Good morning. On today’s agenda:

• Entain CEO says Brazil ruled in even without 2023 legislation.

• Betr says it will miss the Massachusetts launch tomorrow.

• Full House says the Temporary opening heralds revenue jump.

• NeoGames says it continues to benefit from online push for lotteries.

• FansUnite taps up investors for $3m; brings in Tekkorp.

You don’t miss your water.

Entain’s due diligence

CEO Jette Nygaard-Andersen says the company had been “very diligent’ in deciding which markets to exit.

Out, out out: CFO Rob Wood noted the recent decision to exit unregulated markets had caused the loss of ~3% of margin, which was at 26%. Nygaard-Andersen said that 7-8% was still not regulated, with the biggest market being Brazil, which was worth ~6-7% of group NGR in 2022. 

• She added that Entain was “very diligent” when deciding whether there was enough regulatory progress for the company to maintain operations.

• Of the still-to-regulated markets Entain has continued with operations, she said the company was “quite confident” they all have a clear path to regulation.

• Talking about Brazil, she said Entain “believes there is a path to regulation”. “But you shouldn’t see 2023 as a strict deadline.

Another busy year: Wood reiterated that M&A remains key to Entain’s growth strategy and Nygaard-Andersen said the company looked for the “best teams and the best brands”.

• In the last year, Entain has bought a majority stake in Croatian sportsbook operator SuperSport and BetCity in the Netherlands. The latter deal was completed in January.

• Asked about a step down in competition in the M&A market, Nygaard-Andersen said that, while there has been a drop in public valuations, Entain “hasn't seen multiples easing for the top players”.

• “We are a smart buyer and a good buyer,” she added, saying the company had a “good pipeline”. 

• Not happening: Of course, the deal that won’t be happening is a buyout from BetMGM partner MGM. Last month, MGM CEO Bill Hornbuckle explicitly ruled out a bid.

As was indicated by the early February trading statement, NGR ex-the 50% share of BetMGM came in 12% up at £4.35bn, while underlying EBITDA rose 13% to £993m. But online NGR was down 1% to £3.1bn, with underlying EBITDA down 8% to £829m. 

• The online drift was down to the exit in Octt21 from the Netherlands and continued issues in the UK caused by the implementation of enhanced affordability checks. 

• Up against easy comps, retail was significantly boosted with revenue up 62% to £1.28bn and underlying EBITDAR up 260% to £294m.

• Nothing to see here: BetMGM’s numbers were as previously announced with NGR at $1.44bn for 2022 and the target for 2023 of $1.8bn-$2bn.

• In Australia, Nygaard-Andersen noted the recent “noise” around generosity.

• I see Unikrns: Entain noted that its esports-betting offering Unikrn had launched in Brazil and Canada.

Instant takes: Regulus analysts noted Entain’s capex spend was ~50% that of rival Flutter. “If both groups spend on development equally wisely, then the compounding effect of Flutter’s scale is likely to tell, in our view,” the team added. 

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Flutter’s Russia fluster

In Compliance+More today, we reported on how Flutter is determined to not let the bribery charges related to PokerStars activities in Russia derail its US listing plans. Company sources told C+M: “This is a legacy issue that we inherited through the acquisition, and one which we’ve kept stakeholders aware of.” 

Compliance+More

Flutter's Russia fluster cluck

Good morning. On today’s agenda: Flutter says Russian bribery affair won’t impact US listing plans. Kentucky and Oklahoma sports-betting bills advance. New York State Sen. Joseph Addabbo attempts to rustle up action on iCasino. The Netherlands authorities extend duty-of-care study…

Read more

2 hours ago · Compliance+More

Massachusetts launch

Betr is the latest operator to say it will miss out on launch day.

Then there were six: A Massachusetts Gaming Commission meeting on Wednesday disclosed that micro-betting specialist betr wouldn’t be on the starting grid come the launch tomorrow, Friday, bringing the number of operators that are to launch to merely half-a-dozen.

• Betr will now launch in a fortnight whereas Fanatics and Bally’s have said they will open in the coming months and Betway says it will start next year

• PointsBet and bet365 have foregone their licenses altogether.

What we’re reading

Funny bones: Dustin Gouker on FanDuel’s chances of dominating in Massachusetts.

Full House big tent news

The opening of Temporary by American Place in Waukegan puts Full House on course to nearly double gaming revenues this year.

CEO Dan Lee said the half-month numbers coming out of the Temporary casino facility in Illinois suggested a run rate of ~$8.2m a month or ~$100m a year. This compares with its 2022 gaming revenues released this week of $114m.

• Q4 total revenues came in at $36m, down 17% YoY, while FY22 revenue was off by 9% at $163m. Q4 adj. EBITDA dropped 32% to $47m.

• The Q4 declines were largely down to the disruption caused by bad weather and construction work at Full House’s Colorado casinos.

Super six: The company noted that Circa Sports had signed up for one of Full House’s sports-betting skins in Illinois and could go live in the next few months. That will make it six skin agreements bringing in $10m a year, with Circa being worth half that total.

