• Flutter achieves its dual listing in New York today.

• In +More: BetMGM/X tie-up, Evolution lawsuit, Donoghue joins DraftKings.

• Super Bowl tipped to eclipse F1 weekend in Las Vegas.

• The startup focus is LA-based games studio Konquer.

Gonna hitch a ride, head for the other side.

Flutter dual listing

D-Day arrives as Flutter achieves a dual-listing in New York.

The road to a listing: Today’s the day when Flutter achieves its dual-listing on the NYSE. At some point in February it will transition to GAAP accounting methods from IFRS, allowing for easier comparison with peer DraftKings. Final results for 2023 will be published on March 26.

• In May, at its AGM, the company will ask shareholders’ approval to move its primary listing to the US.

• From there, however, things get complicated as various index listing and domicile rules intersect and the company assesses the impact of fund flows.

Who is this monster? According to Jefferies’ estimates, Flutter will generate £12.6bn or $16bn. This is up from an estimated £9.51bn in the year just gone. Over the same period, EBITDA is predicted to rise from an estimated £1.53bn in 2023 to £2.79bn in 2026. 

• Net debt is expected to fall to £800m by 2026 from £2.8bn at the end of 2023, while the FCF yield will rise from 1.5% to 5.8% in 2026.

• Notably, by 2026 it is likely the US division – largely FanDuel – will be the group’s biggest by EBITDA.

• Duel control: By 2030 Jefferies estimates FanDuel will generate over $2.6bn of EBITDA on existing states alone, with GGR hitting $12.7bn; split between OSB of $9.39bn and iCasino of $3.28bn.

Setting out its stall: The Jefferies team suggested the March results will see the company issue F24 revenue and EBITDA guidance.

• They added that a key theme for the year will be the extent to which the competitors can “bridge the gap” to the top two and prevent the establishment of a “persistent duopoly” between FanDuel and DraftKings.

• “At the same time, either of FanDuel or DraftKings may seek to break the rational duopoly and gain a dominant market share,” the team said.

👀Wrong way up: The Jefferies team noted that when it comes to comparator sectors the benefits of being a market leader are more pronounced. “Across other digital markets, leaders are better able to leverage flywheel effects [apologies, ed] and consequently achieve outsized market share.”

• Moreover, in other sectors, the #1 market leader normally trades at a premium to the #2.

• This premium is as much as 90% in the rideshare market.

• Yet, in US OSB/iCasino, DraftKings trades at a premium to Flutter.

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+More

X marks the spot: BetMGM is reported to have done an exclusive deal with social media channel X for the provision of odds and direct links to the sportsbook on related sports content. The details of the partnership and financial metrics are yet to be divulged.

• Before seeing any details, the team at JMP said the tie-up “opens the funnel” in a way few online companies have ventured to this point.

• They added that the visibility of BetMGM will be enhanced through X’s 55m+ US MAUs.

• Moreover, the advanced algorithms of X would be able to “tailor content for individual users and pair it with the BetMGM brand within the social network,” acting as a national marketing channel similar to TV spend.

• JMP noted the recent media deals including the reported re-entry of Barstool Sports into the OSB arena via a marketing deal with DraftKings.

An Evolution shareholder is suing the online gambling supplier, alleging it made false and misleading statements about its involvement with online companies that, the lawsuit alleges, operated illegally in some markets. See Compliance+More tomorrow for more.

Boardroom coup: A major shareholder in gaming affiliate minnow Acroud is attempting to get its CIO Kim Mikkelsen installed as chair of the company. Mikkelsen is the majority shareholder at Strategic Investments, which owns nearly 23% of Acroud. The current chair is Peter Åström.

By the numbers

Arizona: November GGR fell 24% YoY to $42.3m from a handle of $714m, which was up nearly 16% YoY.

What we’re reading

In limbo: The Tropicana continues to trade even as its future demolition looms. In the The Nevada Independent.

Career paths

Former Amazon sports executive Marie Donoghue is joining DraftKings as chief business and growth operator. Donoghue stepped down from Amazon earlier this month. 

Former PointsBet SVP of content, Liam Roecklein, has launched a media consultancy called Relentless Digital Media.

Clyde Harris, Graham Cassell, Mick d’Ancona and Peter Sherman have teamed up to form a new betting and gaming tech-focused consultancy Circle Squared.

Mikolaj Cymerman is the new chief commercial officer at Entain CEE. In a LinkedIn posting he also said he had joined the board at STS.

EveryMatrix has appointed Bobby Longhurst as group chief commercial officer. He previously served as managing director of Sportingtech.

Meanwhile, Sportingtech has appointed Tom Ustunel, previously betting and gaming director at News UK, as its new chief executive.

Vegas Super Bowl

A different ball game: In among a generally difficult Q1 comp, the Super Bowl is looking like it will see the Las Vegas Strip eclipse the recent revenue highs from November’s F1 weekend and lead it into record-breaking territory once again.

• According to the latest room rate surveys, while January and March are trending down – particularly the latter – February is “showing significant strength.”

I won't try to fight in the weekend wars: The Truist team suggested the room survey data points to Super Bowl weekend on Feb. 11 “shaping up to become a material event”, with most Strip locations long sold out on internet channels.

