Following on from E+M’s reporting of a leak of some more of the details from the UK government’s gambling White Paper, the subsequent news suggests there will be further delays (see below) as we await a new Conservative administration. But as has been noted elsewhere, parochial issues around legislative timing aside, the wider sector should perhaps become well-versed in the issues around affordability checks. The UK is highly unlikely to be the only jurisdiction that will look at this particular issue in the coming years.

Tired of waiting for you.

SNAI talks rumors

The obvious play: Sources suggest Entain is in talks to buy Snaitech from Playtech. It is thought the talks pre-date the failure this week of TTB Partners to come up with a bid for Playtech. ”They’re an obvious buyer,” suggested one source.

• You must remember this: Back in February when the Aristocrat bid for Playtech was nixed, Playtech said it was “evaluating other attractive M&A proposals” which was said at the time to include the possibility of a sale of Snaitech.

• JKO in the pack: A sale of Snaitech was also a part of the doomed bid discussions involving the Eddie Jordan-backed JKO.

• Execution: The possibility of a sale of Snaitech to Entain was also raised yesterday by analysts at Peel Hunt in a note discussing the success Entain has enjoyed with its Enlabs acquisition. The Peel Hunt team suggested it proves Entain’s M&A execution capabilities.

History: Playtech originally bought a 50% stake in Snaitech in 2018 for €291m which valued the company, including its debt, at €846m.

• Results recap: In 2021, Snaitech revenues came in at €584.7m, up 12% YoY though down significantly from the €829.7m achieved in 2019 as the retail and gaming machines businesses continued to be affected by Covid closure measures.

• Online driver: The online business was up 45% to €229.9m helping to drive overall adj. EBITDA for the business up 38% at €182.6m.

• Up to date: In yesterday’s statement, Playtech said Snai had an “excellent first half” driven by its online business, retail recovery and favorable sports results.

Both Playtech and Entain offered no comment this morning.

UK White Paper delays 

Waiting for Godot: The Daily Mail reports that the UK white paper on gambling reform has been delayed until a new Prime Minister takes office. Government sources have told the Mail it was “inappropriate to 'bind' the new administration” with new guidelines pushed through during the interim period.

• Don’t let’s do anything. It’s safer: This scuppers the rumors that the publication date had been penciled in for this coming Tuesday.

Not happy: Former Tory leader and now anti-gambling campaigning MP Tory MP Iain Duncan Smith said he was very “disappointed.”

• I can’t go on. I’ll go on: “There was an opportunity to get this done long before this leadership election. It’s not canceled, just postponed - so it will be for the new leader. I’m not going away, I will keep fighting for reform.” 

Further reading: The Pinchpoint newsletter discusses the implications of what was said on affordability this week.

The Pinchpoint

White Smoke Rises

Welcome to the latest edition of Pinchpoint. So, now we kind-of-really-know the UK government’s plans the gambling sector thanks to some comprehensive leaking to the Earnings+More newsletter. We had heard that publication had been pencilled in for next Tuesday, but then the Daily Mail’s Tom Witherow broke the news that the government had decided this was…

Read more

an hour ago · Earnings+More

** 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.

As a proud sponsor of Earnings+More, Yolo Investments wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat.

Rush Street analyst note

When yes means no: After a meeting with key RSI management, analysts at JMP suggest that even if the Californian online sports-betting ballot measure passes in November, RSI might still opt out of market entry due to the prohibitive costs.

• High price of entry: JMP note the license fee for an operator like RSI would be $100m but that it “might not garner the return necessary to justify operating in the state”. 

• Existing footprint: “If the economics do not work, we expect RSI to focus on its existing, iGaming-focused footprint”, they add.

Regional gaming Q2 preview

No buffer: Macro conditions and pressures on discretionary spending will mean hits to margins that “will be difficult to buffer” this quarter. As a result the analysts at Deutsche Bank have reduced their FY23 and FY24 forecasts for all three Boyd Gaming, Golden Entertainment and Red Rock from 5% to 20% against consensus.

• Peak locals: The Las Vegas locals market “has already experienced its cyclical peak”, DB said, but it remains healthy thanks to “population growth and higher average household income levels”. 

• Keeping it real: In addition, all three operators are better positioned, relative to peers, in the event of an economic downturn, given their healthy balance sheets, significant free cash flow generation, and real estate ownership.

