Good morning. On the Weekender agenda:

• Doubts remain over whether Hard Rock will restart in Florida.

• Extent of the William Hill downturn laid bare.

• Better Collective and EveryMatrix affiliate M&A deals.

• Golden Matrix and MeridianBet amend merger terms.

• Jobsboard by BettingJobs features COO, CMO and Global VP of Finance roles.

Skipping over the ocean like a stone.

Hard choices

Commercial risks cloud Hard Rock’s decision over whether to restart OSB operations in Florida, suggest analysts at EKG.

All roads lead: Faced with the likelihood of the Seminole compact case heading eventually to the Supreme Court, the tribe’s Hard Rock business faces a tough choice over whether to restart operations within the state.

• The team at EKG suggested the “most obvious” risk is of once again having to halt operations, thus gaining a reputation for a “whip-lashy MO that could negatively affect brand equity not just for sports betting, but also for the Seminole’s core retail business”.

• “We regard the Seminole as a very savvy gambling operator and believe the tribe will undertake a careful pros-cons analysis,” the team said.

• Although there is “no immediate pressure”, the tribe will be mindful of the potential threat from FanDuel and DraftKings, which both currently offer DFS within the state.

Oh baby, baby it’s a wild world: The EKG analysts said it is “very likely” that tribes in other states will follow the Seminole lead and get OSB provisions included within their compacts. 

• “Tribes in North Dakota pushed – albeit unsuccessfully – to model sports-betting provision of their compact after the Seminole compact, and we hear similar efforts are underway in Kansas,” the team said.

• They added that they can see tribes in California and Washington following the same path, as well as those in Michigan and Arizona looking at renegotiating.

• Such moves would entail a “rethink” of strategy in major tribal gaming states, with tribes increasingly eyeing “own-brand” launches and potentially limiting commercial operators to B2B opportunities.

• The corollary of that would be increased B2B TAM. 

• Assuming Seminole-style compacts, EKG suggested suppliers such as Kambi and OpenBet could have greater opportunities in some of the aforementioned larger tribal gaming states.

• “However, we believe commercial operators with B2B capabilities could challenge traditional suppliers for tribal business.”

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ICYMI

In LosIngresos+Mas this week, the potential for the market in Peru is discussed following the approval of the new regulations. The final law is set to be published later this month, with the market likely to open before the end of the year.

LosIngresos+Mas

Perú se regula

Bienvenidos a la última edición de LosIngresos+Más. Esta semana: La nueva regulación peruana para la industria de las apuestas entrará en vigor en la segunda quincena de noviembre. Brasil espera recaudar hasta $1,200 millones de dólares de la industria del juego para finales de 2024…

Read more

a day ago · LosIngresos+Mas

In Esprouts, Ollie Ring looks back to an esports-betting conference that took place in May 2016 and wonders why the agenda for the sector has barely changed in the intervening seven years.

In Compliance+More: in the UK, Betfair gets criticized by a Coroner over its failures in relation to the suicide of a disordered gambler and the gambling ad ban in the Netherlands comes into force.

In Earnings+More’s Startup Month sent earlier this week, the $35m raised by betr at the very end of June managed to bolster an otherwise anemic quarter for funding rounds in the betting and gaming space.

(Not) king of the mountains

The extent of the downturn within William Hill’s online business is laid bare.

Hill to die on: William Hill’s online operations saw net revenues dive by 19% in 2022 to £509m, while adj. EBITDA for that arm of the business tumbled by 27% to £112m. William Hill was acquired by 888 in July last year.

• The William Hill annual report released earlier this week blamed the downturn on the return of retail and the impact of increased affordability measures in advance of the UK Gambling Act Review White Paper.

• The report said the checks “put the group in a strong position ahead of the reforms being enacted”.

• The international business fared worse with net revenue down 23% to £212m, which was also caused by additional regulatory measures as well as the exit from the Netherlands.

Get the picture: For the business as a whole, revenue decreased marginally to £1.24bn while group EBITDA rose on the back of a retail resurgence, which saw revenues bounceback to £514m, up 53%, and adj. EBITDA of £96m vs. just £0.1m in 2021. Operating losses more than halved to £31m.

Better buy

Super affiliate Better Collective adds another bauble to its collection.

The social: Better Collective has splashed out an initial $15m in cash on Florida-based and US-facing social media and sports content provider Playmaker HQ. Including three-years-worth of earnouts, the deal could be worth up to $54m.

• Playmaker – not to be confused with the Canadian-listed Playmaker Capital – produces sports content mainly on Instagram, TikTok, Twitter, Snapchat and YouTube.

• It has 20m followers and the content reaches a monthly audience of 500m users.

• Playmaker has partnered with a variety of sports apparel and FMCG brands.

• Better Collective said it hopes to leverage Playmakers’ know-how to monetize its audience outside its core of sports betting.

Heroic: Playmaker is targeting revenues of $10m in 2023 with EBITDA margins pegged at 20-25%. To hit its $38m of earnouts, the company will need to generate $75m in revenue and $25m in EBITDA over the next three years.

• Better Collective has the option to pay some of the earnout in shares.

Going deep

Deep, deep down: EveryMatrix’s acquisition of the gaming affiliate optimization service DeepCI was completed this week for an undisclosed sum. The company was founded in 2020 by Riaan de Jager and Lewis Civin, and EveryMatrix said this week it was already profitable.

• DeepCI was the subject of a Startup Focus in early February when de Jager said the business was “completely unique”, as the first platform that is custom-built for affiliate managers.

