Earnings+More - Weekend Edition #81
Weekend Edition #81Bally’s ‘roadmap rescope’, Smarkets redundancies, Kambi’s rose-tinted hopes, DraftKings’ Euro markets exit, BetMGM’s PA promos +MoreGood morning. In a packed edition:
Bally’s online pullbackBally’s announces it is cutting back its interactive workforce by 15% after the online arm “didn’t achieve” its goals for last year. It’s not you, it’s me: The decision to reduce online operating costs is expected to mean $10-$15m in severance payments. In a letter to all staff and submitted in an SEC filing, CEO Lee Fenton said “companies that make decisive steps to effectively manage costs will be stronger and fitter in the future”.
Right-size matters: Fenton said Bally’s was looking at how to “rescope our roadmaps to ensure they are right sized”. “This is an opportunity to reset the business.” Rokker’s Business Design services deliver global gaming clients with research and insight alongside actionable strategy, clarity and alignment. We research, analyse and ideate to address the challenges and opportunities that affect our client’s product, proposition, people and process. Our work aligns clients’ boards and teams in building businesses people love. To find out more visit: https://www.rokker.co.uk/ Smarkets troublesThe betting exchange operator admits to liquidity issues amid redundancy news. Welcome to the source of funds: Among reports of the company shedding 20% of its workforce, the UK-based company has admitted that the exit of high-spending customers caused by enhanced affordability and RG checks is causing issues.
All hands: iGaming Next suggested the redundancies are across all parts of the business and that only staff working directly on product, increasing revenue, cutting costs or raising investment were guaranteed their positions. SBK OK? Smarkets also runs the SBK sportsbook in the UK and in the US where it is licensed and operational in Colorado, Iowa and Indiana. The company was founded in 2008 and includes Passion Capital, Deutsche Telekom, and Susquehanna Growth Equity among its backers. Datalines – BetMGM’s promo spendPennsylvania: Pennsylvania closed out the year with land-based gaming up 0.3% YoY to $279.7m in December. Total GGR across the 16 casinos in the state stood at $3.38bn for 2022, 5% up on 2021.
Largesse: Sports-betting promotional spend moderated somewhat during the year at 33% of total GGR across the market. However, that number was dragged up by BetMGM, which comfortably handed out the most promotions and free bets as a percentage of GGR.
💰 Bling Kings: BetMGM outspent the competition on promotion in Pennsylvania Louisiana: Casino GGR was down 2% YoY to $212m. Nevada esports bettingThe Sharpr newsletter reports on esports betting development in Nevada. Optimistic KambiKambi pins its hopes on hitting its long-term profit target on an optimistic view of potential regulation. Blonde ambition: Brazil, India and Japan, along with the US states of California and Texas, featured among Kambi’s list of jurisdictions that would need to regulate in order for it to hit its “ambitious” target of €150m in EBIT in 2027. Analysts at Jefferies said the new target represents triple its own current FY25E forecast of €56m EBIT.
Diary date: Kambi will report its Q4 earnings on February 22. DraftKings’ Euro DFS exitsA prioritization of the US means DraftKings is beating a retreat in some major European markets. Reverse gear: Draftkings said the exit from the “passionate fantasy sports communities” in Austria, Germany, Ireland and Malta was made in order to “most effectively” serve its US sports-betting base, according to a spokesperson. Operations in the four will cease as of this coming Sunday, January 22.
GeoComply/XPoint twistThe tussle between the geolocation providers over a patent case takes another turn via Twitter. Reader, I married him: In a further plot twist to the patent case being pursued by GeoComply against XPoint, the gaming provider Out the Gate, which was cited in evidence submitted by GeoComply late last week, has issued a statement to say it did sign up to XPoint’s geolocation services after all.
