Good morning. On the Weekender agenda:

• 888 reopens to Middle East VIPs as online revenues tumble.

• Earnings+More launches a readers poll.

• Lottomatica set for Milan listing.

• New York casinos could be worth nearly $2bn a year in profit.

• Meanwhile, the first Japanese resort casino gets the go-ahead.

• Jobsboard by BettingJobs includes roles in the UK, Cyprus and North America.

I ran (so far away).

888’s Middle East return

888 says the hit to revenues from Middle East VIP issues has been cut by half.

The cost of compliance 1: 888 said it had recovered 40-50% of the business lost at the start of the year after it moved to suspend its Middle East VIP business in late January due to significant compliance failures. 

• That move cost CEO Itai Pazner his job. Executive chairman Lord Jon Mendelsohn said his replacement would be announced “within months”.

Triage: Mendelsohn said the company had taken “swift action” with regard to the Middle East VIP business. “The failure was isolated to a very specific cohort of players,” he added.

• After a review of practices, the company said it had moved to reopen accounts and onboard new customers from the region. “Revenues in the region are beginning to recover,” Mendelsohn noted.

• Still, the loss of around half the business will create a £25m headwind in 2023.

As trailed, revenue for 2022 was down 3% to £1.85bn but adj. EBITDA rose 15% to £311m. Net debt remained high at £1.7bn or 5.6x pro forma adj. EBITDA and despite several debt issuances through the year.

• To help the debt situation, the company said it was looking at offloading non-core assets, including its retail freeholds and the the options over its near-20% stake in up-for-sale SIS. 

The cost of compliance 2: Online revenues for FY22 fell by 15% as the company attempted to right the UK ship in the face of a far tougher regulatory backdrop. Ex-UK, online fell 4%. The company said it undertook 500k vulnerability checks in the UK and 2.7m globally, a 19% increase.

• It added that 43% of customers now have deposit limits in place, up from 37% last year.

• Recall, in late March 888’s William Hill business was hit by a record £19.2m regulatory settlement by the UK Gambling Commission.

• Asked about the upcoming White Paper, Mendelsohn said the impact was “based into” its 2023 estimates.

Lookout: The online pain continued into Q1 with UK online down 9% YoY and international off by 11%. QoQ UK online fell 3% and international by 9%. Overall Q1 revenues were down 5% to £446m. A partial offset came from retail, which was up 8% YoY in Q1.

• Analysts at Regulus pointed out a contributory factor to the falling UK online revenues was a 23% fall in marketing expense.

• It said FY23 revenue would be lower by a mid-single-digit percentage but adj. EBITDA would be “significantly higher”.

• CFO Yariv Dafna noted the US business saw negative EBITDA of £12m in 2022, a level of losses that would be matched in 2023.

🍆 The markets liked what they saw from 888’s print, sending the shares up nearly 15% in early trading.

Earnings+More readers poll

Your chance to have your say.

Everyone likes a poll, right? E+M has teamed up with YouGov to conduct our first ever readers poll. 

To take part, simply click on this link. The poll consists of 15 multiple choice questions and only takes a couple of minutes. We’ve tried it out and, like a quick check up with the dentist, it’s painless and over very, very quickly, we promise.

• Should you take part, your answers will help us continue to build on the success of the newsletter(s) to date and all those who take part will earn… our eternal gratitude.

We thank you for your time.

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Challengers welcome

GeoComply and Citigroup invite start-ups and emerging operators and suppliers to free NYC Summit with superstars of gaming

Avengers assemble: innovators, disruptors and grizzled veterans set to share hacks, tips and tricks with developing companies targeting regulated gaming markets in the US.

• FanDuel, BetDEX and Vault co-founder Nigel Eccles heads a stellar cast of financiers, lawyers, operators, marketers, compliance professionals and, ahem, emerging media moguls (see full cast here)

• E+M’s own Scott Longley will be on hand to talk media matters and learn a thing or two from all of the above

• The Challenger Series Summit is a free event in New York on May 8th, 3pm-7pm.

Come with us: the US gaming market can be a tough nut to crack. To get some free advice from some who have cracked it, apply for this exclusive event here.

