• Apparent delays in Kindred’s in-house sportsbook plan causing concern.

• In +More: BetMGM’s Xclusive; MGM, Penn and DraftKings step up to the mic.

• Better Collective pre-releases ahead-of-target numbers for FY23.

• Wells Fargo puts forward US sports betting and iCasino market share estimates.

I don't even own a watch but man, wouldn't that be great?

Investor concern over Kindred

Waiting room: What Kindred said with regard to how far down the track it is with its in-house sportsbook has shifted within the past year, as the reality of a product where delivery is behind schedule has become clearer, according to investment sources.

• Talking on condition of anonymity, one source suggested that “in theory” the company gave a message during its Q4 earnings call of progress with its sportsbook tech stack development.

• But the compare-and-contrast between what the company previously said regarding its proprietary sportsbook and the comments from management last week during its Q4 earnings call is telling, said the source.

Testing, 1,2.. According to what Kindred said during its Capital Markets Day presentation in 2022, the new platform was due to be ready for “selected market roll-out” by the end of last year. In subsequent earnings calls, including the Q3 call in November, that changed to a test market being launched by the end of last year.

Is this it? But last week, the company said it was only now “live in production in a test-market” and that it was “starting to invite customers.” Newly-installed permanent CEO Nils Andén added it was “fair to say that the product they will engage with will not be the finalized product.” 

• He added that a “fair amount of development” was left. “We haven’t communicated the exact roll-out plan but it will be phased out over the next three years where we take it market by market,” he said.

Roll-on, roll-off: However, the source said Kindred was “literally ‘testing’ the tech in a small market at present and won’t be placing ‘actual’ bets in that market until Q2.” “Following the CMD, the market assumed Kindred would be ‘rolling off’ Kambi at the end of 2023,” the source added.

• “Yet the reality is that it isn’t going to be until the end of 2024 where they roll off in small markets, and the large markets won’t be until 2026,” they argued

• “This is a very different story to the one they claim they are executing on.”

• A Kindred spokesperson disputed this interpretation, however.

• “We have always said we would launch in a first test market around year-end 2023 and launched in January 2024, so I would say very much on target for such a big project.”

Save the best for last: Sources suggested this chimes with the arrangement with current sportsbook backend supplier Kambi, which started with a new partnership contract at the turn of this year. That contract runs for three years and is believed to have a minimum revenue guarantee.

• It is thought likely that the first big market to be transferred once smaller test markets have been completed will be France.

• Kindred said last week markets at the very end of the process will be its biggest markets, the UK and the Netherlands.

• The spokesperson confirmed there would be no “significant roll-out” before this summer’s European Championship.

Bin it: The investment source predicted more twists and turns before then, pointing to recent tech stack failures, including Bally’s writing down its investment in an acquired tech stack (and switching to Kambi) and Fubo and Wynn both junking their own respective tech stack solutions.

• Meanwhile, Kindred’s acquirer FDJ previously bought sportsbook supplier Sporting Group in late 2019 but now appears to be junking that in favor of the Kindred platform.

• The Kindred spokesperson said the company’s proprietary technology is an “important reason” for FDJ offering to acquire Kindred.

•  “They have expressed their confidence in our operations and strategic focus.”

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Hail to the Chiefs: The overtime win for Kansas City Chiefs in the Super Bowl generated a 22% rise in geolocation checks throughout the weekend, according to GeoComply. Analyzing data across 28 states, including Washington DC and Puerto Rico, but excluding Florida, the company said the number of active accounts rose 15% to 8.5m.

• Note, since last year’s victory for the Chiefs, Massachusetts, Kentucky, Maine, Vermont and Puerto Rico have all legalized. 

• Party-poopers: The analysts at Regulus were less than impressed with the hype pre-match. The team estimated the game will have generated ~$1bn in legal handle, “an impressive number, but not one that moves the dial for the overall market.”

X certificate: As previously trailed, BetMGM and X (the social media platform previously known as Twitter) have announced a strategic partnership that will see the sportsbook become X’s exclusive live odds sports-betting partner. 

• The odds interface provides a clickthrough for each game to BetMGM's app or website, creating a “seamless user experience,” according to the press release. 

Stop! in the name of the law: A Massachusetts court has issued a temporary restraining order against ex-DraftKings employee Michael Hermalyn, who now cannot contact DraftKings’ customers or use any confidential information in his possession. 

Jackpocket has embarked upon its first foray into national network TV with the Blank Slate Sweepstakes, which premiered on the Game Show Network late last week. The program will run until Feb. 23.

Lottery.com said it has seen strong interest from investors and has upped the prospective fundraising effort being undertaken by Univest to $5m from the previous $1m target.

The week ahead

A big week for: MGM Resorts, Penn Entertainment and DraftKings are the headliners this week with their Q4 and year-end numbers.

• First up is MGM Resorts who report AMC on Tuesday. A note from Deutsche Bank last week said they see the possibility of consensus-breaking numbers, particularly on the Las Vegas Strip. 

• Analysts will almost certainly be seeking instant reaction to how their properties – and by implication the rest of the Strip – performed during the Super Bowl weekend.

• Most of the questions for Penn Entertainment on Thursday will revolve around ESPN Bet. The company will no doubt position the news as ‘so far, so good’ despite the recent qualms expressed by activists over the company’s record on digital.

