Industry News
Pollard Banknote Provides Business Update in Response to COVID-19 Uncertainty
Pollard Banknote Limited, like many organizations, has been confronted with an unprecedented challenge in managing the impact of the COVID -19 virus outbreak.
Our focus in all of our operations is maintaining a safe and healthy environment for all of our employees, their families and all of our stakeholders, while continuing to support the business of our customers. We have implemented stringent health protocols in all of our facilities including extensive social distancing protocols, more frequent cleaning and disinfecting, widespread working at home policies and daily health and temperature screening for all staff working at all of our facilities.
Pollard’s business is primarily focused on the sale of instant tickets and ancillary products to government lotteries around the world and the sale of charitable gaming products to charitable gaming organizations in North America. Our products are sold to lotteries and distributors for ultimate sale at various retail establishments.
Lotteries
Pollard’s lottery operations account for approximately 78% of our overall revenue. Currently almost all lotteries have remained operational and are continuing to sell lottery products including instant tickets at retail. The impact of the virus on retail sales of lottery products has varied from jurisdiction to jurisdiction, however on average, over the last few weeks North American lotteries are reporting between 15-20% reductions in retail sales of instant tickets compared to the same periods last year.
All of our lottery production facilities remain open and operational at this time, and all of our staff who can work from home are doing so. Our supply chains remain intact. We have not yet seen a significant reduction in our short-term production schedule as generally we produce instant tickets well in advance of its release at retail by the lotteries. However, to ensure a safe work environment, including maintaining social distancing, we have reduced our staffing and production capacity in our Ypsilanti, Michigan facility. The combined impact of this reduction in capacity and some softening in our orders due to lower retail sales could result in a reduction in our instant ticket revenue of between 10-15% during this period.
Traditionally, sales of instant tickets have shown significant resilience during times of substantial economic downturn and we anticipate a return to the historic sales levels and continued growth when retail markets return to normal.
Our sales earned through our iLottery operations, generated through revenue sharing, has grown noticeably over the past few weeks, as consumers increasingly move their purchases to the internet. However, only a small number of lotteries have developed iLottery portals and as a result, our increased revenue from iLottery will only modestly mitigate reduced sales in other areas of our business.
Pollard has taken a number of steps to minimize our expenditures throughout our lottery business in light of the reduced lottery revenue. This includes reductions in discretionary expenses, postponing capital projects, select temporary staff furloughs in certain areas of the lottery operations and salary reductions for our entire management group. Government programs available to assist employees and businesses are being investigated and reviewed. In addition, our ancillary products operations, including Schafer and Fastrak merchandising operations, are selectively utilizing temporary staff furloughs to help mitigate any reduction in revenue for these businesses. To the extent the economic environment further reduces lottery sales, additional expenditure reduction initiatives will be implemented.
Charitable Gaming
Our charitable gaming products generate approximately 22% of our consolidated revenue and include the sale of pull-tab tickets, bingo paper and the operation of Diamond Game and Oasis branded egaming machines. Sales primarily occur in social settings such as bars, veteran halls and bingo centers across North America. Essentially all jurisdictions have temporarily closed these facilities and as a result, our charitable gaming and egaming revenue has been mostly eliminated. This revenue reduction is expected to continue during the period these outlets are closed. There is no clear indication when jurisdictions may reopen these establishments or when we can expect retail sales of charitable gaming products to return to their pre-existing levels.
Our American Games and International Gamco business units remain operational at this time and continue to produce inventory to help address a significant backlog of orders that had developed due to strong customer demand prior to the closure of the various social settings. This replenishment of our pull-tab and bingo paper inventory levels will allow us to be strongly positioned to meet our customer demand when the retail locations are allowed to reopen.
Pollard is also taking steps across our charitable gaming businesses to minimize our losses during this period. Discretionary expenses have been eliminated and capital expenditure projects postponed. In addition, temporary staff furloughs, workshare programs among employees and salary reductions across management have been implemented throughout our operations. We do not make these decisions lightly and in all cases we are working closely with employees and governments to take advantage of various programs that provide financial support for our staff in these difficult times.
The situation we are all facing is unprecedented and has been changing very quickly. Based on the current impact of the virus on our business, we would estimate that our overall consolidated revenue could be reduced in the 25-30% range compared to the prior year during this period of decreased sales. We have implemented cost reduction strategies to minimize the impact of the revenue reduction, which will evolve as the situation changes.
Pollard has significant financial strength and a number of sources of liquidity to allow us to weather this period of reduced sales. In addition to our expenditure reduction initiatives, our balance sheet is strong with substantial available cash resources and access to additional funding through an undrawn secured senior bank facility that provides considerable readily available liquidity including a large accordion feature. Our working capital levels going into this period were high, providing further liquidity as we collect our receivables. The Pollard family, 67.5% shareholders, remain very committed to our business through their leadership and continued financial backing.
“The situation relating to the COVID-19 virus is changing very rapidly and will undoubtedly continue to do so,” commented Doug Pollard, Co-Chief Executive Officer, Pollard Banknote. “However, the long-term business fundamentals of the lottery and charitable gaming industries remain extremely positive. Our organization is very strong and will be able to withstand this difficult period. When markets start to open up again we expect our products to bounce back very quickly.”
“Having been established over 110 years ago in 1907, Pollard clearly focuses on taking the long-term view through our vision and commitment to our stakeholders. The Pollard family and all of our more than 1,900 dedicated team members remain committed to growing our world class organization and being the partner of choice to our lottery and charitable gaming customers, now and in the future.”