• The team noted that during the F1 event, higher-end properties appeared to benefit strongly.

• But unlike F1, where it was only the high-end that enjoyed the uplift, Super Bowl is seeing medium-tier properties “also commanding higher rates” YoY. 

• The analysts see the Super Bowl as a potential offset to the lack of a CON/AGG event this year.

Go ’niners: Wells Fargo suggested San Francisco reaching the Super Bowl would be an “important factor” when it comes to room rates, given the size of the fan base and proximity.

Fontaineblah: Truist added that the new supply on the Strip represented by the opening of the Fontainebleau had not impacted room rates as yet, suggesting the March downturn was more about the CON/Agg absence

Earnings reaction – Las Vegas Sands

Year of the bull: Las Vegas Sands’ earnings last week were well-received and, despite the miasma currently surrounding the prospects in China affecting all China-related stocks, the team at CBRE suggested any signs of “incremental stimulus” from Beijing could have a two-fold positive impact.

• First, it would lead to higher valuations. Second, it would indicate higher consumer spending from Chinese visitors to Macau.

• However, not all analysts were convinced. The team at Jefferies said they believed the economic backdrop would continue to pressure valuations.

REIT analyst take

Expansions: The footprint for gaming REITs has grown since inception from ~5% of casino stock in the US – when the casino REIT model first surfaced in 2013 – to ~24% today, according to the team at JMP.

• They added that they suspected more casino companies would look to streamline their operations and “use real estate as a mechanism to fund growth.”

• “Sale-leaseback momentum will persist,” the team said. “Simultaneously, pending legislation pertaining to legalization of gaming in new states supports new casino construction.”

Sector watch – Bitcoin ETFs

How can $1.2bn of fund inflows be disappointing? The confounding nature of the market in Bitcoin was fully evident following the launch of the first Bitcoin ETFs. The $1.2bn of fund inflows has been deemed as disappointing, according to analysts at JP Morgan.

• “Factually, [the funds] have fallen short of expectations for such things as the biggest ETF launch ever.”

• The nearest comparison launch would be when a gold ETF was launched 20 years ago.

• That brought in $1.3bn of fund inflows in its first five days, but, as has been pointed out, that launch consisted of just one fund.

The rarest commodity: Patience, it seems, is being asked for. “Despite the increase in the potential addressable market, we think it will take time for new money to flow in,” said the team at Citi.

• Still, as JPM said, projections for inflows this year of $10bn-$100bn “seem increasingly unrealistic”. 

• They pointed to the gold example – which after the initial flurry attracted $3.4bn in its first year – as a guide.

Buy the rumor, sell the news: Perhaps more surprising, given how much the Bitcoin price moved up in anticipation of the SEC giving its approval to ETFs, the price has actually declined by a high single-digit percentage.

• The confusion is perhaps best highlighted by the fund outflows affecting the most high-profile Bitcoin ETF, Grayscale.

• In fact, outflows from the Grayscale fund outweighed the inflows across the other nine funds that were launched in the immediate aftermath of the SEC decision.

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Fundraising news

Billed as a combination of Topgolf meets betting, Skill Money Games has teed up a $5m seed round led by the Eastern Band of Cherokee Indians (EBCI), with participation from Seth Schorr, CEO of Fifth Street Gaming, Chris Grove from Eilers & Krejcik Gaming and Gavin Isaacs, among others.

• The company is led by founder and CEO Bryan O'Reilly and offers skill-based cash challenges in an AI-assisted indoor golf environment.

Startup focus – Konquer

Who, what, where and when: Konquer was founded by DraftKings alumni Ashford Kneitel and Aditya Singh in 2023 with the ambitious plan of making “the coolest casino games you’ve ever played”. 

Funding backgrounder: The duo has raised $500k from angel investors. 

I came, I saw: While the competition in the slots supplier space remains fierce, Konquer views its niche as non-slot casino games. First up are table games, next are some crash games, before Konquer unleashes a brand new concept in RNG casino games.

• Kneitel leveraged a long-term relationship with Galaxy Gaming to launch the US land-based supplier’s table games online. 

• The agreement will bring games such as Daredevil Poker, Emperor’s Challenge Exposed, High Card Flush and High Hand Blackjack to the North American online market.

• Konquer plans to launch its first four own-brand games during Q1 through a relationship with ODDSworks RGS. 

Crash test: “We have some wild crash games coming out soon, including what I believe is the first crash game that can be played in the physical world with a tangible object,” says Kneitel. 

• “But more important than crash games are our games with new concepts,” he adds. 

• “And we don’t mean incremental changes around the edges; we mean something brand new altogether.” 

• Konquer will focus on the US market, before turning its attention to Canada, Mexico and Colombia, where ODDSworks already has a presence.

What will success look like? Kneitel’s goal is to be nothing less than the number one RNG provider on the planet. He can see an exit by acquisition or IPO at some stage in the future but, citing the average startup’s seven-year timespan to exit, Kneitel says he is in no hurry. 

• “We have a long pipeline of fun games in the works,” he concludes.

Calendar

• Jan 30: PointsBet

• Feb 1: Evolution, Rank

• Feb 7: Kindred, Disney

• Feb 8: Boyd Gaming

• Feb 13: MGM Resorts International

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