Good morning. On the Weekender agenda:

• Leading lights of US online speak in New York ahead of NFL kick-off.

• Caliente provides the “blueprint” for Playtech – except for the court case.

• Better Collective buys Brazilian sports media outfit Torcedores.com.

• Marketing jobs in Asia and Australia are among the openings at BettingJobs.

This is the number one song in heaven.

In it to win it

Penn’s Snowden says ESPN Bet will be aiming for top spot.

Throwing down the gauntlet: During the Bank of America gaming and leisure investor day in New York yesterday, Penn Entertainment’s CEO Jay Snowden suggested that when the company launches ESPN Bet in November, it won’t be settling for anything less – over time – than pole position in OSB.

• Talking of partner Disney, the owner of ESPN, Snowden told an audience of investors there was an “alignment on vision in terms of wanting to be on the podium”. 

• “Neither of us are doing this deal to be in fourth, fifth or sixth place,” he added.

• “That’s not going to be day one, but we’d expect to be able to compete for the top spot over time.”

• He added that at launch ESPN Bet would be 18 months behind. “But we’re launching this to win,” he said.

• “We’re launching this to be a real top player; that’s the focus for 2024 and 2025. You know, you should expect us to be making that turn from breakeven and starting to go positive.”

See me, feel me: Talking about the deal with ESPN, which will see Penn pay the broadcaster $1.5bn over 10 years plus give it $500m of warrants to license the name, Snowden said ESPN was “committed” to the deal.

• From meeting with the company it is “very clear when you’re in those meetings how important this is to ESPN,” he said.

• “Within ESPN, this is a very significant priority and you feel it, you see it, you hear it,” he added. “This is a strategic priority for ESPN as it obviously is for us at Penn.”

• He said the integration of ESPN Bet into the TV and digital content streams would be “seamless”, before adding that the betting product wouldn’t be “jammed down people’s throats”.

• But, he suggested, “when you have an exclusive relationship with the number one name and sports in the United States that has a multiplier effect”.

I was following the pack: Snowden argued that the November launch better suited Penn than going live as of this weekend. “The time of year that we’re launching, having to be mid-season, is actually great,” he claimed. 

• “You’re coming in at a point in the year where people have probably burned through most of their free bet promos and deposit matches and so [will feel they are]able to reload mid-year with a new app and a new experience,” he said.

• “We feel really good about our ability to retain, once we get people at the top of the funnel.”

** SPONSOR’S MESSAGE ** ARE YOU READY FOR SOME FOOTBALL!?!? Now that you've had a month to figure out how you're spending $100K, we at Inside the Pocket invite you, your company, and your network to join our Pro Football Survivor game. Go to itpsurvivor.io to play our quick, easy, and fun Survivor game for the chance to win $50,000 for the winner and $50,000 for the winner's charity of choice. Pro football experts and novices alike will love a shot at this!

This exciting game is industry-focused, and everyone from the gaming space to agencies, brands, and teams and leagues is encouraged to join and share the fun.

Inside the Pocket and its 25+ content partners can bring you all sorts of engaging content from every game type to engage and convert your customers and prospects.

Enjoy! 

Ready to go

Speaking at the same conference, DraftKings and BetMGM say they relish the new season challenge.

Fighting talk: DraftKings’ CFO Jason Park suggested the company was “totally fired up about the state of our product” ahead of the NFL kick-off. “First and foremost. we’re feeling great on the product side,” he said.

• Noting recent advances in terms of market share, Park said 2022 had been “the year of catching up and getting to parity with FanDuel”.

• This year, though, was about “getting out ahead of FanDuel and creating some distance”.

The school of hard knocks: Park pointed out the gambling space was a “hard industry”. “It has taken DraftKings 10-plus years to build a product and take tech capabilities both in iGaming and OSB,” he said.

• Noting the new entrants and Penn’s Barstool/ESPN Bet switcheroo, Park said it was “not new to us to have somebody show up and say ‘we're going to be better’”.

• With “each of those waves”, he said, DraftKings remained disciplined and “stuck to our LTV and CAC outlook for each customer that we were acquiring”.

• “That has served us really well through the first two or three waves and that same disciplined approach will serve us well going through this wave,” he predicted.

Sweating the small stuff: Similarly enthused was Adam Greenblatt, CEO at BetMGM, who spoke to the BoA analysts earlier in the day. “I’m more excited now than I can remember being in my role at BetMGM,” he said. 

