What has been less prominent in the headlines has been the development of the country’s online casino industry, and the suppliers making waves there too. And they’re not all European. Sydney-based Lightning Box have been actively involved in the US land-based and social casino scene for years now, but has recently made a successful transition to online RMG.

CasinoBeats caught up with co-founder and CPO David Little to discuss the Australian company’s unsung success story and how the market is shaping up state-side.

CasinoBeats: You have a long association with the United States, could you fill us in on the background?

David Little: Lightning Box has been active in the US. since our inception in 2004. My co-founder Peter Causley and I know the land-based market very well from our days at Aristocrat and IGT.

Our experiences encouraged us to start developing our own games for those players, and we have enjoyed a productive collaboration with land-based companies like IGT in our early years, and then Incredible Technologies and Everi more recently.

“A mixture of the old and new is always important”

From there, it was a hop, skip, and a jump to social casino. We cemented our position in that sector with a deal with Penn Interactive last year and we also work with High5, who are genuine pioneers in the social space. Online RMG is a natural progression too, particularly after our success in Europe, and puts us on another level as one of the few truly omni-channel suppliers in the US.

CB: Your games have been live in New Jersey since the turn of the year. How have the first six months gone in that market from your perspective?

DL: Very well, I’m pleased to say. We had existing old flash games in the market since NJ opened via Amaya. Our launch of new games was an extension of our existing deal with SG Digital. Their reach got us in front of lots of players early on and they enjoy our games.

Some of our hits, including Chilli Gold, Astro Cat and Panda Pow have gone down particularly well in New Jersey online casinos including Golden Nugget, Borgata, Caesars, Betfair, Mohegan Sun, Resorts Casino and SugarHouse. Part of the reason for that, I’m sure, is their existing success in land based. Players are familiar with the games and are happy to try them now they’re online.

I think that trust is something to bear in mind for operators looking to put together a portfolio. A mixture of the old and new is always important, but you can’t beat content that has proven itself time and time again. 

You’ll find our US land-based games not only in Atlantic City, but Nevada, California and other native and commercial casinos across the USA as well. To date we have 13 games live in New Jersey with more to come over the next six months.

“One of the exciting areas of potential is tribal”

CB: Where next for the market in general and Lightning Box in particular?

DL: New states are either taking the plunge or looking to do so shortly, so I’m sure there will be obvious opportunities coming our way in the coming months. But for me, one of the exciting areas of potential is tribal.

In many states the tribes have been running successful land-based operations for years now. Like the rest of us, however, they are susceptible to both the economy and changing consumer habits. Many have ageing player bases whom they need to replace. With younger generations embracing new technologies it makes sense for them to do so too.

They have a great opportunity with in-venue WiFi or on the reservations to embrace online gaming. Lotteries are in a similar position. We recently did a deal to supply Lotto Quebec with our games over the border in Canada.

Their southern cousins could attract new audiences by doing something similar. When that casino content has already been validated in land-based and social, as Lightning Box’s has, they could earn themselves a very quick win.

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With net revenue jumping 17.6 per cent to $704.6m (2018: $599.2m), gross operating profit saw a tumble of 29.6 per cent from $123.5m to this year’s $87m.

First opening to the public on the same day last year, Wednesday 27 June, initial reports suggested that the introduction of Ocean Casino Resort, at the former Revel, and Hard Rock, on the Trump Taj Mahal site, would drive down profits, despite adding more jobs and hotel rooms, which has thus far been the case.

The figures, released by the New Jersey Division of Gaming Enforcement, show that the two new entries reported operating losses for the period, with it suggested that the expensive process of attempting to attract individuals through their doors has taken its toll.

For the first quarter of the year Hard Rock posted a $6.1m loss, contrasted to Ocean Casino Resort’s $10.3m, with across the board operating profit declines only bucked by Resorts Casino.

Its 79.8 per cent swing, driven by a slightly small showing last year, saw it reach $3m from $1.6m, as Borgata retained its place as market leader despite a 12 per cent dip, with its operating profit coming in at $39.7m (2018: $45.1m).

