Catena Media has implemented cost-saving measures after reporting a 40% dip in EBITDA for Q1 this year. Adjusted EBITDA fell to €0.9 million, from €1.5 million in Q4 2024. Similarly, revenue dropped to €9.8 million, down from €10.2 million in Q4 2024 and €16.0 million in Q1 2024.
Catena’s preliminary earnings report on Tuesday showed the decline and explained the drop by stating, “The lower margin, which follows two successive quarters of improvement, was attributable to a shift in the revenue mix towards more subaffiliation, where gross margins are lower, and to a modest increase in personnel expenses.”
As a result, 50 staff have been made redundant despite CEO Manuel Stan declaring, “We do not foresee any further staff cuts in the near future” back in November last year. Staff have been continuously cut over the last few years, and the company now employs just over 100 people, down from 455 in 2021.
The affiliate marketing group believes the latest cuts will “deliver annualised cost reductions of close to €4.5-5.0 million.”
Sweepstakes casinos to boost business
Sweepstakes casinos have been identified as the company’s future source of revenue stream by CEO Stan. Despite increased regulatory scrutiny, Stan believes the unregulated gaming platforms are not at risk.
Stan commented, “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.”
Revenue in North America only slightly declined by 1.1% from €8.9 million in Q4 2024 to €8.8 million in Q1 2025. The company established a US hub in Miami this year, and will be relieved by the news that Florida lawmakers are no longer considering bills to ban sweepstakes.
State of play for sweepstakes
Several sweepstakes operators have, however, exited New York after a bill proposing stricter regulations made progress. The bill has not yet been made into law, but it passed through another committee this week.
With the size of the Big Apple market, an explicit prohibition like Michigan and Washington have, could make a big impact on operators and affiliates. It is estimated that unregulated New York online casinos generated $4.3 billion in revenue last year.
Several other states have also considered bills aiming to criminalize unregulated casinos. Montana just needs a Governor sign off, while Connecticut, Louisiana, and New Jersey also have legislation in discussion.
Traffic decline forces affiliates to remodel
Catena saw a marked decline in traffic from some of its prominent websites, including Bonus.com and PlayUSA. Partnerships with Daily Racing Form and Lee Enterprises also failed to make an impact.
Other affiliates have similarly struggled this quarter, with Raketech and Gentoo both seeing declines in revenue. Both companies lost money in Q1, with Gentoo’s decline mainly the result of increased regulation in Brazil.
All three companies are cost-cutting and altering their business models away from SEO-heavy websites. The next quarter will be insightful to see whether this is a lasting trend or if the reactionary measures are effective in cashing in on overall growth in the gambling affiliate industry.
The industry is worth an estimated $17 billion and is expected to grow to $27 million by 2027. Companies have to be careful of an ever-changing landscape of regulation changes and updates to SEO algorithms to keep cashing in on the growth.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling.
