Good morning. On today’s agenda:

• Micro-betting provider Simplebet says it is collecting data on NCAA games.

• The buy-in for a downstate NY casino has been set at a minimum of $1bn.

• November OSB GGR declines in the majority of states in November.

• Our startup focus for this week is Outlier.

Take me out to the ball game.

Simplebet’s NCAA scouting

The micro-betting provider says it is gathering data about NCAA games with an eye on launching a College game-focused product.

Somebody’s watching me: Simplebet is seeking to expand its suite of instant-gratification betting products to College sports and is scouting NCAA games in order to access the data, according to COO Mark Nerenberg. Talking to E+M, he said the company “really wanted a College football product”, while for basketball the company would be aiming at being up and running for March Madness.

• “So we have hired a bunch of scouts and we have our own data collection in-venue,” said Nerenberg.

Well connected: Nerenberg said the NCAA “knows” Simplebet is already scouting games. Without naming any specific Colleges, he said Simplebet had “spoken to various schools”. “We are very connected in the College space.”

• “This will take time,” he added. “Technically each school has the rights to the collection of data in the venues.”

Background: As it stands, the status of NCAA data for betting purposes remains murky. Genius Sports is the official data partner of the NCAA but this is limited to the NCAA LiveStats product for media and coaching purposes. The organization does not have a data partner for betting reasons and if it did that would be limited to NCAA championship data, not regular season or conference championship stats.

• Genius also signed a deal with the Mid-American Conference in October for an official data, integrity and fan-engagement partnership.

• That deal was reported to include the potential for selling data to sports-betting operators.

• A subsequent press release for a deal with bet365 also mentioned the provision of College data for betting purposes.

• Genius Sports was contacted for this article but did not respond with any comment.

Micro footprint: Simplebet’s micro-betting product is currently live with DraftKings and Caesars and covers NFL, MLB and NBA. Nerenberg said the format was a “tech challenge” where the collection of data was central.

• “Micro-betting is uniquely suited to US sports,” he added. 

• “What we are seeing is around 25% of all in-play betting on American football and baseball with our clients is on micro-betting.”

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New York casino race

The snappily named New York Gaming Facility Location Board has kickstarted the process for issuing three downstate casino licenses.

Green field: Last week, the RFA process for what the analysts at CBRE suggested is the “most lucrative remaining greenfield casino opportunities in the US” was launched  by the New York state gaming authorities. But the opportunity comes at a cost, the team pointed out.

• The GFLB has set the minimum capital investment excluding land and infrastructure at $500m, though it added this will likely be exceeded given the scale of the plans announced.

• The license fee is also a hefty $500m, meaning the initial buy-in is at least $1bn.

• The final level of gaming tax will be determined by each bid, with the statutory minimum set at 25% for slots and 10% on table games.

• Still, CBRE estimated the size of the opportunity at a potential $4.8bn TAM a year.

In it to win it: CBRE suggested MGM Resorts is well-placed to win one of the licenses, expanding on its current Empire City slots-only property in Yonkers. 

• It is up against Genting’s Resorts World New York property at the Aqueduct Racetrack as well as proposals from SL Green/Caesars in Times Square, Related/Wynn at Hudson Yards, a Steve Cohen bid at Citi Field and a Coney Island project from Thor Equities.

November analysis

Record iCasino GGR in November is offset by weak sports-betting GGR, says Truist. 

Highs: US iCasino GGR across the six regulated states increased 34% YoY to hit a new monthly record in November at $463m, according to the analysts at Truist. The team added that November was the fourth straight month during which operators recorded more than $400m in GGR. 

• Still #1: BetMGM leads iCasino GGR market share with 30% in NJ, 37% in MI and 42% in PA. 

Lows: On the OSB front, with 85% of states having reported November figures, Truist said bookmakers experienced a 20% YoY drop in GGR, despite handle rising 26%. Truist added that early December data was mixed, with handle and GGR tracking at +46% and +64% YoY respectively.

• Mack attack: Louisiana took a $28m hit to its November GGR, down over 545% YoY, due to Mattress Mack’s $75m World Series bet on the Astros.

🚧 OSB GGR YoY in November – LA’s 545% fall excluded due to scaling

• Bookmakers fared better in October, with “nearly final results” showing a GGR rise of 43% to $802m and handle up 19% to $8.7bn. 

Hitting the brakes: The GGR for land-based casinos decelerated to ~1% YoY growth in November, which Macqaurie ascribed to a “slight” consumer reaction. “There’s nothing that’s meaningful to financials,” the team added.

• For December, Macquarie is forecasting ~2% YoY growth or a 4.8% sequential fall.

