The Spanish online gambling market has shown robust growth in the first quarter of 2024, as reported by the Directorate General for the Regulation of Gambling (DGOJ). The Gross Gaming Revenue (GGR) for the quarter reached €350.69 million, marking an 11.23% increase quarter-over-quarter and a 15.14% increase year-over-year. This significant rise underscores the market’s resilience and recovery from previous fluctuations.

Growth Across Key Segments

In terms of player transactions, both deposits and withdrawals showed notable increases compared to the previous year, rising by 15.85% and 13.90%, respectively. Quarter-over-quarter, deposits grew by 5.61% while withdrawals saw a modest increase of 0.72%. Despite the overall growth, marketing expenditure saw a slight decrease of 1.0% quarter-over-quarter, while the number of new accounts surged by 15.21%.

The GGR is distributed across various gaming segments, with betting, casino, bingo, contests, and poker all contributing to the total. Betting accounted for €150.28 million (42.85% of the total GGR), followed by the casino segment with €167.76 million (47.84%). Bingo contributed €4.19 million (1.19%), contests €0.002 million (0.00%), and poker €28.45 million (8.11%).

Betting and Casino Drive Growth

The betting segment experienced a significant positive variation rate of 30.99% quarter-over-quarter and 15.37% year-over-year. This growth was largely driven by a remarkable 588.84% increase in pre-match betting, although in-play sports betting saw a decline of 31.69%. Other betting categories also grew by 1.57% this quarter, whereas horse betting decreased by 28.36%.

The casino segment, despite a slight quarter-over-quarter decline of 2.05%, showed a strong annual growth rate of 17.02%. Within the casino segment, slots increased by 14.98% year-over-year, and live roulette saw an impressive 22.19% growth. Quarter-over-quarter, Blackjack, conventional roulette, and live roulette grew by 7.32%, 9.69%, and 6.37%, respectively, while slots fell by 7.51%.

Other Segments Show Mixed Results

Bingo showed steady growth, with a 9.18% increase quarter-over-quarter and 24.93% year-over-year. Conversely, the contests segment continued its irregular performance, experiencing a dramatic fall of 96.79% quarter-over-quarter and 99.38% year-over-year.

Poker presented a positive outlook with an 11.98% quarter-over-quarter increase and a 3.99% year-over-year rise. Poker tournaments grew by 11.19% quarter-over-quarter and 2.04% year-over-year, while poker cash games increased by 13.91% compared to the previous quarter and 8.91% compared to the same quarter of the previous year.

Player Engagement and Market Dynamics

The average number of active game accounts per month reached 1,327,575, reflecting a 4.57% increase quarter-over-quarter and a 14.58% increase year-over-year. The average number of new game accounts per month stood at 148,862, with a growth of 15.21% quarter-over-quarter and 33.64% year-over-year.

For this quarter, there were 78 licensed operators in the market. The number of active operators by segment included 41 for betting, 4 for bingo, 50 for casino, 2 for contests, and 9 for poker.

Marketing Expenses

Marketing expenses for the last quarter totaled €112.79 million, broken down into €14.27 million for affiliation expenses, €1.07 million for sponsorship, €55.67 million for promotions, and €41.78 million for advertising. Compared to the previous quarter, marketing expenses declined by 1.00% but increased by 14.86% year-over-year. Specifically, sponsorship decreased by 12.55%, affiliates by 0.87%, advertising by 7.68%, while promotions increased by 4.93% quarter-over-quarter. Year-over-year, sponsorship fell by 27.23%, affiliates increased by 14.82%, advertising by 22.49%, and promotions by 10.92%.

Source: “1st Quarterly Report 2024”. Directorate General for the Regulation of Gambling. June 4, 2024.

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According to the Michigan Gaming Control Board (MGCB), the sector posted $175.3 million in gross gaming revenue (GGR), the highest since the vertical launched in January 2021. The present tally excludes the $37 million collected through online sports betting, and the results edge out the previous record set by the state in March 2023, when online casinos posted $171.8 million in GGR. These results come amid a strong month for sportsbooks as well, and the launch of ESPN Bet.

New Record for iGaming as Tax Revenue Prospects Brighten

There were notable standouts during November, with MGM Grand’s BetMGM becoming the first operator in the state to scoop up $46.7 million in a single month from the segment. Online casinos have continued to improve consistently since last year as well. Comparing results from November 2022 to last month, there was a 20.5% gain in GGR on the $145.4 million that online casinos posted last year.

