Good morning. On today’s agenda:

• Heavy hitters are set to dominate the main stage in Las Vegas this week.

• A single-operator model in Florida will limit at-maturity GGR, say analysts.

• Luckbox halts B2C operations as merger talks falter.

• Our startup focus is We The Bookie.

It's got honks, it's got squeaks, it's got dings, and it's got me.

The week ahead – G2E

The industry’s premier jamboree gets underway this week.

Know the formula: If the roadworks caused by the ongoing Formula 1 preparations allow (H/T to Chris Grove for the local traffic report), then the gaming industry showcase will get under way this week with a couple of headline-grabbing appearances.

• First up on Tuesday, the view from the top session will see Churchill Downs’ Bill Carstanjen playing gooseberry to the power couple of MGM Resorts’ CEO Bill Hornbuckle and his Entain counterpart Jette Nygaard-Anderson.

• The joint partners in BetMGM will have a lot to talk about given the persistent rumors about MGM’s intentions.

• E+M’s Deal Talk tomorrow will look in-depth at the state of play and will suggest that a combination of the recent cyberattack and the economic backdrop could put any move back until at least the end of the year.

FanKings: Equally fascinating will be Wednesday’s Playmakers keynote, with the Ginger Rogers and Fred Astaire of US OSB: Amy Howe, CEO at FanDuel, and Jason Robins from DraftKings. The pair have a decent track record when it comes to predictions on the direction of the market, saying this time last year that the centrifugal forces in US OSB would continue.

• Recall, Howe said for any subscale operator it was a “question of how long you want to keep funding” loss-making businesses, while Robins said the benefits of scale were “more and more apparent”.

• Since that appearance, WynnBet, PointsBet (via a sale of its US business to Fanatics), Fox Bet and others have exited the market.

• This year they will no doubt face questions about the challenges being posed in the here and now by that new Fanatics combination and, from November, Penn Entertainment’s launch of ESPN Bet.

• A notable development since last year has been the shift between the top two, with DraftKings undeniably gaining ground on – and in August overtaking – its main rival.

Also on the agenda this week: On Monday, the question of whether the sector is in any way inoculated from regional bank failures – likely not – will be discussed by, among others, Justin Armstrong from UBank and Patrick Munkholm from Fifth Third Bank.

• Hopefully positing a future without that kind of uncertainty are Andrew Zarnett, head of gaming investment banking at Jefferies and Michael Soll from The Innovation Group.

• They will be among those looking at the gaming sector’s future on Tuesday afternoon. 

• One of the bigger open questions on the European side is how the UK market will evolve following the publication of the government’s Gambling Review White Paper. Swapping the UK Gambling Commission’s Birmingham, England HQ for Las Vegas is executive director Tim Miller.

• Joining him is Wes Himes from the Betting and Gaming Council.

E+M@G2E: Earnings+More’s Scott Longley will be moderating a panel on the hot topic of cybersecurity on Monday afternoon at 2.40pm.

Calendar

• Oct 9-12: G2E, Las Vegas

• Oct 16: Gaming In Germany, Berlin

• Oct 26: Reputation Matters, London

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Florida assessment

A single-operator system in Florida will be sub-optimal in terms of revenues, suggest analysts.

Lost opportunity: Despite the potential for Floirida to add 22m (7%) to the number of the US population with access to OSB within a matter of months, the team at JMP suggested  the likely single-operator solution means yearly GGR could be up to 30% lower than would otherwise be the case with a multi-operator outcome.

• The legal situation surrounding the state’s compact with the Semionole tribe could still take some months to resolve.

• But the likelihood is that the Seminole’s Hard Rock online brand will be the only operator in the state.

• JMP estimated it could generate between $1.3bn and $1.5bn in yearly GGR at maturity.

• However, this figure would likely be closer to $2bn were more operators to be allowed into the state.

• The latter would be in line with the likely at-maturity levels that will be seen in New York, which has a similar population figure.

JMP noted that states that have gone with the limited-operators model, including Oregon, Connecticut and Rhode Island, have underperformed the average US OSB spend-per-adult. They add that the “core reason” is that without competition there is “less incentive to invest in players and the product”.

• The team added that though the New York tax rate of 51% is burdensome for operators, companies have held ~10% since April.

• Thus, they are “fundamentally creating higher levels of revenue that we would not expect to see in Florida”. 

Out of luck

Luckbox halts all B2C activity with immediate effect after failing to secure funding to continue.

Timed out: The esports-focused betting operator said late last week it had failed to secure the additional funding needed to continue, as it also admitted talks over a potential merger or acquisition had come to nothing.

• Think positive: The company said it would “shift towards the more cost effective B2B activities”.

• Despite admitting that B2C has generated all the company's revenue to date, Lukcbox said “achieving profitability will require significantly more capital than launching the B2B platform”.

• As part of the move, it has also wound up its Isle of Man subsidiary Real Time Game Services and insolvency practitioners have been engaged.

• Is this the end? The company added that it will continue to pursue talks about a potential merger, acquisition or a capital raise for growing its B2B or restarting B2C operations. 

Analyst takes

Playtech: The news of Caliplay’s legal action in Mexico “only makes sense” as a ploy to get Playtech to negotiate a resolution to the dispute about the strategic partnership, the team at Peel Hunt said. “Given the profit in Mexico and the challenge of instantly replacing a technology supplier, [a split] makes no sense,” they added.

MGM Resorts: The analysts at Macquarie assessed MGM’s update from late last week as suggesting any damage will be limited to Q3. The $100m of EBITDA losses from disruptions was “in-line to slightly higher than expectation” but the impact to Q4 should be lower judging by their positive occupancy forecasts. 

• Overall, the team thought MGM “came out okay” but will lose some share to Caesars, Wynn and Golden Entertainment in Q3 and likely Q4.

