Earnings+More - London’s lost listings luster
London’s lost listings lusterFlutter’s desertion for foreign fields deals a blow to London and poses questions for rival Entain +MoreGood morning, welcome to this month’s edition of Deal Talk. In this issue: London’s heyday as a hub for online gambling listings has long since passed but that doesn’t mean that Flutter’s decision to seek a dual listing – and likely eventually a full listing – in New York isn’t a hammer blow. Can the City recover lost ground from one of the biggest names in betting and gaming fleeing the nest? Rival Entain, meanwhile, is left high and dry as the biggest gaming entity remaining on the London Stock Exchange. Could it also look to cash in its own US chips or does the joint-venture nature of BetMGM complicate matters and make a New York move a step too far? And finally, this issue peers much further down the market-size scale to take a look at the recent fundraising news from FansUnite and speaks to new investors Tekkorp about how they view the opportunity. 22 grand job, in the city it’s alright. Breaking deal newsPlaytech has announced a strategic partnership with Hard Rock Digital that will see it provide technology and take an unspecified low single-digit percentage of the business in return for $85m of investment.
Lost LondonFlutter likely seeking a dual listing in New York is the latest blow to the City of London’s reputation as a willing home for gambling operators and suppliers. Departure lounge: The news that Flutter is consulting with shareholders over a dual listing in the US is being viewed by analysts as only a precursor to the betting and gaming giant, over time, seeking a full listing, given the company said the shareholder reaction had been “positive”.
Slip sliding away: The gaming sector-specific shift to North America pre-dates London’s current existential angst, with the online gambling center of gravity moving west in the wake of the opening of the sports-betting and iCasino opportunity in the US.
Atlantic crossing: There is a reason Flutter is making the move. As is evident from the 2022 full-year earnings published at the start of March, the US is already the biggest revenue generator by geography, contributing 38% of total revenues of £7.69bn, or £2.6bn. 💪 The US is already worth 38% of Flutter’s total revenues
** SPONSOR’S MESSAGE ** Founded in 2013, Metric Gaming is based in Las Vegas and London and developed the industry’s first truly multi-tenant sportsbook platform, purpose-built to support operators across multiple territories, regions or States. Metric is proud to be partnered with both Racebook HQ and Lacerta Sports (powered by Starlizard) and will roll out innovative MTS solutions for both racing and sports in 2023, including soccer and four main US sports. To find out more, please visit www.metricgaming.com Swinging LondonTerry meets Julie: The prospect of London losing its biggest listed gaming entity to the US would have been unthinkable in what might be called London’s gambling heyday in the opening decade of the Millennium.
Jumping through hoopsOrange is the new black: It was the arrest in the US of BetonSports CEO David Carruthers just ahead of the passing of UIGEA in late 2005 that marked the turning point.
Where have all the flowers gone? London enjoyed the benefits from the gray nature of online gaming for much of the first 15-20 years of its existence – and ultimately suffered the consequences as arrests and market shutdowns caused investors to lose faith.
Woke: Then there are the constrictions on the corporate side. One is the rise of ESG. While this is also a factor in the US, it is viewed as being much further up the agenda on this side of the Atlantic and, with gambling, it means some funds look more closely at whether they should be invested at all.
Broke: Then there is the issue of executive pay. Sources note the disparity, for instance, between the total compensation received by Bill Hornbuckle at MGM Resorts ($12m including stock options in 2022) and his equivalent at Entain, Jette Nygaard Andersen (£2.5m).
London can take itResurgam: But for all the pessimism surrounding London right now, it does retain some of its previous appeal as a listings hub for gambling-related entities. For companies with more of an international aspect in terms of earnings, it remains perhaps the most liquid global exchange, suggests one analyst source.
Ones to watch: Lottomatica aside, which will soon be listing in Milan, potential floats are few and far between. They include Cirsa (currently owned by Blackstone) and Tipico (owned by CVC), but these are likely to opt for their home markets of Spain and Germany respectively.
Follow the leader?Eyeing events at Flutter is its major London-listed rival Entain. Backstory: Entain has enjoyed its own singular and relatively labyrinthine corporate journey. It started as the then little-known listed minnow Gaming VC, led by former Sportingbet executive (and kebab-loving) Kenny Alexander, which listed on AIM in October 2005.
Joint custody: Superficially, there are strong resemblances between Entain and Flutter, particularly when it comes to their exposure to the US and, as has been pointed out, it also recently made an investor relations appointment in the US to liaise with its own US investors.
It’s a no… for now: When asked, a spokesperson said Entain was not planning any move with regard to a US listing and they were not aware of any discussions taking place within the company.
Inside the raise – FansUniteFansUnite’s recent $3m raise included a significant investment from Tekkorp Capital. Oops upsize your head: Tekkorp took a $1m stake in the sports-betting operator/supplier and affiliate provider in what FansUnite said was an upsized raise. The cash will go towards general working capital.
Pivot: FansUnite’s main exposure to the affiliate space comes via Betting Hero, which it acquired at the time of the American Affiliate acquisition. It has recently sold the BetPrep domain name to Stram Entertainment, owner of BestOdds.com.
Recall, in FansUnite’s recent earnings statement, the company said total revenue was $26m, quadruple 2021, and that its plans for 2023 included securing more B2B clients and growing its affiliate operations across North America. ** SPONSOR’S MESSAGE: 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 client’s boards and teams in building businesses people love. To find out more visit: https://www.rokker.co.uk/ The month’s transactionsDeal of the month: The biggest transaction for this month came in the world of distributed games with Golden Entertainment, the owner of the Strat in Las Vegas, selling its ‘slot routes’ operations in Nevada and Montana to Illinois-based J&J Ventures Gaming for $322.5m plus an estimated $39m of purchased cash. Distributed gaming involves the installation and operation of slot machines in bars, restaurants and convenience stores.
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