• De Jager said in February that “thinking about an exit at this time is a distraction”.

• Civin will continue with the business, which will operate as an independent entity within EveryMatrix.

Entain’s Slovenian deal off

No deal: Entain has pulled out of a deal to buy the Slovenian lottery operator Športna Loterija due to concerns over selling the business to a foreign-owned entity, according to local media.

• Entain confirmed to the paper it was no longer pursuing a deal to buy the business from its current owners the Skiing Association of Slovenia (SZS), the Olympic Committee of Slovenia (OKS) and the Football Association of Slovenia (NZS). 

• A second bidder is believed to be Superbet, which it is thought remains in the race.

• Entain’s plan to expand its footprint in Eastern Europe via its Entain CEE JV with EMMA Capital recently saw it bid €750m for Poland’s leading bookmakers STS. 

• That bid was subsequently criticized by investors for being value destructive.

Golden ratio

Golden Matrix and MeridianBet amend the terms of their merger.

Win some, lose some: The total value of the merger between Golden Matrix and MeridianBet has been upped a couple of notches to $331m, but the upfront cash payment has been lowered to $30m and the timeline for completion stretched out.

• In a statement, Golden Matrix CEO Brian Goodman said the new terms reflected MeridianBet’s “considerably” increased revenues YTD vs. 2022.

• Pro forma revenues for the combined company for the year to Oct23 are now pegged at ~$139m with adj. EBITDA likely to come in at ~$31m.

• “MeridianBet’s impressive performance thus far in 2023 gives us even greater confidence in the value of the acquisition,” Goodman said.

• The deal is now expected to close in Q4.

Macau recovery

Despite an upturn following May’s blip, investors are likely to remain disgruntled, say analysts.

Lull before the storm: A recovery in GGR to 64% of 2019 levels marks a return from the May lull and should mark the point of reacceleration, according to the analysts at Roth MKM. 

• However, the 1% MoM increase to $1.88bn still likely disappointed investors, said Wells Fargo, who suggested the signs of seasonality in Macau differ from the shape of the recovery seen in the US last year.

• Roth suggested the recovery in VIP is outpacing that in mass and will be a driver of EBITDA recovery in Q2 for the major operators.

• The team is predicting an EBITDA recovery to 75% of pre-pandemic levels in Q2.

Best-case scenario: According to data from the University of Macau, the SAR’s GDP will more than double to 44% if tourist figures reach 80% of 2019 levels by year-end. At worst it will grow 30-35% of pre-pandemic levels in H2, it said.

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Sector watch – meme stocks

Day traders appear intent on throwing money away on a bankrupt company.

Bedtime for bozos: Reddit-reading day traders have reportedly spent almost $200m on what are effectively worthless shares in Bed, Bath & Beyond, the US homewares company, that went bankrupt at the start of May.

• In the latest incarnation of the meme stock craze, the FT reported an average of 18m shares have been traded per day since the bankruptcy announcement.

• The company has been the subject of speculative theories about turnaround plans in forums on Reddit.

Zombie: Speaking to the paper, a Loop Capital Markets analyst said the trading in Bed, Bath & Beyond was “almost a mutation” of the meme stock phenomena that emerged during the pandemic.

• At one point late in 2021, Roundhill Investments took advantage of the meme stock craze that built up around companies such as GameStop and AMC and launched a meme ETF.

• That vehicle, which included DraftKings among its constituents, is up 48% YTD but it remains underwater compared to its launch price.

🤿 The Roundhill MEME ETF has struggled since launch

End of the line: Such is the parlous state of Bed, Bath & Beyond that the company has actually sold its name to online retailer Overstock. As the FT story suggested, the day-traders still punting on the shares are now betting against each other rather than, as was the case with GameStop, hedge funds.

• “There are no institutions shorting Bed, Bath at 25 cents,” the Loop Capital analyst told the FT. “There’s no ‘man’ to stick it to any more.”

What we’re reading

Making a splash: A P2P platform emerges from stealth mode.

Buckle up: MGM’s Bill Hornbuckle says infrastructure funds could be used to help ease congestion on the route into the Strip from southern California.

Rock bottom: Gibrlatar’s elite caught up in Globix crypto collapse.

** SPONSOR’S MESSAGE **

What would you do with $100k in cash? Are you game…?

Newslines

Genius Sports has extended its rights deal with the NFL for a further three years, meaning it will now run until the 2027-28 season. The deal also now includes the exclusive rights to distribute official NFL Watch & Bet low latency live game video feeds to sportsbooks internationally. 

• The news comes hot on the heels of the announcement of the one-year extension of Genius’ agreement with the EPL.

• its shares rose 25% on the news.

Worldpay is once again in the hands of private equity after owner FIS announced it has agreed to sell a majority stake to GTCR, which values the business at $18.5bn. 

• The sale comes four years after FIS paid $43bn for the company and is reportedly backed by $9.4bn of bank debt, including leveraged loans and high-yield debt.

Caesars has become the latest operator to open up sportsbook operations in Puerto Rico.

Sporting Solutions has renewed an agreement to provide pre-match and in-play trading services and odds tools for multiple sports to Sky Bet.

Calendar

• Jul 20: Betsson

• Jul 25: Kindred

• Jul 26: Kambi, VICI (e), Churchill Downs (e)

• Jul 27: Churchill Downs (call), VICI (call), Boyd Gaming, GLP (e)

• Jul 28: GLP (call)

• Chief Operating Officer – North America 

• Global VP of Finance – Eastern Europe / Remote  

• Chief Marketing Officer – Africa

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