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Aspire Global – Interim Report Q1 2020

George Miller

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Authentic GaAspire Global - Interim Report Q1 2020ming Partners with Aspire Global
Reading Time: 5 minutes

 

GOOD GROWTH AND PROFITABILITY INCREASE FROM Q4 2019

FIRST QUARTER AND APRIL

Numbers in brackets refer to Q1 2019 unless other stated.

  • Revenues increased by 1.5% to €33.7 million (33.2) and increased by 4.6% from Q4 2019.
  • EBITDA decreased by 14.2% to €5.2 million (6.1) and increased by 19.7% from Q4 2019.
  • The EBITDA margin amounted to 15.5% (18.3%) and increased two percentage points from Q4 2019.
  • EBIT decreased by 24.4% to €3.9 million (5.2) and increased by 24.7% from Q4 2019.
  • Earnings after tax amounted to €2.4 million (4.1).
  • Earnings per share, basic and diluted, amounted to €0.05 (0.09).
  • First time depositors (FTDs) increased by 4% to 123,300 (119,100).
  • In April total trading volumes increased to about €13.5 million, which is about 20% higher than the average monthly trading volume in Q1 2020.

 

SIGNIFICANT EVENTS IN THE QUARTER AND AFTER THE END OF THE QUARTER

  • Proactive measures taken in relation to the spread of COVID-19 in order to reduce health risks for employees and to ensure business continuity.
  • Growth of 4.6% from Q4 2019 driven by robust underlying business with limited impact from the COVID-19 pandemic. As a consequence of the pandemic, players choose online entertainment over landbased and in April total trading volumes increased to about €13.5 million, which is about 20% higher than the average monthly trading volume in Q1 2020.
  • Swift adaption to new regulatory requirements in regulated markets such as the UK in Q4 2019  revenues increased by 35% in the UK and Ireland from Q4 2019.
  • Good business momentum – in B2B core platform three new partner deals signed and two new brands launched, a sport vertical has been added to an existing partner and a successful migration was completed. In B2B games business line six proprietary games were released and two new markets entered – Portugal and Romania through new deals for games.
  • In B2C EBITDA was positively impacted by successful marketing optimizations and the EBITDA margin increased significantly by 4.6 percentage points from Q4 2019 to 13.0%.
  • As of 1 January 2020, a new sub-segment is reported in segment B2B which includes the games business line.
  • Jesper Kärrbrink, former CEO of e.g. Mr Green and Svenska Spel, appointed Chairman of Aspire Global’s subsidiary Pariplay.

 

COMMENTS FROM THE CEO

The good growth and improved profitability in Q1 2020 from Q4 2019 are encouraging and prove our business model to be efficient with a strong offering. Revenues increased by 4.6% from Q4 2019 with a substantial profitability increase as the EBITDA margin grow from 13.5% to 15.5%. In the quarter we saw limited impact from the pandemic. However, as a consequence of the pandemic, players choose online entertainment over landbased, and in April total trading volumes increased to about €13.5 million, which is about 20% higher than the average monthly trading volume in Q1 2020.

The world is going through challenging times during the pandemic. Early in the quarter we took proactive measures to reduce the health risks for the employees and to ensure business continuity. Thanks to a robust underlying business and dedicated employees, service levels remained high. The impact from the cancellation of sports events was insignificant due to a limited exposure to sports and in Q4 2019 sports betting represented about 5% of total revenues. The sequential improvement is mainly due to a strong business momentum.

It is encouraging to see that we have mitigated the impact in Q4 2019 from new regulatory requirements in markets such as the UK and from Q4 2019 revenues in the UK and Ireland increased by 35%. Compliance is on top of our agenda and we know that this is a key competitive advantage.

 

INCREASED PROFITABILITY

EBITDA increased by 19.7% to €5.2 million from Q4 2019 and the EBITDA margin improved from 13.5% to 15.5%, mainly due to higher volumes. Compared to Q1 2019 the lower EBITDA margin is reflecting our strategy to focus on locally regulated and taxed markets where the margin on partner deals are lower. On the other hand, revenues from locally regulated and taxed markets are over time more sustainable with less political risks. The revenue share from taxed, locally regulated or soon to become regulated markets increased from 69% in Q1 2019 to 75%, proving our ability to grow in locally regulated markets with good profitability.

 

With the acquisition of the game aggregator and game studio Pariplay last year, we became the complete iGaming supplier for operators. We clearly see the synergies we get from the integration of Pariplay when its powerful game offering is combined with our leading iGaming platform. We are targeting tier 1 and 2 iGaming operators and have today significant customers and partners such as 888, GVC, Codere and Mr.play. In the quarter, we could see that our recently added partners to our core platform are performing better than they expected, making us confident in the strategy to focus on bigger brands.

 

NEW PARTNER DEALS

During the quarter we have successfully continued the execution of our growth strategy and we have managed to settle a number of new deals and expand our platform and games to new markets, partners and clients. For example, we signed three new partners for our platform and two new brands went live on the platform. We signed two new major deals for our game offering and the games were launched in two new European markets; Portugal and Romania. In addition, six proprietary games were launched in the quarter and a French version of the platform was finalized, targeting selected francophone markets. One should note though, that we do not have the intention to apply for a license in France.