Bally’s earned the unwelcome honour of seeing the largest percentage decline of the nine land-based establishments, with its operating profit falling from $6.2m to $2.8m, a 54.4 per cent decline.

Of the rest Caesars fell 13.6 per cent to $10.8m (2018: $12.5m), Golden Nugget is 5.6 per cent down to $9.4m (2018: $10m), Harrah’s reached $16.5m (a 41.9 per cent dip from $28.4m) and Tropicana declined 5.3 per cent to $16.5m (2018: $17.4m).

Looking at the internet only entries, Resorts Digital saw a huge swing from a $815,000 loss in 2018 to $1.8m this year, while Caesars Interactive Entertainment NJ dropped 5.7 per cent, as it reached $2.74m from $2.9m.

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By taking on the product portfolio, Penn National is to be enabled to offer blackjack, baccarat, roulette and craps in an array of formats.

John Connelly, chief executive officer of Interblock, commented: “Penn National has long been regarded as one of the leading operators in North America, and Interblock’s ability to work with an operator of this calibre is incredibly fortunate for our company.  

“We intend to use a combination of technology and innovation to help Penn reduce operating expenses across their properties, while increasing revenue.

“This partnership allows for Interblock to introduce several product segments designed for various casinos within the Penn portfolio. Everything from stadiums to standalone units will be utilised to address the demands within each region.

“We are thankful to Penn National for this opportunity, and will work hard to make this partnership a success.”

Under the terms of the fresh agreement, Interblock also states that it guarantees Penn National exclusivity on a number of products to be released in the future.

Each property included in the deal is to also install Interblock’s diamond stadiums, which it is hoped will attract existing and new players “to the next generation of gaming”.

Amongst the first properties to install as part of the deal are Hollywood Casino and Hotel Lawrenceburg, Ameristar Casino Hotel East Chicago and Hollywood Casino Toledo.

“We’ve long been fans of Interblock’s electronic table games products, and are pleased to be able to offer them at more than 20 of our company’s leading properties,” added Dan Cherry, vice president of gaming operations for Penn National Gaming.

Penn National revealed it is to close its Tunica-based Resorts Casino later this year, with the company vowing “to focus on the ongoing successful operations at our two remaining Tunica properties.”

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The Wyomissing, Pennsylvania headquartered organisation unveiled plans to shut Resorts Casino on June 30, subject to regulatory approvals, following the closure of Tunica Roadhouse Casino earlier in the year by Caesars Entertainment, who also terminated operations of its Harrah’s Tunica Hotel and Casino in the area five years ago when entering bankruptcy.

Penn National secured the operations of the property on March 2017, along with Bally’s Casino Tunica which it subsequently renamed to 1st Jackpot, and also operations Hollywood Casino Tunica, located adjacent to Resorts.

The company, which leases the property associated with the two casinos from Gaming and Leisure Properties, has seen the region suffer in part due to heightened competition from neighbouring Arkansas, who recently approved plans to adopt a number of land-based properties.

Regarding the pending closure, Al Britton, Penn National’s senior vice president of regional operations, explained: “With our acquisition of Resorts Casino as part of the two property deal, we knew we were acquiring an aging barge in need of significant capital improvements.

“While we did everything in our control to keep the property profitable over the last two years, increased competition from recent gaming expansion in Arkansas continues to drive the property’s business volumes lower. After exploring all viable alternatives, we are left with the difficult decision to close the business.”

Before stressing that the organisation has an ongoing commitment to the area, despite this announcement, and that a place will be sought for all Resorts Casino employees: “I want to thank the property’s nearly 200 team members for all their hard work, loyalty and commitment to this property during what has been an extended period of very difficult operating conditions.

“We’ll be seeking opportunities for these team members at our two other properties in Tunica, other area resorts, or at one of our other 39 properties across the country.

“I want to emphasise that despite this decision, Penn National remains committed to the Tunica market and continues to focus on the ongoing successful operations at our two remaining Tunica properties.”