SOURCE Pollard Banknote Limited
Industry News
MiFinity to Showcase Innovative iFrame at SiGMA 2024
MiFinity, a leading global payment services provider, is excited to announce its participation at SiGMA 2024, held in Malta from 12 to 14 November. Visitors can find MiFinity at Stand 2012, where the team will be showcasing its award winning PayAnyBank service, and the latest version of the MiFinity iFrame and demonstrating how it helps iGaming operators acquire and retain players with a seamless, flexible payment experience.
Paul Kavanagh, CEO of MiFinity, commented: âSiGMA is a fantastic opportunity for us to showcase our latest developments and engage directly with the iGaming community. The MiFinity iFrame is a game-changer for operators looking to streamline their payment processes and enhance the player experience. We look forward to demonstrating its capabilities and connecting with both existing and prospective partners.â
MiFinityâs Business Development and Account Management teams will be on-site to discuss the new iFrame features in-depth and highlight how MiFinity can optimise payments for iGaming operators. They will also be showcasing MiFinityâs innovative suite of payment solutions developed specifically for the iGaming sector, including MiFinity PayAnyBank â a powerful tool that enables operators to send payouts directly to playersâ bank accounts in multiple countries and currencies, enhancing the user experience with faster, more localised transactions and reduced FX fees.
The MiFinity Affiliates team will also be available to explain the benefits of MiFinityâs affiliate program, which offers some of the highest commissions in the industry and unique promotional opportunities via the MiFinity Bonus website.
Meet the MiFinity team at Stand 2012 at SiGMA 2024 to learn more about the companyâs solutions and how they are transforming the iGaming payment landscape. Pre-book a meeting with the MiFinity team or drop by the stand during the event to explore how MiFinity can support your business.
Book a meeting here > outlook.office365.com/book/[email protected]/
Industry News
Dutch Mental Health Care Calls for Total Ban on Online Gambling Advertising
The Dutch mental health service is calling for a total ban on online gambling advertisements in the Netherlands.
Although a ban on untargeted gambling advertisements and a ban on the use of role models has been in effect since 2023, a recent research by KRO-NCRVâs Pointer shows that (illegal) gambling companies and sports tipster platforms are still enticing young people via social media such as TikTok and Snapchat.
By using influencers and terms like âfree moneyâ, they try to attract a young audience and thus lower the threshold to start gambling. This concerns both legal online casinos and online casinos that do not have a license in the Netherlands. The Gaming Authority has started an investigation based on Pointerâs findings.
Pointerâs research shows that part of the gambling industry deliberately targets young people who are often susceptible to promises such as âfast moneyâ and the influence of role models. Ruth Peetoom, chair of the Dutch mental health service, compares this approach to that of the tobacco industry, where similar marketing strategies were used to get young people to smoke.
Despite the existing advertising ban, gambling companies continue to explore the boundaries of the law, according to Peetoom. The Dutch mental health and addiction care associations in the Netherlands therefore push for a total ban on online gambling advertising and stricter rules for the duty of care of gambling providers.
With the call for a total ban, the Dutch mental health care sector hopes to prevent further normalisation of gambling behaviour among young people and to protect them from the temptation and consequences of online gambling.
Compliance Updates
UKGC: Market impact data on gambling behaviour – operator data to Oct 2024
The Gambling Commission has published further data on the gambling industry in Great Britain.
This data, sourced from operators, reflects the period between March 2020 and September 2024, inclusive, and covers online and in-person gambling covering Licensed Betting Operators (LBOs) found on Britainâs high streets.
Comparison should not be made with the industry statistics dataset, as this dataset may include free bets and bonuses and does not include data from all operators.
This release compares Quarter 2 (Q2) of financial year 2024 to 2025, with Q2 of 2023 to 2024, looking at how the market has changed in comparative periods over a year.
The latest operator data shows:
- online total Gross Gambling Yield (GGY) in Q2 (July to September) was ÂŁ1.32 billion, an increase of 11 percent from Q2 the previous year. The overall number of total bets and/or spins increased 12 percent Year-on-Year (YoY), reaching a new peak for the third consecutive quarter of 25.2 billion, whilst the average monthly active accounts2 in the quarter increased 8 percent
- real event betting GGY increased by 6 percent YoY to ÂŁ453 million. The number of bets decreased 10 percent, while the average monthly active accounts in Q2 increased 9 percent
- slots GGY increased 16 percent to ÂŁ680 million YoY. The number of spins increased 13 percent to 23.3 billion while the average monthly active accounts in Q2 increased 16 percent to 4.4 million per month. Although this is a new peak for GGY in this dataset for the slots vertical, it should be noted that one operator has re-classified some of its products into the slot vertical this quarter, which has had an impact on the vertical data
- the number of online slots sessions lasting longer than an hour increased by 9 percent YoY to 10 million. The average session length remained at 17 minutes. Approximately 6.1 percent of all sessions lasted more than one hour compared to 6.6 percent in Q2 the previous year. The number of spins per session has fallen from 147 to 142 YOY, whilst the GGY per session has fallen from ÂŁ4.20 to ÂŁ4.13 in the equivalent timeframe
- LBO GGY decreased by 1 percent to ÂŁ533 million in Q2 2024 to 2025, compared to the same quarter last year, while the number of total bets and spins decreased by 0.1 percent to 3.1 billion.
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