Gamenet bemoans lack of license visibility

The top line

Group revenues were down 61% to €57m, pre-tax losses were €32.7m compared to profits of €11.7m in Q1 2020. EBITDA was down 73.9% to €11.3m, all figures were caused by lockdowns, the group said.

Online accounted for 99.7% of the group’s revenues at €56.9m and growth of more than 100% YoY. Online EBITDA was up 65.2% at €21.2m and €45.1m as part of the new Lottomatica structure incorporating IGT’s B2C machines acquired this year.

Net debt was €591.4m, multiple rising to 7.5x due to lockdown and no EBITDA contribution from retail. The group has no plans to refinance.

Numero uno: The acquisition of IGT’s B2C machines division for €950m was completed on 10 May and “creates one of the largest industry players in Europe with aggregated 2019 revenues of €1.6bn and €323m EBITDA,” said CEO Guglielmo Angelozzi. The deal increased Lottomatica volumes and share in all segments and “when you neutralise the COVID effect, it adds diversification and boosts our online presence to make us number 1 in Italy.” The group has planned for synergies of €54m within 24 months, implementation is “fully on track”.

Betting on licences: Italian operators are hoping to find a solution to the issue of gambling licence renewals, Angelozzi said when asked about the continued uncertainty around renewals. The permits are valid for nine years and operators pay for them upfront over a three-year period to spread out the cost. There have been frequent interactions behind the scenes with the regulator and Ministry of Finance, but so far there had been “no updates, approval of any law or decree” confirming renewals. Angelozzi said all stakeholders acknowledged that there had “to be an extension of the concessions and they should be free, to compensate for lockdowns.” The government however wants to include any decree in budget-related legislation.

“Betting concessions were due to be awarded in 2016 but in 2021 it’s still a case of paying annually,” said Angelozzi. “Gaming machine licences are set to expire in 2022, but the scenario is the same as with betting.”

Asked if Lottomatica and others could be on the hook for big upfront payments, he replied: “We can’t know, but historically that hasn’t happened and currently tenders can’t be run anyway.”

Taxing times: With retail outlets closed for the past year, the Italian government has deferred payment of gaming taxes, Gamenet will pay its tax instalments from May-June in November-December. When asked about the impact of the payments on cash flow, CFO Mario Bruno said the total amount for the year was set at €180m to be paid in six instalments, with “the next €60m to be paid in November-December.” This will have a negative impact on the company’s cash position, which will be partially offset by the county re-opening throughout June and Q2. As lockdowns ease, Q3 and Q4 are expected to build on Q2 improvements, added Bruno.

In other big news today:

SG acquires SportCast

Scientific Games has acquired the betting engagement, tech and pricing specialist SportCast for an undisclosed amount. SportCast has been active since 2013 and is widely credited with being behind the launch of the Bet Builder feature, which “allows players to build bets across multiple markets on a single game with instant pricing.” The deal will enable SG to focus on US pre-match and in-play bets and same-game parlays. Keith O’Loughlin, EVP Sports for Scientific Games, commented: “SportCast’s technology and platforms will help us fuel the next wave of our data-driven, global sports expansion.”