• There is the potential for DraftKings with its earnings on Thursday and its call the following day to announce an exclusive marketing partnership with the recently ex-Penn Barstool Sports.

Also reporting this week is Betsson (Thursday) and gaming affiliate provider Catena Media (Tuesday).

What we’re reading

Bright lights, big city: Business Insider on how many are making a permanent move to Las Vegas.

Career paths

Videoslots has appointed Klas Winberg as CCO. He previously served as CEO of Play North.

Galaxy Gaming has appointed Michael Ratner to executive VP of product.

BC exceeds targets

Your over-delivery is on its way: The gaming affiliate and sports media giant Better Collective pre-released its FY23 numbers on Friday, saying revenue at €327m is ahead of the target of €315m-€325m. Adj. EBITDA of €111m is within the target of €105m-€115m.

• It was a very good year: The company noted it had upgraded its financial targets twice during 2023 due to strong operational performance and accretive acquisitions.

• Better Collective originally targeted revenue of €290m-€300m and adj. EBITDA of €90m-€100m.

• Analysts at Jefferies pointed out the final outcome will be 11% and 17% ahead of forecasts.

Big mo: BC’s most recent €176m deal for Playmaker Capital was completed just last week. Jefferies said the acquisition “raised expectations around medium-term margin performance and should add further momentum, especially in the Americas.”

Earnings in brief

Mohegan Sun: A threefold increase in digital revenues and the opening of the Inspire resort in South Korea helped push Q4 revenues up 4% to $425m, but a 17% increase in operating expenses left income from operations more than halving to $32m.

ICE analyst takes

Cold takes: Having met all the major live casino suppliers last week at the Excel in London, the team at Jefferies said all affirmed a “strong global runway for growth”, with North and South America being the focus.

• The team noted that competition in the US is heating up with current participants Evolution, Playtech and Light & Wonder due to be joined by Stakelogic this year.

• “Despite this, pricing remains rational and demand for dedicated operator tables high,” they said. 

By the numbers

And the winner is: Wells Fargo last week issued its estimates for the shape of the sports betting and iCasino markets in the US for Q4 and FY23. The analysts pointed out that the big winner from the advent of ESPN Bet appears to be… FanDuel, which across both sports betting and iCasino has extended its market leadership QoQ by 4 ppts to 35%.

• DraftKings on 30% was 1 ppt down, BetMGM on 13% was 2 ppts down and Caesars also lost 1 ppt of ground.

• Penn, across the quarter with first Barstool and then ESPN Bet from late November onwards, saw its market share rise 1 ppt to 4%.

• As can be seen below, after tripling its market share to 6% in November, it fell back to 5% in December.

Fall from grace: The pattern for 2023 as a whole is similar, though it does show how BetMGM’s market share decline appears to predate the emergence of ESPN Bet.

• Across the year, FanDuel was on top, adding 3 ppts to end 2023 with 24% of the aggregate sports betting and iCasino market, while DraftKings improved by 6 ppts to end on 29%.

• BetMGM, meanwhile, fell back 5 ppts YoY to 14%, while Caesars was down 2 ppts at 6%.

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+More startups

Flutter incubator

Female persuasion: Flutter said its startup incubator program Alpha Hub is on the search for companies that have ideas about how to engage women, after research showed it was an underserved gaming market.

• Relaxation technique: According to the parameters as laid out by Flutter, ideas should be centered on providing a “digital entertainment destination that focuses on helping customers to unwind, have fun and relax.”

• It added there is also a “wildcard option” for those startups that can provide interesting ideas that “don’t quite fit the brief.”

• Applications are now open and will close on March 15, 2024.

Startup investment

Go with the flows: The no-code automation platform provider Flows has announced that Light & Wonder has taken an undisclosed strategic stake in the company for an also-undisclosed sum. Flows will use the cash to enter a “slew of new markets”, scale up its operations and accelerate growth.

Startup news

TopProp is releasing a v2.0 called The Touchdown, a tournament-style game that allows users to make seven picks and if they get all picks correct they can win the daily bonus or beat the competition with the top daily score to take home a guaranteed prize.

ICE Fast Forward contenders

A total of five companies put themselves forward for the pitch competition at ICE last week. Here is a rundown of the runners and riders:

LiveDuel is a Cork, Ireland-based provider of decentralized sports betting built on the blockchain. It is led by CEO and founder Will Martin and includes among its investors TechStars, leAD and Avalanche.

The French YesOrNo bills itself as a responsible social-betting provider and is led by founder Gilles Feingold.

The Riga, Latvia-based Video Tracking Solutions provides a fully automated AI solution for live casino, processing all table game activities on blackjack tables and displaying the data in real time. It was represented at the pitch by COO Vismands Menjoks.

Watchers says it provides the tech that can “turn any platform into a social one” via the integration of text chats, audio streaming and AI bots. The company was represented at the pitch by director Yana Burden.

As its name suggests, Australia-based Gerford AI is another AI solution provider, this time in the area of coaching and tracking in emerging sports. It was founded by Iggy Jovanovic.

Calendar

• Feb 13: Catena Media, MGM Resorts International

• Feb 15: Betsson, Penn Entertainment, DraftKings (earnings)

• Feb 16: DraftKings (call)

• Feb 20: Caesars Entertainment

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