Earnings+More - MGM continues to build
Good morning. On today’s Earnings Extra agenda:
You can turn me on with just a touch. Breaking newsBally’s signs with Kambi and White Hat: Kambi and White Hat Gaming will supply OSB and PAM solutions to Bally's as the operator junks its previous in-house solutions.
MGM Pushes onMGM confirms Push Gaming acquisition as future projects point to global focus. Pushed up the agenda: Talking about the deal to buy a majority stake in Push Gaming, CEO Bill Hornbucke said MGM is “building a fundamentally strong business” in tandem with LeoVegas via its bolt-on acquisition strategy. MGM didn’t confirm reports in late April that the deal, which is expected to complete in Q3, was worth €150m.
FCUK: Notably, following the release of the White Paper on gambling in the UK, Hornbuckle suggested that via LeoVegas the market was one that would be concentrated on release in the UK,
That old thing? As previously broadcast by JV partner Entain, BetMGM saw “improved economics” with the business on track to hit 2023 revenue guidance of between $1.8bn-$2bn and to be EBITDA profitable by H2. “We’ve all become a lot more disciplined,” Hornbuckle said.
Been around the world and I, I, I: Hornbuckle said the recent news about the certification of the Osaka, Japan project was a testament to MGM’s “perseverance” as it paves the way to the company breaking ground on the ~$10bn project by late next year or early 2024.
Boom-bang-a-bang: Earnings in Q1 were boosted by the return of MGM’s Macau operations to something like its pre-pandemic bulk. GGR at MGM China was at 78% of 2019 levels or $663m which bettered the ~50% of 2019 GGR hit marketwide.
Brass in pocket: Halkyard said the return to normalcy in Macau had helped push Q1 cash flow across the business to $564m less capex.
Blinding lights: Total revenues rose 36% to $3.9bn with the Las Vegas Strip properties contributing $2.2bn (up 31%) of net revenue and property level adj. EBITDA of $836m (+41% YoY). Total Q1 adj. EBITDA came in at $1.1bn, up 65%. Hornbuckle noted once again the extent to which the Strip was “fueled” by the sports and event calendar.
** SPONSOR’S MESSAGE ** Venture capital firm Yolo Investments manages in excess of €600m in capital across 80 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem. MGM quick takesUptown top ranking: The team at Macquarie said MGM was benefitting from its moves to position itself as more upmarket in Las Vegas, noting that buying the Cosmopolitan, consolidating CityCenter and divesting the Mirage “will lead to further outperformance”.
Feeling the heat: The team at Truist said that although MGM said forward bookings are up YoY each month through to November, a seasonal slowdown was also priced in.
VICI in briefVICI: The gaming REIT saw revenue more than double in Q1 to $878m while AFFO was up 73% to $529m as the company said it had benefited from “opportunistic accessing of liquidity”. During the quarter VICI invested in Canada through the acquisition of four casinos and marking its first international foray.
Analyst takesMacau: The April data was tracking ahead of forecasts, according to the team at Jefferies who said the GGR tally of $14.8bn meant the YTD GGR tally was tracking 38% below 2019 levels vs. the 54% figures from January.
Esports Entertainment’s new cashEsports Entertainment has completed a private placement of new unsecured Convertible stock with an unnamed institutional investor worth $4m after expenses. It recently announced a $15m debt exchange with the Alto Opportunity Master Fund, also in exchange for new Convertible Preferred Stock.
Growth company funding newsBetty: The Canadian-based iCasino startup has completed an undisclosed funding extension round led by Happyhour.io align with Seth Young, industry angel investor Mark Mariani, Endzone Media and Milwaukee Venture Partners. Startup MonthThe latest edition of the Startup Month will be sent later this morning including a look at the issues faced by female founders in the betting and gaming space as well as a new startup survey from the aforementioned HappyHour and an Inside the Raise with Prophet Exchange. ** SPONSOR’S MESSAGE ** The Huddle Journal The NBA Playoffs' initial five games are a wrap, and Huddle's got some slammin' stats to share!
Huddle is bringing their A-game this season! Learn more and check the Huddle Blog here: https://huddle.tech/huddle-announces-impressive-performance-during-nba-playoffs-2023-games-1-5/ NewslinesLet them eat cake: Caesars said it will renovate the Jubilee Tower at Horseshoe Las Vegas and integrate it into Paris Las Vegas with the new name, the Versailles Tower. Totally tropical: Meanwhile, Caesars online has launched a second iCasino brand in Pennsylvania under the Tropicana name. Star Entertainment: Private equity groups Bain Capital, Apollo, Blackstone and Oaktree Capital have all expressed an interest in providing funding to the Australian casino group. Calendar
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