Good morning. On the Weekender agenda:

• PointsBet refocuses on Australia and Canada

• The heat is on: the Strip posts a monthly record.

• Doin’ it for the kids: Rivalry’s profit expectations.

• Product managers are in demand at BettingJobs.

Please stick to the rivers and the lakes that you're used to.

The handover

PointsBet completes the sale of its US division to Fanatics.

Dear Fanatics, sorry for the losses… PointsBet has bequeathed Fanatics a US-facing business that lost A$262m or ~$169m in the 12 months to June, up 6% YoY. Agreement over the sale of the business for $225m was reached in June.

• The first stage of the transfer of ownership of the parts of the PointsBet US operation that have received regulatory approval was completed yesterday, August 31, with a payment of $175m of the $225m purchase price.

• States where approval has been obtained include Colorado, Kansas, Maryland, New Jersey, Pennsylvania, Virginia and West Virginia. Indiana and Illinois will follow later this year as will the four iCasinon states. The sunset date for completion is February.

• In each state Pointsbet will (presumably temporarily) be renamed ‘PointsBet, a Fanatics experience’.

• PointsBet shareholders will see a total of A$458m returned to them following the sale. The total includes a slug of the company cash reserves of A$212m.

• US gross win rose 23% to A$195m while an improvement in net win margin to 4% saw net win up 58% to A$117m.

Brave face: PointsBet CEO Sam Swanell said the sale marked the beginning of an “exciting new chapter” for the company. He said the “new PointsBet 2.0” would build on its market positions in Australia and Canada.

• Continuing operations generated revenues of A$210m, up nearly 8% YoY.

• But with expenses rising 66% to A$227m and the cost of sales up 10% to A$106m it left the company recording a loss of A$108m.

• On the call with analysts, CFO Andrew Mellor said the continuing business produced an EBITDA profit in H2 of A$20.3m after slashing marketing by two-thirds.

There’s no place like home: Swanell said PointsBet had a “strategically important place in the Australian wagering market” and hoped to grow from its “solid” current market share of 5%. He added the company hoped to be at or “close to” breakeven by April 2024 with positive EBITDA in 2025 still the target.

• The Canadian business, meanwhile, produced net revenue of $18.2m in its first full year of operations. 

• The FY EBITDA loss in Canada was A$35.8m. Mellor said next year’s Canadian losses should be “significantly lower” and would be offset by Australian profits.

• “The Canadian business provides shareholders continued exposure to the North American market through a jurisdiction that is more attractive than most US states,” said Swanell.

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ICYMI

In Compliance+More, the first of a new series of regtech focuses featured compliance and regulatory licensing solution provider ArdentSky. As CEO Elliot Blatt says, the company’s platform has become the “industry standard for gaming licensing automation”.

• In other news this week, the New York regulator has found itself caught up in a “toxic” scandal and in the UK, the CEO of the Betting and Gaming Council has found himself at the wrong end of a tongue-lashing from the head of the Samaritans.

Rinse, repeat: In Straight To The Point this week, Steve Ruddock takes a look at the situation in Atlantic City which, as he suggests, is a market that is in a “constant cycle of boom and bust”.

• Offer you can’t refuse: Chris Grove is offering to pay for 100 paid subscribers to Straight to the Point. See this LinkedIn post for details.

The heat is on

Baccarat hold helped push Strip revenues to new highs.

Sweating assets: The Las Vegas operators “held lucky” as Strip revenues rose 8% YoY and nearly 15% MoM to $835m, a new all-time monthly record. Notably, while total visitation was up 1%, convention attendance was down 17% YoY. The team at CBRE noted this was counterbalanced by the strong entertainment calendar.

• Locals GGR was up 6% to $247m, again driven by higher hold, this time in slots. 

• Noting the 1% decline in handle, CBRE said the recent gaming volume declines have “raised some questions about the state of the Locals consumer”. 

