• DraftKings CEO says the company’s key concern is shareholder value.

• In +More: Caesars, Kambi, Better Collective report in the week ahead.

• By the numbers looks at New Jersey and New York data in January.

• LiveDuel goes under the startup microscope.

Anything you want, we got right here in the U.S.A.

DraftKings’ cash pile options

Back in the USA: Asked about the internal discussions over what DraftKings will do with the capital “accumulating on our balance sheet,” Robins said “priority A is winning in the US and I think [the acquisition of] Jackpocket is absolutely in line with that.”

• DraftKings announced the $750m Jackpocket buyout on Friday. The company will use ~$413m of cash with the rest paid in shares.

• Robins noted that lottery was the oldest form of gaming in the US with a “massive” audience and, as with DFS, Jackpocket offers an active database to cross-sell into. 

• “I think this is doubling down on that,” he said. “We feel like we have the best-in-the-industry cross-sell rates,” he said. 

Buybacks alert: Robins emphasized DraftKings would be “strategic” and “super disciplined” on further M&A. “I don't think you’ll see us go in this rash of buying companies left and right,” he said. “This is one we did a ton of diligence on.“

• Skinning the cat: “M&A is not the only way” to create shareholder value, he added. “There are many others.” 

• This could involve taking on debt. “That is something that we're actively looking at right now,” Robins said.

Piling up cash: CFO Jason Park noted DraftKings had $1.6bn in cash at the end of the year before taking into account the cash element of the Jackpocket deal. He repeated that the company would be free cash flow positive as of the end of 2024. “We’re obviously going to be accumulating cash very quickly,” he said.

• Into orbit: The analysts at Macquarie noted DraftKings was now “well past the burn stage.”

• “Bottom line, we don’t believe there are risks to DraftKings’ 15-30% multi-year top-line growth path.”

Step carefully: Robins noted the so-called ‘courier’ lottery was a product that didn’t need legislative action but merely the nod of the state lottery director. And while he said Jackpocket was “well-positioned” for iLottery, the regulatory process was “more of a slower burn.”

• The other side of the coin, of course, is that the ease of gaining regulatory clearance made it easier for competitors to enter the space.

• “But I think that what really is hard is the technology side,” he added. “It’s a very complicated fulfillment process.”

But the team at Regulus added a word of caution. The attempt to “use a lottery workaround product” to leverage sports betting and iCasino is “also likely to turn up the regulatory and safer gambling heat,” they argued. 

• “Whether DraftKings’ bravery in entering the US lottery space with a workaround product is to be admired or feared remains to be seen.

We need to talk about Dave: The new partnership with Barstool got a mention, with Robins noting DraftKings was “really thrilled” to be working once more with the company as an exclusive marketing partner. 

• “This is about as good as it gets in terms of us having historical data and being able to underwrite this deal,” he added.

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Betsson has acquired Netherlands operator Holland Gaming Technology as well as games developer Holland Power Gaming for €16m in cash upfront and deferred payments of €9m and €2.5m to be paid after six and 12 months.

The first ESPN Bet-branded retail sportsbook is set to open at Penn Entertainment’s Hollywood Casino at Greektown in Detroit in April.

The week ahead

Caesars Entertainment has already given a good idea of how it performed in Q4 after pre-announcing its earnings at the time of its recent debt announcement in January. The company said then that revenue would come in at $2.82bn-$2.84bn while adj. EBITDA is predicted to be down 3% at the estimated midpoint of $930m.

• The online business is predicted to come in $44m below consensus due to the poor sporting results in November while adj. EBITDA will be ~$29m lower.

Also reporting this week are sportsbook supplier Kambi (on Wednesday) and Better Collective (Thursday). Better Collective has also pre-announced its numbers, just last week, saying revenue would be ahead of target at €327m but with adj. EBITDA coming in bang on the mid-range of its target at €111m.

• Later in the week, Churchill Downs and VICI will also report.

Careers+More

The big move: On the earnings call on Friday, DraftKings’ Jason Robins spoke about the recent hire of Mary Donoghue as the new chief business and growth officer at the company. Donoghue joins from Amazon Prime where she was VP of global sports video, exciting speculation that DraftKings might enter the market for live sports streaming rights.

• But, Robins dampened such hopes. “That’s not something that right now is on our mind,” he said.

• But he did suggest that Donoghue came with skill sets that would help DraftKings “understand all parts of the ecosystem.” 

• “We do a lot of business with folks who own live sports,” he added. “Having that understanding from the other side of the table will be very helpful in future negotiations.”

By the numbers – New Jersey

Awks: The day a much-distributed report from EKG rubbishing the idea there is any cannibalization of B&M gaming by iCasino came out, New Jersey released its latest dataset for January showing the state getting off to a roaring start in 2024 with the exception of land-based casinos.

• Sports-betting GGR led the way, up a whopping 136% YoY and 34% up MoM to $171m from handle that rose 59% YoY and on margins that hit 9.9% vs. 7.7% in Jan23. 

• iCasino GGR, meanwhile, rose 19.6% YoY and just shy of 2% MoM to $183m.

• However, B&M GGR was down 3.1% YoY, with slots GGR down nearly 6%, while table game revenue rose 5.2%.

• One market watcher talking to AP attributed the strong OSB and iCasino numbers and the parallel fall in B&M gaming to the harsher winter weather in January.

