• Caesars goes early with earnings after announcing new debt tender.

• Pennsylvania and Michigan add more numbers for ESPN Bet.

• Flutter survives “better than feared” November mauling.

• The latest Product+More looks at Sportradar’s Alpha Odds.

• BettingJobs’ Jobsboard features CEO and head of sales roles.

And no alarms and no surprises.

Caesars’ preliminary earnings

Alongside a tender for $3.4bn of its outstanding bonds came news about Q4.

Jumping the gun: A new debt deal announced on Thursday has seen Caesars issue preliminary figures for its Q4 earnings, with revenue likely to be flat at the midpoint of a predicted outcome of $2.82bn-$2.84bn. 

• Las Vegas will be down slightly at ~$1.09bn, regional will be flat at ~$1.35bn and digital operations are predicted to see a 28% rise at midpoint to ~$304m.

• Adj. EBITDA is predicted to be down 3% at the estimated midpoint of $930m.

No surprises: The team at Deutsche Bank noted there likely wouldn’t be any surprise in the weakness relative to consensus displayed in the preliminary numbers.

• Wells Fargo said most of the reasons for the revenue miss in Las Vegas were known, including higher union pay deals and Caesars Palace disruption.

• The one element of new news, here, was the low table hold, which accounts for the majority of the adj. EBITDA shortfall on expectations.

Taking the hit: In line with what has already been said by Flutter about November’s adverse sports results, digital is also predicted to come in below consensus, with revenue $44m worse than would have been the case while adj. EBITDA was ~$29m lower.

• Wells Fargo said that adjusting for hold adj. EBITDA would have been an “impressive” $58m.

• Live strong: Macquarie noted that iCasino handle increased 53% YoY. The digital “path to profitability” was one reason why they maintained an Outperform on the stock, alongside the deleveraging story and the Vegas strength.

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Down the drain: More trouble looms for Bally’s permanent Chicago casino project, after the discovery of old water pipes at the site of its planned second-phase 400-room hotel means a new location might have to be found, according to the Chicago Sun Times. 

• “We are one step closer to the start of construction of the permanent casino by working closely with all stakeholders including the city,” a Bally’s spokesperson told the paper.

Las Vegas Sands has said it will invest a further $750m in a second phase of development of the Marina Bay Sands resort in Singapore. This is on top of the $1bn already committed to the work. 

• Diary note: LVS is set to report next Wednesday, Jan. 24.

ICYMI

This week in Earnings+More, 888 and Flutter (also see below) offered a compare-and-contrast on the UK and Ireland. Meanwhile, in Compliance+More, the UN report on Asian organized crime and its links to gambling and crypto was the main story on Thursday.

By the numbers

Pennsylvania: ESPN Bet managed 10% share of both sports-betting handle and GGR in December but, after promos, the NGR share fell to 2%. In NGR terms, FanDuel maintained leadership with 54% share, followed by DraftKings on 26%.

👀 Pennsylvania sports-betting NGR share, Dec23

• iCasino revenue came in at $165m, up 23% YoY. FanDuel and DraftKings were neck and neck with 25% share, followed by Rush Street (19%) and BetMGM (13%). 

• Penn achieved a mere 1% share.

Michigan: Promo spend outpaced GGR in December, up 44% YoY vs. the 31% rise in revenue to $66m, while iCasino rose 19% to $181m. ESPN Bet achieved 11% share of handle, while the promo-boosted GGR share was 12%, down from 18% for the parietal month of November. 

• In AGR terms, ESPN Bet made a loss of $2m after promos spend of $9.8m outpaced the $7.8m of GGR.

• ESPN Bet laid out the most promo spend for the month (15% of handle), ahead of FanDuel ($5.4m) and DraftKings ($6.3m).

• The big loser: While FanDuel and DraftKings increased handle YoY (by 51% and 33% respectively), BetMGM saw handle fall 24% YoY and GGR was down 26% at $8.9m.

Flutter reaction

Getting away with it: Flutter managed to reassure the analysts over an adverse sports results-afflicted Q4 with numbers that were commonly seen as being “better than feared.” The £1.14bn was some 11% down on previous implied guidance and 4% lower than recent Street estimates.

• The Wells Fargo team said the “big surprise #1” was the acceleration in structural hold to 13.5%, above the company’s own 12% target.

• However, the team added they were “not clear” on how the company defines structural hold.

Islands life: The team at Regulus were impressed with Flutter’s Q4 performance in the UK and Ireland. In a compare-and-contrast with 888 – which reported a day previous – the team noted Flutter had provided 25 ppts of outperformance.

• “Flutter’s platform and operational capability is now putting distance between the market leader and rivals,” the team added.

• “In this context, DraftKings’ US achievement is all the more remarkable.” 

The shares week

Dual control: Flutter remained on track to see its shares dual-listed on the NYSE on Jan. 29 after it filed registration forms with the SEC. 

• Earlier in the week, analysts suggested a rotation into Flutter on the part of US institutional investors was already taking place, perhaps prompting the buying spree on Thursday,

🗽 Flutter up over 15% on Thursday, up 18% on the week to date

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Product+More – Sportradar Alpha Odds

What is it? Alpha Odds is an odds recalculation tool that allows operators to generate bespoke betting prices in line with their risk exposure and liabilities, while also reducing volatility and improving efficiency. Its AI capabilities essentially smooth out the margin performance of its operator clients.

• “It does what would have been done manually 15 years ago," says Darren Small, SVP for managed trading services or MTS.

Oversight: There is trading team oversight, along with operational account managers, who make sure the technology is performing as it's supposed to. Moreover, Sportradar recently installed a brand-new specialist liability trading team to oversee the technology and ensure it is configured in the most efficient and appropriate way.

• Small says that over the past 12 months, Alpha Odds has consistently driven about a 1% improvement to its customers’ GGR from soccer.

• He adds that the technology within Alpha Odds allows operators to achieve a better understanding of where their exposure lies, with real-time capabilities offering ongoing risk reduction, something the most-skilled traders would be unable to do at scale.  

• “It effectively helps operators to reduce those big exposures while still taking the same amount of business,” he says.

Small notes that when it came to the bad run of soccer results last October, Alpha Odds helped to reduce trading volatility each weekend. This is because the technology understands each operator’s held exposure, coupled with the insight it has on how each operator’s customers are placing their bets.  

• “The AI models within Alpha Odds understand that the winning customers tend to do this off the back of their wins and they tend to reinvest, they tend to place a bet in a particular way.” 

• “That’s why I think that the Alpha Odds product responded so successfully.”

VAR from the madding crowd: Sportradar says this leaves the sportsbooks on the MTS platform better prepared to take on the next looming challenge facing the industry – the changing nature of the actual game.

• As Small points out, a huge factor for sportsbooks at present is the amount of added time for each game.

• “The World Cup last winter saw changes in behaviors of the referees, adding a lot more injury time,” he says.

• “That has translated to the domestic competitions. Injury time has gone up considerably.”

• That matters because, Small says, it leads to more favorites winning.

Watching brief: For now, the models – whether Alpha Odds or those employed across the industry – are unlikely to be adjusted “based on some early-season outliers.” But the odds machines will be keeping a close watch.

Calendar

• Jan 24 Las Vegas Sands

• Jan 30: PointsBet

• Feb 1: Rank

• Feb 6-8: ICE, London

• Feb 7: Disney

• Chief Executive Officer – Remote 

• Online Sports Product Specialist – Amsterdam 

• Head of Sales – Europe / Remote 

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