Welcome to the latest weekend edition. Self-regarding nonsense, maybe, but this week marks our one-year anniversary since Earnings+More launched. We want to thank all our subscribers and are particularly grateful for all the feedback we have received. Most of all, producing the newsletter has been a blast and we hope to continue to inform and even, dare we say it, entertain as we carry on into our second year. 

Cheers, all. 

PointsBet Q3

• Gross win up 24% to A$124.9m and net win up 18% to A$76.9m.

• Australian gross win up 44% to $78.8m.

• US turnover up 70% to A$818.6m but gross win down 29% to A$19.1m.

• US active rose 96% to 249k.

Little voice: PointsBet’s market share across eight states (i.e. excluding recent launches in New York and Pennsylvania) stood at a blended 3.6%, compared to internal targets of 10%. Only in Illinois was it anywhere close to the target with 8.9% while in the seven others the blended market share stood at 2.4%.

Local heroes: CEO Sam Swanell said the company’s sponsorship deals with NBC’s regional sports network in Illinois played a big part in the group reaching that level of market share and he expected similar impacts from NBC’s DC-Virginia and Maryland networks. 

• Swanell added that Pointsbet was two years into its NBC sponsorship deal and had around $200m left to pay on the $393m-five year deal it has with the network. The total cash and shares value of the deal comes to $520m.        

Launchpad: Recent launches include igaming - which made a debit contribution of A$5.5m during the period - in West Virginia and Pennsylvania as well as sports-betting and igaming in Ontario.

Startline: Swanell said being able to launch with both OSB and icasino from day 1 in Ontario was a major positive and even if the province is not a new market per se, it was showing strong metrics. 

“We’ve got the product that we wanted and are delivering it. It’s doing what we want it to do, which is to appeal to and attract bettors and lean into those better quality clients; it is bearing some of that fruit.” 

Winning battles: PointsBet said in-play was up 22% as a percentage of US handle was up 22% on the prior year with NBA in-play up 26%. For March Madness, in-play rose 116% and PointsBet said in-play represented 49% of total tournament handle, up from 35% last year.

Sam Swanell: “This validates our thesis that in-play betting will continue to increase in the US market as a percentage of overall bets and PointsBet’s superior, optimized client experience in this area will continue to differentiate us from our opposition.”

** Sponsor’s message: Venture capital firm Yolo Investments is home to €551m of equity in more than 70 of the most exciting companies across fintech, gaming and blockchain. It continues to build one of gaming’s most dynamic portfolios as it eyes up seed and A-stage opportunities across the sector. Its dedicated 29-company, €183m AUM gaming fund already houses holdings in fast-growing suppliers and operators, including Kalamba Games, SimWin and ThriveFantasy. Yolo Investments is also on the lookout for LPs as it looks to scale new concepts, including its high roller live casino brand, Bombay Club.

Las Vegas Sands analyst reaction

Island life: Credit Suisse noted that Singapore was the bright spot with EBITDA accelerating as the quarter progressed. With April travel restrictions having eased further, suggesting profits will follow, it means pressure on the upside for Q2 estimates.

• The team at CBRE agreed with the Marina Bay Sands comeback story, raising their estimates for MBS FY22 EBITDA ot $907m but noting that the full recovery to 2019 levels would need a return of outbound tourists from China.

Weighed down: The optimism in Singapore is in contrast to the continued worries over prospects in Macau. Jefferies said the “waiting game continues''. Wells Fargo said the future prospects “remain highly uncertain” given the Covid lockdowns in large parts of China. CBRE said “the fatigue from waiting for a sustainable recovery in Macau is real”.

CBRE: “The successful completion of the concession rebids will remove a long-standing overhang for the shares, but we still need to see signs of a sustainable reopening and fundamental recovery in GGR to get more constructive on Macau.”

Running on fumes: The team at Macquarie suggested that this quarter, as with previous quarters, was a “sentiment” quarter where they “put little value in the financials”. But they favor LVS over other Asian-focused operators.

Macquarie: “Following the $6.25bn sale of Venetian/Palazzo, LVS remains well-positioned to weather the storm and continues to evaluate integrated resort opportunities in North America, Asia as well as continue to look at new investments in digital.”