• “However, with the Las Vegas MSA hitting a new employment peak in July, we remain confident in the overall health of the Locals consumer and the Las Vegas economy,” the team added.

• Sports-betting GGR came in $25.3m on handle of $408m with 66% of that coming via mobile and 34% in retail. 

Meanwhile in Macau: Data for August shows GGR rose 3.3% MoM to $2.12bn while YTD GGR is up 295% to $14.1bn. The YTD figure is now at ~58% of the 2019 numbers.

Rivalry’s expectations

A “deep” understanding of GenZ and young Millennials demographics is helping the esports-led operator weave its way towards 2024 profitability.

The Beef: Rivalry said profitability was in sight in H124 despite a 29% decrease in sequential revenues and widening net losses in Q2 as the company struggled with sportsbook “margin challenges”.

• Addressing the issue, CEO Steven Salz pointed to Rivalry’s recent introduction of same-game parlays for esports while also “beefing up” its operational team.

• Salz also noted Rivalry’s success in its social media and constant strategies, helping push a 25% increase in followers across all channels and a 180% increase in engagement.

• “By all metrics, Rivalry's brand engagement as measured by its social and content reach is, by orders of magnitude, the largest brand in the esports-betting category globally,” he added.

The kids are alright: In Q2, revenues rose 60% YoY to C$8.5m, but net losses increased 1% to C$6.3m. It had cash on the balance sheet of C$414m. Salz said Rivalry’s “sophisticated understanding” of the Millennial and Gen Z consumer is his company’s “biggest competitive advantage”.

• “As the industry's traditional demographic starts aging out, [this will be an] even more sought after customer cohort,” he added.

• Further reading: Ollie Ring’s Esprouts on Rivalry and the P word.

Earnings in brief

Codere Online: CEO Aviv Sher said the Spain and LatAm-focused operator was on track to hit profitability in 2024 after it saw a 34% YoY increase in Q2 revenues to €39.1m. Notable was the contribution from iCasino, which chipped in 54% of Q2 NGR. Adj. EBITDA losses more than halved to €4.5m.

• Mexico was the standout, with revenues up 51% YoY to €18m.

• The company upgraded its guidance for the year with revenues now expected at between €150m-€160m, up 7% at midpoint and adj. €15m-€25m.

Star Entertainment: The Australian-based casino operator notched up a whopping A$2.44bn loss in the FY23 after it took multi-billion dollar impairments against its Star Sydney, Star Gold Coast and Treasury Brisbane properties. The company also incurred A$595m of regulatory and legal costs during the year.

• Among the company’s targets for this year, it said, was working towards returning to suitability as an operator in New South Wales as well as repairing and strengthening its regulator relationships. 

• Despite the regulatory mishaps, revenue rose 22% to A$1.87bn while EBITDA before significant items came in 34% up at A$317m.

• CEO Robbie Cooke said the company was “determined to earn back the trust and confidence” of regulators, governments, shareholders and its customers.

Ainsworth saw revenue rise 16% to A$144m but pre-tax profits dropped 29% to A$4.2m as the company suffered from some of the blowback from the regulatory tensions in the Australian market.

• Better news came from the company’s operations in North and Latin America. Combined, the Americas represented 87% of total revenues, up from 83% last year.

Sportradar: In an ad hoc update, the data and streaming provider reaffirmed its HY guidance for revenue in the range of €902m-€920m, which would represent annualized growth of 25% at midpoint, and adj. EBITDA up between 17-18% at €157m to €167m. It added the majority of H2 revenue would come in Q4.

• Separately, this week the company extended its agreement to provide official betting data to NASCAR for another four years.

Inspired: The expiry of the lottery contract in Malta last June left a hole in the company’s B2C licensed operation meaning revenues dropped by two-thirds to €22m, dragging total revenues down by over 14% to €175m.

• But strong momentum in Turkey helped revenues at the management business rise nearly 37% to €29.8m while tech and support services revenues rose nearly 5% to €124m.