 

PLATFORM OFFERED AS STAND-ALONE SERVICE

Our B2B offering has been adjusted to be even more competitive and the platform is now being offered stand-alone or together with the choice of a wide range of services, making the full turnkey solution optional. The adjusted offering is better suited to target large and mid-sized iGaming operators who lack a proprietary platform, or land-based operators who aim to go online – an untapped and important market so far. The interest from potential clients is good and we look forward to progressing these dialogues during the year.

 

SIGNIFICANT GEOGRAPHIC EXPANSION

A key part of our growth strategy is geographic expansion. We are preparing ourselves for license applications in the Netherlands Q1 2021 and in Germany Q3 2021. We are also preparing to launch our games and aggregation platform in four new markets in 2020. We will be targeting Italy and Spain in Q2 2020 and New Jersey and Switzerland in Q3 or Q4 2020. I am of course especially excited by the opportunities in the huge US market.

 

GROWTH THROUGH M&A

We continue our active search for acquisitions and new projects that could broaden the offering for players, enhance the scale benefits of the platform or accelerate the B2B growth. It is our clear target to control more parts of the value chain in order to enable our partners to achieve their full potential. M&A processes have been impacted by the pandemic and slowed down temporarily. Though, we are ready to start these processes again as soon as the society is back to more normal routines.

 

SUSTAINABILITY IN FOCUS

A few weeks ago, we presented our first report according to the GRI Standard. To us, sustainability is mainly about responsibility: actively and credibly ensuring that our business does not attract a vulnerable audience, promotes unhealthy gaming behaviour or condones criminal activity. It is through correct segmentation, balanced marketing, effective gaming tools and proactive support that we can best help players to maintain sustainable consumption patterns based on their original intentions. We are convinced that this is the sustainable way forward, both operationally and financially.

 

OUTLOOK

We have been successful in securing business continuity during the pandemic and continue the execution of our growth strategy, capitalizing on our complete iGaming offering. As a consequence of the pandemic, players choose online entertainment over landbased, and in April total trading volumes increased to about €13.5 million, which is about 20% higher than the average monthly trading volume in Q1 2020. It is not possible for us to say how sustainable or long this effect will be, but thanks to our competitive offering and strong business momentum we are confident in our ability to continue to deliver profitable growth.

Tsachi Maimon,CEO

 

 

Industry News

GVC Adds Senior Gaming Executives David Satz and Robert Hoskin to its Board

Niji Narayan

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GVC Adds Senior Gaming Executives David Satz and Robert Hoskin to its Board
Reading Time: 2 minutes

 

GVC Holdings PLC has announced the appointment of David Satz and Robert Hoskin to its Board of Directors.

David Satz has joined as an Independent Non-Executive Director on 22 October 2020, and Robert Hoskin will be promoted to the Board as an Executive Director on 1 January 2021 in the role of Chief Governance Officer.

David Satz most recently served as the Senior Vice President of Government Relations and Development for Caesars Entertainment Corporation in Las Vegas, where he worked from 2002 to 2019.

Robert Hoskin has been at GVC since 2005 and will take up the role of Chief Governance Officer, overseeing GVC’s legal, regulatory, governance and social responsibility affairs. He is currently Group Director of Legal, Regulatory and Secretariat.

“I am delighted to be welcoming two such high calibre individuals to our Board. David has unrivalled regulatory and legislative expertise in the all-important US gaming market. His knowledge and insight will be hugely additive in helping us to achieve our ambition of being the leading operator in the US through BetMGM, our fast-growing joint venture with MGM Resorts,” Barry Gibson, Chairman of GVC, said.

“Robert has made an outstanding contribution to GVC in his 15 years at the Group, and his promotion is richly deserved. The fact that regulation, legal and governance are now represented at Board level will give us even greater oversight of these critically important areas, all of which are central to our long-term growth plans,” Barry Gibson added.

“I have long been an admirer of GVC’s diversified business model, industry-leading brands, and unique proprietary technology platform. I look forward to working closely with the Board and the executive management team in order to help support GVC’s impressive growth trajectory, especially in light of the unprecedented opportunity presented by its strong position in the nascent US sports betting market,” David Satz said.

“It has been an absolute pleasure to have witnessed GVC’s extraordinary growth story from an AIM-listed company to the successful and international FTSE 100 business that it is today. I am honoured to be joining what is an outstandingly strong Board and am delighted that the importance of Governance is being recognised in this way,” Robert Hoskin said.

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AC Milan Extends its Partnership with StarCasinò.sport

Niji Narayan

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AC Milan Extends its Partnership with StarCasinò.sport
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AC Milan football club has extended its partnership with StarCasinò.sport. The sports entertainment platform, part of the Betsson Group, will continue to be an AC Milan Official Partner for the next three years, until the end of the 2023 season.