GAN debt raise

Giving with one hand: The PAM platform provider and owner of the B2C Coolbet operation has taken out a $30m loan with Beach Point Capital and says it is poised for a "near-term opportunistic implementation" of a $5m share buyback. 

• The term loan is repayable in four years and a half years and carries a 9.5% yearly interest rate.

Home improvement: GAN added it had recently begun the "implementation of cost controls" along with other strategic initiatives that are expected to accelerate adjusted EBITDA generation and improve profitability. Alongside the share buyback, GAN said the new money would be "focused on funding existing high-return B2B investments and future opportunistic investments".

Deutsche Bank Mar22 OSB estimate

On the March: With the data from most states in, the DB team suggest Mar22 sports-betting GGR to come in at ~$590m, up 62% on Feb22 (excluding Arizona) and up 68% YoY on new markets expansion (mainly New York). 

• Based on the markets reporting so far, same-store GGR is up 12%.

• Hold up: DB suggest hold rose sequentially from 4.9% to 7%.

FanDuel dominance: DB compared the markets shares across a subset of seven states (PA, NJ, NJ, NY, IN, IL, IA, MI), which shows FanDuel’s leadership bouncing back to 42.5% market share, followed by DraftKings (16.2%), BetMGM (10.8%), Caesars (9.5%), Barstool (1.7%) and others (19.3%).

Eilers & Krejcik Online Casino Tracker Q1

Easy does it: Online casino GGR was up 51% YoY to $1.2bn in Q122, according to the EKG Online Casino Tracker. Michigan benefited from “easy year-over-year comps”, having regulated in Jan21, while Connecticut’s Oct22 opening also contributed to the total. 

• The report noted that mature markets New Jersey and Pennsylvania had underperformed against the national growth rate, with 31% and 23% YoY GGR rises respectively. 

• EKG said it expects growth to trend at 15%-25% in both states in the short term. 

National leader: BetMGM continues to lead in national market share with 27.9%, up from 24.5% in Q121. DraftKings is second with 19.7%, up from 17.2% a year prior. EKG added that DraftKings has been regularly outperforming FanDuel in NJ, PA and MI when it comes to share of GGR in part thanks to its better performing app. 

Number to notice: EKG estimates that Boyd Gaming’s Stardust online casino brand would provide access to 33.1% of the US adult population via retail casino licensure and market access partnerships. 

New Year spike: BetMGM hits more than 50K app downloads in Jan22. 

Sector watch - streaming

Brutalism: “If you miss a number, if you miss a sales expectation, it’s a brutal reckoning,” Joseph Amato, chief investment officer at Neuberger Berman, told the FT in the wake of Netflix’s poorly received first-quarter earnings statement.

Minus marks: For the streaming sector, the news got worse when Warner Bros Discovery brought a swift end to CNN+, the news channel’s attempt at a subscription service that was killed barely a month after launch. 

• According to reports, the bosses at the newly-merged business looked at the early subscriber numbers and decided the best route was to pull the plug.

• Warner Bros Discovery then doubled down on its streaming skepticism when it said it would look for other potential savings with its streaming businesses and “would not overspend” on content.

Sounds familiar? Analysts at Lightshed noted that post-Netflix, it was clear that while long-term TAM for subscription video on demand remained the same (between 500m to 1bn subscribers worldwide) “it will take far longer to get there”. 

Lightshed: “With TAM in question… it is becoming clear that the profitability of SVOD may not be nearly as compelling as investors hoped and certainly nowhere near as profitable as the legacy businesses that streaming is replacing.”

Sporting chance: Two streaming companies have their eyes on another juicy TAM, of course. FuboTV and now DAZN have aspirations to match sports streaming with sports betting. But in the case of both, establishing first whether sports streaming can be profitable is a work in progress.

Dare to dream: FuboTV’s David Gandler told CNBC last November that he believed that sports consumers are willing to pay higher prices for live sport. “We’re aggregating all of the most expensive sports content in the world,” Gandler said.

DAZN remains highly loss-making, recording a loss of $1.3bn in the year to December 2020. Enthusiasm for being called the Netflix of sports might be in the wane but it remains a strong player in European markets with rights to the Italian Serie A and the Bundesliga in Germany where it shares the rights with Sky Deutchland.

Further reading: Lightshed: Is it time for #GoodLuckStreaming? And Time to Sound the SVOD alarm.