• The team suggested spend per visit is still driving growth.

Quarterly hold: In a separate note, Macquarie estimated Q4 marketwide hold will come in at 8%, suggesting this strong result will add ~1.5k bps of incremental GGR growth. But the team added that this 8% number is being dragged up by FanDuel and the proliferation of same-game parlays. For most operators, they predicted GGR hold will be between 50-100 bps lower.

• FanDuel’s above-average hold in Q4 means it will gain around 500 bps of market share, Macquarie estimated.

• FanDuel’s OSB & iCasino market share across 15 states excluding Nevada, Colorado and Louisiana stood at 42.1% in Q3.

Datalines

Iowa: Casino GGR was down 3.5% YoY to $142.5m in December. Sports-betting GGR was up 55.2% YoY at $20.7m, with handle dropping 13.7% to $230m. 

Virginia: Sports-betting AGR was up 76.2% YoY to $52.8m in November, with handle rising 28% to $518.8m. Operators recorded margins of 11% during the month. 

Washington DC: Sports-betting GGR fell 40.% to $2.6m in November, but handle rose 4.3% to $22.3m. 

Wyoming: Sports-betting GGR rose 8.3% to $1.4m. Handle also rose, up 52.2% to $16.7m. Historical horse racing revenues increased 39.4% to $9.4m in November. 

Analyst takes

Sector outlook: Jefferies’ analysts suggested that, in the context of a recession, the gaming sector will remain out of favor with investors and they have “narrowed” their sector view in response. As a result, they have downgraded Penn Entertainment, Golden Entertainment and Sportradar.

• Notably, they suggested Macau will “finally accelerate”. But, on US regional gaming, the team is less hopeful, saying they are “resilient but lack growth”.

• On digital, Jefferies said it would be hard for the sector to be more out-of-favor in 2023 given the investor negativity evident in 2022.

VICI: JMP’s analysts saw the gaming REIT as remaining “aggressive on the deal front” this year, given ample liquidity, a low cost of capital and a robust pipeline. They also expected non-gaming investments to be a continuing theme.

Startup focus – Outlier

Who, what, where and when: Founded in 2019 by Evan Kirkham, Luis Lafer-Sousa and Peter Reggio, Colorcast – now Outlier – has launched a sports-betting platform allowing bettors to browse, analyze and execute picks from any major sportsbook in one place.

Funding backgrounder: The latest Seed funding round closed last October raising $3.7m, with Next Coast Ventures taking the lead and follow-on investments from Alumni Ventures, Tribeca Early Stage Partners and Connetic Ventures, among others.

The pitch: “The big innovation is the stitching of every piece of the bettor's user journey into one seamless flow,” says Kirkham, who adds that Outlier will be bringing all of the relevant information to the point of execution. “It’s one seamless flow on any of the major books, in two-clicks.”

• “Bettors want to place more informed and confident picks,” he says. 

• But they are largely unwilling to identify, aggregate and interpret data all on their own.

• Bettors want data presented alongside the bet, while knowing they're getting the best price for their pick. 

• “Outlier accomplishes both tasks in one seamless betting journey,” Kirkham says. 

• Markets currently include the NFL, NBA, MLB, NHL, NCAAF and NCAAB. “We're already thinking about how our product could extend to more markets, both domestic and international,” he adds.

What will success look like? “I'd prefer to keep this a little close to the chest if that's ok,” Kirkham says.

The week ahead

The latest edition of Deal Talk will be sent tomorrow. It includes a look at the bid for PointsBet’s Australian-facing operation from Betr, analysis of sector M&A in 2022 and E+M’s estimates for the value of transactions in the last 12 months.

Newslines

Kambi relief: The sports-betting backend provider has signed a deal extension with major client Rush Street Interactive that will see Kambi support “continued growth in existing markets and expansion into further jurisdictions in the future”.

Kentucky legislators have introduced a bill that would legalize online poker and online and retail sports-betting in the state. The tax rate for OSB would be 14.2% and 9.7% for retail betting.

Go ahead: Waukegan City Council has unanimously approved permits for Full House’s The Temporary by American Place Casino.

What we’re reading

The race: F1 takes a gamble on Vegas.

A knight’s tale: The remarkable rise of chess.com. 

On social

The Dad Joke Man @DadJokeMan

David Beckham's 2nd son arrived at training for Brentford, he asked the coach "What number shirt am I?" The coach said "Wear four out there Romeo…”

2:54 PM ∙ Jan 7, 2023

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Calendar

Jan 10: Deal Talk #6

Jan 17: Due Diligence #3

Contact

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com