Good morning. On the Weekender agenda:

• PointsBet extols its remaining tech capability.

• Boyd Gaming sees regional falls, but online saves the day.

• The Kentucky Derby provides the bright spot for Churchill Downs.

• Analysts look for a solution to the JV structure at BetMGM.

• The BettingJobs Jobsboard includes CRM and Casino Revenue director roles.

You may ask yourself, "Well, how did I get here?"

Not a big college town

PointsBet CEO Sam Swanell puts a positive spin on the sale of its US operations.

A new you: CEO Sam Swanell pointed out PointsBet’s proprietary tech stack as a “global market leader” had been validated by the sale of its US operations to Fanatics for $225m. As part of the sale, PointsBet gets to keep copies of its own code base as well as the Banach odds factory tech. 

• He noted the recent sale of Angstrom to Entain for up to £203m and said that it provided “data points for the value of the tech and in particular the odds factory”.

• “We believe our odds factory capability is superior,” he added. 

Black country, new road: PointsBet is now on an “expedient path to profitability” following a sale that “marks the beginning of an exciting chapter” for the company. In FY23, remaining operations saw net win rise 7% to A$230m, while in Q423 it was up 10% to A$61m. 

• In Ontario, Swanell promised PointsBet would continue to invest given it provides “continued exposure” to the North American market in a jurisdiction that is “more attractive than most US states”.

• He said Australian profits “largely offset” the Canadian losses in FY24.

• What you get for $225m these days: The US business unit achieved Q423 net win of A$41m, up 35%, while FY23 net win rose 72% to A$161m.

🎯 With PointsBet now “more targeted”, Swanell insisted the company’s efficiency has improved in Australia and can get the “same effectiveness with less spend”. Asked about the Australian government’s plans to institute a ban on gambling ads, Swanell was the picture of sanguinity.

• “There are elements of what we did in the last two years that we don’t plan to repeat,” he said.

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ICYMI

Esta aqui: The news from Brazil was the top story for LosIngreos+Mas, as President Lula finally signed the Provisional Measure that formally legislates for regulated sports betting. The news was also covered by Compliance+More.

Pencil shavings: Also in Compliance+More this week, the UK government and the Gambling Commission have opened up a multi-pronged consultation process, which is to set the terms for the reforms to the Gambling Act as proposed in the White Paper.

Newsletter launch: +More Media is delighted to announce the launch of Steve Ruddock’s brand-new newsletter Straight to the Point, which is set to release its first edition on August 7. Sign up below for your online gambling news, information and insights.

Straight to the Point

Straight to the Point Online Gambling News, Information, and Insights from Steve Ruddock By Steve Ruddock

Boyd Gaming Q2 

Online provides succor as regions see revenue declines.

Where my peeps at? Boyd delivered “strong results in a challenging environment”, said CEO Keith Smith, with the only bright spot in the quarter being online. Construction delays to key properties at Fremont and Main Street Station in Las Vegas were blamed for the overall drag on revenue.

• Boyd ditched its phased renovation plans during the summer lull to put its foot on the gas, but the work took out 20% of slot machines and a third of table games during the quarter.

Blues in the south: Revenues rose 2.5% to $917m, helped by a 50% increase in online revenues to $85m, but all the regional segments notched up low single-digit revenue declines and adj. EBITDAR was down 0.7% to $351m.

• Questioned about the stagnant activity in Mississippi and Louisiana, management said they were confident the bottom had been hit, with footfall and customer spending trending upwards. 

• Despite having “grown dramatically through smart M&A”, Boyd won’t be chasing any outlandish deals, “but it is in our history to grow” through acquisitions, Smith said.

The perfect partner: The five-year anniversary of Boyd’s tie up with FanDuel has also come around. FanDuel’s strong performance in Ohio and Pennsylvania was noted, as well as the addition of now standalone Boyd Interactive to the balance sheet.

• The online casino business, branded Stardust, isn’t expected to “move the needle materially” in the short term, said Smith.

• “It’s small dollars, nothing will change that trajectory,” he said . “Profitable but small.”

Derby daze

The 150th running of the Kentucky Derby in May was all upside for Churchill Downs and its partners.

Gate receipts: Churchill Downs saw record handle and new registrants for its TwinSpires horseracing platform for this year’s race, while also providing a boost for its B2B partners FanDuel and DraftKings.

• CEO Bill Carstanjan said he expected more B2B partners to be added in the next 12 months.

• “We are very optimistic that horseracing and our TwinSpires services can be expanded meaningfully to online sports-wagering platforms to reach millions of customers,” he told analysts.

Choke: Still, TwinSpires’ $137m of revenue and $34m of adj. EBITDA were, alongside other elements of the business, below estimates. The company noted the loss of 15% of race days in June, primarily due to the impact of the Canadian wildfires on air quality. 

• The lower-than-expected total revenues of $769m was due to a “myriad of reasons”, according to analysts at Jefferies, and adj. EBITDA of $364m was an “uncharacteristic miss”, said JMP.

