LeoVegas MGM Group Review - ESG and Sustainability Performance (2024)

ESG Summary

Transparency			LeoVegas Group scores a 4 for transparency, providing detailed insights through annual reports and regulatory filings, though there’s room for improvement in certain areas. Detailed reports providing insights into sustainability efforts. Enhancing transparency further through continual improvement in reporting.
ESG Strategy			The company earns a solid 5 for its well-defined ESG strategy, with clear targets and initiatives aligned with global sustainability goals. Well-defined plan with specific targets and initiatives.
Sanctions			LeoVegas’ score is 1, reflecting past regulatory challenges. However, recent improvements demonstrate a commitment to compliance and ethical practices. Continued focus on compliance and social responsibility measures to avoid future sanctions.
3rd Party Rating			With a score of 4, LeoVegas Group maintains a positive public perception, bolstered by industry awards and recognition, though further enhancements could be pursued. Positive ratings and awards validate LeoVegas’ efforts. Seeking additional awards and recognitions to enhance LeoVegas’ public perception and industry standing.

Company Overview

About the Company

LeoVegas Group, previously publicly traded on Nasdaq First North Premier in Sweden, underwent a significant transformation through its acquisition by MGM Resorts International on August 31, 2022. In this acquisition, MGM Resorts International acquired around 96 percent of LeoVegas AB’s shares. Following this transaction, LeoVegas AB was delisted from the Nasdaq Stockholm stock exchange, and the last day of trading occurred on September 22, 2022.

LeoVegas Group, a private entity under the ownership of MGM Resorts International, operates with licenses obtained from various regulatory authorities. These licenses empower the company to offer its diverse range of services, ensuring full compliance with the regulatory frameworks in different jurisdictions.

The regulatory approvals include licenses from the Swedish Gambling Authority, the German Federal States’ Joint Gambling Authority (GGL), Malta Gaming Authority, UK Gambling Commission, Alcohol and Gaming Commission of Ontario, and iGaming Ontario. This extensive licensing allows LeoVegas Group to provide online casino, live casino, sports betting, bingo, eSports betting, and mobile gaming services.

The acquisition by MGM Resorts International and the subsequent change in ownership structure mark a significant chapter in LeoVegas Group’s trajectory, positioning it within the broader context of the global gaming and hospitality industry. As the company continues its operations with a new ownership structure, it remains committed to upholding the highest standards of regulatory compliance and responsible gaming practices.

Key Performance Indicators (KPIs)

Financial Performance Summary

LeoVegas Group has demonstrated impressive growth in various financial metrics, indicating its strong performance in the market.

• Gross Winnings Revenue (GWR) on Sports Betting:
  • The Gross Winnings Revenue (GWR) for sports betting showed a significant upward trajectory over the years:
    • 2016: £544.1 million
    • 2015: £354.1 million
    • 2014: £312 million
    • 2013: £268 million
  • This consistent growth in GWR from 2013 to 2016 indicates increasing demand for LeoVegas Group’s sports betting services.
• Gross Winnings Revenue (GWR) in Casino and Games (Latest Quarter Performance):
  • The latest quarter’s Gross Winnings Revenue (GWR) from casino and games was reported at £352.6 million, showcasing a strong performance in this segment.
  • EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for the same period reached £98.0 million, indicating robust operational efficiency and profitability.
  • The Earnings Per Share (EPS) stood at £0.32, reflecting the company’s profitability per outstanding share of common stock.
  • Active Customers totaled 1,818,759, highlighting the company’s successful customer engagement strategies.
  • 61% of the Gross Winnings Revenue (GWR) was derived from locally regulated markets, indicating a strong presence and compliance in regulated jurisdictions.
  • Mobile GWR accounted for 78% of the total, showing the company’s successful mobile strategy and customer adoption of mobile gaming platforms.