“The aim of Betsson Group is to create engaging, amazing and safe experiences for all users and, through our brand StarCasinò.sport, we propose an innovative and exciting storytelling of sports. The renewal of the partnership with AC Milan, a top-class Club, is very important for us in terms of broadening our image and it allows us to create high-quality entertainment for the Rossoneri fans as well as for all football fans,” Ronni Hartvig, Chief Commercial Officer of Betsson Group, said.

“We are delighted to announce the renewal of our partnership with StarCasinò.sport. In recent months we jointly created exciting and innovative special content dedicated to our fans and we are both very pleased with the results we have achieved. We want to keep surprising AC Milan’s fans and we are ready to engage them in many new Rossonero initiatives,” Casper Stylsvig, Chief Revenue Officer at AC Milan, said.

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Industry News

MMO game Street Mobster leaking data of 1.9 million users due to critical vulnerability

George Miller

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MMO game Street Mobster leaking data of 1.9 million users due to critical vulnerability
Reading Time: 3 minutes

Attackers could exploit the SQL Injection flaw to compromise the game’s database and steal user data.

The CyberNews.com Investigation team discovered a critical vulnerability in Street Mobster, a browser-based massively multiplayer online game created by Bulgarian development company BigMage Studios.

Street Mobster is a free to play, browser-based online game in the mafia empire genre where players manage a fictional criminal enterprise. The game boasts a 1.9+ million player base and stores a user record database that can be accessed by threat actors by committing an SQL Injection (SQLi) attack on the game’s website.

Other games created by BigMage Studios are also potentially vulnerable to the same type of attack, which means that there is a possibility that even more users might be at risk.

The records that can be compromised by exploiting the SQLi vulnerability in Street Mobster potentially include the players’ usernames, email addresses, and passwords, as well as other game-related data that is stored on the database.

Fortunately, after we reported the vulnerability to BigMage Studios, CERT Bulgaria, and the Bulgarian data protection authority, the issue has been fixed by the developers and the user database is no longer accessible to potential attackers.

What is SQL Injection?

First found back in 1998, SQLi is deemed by the Open Web Application Security Project (OWASP) as the number one web application security risk.

Even though this vulnerability is relatively easy to fix, researchers found that 8% of websites and web applications are still vulnerable to SQLi attacks in 2020. Which, from a security perspective, is inexcusable. So much so, in fact, that UK internet service provider TalkTalk was hit with a record £400,000 fine over succumbing to a cyberattack that involved SQLi.

The vulnerability works by injecting an unexpected payload (a piece of code) into the input box on the website or in its URL address. Instead of reading the text as part of the URL, the website’s server reads the attacker’s payload as code and then proceeds to execute the attacker’s command or output data that would otherwise be inaccessible to unauthorized parties. Attackers can exploit SQLi even further by uploading pieces of code or even malware to the vulnerable server.

The fact that Street Mobster is susceptible to SQLi attacks clearly shows the disappointing and dangerous neglect of basic security practices on the part of the developers at BigMage Studios.

 

How we found this vulnerability

Our security team identified an SQL Injection vulnerability on the Street Mobster website and were able to confirm the vulnerability by performing a simple command injection test on the website URL. The CyberNews team did not extract any data from the vulnerable Street Mobster database.

What’s the impact of the vulnerability?

The data in the vulnerable Street Mobster database can be used in a variety of ways against the players whose information was exposed:

By injecting malicious payloads on Street Mobster’s server, attackers can potentially gain access to said server, where they can install malware on the game’s website and cause harm to the visitors – from using the players’ devices to mine cryptocurrency to redirecting them to other malicious websites, installing malware, and more.

The 1.9 million user credentials stored on the database can net the attackers user email addresses and passwords, which they can potentially use for credential stuffing attacks to hack the players’ accounts on other gaming platforms like Steam or other online services.

Because Street Mobster is a free-to-play game that incorporates microtransactions, bad actors could also make a lot of money from selling hacked player accounts on gray market websites.

What to do if you’ve been affected?

If you have a Street Mobster account, make sure to change your password immediately and make it as complex as possible. If you’ve been using your Street Mobster password on any other websites or services, change that password as well. This will prevent potential attackers from accessing your accounts on these websites in case they try to reuse your password for credential stuffing attacks.

However, it’s ultimately up to BigMage Studios to completely secure your Street Mobster account against attacks like SQLi.

Disclosure and lack of communication from BigMage Studios

Following our vulnerability disclosure guidelines, we notified the BigMage Studios about the leak on August 31, 2020. However, we received no reply. Our follow-up emails were left unanswered as well.

We then reached out to CERT Bulgaria on September 11 in order to help secure the website. CERT contacted the BigMage Studios and informed the company about the misconfiguration.

Throughout the disclosure process, BigMage Studios stayed radio silent and refused to get in touch with CyberNews.com. Due to this reason, we also notified the Bulgarian data protection agency about the incident on October 9 in the hopes that the agency would be able to pressure the company into fixing the issue.

Eventually, however, BigMage Studios appear to have fixed the SLQi vulnerability on streetmobster.com, without informing either CyberNews.com or CERT Bulgaria about that fact.

 

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