Good afternoon. In this earnings extra:

• The earnings statement from DraftKings could have been received better.

• Super Group says it is planning to take full ownership of its sportsbook backend.

• Century Casinos revenues drop ahead of Rocky Gap buyout completion.

I should have known better.

DraftKings disappoints

Revenues rose 136% YoY to $501.9m but adj. EBITDA losses of $264.2m were only trimmed by 15.4% as the path to profitability continues to be elusive. 

Bad reaction: DraftKings saw its share price suffer a mini-collapse in pre-market trading despite Q3 earnings showing B2C revenues rising 161% to $493m. But the forward guidance for Q422 and FY23 was deemed “disappointing” by analysts at Wells Fargo. 

😱At pixel time DraftKings shares were down over 17%

• Analysts at Jefferies noted the bad reaction might be due to competitors “setting the bar high” earlier in the week.

• Regulus Partners noted marketing as a percentage of revenue was still at 64%.

• CEO Jason Robins told analysts DraftKings had achieved market share gains in the past quarter due to the “less aggressive” promotional environment.

• “It’s night and day compared to last year,” he said before adding the environment for marketing partnerships had “improved dramatically”.

Guard rails: The midpoint of the forward guidance for 2023 EBITDA is $525m which is worse than forecast, albeit with the midpoint of 2023 revenue guidance of between $2.8bn-$3bn being bang on consensus.

• Robins noted the Q4 guidance includes Kansas and the expected Mayland launch and the pre-launch costs of the upcoming Ohio debut on January 1.

• He noted that 2023 guidance now included Ohio and Massachusetts launch costs. CFO Jason Park said the new launches next year would add ~5% to revenues but ~25% to adj. EBITDA losses.

• Robins noted the inclusion of state launches “muddied the waters” on comparisons with previous guidance estimates

Don’t dream it’s over: He noted the company has “discontinued” putting additional cash into the California ballot effort. The (doomed) effort cost the company $16.5m in Q3. “We’re ready to pivot on a dime if we get a pleasant surprise, although that’s certainly not what we’re expecting,” he said.

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Super Group’s to-do list  

Revenues fell 1.5% YoY to €316m and adj. EBITDA dropped 15% to €54m as the Betway and Spin parent suffered from global macro impacts.

Different strokes: Asked about the drop in revenues and profits, particularly in iCasino, CEO Neal Menashe said the usually resilient vertical suffered “in different ways in different markets.” “We address this by having more customers and giving them games they like with lower bet sizes,” he added.  

• In the US, COO Richard Hasson said the group was waiting on a number of state licenses before completing its NYSE listing with Digital Gaming Corporation by year-end. 

• CFO Alinda van Wyk said US EBITDA losses of €50-€70m were penciled in for FY23, with break-even expected by late 2024-early 2025.   

• The group’s Betway sportsbook went live in Ontario in the past week and its Spin iCasino brands will go live next week.  

When I say jump: The company acquired a majority stake in the UK-focused online casino operator Jumpman Gaming at the start of September which it said contributed €7m of net revenue in September and positive EBITDA for Q3. 

• Bite of the… apricot: It added it was in discussions with its long-term sportsbook technology provider Apricot to acquire the group for a maximum consideration of €43m.  

Earnings in brief

Century: Revenues fell 4% to $112.6m while adj. EBITDA drops by 15% to $28.1m. Recall, in August, Century agreed to buy the Rocky Gap casino from Golden Entertainment and VICI for $260m.

Newslines

Greenwood Gaming has pushed back the opening of the Pennsylvania satellite casino Parx Shippensburg to early next year due to construction delays, according to reports.

USAbility: The sports-betting and iGaming consultancy has appointed former William Hill US CEO Joe Asher to its advisory board and is also a shareholder.

What we’re waiting for

Calendar

• Nov 7: Full House Resorts

• Nov 8: IGT, Everi, AGS, Playtika

• Nov 9: Flutter Entertainment, GiG, Light & Wonder, NeoGames

• Nov 10: Genius Sports, Acroud, Endeavor

Contact

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com