• ESPN Bet is growing the market, not denting market shares. 

• Profits in North America were a distant prospect, says Kindred.

• F1 exceeded expectations, says MGM Resorts’ Halkyard.

• BettingJobs’ Jobsboard includes growth director and Mandarin-speaking acquisition manager roles.

And we sang him a song of times long gone, though we knew that we'd be seeing him again.

OSB market analysis

The buzz at the Jefferies sports-betting summit this week was all about ESPN Bet.

Better to be talked about: Without actually making an appearance, Penn Entertainment’s ESPN Bet venture was the talk of the summit held in New York this week, reported the team from Jefferies, who said the consensus was there had been little impact in terms of competitive landscape or the promo backdrop.

Time on device: Pointing to the evidence that the app is generating “considerable” initial consumer take-up, the team added the evidence to date suggested ESPN Bet could grow the market over time.

• But they reported more skepticism over whether the app was cutting-edge enough to steal customers.

• “The ESPN Bet product, while solid, is less advanced than current market leaders,” they suggested. “Our view is that it remains an important issue to watch, but is not a negative for incumbents.”

Even handed: Similarly taking a wait-and-see attitude was MGM Resorts CFO Jonathan Halkyard who told a Bank of America conference this week (see below) that it was “too early to tell with Penn and ESPN Bet if they’re going to change that dynamic at all”. 

Multiple fronts

The other two: Separately, the team at Truist said this week in their monthly OSB and iCasino roundup that they were tracking the progress of two further challenger brands, Fanatics and bet365. 

• The first is live in three markets to date – Ohio, Massachusetts and Maryland – and has recently peaked at 2.7% share in the three states.

• Meanwhile, bet365 is live in only two states – Ohio and Indiana – and had a September market share of 5.1% between the two, down from 6.6% in July.  

Growing TAM

The team at Macquarie said this week there was accumulating evidence that the sports-betting TAM continues to rise, going by what they suggested is the continued acceleration in New York.

• However, the team at Deutsche Bank in their monthly OSB and iCasino analysis said the 6% YoY rise in promo activity among trackable states would have been a “contributing factor to the somewhat sudden uplift in handle” in Q3.

• The team added that with “tame” YoY hold comparisons and some added promo activity in November and December, they anticipated “GGR trends will remain solid”.

Murders and executions

Big fish, little fish: Back with the Jefferies conference, the team reported the potential for M&A activity remains “in the background, an eventuality”. The analysts pointed out that DraftKings and FanDuel continued to gain ground, with the integrated operators Caesars and MGM “remaining largely relevant” and Penn “establishing its presence” with ESPN Bet.

• It means the operators below these levels “should be candidates for consolidation”.

• “Further, as the product competitiveness intensifies, we expect larger operators to acquire tuck-in capabilities, which we do not expect to be significant capital events.”

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Inspired Entertainment has 60 days or until Jan 22 to post its Q3 earnings with Nasdaq or risk losing its listed status, according to a letter it received from the exchange this week. 

• The company said in early November it needed more time to restate certain financial statements from 2021 in relation to the capitalization of costs.

MGM Resorts has unveiled plans for its Empire City property in New York should it receive one of the downstate casino licenses, including table games, the latest slots and a high-limit gaming area, alongside a new 5,000-capacity entertainment venue. 

Las Vegas Sands has denied reports that it is seeking to raise S$10bn ($7.5bn) in Singapore to finance an expansion of its Marina Bay Sands IR.

Penn Entertainment has announced an official sports-betting partnership for its ESPN Bet and theScoreBet brands with the NHL.

Sportradar has announced a deal to provide real-time statistics, player information and detailed datasets to Canadian sports network Sportsnet.

Everi has established a strategic partnership with Bitline to utilize blockchain technology, which will allow casino customers access to chips through their cryptocurrency or digital assets, according to a report in the Las Vegas Sun.

Playtech has opened its third US live-dealer studio, this time in Pennsylvania. It follows on from studios in New Jersey and Michigan.

Player trading startup Mojo has laid off 20% of its staff as it undergoes a “strategic shift” from B2C to B2B, according to Business Insider.

ICYMI

The Brazilian Senate postponed its vote on the sports-betting bill while disagreements over the inclusion of iCasino play out. See Compliance+More and LosIngresos+Mas.

By the numbers

More records in Vegas: High-end baccarat helped push Strip revenues to another record high in October of $715m, up 1.2% YoY. Excluding baccarat, the Strip was down 3% YoY, the third month in a row the Strip ex-baccarat was down.

