a sudden halt after the Administrative Court of Darmstadt upheld a complaint by the Austrian sports betting operator Vierklee. The court has suspended the licensing process until further notice.

The lockdown has hit the world’s biggest gambling hub, Macau, very hard. The country has seen a dramatic drop in gaming revenue owing to the Coronavirus pandemic. According to reports, the region’s revenue for March equaled $657.5 Million, down almost 80% as compared to the same period last year.

The pandemic has also hit the bookmakers in the U.K., forcing industry leader GVC Holdings to withdraw the payment of its second interim dividend that was slated for April 23. Both GVC Holdings’ Ladbrokes and Coral brands have also withheld rent payments for close to 3,000 betting shops in the U.K.

Caesar Entertainment Raked in Record Revenues in Jan-Feb, Stamped With Record Fine by UKGC

Shortly after Caesars Entertainment Corp announced that it was furloughing roughly 90% of its employees in the U.S., CEO of Caesars Entertainment Corp, Tony Rodio, revealed that the company had the best two months in its history. Meanwhile, all is not hunky-dory with the U.K. arm of Caesars Entertainment. The U.K. Gambling Commission has slapped Caesars with a record £13 Million ($15.75 Million) fine over regulatory issues.

CEO Tony Rodio Says Company Pulled in Record Revenues in Jan-Feb

Caesars Entertainment Corp has recently furloughed nearly 90% of its employees and corporate staff within the U.S. owing to the Coronavirus outbreak. In a recent YouTube video, CEO of Caesars Entertainment Tony Rodio gave an update on the company’s revenue. Rodio, who shot the video at his home, said that the first two months of the year were very profitable for the company that registered record revenue inflow at the time.

“February seems like ancient history, but I did want to take a moment to let everybody know that the company was off to the best start, and maybe through its history, through the first two months of 2020.”

Rodio also added that he’s not sure when Caesars’ properties will reopen but that he was confident that the company will be able to “hit the ground running.”

“I think it will be a slow ramp, but I’m confident that our company will do as well as anybody in the industry. This is a stressful time for our workers around the country. Please know that we are prepared to do whatever it takes to reopen when appropriate in a way that prioritizes not only your health but the health of our guests,” Rodio said.

UKGC Slaps Caesars With Record Fine For Regulatory Lapses

Last month we had reported that the U.K. Gambling Commission (UKGC) has handed out its most significant fine to-date, amounting to £11.6 Million ($14.3 Million) to gambling giant Betway over regulatory lapses. The U.K. arm of Caesars Entertainment has just been slapped with an even bigger fine. Early this month, the UKGC found Caesars, which runs 11 live venues in the country, guilty of social responsibility issues and money laundering. UKGC has fined Caesars a whopping £13 Million ($15.75 Million) for these infarctions.

Making the announcement in a press release dated April 4, the Chief Executive of UKGC, Neil McArthur, said that the company had made “extremely serious” regulatory infractions. The regulator had investigated the company’s alleged violations regarding VIP customers and found that either these high stakes gamblers were not adequately vetted or they were left unmonitored between a two-year period, from January 2016 to December 2018. The company let many customers wager with unchecked funds and even allowed self-excluded players to gamble.

The UKGC, in its report following the investigations, stated, “The operator [is guilty of] not carrying out the adequate source of funds checks on a customer who was allowed to drop around $4.2 million and lose $1.94 million over a period of three months.”

The UKGC has directed the company to make operational changes, reassess its current procedure for classifying VIPS, and review their financial history.

In addition to the company being slapped with the record fine, three senior managers of the company have been made to surrender their personal gaming licenses.

partypoker Obtains Gaming License to Operate in Italy

Global poker brand partypoker continues to grow. After partnering with the World Poker Tour (WPT) recently to launch the WPT Online Series, the brand recently obtained the gaming license to operate in Italy.

In a press release, the parent company of the brand, GVC Holdings, has announced that partypoker has obtained a license for offering services in the country. GVC has confirmed that its real-money ring-fenced site went live in Italy on April 1. The license allows partypoker to offer some global tournaments. Soon, the country’s residents will be able to play cash games as well as big tournaments.

Managing Director of partypoker, Tom Waters, in his official statement, said, “Despite recent changes that restrict marketing in Italy, the poker market there remains an exciting opportunity for partypoker. We will be looking to improve and expand on our product and offering over 2020 and bring a different option for the Italian poker market.”

The partypoker.it is already accessible and localized, and to mark the occasion, partypoker has announced a freeroll campaign guaranteeing €175 every day.

Interestingly, partypoker had exited the Italian poker market in 2016, citing regulatory issues. The country had signed the shared liquidity agreement with other European countries in 2018 though it could never integrate its players.

