Earnings+More - Hornbuckle: ‘We can grab share back’
Hornbuckle: ‘We can grab share back’MGM’s defense, Rush Street pushes on, 888Africa M&A, Caesars analyst takes +MoreGood morning. On today’s agenda:
Come out fightingMGM CEO Bill Hornbuckle insists JV is on the right path. How big is too big? CEO Bill Hornbuckle appeared to set MGM Resorts on the M&A path after telling analysts on the Q2 call that the company’s “fortified balance sheet” enabled it to make “optimistic investment and acquisitions” as well as return cash to shareholders.
Ang your hat: When it was put to him that margins at BetMGM were lower than with its peers, Hornbuckle said the completion of the move to a single wallet and the addition of the product differential brought by Entain’s recent acquisition of Angstrom would aid the situation.
China in my hand: A fourfold leap in revenues at MGM China to $741m helped push total revenues to $3.94bn, a 21% increase. However, Las Vegas was flat at $2.15bn, regionals were down 3.5% to $926m and the share of digital losses came to $22m.
Code share: The recently announced loyalty program partnership with Marriott Bonvoy is expected to bring benefits to the Las Vegas operation. Halkyard said the deal would enable MGM to replace ~5%-7% of its lowest-yielding rooms with Marriott direct bookings driving $60m-$75m of incremental profit.
** SPONSOR’S MESSAGE ** Venture capital firm Yolo Investments manages in excess of €600m in capital across 80 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem. Push StreetRush Street Interactive hits profitability and talks up LatAm opportunities. Surprise, surprise: “The second quarter profitability came in quite a bit better than the street expected and certainly better than we expected as well,” said CEO Richard Schwartz, after the company said it is on track for a profitable year.
Latin lessons: Colombia and Mexico contributed to the international growth, and Schawrtz suggested the company would be looking to take advantage of the “head start” it had got in the region when it comes to the potential in Brazil.
Don’t be a playa hater: RSI has done the simple things well, analysts said, concentrating on product tweaks that make it easier for players to withdraw and deposit quickly, along with exclusive retention tools.
Lion Kings888Africa acquires BetLion for an undisclosed sum. Talent incorporated: The acquisition of the Kenya and Zambia-licensed operator, which was itself only founded in 2019, augments 888Africa’s business and provides the company with a second hub in Nairobi, Kenya, alongside its existing center of Dar es Salaam in Tanzania.
Slot surveyEKG finds slot replacement sales grew 50-60% YoY and 10-15% QoQ. Ship shape: Reacting to the slots survey – which covers almost half of the North American install base – the team at Roth MKM said the evidence showed that almost every listed operator is “involved in some sort of reinvestment plan, ranging from renovations, expansions or new developments”.
Losers and boozers: Losing share in the Q2 survey was IGT, which Macquarie reported was down 400 bps to 23%, while Light & Wonder was flat at ~20%. Aristocrat was at ~30%, its highest post-pandemic level, while AGS was up 200 bps sequentially to 6%. Everi was up 100 bps at 7%. ** SPONSOR’S MESSAGE ** Tried, tested and proven over a decade in the highly-regulated US market, and continuing to expand across Europe, Latin America, Asia and Africa. GeoComply harnesses the power of its market-leading geolocation technology to protect against fraud, including fake account creations, bonus abuse, account takeovers, stolen identities, money laundering, and more. Visit geocomply.com. Caesars analyst takesDigital hits profit inflection point, says CBRE. Turning the corner: The importance of the switch to profitability in digital is that Caesars is no longer hemorrhaging cash in order to fund its ambition. In the words of the analysts at CBRE, it is “on the cusp of significantly accelerating free cash flow” as it generates an ROI on its land-based business as well as hitting the profit inflection in digital.
Clear as crystal: B Riley analysts said the digital performance was “quite the turn”, adding the the new Caesars Palace iCasino app “should instigate market share gains” in the “most profitable segment “ of B2C. More analyst takesDownloads: The team at JMP said the data from July shows that Fanatics and bet365 are continuing to take market share. While FanDuel maintained its number one position at 27% share, with DraftKings at 26%, the team suggested they are seeing a “notable increase” in share from new operators, with Fanatics and bet365 both garnering 5% in July.
Century Casinos: Also expected to show a move towards FCF generation is Century, which recently completed the acquisition of the Rocky Gap property in Maryland from Golden Entertainment and which is set to report next Tuesday. The team at Roth MKM suggested Century will be able to “meaningfully deleverage” in the next 12-18 months. IGT: The lack of clarity regarding the outcome of the strategic review shouldn’t obscure the extent to which the strength of the Q2 earnings for gaming and digital might “lubricate optionality”, suggested the team at B Riley.
Flutter: The team at Peel Hunt believed the benefit of the US listing move is now priced in and warned that, though the company will likely achieve US profitability in 2023, the low short-term number will mean attention will move to its high multiples ** SPONSOR’S MESSAGE ** Underdog: the most innovative company in sports gaming. At Underdog we use our own tech stack to create the industry’s most popular games, designing products specifically for the American sports fan. Join us as we build the future of sports gaming. Visit https://underdogfantasy.com/careers NewslinesHuddle has signed a deal with BVGroup to power the group’s pricing on an array of US sports. The partnership will see Huddle power BetVictor with pricing on an array of market types ranging from core to micros across NFL, NCAAF, NBA, NCAAB and MLB. Crowd control: Affiliate Acroud has announced it will be taking a €20m writedown against the assets of Highlight Media, which it bought when it was called Net Gaming in 2016. The non-cash impairment will come in the upcoming Q2 earnings report. Lottery.com has regained compliance with Nasdaq listing requirements after securing a credit facility and the appointment of Tamer Hassan and Paul Jordan as directors. The US Bankruptcy Court for the District of Nevada has approved Play Synergy’s purchase of the slot business and online assets of Aruze Gaming America. Calendar
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Older messages
Caesars bets on Palace boost
Wednesday, August 2, 2023
Caesars' tough comps, IGT headway, Betr pivot, Golden Entertainment and Melco briefs +More
The end of the road for Fox Bet
Monday, July 31, 2023
Fox Bet split, iCasino market share examined, the week ahead, Lottomatica call recall, analyst takes, startup focus – STX +More
PointsBet: We can do more with less
Friday, July 28, 2023
PointsBet's new focus, Boyd's mixed bag, Churchill Downs' Derby boost, analyst takes on BetMGM +More
BetMGM hits profitability in Q2
Wednesday, July 26, 2023
BetMGM's milestone achievement, Kambi's parting shot, Raketech earnings in brief +More
Has BetMGM stalled?
Tuesday, July 25, 2023
888's appointment, Kindred's return, BetMGM market share examined, Women's World Cup offerings weighed up +More
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