No buffet: DB however also pointed out spend per visitor had softened in recent months, but this was due mainly to the elimination of lower-spend customers whose “typical patronage involved a trip to the since-shuttered buffet or on a low-value promotional offer”. 

Banner quarter: Meanwhile, the team at Wells Fargo expects a “strong” Q2 Strip performance from MGM, Caesars and Wynn Resorts reflecting weekend occupancy in the low 90% and recovering group/convention business at ~80% of Apr-May19 attendance.

• But the Wells Fargo team are less enamored of the regionals outlook where recent data across 17 regional markets showed visitation levels had dropped 5.9% for a third month running in June. 

• Pressure point: The team repeated their suggestion that a flattish June marked an inflection and was evidence that gaming consumers “may be feeling increased pressure”. 

• “If this trend holds or worsens, as many investors anticipate, 2023 regional estimates for mid-single-digit revenue growth over 2019 may need to come down.”       

Inspired analyst updates

In the mood: Moody’s has upgraded Inspired Entertianment’s credit rating by one notch to B2 from B3 citing a positive outlook for the next 12-18 months.

• B2 or not B2: Moody’s said Inspired has “experienced a strong rebound in revenues” since the lifting of Covid restrictions around betting shops in the UK. 

• On appeal: They added that despite the trends towards online gaming and betting, Inspired’s gaming machines “remain an appealing form of entertainment”. 

Not hurting yet: Meanwhile, analysts at Roth suggested that recent commentary from Entain indicates strength in UK retail. While Entain is not an Inspired client, the performance of the retail estate (~40% of total UK retail betting shops) indicates the worsening economy is “not yet” impacting betting shops GGR.

• Offset: In terms of digital, Entain’s commentary on worsening conditions across Europe doesn’t bode so well for Inspired although the Roth team suggest any weakness can be offset by new launches in North America.

Jefferies digital betting matrix

As you were: FanDuel, DraftKings, BetMGM and Caesars continue to lead the US OSB market in terms of monthly active users (MAU) and downloads, the heaviest-weighted data points in Jefferies’ betting matrix for June. 

• Minor placings: Barstool, BetRivers and PointsBet moved up one place to fifth, sixth and seventh at the expense of Bet365 which dropped to eighth.

• Tipping the wink: In terms of momentum, Tipico saw a spike likely driven by the M&A speculation linking the group to a potential takeover by Fanatics, noted Jefferies.

Future Anthem fundraise 

A is for anthem: AI and personalization startup Future Anthem has closed a Series A fundraise to help it accelerate growth in the North American sports-betting market. The amount raised was not disclosed.

• Bettor bet: The financing was led by Bettor Capital and included Lloyd Danzig’s Sharp Alpha Advisors, industry investor Benjie Cherniak and a number of other investors to complement existing shareholders.

• Early backer: Bettor Capital is one of the leading early-stage investors in the OSB and icasino space in North America and is led by ex-FanDuel and Barstool Sports executive David VanEgmond.

Amped up: Future Anthem’s Amplifier AI analyzes data to help operators optimize their performance and enhance customer experiences in real-time. The company is led by CEO Leigh Nissim.

Sector watch - esports

Huddle up: HUDstats will provide its range of esports data and analytics products to Sports Information Services (SIS) as part of a new multi-year partnership. As part of the partnership HUDstats will provide SIS with real-time data for esports-betting purposes including NBA2K and FIFA streams.

• Esports launch: SIS launched its esports-focused vertical three years ago and has signed supply deals with operators such as Bet365 and MaxBet. The HUDstats deal follows the partnership it signed with Oddin.gg for odds, trading support, live streams and betting notifications.

There’s a riot goin’ on: League of Legends publisher Riot Games has partnered with React Gaming to provide the esports-betting operator access to its League of Legends‘ API. 

• Through the partnership React will give players on its peer-to-peer tournament platform Compete.gg the ability to track performance and historic data from previous League of Legends matches. 

• React also recently signed a data supply deal with Oddin.gg for its Loot.bet esports betting website. 

Unique monitoring: Separately, Kambi has been talking up its ability to monitor esports-betting integrity, suggesting in late June that the monitoring of esports betting was no different to other sports, though with some unique challenges. 

• Get physical: “For the vast majority of sports it’s necessary for the participants to be physically present,” the company SVP for risk and compliance Oliver Lamb said. “This isn’t the case for esports, so organizers have reduced access to them around the event.” 

• With governance fractured, integrity messages are not always as strong as they could be and brother is player understanding of integrity issues.