Full House: The team at CBRE said with the overhang of the legal dispute in Illinois surrounding the Waukegan property, and with economic conditions as they are, the prospects for the Full House share price are limited. “There is just too much up in the air right now,” they added.

M&A notebook

Spin cycle: FantasySpin has bought rival DFS operator BettorFantasy, which, according to the press release, provides a “thrilling slots-like experience” that “sits at the intersection of iGaming and fantasy sports”. 

• FantasySpin said the deal “further cements” its commitment to “delivering unparalleled experiences and fostering innovation within the DFS space”.

• Another further reading nudge: “Real-money daily fantasy sports slots are coming, because of course they are,” says Dustin Gouker in The Closing Line.

News Corp sold its A$70m ($44.5m) stake in the Australian Betr back in February, about four months after launching the company, according to the Australian Financial Review.

Startup focus – We The Bookie

Who are you? The Irish online B2C sports-betting operator was founded in 2019 by Malcolm Wilkinson, who has harnessed his actuarial skills to reimagine the sports-betting industry. He has enlisted social media guru Dr Steve Steck as CMO to help realise the brand’s mission and vision.

Funding backgrounder: An initial family/friends raise trousered €150k in 2021, which funded a beta/proof-of-concept launch in January 2023. Subscribing to the ‘only raise what you need’ mantra, it is currently targeting up to €200k to help fund the transition to a superior platform.

• “We’ve done a lot with a little, having spent only €100k to set-up the company and run a live betting site for six months,” Wilkinson trumpets. 

• “Scaling globally will require significantly more investment but we will stick to our lean ways to ensure the best value for investors and customers alike.”

What’s the game? We The Bookie operates as a conventional bookmaker but redistributes 50% of monthly gross gaming revenue back to customers in direct proportion to each one’s net loss. 

• “While our pre-launch modelling suggested our punters would likely get back around 20% of their losses at the end of each month, we were delighted to see they got back 21%-48%,” says Wilkinson.

• “We The Bookie has been created to be the most socially responsible bookmaker on the planet,” he claims. 

• Beyond plans to give back to local community initiatives, he says built-in safeguards “reduce the temptation to chase losses or reload”. 

• He also suggests the model appeals more to the casual punter than the sharp because “it’s only the net losers who get to participate in the rebate program”.

• “Customers can pump their breaks, sit back and root for We The Bookie to perform strongly so that at month’s end they can get back more.”

What will success look like? Over the next six months, this will include a new-and-improved platform, and demonstrating the model’s customer acquisition and retention powers. 

• In short, funding will be used to not just disrupt the Irish market but the UK as well, which will then snowball into multiple geographic markets. 

• “It’s a globally agnostic model so we are excited to start scaling and bringing We The Bookie to every corner of the globe,” says Wilkinson. 

• “Our way will become the new norm – and there’s very little the incumbents can do about it”. 

** 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.

Growth company news

Underdog Fantasy has launched GuardDog, a pioneering investment initiative dedicated to fostering innovation in responsible gaming. The initiative has received $1m of initial funding.

• UF said the fund’s mission will be to “identify, invest and help grow innovative startups that help real-money operators operate responsibly and players play responsibly”. 

Spectrum Gaming has launched the Spectrum Gaming Capital Tech Exchange, a first-of-its-kind platform to bring together early-stage, revenue-producing gaming-technology companies and pre-qualified venture capital.

One of E+M’s disruptors to follow, odds provider Huddle has announced a partnership with Sportradar allowing it to access the latter’s portfolio of data sources.

Another disruptor from the most recent Startup Month is BeyondPlay and it followed this up with the announcement of a strategic partnership with Play’n GO.

Novig has secured an Internet sports-betting operator license from the Colorado Division of Gaming. The commission-free sports-betting exchange plans to launch next month with Full House Resorts.

Challenger sports-betting backend provider SB22 and BetLeroy have joined forces to launch a mobile app aimed at boosting engagement among sports bettors through leaderboards, a range of betting options and a patent-pending Apple Watch app.

Sports analytics provider Moneyline Sports has announced the launch of SportstraderAI, a consumer-facing platform for predictive analysis and providing value bets for its subscribers.

File under ‘is this really the time?’: Challenger – or just challenged –  bank Layup, which provides prize-linked savings accounts for sports fans, has raised $2.3m in a seed round led by Chicago’s Continental Investment Partners. 

• See G2E panel preview above for whether to put any money in this one.

Career paths

Martin Collins has joined Soft2Bet as chief business development officer. He moves from GiG where he was director of sales and business development.

BMM Innovation has appointed Laura Olsen-Reyes as chief marketing officer. She comes with more than 20 years of gaming industry experience, most recently at Eclipse Gaming.

Victor Rocha has joined Chalkline as a strategic advisor. Rocha is conference chair for the Indian Gaming Association and leads Victor Strategies, an advisory service to the gaming industry. 

Strive Gaming has hired former Kambi deputy general counsel Tommaso Di Chio as chief legal and compliance officer. 

Yolo has appointed Matthew D'Emanuele to the new position of CEO of Yolo Entertainment, amid a wider corporate reorganisation. D’Emanuele was previously CEO of B2B software provider Eastrock Group and director of operations at GiG.

• As part of the reshuffle, Jose Micallef has assumed the role of Yolo Platform CEO. 

• Joe McCallum, managing director of Yolo Group, will sit on the company’s supervisory board.

PlayStar Casino has named Peter Ekmark as CEO, ahead of going live in several US states next year. Ekmark, who has served as a board member since September 2022, replaces Per Hellberg at the helm.

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Newslines

Kambi has signed a sportsbook backend provision deal with Dutch iCasino challenger brand 711.

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