These financial indicators provide insights into LeoVegas Group’s strong financial performance and market presence. The Gross Winnings Revenue (GWR) growth in sports betting and casino/games segments, along with robust EBITDA and active customer figures, indicate the company’s success in the online gaming industry. The focus on regulated markets and mobile gaming further reinforces LeoVegas Group’s strategic direction towards sustainable growth and profitability.

ESG Overview

In this section, we explore the Environmental, Social, and Governance (ESG) practices of LeoVegas Group. Understanding a company’s ESG commitments is crucial for investors, stakeholders, and the general public to assess its impact on the environment, society, and governance structures. We delve into LeoVegas Group’s initiatives, strategies, and performance in these key areas, shedding light on its sustainability efforts and social responsibility. For a comprehensive guide on ESG in the iGaming industry, you can visit Better World Casinos – Understanding ESG and iGaming.

ESG Strategy

LeoVegas Group is deeply committed to sustainability through its robust Environmental, Social, and Governance (ESG) strategy. This encompasses a wide array of initiatives:

• Environmental Focus: Implementing energy-efficient technologies and transitioning to renewable energy sources.
• Social Responsibility: Enforcing responsible gaming policies, prioritizing employee well-being, and engaging in community initiatives.
• Governance Standards: Upholding transparency, accountability, and ethical business practices across all levels.

By actively engaging stakeholders and promoting ethical conduct, LeoVegas aims to create enduring value while contributing positively to society and the environment.

Environmental Impact

In this section, we delve into the company’s efforts towards environmental sustainability and its initiatives to reduce its carbon footprint. For a detailed overview of LeoVegas Group’s environmental strategies, you can also visit ESG Environment page.

Environmental Performance

Emissions

LeoVegas Group is committed to reducing its environmental impact, particularly in terms of emissions. The company has implemented strategies to manage its carbon footprint, including initiatives to decrease business travel. These efforts are part of LeoVegas’s broader goal to minimize emissions and operate in a more environmentally sustainable manner.

Emissions Scope and Supplier

LeoVegas Group’s environmental initiatives also include a focus on emissions scope, supplier engagement, and other related factors. The company works to assess and address its carbon emissions across various scopes, aiming for transparency and accountability. Additionally, LeoVegas collaborates with suppliers to promote sustainability throughout its supply chain, encouraging partners to adopt environmentally responsible practices.

Targets & Initiatives

LeoVegas Group has set specific targets and initiatives to drive its environmental sustainability efforts. This includes the partnership with Google Cloud for a climate-neutral technical platform. By leveraging advanced technologies, LeoVegas aims to reduce its environmental footprint and achieve its sustainability objectives. These initiatives demonstrate the company’s commitment to environmental stewardship and responsible business practices.

Social Impact

In this section, we explore the company’s initiatives related to social responsibility, employee engagement, and community involvement. For a comprehensive view of  LeoVegas Group’s social endeavors, you can also visit ESG Social page.

Social Performance

Internal

Employee feedback: Employee feedback on Glassdoor provides insights into LeoVegas Group’s internal social performance. The company’s Glassdoor rating of 4.1 reflects positive sentiments among employees, with 82% indicating they would recommend LeoVegas to a friend. CEO Gustaf Hagman enjoys a high approval rating of 95%, illustrating strong leadership within the organization. Employees appreciate aspects such as the CEO’s approachability and a friendly work environment.

Gender: LeoVegas Group is committed to promoting gender diversity and equality within its workforce. The company strives to create an inclusive workplace where individuals of all genders have equal opportunities for growth and advancement. LeoVegas recognizes the importance of gender diversity in fostering a more innovative and productive work environment.

External

Responsible Gambling Measures

As part of its social responsibility initiatives, LeoVegas Group is dedicated to responsible gambling practices. The company implements various measures to promote responsible gaming among its customers, including self-exclusion options, deposit limits, and educational resources. LeoVegas prioritizes the well-being of its customers and works to prevent and address problem gambling.