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2018 Q4 launches at New Jersey’s Resorts Casino undertaken with DraftKings, and alongside Rush Street Interactive at Rush Street Gaming’s SugarHouse Casino and Rivers Casino, have been added to in 2019 following an agreement with Greenwood Gaming & Entertainment and it’s Parx Casino and South Philadelphia Turf Club entity’s.

Kambi, whose powered sportsbook generated 85 per cent of the Garden State’s revenue in December, has also seen customers increase self-service-betting-terminal orders, whilst also working with ATG for the launch of sports betting across approximately 2,000 retail stores in Sweden.

Group CEO Kristian Nylén commented on Kambi’s retail provisions, which is being undertaken at a much larger scale than previously: “While there were many positive aspects to our Q4 2018 performance, the highlight was Kambi’s retail delivery. During the quarter, Kambi successfully launched on-property sportsbooks with DraftKings at the Resorts Casino in New Jersey, and with Rush Street Interactive in two casinos in Pennsylvania.

“Furthermore, much of the planning and preparation work for the launches of ATG in 2,000 retail stores in Sweden, and two properties owned by new customer signing Greenwood Gaming and Entertainment in Pennsylvania, took place in Q4, enabling their successful launches in January 2019.

“With the US market high on Kambi’s priority list, our ability to demonstrate our high-quality on-property Sportsbook and prompt time-to-market leaves us well-placed moving forward, particularly considering the emphasis US operators and state regulators place on the retail channel.

“When also factoring in the early success we have had online in New Jersey, I’m not surprised Kambi is now seen as the leading multi-channel sports betting supplier in this burgeoning market.”

Kambi also stressed an expectation that the number of legalised and regulated states could double during the next 12 months, identifying current legislative movements in Connecticut, Massachusetts, Michigan and New York as potential targets for expansion in the coming months.

Kambi’s Q4 financial performance within its latest report was set against a tough year-on-year comparative period, with revenue amounting to €21.7m (2017: €19m) for the quarter and €76.2m (2017: €62.1m) for the full year.

Operator turnover growth came in at 42 per cent, with profit after tax for the fourth quarter of 2018 reported as €3.3m (2017: €3.9m) and €9.8m (2017: €5.9m) for the 12 month period.

Nylén explained: “It gives me great pleasure to present another strong quarter for Kambi, bringing to a close what was the most successful year in our history. Thanks to the hard work of all Kambi staff, Q4 2018 produced another period of financial growth, new customer signings and regulated market entries.

“Kambi’s operator turnover increased by 42% year-on-year in Q4 2018 while revenue was up 14%. Meanwhile, operator trading margin came in at 8.5%, once again above our long-term expected average.

“Bearing in mind the comparative period in 2017 delivered Kambi’s highest ever operator trading margin, our Q4 2018 performance is particularly pleasing and highlights the positive momentum we have built within the business. “

Adding: “Reflecting on the year as a whole, 2018 will be remembered as one of achievement and one in which Kambi reached new heights. And although much hard work remains in front of us, the strong foundations we have put in place leave me confident Kambi can remain on this upward trajectory throughout 2019.

“The year has already begun positively with the successful launch of new customers in multiple markets and the signing of an agreement to relaunch the popular German sports betting brand mybet later this year. The business remains in great shape for the challenges and opportunities that lie ahead.”

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The organisation is to kick-start a series of US and Europe-based sports wagering launches over the next year, beginning with Atlantic City’s Resorts Casino DraftKings sportsbook, pencilled in for tomorrow (Tuesday 20 November).

Already establishing a commanding position within the Garden State’s online market, enjoying an approximate 60 per cent market share, Kambi is striving to build upon its existing land-based offerings, with on-property sportsbook operated in casinos within Mexico and Cambodia, as well in various sports betting parlours in Belgium.

Following its New Jersey online success Kambi stresses it is ready to replicate that with an added on-property focus, with more than 100 betting kiosks at the ready for US customers.

Regarding its Resorts Casino Hotel launch lurking on the horizon, the DraftKings sportsbook is to feature a dozen betting kiosks, five over-the-counter points of sale and customised digital signage.

