Earnings+More - Weekend Edition #76
Weekend Edition #76$31bn-valued Fanatics’ fund raise, MGM gets an analyst upgrade, sector watch – financial affiliates +MoreWelcome to the latest Weekend Edition. On the agenda for today:
RIP Jet Black. Fanatics’ war chestThe apparel to soon-to-be sports-betting business has been valued at $31bn after raising $700m from investors for potential M&A. Off the shelf: Acquisitions in the sports-betting, gaming and collectibles areas are top of the agenda for Fanatics after its latest funding round, according to reports. Two-thirds of the cash came from new investors, including Clearlake Capital and LionTree, with continuing participation from Silver Lake, Fidelity and SoftBank.
**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. IMG’s great Leap forwardIMG Arena has snapped up virtual sports provider Leap Gaming for an undisclosed sum. Leap of faith: The deal builds on an existing relationship between the Endeavor-owned IMG Arena and the Israeli-based company, which involved an unspecified investment. Leap was founded in 2014 and says it has relationships with 120 sportsbooks globally.
Stock watchThe Macau operators’ Hong Kong listings all rebounded further on Thursday on the news of an increased lifting of China’s Covid measures. 🎯Macau’s Hong Kong listings enjoy a relief rally EE in piecesEsports Entertainment in turmoil as CEO departs as it confirms potential iGaming exit and says it has received merger approach. Sacked in the morning: As was broken by the Sharpr newsletter this week, Grant Johnson, the CEO and chairman of Esports Entertainment, has been given the boot. The company says it has identified several potential candidates to replace him as CEO. Jan Jones Blackhurst has stepped up from the board of directors to take over as chair.
A picture of turmoil: EE – which this week gained approval from Nasdaq to continue as a listed entity – also confirmed the shuttering of its UK & Ireland-facing operations SportNation and RedZone due to an “inability to generate profits”, having previously shut its Vie.gg esports-betting operation in New Jersey.
We need to talk about DaveThe Massachusetts Gaming Commission wants more time to consider Penn’s license application in light of its links to Dave Portnoy. Peace of mind: Following a meeting of the Massachusetts Gaming Commission this week, Penn Entertainment’s application for a sports-betting license is, according to the committee chair Cathy Judd-Stein, “at a crossroads”.
MGM get an upgradeTruist raised its rating to a Buy on the potential for the event calendar in Las Vegas to contribute to outperformance. Starting grid: Any ill economic winds that might affect Las Vegas next year will likely be offset by a solid event calendar – particularly Formula 1 – the return of midweek travelers and the more diversified attractions.
The rest is noise: MGM is getting “little to no value” recognition for its BetMGM JV, Truist suggested, but it added that, with the tide turning on profitability, investor attitudes are changing.
Analyst takesBally’s Corporation: The team at JMP said after meeting management that the iCasino app is “nearly there’ in New Jersey, where Bally’s remains confident it can win market share and that this will serve as the blueprint for other iCasino states.
Regionals: November GGR was up 5.4% YoY and up 14.5% vs. 2019 to $2.6bn, countering “overly negative” expectations of a slowdown in 2023, said the team at Wells Fargo. Noting “great concern” over lower-income customers, the team found that over the past 16 months visitation and GGR trends had been “fairly similar” to properties that skew towards higher income cohorts. Full House: The team at JMP have also initiated on the regional operator, which is soon to open its Temporary casino in Waukegan, Illinois. They believe it will “cater to an underserved” part of the state in one of the wealthiest counties. The similarly imminent Chamonix casino, meanwhile, will bring a “quality asset” to the Cripple Creek market. Downloads: The World Cup and the launch in Maryland helped boost app downloads by 184% YoY to 545k during week 13 of the NFL Season, according to JMP. This week on E+MOn Tuesday, we sent out the Startup Month #5 which discussed investor enthusiasm for gambling regtech ventures and also featured an interview with Meredith McPherron, CEO and managing partner at Drive by DraftKings.
Sector watch – financial affiliatesA recent open letter from the UK’s financial watchdog suggests it is cracking down further on the employment by CFD and spread-betting firms of affiliates. In a letter that suggested a “significant minority” of firms within the CFD and spread-betting sector “operate business models that cause significant consumer harm”, the Financial Conduct Authority (FCA) also took aim at the activities of affiliates in the space.
The letter said all CFD and spread-betting firms should “consider their use of affiliates and must have robust due diligence for their onboarding and ongoing monitoring”.
DatalinesIllinois: Land-based casino revenues in Illinois were up 9.6% YoY in November to $113.9m. In sports betting, revenue rose 94.1% YoY to $102.1m on handle up 22.5% to $1.03bn, the first time it has reached over the $1bn mark. FanDuel accounted for 42% of GGR, while DraftKings led by handle with 34%. New York: GGR for November hit $148.2m, up 1.8% on handle that rose less than 1% to $1.55bn. FanDuel led with 52.8% of GGR of revenue, with DraftKings second on 28.6%. Virginia: Casino, sports-betting and historical horse-racing revenues were up 129% to $92.1m in October. Sports-betting GGR rose 365.3% to $45.5m, with handle increasing 23.5% to $528m. In Ohio land-based GGR for November rose 2.7% to $183.6m. Casino GGR in Kansas was down 0.3% to $31.6m. In Maryland, GGR came in at $163.4m for November, up 1.9% YoY. Portugal: Online gaming GGR hit €159.1m in Q3, up 39.3% YoY, boosted by a near 40% rise in iCasino to €89.8m. Sports-betting GGR was also up 40% to €69.3m. NewslinesEntain has refinanced £1.13bn of term loans priced in euros and dollars, with the proceeds paying off another term loan due to exposure in March 2024. Caesars Sportsbook is the first US betting operator to go live with Genius Sports’ Watch & Bet solution for NFL streaming. Hard Rock International’s $1bn acquisition of the Mirage casino on the Las Vegas Strip has been recommended for approval by the Nevada Gaming Control Board. Hard Rock will redevelop the property into a 3,600-room guitar-shaped resort over the next three years. GiG will supply its online sports-betting and casino solutions to News International. What we’re readingCafe racers: The FT’s Lex discusses Japanese streamer CyberAgent’s motorcycle betting offering. What we’re writingNo ordinary Joe: Scott Longley interviews Joe Asher for iGB. CalendarDec 13: Deal Talk #5 Dec 20: Due Diligence #2 Contact
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The Startup Month #5
Tuesday, December 6, 2022
Gambling regtech's investment moment, Investor focus – Drive by DraftKings, Inside the raise – Dabble, November's fundraisings +More
Wynn’s November bounce
Monday, December 5, 2022
The shares month, World Cup balls, Betclic on the up, Ontario Lottery dressing down, startup focus – Prophet +More
Weekend Edition #75
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VICI takes full ownership of two MGM properties, ESPN's sports-betting uncertainty, illegal betting survey +More
888’s debt ‘priority’
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888 will seek to lessen debt load, DraftKings' HORSE move, Nevada pushes on in October +More
888 admits to debt woes
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888 blames economy for leverage issues, Maryland off to a strong start, Macau concession reaction +More
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