• Asked about the competitive landscape, he said none of the competitors on the horizon, including Fanatics Sportsbook and bet365 as well as ESPN Bet, kept him up at night.

• “I think the players will always experiment,” he said. “My expectation is that ESPN Bet will launch and get a ton of samplers.”

• He noted the player experience would be key and that he was “happy to compete against that”. 

• But he also suggested the sector is “hard and shouldn’t be underestimated”.

• “To gain meaningful ground against the incumbents I think will be extremely challenging.”

The shares week

Penn Entertainment closed at a 12-month low on Tuesday.

Tuning out: Investor faith in the potential for ESPN Bet to reverse Penn’s online fortunes appears to be on the wane. The shares suffered a near 7% fall this week, leaving them languishing at a 52-week low.

ICYMI

The latest edition of Sharpr talks about how crypto betting operator Thunderpick has signed a deal with esports and gaming industry influencer Jake Lucky.

• Alongside Lucky, the operator has added Counter-Strike esports players Jordan ‘N0thing’ Gilbert, Austin ‘CooperTV’ Abadir and Ryan ‘Freakazoid’ Abadir to its roster of influencers.

Meanwhile, Ollie Ring’s latest musings for Esprouts points to the return – if it ever went away – of skin betting, the rash that esports just can’t help scratching.

Steve Ruddock’s Straight To The Point wrote yesterday about a survey of NFL bettors from Optimove, which shows that 63% of respondents were happy with the amount of advertising or wanted more while only 15% felt “bombarded” by ads. 

In Compliance+More this week, Thursday’s edition focused on comments from UK Gambling Commission CEO Andrew Rhodes to parliamentarians that suggested the body has a blind spot when it comes to evidence of black market activity.

Hot stuff

The good news is Caliente remains Playtech’s biggest B2B customer – the bad news is that the partners are still headed for a court date.

Hot yoga: CEO Mor Weizer said the success of Playtech’s partnership with Caliente provided the “blueprint” for its structured partnership arrangements. With Caliente representing the vast majority of the €89.3m revenue from Mexico – up 47% YoY – it makes the Mexican operator Playtech’s biggest B2B customer.

• Asked about the state of the litigation – where one potential outcome is that Playtech may be forced to sell back its 49% stake in Caliente – Weizer was careful with his words.

• “It’s a matter for the court,” he said. “I don’t want anyone to lose sight of the strength of the business.”

• CFO Chris McGinnis noted later on in the call that the timing of the outcome of the legal case was out of Playtech’s hands. “The expectation is 2024 before we likely get a ruling on that,” he said.

Helped by the Caliente growth, B2B revenues rose 7% to €334.5m, but unregulated revenues ex-Asia were down 13% to €42.6m while revenue derived from Asia dropped by 14% to €29.4m. B2C rose 9% YoY to €532m, largely driven by the 10% rise at Snai to €488m.

• Playtech hopes to repeat the Caliente success in Brazil where it has signed another comprehensive partnership with market newcomer Galera Bet.

• Weizer said that ahead of the launch of regulated sports betting in Brazil, the country was already a top-five market for Playtech.

• “Playtech has been increasing its exposure to Brazil via other B2B partners, some of which are among the largest in the country,” he added.

• In North America, Weizer noted Playtech is now live in 10 US states and also has its strategic partnership with NorthStar Gaming in Canada, which also includes an equity investment. 

• In H1 the company also signed a strategic agreement with Hard Rock Digital, which saw it take a single-digit percentage of the company in return for $85m of investment in the business.

Bolt-on from the blue: Noting the 50% fall in net debt to €248m, Weizer suggested the company had the appropriate balance sheet to “consider targeted M&A to expand Snai”. He noted the company had already executed against this plan with a deal to buy the Puglia-based betting operator Giove for €6m in March this year.

• But McGinnis also hinted at B2C M&A outside of Italy, with a focus on regions where Playtech already operates, including Germany and Austria.

• “On size, in Italy, I think everyone knows there’s not necessarily that many assets out there,” he said, suggesting bolt-ons would “probably be the more likely”. “And in other regions, perhaps a bit more flexibility,” he added.

M&A lines

Better Collective has bought Brazilian sports-media platform Torcedores.com for an undisclosed sum. It is the company’s first media brand in the country. Torcedores.com and other smaller assets that come as part of the deal generate a monthly audience of 12m.

