Good morning. On today’s agenda:

• Playtech acknowledges a multi-bidder battle for Italian operator.

• Las Vegas Strip continues its lucky streak in August.

• Analyst notes on Entain and VICI.

• Startup focus is Verse Fantasy.

Everybody knows that the dice are loaded.

Bid battle

PlanetWin365 is the subject of a £500m bidding war.

Fight, fight, fight: A selection of the biggest listed betting and gaming groups are slugging it out to buy the Italian-facing SKS365, the operator of the PlanetWin online and retail betting operation. 

• Playtech confirmed on Friday it was “participating in a process” alongside other parties regarding an acquisition of SKS to add to its existing Snaitech business in Italy.

• The statement followed a report from Sky News that suggested Flutter and Lottomatica were also among the bidders.

• Flutter currently owns the Sisal business in Italy, bought in late 2021 for £1.6bn. A spokesperson said it would not be commenting on the rumors.

• Lottmatica runs the eponymous retail estate alongside Goldbet and the more recent acquisition of BetFlag, purchased in November 2022 for €310m.

Podium booster: Analysts at Goodbody noted SKS365’s online operation currently controls a mid-single-digit online gaming share and a slightly higher percentage of online sports betting. It also operates ~1k retail outlets.

• Given all the mentioned potential bidders already have significant footprints in Italy, they noted any acquisition would be “interesting”.

• “The Italian online market is particularly attractive given the low online penetration and structural tailwind as this penetration increases,” the team added.

Everybody knows: During its H1 earnings call, CEO Mor Weizer noted that Playtech had added a “small bolt-on” to the Snai business in the period with the €6m acquisition of Giove and said the company was “considering” more deals. 

• Chris McGinnis, CFO, added that  “everyone knows there are not necessarily that many assets out there”. 

• “So I think bolt-on would probably be the more likely or the best way to describe any potential M&A in Italy.”

• Peel noted that if Playtec were to win out with SKS365, it would make a Snai demerger more likely.

More bolts than the Golden Shot: Just last week, Flutter announced the acquisition of Serbian bookmakers MaxBet for an initial €141m. Goodbody noted that a deal for SKS365 could also be attractive to Entain, which has been busy with M&A too.

• But Goodbody suggested there are “question marks over investor appetite” for Entain to do further M&A given the “muted reaction to some of the recent deals it has done”.

• In particular, the €750m bid for STS came under fire, being termed “outrageous” by Entain shareholder Eminence Capital.

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Nevada in August

The Las Vegas Strip holds its luck in August – but eyes now turn to the hack-affected September.

The neighbor of the beast: Strip revenues were up 1% YoY to $667m for August, another record albeit driven mostly by strong VIP hold. Relative to 2019, Strip GGR was up 28%.

• Visitation was up 4% YoY to 3.3m, just 7.2% below Aug19, and convention attendance rose 64% to 648k, a mere 1.6% below 2019.

• The analysts at CBRE said the improvement in convention attendance gives them confidence there is “more upside for the Strip” as the larger group business continues to recover.

Do you remember? After July and August, the QTD uplift sits at 5% but a continuation of the trend will be challenged by the effect of the disruption caused in September by the cyberattack on MGM and Caesars.

• JMP said the hack could have a minor impact on the overall market, while estimates for MGM for H2 would be affected.

• However, the team at Macquarie noted that with MGM trending above expectations any harm would be confined to the short term. They remained bullish on the long-term picture.

• JMP pointed out that while the regional markets suggested “choppy” consumer trends, Las Vegas “appears to hold strong”. 

Every cloud: The picture is more mixed for the Locals market, which was down 1% in August but was up against the toughest comp of the year. Barring November, these ease in the rest of the year while, as JMP suggested, Golden Entertainment’s Strat and to a lesser extent Red Rock and Boyd could also gain from MGM’s troubles.

• Everyone out: A further risk lies in the possibility of a strike on the part of the Las Vegas Workers Union. 

• The team at JMP noted that the union hasn’t walked out for nearly 40 years.

Macau’s typhoon effect

Winds of change: The super typhoon Saola, which caused major disruption at the start of September, was the main cause of a 13% MoM drop in GGR in the month to $2.1bn. Still, the nine-month figure was over 300% ahead of last year.

• Citi analysts recently predicted GGR for 2023 would come in at $22.7bn, 62% of the 2019 level. 

• Wells Fargo said the ongoing Golden Week has started strongly with visitation on September 30 hitting 159k, a post-pandemic single-day high.

Analyst takes

Entain: The company may have lowered revenue guidance at the start of last week but the team at Jefferies said investors remain focused on the “dance” between Entain and MGM Resorts over the future of BetMGM.

• The team suggested a deal is an “eventuality” as profitability grows and overshadows questions over operational issues.

VICI: Q3 earnings are “expected to be quiet”, suggested the team at JMP who noted that despite closing several transactions over the past three months, including the Rocky Gap Casino, four casinos in Western Canada and a financing transaction with Canyon Ranch, deployment was only $506m. 

• The big news involving VICI was the decision not to participate in the Bellagio stake sale in August.

• The team pointed out that VICI’s yield for its Las Vegas portfolio compares favorably to the low 5% yield on the deal that Realty Income will receive on its 27% stake

• “We also suspect leverage will continue to trend lower,” they added.