PointsBet rumor mill

Pointing in different directions: PointsBet is now looking at selling its US operations having failed to find a buyer for its Australian business at a suitable price, according to the Australian Financial Review. The paper says Moelis & Co has been appointed to find a buyer.

• PointsBet first told the market in late December it had received a bid from the Australian Betr.

• But as E+M reported in late March, that bid went cold as Betr startup marketing costs escalated and Entain was heavily tipped to pick up the pieces. Now the AFR suggests the bidders have balked at the A$250m asking price.

• Meanwhile, the paper said private equity has looked at buying the US business.

• But sources suggested Fanatics is a more likely buyer as it seeks both a platform of its own and market access, including notably a New York OSB slot.

• In January, Fanatics was linked with a $100m-150m bid for betPARX.

Lottomatica’s Milan move

The Italian-focused betting and gaming group is set to float in Milan.

Floating points: The IPO on the Euronext Milan exchange is expected to generate €425m in proceeds, which will go towards retiring a shareholder loan and paying a portion of existing debt. Post-float, net debt will be reduced to €1.3bn or ~2.4x FY23 estimated adj EBITDA.

• The company also released Q123 preliminary earnings, with revenue up 19-20% at €421m-€423m and adj. EBITDA up 24-25% to €155m-€156m.

• The main driver was the online business, including the recent Betflag acquisition, which was up 40% YoY. Retail rose 18% and the gaming franchise arm was up 10%.

• It reiterated FY23 revenue guidance of €1.5bn-€1.6bn and EBITDA of €550m-€570m, with online EBITDA of at least €275m. 

ICYMI

Compliance+More led on Thursday on the likelihood that the UK White Paper is ‘on the grid’ for release by the government next week, with Monday being a possibility. Will the UK industry finally get a sighting of its future regulatory framework?

Compliance+More

White Paper under starters orders

Good morning. On today’s agenda: On the grid: UK sector awaits the White Paper release. Sports betting could be fast-tracked in Kentucky. Dutch market access struggles. Good regulation costs money, says Sweden Sportradar’s head of sports integrity talks about AI innovation…

Read more

a day ago · Compliance+More

• Also this week, sports-betting legislation could be fast-tracked in Kentucky.

• The affiliate sector sees regulators coming down hard on rev share and CPA deals alike.

In Sharpr this week, more details were revealed about the plans for the Optic Gaming betting venture.

In the latest edition of Deal Talk on Tuesday, Earnings+More looked at who might buy betFIRST in Belgium.

On the Gambling Files this week, Jon and Fintan talk to Richard Marcus about the upcoming Global Table Games and Game Protection Conference in Las Vegas.

New York lots

The ‘new’ New York casino market could be worth $5bn a year.

I♥️NY: New York could be on the way to being the second largest commercial gaming state in the US, according to analysts at Bank of America. The team suggested revenues will be worth >$5bn at maturity, with total EBITDA across the winning bids of nearly $2bn.

• High population density, domestic and international tourism and the attractive initial tax rates – 25% GGR for slots, 10% for table games – will be the main drivers.

Pick a winner: While fighting shy of picking the winners, the BoA team echoed the consensus that MGM and Genting will snag a license each, leaving 10 bidders aiming for the remaining slot.

• They suggested three front runners: Las Vegas Sands in Nassau; Wynn/Related at Hudson Yards and Steve Cohen and (potentially) Hard Rock at Willets Point.

• Recall, the bidders will have to commit to a $500m licensing fee and at least $500m capital investment. 

• The BoA team indicated they will have to wait until Q1 next year for the licenses to be awarded.

Datalines – New York

Cake: The top four continued their utter dominance in OSB with 96% between them. FanDuel led with 49%, DraftKings was second with 32%, Caesars was on 9% and BetMGM achieved 6% share.

• Crumbs: Below this, the remaining five books – Bally, Wynn, PointsBet, Rush Street and Resorts World – managed an anemic $6m in GGR between them from a total market worth $163m.

🎂 New York winners – and the rest

Bingo kings

Everi has snapped up electronic bingo provider Video King for $59m.

Kings of the wild frontier: The fintech to gaming provider has effectively bought itself an installed base of 55k portable electronic bingo tablets that achieved revenues of >$25m in 2022 and which analysts suggested came with EBITDA margins of ~35%. That implies a multiple of ~6.7x.