• Better Collective said it is “significantly” ramping up its Brazilian market presence ahead of the regulation of sports betting.

• It indicated it will be diversifying Torcedores.com’s revenue stream, which to date has been through CPM advertising. 

Earnings in brief

OPAP: “Consistent outperformance” in online and a resilient retail helped push Q2 GGR up 13% YoY to €498m while EBITDA was up 6.7% to €178m. CEO Jan Karas noted the successful launch of an online lottery offering over the period.

• The company said it would be embarking on a €150m share buyback program in 2024.

Novomatic: Recent acquisitions helped push Novomatic revenue up by 20% to €1.58bn while EBITDA rose 3.9% to €386m. The HBG buyout contributed to a 88% rise in other revenues to €77.5m and a 133% increase in the live gaming segment to €54.6m. Slot machine revenue was up 20%. 

Hong Kong Jockey Club: Total handle hit a record high for the year to June at HK$305bn ($39bn). Revenue for the club from racing was HK$19.4bn, while soccer betting came in at HK$20.7bn and lottery takings were HK$3.5bn.

Cirsa: The success of the E-Play24 acquisition drove a 135% YoY increase in online revenues to €97m, but the casinos business remained the key driver with a 70% YoY revenue uplift to €231m, helping to push overall revenues up 27% to €500m.

• For more on Cirsa’s Q2 earnings see next week’s LosIngresos+Mas.

Golden Matrix: The costs associated with the acquisition of Meridianbet accounted for the Q3 loss of nearly $1m in Q3. This was despite revenue for the quarter rising 24% to $11.3m. The company also blamed marketing costs associated with the rollout of the MexPlay iCasino product in Mexico.

Analyst takes

Sportradar: Though a global business, JMP analysts said in an initiation note that it is the trajectory of the US business that is of interest to investors. Noting its ties to top leagues – including a deal with the NBA – this provides the company with an “attractive opportunity to upsell clients with value-enhancing technology and services to drive revenue”. 

Entain: Jefferies lowered its Entain share price target to £14.60 on estimated changes, a higher share count, the fine in Turkey and foreign exchange conversions. The Buy rating is unchanged, with the analysts suggesting the price is low despite short-term issues.

Macau: Gaming revenue for September is likely to be down 6% sequentially from August, while Typhoon Saola, which struck last weekend, could yet result in even lower revenue for the month, according to Morgan Stanley.

** SPONSOR’S MESSAGE ** Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 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.

Datalines

Sweden: Licensed gaming revenues in Q2 fell 1% YoY to SEK6.7bn ($604m). Online gaming and sports betting is now worth 62% of the total at SEK4.18bn, down 3.2% YoY, while state-operated lottery and slots was down 1.6% at SEK1.4bn. 

Newslines

Kentucky went live yesterday with Gov. Andy Beshear making the first in-person sports-betting $20 wager that the University of Kentucky and University of Louisville football teams would beat the odds on the number of winning games this season. The mobile sports-betting market will open on September 28.

Betr is now live in Virginia, the Jake Paul-led brand’s third state after Ohio and Massachusetts. Separately, the affiliated micro-betting supplier Simplebet has announced a new same-drive parlay product for the start of the NFL season.

VICI has completed the acquisition of four Century Casinos properties in Alberta for $162m.

BetMGM is now the only online casino offering Aristocrat’s Buffalo slots game.

MGM’s Osaka casino is over budget and over time, according to a report from a local news agency. The report suggested the project won’t be open until the fall 2030 versus the previous fall 2029 schedule. Moreover, it will cost $1.29bn more than previously estimated.

Calling all sportsbooks! Are you:

• Forced to limit customer stakes due to market liability?

• Suffering one-sided markets?

• Caught out by stale prices?

• Turning away large staking players?

Stop falling behind your competitors! Matchbook pricing and brokerage service is your connection to the sharpest pricing and global liquidity, helping you to manage risk and fortify your margins. Matchbook pricing is proven to be resistant to market changes. Matchbook B2B, because the best price is for everyone. 

Find out more at http://www.matchbook.com/promo/b2b or email b2b@matchbook.com

Calendar

• Sep 19-21: SBC Summit Barcelona

• Head of marketing – Asia

• Business development manager – Europe, Remote, Malta

• Digital marketing manager  – Australia & New Zealand 

An +More Media publication. 

For sponsorship inquiries email scott@andmore.media.