It needs no reminding that Italy is among the worst affected countries from the Coronavirus outbreak, and it seems highly unlikely that it will be hosting any live poker stops anytime soon. Amidst all this chaos, partypoker’s re-entry into the Italian market after a four-year gap comes at an opportune time when online poker traffic is peaking globally.

Germany Sports Betting Licensing Hits Legal Hurdle

Germany had made rapid strides towards legalizing sports betting and online gambling with its State Treaty of Gambling coming into force on January 1, 2020. The directives for online gambling in the State Treaty will remain in effect till June 30, 2021, allowing the country’s regulators time to develop and formalize a permanent regulatory framework.

In the meantime, the Darmstadt Regional Council and the Hesse Ministry of the Interior were directed to accept and review sports betting license applications and award licenses to approved applicants. In March, Germany’s 16 state leaders approved the new gambling regulations and also the creation of a new regulatory body, the GlüNeuRStv.

However, creating a new legal roadblock in this process, Austrian betting operator Vierklee filed a complaint with the Administrative Court of Darmstadt. Hearing out the allegations last Wednesday, the court upheld the claim that the wagering license process was discriminatory and not transparent. It has suspended the licensing process until further notice.

According to Vierklee’s legal counsel, the company and other sports betting operators were not informed about the start of the concession process in July 2019.

Reacting to the halt in the licensing process, the President of the German Sports Betting Association (DSWV), Mathias Dahmsm said that the ruling was a “big blow to our members,” as close to 30 members have already applied for a license.

Notably, the country had approved sports betting in principle in 2012, ever since the State Treaty was drafted. Slow progress in setting up of a regulatory and licensing framework has led to prolonged delay in legalizing sports betting.

Macau Gaming Revenue Registers Drastic Fall in March

Macau casinos have been grappling with massive losses these last six months. With the Coronavirus pandemic forcing all casinos to shut doors, the losses are gradually increasing every day.

According to a report published by the Macau Gaming Inspection & Coordination Bureau or DICJ on April 1, the Gross Gaming Revenue (GRR) for Macau casinos in March 2020 was $657.5m, indicating a decline of 79.7% compared to the same period last year.

The month of March registered the sixth straight month when the Macau gaming revenue dropped. However, the month’s losses were primarily due to the global Coronavirus pandemic that has resulted in strict border restrictions and a drastic fall in turnouts.

The Bloomberg Intelligence analysts had correctly predicted a 79.5% decline in revenue for March. Trade analysts Vitaly Umansky, Eunice Lee, and Kelsey Zhu stated: “Macau continues to suffer from the ongoing coronavirus pandemic.”

March’s decline comes after February’s record-setting 87.8% drop in revenue when the region shut down all casinos for 15-days to curb the contagion.Keeping in mind the Coronavirus outbreak, Macau’s government had earlier announced that it expected casinos to generate $16.2 billion in 2020 that is nearly half of what they had earned in 2019. In 2019, the yearly revenue from Casinos was $36.47 billion.

GVC Halts Dividend, Withholds Rent Payments of Betting Shops

The U.K. based betting giant and owner of betting brands Ladbrokes, Bwin, and Coral, GVC Holdings PLC, has canceled its interim dividend because of the growing business concerns arising out of the Coronavirus pandemic. The company’s brands Ladbrokes and Coral brands have also withheld rent payments for nearly 3,000 betting shops across the U.K.

GVC said that the outbreak of the COVID-19 virus had “significantly reduced” its revenue from mid-March as sports events were canceled and retail outlets being closed.

On Monday, the company issued a trading update where it admitted that while it had flagged off the New Year on the right foot, the Coronavirus pandemic had severely affected its retail operations. The company had earlier estimated that it would lose £100 Million a month in earnings due to the pandemic. Still, it has now revised the estimate to £50 Million after adopting a range of cash conserving measures.

As a measure to conserve its financials, the company has announced that it will withdraw payment of its second interim dividend and stated that it “will consider dividends with future results announcements.” The dividend was to be paid on April 23 and would have cost the company £103 Million.

GVC Chief Executive, Kenneth Alexander, said, “GVC is a business that, in normal times, delivers an outstanding performance. However, while our global and product diversification is standing us in good stead during the current uncertainty, the Covid-19 pandemic is posing an unprecedented challenge to our business and our industry.”

He added, “We are responding decisively, and have put in place a range of measures to keep our people safe, strengthen our financial position, limit cash outflow, preserve jobs and maintain a compelling customer offer. I am confident that we will emerge from this period in a position of strength.”

GVC Holdings has also withheld the rent payments for more than 3,000 Coral and Ladbrokes betting shops during the U.K. Coronavirus lockdown. According to the company, this is a temporary move, and it intends to make up for the shortfall once trading resumes.