This is to be quickly followed with a trio of launches within Pennsylvania, as Kambi makes its debut within the Keystone State with further on-property sportsbook installations.

Agreements are in place with Rush Street Interactive, part of the group which owns both the SugarHouse Casino and Rivers Casino in the state, which was recently followed up with a link-up alongside Parx Casino owner Greenwood Gaming and Entertainment.

Max Meltzer, chief commercial officer, explained: “We’re very excited about bringing our high-quality sportsbook to brick and mortar establishments in the US, where operators are recognising the excellence of our on-property product, both from a technology and player experience perspective.

“In recent years, Kambi has invested heavily in developing a land-based solution that is on par with our online Sportsbook and, as a result, we now have the most advanced product on the market, not just in the US, but globally.

“This is one of the key reasons why the likes of DraftKings, Rush Street Interactive and Parx Casino have chosen to offer our on-property product, and why we are quickly becoming the number one choice for online and on-property sportsbooks on both sides of the Atlantic.”

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The firm has been working within New Jersey’s regulated online casino alongside Resorts Casino Hotel Atlantic City, managing its digital gaming asset’s online and offline creatives for the last two and a half years.

Securing a further twelve month retainer with Resorts, who operate the www.resortscasino.com and www.mohegansuncasino.com sites, Vegas Kings is to continue its provision of a full tiered service.

Ashley Adir, chief executive officer of Vegas Kings, commented: “We are very excited and proud to continue our close working relationship with the Resorts Digital Gaming team.

“Both brands are gaining great share within the New Jersey online market and the additional value that VK brings to the table is helping pave the way for both services to be at the forefront of the industry.”

Under the terms of the agreement, Vegas Kings is to handle all the daily creative and web development requests, ranging from online acquisition banner creatives, social media adverts, HTML mailers, video production promoting new games to full HD TV adverts, billboards and website back-end development.

“We love working with Vegas Kings and were so excited and thrilled to sign another year with them. Without them, being one of the leading operators in New Jersey would not be possible,” stated Ed Andrewes, CEO of Resorts Digital Gaming LLC.

New Jersey’s Division of Gaming Enforcement (NJDGE) released its gaming revenues for the month of July this week, with a 25.8 per cent increase in internet gaming win to $25.8m, from the previous years $20.5m, detailed.

Amongst that figure is a 5.1 per cent boost for Resorts Digital, seeing its figures almost break the $4m barrier as it reached $3.9m for the month, up from 2017’s $3.75m.

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Figures released by the New Jersey Division of Gaming Enforcement show a rise of $252.5m, in addition to an occupancy rate of 95.8% for the quarter.

The Borgata was the only establishment to produce a loss, albeit of less than half a point, down to $81,843.

Tropicana was responsible for the most impressive figures, with earnings jumping from $27.6m to $46.2m representing a substantial increase of 67%.

Amongst the other significant figures produced, Golden Nugget showed a 15.4% rise to $12.8m, Caesars numbers pointed to a profit of a little over $29m, an improvement of 10.9%, and Bally’s showed a gross operating profit of $18.1m, up 10.7%.

Both Harrah’s (0.9%) and Resorts Casino (0.3%) showed increases of less than one percent, with final figures of £37.7m and $10.7m respectively.

The average room rate in Q3 was a little over £118, with Golden Nugget posting the cheapest price at a little under £93 while at a touch above the $142 mark Borgata had the highest.

Atlantic City casino’s also posted significant increases for the first nine months of the year compared to 2016, with earnings jumping up 19.8% to $561.2m and occupancy rate rising 3.5% to 89.2%.

Room rates for the first nine months of 2017 averaged out at a little over $110, Golden Nugget again the cheapest at £85.16 and Borgata at the other end of the spectrum with an average price of $134.39.

Atlantic City’s duo of internet only enterprises also enjoyed a successful third quarter, with Caesars Interactive Entertainment New Jersey (CIENJ) up 55.4% from $2.4m to $3.7m.

Resorts Digital, on the other hand, produced figures showing a mightily impressive rise, from $570,000 in 2016 to $12.1m for the same period in 2017.

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