BetMakers: The Australian-listed sports and horserace betting backend provider posted a A$38.6m loss for FY23 after it wrote down A$8.9m of the value of its global betting services division. Revenue rose 3.7% to A$95m but EBITDA losses widened to A$27.9m.

• BetMakers hopes to reduce the cost base to under A$110m this financial year and has undertaken a A$20m cost reduction program. 

BetFan: The Polish bookmaker enjoyed a 26% rise in H1 revenue to €4.7m with profits coming in at €839k. The company launched a new mobile betting app during H1 and rolled out more than 100 retail betting terminals.

EveryMatrix: The iCasino and OSB provider generated revenue of €27m in Q2, up 82% YoY while adj. EBITDA jumped by 188% to €15m. The casino segment saw quarterly revenue of €12.6m, a rise of 83% YoY while sports revenue was €7.8m, up 79%. The platform segment made up the remaining €6.7m, up 85%.

• Over the period, EveryMatrix went live in New Jersey with DraftKings.

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The shares week 

The soon-to-be real-money gambling operator DoubleDown has enjoyed quite a week.

Double up: The social games provider, which is set to complete its Suprnation acquisition, saw its shares climb over 20% earlier in the week. 

• At the time of the company’s Q2 earnings, CEO In Keuk Kim told analysts that real-money iCasino was “just one game category adjacent to our core social casino business that we are evaluating for opportunity to leverage our expertise”.

• CFO Joe Sigrist noted that DDI had people “chomping at the bit” to bring its content to the SuprNation platform and player base.

• He added the company was “continuing to evaluate” further M&A.

🧨 DoubleDown on the up

Career moves

Bragg Gaming has appointed Matevž Mazij as CEO, replacing Yaniv Sherman who has stepped down. Mazij founded Bragg forerunner Oryx Gaming and is the company’s largest shareholder and chair.

Light & Wonder has promoted Vanja Kalabic to chief accounting officer. Previously, the company announced that Oliver Chow has begun serving as interim CFO.

Square in the Air has hired Sports Handle co-founder Brett Smiley as vice president of US operations. He will oversee Square in the Air’s North American clients and manage its joint venture Chalk + Dog with Boston-based sports marketing agency CTP.

Innovation Group has appointed Carly Albright as a senior analyst. Albright previously worked in game design for Aristocrat and IGT.

Newslines

Gaming & Leisure Properties has acquired the land on which Hard Rock is to build a casino in Rockford, Illinois for $100m and entered into a 99-year lease with the Seminole-owned company.

• The property is set to open this time next year, replacing the temporary facility that has been up-and-running since 2021 under the stewardship of 815 Entertainment.

• Analysts at Macquarie noted the results from the temporary operation – with monthly GGR at ~$6m a month – demonstrates the “strength of the location and depth of the market”.

Bet365 has received a license in Arizona where it will operate via a market access agreement with the Ak-Chin Indian Community. It has a 180-day deadline in which to launch. Bet365 replaces Fubo Sportsbook as the tribe’s sports-betting partner.

Bally Bet has relaunched via the Kambi platform in Ohio after temporarily ceasing online operations in most of its US markets in June.

The George Sportsmen’s Lounge is set to open at Red Rock’s new Durango resort when it opens this fall, according to the Las Vegas Review-Journal.

Rush Street Interactive is set to open a retail betting outlet in Hartford, Connecticut on September 18. The outlet is being managed by Rush Street for the Connecticut Lottery Corp.

Betsson has appointed Nordea to assess the appetite of investors for between €50m-€75m of new bonds. The company said the proceeds from the contemplated transaction would be used for general corporate purposes including potential acquisitions.

Boom Entertainment has acquired NBC Sports Predictor, a gaming app with almost 2m users.

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Calendar

• Sep 7: Playtech

• Product Manager – North America

• US Marketing Consultant – North America

• Head of Product – UK

An +More Media publication. 

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