Community Engagement

LeoVegas Group actively engages with communities through its Leoinitiative, launched in 2017. This initiative focuses on positively impacting and protecting the endangered lion population. Collaborating with Stichting Leeuw, LeoVegas has rescued lions from captivity in Europe, demonstrating its commitment to wildlife conservation and community welfare. By engaging in meaningful projects like the Leoinitiative, LeoVegas aims to make a positive difference in external communities and contribute to a more sustainable future.

Responsible Marketing

In addition to responsible gambling practices, LeoVegas Group also prioritizes responsible marketing. The company ensures that its marketing campaigns adhere to ethical standards and do not target vulnerable individuals. LeoVegas promotes transparency and integrity in its marketing efforts, aligning with its commitment to social responsibility and ethical business practices.

Governance and Compliance

For any organization, governance forms the backbone of its operations, shaping its transparency, integrity, and regulatory compliance. It encompasses the structures and processes through which companies are directed and controlled. To delve deeper into the governance practices within the iGaming industry, visit Better World Casinos – ESG and Governance.

Governmental Performance

LeoVegas Group emphasizes responsible and sustainable business practices through its values and ethics. The company’s Corporate Governance Report 2022 outlines compliance with Swedish regulations, supported by policy documents such as the Code of Conduct and Sustainability Policy.

Code of Conduct

LeoVegas Group upholds high ethical standards and integrity through its Code of Conduct. This document outlines the company’s commitment to conducting business in a responsible and ethical manner. The Code of Conduct serves as a guide for employees, outlining expectations regarding legal compliance, fair competition, data privacy, and anti-corruption measures.

Frameworks & Policies

LeoVegas Group has established various frameworks and policies to govern its operations and ensure compliance with legal and ethical standards. These frameworks include policies related to data protection, responsible gaming, and environmental sustainability. By adhering to these policies, LeoVegas demonstrates its commitment to operating ethically and responsibly.

Anti-Corruption Measures

As part of its commitment to transparency and integrity, LeoVegas Group has implemented robust anti-corruption measures. The company prohibits bribery and corruption in all forms and maintains a zero-tolerance policy toward such activities. Employees are required to report any suspected instances of corruption, and the company conducts regular training to raise awareness and promote compliance.

Sustainability Charter

LeoVegas Group’s Sustainability Charter outlines its dedication to environmental conservation and social responsibility. The charter reflects the company’s commitment to reducing its environmental footprint, promoting diversity and inclusion, and contributing positively to communities. Through the Sustainability Charter, LeoVegas sets clear goals and initiatives to drive its sustainability efforts forward.

Tax Policies

LeoVegas Group follows stringent tax policies and practices to ensure compliance with tax regulations in the jurisdictions where it operates. The company aims to maintain transparency in its tax affairs and comply with all relevant tax laws and regulations. LeoVegas views tax compliance as an essential aspect of its corporate responsibility and contributes to the communities in which it operates.

CEO Compensation

LeoVegas Group’s CEO compensation is structured to align with the company’s performance and shareholder interests. The compensation package includes a mix of fixed salary, performance-based incentives, and long-term incentives such as stock options. This approach aims to incentivize the CEO to drive the company’s growth and success while also rewarding long-term value creation.

Corporate Structure

Committees

LeoVegas Group’s corporate structure includes various committees responsible for oversight and governance. These committees, such as the Audit Committee and Remuneration Committee, play crucial roles in ensuring transparency, accountability, and effective decision-making within the organization. The Audit Committee oversees financial reporting and internal controls, while the Remuneration Committee is responsible for CEO compensation and employee incentive plans.

Financials

LeoVegas Group’s financial performance is outlined in its Annual Report, providing insights into the company’s revenue, profitability, and key financial metrics. The report includes details on Gross Winnings Revenue (GWR) in various segments, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and Earnings Per Share (EPS). Additionally, the report highlights the company’s financial position, including cash reserves, debt levels, and investments. LeoVegas aims to maintain a strong financial foundation to support its growth strategies and create value for shareholders.

