Good morning, welcome to your weekender. In this edition:

• Flutter impresses the analysts on both sides of the Atlantic.

• Wynn pre-announces earnings in Macau from the first two months of Q123.

• Rush Street shares dip 10% despite warm analyst words.

• The WorldPay spin-off is the subject of sector watch.

• NEW: See our brand new Jobsboard down the page, brought to you by our friends at BettingJobs. 

When you go will you send back a letter from America?

Flutter going west

Flutter is still consulting with shareholders but analysts consider a US listing a done deal.

We should have held you, we should have told you: Saying Flutter was “taking our ball away”, the team at Peel Hunt said the clear pivot towards North America meant a US listing “makes increasing sense”.

• “This is the year when the US business makes a profit and continues to prove that it has achieved sustainable market leadership,” Peel Hunt added.

• The team at Wells Fargo said that, with the publication of its FY earnings, Flutter “moved further across the Atlantic”.

• A potential US listing “could be a catalyst for new investors and disclosures,” the team added, saying that long term it could “set up Flutter to move its primary listing to the US and/or spin FanDuel”.

• Further reading: The head of the LSE insists London has “strong” future as a financial center despite high-profile departures.

Money well spent: Wells Fargo noted that in Q4, ex-investment in new launches, FanDuel was EBITDA positive at $36m, with the Maryland and Ohio launch spend coming at at $78m. JMP noted FanDuel was “proving its time advantage and the tie to a large global operator separates it from any US competitor”.

• The team noted that higher levels of revenue and player retention were falling to the bottom line with FanDuel generating 4x more contribution profit than its nearest competitor.

• JMP saw evidence of a “profitability coil” as older cohorts outpace new customer cohorts and the team forecasts EBITDA in 2025 of $738m.

• Wells Fargo estimated the H222 EBITDA loss for the US operations was ~$134m, with $80 of that due to the FanDuel/DFS/TVG group and $55m attributable to Fox Bet. 

• Flutter CEO Peter Jackson all but indicated on the call that Flutter would pull the plug on Fox Bet as and when it regains complete control of the business.

Flywheel watch

🤮 3 appearances in the presentation.

🤠 Share reaction this week will harden US listing convictions

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Wynn ahead of the game

Wynn’s Macau subsidiary has seen adj. EBITDA in the first two months of the year rebound significantly, according to Q123 pre-announced earnings.

Strength in numbers: Coinciding with a debt offering in Hong Kong, Wynn said the business in Macau saw “particular strength” in visitor numbers over the Chinese New Year and that trading post-holiday season continued to be robust.

• The company said trading for the two months to the end of February would come in at $391m-$395m, up 74% at midpoint on Jan/Feb22.

• Deutsche Bank said extrapolated Q1 revenues of $600m would be ahead of the team’s forecasts of ~$522m. 

• Again, DB said the extrapolated Q1 adj. EBITDA figure of $146m was well ahead of its ~$85m forecast.

• Adj. property EBITDA for the same period would be between $94m and $98m compared to just $4m in the prior-year period.

• Mass market table drop recovered to 95% of pre-pandemic levels and direct VIP turnover was 40% up.

• The company said that based on regulator data, its GGR market share for Jan/Feb23 was 15%, which is above 2019 levels despite the “meaningful changes” to the junket backdrop.

The offering consists of $500m in convertible debt, which left Wells Fargo perplexed, given the current Macau environment suggested traditional debt options would have been available.

• But the team at CBRE was more impressed, saying it was “another savvy financial maneuver” to shore up the balance sheet in Macau.

On the download

Pullback: A 17% decline in app downloads YoY in February was a sign of operators pulling back on their collective marketing efforts as well as a tough comp against launches in New York and Louisiana last year, according to analysts at JMP.

• “Initial promotional intensity has been elevated in Ohio and Maryland, but has declined at a faster pace vs. prior states in the months following the launch,” the team added.

• Download market shares were consistent with state-level data: DraftKings grabbed 37% download share, followed by FanDuel (31%), BetMGM (16%) and Caesars (5%).

On social: Checkd Group’s FlashPicks found that behind FanDuel and DraftKings, bet365 is the app its users most like to use.