• The company noted that ~20% of the tablets may be enabled to broaden their output into video poker, slots and instant games as well as digital wallet products.

• B Riley analysts suggested the deal could be “more accretive than at first blush”.

• Truist noted the deal fits with Everi’s recent strategy of tick-in acquisitions, including recent deals for ecash, Venuetize and Intuicode.

M&A notebook

Tika tape: Playtika is reported to have attracted private equity takeover interest following the company’s strategic review last year. The casual games company was the subject of a rumored bid last summer from current shareholder Joffre Capital, which came to nothing.

Growth company funding

Prophet: Defying the recent funding drought, the New Jersey-based betting exchange has raised $10m of new funding from investors including MIXI Inc, Ninjabet.com and Chicago Trading Company.

• Speaking to E+M at the start of March, CEO Dean Sisun said Prophet had cut back on its marketing efforts as it awaited the injection of exchange liquidity from two European market makers.

Beyond Play: The platform and streaming provider has raised €5.5m of new funding led by previous backer Bettor Capital. David VanEgmond from Bettor Capital will also join the board. 

• Bettor Capital’s interest in Beyond Play dates back to February when it took on the 25% stake of exiting LeoVegas for €1.9m.

Earnings in brief

Intralot: Having brought Standard General in as an investor and reconfigured its debt, the Greek-listed lottery and gaming provider said it was now on a firmer financial footing after seeing 2022 revenues fall 5% to €392m. Cost cutting saw EBITDA rise 11% to €123m.

Asia watch – Japan casinos

The long road to resort casinos in Japan is nearing a conclusion as the government approves the application for the city of Osaka.

Prime Minister Fumio Kishida’s government has finally signed off on the proposal submitted by authorities in Osaka, opening the way to a scheduled launch in 2029, ending one of the longest sagas in global gaming.

• The approval spells good news for MGM Resorts, which has been working with local partner Orix on the Osaka plan.

• The cost of the development is reported to be over $9bn and will include a casino, hotel and conference facilities.

• It is expected to generate 20m visitors a year and yearly revenues of ~$4bn.

Trust the process: Two other locations are up for consideration, including an IR in Nagasaki. However, as reported by Inside Asian Gaming, the bid there, led by the prefecture’s preferred partner Casinos Austria, has been somewhat mired in controversy with two unsuccessful local groups questioning the process.

• Another problem lies with Credit Suisse, which is one of the financial backers for the Casinos Austria bid.

• Its future remains clouded since it was taken over by rival UBS last month.

Asia notebook

Macau: The Government Tourism Office revealed there were 4.9m visitors in Q1 vs. 5.7m for the whole of 2022, with Macau casinos recording a 95% rise in GGR to $4bn during the period.

• Jefferies said Macau casinos’ daily revenues for the first 10 days of April were MOP400m ($49.5m) per day, with mass GGR flat MoM and VIP GGR down 10%. 

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On social

That’s leadership: Charles Gillespie from Gambling.com welcomes the news of the Premier League ban on gambling company shirt sponsorship.

What we’re reading

Land of luxury: Sportico’s JohnWallStreet column says Endeavor is on track to become the LVMH of sports following its UFC acquisition.

No logo: English Premier League clubs have agreed to withdraw all gambling sponsorship from the front of matchday jerseys from the start of the 2026-27 season.

Newslines

Churchill Downs has priced up a $600m new debt offering, which it intends to use to pay off an existing term loan.

Lottery.com has received notice it does not comply with Nasdaq listing rules after failing to publish its 10-K. The company has requested a panel hearing.

Sportradar has signed a two-year renewal agreement to supply sports data to the college sports-focused broadcaster Big Ten Network. 

Elys Game Technology will launch its North American online sportsbook platform by Q3.

New York-based hedge fund Conifer Management has acquired a 10% stake in Catena Media. 

Calendar

• Apr 18: Due Diligence

• Apr 25: Boyd Gaming

• Apr 26: Kindred, Kambi, Churchill Downs release

• Apr 27: Betsson, Evolution

• Money Laundering Reporting Officer, UK

• Financial Controller, North America

• Global HR Director, Cyprus 

An +More Media publication. 

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