Good morning. On today’s agenda:

• Affiliate market leader Better Collective on target.

• Seven go to post in Kentucky.

• Catena Media crashes on revenue reverse and profits drop.

• Entain gets STS shareholder approval.

• Novig raises $6.4m in seed funding.

Interstellar overdrive.

Collective effort

The superaffiliate maintains it is on track to hit over €100m in EBITDA in 2023.

Seasons in the sun: CEO Jesper Søgaard said the company had seen “stellar developments” in Q2, calling the growth in operational EBITDA – up 135% – “staggering”. He noted the company was “reaping the benefits” from its investments in the US despite it being the off-season for sports.

• Revenue rose 39% to €78m, although this was flat QoQ. EBITDA before special items came in at €29.2m.

• Publishing was worth 66% of total revenue at €53.5m, while paid media contributed €24.67m or 34%. 

• The US was worth €22.9m or 31% of total revenues; Europe and the rest of the world contributed €55.2m or 69%. 

• Revenue in July was up 39% to €23m.

Target practice: Questioned regarding the year-end targets that were upgraded in June – and what one analyst suggested would be an undemanding H2 target – CFO Flemming Pedersen said the company was “just into the second half and one of the more volatile things” is the start of the football season in the US. 

• “As in previous seasons that is a moving target right now, but there is more uncertainty there than in the rest of the market given the dynamics in the US.”

• Søgaard added that BC had enjoyed a boost from the FIFA World Cup in Q4 last year. “That gives some fairly tough comps.”

• Asked about the impact of the launch in Kentucky (see below), Søgaard said it was good to see a broader market” but he did expect “more normal trading” this quarter.

• With regard to competition, he said there was “no big change in the landscape”. 

Pedersen noted BC’s M&A plans had been largely self-funded. During the quarter it acquired Skycon and post-close it has laid out up to $54m for social media experts Playmaker HQ and €3.7m for fourSwedish-facing brands from Everysport.

• “As we continue to expand, our competitive moat will continue to grow deeper,” Søgaard added.

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Kentucky seven

The leading books are lined up for launch next month.

At the post: DraftKings, FanDuel, BetMGM, Caesars Sportsbook, bet365, Circa and Penn Interactive have been approved for temporary sports-betting service provider licenses. The state gaming commission also approved temporary licenses for sports-wagering operators for seven of the state’s licensed racetracks. 

• DraftKings announced yesterday it is partnered with ECL Corbin, which operates Mint Gaming Hall at Cumberland and Cumberland Run.

• BetMGM announced a partnership with Revolutionary Racing Kentucky and plans to launch on September 28.

• FanDuel is partnered with Churchill Downs. 

Crash Landing

Catena Media loses over a fifth of its value yesterday after it reveals a slump in profits.

Don’t blame it on the sunshine: CEO Michael Daly variously cited the weaker sporting calendar, increased competition from media partnerships elsewhere in the sector, reduced marketing spend and a lack of new market openings for a 16% drop in revenues to €16.9m.

• Daly defended the company's record on the call with analysts, saying “I would not define it as a shrinking business”.

• However, adj. EBITDA from continuing operations tumbled 60% to €2.6m and North America adj. EBITDA fell 37% on revenues that declined 16% to €12.5m.

• Its rump rest-of-world business saw a 17% fall in revenues to €4.3m.

Squawk this way: Recall, Catena has recently been through a strategic review and has offloaded large parts of its European- and rest of world-facing assets. This includes the sale earlier this month of the Squawka and GG operations to Moneta for €6m. At the same time, the company announced a €3.8m-€4.2m cost-reduction program. 

• Catena emphasized yesterday that the raft of asset sales, including the offloading of AskGamblers to GiG, will bring in €33.6m.

• It means the company will soon wipe its net debt and leave itself with a cash position of €10.6m.

• Daly insisted the company is on track to hit its North American 2025 revenue target of $125m.