Earnings in brief

Gauselmann: Chairman Paul Gauselmann said the pandemic had “bottomed out” after his company reported H1 revenues at €1.76bn, up slightly on the figure for the same period 2019. The company said the first two years of the pandemic had cost the company €2bn in sales after Covid forced the closure of its 1,000 gaming outlets for up to nine months in total. The company added that 60% of sales now came from outside Germany with the UK and Spain being key markets.

• Schadenfreude: The company complained about “ever increasing” restrictions in Germany where the number of gaming machines has been reduced by 30%. This has also “increased the appeal” of illegal online offerings.

• Halt wer da hingeht? The company noted media reports that the German Federal States’ Joint Gambling Authority has “already started calling on illegal providers” to discontinue their activities.

Datalines 

Illinois: Sports-betting GGR came in at $67.3m, down 4.6% MoM. Handle was down 9% MoM but up 50.7% YoY to $764.6m.

• Leaders: FanDuel once again led the field, with nearly 50% of GGR at $32m, followed by DraftKings with 11% of GGR at $6m.   

Further reading: H/T to Daniel Stone from GamblingCompliance.com who points out that FanDuel generated more revenue from parlays than BetRivers, PointsBet, Caesars, Barstool and BetMGM did collectively from all bets in Illinois between March and May.

Daniel Stone @DanielStoneGC

FanDuel generated more revenue from parlays than BetRivers, PointsBet, Caesars, Barstool and BetMGM did collectively from all bets in Illinois between March and May. The IL market has been energised in recent months by the removal of a requirement for in-person registration.

July 14th 2022

1 Retweet3 Likes

 Indiana: Casino GGR for June was down 3.8% YoY and flat QoQ to $197.2m from a neutral calendar. Sports-betting GGR was down 38.1% YoY and -48.6% MoM to $15.8m while handle rose 4.1% YoY but was down 16.9% MoM to $256.3m.

• Leaders: FanDuel was the leading mobile app in handle and GGR market share with 33.3% and 35.1% respectively. DraftKings was second with 29.7% and 22.3%, BetMGM was third with 13.9% and 20%.

Newslines 

DAZN is in talks to acquire Eleven Sports from Italian entrepreneur and Leeds United Football Club owner Andrea Radrizzani, according to the FT. Eleven has an “eclectic” mix of sports broadcast rights including Formula One in Poland, and the Uefa Champions League and the next three seasons of the English Premier League in Portugal.

MGM Resorts and BetMGM have renewed their official sports-betting partnership with the MLB which includes the use of official data.

IMG Arena will supply PointsBet with more than 40,000 sporting events as part of a two-year streaming partnership between the two groups including streaming rights to the MLS, ATP Tour and EuroLeague basketball.

Low6 and Inside the Pocket have agreed a strategic partnership whereby Low6 will deliver a selection of its free-to-play products to ITP’s content aggregation platform and marketplace. 

Evolution soft launched its live casino operations in Connecticut this week with FanDuel and DraftKings. 

Racing and Sports (RAS) will continue to provide its horse and greyhound racing data and feeds to Entain Australia for the next five years after the two groups extended their partnership. 

Betfred will be the official betting partner of the Cincinnati Bengals when legalized sports-betting in Ohio launches in January.

Gaming Innovation Group has signed a head of terms agreement with the UK casino group Aspers for an initial three-year contract. GIG will supply its fully-managed solution to enable Aspers’ transition into an online gambling operation.

Oddschecker and Yardbarker (part of Playmaker) have agreed a content partnership including the development of a new sports-betting hub which is expected to launch for the new NFL season.

What we’re writing 

Flaw in the evidence: Scott Longley wrestles with the partial truths of gambling’s public health debate. For iGB.

A lot to learn: Jake Pollard looks at what the US sector should take from the UK’s gambling dramas.

What we’re reading

Love/hate: Jonathan Bierig from Ultimate Odds on the ins and outs of UX. 

On social 

What descending at 80kph feels like 

Tour de France™ @LeTour

ICYMI 👀 🇬🇧 @tompidcock with a crazy descent! 🇬🇧 Tom Pidcock a fait une descente folle ! #TDF2022

July 14th 2022

106 Retweets700 Likes

Calendar

• Jul 20: Las Vegas Sands

• Jul 21: Betsson Q2, Evolution Q2

• Jul 22: Kindred Q2

• Jul 26: Boyd Gaming Q2

Contact us

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com