• Eminence’s Sandler gets a seat on the board at Entain. 

• In +More: BlueBet talks, darts record, Ohio data.

• Penn could be in for a volatile year.

• EKG predicts FanDuel and DraftKings will lose a little share in ’24.

Here we are now, entertain us.

Boardroom play

Eminence Capital’s Ricky Sandler gets a seat on the Entain board.

Seat at the table: The activist investor, which previously went public with criticism of Entain’s M&A strategy, has been handed a non-executive directorship and a seat on the board – but expectations of any imminent corporate action might be premature.

• Eminence founder and CEO/CIO Ricky Sandler joins with immediate effect and will also sit on a committee that will choose a further board placement.

• He joins at a time when the company lacks a permanent CEO, after the departure of Jette Nygaard-Andersen last month.

Loud and clear: Recall, in June last year at the time of the £750m acquisition of STS, Eminence issued an open letter to the Entain board that complained its M&A strategy was “perplexing on many levels” and accused the management team of being “tone deaf.”

• This week, though, Sandler said Entain was a “robust business with market-leading brands, a unique technology platform and enviable positions in key geographies around the world.”

• He added he hoped to “help Entain achieve long-term success and create lasting value for its shareholders."

You say tomato: Analysts at Goodbody suggested Sandler’s appointment could “increase pressure” on Entain to “potentially divest all or part of its stake in BetMGM, or consider a full sale of the business.” But the team at Jefferies were not convinced, saying Sandler’s comment about “long-term success” indicated a “short-term solution may not be top of Eminence’s agenda.”

• Yet sources speaking to E+M said an activist such as Eminence would find it difficult to effect change from the position of a non-exec post.

• One sector expert added it was curious that the STS deal wasn’t the “outrage” that the activists thought it was.

• “They spat the dummy out at a deal that was actually a great deal,” the source added. “There were others that preceded it that were bad.”

• “Fundamentally, their investment thesis is way too simple,” they added.

👀Career path: A notable departure this week was Nick Batram, previously head of M&A at Entain, who announced via LinkedIn he has left the company after eight “transformational” years.

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+More

Australian minnow BlueBet has confirmed it is in discussions regarding “strategic initiatives” with the Australian Betr and other potential partners. Recall, the Matt Tripp-led Betr has long been rumored to be a potential bidder for PointsBet’s Australian business.

• Bluebet’s share price soared 33% on the news; PointsBet, however, was down over 5%.

Rush Street has launched OSB and iCasino operations in Delaware under the terms of its five-year deal signed in August with the state lottery.

🎯 Lil’ Littler: This week’s PDC World Darts Championship final between the 16-year-old Luke Littler and Luke Humphries “smashed” betting records. According to Kambi, it was the most bet-on darts game in the company’s history with total bets up 45% on last year’s final.

AGTech has won a contract to supply lottery terminals to China’s Sports Lottery Administration in Shanghai and Guangdong Province. In December, the company announced it won the lottery terminal contract for Shandong and Tianjin.

By the numbers

Ohio followed the trend from other major OSB states in November, with Penn’s ESPN Bet solidly placing in the top three despite only being available mid-month. It garnered 8% of the market by handle vs. the 35% and 32% for FanDuel and DraftKings respectively.

• Unlucky for some: Not shown in the chart below are the 13 brands that make up the $41m ‘others’ segment. 

• Relegation worries: This includes bottom of the table Betr (not to be confused with the above Australian firm), which generated just $515k of handle and GGR of $65k.

🎯 Ohio in November: ESPN Bet makes market share gains

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In LosIngresos+Mas there is more about Brazil’s legislation, while Compliance+More this week looked at the ‘clown car’ California ballot measure effort.

Penn analysis

Combustible: The analysts at Deutsche Bank are predicting a rollercoaster ride for Penn Entertainment’s shares this year as the “skittish” macro environment, current regional gaming trends and the uncertainty over the trajectory of ESPN Bet provide for a volatile mix.

• Looking at Penn’s interactive elements, the DB team suggested several income streams are “often overlooked”, including the market access fees, social gaming element and theScore Media.

• Combined, the team estimated these contribute ~$60m annually in EBITDA.

Gaining: As was previously indicated by DB, the team believed that from the scant data available, DraftKings and BetMGM appear to have lost ground with ESPN Bet’s debut. Across all states – i.e. including those where ESPN Bet is not active – DB said ESPN’s market share is 4.3%, up ~260 bps QoQ and ~170 bps YoY.

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.

Market share prediction

Ball watching: Gazing into their crystal ball, the mystics at EKG said the emergence of ESPN Bet and to a lesser extent Fanatics, bet365 and a Florida-monopoly-boosted Hard Rock will dent the share of DraftKings and FanDuel but won’t knock either from their perches.

• “We see little chance of the category leaders ceding significant share to rival brands,” the team suggested.

• “But we do believe some loss of share is inevitable as the competitive landscape ramps up.”

Spend, spend, spend: As well as “heavy” spending on marketing and promos from ESPN Bet, EKG believed BetMGM will hope to regain ground lost to the top two in 2023. “It seems likely to spend aggressively as part of a projected EBITDA-negative 2024,” the team added.

Five big ones: The market share thoughts are among five predictions for the year, which include the likelihood that TAM expansion will “slow to a crawl”, that DraftKings will be involved in large-scale M&A – with LatAm a likely locus – that iCasino will go “game-show crazy” and RG policy will remain “restrained.”

Download data

📲ESPN Bet has lost top spot in the download charts for the first time since launch in mid-November, according to the team at JMP, who said that in week 17 of the NFL season DraftKings gained top spot with 27% share. ESPN Bet was second with 26%, followed by FanDuel on 22%.

• 💵 The team noted that promo spend across the market “increased considerably” in November.

• “ESPN Bet has increased the size of the market by introducing sports betting to new players, highlighted by MoM handle growth, excluding ESPN Bet, well above historical seasonality,” they added.

• The team said they expected “positive customer acquisition comments” on the upcoming Q4 earnings calls

Date for the diary: Penn Entertainment will release its Q4 earnings numbers on Feb. 15.

Share watch – Bally’s

No fizz: The New Year’s champagne fell flat very quickly for Bally’s, which as of COP Thursday was down over 13%. The drop came amid a bad week for regional gaming stocks generally, with Red Rock Resorts off by nearly 7%, Caesars down nearly 5% and Penn just over 4% lower.

👀 Bally’s suffers a post-New Year double-digit drop

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Calendar

• Jan 18: Flutter

• Feb 6-8: ICE

• Feb 8: Boyd Gaming

• Feb 15: Penn Entertainment

• Feb 20: Caesars Entertainment

• Head of Marketing (Lottery) – Middle East 

• Senior Creative Designer – North America 

• Safer Gambling Officer – UK 

An +More Media publication. 

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