• “We did see mild softness across some of our regional gaming properties, particularly in the first half of the quarter, said Carstanjan.

• “If you look at the numbers across the entire country, you can see pockets of strength and you can see pockets of weakness,” he told the analysts.

BetMGHmmm

The 50/50 ownership structure at BetMGM is a loose thread begging to be unpicked, according to some analysts.

Riddle me this: For all that the analysts were upbeat about BetMGM’s prospects following its H1 update, the nagging questions around the company’s joint-venture status continued to nag away among some of the followers of the respective parents.

• “We continue to believe there are opportunities to solve for the 50/50 stake,” said the team at Macquarie.

• “With one of the strongest balance sheets, supportive shareholders and a goal to be a global digital leader, we expect this to be a priority.”

• Similarly convinced of the case for an ownership resolution is the team at Jefferies, who suggested a “maximization” for the opportunities for BetMGM would “require change”.

• “Over time, the highest performance and value are ultimately achieved via alternative structures”, they added. “The debate should remain active pending some more permanent clarity.”

• Truist, meanwhile, said they would be “more positive” on MGM Resorts if it owned 100% of BetMGM “but not at any price”.

Give me some credit: Part of the issue for both MGM Resorts and Entain is that at present neither are truly getting credit for BetMGM’s success. Using “any reasonable range” of valuation multiples on both companies’ FY24 EBITDA estimates “would imply very little, if any, value attributable” to BetMGM.

• “There is an even bigger relative value disconnect as the market continues to bid up the pure-play public comp DraftKings,” CBRE added.

The shares week

Split opinion: The share price performances on the day of BetMGM’s figures are instructive as to how investors on either side of the Atlantic think the ownership dilemma will be resolved.

• After an initial bump MGM Resorts settled up ~1%, while Entain enjoyed a more significant ~5% boost.

👀 Who will bid for whom?

Earnings in brief

VICI: The largely gaming-related REIT said its plans to expand beyond the sector were continuing, as it looked to the health and wellness sector for potential M&A opportunities. Revenue rose 36% to $898m while the key REIT metric of adjusted funds from operations (AFFO) per share rose 12% YoY to 54¢, above consensus.

GLP: Q2 revenue rose 9.2% to $357m while AFFO per share was 92¢, ahead of consensus. The highlight from the quarter is the plan to provide part-financing for the proposed A’s stadium on site of the Tropicana on the Las Vegas Strip to which GLP will contribute $175m

• REIT review: E+M will report on the earnings calls from VICI and fellow REIT GLP in Monday’s Cheat Sheet.

Lottomatica: The Italian-facing operator of the Goldbet brand has raised its guidance for the FY after seeing revenue in H1 rise by 20% to €820m, driven by a 27% uplift in online to €247m. Adj. EBITDA was up 28% to €299m. The company now expects revenues of €1.63bn-€1.69bn and adj. EBITDA at €570m-€590m.

• E+M will report on Lottomatica’s earnings call in Monday’s Cheat Sheet.

Gaming Realms: The continuing success of Slingo-branded games, which went live with 25 more partners in H1 and with five new game variants, helped push revenues up an expected 34% to ~£11.4m, while EBITDA is predicted to come in up 32% to ~£4.6m.

• The company launched the Slingo Originals portfolio with Betway, OLG and LeoVegas in Ontario, and with PokerStars in New Jersey and Stardust in Pennsylvania over the period.

BlueBet continued investment in its in-house tech platform and saw the benefits in Australia where gross win rose 12% to A$19m. The company continued to fund its US-focused ClutchBet business where it has achieved $4m of handle in Colorado since launch in April this year.

XLMedia: Without a big enough launch state in the US in H1 to match New York last year, the affiliate provider saw revenues drop by a third to $29m while adj. EBITDA swooned in unison, down 39% to £6.5m.

• The company said the poor performance in the US was partly offset by growth in Europe and by a 14% cut in headcount.

FDJ: The lottery operator said it saw solid results, driven by an increase in stakes across its 30k strong points of sale operation. Revenue rose 6.3% to €1.29bn but EBITDA was down 2.7% to €300m. The company noted the recent acquisition of the Irish national lottery.

• “Becoming the operator of a foreign lottery marks another major step in the FDJ Group’s international development,” said CEO Stéphane Pallez. 

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What we’re reading

Circa takes the plaudits in Nevada.

Newslines

Aristocrat has debuted its NFL-themed slot machines, which it expects to start operating on casino floors in September.

The Nevada Gaming Commission has finally found the owners of the Fontainebleau Las Vegas suitable for licensing. The property is slated to open in December.

Calendar

• Jul 28: GLP (call), Lottomatica (call)

• Jul 31: Golden Entertainment

• Aug 1: Caesars Entertainment, IGT

• Director of CRM – LATAM  

• Casino Revenues Director – Eastern Europe/Remote/Malta/UK 

• Sportsbook CRM Manager – UK 

An +More Media publication. 

For sponsorship inquiries email scott@andmore.media.