A GeoComply spokesperson said: “We stand by our positions as conveyed to the Court and expect them to further address this particular issue soon.” Catena updateWritedowns of €17.2m take the gloss off a 31% rise in North American affiliate revenues. Write off: Catena’s Q4 numbers will feature non-cash writedowns related to a restructured casino affiliate asset as well as the pending sale of its financial trading affiliate arm. In a trading update on Thursday the company said revenues for Q4 would be up 15% YoY to €27.4m, with North America worth 78% or €21.5m. Adj. EBITDA will be down 4% to €12.7m.
🚀 Bid hopes: Catena’s shares up nearly 47% since the new year Earnings in briefRivalry: Revenue for 2022 rose 130% to $21.7m on handle that was up 181% YoY to $186m. The company noted its proprietary iCasino offering contributed 30% of that handle and 15% of revenue or ~$3.3m.
Feels the Burns: FansUnite said its Scottish-facing McBookie business saw revenue rise 22% to £44.8m in 2022, with iCasino growing by 20% to £28.4million and sports betting up 26% to £16.5m. Gross win rose 44% to £2.4m. Real Luck: The group behind the esports betting and casino brand Luckbox said monthly revenues had grown 120% in Q4, while QoQ player deposits were up 420%. CEO Thomas Rosander said the company will be launching a B2B product this year. Analyst takesBoyd Gaming: The regional gaming operator got a second vote of confidence this week as the team at Roth initiated Buy coverage. Despite the economic backdrop, the analysts said they saw the company as a free cash flow “compounder,” estimating 2023 cash flow of $555m.
M&A briefsPlaytika has made a ~$750m bid for Angry Birds developer Rovio. Analysts at Macquaries said the deal would “clearly advance Playtika’s strategy to expand in casual gaming”, adding millions in users, a recognizable franchise and in-app ads exposure. Coming soonNext Tuesday sees the debut issue of Compliance+More. Sign up. Growth company newsSimWin Sports has signed a deal with Sports Illustrated to be a presenting sponsor. Sports Illustrated will also become owners of football, basketball and soccer teams in SimWin’s virtual leagues. NewslinesMass approval: Bally’s Interactive, FanDuel, betr, DraftKings, Digital Gaming Corp (Betway) and PointsBet have been provisionally approved for an online sports-betting license in Massachusetts. VICI closed the upsized underwritten public offer after having raised $1bn. IGT and Greentube have signed a patent cross-licensing agreement that will enable IGT to offer its clients access to both IGT’s and Greentube’s remote game server (RGS) portfolios. Betfred is up before the Nevada Gaming Control Board next Wednesday to seek approval to operate a sportsbook at Mohegan Las Vegas. On socialSlot machines are absurd. Slot machines are absurd:
— 70% of total Nevada gaming revenue
— In 2022, its $9B revenue was more than North American box office ($7.5B)
— The slot machine at Las Vegas airport recently passed $1B in lifetime revenue What we’re reading‘Big Meat is still alive and well.’ CalendarJan 25: Las Vegas Sands Jan 26: Rank, BetMGM Feb 1: Entain Feb 2: Evolution, Penn Entertainment, Boyd Gaming
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Weekend Edition #80
Friday, January 20, 2023
Kindred issues a profit warning, 888 update, MeridianBet reverses into Golden Matrix, DoubleDown buys SuprNation, Lottomatica IPO +More
Fanatics cites Sky Bet as ‘second-mover model
Friday, January 20, 2023
Fanatics' plans, OSB's inflection point, DraftKings' unruffled investors, GeoComply 'mimicry' evidence +More
Due Diligence #3
Friday, January 20, 2023
New entrants enter the OSB fray, Kindred serial warnings, recent analyst takes +More
Entain exits unregulated markets
Friday, January 20, 2023
Entain says NGR/EBITDA impact will be small, Macau junket operator ordered to pay $831m fine, Macquarie's 2023 outlook, New Jersey December, analyst takes +More
Deal Talk #6
Tuesday, January 10, 2023
PointsBet's Oz sale, sector-related M&A deals in 2022 worth $10bn, IGAC SPAC downs PlayUp merger, gaming affiliate M&A is back (sort of) +More
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