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Read Full BioCatena Media has announced cost optimization measures that will make over 50 people within the company redundant, affecting a mix of full-time employees and contractors.
Sources close to the company have informed CasinoBeats that several VP roles and administrative functions have been eliminated.
Catena’s preliminary earnings announcement suggests the lay-offs are in response to the Q125 EBITDA margin of 9%, down from 15% in Q424.
The Malta-based affiliate has reported a 40% drop in EBITDA quarter-on-quarter, from €1.5m in Q424 to €0.9m in Q125. In the same period, the group recorded a 3.9% decrease in group revenue from €10.2m in Q424 to €9.8m in Q125.
The company has suggested that the latest round of job cuts should “deliver annualised cost reductions of close to €4.5-5.0 million.” According to public information, the company had already reduced its headcount by over 60% before the latest round of redundancies.
Catena Cuts Workforce Despite Prior Restructure
During the November 2024 earnings call, CEO Manuel Stan assured investors that the company would not make any further short-term redundancies. “We are confident now that we have the right structure in place.”
“We have put a lot of work into this over the last couple of quarters, and now we feel that we’re in a good place. We do not foresee any further staff cuts in the near future,” he continued.
Stan also remained confident that the company could achieve “double-digit growth” for 2025.
Sweepstakes: “Future Term Bulletproof” Strategy
Catena’s primary revenue stream comes from North America, where revenue dropped by 1.1%, from €8.9m in Q424 to €8.8m in Q125.
Leadership has outlined that sweepstakes are the company’s number one priority. On the Catena February 2025 earnings call, Stan dubbed sweeps a “future term bulletproof” strategy.
When addressing analysts concerns around regulatory pressures, Stan added: “Regarding the regulatory pressure, I think we continue to see some pressure from some of the states. So far, we haven’t seen any of the bigger states, if you will, doing anything or taking any actions. So I think that, for the time being, we’re still in a very good position.”
“Overall, we haven’t seen anything significant to put us in a position that we need to be concerned about the immediate future of sweepstakes,” he concluded.
In February, the company also publicly announced that it had begun establishing a US hub in Miami, Florida.
This is in spite of the fact that the Sunshine State considered two bills seeking to prohibit sweepstakes. The bills ultimately failed, given that they also sought to strengthen the Seminole’s monopoly over legalized gambling in the state.
Regulatory Uncertainty Clouds Catena US Plans
Despite Stan’s assertions, bills prohibiting sweepstakes have been prevalent across US legislature this session. Proposed legislation to outright ban sweeps has failed in Arkansas, Florida, Maryland, and Mississippi thus far.
Active legislation remains in Connecticut, Louisiana, New Jersey, New York, and Montana. Montana’s bill is pending Gov. Gianforte’s signature and is the closest to becoming law.
Connecticut and New York have bills heading to the Senate, while New Jersey’s Assembly Bill A5447 passed unanimously through the Assembly Tourism, Gaming, and Arts Committee yesterday.
Several operators, including Hello Millions, SportsMillions, PlayFame, SpinBlitz, Rolling Riches, and High 5 Casino, have left the state of New York after lawmakers introduced multiple bills targeting sweepstake operators.
Although California has not introduced legislation, Stake is currently being sued in California. Plaintiff Dennis Boyle alleges that Stake.us constitutes an “illegal gambling website” that is in breach of the California civil code, given that it provides unlawful gambling and engages in “unfair business practices.”
Bonus.com and PlayUSA Struggle to Maintain Market Share
Catena’s flagship brands, such as Bonus.com and PlayUSA, have also struggled. The company has struggled to arrest site decline and achieve leadership’s previously touted organic growth.
Bonus.com has seen a traffic decline of 67%, from over 450,000 monthly users at its peak to approximately 150,000.
PlayUSA has seen a reduction in traffic from over 500,000 at its peak to below 100,000.
Media Strategies Fail to Offset Traffic and Revenue Drops
Catena has previously signed media partnerships with companies such as Daily Racing Form, despite Google’s site reputation abuse (SRA) penalty being handed out to major outlets such as Forbes and CNN.
Another notable partnership was signed with Lee Enterprises, encompassing subfolders such as tucson.com/sports/betting and buffalonews.com/sports/casinos.
The Google SRA penalties made such partnerships high-risk, and the company’s financial results imply that the deals have not paid dividends, with Buffalo News failing to gain any traction.
Sources close to the company have attributed its continued decline to a shrinking affiliate revenue model, a lack of product diversification, and issues stemming from Google policy adjustments.
Strategic Financial Rebalancing Underway
Catena has also announced that it will suspend interest payments on its hybrid capital security until further notice as it attempts to “materially ease the company’s financial burden.”
“Further financial structure optimisation is needed to create headroom for the tech-facing investments the group must make to drive the business forward,” it added.
The company has not responded to a request for comment.
