Earnings+More - Caesars talks digital profit
Caesars talks digital profitCaesars sees digital inflection in October, Fertitta takes Wynn stake, Better Collective sheds US staff, Prop. battle hurts CA sports betting +MoreGood morning. On the agenda for today:
Caesars sees digital inflectionDigital operations moved into positive EBITDA territory in October as Q3 revenues rise 6.4% YoY to $2.9bn and adj. EBITDA rises to $880m. Win some, lose some: CEO Tom Reeg said the sports-betting and iCasino operations have a “really good shot” at profitability in 2023 after the business “inflected” to profitability in October, 12 months ahead of schedule. But he apologized to shareholders for the “self-inflicted error” of seeking the now-aborted Strip asset sale in Las Vegas.
Back in boom town: Caesars enjoyed a record adj. EBITDA haul from Las Vegas in October of over $200m and Reeg suggested the strength of operations in Nevada had mitigated against the sale of a Strip asset.
Free your mind: The analysts at Macquarie noted the Caesars “investment story” was now pivoting to free cash flow. Reeg said the company would be generating “something in the neighborhood” of $1bn of FCF in 2023, the vast majority of which would go to paying down debt. **Sponsor’s message** Venture capital firm Yolo Investments manages €550m in capital across 80 of the most exciting companies in fintech, gaming & blockchain. The Gaming Fund, regulated by the Guernsey Financial Services Commission, a dedicated 29-company, €183m AUM portfolio has invested in fast-growth assets including Dabble, Kalamba, SimWin & ThriveFantasy. Yolo Investments has just opened its fund to new investors as it looks to scale new cutting-edge concepts, including its exclusive high-roller land and live casino brand, Bombay Club, global banking network & OTC desk Aims Group. Tilman Fertitta’s Wynn moveThe owner of the Golden Nugget has snapped up a 6% stake in Wynn Resorts, making him the second-largest shareholder behind Elaine Wynn. Rocket fuel: The new ~$377m shareholding was purchased on October 19 through his Fertitta Entertainment vehicle, which also owns the NBA’s Houston Rockets and Landry’s restaurants. The Wynn share price rose 11% on the news. 🔥Wynn Resorts shares rise on Tilman Fertitta shareholding news Accumulate to speculate? The news of the shareholding ignited speculation about Feritta’s motives. Analysts at CBRE said that though the filing “signals” a passive investment, Fertitta’s track record “suggests otherwise”.
California damageNegative ads and damaging rhetoric could have long-term impact on future sports-betting efforts. Political casualty: The cause of sports betting in California is in danger of suffering long-term damage from the nature of the seemingly doomed campaigns for Propositions 26 and 27 in next Tuesday’s vote, according to Brendan Bussmann from B Global Advisors. Talking to the analysts at Truist, Bussmann blamed the “extremely negative tone” of the campaign ads.
Bettor Collective layoffsSources have confirmed reports that Better Collective is to shed ~10% of its US workforce as US expectations fall short. Falling short: The EGR report yesterday said Better Collective was making redundancies at its business in the US and that the company is struggling to hit its medium-term target of $100m in revenues from the US.
Time to inflect‘Inflection point’ is emerging as the phrase of the quarter as Macquarie suggests they expect lower losses from US online in Q3. The online operators could surprise the market with lower-than-expected losses, according to Macquarie, who pointed to the high level of hold in Q3 of 10.8% driven by football hold of 15% in September.
Analyst takesDownloads: The number of app downloads increased 31% YoY and 45% WoW during week 8 of the NFL, reaching 230k for the operators that control ~90% of OSB market share, according to the latest data from JMP. Season to date, FanDuel (+45% YoY), DraftKings (+66%) and Rush Street Interactive (+260%) all enjoyed above average growth compared with the overall sector. DatalinesMacau: GGR of MOP3.9bn, or ~$488m, was down 10.7% YoY and 85% down vs. Oct19. The team at Macquarie suggested the figures “clearly show that demand remains hampered by strict travel restrictions,” despite the prospects for travel improving slightly.
NewslinesChurchill Downs has completed the buyout of substantially all of the assets of Peninsula Pacific Entertainment for total consideration of $2.75bn, including assets and operations in Virginia, New York and Sioux City, Iowa. Boyd Gaming has closed on its previously announced acquisition of Pala Interactive for $170m. Tiidal Gaming’s Sportsflare has signed a licensing agreement with US daily fantasy sportsbook No House Advantage. GeoComply has received a Tier One contractor license for its GeoComply Core and IDComply products from the Maryland State Lottery and Gaming Control Agency. On socialI guess this was only a matter of time but still, ROFL.
Boris Johnson to be a keynote speaker at the "International Symposium on Blockchain Advancements"
benzinga.com/z/29482439#.Y2… via @Benzinga Calendar
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