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Startup focus – Verse Fantasy

Chapter and verse: Verse was formed in 2020 by David Rosen, Jack Gorelick and Daniel Zimmerman, three college friends at Syracuse, New York, who grew their interest in the sector via working as interns at Barstool.

Funding backgrounder: The company raised a $860k pre-seed round last fall. The backers include RallyCry Ventures along with private investors.

Poetry in motion: The central idea for Verse is that of “self-segmenting and self-servicing” groups of players who are “already banding together” to play in fantasy leagues, says Zimmerman. 

• “That is what Verse is all about – making gaming with your friends and league mates as easy as making a group chat,” he adds.

• “Thirty million Americans are already playing in weekly peer-to-peer games of skill with real money on the line. It’s called season-long fantasy sports,” he says.

• But with Verse “every single weekly matchup is a chance to win real cash and bragging rights”.

Couch to 100k: Alongside Verse’s ‘LeagueSync’ feature, the contest creator tool allows users to build their own custom DFS pools. Users can choose from hundreds of stat combinations, prop types and filters to build exactly the game they want to play. 

• “Users no longer have to choose between joining 100k entry groups with no shot at the prize,” Zimmerman says.

• “You and your league can instead opt for a Thursday Night Football 5 pick contest on Verse and compete on the couch.”

Maybe a rethink: Speaking ahead of the recent news of Florida’s legal move against three fantasy operators, Zimmerman said Verse operates “where other DFS operators do, so we are particularly interested in California, Florida and Texas”

• “On a more specific level, college campuses are target #1 for us,” he adds.

• “We know how interconnected the communities on campuses are and how fast adoption can take place.” 

• “We plan on rolling out significant rewards programs to fraternities and other social groups on campuses soon.”

• The Verse Fantasy product just launched in early September in 24 states with real money gaming. 

• In preparation for this launch, Verse has extended its partnership with Sportsdata.io along with many other top-quality third-party providers.

Growth company news

Omada fund raise: The France-based social prediction mobile game operator has raised €7.1m in seed funding, led by Felix Capital alongside 20VC, Play Ventures, F4, Motier Ventures and a host of angel investors.

• Omada was founded by serial entrepreneur Adrien Miniatti, who previously built and sold Green Panda Games to Ubisoft.

• The company insists its game is not about appealing to gamblers but says it is a game that exists at the intersection of gaming, social networking, sports and entertainment.

SB22: The sports-betting platform challenger announced two deals at the end of September. The first is a tech integration deal with WagerWire that will see the latter’s proprietary marketplace integrated into the SB22 platform.

• The second deal sees SharpLink add its AI-powered C4 BetSense to the platform.

Micro-betting in LatAm: Sports-betting platform Vibra Solutions and micro-betting provider nVenue have teamed up to offer in-play micro betting in Latin America.

• Recall, nVenue recently signed a multi-year partnership with NASCAR for in-race micro-betting markets and predictive content.

What we’re reading: Business Insider looks at 26 VCs and other investors pouring cash into sports-related sectors, including gambling.

What we’re listening to: The Betting Startups podcast talks to Matt Deutsch from Bettor Sports Network.

The week ahead

Tomorrow sees the latest edition of The Startup Month, which takes a look at the theme of disruption within the betting and gaming sector and picks six companies that are doing their bit to upend the sector. Plus, a round-up of Q3 funding rounds.

Career paths

Betfred: After nearly 30 years with the company, Mark Stebbings stepped down as group COO last Friday. Betfred has yet to announce any details about his replacement. On LinkedIn Stebbing paid tribute to his “unbelievable mentor”, Betfred founder Fred Done,

• Meanwhile, across the pond, Bryan Bennett has left his role as COO of Betfred USA. His departure follows the appointment of Kresimir Spajic as CEO earlier this month.

• Spajic will oversee the company’s sportsbook strategy and operations across 10 states.

Jobseeker: Thomas Winter has announced he is leaving Golden Nugget, the company he helped found in 2010 and which was bought by DraftKings two years ago. He said on LinkedIn, the next stage of his career would be focused on the “latter part of work-life balance”. 

• Acroud has announced that CFO Tricia Vella will resign at the end of December. Vella became head of finance at the company in April last year.

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Newslines

Australian Betr (not to be confused with the US Betr) says it will be the long-term winner despite having to payout A$72m ($46.4m) to punters who took up the online bookmaker’s 100-1 offer for Penrith to prevail in the National Rugby League grand final.

• The Sydney Morning Herald said the promotional payout is expected to be the largest in Australian history.

• The paper quotes founder Matthew Tripp as saying the firm will emerge well in front after hedging its bets via lay-off wagers and early payouts.

Entain has announced the completion of its acquisition of next-gen sports modeling, forecasting and data analytics firm Angstrom Sports for an initial £81m, which could rise to £203m depending on additional contingent payments over the next three years.

Inside the tent: Circa Sports has launched in Illinois with its OSB app and a retail sportsbook at Full House Resorts’ Temporary at American Place in Waukegan.

Playtika has completed the purchase of the Israeli-based mobile gaming studio Innplay Labs for up to $300m.

FDJ has finalized its €175m acquisition of Zeturf.

EBET has announced a one for 30 reverse stock split.

Calendar

• Oct 8: GeoComply Challenger event, Las Vegas

• Oct 9-12: G2E, Las Vegas

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