Good morning. On today’s agenda:

• Kindred confirms departure of COO Anne-Jaap Snijders.

• Super Group faces a complaint over lack of filing detail at float.

• 888 sells its Latvian business for €28m to Paf.

• Las Vegas operators up against it on global comparatives ex-Macau.

• Our startup focus is e-Technologies.

• Career paths sees high-profile departures at Pinnacle and Entain.

I exercise all options, and I know I'll see you there.

Kindred COO departure

Anne-Jaap Snijders is the latest to exit the firm following CEO and CFO departures.

Meltdown: Snijders is the latest high-profile departure from the Kindred management team, following CEO Henrik Tjärnström’s resignation last week. That itself came after CFO Johan Wlsiby’s abrupt resignation a matter of days earlier.

• Nothing to see here: Kindred confirmed Snijders had left the company and claimed it was part of an “operational review that has been ongoing for some time”.

• This review had the aim of “(increasing) effectiveness within the commercial engine”.

• The spokesperson said it had “nothing to do with the strategic review initiated by the board”. “Operational changes are a natural part of the business to ensure a strong and competitive offering.”

Recall, Kindred is currently undergoing a strategic review announced at the end of April. Subsequently, Wilsby and Tjärnström announced their departures last week.

• The ructions at Kindred have apparently left investors unruffled as they continue to pin their hopes on a sale of the business despite the management exodus.

• The share price is up over 12% in the past month, since the review was announced.

🤷 Henrik who?

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Super Group’s legal fight

The owner of Betway and Spin sees a legal challenge by the investors in the original float vehicle.

To what purpose? A shareholder in the Sports Entertainment Acquisition Corp. (SEAC) special purpose acquisition company, which merged with Super Group to enable the betting and gaming company to list, filed a complaint in the Delaware courts late last week alleging a lack of disclosure at the time of the 2022 listing.

• The complaint names Sports Entertainment co-founders and ex-NFL and NHL execs John Collins, Eric Grubman and Chris Shumway as defendants, among others.

• SEAC raised $350m at the height of the SPAC boom in July 2020 with the purpose of seeking a merger with an existing company within two years of its own IPO.

In the dark: The lawsuit alleges that having alighted on a potential merger with Super Group, the defendants issued a “materially false and misleading proxy statement” that failed to disclose changes to the regulatory backdrop in both Germany and the Netherlands.

• Recall, the new German regulatory regime came into force in July 2021; in the Netherlands the regulated market opened up in October that year.

• "While the proxy contained boilerplate references to gambling regulations, passage of these major legislative pieces in material jurisdictions went unmentioned," the complaint stated. 

• "In contrast, the proxy contained extensive discussions on changes to the regulatory landscape in Canada.” 

• “By comparison, stockholders could only read defendants' silence on German and Netherlands laws as meaning they would not affect the post-merger company."

At odds: The complaint added that a matter of months after shareholders voted in favor of the deal in January 2022, the company issued disappointing forward-looking guidance. However, the Q122 results actually saw revenues rise 7% to $335m as growth in Africa and Asia “partially offset adverse impacts from tightening regulation”.

• The lawsuit noted the share price subsequently “cratered”. 

• Indeed, as can be seen, Super Group barely managed to stay above the $10 float price before subsiding to its current levels of $3.67. 

🧑‍⚖️ Super Group’s post-SPAC merger share price performance

The week ahead

🍿 Super Group is unlikely to comment on the legal complaint when it reports on Wednesday.

In other news: More pertinent to current investors in Super Group will be how the company views its opportunities in North America. Recall, at the time of its Q4 earnings earlier this year it said it was assessing which states were “commercially feasible” after announcing $70m of US losses in 2022.

• The company said at the time it wouldn’t pursue US opening “just for the sake of it”.

• The fall in North America revenues was in line with expectation, the company said, after the move to a regulated market in Ontario.

Esports-betting-led operator Rivalry, meanwhile, will look to build on the news that GGR had trebled to $9m as it announced a $10m investment from Pinnacle in Q4.  

• Further reading: The New York Times on how the esports world is “starting to teeter”.

Calendar

• May 23: E+M Data Month

• May 24: Super Group, Rivalry Q1s

• May 26: E+M Weekender

888 sells Latvia business

William Hill and Mr Green-branded business sold to Paf for €28m.

Baltic exchange: 888 has offloaded its local-licensed Latvian business to the Finnish state monopoly operator Paf. The deal will see 888 receive €24m in cash with a further €4m+ payable in 2024.

• The Latvian business generated revenues of €9m in 2022 and EBITDA of €2.5m.

• 888 said its “relatively limited exposure” to the Baltic region meant that it was not a core market nor one where it would prioritize investment.

• Paf will receive a brand license for a limited period, though the business already operates independently from 888 and on its own platform.

Analyst takes

The burden of expectations: The prospect of having to perform against challenging comparatives from last year is becoming more evident, according to the team at Deutsche Bank after meeting with companies in the past week.

• Catalysts “remain more difficult to identify, thereby exacerbating the concerns around macro-economic conditions”, the team added.

