Earnings+More - May 20: Weekend Edition #47
May 20: Weekend Edition #47Playtech TTB deadline, Aristocrat H122, MGM analyst update, Sportradar analyst reaction, sector watch - payments +MoreSo, where are we on the optimism/pessimism pendulum right now? The message from the first-quarter results, that the betting and gaming sector is recession resilient, seems to have gotten through loud and clear to investors going by the general sector performance this week. DraftKings is up 22% on the week, Flutter is 4.5% better and Penn National has posted a 3.5% gain. But other key stocks - MGM and Caesars notably - are down on the week. As we end the Q1 earnings season, it feels like we are at a crossroads. But with the market’s compass currently swinging wildly, the direction forward is not as discernible as it was. Tumbling dice. Click below: Playtech TTB deadlineBeat the clock: The Playtech board has issued a further update with regard to TTB Partners’ potential offer for the company and says it now has until market close on June 17 to make an offer.
Stay strong: Playtech further noted that the independent committee “continues to explore options for maximizing shareholder value, and reiterates the strong performance of the group, as announced to the market on 5 May 2022, which has continued through the month of April and into the month of May.” Snail pace: Analysts at Peel Hunt said that after 15 weeks “it is hard to imagine the pace of that progress” but that perhaps “volatile markets are the cause”.
Share price reaction: Playtech was up almost 10% in early trading. **Sponsor's message: Spotlight Sports Group (owned by Exponent Private Equity) is a leading technology, content and media business specialising in sports betting. Join Spotlight Sports Group and The Parleh for a live webinar on Wednesday, May 25, as we take a deep dive into the launch of Ontario’s online sports betting market. Register for the event here. Aristocrat H122
Walls come tumbling down: Having been balked in its attempts to buy Playtech (see above), Aristocrat said it would be pursuing a buy-and-build policy in real-money gaming. Asked on the earnings call whether its needed the A$3.3bn of liquidity it had raised as part of the Playtech bid process, CEO Trevor Croker said the scale ambitions remained “transparent”.
Recession watch: Asked about the current climate, Croker said the “sentiment from the current quarter seems to be strong”. He noted the company has more long-term deals in place and a lot more visibility than previously. MGM Resorts analyst updateStrong and stable: Deutsche Bank said MGM is likely to continue producing stable results and strong margins in both Las Vegas and regional markets through to the end of 2022, “assuming customer spend levels remain healthy”. However, the DB team also lowered its target multiple for the group’s BetMGM stake.
Diller news: The Nevada Gaming Commission has limited board director Barry Diller to a two-year license for his ownership stake in MGM Resorts International while he remains under investigation for insider trading by the Securities and Exchange Commission and the Justice Department. Sportradar analyst updateSo solid crew: Deutsche Bank said Sportradar produced solid Q1s this week despite lower than expected EBITDA due to the increased costs of sports rights. DB said there remained “potential negative impact from the Russia/Ukraine conflict” but management was positive about its managed trading services business and strong US growth.
Revenues and costs up: Sportradar’s US betting revenues were up 114% YoY, advertising was up 300% YoY and AV revenues were up 100%.
NeoGames analyst updatePositivity: The team at Macquarie said it was positive on the outlook for NeoGames despite the group reducing 2022 revenue guidance by $1m to $91-96m, midpoint unchanged at $93.5m (+11% YoY).
Sector watch - paymentsWar is stupid: To add to online gaming’s worries around the Netherlands and Germany, Paysafe said in its Q1 earnings call that the war in Ukraine was adding further stress, particularly as regards to payments in Russia.
On the bar tab: Better news for Paysafe comes from the US where its Skrill subsidiary has recently signed a banner deal with Barstool. Skrill will soon be integrated into the Barstool Sportsbook app, making it Skrill’s first tier 1 in the North American market.
Crypto bros: There was less online gaming chat at FIS - home to WorldPay - which appeared to be more focused on its crypto partnerships. CFO Stephanie Ferris said the company now processes for four out of the top five crypto exchanges.
DatalinesMississippi Apr22: Gaming revenue was down 21.1% to $206.1m, sports betting handle was up 7.7% to $35.5m but revenues dropped 2.1% to $4.2m Sweden Q1: Online betting and gaming turnover rose 2% YoY to €400m. State lottery and slot machine games revenues declined 12.5% to €1.6m and €114m. State-backed casino operator Casino Cosmopol’s revenues dropped 28% to €9.8m and commercial casinos’ revenues increased 87% to €3.7m. National lottery sales were down 3% to €83.7m.
UK Q4: Online GGY was down 1% QoQ to £1.2bn and stakes were down 2% to £19bn. Online slots generated £17.9bn of that total. March saw the highest level of wagering, with 6.3 million accounts active thanks to the Cheltenham Festival happening during the period. Betting stakes were up 7% QoQ to £493m.
NewslinesConditional approval: Accel Entertainment’s $140m acquisition of Century Gaming has been approved by the Nevada Gaming Commission, but the regulator also set as a condition of the approval a two-year limit on all applications. The commission said it had concerns on due diligence, documentation, fines in other jurisdictions and inconsistencies in the company information Accel provided. SBK Betting exchange Smarkets will launch its SBK sportsbook in Iowa and Indiana later this year. Smarkets has partnered with Affinity Interactive for its launch in Iowa. EBET subsidiary Esports Marketing Technologies has agreed a deal with loyalty and engagement platform Captain Up to provide in-play challenges, achievements, and a rewards shop. Bragg Gaming says it has received approval from the Pennsylvania Gaming Control Board for igaming. DAZN Bet has appointed Simon Gatenby, previously performance marketing director at Entain, as chief marketing officer. It has also raided Entain for Shane McLaughlin who has been appointed managing director for UK and Ontario. On socialCatena Media CEO talked a bit on the 1Q22 call about their current revenue model in the US, why their preference for a CPA model versus a revenue share model. So just some color on how 'el chorizo' gets made between an affiliate and operators. Highlighting what stood out to me... Calendar
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Wagers.com Earnings+More podcast #9
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May 19: ‘We live in a big data world’ says Sportradar
Thursday, May 19, 2022
Sportradar Q1, DraftKings investor presentation, Acroud Q1 +More
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GAN Q1, DraftKings analyst update, New Jersey, Louisiana, Massachusetts data +More
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Gaming's recession risk, the week in shares, iGaming Next day two, startup focus - BroThrow +More.
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