Online gaming has been an important driver of tax revenue, with the City of Detroit confident that it would top $81 million from tax windfall this year thanks to the vertical. The MGCB provided a detailed breakdown of individual performance markers as well.

FanDuel, MotorCity’s iGaming operator managed to bring in another $43.9 million, and DraftKings’ online casino operators contributed another $34.7 million to the total.

Part of the boost that online casinos saw has to do with the ongoing although concluded strikes in Detroit which have elevated the status of online platforms and given players more opportunity to explore the vertical, admittedly on short notice, and for a want of alternative.

Protests Upset Land-Based Results as iGaming Surges

Yet, the same casinos that partner with digital skins did face some issues. MotorCity, Greentown and MGM Grand brought in only $76 million from their land-based operations, which was a notable 24% drop from the results posted in November 2022. Revenue declined by more than $23.9 million, with MGM posting $30.6 million or down 34%.

MotorCity managed to pull in 24.7% million, but these results were still 18% down from last year’s. Not least, there was Greektown which earned $20.7 million, with results down 11%. A silver lining is that a union agreement has been reached and workers have returned to the physical casinos. In the meantime, union leaders have encouraged players to avoid online gambling and wait for the normalization of land-based operations. Their appeals have been left mostly unheeded.

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Gaming in Macau registered its first month with a decrease in gross gaming revenue (GGR) on a subsequent basis since all travel restrictions for the Special Administrative Region (SAR) of China have been lifted.

Recovery Slowing Down but Strong

The monthly Games of Fortune statistics report published by the Gaming Inspection and Coordination Bureau (DICJ) revealed that casinos generated GGR of MOP$15.21 billion ($1.89 billion) in June.

The June result is 2.3% down compared to MOP$ 15.57 billion ($1.92 billion) the SAR casino industry registered in May when the market grew by 5.73% on a sequential basis to account for a third consecutive month of growth since February.

In mid-June, JP Morgan Securities (Asia Pacific) issued a note advising investors that, based on seven-day daily run rates, the firm’s previously issued June forecast of between MOP$ 14 billion ($1.74 billion) and MOP$ 14.5 billion ($1.8 billion) “may prove too conservative” and the June tally proved the advisory was spot on.

Among the factors identified for the better daily run rates, JP Morgan analysts outlined the return of live concerts to Macau venues such as the Cotai Expo at The Venetian Macao and Melco Resort’s casino resort Studio City.

“..we would not be surprised if June bucks the weak seasonality to print better than MOP$500 million ($62 million) per day,” analysts Kim and Shi wrote, suggesting that casinos may post strong second-quarter results that would beat the market consensus, pushing up mass GGR and EBITDA to over 80% and 65% of pre-pandemic levels, respectively.

Well Below Pre-Pandemic Levels

The June GGR also represents an increase of 513.9% to MOP$ 2.48 billion ($307.5 million) Macau casinos registered in June in the year prior but is still far below (36.1%) the pre-pandemic 2019 level of MOP$ 23.81 billion ($2.95 billion).

The year-to-date figure stood at MOP$ 80.14 billion ($9.94 billion), posting an increase of 205.1% from MOP$ 26.27 billion ($3.26 billion) accumulated during the first six months of 2022. The YTD result is 46.2% below MOP$ 149.5 billion ($18.54 billion) the industry achieved in Jan-Jun 2019.

Official visitation data showed that Macau saw a daily average of over 70,000 arrivals in June and with an aggregate total of almost 9.44 million for the first five months of the year, the government is expecting a total of more than 20 million tourists to visit the SAR in 2023.

Confident of the continuing recovery throughout the year and beyond, Macau chief executive Ho Iat Seng said that the industry could well achieve a GGR of MOP$ 130 billion ($16 billion) in 2023.

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The recovery of the gambling industry in Macau will continue into June, suggests a Monday note by JP Morgan Securities (Asia Pacific), citing the return of live concerts and its impact on mass market gross gaming revenue (GGR).

Daily Run Rate Increased

Using weekly data, JP Morgan analysts DS Kim and Mufan Shi outlined that the daily run rate for the past seven days increased from MOP$530 million ($66 million) in the prior period to MOP$570 million ($71 million) per day, and compensating to the slower than expected start of the month and bringing the June total GGR to MOP$9.5 billion ($1.18 billion).

