Earnings+More - Sep 9: Weekend Edition #63
Sep 9: Weekend Edition #63AGS nixes Inspired talks, FanDuel/Churchill Downs, LiveScore fundraise, Kambi M&A, sector watch - US TV sports +MoreThought bubbleThe news that LiveScore has secured a £50m strategic investment from Switzerland-based media conglomerate Ringier says a lot about investment in the online betting and gaming space. Two years ago, this would have been a SPAC; now, though, instead of public money it is private money that is coming in. Alongside the news that AGS and Inspired failed to agree on a price for a deal, it adds to the impression that money for corporate activity is tighter than previously. AGS nixes Inspired talks
Let’s call the whole thing off: In an SEC filing yesterday, AGS said discussions over the approach from Inspired Entertainment had been concluded without agreement on a transaction. Analysts said the two couldn’t agree on a price.
Back where we started: However, the team at Roth pointed out that regardless of these specific talks coming to an end a residual AGS premium should remain as the negotiations have revealed that AGS is up for offers. “We believe other potential buyers might be interested as well,” the analysts added.
**Sponsor's message: Spotlight Sports Group is a leading technology, content and media business specialising in sports betting. Each week our experts produce a newsletter covering the biggest stories in the global sports betting industry. Sign up for our newsletter here to have it land in your inbox this Friday. For more information visit: spotlightsportsgroup.com NFL kickoffBreaking data: GeoComply said geolocation volumes for last night’s NFL kickoff game were up 77% YoY from 12.7m to 22.6m. Geolocation volumes in New York for its first full season of NFL came in at 3.7m. OSB promotions analysis
Let’s get rational: After tracking promotional offers in the last few weeks, the team at Wells Fargo suggests “operators might be getting more rational” with promotions as of Aug 30 around 12% below the prior week.
FanDuel/Churchill Downs
Day at the races: As of January, FanDuel will pay for tote betting services and technology from Churchill Downs Inc. to enable horse wagering on FanDuel’s US platforms. CDI will receive content fees when FanDuel accepts wagers on CDI-owned content.
Welcoming the deal, the team at Jefferies said it comes “at little cost” to CDI, albeit with the slight potential for cannibalization of its own TwinSpires business.
LiveScore fundraise
Ringier-ring-a-roses: The new money from privately owned Switzerland-based media conglomerate Ringier’s newly formed sports media group values LiveScore at $500m, which it said would go towards accelerating growth in central and Eastern Europe. LiveScore’s current markets include the UK, Ireland, the Netherlands and Nigeria.
A little bit of history: LiveScore was spun out of Gamesys in 2019 and ex-Gamesys founder Noel Hayden remains the executive chairman and a substantial shareholder.
Platform change? Sadi suggested LiveScore might be open to switching providers from DraftKings/SBTech. “We own our own PAM; it’s custom built for the media business and betting business. We own all our front ends.”
Who is Ringier? Ringier Sports Media Group (RSMG) announced a partnership in July with Sportradar aimed at the African market and built around a sports platform called Pulse. RSMG also owns Sportal Media Group and Digital Ventures OOD in Bulgaria, Gazeta Sporturilor in Romania and Sportal in Serbia.
Kambi-Shape M&A
Shape of things to come: Kambi has moved to enhance its backend offering with the addition of Shape in an all-cash deal, which could rise to €78.1m. The Copenhagen-based Shape builds customizable frontend technology and includes Danske Spil and Norsk Tipping among its client roster as well as current Kambi clients BetWarrior and JACK Entertainment.
Fundraises in brief
Online analyst update
Last exit to Brooklyn: Assessing the leading players, the team at JMP suggest DraftKings, FanDuel, and BetMGM have proven the “scale of their acquisition funnels, balance sheets, and, most importantly, tech stacks'' means they can fend off any competition.
Offensive discipline: JMP predicts that promotions as a % of GGR will peak in September before fading throughout the rest of the season and will be below the levels seen last year as operators give up the chase on unprofitable customers. 👀Tumbling dice: The JMP team note that price/sales multiples for betting and gaming operators have fallen from ~10x to ~2x within the last 18 months. Analysts in brief
Regional gaming updates
Who knows what tomorrow may bring? Looking at recent regional gaming traffic data, Wells Fargo and Deutsche Bank suggest it points to a deceleration in August against tough comparatives from 2021. The team at Wells Fargo said data across 17 regional casinos suggested a MoM decline in visitation in August of 8.3%, which implies an overall regional GGR fall of 7.1%.
Sector watch - US TV sportsGuns for hire: Sinclair’s Diamond Sports Group was reported last month to have hired investment banks Lion Tree and Moelis, leading to speculation it is looking to offload its 21 regional sports networks.
Lightshed pointed out the critical question for the team MLB, NBA and NHL owners is who should take up ownership of the RSNs and “how do they create a compelling streaming service individually or jointly to future-proof the business”. Capital moves: Separately, Monumental Sports & Entertainment (MSE), the owner of the Washington Wizards and the Washington Capitals, has agreed to acquire the remaining 67% of the NBC Sports Washington RSN that it doesn’t own from NBCUniversal for an undisclosed sum.
Datalines
NewslinesCamelot has dropped its appeal against the Gambling Commission awarding the contract to operate the UK national lottery to Czech lottery group Allwyn. The decision came about because of the risk that £1bn for good causes could be lost and major commercial risks incurred if it delayed the handover of the £6.4bn contract The AGA says a record 46.6m Americans intend to place a bet on the NFL this season, up 3% on the 2021-22 season. Of that total the AGA forecast that 23m will do so online, up 18% on 2021, while 10.6m will place a wager in-person, a 2% rise YoY. GAN has gone live with Oaklawnsports.com, the online sports betting platform for the Arkansas-based Oaklawn Racing Casino Resort. FuboTV has launched its mobile betting app in New Jersey, having completed the soft phase launch of its OSB offering. Geolocation provider XPoint Tech has gone live with the DFS operator BettorFantasy and is now available in 21 states. On socialCalendar
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