• CFO Lewis Fanger noted it also has one idle skin in Indiana, which it might opt to use itself.

Golden gets shot

Golden Entertainment has offloaded its distributed gaming business for $322.5m to J&J Ventures Gaming.

The detail: The distributed gaming operations are in Nevada and Montana and the price is ~9x 2022 adj. EBITDA of $44m. The buyer is an Illinois-based provider of distributed gaming services; it will supply Golden’s wholly owned taverns business via a five-year contract. 

• The deal is expected to close prior to year-end and will see Golden’s net debt reduced to an expected 0.3x 2024 adj. EBITDA.

• Reaction: Analysts applauded the deal given it was achieved at a higher multiple than the 7x adj. EBITDA that Golden currently trades on.

• B Riley analysts said Golden, which owns the Strat in Las Vegas, was now a “sharpened, simplified Nevada pure play”, while CBRE said it now looked “more attractive and saleable to potential suitors”.

• Recall, last year Golden sold the Rocky Gap casino in Maryland for $260m to Century/VICI, a deal that is expected to close this summer.

NeoGames’ combo play

Supplier continues to benefit from the global lottery push into online.

Numbers up: The potential for iCasino and sports-betting provision represented by the Aspire Global acquisition will help shift NeoGames beyond its “core focus” of iLottery provision, said CEO Moti Malul after its Q4 revenues tripled to $83m with adj. EBITDA hitting $18m.

• iLottery revenues from its NeoPollard Interactive joint venture rose 33% to a record $28m, while Aspire was up 27% to $55m.

• NeoGames initiated guidance for 2023 with revenues, including its share of the recently enhanced NeoPollard JV, to between $235m and $255m.

• A minha menina: Q4 saw the launch in partnership with Intralot of an iLottery and OSB offering for the state lottery in Brazil’s second-largest state Minas Gerais.

🎢 NeoGames: earnings day bump before later giving up ground

FansUnite’s Tekkorp cash

The OSB operator/provider and affiliate provider has secured an upsized private placement worth $3m led by Tekkorp.

United we stand: Tekkorp has taken a ~$1m stake in Toronto-listed FansUnite via a private placement with the rest coming from other investors. The money will go towards general working capital purposes.

• The company released preliminary results in early February, which said revenue for this year would be C$26m-C$27m but with net losses of C$16m.

• FansUnite recently sold its BetPrep affiliate site for an undisclosed sum to Stram Entertainment, the company behind BestOdds.com.

Growth company funding

Betting affiliate Betsperts has announced $3m of new funding alongside a significant board appointment.

Nothing ventured, nothing gained: The money comes from Verance Capital and includes participation from HBSE Ventures, Parlay Capital, and other current Betsperts investors. The company said it is seeking a further $2m in growth capital to support organic growth plans and potential M&A.

• The company also announced Ari Borod, chief business officer at Fanatics Betting & Gaming, has joined the board. Borod was previously at FanDuel and Action Network.

• In late December, Betsperts bought Bleacher Nation for an undisclosed sum of cash plus equity.

Earnings in brief 

SJM: Revenue fell 37% in 2022 to HK$9.6bn while adj. EBITDA losses nearly doubled to HK$3bn, as the Macau operators struggled with China’s Zero-Covid restrictions. The company said it had “unwavering confidence” in Macau’s future.

Bet-at-home: The focus on cost cutting, UK exit and the implementation of deposit limits in Germany caused FY22 GGR to drop 10% to €53.5m, while EBITDA was down 85% to €2.1m or minus €1.7m if discontinued operations were accounted for. 

Real Luck Group said it recorded a new monthly record handle of C$2.8m in February, with revenue growing 110% and ARPU up 127% MoM.

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Growth company news

SB22 has partnered with an operator called ZingSports to launch a sports-betting platform in Puerto Rico, pending regulatory and licensing approvals.

Australian startup Cipher Sports Technology has announced the launch of a sports-wagering customer analytics platform called Convertr.

Newslines

Melco Resorts has announced a $170m share buyback program.

NorthStar Gaming began trading yesterday on the TSX Venture Exchange.

BetMGM has launched what it says is the first brand-led iCasino offering in New Jersey, in association with IGT and Sony Pictures Television.

Separately, BetMGM is now the official sports-betting partner of the MLB’s Boston Red Sox.

Rokker has announced the launch of RokkerX, a new subsidiary that will look to provide managed trading services, with hubs in the UK, Spain and Bulgaria.

EveryMatrix has announced a deal to supply a range of content and platform services to betPARX.

Great Canadian’s $1bn Toronto casino will open this summer.

Buzzkill: ​​Buzz Bingo is to close nine of its 91 retail locations in the UK, citing changes in post-pandemic customer behavior.

Spotlight Sports and Sky Betting & Gaming have combined to produce a racing content hub for the Cheltenham Festival, which takes place next week.

Calendar

• Mar 9: Playstudios, AGS

• Mar 10: Genius Sports, Century Casinos

• Mar 14: Super Group

• Mar 15: Sportrader

• Mar 16: FL Entertainment

An +More Media publication. 

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