Considering the trend since the beginning of June, Kim and Shi believe that their previously issued monthly forecast of between MOP$14 billion ($1.74 billion) and MOP$14.5 billion ($1.8 billion), which translates to between MOP$470 million ($58 million) and MOP$480 million ($60 million) per day, “may prove too conservative.”

“..we would not be surprised if June bucks the weak seasonality to print better than MOP$500 million ($62 million) per day,” Kim and Shi added, pointing out that casinos could post strong second-quarter results and beat the market consensus, with mass GGR and EBITDA recovering over 80% and 65% of pre-pandemic levels, respectively.

Live Concerts Behind the Recovery

JP Morgan analysts see the return of live concerts to the SAR in recent months as one of the major factors stirring the industry recovery, citing the short-term residency at The Venetian Macao’s Cotai Arena of Jacky Cheung.

“It appears the Jacky Cheung concert at Sands’ Venetian continues to attract the right type of – read ‘high-value’ – players, including those from the database of Sands’ sister property Marina Bay Sands,” Kim and Shi wrote in the memo, outlining that this “in turn helps to lift overall industry GGR.”

Hong Kong singer and actor Cheung delivered a series of 12 concerts at the Cotai Expo at The Venetian Macao casino resort between June 2 and June 9. Besides Cheung, there was a series of 14 concerts by Cantopop artist Leon Lai Ming at the casino resort promoted by Melco Resorts, Studio City, spanning across May and the first half of June, as well as several concerts by South Korean K-pop group, Blackpink.

Shi and Kim further wrote that these events “do seem to move the needle for gaming business in Macau – at least thus far – which bodes well for Macau’s mass business to recover well beyond pre-Covid levels, in our view.”

Pointing to the increase in the daily run rate ever since these events took place, Kim and Shi believe that the industry would post another impressive result in June and pick up right where it left in May.

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Gaming in Macau continued to recover in May but is still far below the pre-pandemic levels according to the monthly report by the Gaming Inspection and Coordination Bureau (DICJ).

2023 Upward Industry Trend Continues

The agency overseeing the gaming market in the Special Administrative Region (SAR) of China revealed that in May gambling operators registered gross gaming revenue (GGR) of MOP$ 15.57 billion ($1.92 billion), an increase of 366% compared to MOP$ 3.34 billion ($413 million) in May 2022.

The May GGR is 5.73% up to MOP$ 14.72 billion ($1.82 billion) registered by the market in April, confirming the market upward trend from February but the rate of sequential monthly increase continued to decrease.

GGR for the first five months of 2023 amounted to MOP$ 64.93 billion ($8.02 billion), which compared to the amount registered in the same five-month period in the year prior (MOP$ 23.79 billion ($2.94 billion)) represents an increase of 173%.

GGR in May 2023 is down 40% compared to the pre-pandemic level of MOP$ 25.95 billion ($3.21 billion) registered in May 2019, while the cumulative figure is down 48.3% from MOP$ 125.69 billion ($15.53 billion), suggesting that the market is still far from reaching the point from which it began descending.

The May GGR figure was also positively influenced by the “May Day” Golden Week holiday period at the start of the month during which international visitations reached almost half a million, bringing hotel occupancy rates to 85%.

Lifting the Restrictions Raised Optimism

After seeing the gambling industry plunge by 50% in 2022 and the New Year’s holiday visitations disappoint, the Macau government removed quarantine requirements for inbound travels to the SAR for all nationalities starting from January 8, allowing visitations from mainland China to resume. Testing requirements for visitors from mainland China, Hong Kong and Taiwan were also lifted.

The effect of the measures was seen almost immediately and the market registered an increase of 82.5% in January GGR, stirring optimism among investors that the industry is on a path to recovery. Later in February, Morgan Stanley issued a note, revising upwards its 2023 GGR and EBITDA estimates.

Macau’s chief executive Ho Iat Seng was even more bullish than investment banks, claiming that the gaming industry in the SAR could easily achieve MOP$ 130 billion ($16 billion) in 2023 GGR, confident of the continuing recovery in the year and beyond.

AGA’s president and chief executive officer Bill Miller was the latest to express his optimism about the gaming industry recovery in Macau. Speaking at the three-day G2E Asia in Singapore, Miller pointed to the SAR, the Philippines and Singapore as examples of strong recovering markets in this part of the world.

