Good morning. On the Weekender agenda:

• Betr’s Joey Levy sees trouble ahead for ESPN Bet.

• The UK after the White Paper: Reputation Matters 2023 launches.

• Tabcorp services the storm, Entain cuts Oz jobs.

• Catena Media shares in the spotlight after a traumatic week.

• BettingJobs‘ Jobsboard features CTO, CMO and MD roles.

I see bad times today.

Up against it

Betr’s Joey Levy predicts “execution challenges” for ESPN Bet.

Throwing rocks: Looking at Penn Entertainment’s failure with Barstool, the CEO of the similarly social media star-led Betr took to posting on Medium to suggest some lessons to be learned on betting and media partnerships that he hopes Betr can avoid. 

• Starting with the product, Levy suggested that Kambi-powered Barstool Sportsbook was “never a truly differentiated product”.

• “I say all of this today acknowledging that the Betr Sportsbook experience is nowhere close to where we would like for it to be,” he added.

Glass houses: Further criticism of Barstool centered on its customer acquisition and retention record, suggesting it relied “solely” on converting its organic media audience. “No matter how large and engaged your audience – [it] is not an optimal (or candidly feasible) strategy in this market,” Levy said.

• “The Barstool Sports megaphone provided brand awareness and brand affinity, but should not have been solely relied upon to be the source of new customer acquisition.” 

• He then claimed an element of dysfunction at the top, with the Barstool media team in New York and Penn Interactive at HQ being “not as deeply integrated as an organization as they probably should have been”.

• “It is possible that the Barstool content creators did not have as much influence over product development as they would have liked to have had and probably should have had,” he added.

Is this better? The problem identified by Levy is that the new platform is only a “marginal improvement” on the Kambi-powered book. It is “still the same legacy sportsbook everyone else has – a glorified spreadsheet of money lines, point spreads and over/unders that are uninterpretable to the sports fan who has never bet on sports before”. 

• “It remains to be seen,” Levy wrote, how much Penn plans to invest in customer acquisition and retention and how much it will rely on ESPN to drive the product.

• Finally, operationally Levy suggested the Penn/ESPN deal “feels worse to me” when compared with the Barstool partnership.

• “Penn fully owned and controlled Barstool, while here, Penn is paying $2B (!) to license a brand,” he said.

• Levy suggested ESPN will contribute strong brand awareness to the betting operation but will “deliver suboptimally” on brand affinity given its content creators’ lack of exposure to the Penn business.

Further reading: Dustin Gouker, meanwhile, provides a timely takedown of, er, Betr’s prospects in this week's issue of the Closing Line.

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Reputation Matters 2023

An +MoreMedia event to discuss the future of the UK gambling sector takes place in London at the Barbican on the afternoon of October 26.

After the White Paper: Reputation Matters returns on October 26, this time to the Barbican in London, where representatives from Entain, Playtech, Gamban, Regulus Partners and many others will convene to discuss the next steps for the sector following the publication earlier this year of the UK government’s Gambling Act Review. 

• Sponsored by UK law firm Wiggin, the event consists of an afternoon of panels, fireside chats and keynotes.

• Tickets can be purchased for the event via the Reputation Matters 2023 Eventbrite page.

The line-up includes:

• Grainne Hurst from Entain, Ian Ince from Playtech and Stephen Ketteley from Wiggin discussing the legal response to the White Paper.

• A fireside chat between Matt Zarb-Cousin, co-founder of Gamban and a high-profile figure in the Campaign for Fairer Gambling, and Dan Waugh, partner at gambling consultancy Regulus.

• A keynote from ex-BHA CEO Nick Rust on the future of horseracing and betting.

• Representatives from Armalytix, Department of Trust, Betsmart Consulting and ClearStake discuss how the financial risks debate is being pushed towards open banking solutions.

• Roberta Caccia from Investec, Simon French from Panmure Gordon, Sam Sadi from LiveScore and Robin Chhabra from Tekkorp discuss where the industry goes from here.

For ticket details, go to the Reputation Matters Eventbrite page.

ICYMI

Both LosIngresos+Mas and Compliance+More led with the brewing betting scandal that erupted this week involving West Ham and Brazil striker Lucas Paquetá. The links to betting in Paquetá’s hometown in Brazil bring an international dimension to the allegations of so-called spot-fixing.

Yesterday, Earnings+More provided its Quarter in Review roundup of some of the trends evident from the recent earnings season just past. As the edition points out, when it comes to inflection points in OSB and iCasino, some are more equal than others.

In Straight To The Point this week, Steve Ruddock takes a look into the short history of Golden Nugget Online Gaming, which, he suggests, is US iGaming’s best-kept secret.

Discussing BetMGM’s adventure in the UK on the Gambling Files this week, Jon asks an imponderable about the future of the JV: “When you’ve got a joint venture, how do they end?”

Switching tabs

Tabcorp survives the “distortion” caused by extra competitive marketing spends and a significant new entrant.

The only ones: The Australian betting and gaming giant said it had weathered the storm of an increasingly competitive promotional and marketing spend and the debut of a market new entrant (the Australian Betr) and claimed to be the “only one” of the large operators to increase both revenue and EBITDA in FY23.

• CEO Adam Rytenskild made the claim after Tabcorp reported a 2% rise in revenue to A$2.43bn ($1.56bn) and an 8% increase in EBITDA to A$391m.

• The company claimed its total market share rose by 100 bps to 34.6%; however, digital share dropped 40 bps to 24.5%.

• Rytenskild said Tabcorp was a “very different business” than it was a year ago. Recall, it demerged from the lottery business in May last year.

