Earnings+More - Beat, raise, draft, kings
Beat, raise, draft, kingsDraftKings ups FY guidance, Barstool’s balancing act, Red Rock’s solid earnings, sector watch – esports betting +MoreGood morning. On the Weekender agenda:
This is not how I woke up but it’s how I look now. DraftKings’ familiar patternRevenue growth for 2023 of up to 44% is predicted, as Q1 beats forecasts. Rinse, repeat: With revenues of $770m, up 84% YoY, and adj. EBITDA losses trimmed back to $221m, DraftKings comfortably beat forecasts in Q1, helped by favorable hold and continued operational improvements.
Scream if you want to go faster: Following the launch in its home state of Massachusetts – where it narrowly failed to beat rival FanDuel to top spot – DraftKings is now live in 21 states plus Ontario, Canada. The company said in the press release that it continued to acquire customers faster and more efficiently in debut states.
🍆 DraftKings was up nearly 10% in post-close trading Quick takes: Wells Fargo said DraftKings likely had “more beats and raises in the tank”. However, Deutsche Bank added that although the beats were “healthy”, they “don’t see a meaningful read through” to the medium- or long-term story.
An FYI: The DraftKings call with analysts will take place later today, after which Earnings+More will release an Earnings Extra edition. ** SPONSOR’S MESSAGE ** Challengers welcome GeoComply and Citi 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.
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. ICYMIIn Earnings+More this week, Flutter reported quarterly earnings on Wednesday when CEO Peter Jackson said he “wouldn't be waiting to catch us” given the growth the company was seeing across the board. In the same edition of the newsletter, Caesars also proclaimed its digital self-sufficiency. Earlier this week, the latest E+M Startup Month looked at how female founders face more hurdles than their male counterparts. Meanwhile, gaming sector behemoth MGM Resorts reported its earnings on Monday. On the Gambling Files this week Jon and Fintan spoke to Las Vegas resident and super-lawyer Jennifer Gaynor to discuss all things Vegas, including the success of turning the city into a truly all-encompassing experiential venue. In Compliance+More yesterday there was a report on the UK Gambling Commission’s plans to move quickly with large elements of the White Paper. Meanwhile, on Tuesday the NFL’s positioning with regard to gambling was criticized following the recent high-profile player suspensions. In Sharpr yesterday, Cody Luongo and his team looked at the news that esports organization G2 Esports has announced a partnership with Counter-Strike: Global Offensive skin gambling site CSGORoll. Red Rock’s Valley storyIt’s all about migration to Las Vegas for Red Rock Resorts. Go east: Red Rock Resorts’ medium-term story is being boosted by the recent levels of migration from California to the Las Vegas Valley, suggested vice-chair Lorenzo Fertitta, who said there was a “totally different mix” of people, including business owners and retirees.
Buffer zone: Scott Kreeger, president, noted that since reopening post-pandemic Red Rock has enjoyed 11 consecutive quarters of margins above 45%. “I think this quarter is the second- or third-best quarter for margin in the company’s history,” he added.
From A’s to Z: Management noted that under the current plans for the Oakland A’s move to Las Vegas, Red Rock would retain a parcel of the land set aside for the stadium. Analyst takes – PennAnalysts suggest Penn will have to bear the risks of further social media storms if it is to benefit the upsides from the audience Barstool brings. Events, dear boy, events: The past two days have highlighted the clear downsides of being tied to the Barstool brand as the issues around the sacking of Ben Mintz for airing racist slurs overshadowed Penn’s online progress.
Lost in music: Deutsche Bank noted it wasn't just the online story that was obscured yesterday and that “likely lost in the noise” was its forecasts for property level EBITDA “actually moving higher”. But they added that the margin decline in the bricks-and-mortar business was the “most concerning aspect of the quarter”.
The shares weekPortnoy in a storm: The stout defense of Barstool Sports and its content policies by CEO Erika Ayers on the Penn Entertainment call yesterday may only have made matters worse as far as investors were concerned.
🩼 Penn Entertainment shares suffer social media fallout Analyst takesRush Street Interactive: The push towards profitability will be helped by the group’s cost controls, suggested JMP, who said it was “more impressive” than the 5% revenue beat. For Roth MKM the implication was that core markets are “generating enough growth” to drive operating leverage and profitability in 2024 and 2025. Sector watch – esports bettingRight approach: Rivalry keeps on attracting praise for its approach to esports betting as Q4 GGR rose threefold to $9m and CEO Steven Salz announced a $10m investment in the company from bookmaker Pinnacle.
Compare and contrast: EEG’s strategy of focusing on OSB (Bethard) and iCasino (LuckyDino) gray operators to supplement its esports-wagering activities failed, Ring said.
.exe file: Rivalry currently generates 12% of its revenues from iCasino, and Ring said its Casino.exe portal is “unique and something that gamers will likely identify with more than your typical slots”. This will help it reach profitability this coming year, he added.
** 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 On socialOh Portnoy, oh Portnoy, oh Portnoy. NewslinesWhite Hat Studios has been approved to launch its iCasino games in Connecticut. Kambi has extended its sportsbook partnership with the Scandinavian bookmaker Paf. The firms have been partners since 2011. Calendar
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Penn overshadowed by Portnoy storm
Thursday, May 4, 2023
Barstool storm looms large, Rush Street on its Connecticut exit, Lottomatica's debut drop, bet365's Ohio move examined +More
Flutter means to stay ahead
Wednesday, May 3, 2023
Flutter's market leadership, Caesars suggests digital losses are history, VICI's positive outlook, Kambi's convertible repayment +More
Move fast and break down barriers
Tuesday, May 2, 2023
Female founders makes their move, Wagr's no cash sale, startup survey, inside the raise – Prophet Exchange +More
MGM continues to build
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MGM's expansion plans on all fronts, analysts react +More
Gambling’s big earnings week
Monday, May 1, 2023
MGM, Caesars, Flutter and DraftKings to report, GLP call recap, Churchill Downs share reaction, startup focus – BettorTakes +More
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