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According to a report from the Gaming Inspection and Coordination Bureau (DICJ), Macau’s casino industry recorded a gross gaming revenue (GGR) of MOP14.72 billion ($1.83bn) for the month of April – an increase of 450% on the same period last year.

The figure is also 15.6% more than the March figure, totaling MOP12.74 billion ($1.58bn). The Macau casino industry’s initial median analyst estimate saw a 393% rise in April, making it the highest monthly GGR recorded by the region in a month since January 2020.

Macau’s total GGR for January to April increased by 141% year-on-year to MOP$49.36 billion ($6.12bn). The figure is higher than the region’s gross gaming revenue for the entire 2022 fiscal year, which amounted to MOP46.36 billion ($5.75bn).

It is, however, only 62.4% of the MOP23.6 billion ($2.94bn) which Macau casinos recorded in April 2019, before the onset of the pandemic. At the height of the region’s first major COVID outbreak in July 2022, Macau’s gaming revenue dropped to MOP398 million ($49m).

Macau has made significant efforts to reintroduce tourism this year, such as opening cross-border travel with mainland China on February 3. The region recently announced that it expected an average of 70,000 visitors daily during the five-day Chinese Labour Day holiday, which will kick off this week.

Macau’s reputation as one of the only places in China where gambling is not prohibited has made it a staple traveling spot for tourists. Gambling makes up between 50% and 80% of the region’s total economy.

Following the government’s decision to remove border restrictions from January 8, Macau’s visitor count has significantly improved. Authorities also scrapped mandatory hotel quarantine and COVID testing requirements for foreign visitors.

By April 15, Macau’s visitor count had reached 98,000 – the highest single-day tally in over three years. The figure was, however, beaten on Sunday, April 30, when the Public Security Police Force revealed a new record of 133,911 visitors for the day.

Reports from the Statistics and Census Service of Macau state that in March 2023 alone, Macau received almost 2 million visitors. The figure was as low as 526,912 in March 2022.

With transportation services between Macau and Hong Kong opening up for the first time in three years, the number of Chinese New Year visitors to the casino mecca reached 451,057 in 2023. This figure is almost 300% higher than the number recorded during the previous year.

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Gambling industry analysts at Morgan Stanley believe that gambling in Macau is on the way to recovering, raising its gross gambling revenue (GGR) estimate for 2023 by 42% and 2023 EBITDA estimate by 70%.

Better Product Mix, Higher Margins

According to the note released by Morgan Stanley on Monday, the gambling industry in the Special Administrative Region (SAR) of China is about to deliver $22 billion in GGR and $5.8 billion in EBITDA in 2023. The new 2023 EBITDA estimate still falls short of the $9.3 billion in EBITDA in 2019 but is 30% above the industry consensus of $4.5 billion.

The main factors analysts Praveen Choudhary, Gareth Leung and Stephen Grambling cited for raising the 2023 GGR and EBITDA estimates are the better product mix and higher margins due to the return of Chinese customers.

Further, the investment bank estimates that there should be further industry improvements in 2024 when EBITDA will reach $9.6 billion to surpass the 2019 level mainly due to the revenue mix. For 2024, Morgan Stanley’s estimate is 17% above the industry consensus.

Justifying the revised estimates, Morgan Stanley analysts stated that the reopening of China resulted in additional revenue and profit for Macau operators in the first two months of the year which was not factored in the previous calculations as it was not expected.

Mass to Trigger Operating Leverage

Analysts believe that the sustainability of premium mass will be key to achieving pre-pandemic EBITDA levels in 2024 in the absence of junket business, claiming “that EBITDA margin will be 500 bps higher than in 2019 mainly due to operating leverage resulting from mass gaming reaching a certain level.

The team of analysts outlined two main reasons why their revised estimates for 2023 and 2024 are significantly higher than the industry consensus: the historical correlation of Macau’s mass segment with China’s nominal GDP, which exceeded in 2022 by more than 20% the 2019 level and could maintain a pace of between 4% to 5% annually going forward, and the infrastructure improvements related to the larger customs checkpoints and increase in hotel rooms by 4,000 new rooms during the pandemic.

Morgan Stanley analysts concluded that due to the revenue mix improvement EBITDA margin in 2024 could increase to 28%, as compared to 23% in 2019.

