• Affiliates Better Collective and Gambling.com issue short-term ESPN Bet reports – and talk M&A prospects.

• Analysts warm to the message from DraftKings’ investor event. 

• Aristocrat heads the earnings in brief.

• BettingJobs’ Jobsboard features head of audio and CFO roles.

Something tells me I'm into something good.

Instant ESPN Bet reaction

Both leading affiliates talked up their long-term vision – but first there was some immediate reporting on how ESPN Bet landed in its first 24 hours.

D-Day+1: Those looking for early reads on how the launch of ESPN Bet went will have made a note of the comment from Gambling.com CEO Charles Gillespie. Pointing out that his company was “one of the few” affiliates working with ESPN Bet, he said the performance in the first 24 hours was “extremely strong”.

• “It was a very impressive day one,” Gillespie added. “Now it's just one day, so we’re not reading too much into that. But we are very pleased with the first 24 hours.”

• Meanwhile, his equivalent at Better Collective, Jesper Søgaard, was slightly less effusive, merely saying it was “off to a good start”.

👀 Catena Media does not have a deal to be an affiliate provider to ESPN Bet.

Salt seller: Caution was advised by Chris Krafcik from EKG on LinkedIn. Early search and download data is sure to be forthcoming in the next days and weeks and should be treated with “ample pinches – even heaps – of salt”, he wrote.

• “Tiny sample size, downloads from non-legal states and glitchy product are just a few of the many sources of noise on this channel.”  

• Even the state-by-state data, which will be released in the new year, will be patchy, Krafcik suggested, with the analysis of the half-month of ESPN Bet-specific data from November “bound to be breathless” and including “largely useless per-day extrapolation”. 

Right on cue: JMP issued a report yesterday detailing the download info for Wednesday – the first full day of operation for the app – revealing it was downloaded 180k times, which constitutes a “massive start,” the team said. 

• “To put the start into perspective, Wednesday was only behind DraftKings Super Bowl 2023 and FanDuel Super Bowl 2022,” they added.

• They noted the average for the other apps on the market was a 35% uplift, suggesting it indicated ESPN was pulling in incremental bettors.

• “We would expect record numbers heading into a heavy sports calendar this weekend,” JMP concluded.

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All those who say A’s: Major League Baseball owners have unanimously approved the A’s move to Las Vegas. Gaming & Leisure Properties, which will partly fund the development of a $1.5bn 30,000-seat stadium on the site of the Tropicana, said it was an “important milestone”.

Raise: Millennial and Gen Z esports-focused betting and iCasino operator Rivalry has announced a C$14m ($10.2m) cash injection via a placement of convertible debentures to fund its expansion into new verticals and geographies, as it promises profitability in H124.

Take me home: Fanatics has launched in West Virginia, including a pilot test of its iCasino within the sportsbook app.

Product+More: FanDuel has extended its partnership with Genius Sports to include the BetVision streaming product.

He’s not finish: Soon-to-be-former monopoly operator Veikkaus in Finland has chosen Endeavor’s OpenBet to provide its sportsbook backend in readiness for the liberalization of the market later next year.

Data

Massachusetts: DraftKings continued to dominate in the Bay State, generating 55% of total handle of $572m and 58% of the GGR total of $60.6m. FanDuel was a distant second by both metrics, on 28% and 27% respectively.

Maine: Over $12m has been wagered since the market opened on Nov 3, with DraftKings accounting for over 90% and Caesars the remainder.

What we’re reading

Grand Prix: As Vegas readies itself for F1 this weekend, The Nevada Independent says questions loom over “lofty economic expectations”.

What we’re watching

Baby driver: That said, the footage of the course really is something else.

Affiliate tour d’horizon

Big get bigger: M&A in the affiliate space continues apace, at least as far as sector leader Better Collective is concerned. BC completed four deals over the course of Q3 and topped them off with its second-biggest ever acquisition post-quarter end with the €176m cash and shares deal for Playmaker Capital.

• On the Q3 call with analysts, CEO Jesper Søgaard said adding Playmaker’s largely sports media assets took Better Collective’s global audience to over 380m compared to just 7m in 2018.

• “We are in a unique position to consolidate the fragmented digital sports media industry,” he said.

• Better Collective has “proven” it can make better businesses out of the platforms it acquires, Søgaard added.

Keep up: Less busy has been Gambling.com, which CEO Charles Gillespie admitted hadn’t announced any deals since the BonusFinder and RotoGrinders acquisitions almost two years ago. But he remained adamant the company was, relatively speaking, chomping at the bit to add more heft.