Sanctions, Controversies, and Concerns

LeoVegas Group has faced regulatory challenges and significant penalties, indicating concerns regarding its social responsibility and anti-money laundering practices.

• In August 2022, the company was fined £1.32 million for deficiencies in these areas. Alongside the fine, LeoVegas received an official warning and underwent an audit to ensure the effective implementation of its anti-money laundering and social responsibility policies, procedures, and controls.
• The UK Gambling Commission highlighted several failures in LeoVegas’ approach to social responsibility. These included setting spend triggers for Safer Gambling Team customer review at levels significantly higher than the average customer’s spend, without adequate justification. Additionally, LeoVegas was found to not consistently act on indicators of harm exhibited by customers. Regarding anti-money laundering measures, the Commission deemed the company’s controls inadequate, with financial triggers for reviews set too high and allowing significant levels of gambling spend without sufficient knowledge of customers’ financial situations.
• These regulatory issues have impacted LeoVegas’ financial performance and operational outlook. Despite reporting marginal year-on-year revenue growth in 2021, regulatory challenges in key markets like Germany and the Netherlands have hindered its progress. In Germany, the introduction of a high turnover tax for online poker and casino operations significantly reduced LeoVegas’ market share. Additionally, LeoVegas ceased operations in the Netherlands ahead of the country’s regulated online gaming market opening, resulting in a loss of revenue.

Business Strategy Adaptation

To address these challenges, LeoVegas has adjusted its business strategy. This includes the acquisition of Expekt to enhance its sports betting capabilities and the exploration of new markets such as the United States and Canada. LeoVegas remains optimistic about its growth prospects, especially as more European countries regulate online gambling.

However, overcoming these regulatory hurdles and driving innovation in turbulent market conditions will be crucial for LeoVegas’ future success. The company acknowledges the importance of addressing regulatory concerns and enhancing social responsibility and anti-money laundering measures to sustain its operations and uphold its reputation in the industry. LeoVegas is committed to adapting and evolving its practices to meet regulatory standards while continuing to provide a safe and responsible gaming environment for its customers.

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UN Sustainable Development Goals (SDGs)

LeoVegas Group actively contributes to several United Nations Sustainable Development Goals (SDGs), aligning its operations with global initiatives for positive impact:

	LeoVegas Group is committed to promoting the well-being of its customers through responsible gambling initiatives and the use of reliable metrics to monitor player behavior. By prioritizing player safety and awareness, the company supports the goal of ensuring good health and well-being for all.
	The company places a strong emphasis on diversity and inclusion, fostering a multicultural workforce across its locations. By creating an inclusive environment, LeoVegas Group supports the goal of providing quality education and promoting lifelong learning opportunities for all.
	LeoVegas Group is dedicated to achieving a 50:50 gender balance in leadership roles. Through its commitment to gender equality, the company actively promotes diversity and equal opportunities within its workforce, contributing to the goal of gender equality.
	LeoVegas Group’s initiatives focus on creating a positive work environment for its employees. By prioritizing employee well-being, professional development, and fair treatment, the company contributes to the goal of promoting decent work and economic growth.
	The company’s commitment to diversity and inclusion aims to reduce inequality within its organization. By fostering an inclusive workplace culture where all employees have equal opportunities, LeoVegas Group supports the goal of reducing inequalities.
	LeoVegas Group has implemented climate targets, waste reduction strategies, and carbon offsetting initiatives to promote responsible consumption and production. By minimizing its environmental impact, the company contributes to sustainable practices and supports this SDG.
	LeoVegas Group has set ambitious climate targets and actively works to reduce its emissions. The company engages in carbon offsetting efforts and promotes sustainable practices to address climate change, aligning with the goal of taking urgent action to combat climate change and its impacts.
	LeoVegas Group recognizes the importance of collaboration and partnerships in achieving sustainable development goals. The company engages in partnerships with various organizations to promote sustainable practices, drive innovation, and work towards a more sustainable future for all. Through these partnerships, LeoVegas Group contributes to the broader goal of global cooperation and partnership for sustainable development.