Earlier in the month, data released from the Macau government revealed that the casino industry in the SAR generated MOP11.58 billion ($1.44 billion) in January, an increase of 82.5% year-over-year and its highest monthly in three years, sparking optimism that a solid industry recovery is underway.

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SOFTSWISS was a pioneer in the online crypto-casino movement and continues to assert dominance in the arena now. Being the leader of a multi-metric solutions company focused on cryptocurrency gambling puts the company in a unique position to analyze the state of Coins in iGaming. In addition to more than a decade of experience, the company presumably has access to more data than anyone else on the subject through the provenance of its Game Aggregator and Casino Platform. The company has about 700 clients using one or both of those solutions.

In addition to annual reports, SOFTSWISS also publishes quarterly updates. While the just-in-time information is valuable, the annual reports tend to reflect longer-term trends better.

The current trends in digital coin gambling for the year 2022 compared to 2021 are not exceptionally rosy nor is the current trend toward returning to fiat currencies for online gambling seen recently. Caveats should be stated before digging into the numbers too deeply: All data comes from SS customers; partway through the year they introduced a coin-to-fiat converter and all bets placed in fiat currencies, even if the deposit and withdrawals were cryptos, were counted as fiat bets.

The value of Bitcoin and Ethereum which are the two biggest cryptocurrencies by market cap fell 65% and 67% year on year.

Overall, crypto betting fell nearly 15% but Ether increased its share of the total bets made against Bitcoin. We’ll dig into that in a moment as well.

Crypto trends in iGaming are inextricably tied to the macroeconomy and crypto’s place in it. That said, many players may have been reluctant to use digital currencies thanks to the chaotic events it was involved in including November’s FTX debacle. The overall crypto climate was basically unstable for most of the year, but gambling on the company’s platform did increase appreciably when taking fiat currency into account.

The company’s platform saw a 31% increase in total bets made in 2022 over those made in 2021. Gross Gaming Revenue (GGR) increased 36% over 2021 numbers.

The platform handled over 20 billion euros in bets during the second quarter alone last year including fiat and cryptocurrencies. That number continued to grow throughout the year. The average bet placed increased by some 35% in Q2 2022 compared to the same quarter in 2021.

Contributing to the rise in numbers may have been an increasing number of SOFTSWISS game aggregator clients, new partnerships with 18 game studios and three new providers accredited in Malta, and the consistent geographical expansion of existing clients.

GGR rose 36% in 2022 from 2.4b EUR to 3.3b – much of that might be attributable to the explosive Latin American market expansion with SS working steadily to help clients capture the nascent lucrative market.
Looking at the phenomenal growth of fiat betting as well as revenues compared to less-than-stellar crypto performance we see BTC and ETH moved in different directions. Bitcoin’s slice of the total crypto pie lost 7.4% percentage points over the year while Ethereum gained in popularity among players by 3.7%.

Chief Operating Officer at SOFTSWISS, Vitali Matsukevich commented: “The fact that we see an increasing number of new fiat projects does not diminish the power of the already established worldwide community of crypto players. There is still a strong drive for iGaming operators to implement and expand payment methods supporting digital coins. iGaming tech providers will still be focused on developing new crypto-centric tools. For example, we’ve launched the In-Game Currency Conversion feature allowing the crypto audience to enjoy all available games through automatic conversion of digital coin bets into fiat wagers.”

Fiat bets accounted for 76% of all bets on the platform by the end of 2022.

The top three digital currencies used along with their share of the total were

Bitcoin – 72.7%
Ethereum – 13.6%
Litecoin – 5.5%

DOGE picked up in popularity as did LTC while USDT nearly doubled its share from 1.7% of all crypto bets to 3.7%. Bitcoin Cash fell off the top six list and was replaced by XRP at an inaugural .7% share.

CEO Matsukevich expressed optimism for 2023 and asserted that players will not abandon crypto thanks to its decentralized nature, transaction speed, and anonymity.

He added: “Despite all digital coin fluctuations, crypto has already gained a significant share among players and operators and has become an integral part of the market. For this reason, SOFTSWISS continues to strengthen its partners’ projects, whether fiat or crypto, with new innovative tools and solutions, providing operators with security, reliability, and top-level service.”

Source: SOFTSWISS, an invitation to view the report, February 23, 2023

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