Archive for February, 2011

The dilemma facing Sweden’s state online and land gambling monopoly Svenska Spel – how to hold back to avoid problem gambling and at the same time press forward to be successful – surfaced this week when the company reported net gaming revenues in decline for the second consecutive year. Major changes to management in years past, and a Board strategy more in line with Svenska Spel’s claims that it maintained a monopoly to protect Swedish citizens, are probably the main causes for the decline, although competition has been growing on the internet.

It now appears that management wants to convince the Board that the company should seek a licence to offer a broader range of games in order to remain competitive, as net gaming revenues for the year ended December 31st 2010 down 2.8% at SEK9.62 billion.

The Svenska Spel group’s profit after financial items and tax for 2010 was SEK 4,766 million, a reduction of SEK 211 million (4.2%) compared with 2009.

“Given the conditions in the market, with an ever increasing selection of games, and given that we are taking measures to limit gambling, this is a fully acceptable result,” said Anders Hägg, acting CEO of Svenska Spel.

“To be able to develop in line with the market, we need to be innovative in our development within the framework of existing permits, but we also need to be given the opportunity to offer new forms of gaming that are in demand,” he added.

Net gaming revenue fell by SEK 281 million (2.8%), from SEK 9,905 million in 2009 to SEK 9,624 million last year. Net sales from gaming operations for 2010 amounted to SEK 7,885 million (8,096 in 2009), a reduction of SEK 211 million (2.6%).

Developments during the fourth quarter show that growth in the market is currently occurring with operators other than Svenska Spel, Hagg claimed. In Q4, net gaming revenue fell by 6.8% compared with Q4,2009 and the operating profit for the quarter was SEK 1,186 million (1,338 in Q4,2009), a fall of SEK 152 million (11.4%).

“In order to be competitive, it is important to be creative and to constantly develop our range of games, so that we can give the customer the best gaming experience while maintaining integral responsible gaming. This chiefly applies within the framework of existing permits, but hopefully in future we can also be given the opportunity to have new permits for new forms of gaming that are in demand,” said Hägg.

“We are convinced that we can handle all forms of gaming on the market with the best opportunity for the customer to maintain control over his or her gaming, in terms of both time and money. That we are also a company that does not have the maximisation of profits as a goal increases our potential for introducing and handling responsible gambling measures, even when these have a negative effect on revenue.”

Internally, 2010 was a busy year for Svenska Spel, with a process that began in the autumn with the intention to increase efficiency and decrease costs in the organisation, in accordance with the requirements of both the owners and the board. Responsibility in gambling measures were further sharpened, including the acquisition of the responsible gaming subsidiary Playscan AB and the imposition of an 18 year age limit for buying lottery tickets.

Svenska Spel’s casinos implemented a new initiative during the year, with responsible gaming weeks in all the casino locations. The number of discussions with guests about their gambling habits increased, as did the number of voluntary suspensions.

In related news, the company announced this week that it has established a research council that will provide funding of five million kronor a year to increase knowledge about gaming and preventive measures against problem gambling.

The research council is made up of experienced researchers from public interests, who adjudicate research applications on the basis of scientific quality and social relevance.

“It is high time we gave researchers the opportunity to gain knowledge about gaming and preventive measures for problem gambling. This is a complex and urgent question, not least for the two percent of the population with a gaming problem and their families,” said Margareta Winberg, chair of Svenska Spel.

“Gaming is a young area of research in Sweden that suffers from a lack of resources. Compared with alcohol and narcotics dependency, problem gambling has received little attention.”

Svenska Spel director, chair of the research council and senior lecturer at Karolinska Institutet, Stefan Borg added: “As a public corporation, Svenska Spel has a special duty to focus on and prevent problem gambling. With the input of the research council, we hope to increase knowledge and find out more about gaming and preventive work on problem gambling.”

The Microgaming Poker Network (MPN) has paid out a total of $470,792 shared between 10 lucky players when the Bad Beat Jackpot was hit twice in two days.

A regular player at NordicBet Poker made the first hit on Saturday, 12 February and took home $195,404 – a lucky loser indeed! Three other players at the table also shared in the win.

The player commented: “I knew that my Four of a Kind Tens weren’t enough to beat my opponent’s Royal Flush, although when I looked moments later I saw notification of my win and realised that I had hit the Bad Beat Jackpot, I started screaming! I still can’t believe I won and now I think it’s time to relax before taking my place back at the poker table.”

Shortly after the first hit, the Bad Beat Jackpot struck a second time on Sunday 13 February, paying out $79,985 between six players.

A Microgaming Poker Network spokesperson confirmed that this is the largest Bad Beat Jackpot won to date on the network and the first time its been won twice in two days. Winnings will be paid out in single payments to the lucky players.

According to reports from the Irish Press Association, some Labour Party politicians in that country are not content with extending the tax net to online gambling operators. They would now like to ratchet up the rate from 1% to 1.5%. Party Leader Eamon Gilmore is apparently behind the move, which is unlikely to be well received by operators.

Gilmore wants the extra income to go to the Irish Horse and Greyhound Fund, which helps support the racing industry, with the politician contending that this would relieve the government of further subsidies for racing.

The Labour Party apparently sees the recent extension of the tax net as another opportunity to give the industry more money to maintain horse racing prizes at a higher level than in other European countries.

In related news, The Racing Post reports that the Italian horseracing industry is also under pressure, and has unveiled statistics showing that betting turnover on the sport in Italy for 2010 was about €1.7 billion, a drop of 12.7% compared to the 2009 figure of €1.98 billion, a trend that runs contrary to that of other gambling sectors in the country.

Analysts are apparently pessimistic, predicting that the decline appears to be continuing into 2011, with January figures down some 17% relative to the same period last year.

The recent government pledge to inject €150 million will certainly help the Italian racing industry in the short term, but critics claim that this support merely papers over the cracks in a beleaguered sport.

The oversight body for the industry, UNIRE, has claimed it is already studying the problem in concert with the government.

Over the past decade, any discussion on the legalisation of internet gambling in the US would have been incomplete without some mention of the Republican senator from Arizona, Jon Kyl.

The wiley veteran politician has been at the centre of much of the opposition to legalisation, and is widely accused of being part of the political alliance that rammed the UIGEA through a late night session of a Congress that was about to break for elections back in 2006.

The Washington newspaper Politico reported Thursday that Senator Kyl will no longer be a thorn in the side of the industry after 2012, as he has announced that he will not be standing for re-election to the Senate next year.

This senior politician is unlikely to be missed by the industry, but there’s perhaps an element of “better the devil you know” when the voting record of Kyl’s home state is reviewed – the last time an Arizona Democrat was elected to the Senate was in 1988!

In a move that bound to cause a few ripples in the online poker industry, Bodog Poker has announced that it intends implementing a series of blocking systems to stop poker information portals from scraping listings from its site which “mainly serve professional players” in a bid to attract more recreational players.

Patrik Selin , Bodog Europe said: “These poker operator information portals are another example of how online poker is assisting in its own demise. I have commented previously on how the operators are doing this to themselves with hand histories, HUDs and rake back, all of which we will be cutting out.

The next tier in the process is the operator information sites. Nobody who is playing poker for fun visits these sites, or, probably even knows they exist. They primarily exist to serve the needs of the professional players and therefore we will be implementing online protection against these sites to further aid the crucial leisure poker player.”

In related news, Bodog announced the release of a new poker lobby with a more user-friendly interface making navigation easier.