By integrating these SDGs into its business practices and corporate strategy, LeoVegas Group demonstrates its commitment to social responsibility, environmental stewardship, and creating a positive impact on society and the planet.

Awards and Ratings

• Global Gaming Awards and International Gaming Awards Wins
  • LeoVegas Group had a remarkable night at the Global Gaming Awards (GGA) and International Gaming Awards (IGA), securing two prestigious awards:
    • “Online Casino of the Year” at GGA: This marks the sixth consecutive year of winning this award, solidifying LeoVegas’ position as a leader in the igaming industry.
      • LeoVegas has received the “Online Casino of the Year” award at the GGA since its inception six years ago.
      • The nomination this year included the line “No online casino of the year nominations can be complete without LeoVegas,” emphasizing its integral role in the industry.
    • “Mobile Operator of the Year” at IGA: Recognized for excellence in mobile gaming operations, LeoVegas’ win at the IGA highlights its commitment to mobile gaming innovation.
      • Supported by industry insiders and clients from all sectors of the igaming industry, the IGA is a prestigious recognition.
• EGR Operator Awards 2023
  • LeoVegas Group achieved remarkable success at the EGR Operator Awards 2023, claiming two prestigious titles:
    • “Operator of the Year” and “Casino Operator”: These awards underline LeoVegas Group’s brand positioning as the King of Casino.
      • Demonstrates LeoVegas’ steadfast commitment to delivering the world’s premier igaming experience.
    • Nominations in Seven Categories: LeoVegas Group was also nominated in seven categories, showcasing its breadth of offerings and commitment to excellence:
      • Sports Betting Operator for BetUK
      • Mobile Casino Product for LeoVegas
      • Mobile Sports Product for expekt

These awards serve as a testament to the dedication of Team Leo and their ongoing efforts to innovate and lead in the industry. LeoVegas Group’s exceptional performance in these awards highlights its position as a leader in the igaming sector.

Conclusion

Overall Summary and Verdict

LeoVegas Group, a prominent player in the iGaming industry, showcases a strong commitment to excellence, innovation, and sustainability. Despite encountering regulatory challenges, the company remains resilient and adaptable, implementing measures to enhance social responsibility and address past shortcomings. LeoVegas’ focus on sustainable business practices and contributions to UN Sustainable Development Goals reflect its dedication to broader societal and environmental well-being.

Transparency: LeoVegas Group scores a 4 for transparency, providing detailed insights through annual reports and regulatory filings, though there’s room for improvement in certain areas.

ESG Strategy: The company earns a solid 5 for its well-defined ESG strategy, with clear targets and initiatives aligned with global sustainability goals.

Compliance: LeoVegas’ compliance score is 3, reflecting occasional regulatory challenges. However, recent improvements demonstrate a commitment to compliance and ethical practices.

3rd Party Rating: With a score of 4, LeoVegas Group maintains a positive public perception, bolstered by industry awards and recognition, though further enhancements could be pursued.

Verdict & Scorecard

Final Score: 4 /5 (Good – Nice choice! Go have fun!)

Strengths:

• ESG Strategy: Well-defined plan with specific targets and initiatives.
• Transparency: Detailed reports providing insights into sustainability efforts.
• 3rd Party Ratings: Positive ratings and awards validate LeoVegas’ efforts.

Areas for Improvement:

• Sanctions and Compliance: Continued focus on compliance and social responsibility measures to avoid future sanctions.
• Transparency Enhancement: Enhancing transparency further through continual improvement in reporting.
• Public Perception: Seeking additional awards and recognitions to enhance LeoVegas’ public perception and industry standing.