• But he admitted the figure included the possibility of New York iCasino being launched by 2025. The target “does involve a number of states in sports and a couple in iCasino”, he said.

🚑 Catena Media shares down nearly 21% yesterday

More media deals

XLMedia completed the latest media partnership deal yesterday as it announced it would be working with Capitol Broadcasting Company in North Carolina. The arrangement with the owner of WRAL.com and wralsportsfan.com will see XL provide exclusive betting-related content.

Entain get STS nod

The £750m takeover of STS gains shareholder approval.

On the nod: Entain has received the necessary acceptances for the deal to acquire STS from the Polish bookmakers’ shareholders. After a compulsory acquisition procedure for the <1% of shares outstanding, the delisting process from the Warsaw exchange will commence.

• Recall, less enamored by the move are investors on the other side including activists Eminence Capital, which went public with complaints about what they said was a “perplexing deal”.

• CEO Jette Nygaard-Andersen appeared to acknowledge the complaints on the recent H1 earnings call when she said the company was expecting a “slower pace of activity ahead”.

Exacta completion

Churchill Downs has crossed the ts on the acquisition of Exacta Systems for $250m and will start realizing the “significant and immediate synergies” from the deal. Citing the deal, analysts at JMP said this week Exacta was a “catalyst hiding in plain sight”.

• The team noted that Exacta recently signed a partnership deal with Interblock for HHR-based table games.

• The initial product offering only includes roulette, but “acts as a starting point for a full suite of electronic HHR table games,” JMP said.

• “The addition of tables alone paves a long-term runway of stable growth across its already robust business.”

Startup fundraise

Novig has raised $6.4m in seed funding in a round led by Lux Capital.

Ahead of its debut in Colorado, the startup betting exchange venture has announced a funding round led by Lux Capital with participation from Y Combinator, Paul Graham, Joe Montana, Soma Capital and a host of other investors. 

• Novig is led by founders Jacob Fortinsky, CEO, and Kelechi Ukah, CTO, who are both recent Harvard graduates with previous experience at Jane Street and Bank of America. 

• They founded Novig with a belief in the peer-to-peer exchange model, with a “unique focus on quantitative research and high-frequency trading”.

• The company has partnered for market access in Colorado with Full House.

E+M diary note: Novig will feature as a startup focus in next Monday’s Cheat Sheet.

Earnings in brief

SJM: The Macau operator generated adj. EBITDA of HK$461m ($58.8m), up from a HK$1.12bn loss this time last year and the first profit for the company since 2019. Net gaming revenue leapt over 120% to HK$8.7bn. The company said its share of the Macau market stood at 11.8% in H1, with mass market table share at 15% and VIP GGR share at 3.5%.

Ainsworth: The Australian-listed games provider has pre-announced its H1 earnings, saying it expects to report pre-tax profits of A$23m ($14.8m) when it reports next Tuesday. The figure includes A$2m from its agreement with online backend supplier GAN.

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Datalines

Michigan: Online GGR rose 16% to $161m, with BetMGM leading OSB/iCasino combined on 30%, followed by FanDuel (23%) and DraftKings (20%). 

Newslines

Sportradar has signed an exclusive multi-year deal with US Soccer for all US national team games and tournaments, including the SheBelieves Cup and the US Open Cup. The data and content deal also involves a sports integrity element.

Game platform Skillz has authorized a share repurchase program of up to $65m and is evaluating its options to repurchase up to $65m of its outstanding loan notes..

SuperBook Sports is shutting down its betting operation at the Taft’s Ale House in Cincinnati, according to Sports Handle.

DraftKings has launched the Golden Nugget Casino app in Pennsylvania. Meanwhile, IGT has launched Caesars Cleopatra, a game which it created specifically for the recently launched Caesars Palace Online Casino.

Calendar

• Aug 29: Rivalry, Ainsworth

• Aug 31: PointsBet

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