• The exception is Macau where the recent positive trends “remain on track”.

• While there might be “some room for upside” for the Las Vegas Strip operators, the situation is bleaker for regional operators where DB said they “continue to see a tougher outlook”.

Flutter and DraftKings: The team at Jefferies have noted their call flow from investors is showing “accelerating” interest in digital gaming names, and Flutter and DraftKings in particular. “The forthcoming listing of FLTR, the near-term profitability, the M&A activity and the lack of macroeconomic relevance position the names favorably,” the team added.

• With smaller-cap names such as Rush Street and Gambling.com (see below) also “attracting attention”, Jefferies said the “focus on this group continues to rise” and “performance should reflect this positive interest”.

Gambling.com: Truist analysts said they liked the affiliate’s positioning in the broader interactive space as the group upped FY guidance by 2% to $95m-$97m and EBITDA guidance by 3% to $33m-$37m. 

• The updated numbers included new investments to develop the Casinos.com domain and no new state launches or M&A. 

• Jefferies noted that a recent S-3 filing allowing pre-IPO shareholders to sell shares “presents a modest overhang”, but will be a long-term positive as it will improve liquidity. 

Startup focus – e-Technologies

A kicks inside: e-Technologies was founded by industry veteran David Kicks, as a way for governments to take “full advantage of a payment gateway and orchestration layer to modernise the way in which they collect tax”. 

• The mission was to help governments understand how the payment industry works in relation to iGaming. 

• e-Technologies offers a solution that “provides a channelisation strategy to encourage participation in a well-managed ecosystem that benefits all stakeholders, up to and including the players”, Kicks says.

• He insists the company is not a pure technology play. 

• “We have to marry this with deep insights as to how the gaming market works and what incentives and facilitators drive the grey market and what might change the dynamics.”

Mind the gap: The aim is to “bring clarity” to governments in a “morass of competing ideas”. “Governments are always receptive to closing tax gaps and are willing to engage, especially with safeguarding measures and looking into different approaches to ensure responsible gambling,” he says.

• For operators, meanwhile, there is the clear desire to enter newly regulated markets. 

• “With pressure from both shareholders and suppliers, there is interest in engaging with clearly defined and simpler market entries,” Kicks adds. 

• “Therefore, any sort of technology that can speed up this process is going to be attractive.”

Jigsaw puzzle: Europe continues to be a “complex, fragmented and saturated market, offering little to no room for growth”. Therefore, operator attention is now focused further afield. “The African market will be one of particular interest for the iGaming industry,” he says.

• “Having a burgeoning population, the continent is on a rapid development trajectory with reports claiming it will be worth £6bn by 2030.”

• e-Technologies was recently appointed by Nigeria’s Federal Inland Revenue Service and National Lottery Regulatory Commission, as they are set to introduce responsible and regulated online gambling in their local economy. 

• “With that, we start looking towards other African countries and their ongoing gambling regulation developments,” Kicks says.

• “While African markets are evolving, there are still many challenges that exist. Looking at taxation, government authorities are “struggling to strike the balance” between taxing enough to see benefits from regulation and taxing too much that it would encourage non-participation. 

• “However, there is a strong desire to create a sustainable model and e-Technologies is currently in talks with five other African governments while also looking globally to expand our operations.”

Growth company news

Recent startup focus company The Unit has extended its marketing services collaboration with BetRegal, a Canadian-born iGaming brand that has expanded to serve specific regulated markets across the globe.

SimWin Sports’ virtual American football season will feature The Boston Legends, a new ownership group led by Autograph, the non-fungible token platform co-founded by former quarterback Tom Brady.

EveryMatrix delivers iGaming software, solutions, content and services for casino, sports betting, payments, and affiliate/agent management to 200+ global Tier-1 operators and newer brands. The platform is modular, scalable, and compliant, allowing operators to choose the optimal solution depending on their needs.

EveryMatrix empowers clients to unleash bold ideas and deliver outstanding player experiences in regulated markets.

www.everymatrix.com

Career paths

888 has appointed Ben Hurst as its new vice-president of North American market expansion. Hurst has recently been a consultant for 888 and other brands and before that was SVP and head of digital at Madison Square Garden (MSG) Sports & Entertainment.

Paris Smith is set to leave her role as CEO of Pinnacle after 17 years with the bookmaker. She will continue to work with the group as an advisor.   

Sky Betting and Gaming has announced its head of product Satpal Ghatrora is leaving after seven years at the group.   

Entain chief governance officer Robert Hoskin will be stepping down from his role at the end of June after 18 years with the group. Entain said the move was part of a restructuring project. Simon Zinger, Entain’s general counsel, will take on Hoskin’s duties.

Newslines

DraftKings: The US Attorney’s Office in Manhattan has filed a federal criminal complaint in the Southern District of New York charging a man with six counts related to an alleged hacking of 60,000 DraftKings player accounts.

Startup bookmaker kwiff has signed customer acquisition and analytics provider Adjust to optimize its mobile onboarding and CRM platform.

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