What we’re writing

Scott Longley looks at the issues for gambling with the UK’s cost-of-living crisis. For EGR (paywall).

​​For Wagers.com, Jake Pollard looks at how Kambi is looking to offer operators ‘lighter’ B2B options. 

What we’re reading

Pin the tail on the donkey: The latest Pinchpoint newsletter from the Department of Trust takes a look at the latest rumors around the likely affordability limit in the UK and suggests the government will set it at £500.

The Pinchpoint

The £500 affordability question

Welcome to edition #2 of Pinchpoint. Thank you for subscribing. ICE half felt like a return to “business as usual”. Pinchpoint enjoyed seeing many happy impromptu reunions as old friends collided in the carriageways, whilst absolutely no one knew where they were going, unable to triangulate directions against the usual landmarks of IGT, Playtech, Microga…

Read more

4 hours ago · Wagers.com Earnings+More

From pitch to reality: Socios describes itself as a “blockchain-powered fan transactional app” and just 47% of token holders have ever voted in a poll. “This is very different to the “fan engagement” device being extolled by clubs’ in-house media and on social media channels,” says The Athletic. 

Datalines 

Nevada Mar22: Statewide GGR rose 26.8% YoY and +24.6% MoM to $1.35bn, with Strip GGR up 48.8% to $746m, Locals GGR was up 7.4% to $278m. March Madness helped push sports betting handle up nearly 35% to $862.8m but GGR was down 6% to $36.9m. Of the total GGR, $19.1m came via mobile and $17.8m from retail for a win rate of 4.3%. 

• Hoop dreams: Total basketball handle, including College and NBA, reached $501.5m. NCAA handle is estimated to have been worth ~70% of total hoops wagering but does not include the Final Four or the championship games which occurred in April. 

• Positives: The teams at Wells Fargo said Q1 Strip numbers augured well for Caesars, MGM and Wynn, while Locals’ performance (+24.5% MoM) reflected “ongoing demand recovery/lower COVID case counts and some benefit from NV's mask mandate coming off in February”.

Colorado Mar22: Betting handle was up 68% YoY and 14.8% MoM to $505.6m,  online and mobile betting recorded $500.2m of the amount, $5.4m was wagered in retail outlets. GGR was up 38.2% YoY and 43.95 MoM to $28.2m. saw was by far the most popular sport to wager on in Colorado in March, with A total of $218.4m was bet on basketball, NCAA  basketball saw $96.9m in wagers, while parlay totalled $99.7m. Players won $477.4m during the month, the state recorded $1.3m in tax revenues.

France FY21: The French gambling sector generated GGR of €10.7bn in 2021, a rise of 7% compared to Covid-hit 2020 but just below the €11.1bn total of 2019, according to the latest data from national regulator ANJ. Online sports betting and poker sites generated €2.2bn of GGR. GGR from national lottery Francaise des jeux, land-based horse racing tote operator Pari Mutuel Urbain and the country’s land-based casinos accounted for €8.6bn of the total, a rise of 3.6% on 2020. 

Newslines 

One nation brag: Bragg Gaming will provide its Player Account Management (PAM) platform and gaming content through its Oryx igaming solution to Betnation.nl, a new operator set to go live in the Netherlands later this year.

World of wonder: Light & Wonder and Konami Gaming have signed a partnership that will see Konami add its gaming content to LNW’s online casino platforms in Michigan, Pennsylvania, and New Jersey. LNW supplies brands such as Barstool Sports and Golden Nugget.

By the by: Betting solutions provider Betby will provide its sportsbook platform to the crypto-focused betting brand BC GAME. It will also supply its gaming content and esports titles to the new operator. 

On social 

MichaelJMurphy @MichaelJMurphy

From Rush Street regarding compliance in Ontario (direct from AGCO): I still read this as bad for consumers. One of the roles affiliates excel at is evaluating the value of promotions - now affiliates cannot use their voice/reach to warn about predatory offers, seemingly.

April 28th 2022

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Calendar

• May 2: MGM Q1

• May 3: Red Rock Resorts, Caesars Q1

• May 4: Flutter, RSI Q1

• May 5: LeoVegas, Bally Corp, Penn National Gaming, VICI Properties, AGS Q1

• May 6: DraftKings Q1

Contact us

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com