ICYMI

On Compliance+More this week, we examined the latest consultation from the UK Gambling Commission on whether to include an operators’ licensing provision to notify about any customer suicides. The Commission ducked C+M’s questions.

Compliance+More All things regulation in gambling

On Earnings+More this week

• PointsBet slumps on widening first-half losses.

• Caesars’ revenues masked huge promotional incentives, says analyst.

• FanDuel and DraftKings pay the price for Ohio leadership.

On Compliance+More this week

• Massachusetts and New York make life difficult for gambling affiliates.

• The French regulator warns FDJ over its ads strategy.

Jobsboard

Reminder: See down the page for our new Jobsboard service.

Analyst takes

Rush Street: The company is on course to produce $34m of EBITDA next year, according to the team at Roth MKM, after it reported its Q4 earnings this week. But it is the potential for takeout that excites, with RSI a potential target for either an existing operator, such as Caesars, Penn or Bally’s, or a new entrant.

• They noted that Fanatics, which is still to launch, does not as yet have its own iGaming stack.

• The team pointed out RSI has maintained ~8-9% market share, even in states such as Michigan and West Virginia where it doesn’t have a land-based casino database.

• Still, Wells Fargo warmed to the news that RSI wasn’t entering the Massachusetts market. It was “nice to see some OSB/cost discipline here,” they added.

🤷 Rush Street fell nearly 10% on the day after its Q4 earnings

Everi: B Riley analysts suggested the company’s fintech cashless transaction was going under the radar. The technology was now connected with 100k units or ~10% of the North American market and cashless transactions for Everi rose 42% YoY.

• Citing Penn’s recent earnings statement, the team said, while the percentage of cashless users is small where it is installed, they believed existing casino customers see “substantive volume improvements, increased loyalty and/or visits, and younger demographic advantages”.

Golden Entertainment: The below-2019 occupancy rates at the Strat in Las Vegas gave analysts something  to chew on when the company reported earnings this week. CBRE noted Las Vegas midweek occupancy is still ~6% below Q419 but they expected that to narrow this year.

Earnings in brief

SciPlay: Growth outpaced the casual games market in Q4, with the company’s social casino games growing 14.5% YoY versus a decline of 3% across the rest of the market. The company noted that Jackpot Party was cited as the no.1 social game by Eilers & Krejcik Gaming. 

• Revenues climbed 18% to $182m, while the company produced cash flow of $150m. 

Sector watch – payments

WorldPay is set to become an independent entity once more as owner FIS writes down $18bn against the acquisition from 2019.

Hot potato: The pass the parcel game involving WorldPay is continuing after payments giant FIS gave up the ghost of trying to make its $43bn acquisition from 2019 work. The company confirmed in mid-February it would be spinning out the business with former WorldPay CEO Charles Drucker returning as a strategic advisor.

• FIS chairman Jeffrey Goldstein said the company was ”confident that this is the right time for the separation of Worldpay”.

• The price of the separation to FIS was an $18bn writedown. 

• Analysts at Mizuho told the FT the original deal was down to “peer pressure” to create payments behemoths. “This should never have happened,” he said.

What are we going to do now? WorldPay was founded in 1989 and at one point was owned by Royal Bank of Scotland. It was bought by Vantiv in 2017 for $10.4bn. FIS said that the WorldPay business would generate growth of 2-4% in 2023, something that Dracker will hope to improve upon.

• WorldPay is one of the leading payment services companies working in the gambling space.

• A more focused WorldPay will look to compete with newer entrants in the fintech space including Stripe and Square (now known as Block).

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Newslines

Squeezebox: UK National Lottery operator-to-be Allwyn has secured a €335m, six-year accordion loan.

LeoVegas has been granted a new gaming license by the German Federal States’ Joint Gambling Authority (GGL).

Fanatics received a sports-betting license from the Tennessee regulator.

FanDuel has been named a new official sports-betting partner of the MLB.

All set: Better Collective said it is ready to launch its sports-media brands in Massachusetts.

Calendar

• Mar 7: NeoGames, Full House

• Mar 9: AGS, Playstudios

• Mar 10: Genius Sports, Century Casinos

• Head of Games Studio, Cyprus. 

• Chief Financial Officer, Curacao.

• Head of Compliance, remote in Europe.

An +More Media publication. 

For sponsorship inquiries email scott@andmore.media.