Deal Monday: Fanatics/PointsBet and Aristocrat/NeoGames
Deal Monday: Fanatics/PointsBet and Aristocrat/NeoGamesFanatics’ PointsBet US acquisition, Aristocrat’s Neo surprise, affiliates move to center stage, analysts takes, startup focus – Pro League Network +MoreGood morning. On today’s agenda:
Deal MondayFanatics has snapped up PointsBet’s US business for $150m while Aristocrat swallows NeoGames for $1.2bn. While you were sleeping: The tectonic plates of the global gaming sector saw sudden moves overnight as first Fanatics announced it had bought PointsBet for $150m and then Aristocrat said an offer to buy NeoGames for $1.2bn all-cash had been accepted. On Points: Under the terms of the Fanatics deal, the PointsBet business will be broken-up with Fanatics taking the US business while the Australian and Canadian arms alongside the proprietary platform remain. The cash consideration is A$222m or $150m.
Aristocrat: The $29.50-a-share, $1.2bn deal sees the Australian gaming giant snap up the NeoGames iLottery-to-iGaming business for $1.2bn in cash.
** SPONSOR’S MESSAGE ** The Huddle JournalTime to share Huddle's slammin’ stats during NBA Conference Semifinals
Learn more and check the Huddle Blog here. Out of the blueRecall, Aristocrat’s last foray into putative M&A came in October 2021 with what turned out to be a failed £2.7bn bid for Playtech.
Not out of the blueFanning the flames: The heavily rumored deal for PointsBet sees Fanatics greatly augment its reputed US presence where its market access was limited to a handful of states.
At a loss: PointsBet’s US business for the HY23 generated net win of A$70m with A$51m of that coming from sports betting and A$19m from iCasino. It has a low-single-digit market share profile across most states with the exception being Illinois where it consistently achieved 5%+.
😱 PointsBet shares down over 20% The week aheadThe leading gaming affiliates take center stage. Better Collective reports tomorrow where it will update on its stated ambition to become a digital sports media group. In a recent preview note, analysts at Redeye said they expected to see “continued solid growth”, which will include the launch of Ohio. But they are not so hopeful of the Massachusetts debut.
Catena Media reports the following day and questions are likely to focus on the group’s ongoing strategic review.
Tuesday also sees the debut earnings statement from Lottomatica, which recently completed its €3bn listing in Milan. After a first day of dealing drop, the shares have since recovered some poise.
E+M this week: On Tuesday, Due Diligence takes a look at the news that Kindred is undertaking a strategic review and asks what role activist investor Corvex will play. Calendar
Analyst takesAfter another busy week of earnings, here’s a review of analyst takes. Ain’t no pleasing you: For Deutsche Bank the results from Light & Wonder were “strong” but “uneventful” from a “new news perspective”. LNW’s Q1 EBITDA was $16m above DB forecasts, thanks to the gaming segment. Macquarie noted that gaming revenues were down low single-digits sequentially, in-line with IGT but slightly below PlayAGS. Muscle beach: The Jefferies team said IGT’s gaming and PlayDigital units achieved momentum that enabled the group to flex its “lottery muscle” and create new demand and revenue streams in Q1.
Blame the Fed: PlayAGS has received minimal credit for repositioning its business, according to the Roth MKM team, who suggested that consistent market share gains and EBITDA beats since the second half of 2021 were “overshadowed by rising interest costs”.
Bally’s Corporation delivered a “nice” Q1 and was “finding what works” and “what needs to change” as part of its ongoing restructure, said JMP. The group announced the departure of CFO Bobby Lavan, is trying to sell DFS brand Monkey Knife Fight and outsourced OSB to Kambi, which JMP said was “a smart move”.
Wynn Resorts: The team at CBRE noted that the mood music from Macau “keeps getting better” with mass table drop at 82% of 2019 levels. They added that at the current recovery trajectory, Wynn could be run-rating at 2019 EBITDA levels in Macau as early as Q4 this year.