Consumption be done about it: The company noted its best-performing state was Queensland where the state government raised its point of consumption tax to 20% to level the playing field with Tabcorp.

Entain’s Australian job losses

They create desolation: Following a report in the Australian Financial Review, Entain confirmed it has axed 10% (80-90 people) of its headcount in Australia. The company said in a statement the moves were a “tweak” to it structure as it prepares for the “next stage of growth”.

• Entain runs the Ladbrokes and Neds brands in Australia. In its recent H1s, the company said first-half NGR for Australia was down 2%

• On the recent earnings call, CFO Rob Wood said Entain has pursued a “slightly different strategy” from other operators and pulled back from marketing in anticipation of higher tax rates.  

Earnings in brief

The Lottery Corp: The other half of the previous Tabcorp demerger saw revenue for FY23 rise 0.2% YoY to A$3.51bn ($2.25bn) while adj. EBITDA rose 4.2% to A$713.2m. CEO Sue van der Merwe said the company is investing in technology to make it easier to play its games, to drive personalization of games and to accelerate the integration of retail and digital.

NorthStar Gaming: CEO Michael Moskowitz said the Q2 earnings showed the company’s integrated editorial content is proving to be “increasingly popular with customers looking for insights to improve their betting experience”.

• GGR rose 26% to C$5.5m while net revenue was up 27% to C$4.6m.

• The company said recent acquisition Slapshot Media contributed C$0.1m of GGR.

• Raise: Post-earnings, NorthStar also announced a proposed C$10m financing round via the sale of C$5m worth of new shares and a further C$5m in convertible debentures. The company said the new money would help fund its expansion following the Slapshot deal.

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The shares week

A 5% rally on Thursday does little to mask the problems at Catena Media.

Endurance rally: Catena Media managed a 5% bump in its share price on Thursday. But the damage was done earlier in the week when its shares dropped over 20% after CEO Michael Daly was forced to defend the company from analyst queries over its “shrinking” business. 

• The situation wasn't helped by the news that its largest shareholder, fund management house Alcur Fonder, had reduced its stake from nearly 8% to less than 5%.

• View from there: From its high of SEK145.5 (~$13) in May18, Catena is down nearly 90%.

• As recently as February, the shares were worth ~SEK37.5 on hopes that rival Better Collective might launch a takeover after it emerged as a 5% stakeholder.

🤮 Unwanted and underwater: Catena Media keeps sinking

Sector watch – social gaming

The big news in social is Light & Wonder swallowing the element of SciPlay it didn’t already own for ~$500m.

We are one: On the earnings call that accompanied the news of the purchase of the 17% of SciPlay it didn’t already own, LNW’s CEO Matt Wilson said the deal would enable “seamless collaboration to grow as one”. 

• In Q2 SciPlay revenue grew 19% to $190m while adj. EBITDA was up 45% to $59.1m.

• SciPlay CEO Josh Wilson (no relation) said the company’s leading game franchises, Jackpot Party Casino, Quick Hit Slots and Gold Fish Casino “continue to captivate our players”

• Saying the games “push the boundaries”, he added that SciPlay “pays attention to every single player”. 

• “We continue to evolve our investments such as data analytics, ad tech, marketing, innovation, DTC and new games.”

Atlas, shrugged: Wilson (J) said the “mutual R&D partnership” with Light & Wonder “serves as both a catalyst for new content development and also a reliable testing engine for both companies”. Wilson (M) said the teams would be working “even more closely” now and were “already coordinating roadmaps”.

• “There’s not a lot of players in the industry that have the unique collection of assets that we have, the land-based business, the leading iGaming position and then the fastest-growing social casino company,” he said.

• “So unlocking that full potential about building the world’s greatest products was key to bringing SciPlay back into the family.”

Verdict: Analysts noted the deal gave Light & Wonder a social business that “remains focused on taking share in social casino, expanding margins without jeopardizing future growth, and growing cash flows”. Truist noted the acquisition, expected to complete in Q4,  “removes an overhang” apparent since a deal was first mooted in Jul21.

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Newslines

Bally’s temporary Medinah Temple casino could open by the weekend of September 9, according to the Chicago Sun-Times. Practice gaming sessions overseen by the regulatory authorities are set to take place on September 6-7.

The Venetian Resort Las Vegas and Yahoo have announced a multi-year naming rights partnership for the Yahoo Sportsbook powered by William Hill on The Venetian casino floor. 

OddsMatrix Sports Data Services, part of EveryMatrix, has partnered with Kindred to provide comprehensive historical and current sports data ahead of the launch of its new proprietary sportsbook.

GiG has signed up the Isle of man-licensed Mooir eGaming to a casino platform deal.

DAZN Bet has gained a license to operate sports betting from Germany’s gambling regulator.

FansUnite said it has reached an agreement with Welsh-based bookie DragonBet to migrate off the Chameleon Gaming platform on or around September 3, completing the company’s transition away from platform licensing.

Marketing company 2mee will achieve a listing in London via a reverse takeover of a listed SPAC called Golden Rock Global. 2mee provides influencer-based services to operators such as Sky Bet and Sportsbet.io.

Calendar

• Aug 29: Rivalry, Ainsworth

• Aug 31: PointsBet

• Sep 7: Playtech

• Chief Technology Officer – Eastern Europe/remote/UK

• Chief Marketing Officer – Africa/UK  

• Managing Director for Brazil – Gibraltar/Isle of Man/LatAm/UK

An +More Media publication. 

For sponsorship inquiries email scott@andmore.media.