🚛 The iCasino juggernaut in New Jersey

New York

No safety: BetMGM suffered something of a shellacking during the week of the Super Bowl, posting a negative GGR of $9.6m for the period to Feb 11, with the game itself costing it $4.8m. Caesars was also in negative territory, both for the week – down by $1.3m – and for the game itself where it lost $970k.

• Faring better were the market leaders, with FanDuel managing to post $3.7m of GGR win for the game while DraftKings posted $8.8m of GGR.

• However, for the week of the game DraftKings posted only $7.1m while FanDuel came out on top with $8.2m.

Maryland promos: Jefferies noted that Maryland was the first state to disclose promo data for January, showing overall spend up 3% YoY and 14% MoM but with spend as a proportion of GGR down by 9 ppts YoY.

• ESPN Bet cut back significantly, with promo spending down 85% MoM to less than $1m.

• The team noted this represented a “sharp sequential decline” from the $13m (39% of handle) and $6m (14% of handle) seen across its first two months.

• “Indeed, while ESPN Bet’s free bet spend was double that of the next largest spender in its first month of November, it spent 15x less than the biggest spender in January,” the team added.

By way of contrast, FanDuel effectively doubled free bet spend MoM in January to the highest level since market launch. Yet, despite this, Jefferies reported FanDuel was still able to grow NGR by +30% YoY and retained its #1 position with 56% NGR market share.

Brazil, Peru, Mexico, Colombia and of course Argentina… Latin America is probably the hottest region in the world for iGaming currently, which is why we’re delighted to welcome Nicolas Campano as Soft2Bet’s new Sales Director LATAM. Nicolas has acquired fantastic industry experience thanks to previous roles with Play’n Go and Yggdrasil and will drive our sales and growth efforts in the region’.    

Startup focus – LiveDuel

Route one: Founded by Will Martin, the Cork, Ireland-based LiveDuel is a decentralized sports-betting exchange. Foregoing complex pricing, LiveDuel “simplifies the betting experience,” says Martin, offering straightforward options for home, away or draw bets on soccer games instead of 18 options on traditional exchanges. 

• With a consolidated liquidity pool, users enjoy instant transactions and an easy way to add liquidity to earn rewards.

• “You can view LiveDuel as a hybrid between the usability of a sportsbook with better pricing of a betting exchange. I love exchanges but the user experience is just overwhelming for 90% of fans.” says Martin.

Net income: Backed by prominent investors including Techstars, Adidas Family Office and Avalanche, LiveDuel is currently raising a $2.5m seed round. 

Cup runneth over: Through leveraging viral TikTok filters it designed and developed, “the company’s commitment to community and content sets it apart,” claims Martin. The 2022 World Cup saw more than half-a-million creators use LiveDuel’s filters to make a video, generating over half-a-billion views and 3k signups on zero spend. 

• Its next goal is to empower live streamers to create even better sports content.

• “The way our target audience (18-40 year olds) consume sports is completely different from five years ago,” says Martin. “Sports is all about community and content and we want to support content creators to make better sports content faster.” 

• LiveDuel’s approach to content is largely decentralized. “We build creator tools and let the community create on top of them,” he explains. “The goal is to build an engaged and vibrant community at scale to set us apart from the competition.”

World class: Focused initially on soccer, LiveDuel’s aim is to go “deeper than anyone else” into the world’s most popular sport to give fans a “unique experience to engage with.” 

• “Betting on a game isn’t the start and end point for a fan. LiveDuel is more than bets, it's the full journey, pre-game, live and post-game,” says Martin. 

• “By initially focusing on soccer, we can deliver a world-class experience that doesn’t exist today on any betting platform.”

• With plans to expand into other sports, LiveDuel anticipates significant growth and sees huge opportunities in F1, cricket, UFC and US sports. 

Trophy lift: The company's recent win at the Pitch ICE competition and strategic partnerships underscore its momentum. With the upcoming launch of real-money bets this year and an innovative new approach to bet builders, LiveDuel is “poised for success,” says Martin. 

• “We’re not thinking about our exit strategy right now, we are on a mission to deliver our vision and be a major global player.” 

• “If we can stay focused, delight sports fans with our products and dominate the digital native market, an IPO is a possibility down the road.”

Growth company news

You keep me hangin’ on: New York-based iCasino games provider Supremeland Gaming has gained its first-ever license approval in the state of Pennsylvania. Executive chair Johan Apel said the company will unveil multiple titles in the coming months designed by the in-house design studio, Powderkeg.

Australian-based betting operator Dabble has become the official and exclusive wagering partner with the Repco Supercars Championship. 

Huddle has been named as the official betting technology partner to the Canadian Elite Basketball League, working alongside official data provider Sports Info Solutions.

Calendar

• Feb 20: Caesars Entertainment, AGA State Of The Industry presentation

• Feb 21: Raketech, Kambi, Churchill Downs (e)

• Feb 22: Acroud, Better Collective, Churchill Downs (call), VICI (e)

• Feb 23: VICI (call)

Kambi Group is the leading provider of premium sports betting technology and services, empowering operators with all the tools required to deliver world-class sports betting and entertainment experiences. The Group’s services not only include its award-winning turnkey sportsbook but also an increasingly open platform and a range of standalone sports betting services from frontend specialists Shape Games, esports data and odds provider Abios, and AI-powered trading division Tzeract. Together, we are limitless.

For more info, go to www.kambi.com

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