Genius Sports: B Riley analysts noted how the $5m beat on revenue forecasts in Q1 effectively flowed through almost directly to the bottom line, which came in at $8m versus the $3m forecast. It demonstrates “ significant operating leverage,” the team added.
Sector watch briefingSports streamingSuns block: An attempt by the Phoenix Suns to provide a free-to-air streaming service and dump its existing broadcast arrangement with the Chapter 11-stricken Diamond Sports Group was blocked by the bankruptcy courts.
Earnings in briefMohegan Gaming’s net revenues rose 13% to $406m and adj. EBITDA increased 18% to $102m in Q2. Mohegan Digital revenues rose 284% to $27m as the group launched in Ontario to complement its existing online operations in Connecticut. Land-based gaming generated $285m of total revenues. Zeal Network: Revenues rose 6% to €27m while EBITDA was up marginally to €9m. During the period, Zeal was granted permission to offer slots by the German authorities. It confirmed revenue forecasts of €110m-€120m for 2023 and EBITDA of €30m-€35m. Ainsworth Game Technology said it expects to announce H1 pre-tax profits of A$20m excluding currency impacts and one-off items at the end of June. In a trading update, the group said it was seeing continued growth in North American historical horseracing wagering, while Latin America revenues are “expected to increase by at least 25%” on the $33m recorded in H222. Both Genting Singapore’s adj. EBITDA and revenue were up 54% to $192m and $484m in Q1. The group said Resorts World Sentosa was benefiting from the travel and gaming recovery in the region and from its partnership with the Super Golf League/LIV Golf events. Pollard Banknote: Revenues were up 9% to C$125m but EBITDA was down C$1m to C$18m as cost of sales rose 17% to C$107m and “significant cost increases” with the group’s instant ticketing system impacted margins. Startup focus – Pro League NetworkCrazy golf: New York and Boston-based Pro League Network was formed only last year by sector veterans Mike Salvaris and Bill Yucatonis and aims to be the “leading source of fun and inherently bettable live sports” via, first, thoroughbred racing and other content including professional mini-golf and (checks notes) professional pillow fighting. Yes, pillow fighting. Professional pillow fighting. Funding backgrounder: Currently self-funded, the company is closing on its seed round. The pitch: The company points out it is providing a “completely new business model” for sports. “PLN is betting that the future of sports lies in sports that are short form, studio-produced, always available and often creator-driven,” it adds.
Broadcast news: By the end of the year, that will ramp to two to three hours of content per day to sportsbooks. “All legal, betable sports with the highest integrity and optimized for the wagering calendar,” the team says. ** SPONSOR’S MESSAGE** BettingJobs is the global leading recruitment solutions provider to the iGaming, Sports Betting and Lotteries sectors. Boasting a 20-year track record supporting the iGaming industry, and with a team of experts and world class knowledge, it’s no surprise BettingJobs is experiencing rapid growth with outstanding results. Does your company have plans to expand teams to cope with strong growth and demand? Contact BettingJobs.com today where their dedicated team members will help you find exactly what you are looking for. Career pathsKindred Group has announced that CFO Johan Wilsby will leave his position this autumn. The group has initiated the process to find his replacement. UK casino group Rank has promoted head of interactive Jon Martin to the role of group COO. Greek operator OPAP has appointed Achillia Condou as its new chief people officer and member of its management team. She joins OPAP from FMCG conglomerate Unilever. Colombia’s gambling regulator Coljuegos has appointed Sammy Libos Zúñiga as its new president with immediate effect. Zúñiga was previously deputy director of fiscal policy at the Ministry of Finance and Public Credit. Alex Norling has been promoted to global head of creative at esports-focused bookmaker Rivalry, which he joined in February 2021. NewslinesFrom today, Genting Hong Kong has delisted from the Hong Kong Stock Exchange. An +More Media publication. For sponsorship inquiries email scott@andmore.media. Earnings+More is free today. But if you enjoyed this post, you can tell Earnings+More that their writing is valuable by pledging a future subscription. You won't be charged unless they enable payments. |
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