• “Just because we haven’t announced anything in two years doesn’t mean we’re not tirelessly working in the background on some fairly interesting stuff,” he promised the analysts.

• “We’re not afraid of pursuing a transaction that would require a little or medium bit of additional capital,” he added. “We’re having more interesting conversations than we were six months ago.”

By the numbers: Better Collective saw revenues rise 26% YoY to €75m and EBITDA was up 35% to €20m, while Gambling.com’s revenues rose 19% to $23.5m but adj. EBITDA fell 6% to $6.1m.

• Gambling.com said the fall was due to the success of its lower-margin media partnerships with Gannett and USA Today.

• October spawned a monster: Meanwhile, Better Collective said the poor sporting results for the bookmakers in October were behind the 6% fall in the month’s revenue to €24.3m. 

• That aside, Søgaard said the company was “actually pleased with the October performance”.

Shares watch

Revulsion: If what both companies said seemed innocuous enough, it still clearly spooked the market. Gambling.com was down over 20% on the day while Better Collective also suffered a 17%+ collapse.

💥 Crash test dummies: affiliates leaders fall in tandem

Affiliate earnings in brief

Raketech: The affiliate said revenue rose 49% to €21.5m while adj. EBITDA was up 27% to €5.6m, which the company said meant it would “comfortably” hit its FY23 adj. EBITDA guidance of €23m-€25m.

Updraft

The conservative path: DraftKings said on Tuesday its TAM for 2028 of $30bn only included the current slate of regulated states. In comparison, Jefferies’ estimate of $35bn included the larger states yet to legalize.

• Jefferies noted the sports-betting and iCasino sector as a whole “does not require a macroeconomic outcome as a prerequisite of success”.

• The team at JMP added the guidance for 2025-2028 will likely prove to be on the conservative side given the likelihood of further legalization in the next five years.

Hitting from the baseline: Recall, DraftKings said on Tuesday it expected adj. EBITDA to hit $900m-$1bn in 2025, rising to $2.1bn in 2025 when revenues are projected to have hit $7.1bn. The baseline for the forecasts is the current state footprint and doesn’t include incremental state openings.

• Deutsche Bank noted the bull case for DraftKings rests on same-store GGR growth remaining “robust” and that the decline in reinvestment and promos will not impact that growth.

• They also argued the forecasts rely on competitors having no impact on DraftKings’ market share nor its reinvestment plans.

• In comparison to the optimism with other analysts, DB remained cautious.

• “While the big picture story is possible, with paths through legislation, delivery on the stated legalized financial target, or a combination of the both... we see risks,” the team said.

Every day, in every way: The improved guidance is driven by “overall better execution” while product development “remains a critical element of the story”, said the team at Jefferies. 

• “The positive dynamic of product momentum as the primary determinant of success should benefit DraftKings as it has in 2023.”

Splashing the cash: Jefferies said that chatter around free cash flow has become “much more relevant” for DraftKings, noting that the growing EBITDA would generate $800m-$1bn of free cash flow in 2025.

Stat to mull: Wells Fargo estimated DraftKings will have turned over $99bn of handle in 2023, with $36bn in sports betting and $63bn in iCasino.

Earnings in brief

Aristocrat: Revenue rose 13% to A$6.3bn ($4.1bn) driven by the Americas gaming business and against the headwinds of what CEO Trevor Croker termed “mixed conditions” for the Pixel United mobile gaming arm. Pre-tax profit rose 53% to A$1.45bn.

• The Americas gaming segment saw a 16% rise in revenues as Aristocrat continued to take incremental market share.

• In the online space, Croker said he was confident the NeoGames acquisition, to be completed in H124, would add “vital capabilities” that will unlock Aristocrat’s “full potential”.

Codere Online: Investment in the Mexican and Spanish markets continued to be the “best use” of the company’s cash, Codere said, after NGR in each market rose 63% and 21% respectively in Q3. Total revenue was up 42% YoY to €41.1m. See LosIngresos+Mas for more.

NorthStar Gaming: Losses narrowed in Q3 to C$4.2m ($3.1m) from C$6.1m in the prior-year period as revenues more than doubled to C$4.7m. The company recently completed a placement of $10.3m from existing shareholder and platform provider Playtech.

FansUnite: Revenue for Q3 will come in at C$4.5m-C$4.8m, or an 8.5% increase at mid-point, with adj. EBITDA coming in at between a C$100k loss and a C$200k profit. The strategic divestment of its OSB and iCasino assets will result in annualized cash savings of C$7.8m.

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Calendar

• Nov 21: Catena Media

• Nov 29: Kindred, Rivalry

• Dec 4: BetMGM investor meeting

• Dec 5: Allwyn

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