• Total Nevada-wide GGR hit an all-time high of $1.32bn. Locals GGR was up 5.7% YoY to $262m, while Downtown Las Vegas GGR rose 7.8% to $97.5m.

Macau: GGR was down 18% MoM to $2bn with the post-Golden Week slowdown. In the YTD, GGR of $20.4bn represented a 325% improvement on 2022.

What we’re reading

Golden balls-up: CR7 faces a $1bn class action lawsuit.

Kindred call recall

Cost of doing business: Having announced on Wednesday its exit from North America, Kindred’s interim CEO Nils Andén said the decision was taken due to the escalating costs of trying to compete and the distant prospect of turning a profit.

• “The underlying cost structure… meant a meaningful profit contribution [was] beyond an acceptable time frame for the company today,” he told analysts on the call.

• Recall, Kindred saw cumulative EBITDA losses in its North American operation of £73.6m between Q121 and Q323.

Trickle down economics: The cost of closing the North American operations and the restructuring in the rest of the group will be given at the time of the Q4 earnings announcement early next year. The company hopes the 300 job losses will save ~£40m a year but doesn’t expect to see any benefit until they “trickle into 2025”, said Andén.

• The job losses will be focused on “backend resources” as opposed to revenue-generating areas and won’t affect the company’s ongoing work on its proprietary sportsbook.

• Interim CFO Patrick Kortman said the first test market for the new platform would launch by the end of December.

MGM fireside chat

Out of the park: High expectations of what F1 could do for Las Vegas operators in what would traditionally have been a quieter time of year were more than met, according to MGM Resorts CFO Jonathan Halkyard.

The fast lane: Speaking at the Bank of America Securities Leveraged Finance/Credit Conference this week, he said it was the company’s highest grossing weekend in terms of hotel revenue in its history. 

• “That’s quite something to have a record weekend on what was otherwise the slowest weekend of the year,” he added.

• Not everyone is convinced, however, suggested an open letter from a Las Vegas show producer.

Change of the century: Talking more generally of the way Las Vegas has developed into a sports destination, Halkyard said the market has “changed permanently” since the pandemic. He noted the Allegiant stadium, home of the Raiders, hosted around 40-50 events outside of the eight or nine regular season home games.

• “The group business in Las Vegas continues to get stronger and stronger, as we and others are able to win business from other cities,” he added.

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Rank investor call

Better off: One of the winners from the UK government’s planned reordering of its oversight of the gambling sector is land-based casinos, which under the proposals contained in the White Paper to update the regulations will be able to refresh their machine estates, Rank said yesterday.

• “It’s about a better machine offering, sports betting and improved food and beverage supporting a much more accessible gambling environment that will appeal to a much broader group of consumers,” said CFO Richard Harris.

Cross-channel ferrying: However, digitally, Rank is underweight compared to its B&M positioning, said COO Jon Martin, noting how the company was “yet to fully leverage” its multi-channel opportunity. He noted that only 9% of the Mecca Bingo player base and 5% of Grosvenor customers played with the online propositions.

• “These players are really important to our growth,” he said. “They’re at least twice as valuable to the brand, increasing their spend in digital, but also critically in our venues.”

• He added that “unified membership” would be a “critical enabler” in this area, something he said Rank was still waiting on. “We do this today, but not in the real-time way that customers want,” he said.

Earnings in brief

Rivalry: CEO Steven Salz said the eSports-led operator saw iCasino make a meaningful debt contribution since launching in July, adding that southeast Asia was a region where it was seeing “increasing traction”. Meanwhile, in Ontario, he said the company was benefiting from the “crawl, walk, run” strategy as previously outlined. 

• Revenue of C$8.7m ($6.4m) represented a 22% increase year-over-year, while net losses improved marginally to C$5.6m.

Analyst takes

Entain: Goldman Sachs this week downgraded Entain to a ‘Sell’, due to a combination of regulatory headwinds, competition and market dynamics. Specifically, the analysts cited concerns that BetMGM was losing market share, while the recent HMRC settlement of £585m was higher than expected.

AGS: Having met with representatives from the company, the team at Truist reported that the strong Q3 performance had continued into Q4. “Solid game ops performance, Spectra cabinet shipments and an enhanced content portfolio were highlighted as growth drivers,” they added.

• Meanwhile, JMP suggested the pipeline is the “single most important factor” for AGS. 

• “We believe management is confident in the positive financial impact the Spectra 49 cabinet (just launched) will have for the total enterprise,” they added.

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Calendar

• Dec 4: BetMGM investor meeting

• Dec 5: Allwyn

• Growth Director – Eastern Europe 

• Acquisition Manager (Mandarin) – Asia 

• Key Account Manager – Malta 

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