• 888 launches a strategic review of US ops after ending SI partnership.

• In +More: Bally’s in Rhode Island, FanDuel in North Carolina.

• Full House has temporary problems in Waukegan.

• AGS sees an “air pocket” for smaller suppliers following IGT/Everi deal.

The things you do to stop the truth from hurting you.

888 cans Sports Illustrated partnership

Cut and run: 888 has pulled the plug on its partnership with Sports Illustrated and has initiated a strategic review of its US operations. The ending of the deal with SI owner Authentic Brands will cost 888 an initial $25m break fee and a further $25m over the course of the next three years, with the company clawing back cost savings of $6m-$7m this year and next.

• 888 said all options were open in the review, including a sale of the US-facing B2C business, a “controlled exit” from the US or other possible strategic alternatives.

• The company didn’t set out a timetable for completion of the review.

Footprint: 888 is active in the US via the SI Sportsbook and SI Casino in Michigan, the SI Sportsbook in Colorado and Virginia and the 888Casino in New Jersey. The company said the gross profit margin in all states was lower than the level across the rest of the group.

• This reflected “significant direct costs” in the US, including duties, market access fees and license fees as well as “intense” competition.

• D.I.V.O.R.C.E: 888 added that its current structure “will not optimize returns.” It said the parting of ways with Authentic was mutual.

Join the club: 888’s retreat – and likely exit – is the latest US pullback from a European-based operator following the departure from North America of Kindred and MaximBet. Meanwhile, homegrown brands have also all but quit the online space including WynnBet and Churchill Downs.

Not enough runway: The exit from the SI deal is the first major move of new 888 CEO Per Widerström, who joined in October last year. Despite claiming the SI Casino business, in particular, had enjoyed a “series of record-breaking months” of late, he said “achieving sufficient scale in the US market to generate positive returns within an accelerated time frame is unlikely.”

• 888 continues to have a B2B position in the US via its deal to provide the poker backend to Caesars’ WSOP brand. That deal was last extended in 2021.

Further reading: as for Authentic Brands, Sportico reports the company will consider a ‘Gaming 2.0’ strategy, distributing its content to other sportsbook operators.

👏 888’s investors welcome the news of a US rethink

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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.

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Bally’s has launched iCasino in Rhode Island, the seventh state to regulate online gaming to date. Bally’s will enjoy a monopoly.

FanDuel is to be the official sports betting partner of the NFL’s Carolina Panthers. The move was announced ahead of the North Carolina market launch on Monday.

UK-listed prize draw provider Good Life Plus has received a £2m injection from Winforton Investments, a private investment vehicle controlled by Mark Blandford, ex-founder of Sportingbet. As a result of the transaction, Winforton will own ~18% of the company.

GiG has agreed an extension on its backend provision deal with DoubleDown Interactive’s iCasino operation SuprNation.  

EveryMatrix has added RubyPlay’s slots portfolio to its SlotMatrix aggregation platform.

Careers+More

Catena Media has quickly moved to replace the vacuum at the top following the departure of Michael Daly by appointing Manuel Stan as its new CEO. The Las Vegas-based Stan was previously senior VP and general manager North America for Kindred.

Full House earnings review

Profit generator: CFO Lewis Fanger highlighted on the analysts’ call how Full House was now a “free cash generator” having completed the capex on its (temporary) American Place in Waukegan and Chamonix, Colorado casino projects. Investment into the permanent facility at Waukegan won’t begin until 2026/27. 

• The additional time “could be our friend,” he added, as it means Full House doesn’t need to tap the debt markets right now.

• Q4 revenues rose 66% to $60m while adj. EBITDA was up 87% to $7.3m.

• Talking of what CEO Dan Lee called the “nuisance lawsuit” from the Potawatomi tribe, he said he was “pretty sure” Full House would win when it is resolved in Q4 or Q1 next year.

Beauty on the inside: Analysts noted that the miss on adj. EBITDA was down to higher marketing costs at the American Place facility during a quieter time of year. Lee noted the difficulties Full House faced in promoting what was, still, effectively a tented temporary structure.

• “Once you walk in, it's much nicer than you expect from the outside,” he said. “But getting people to walk in the door is a little bit of a challenge.” 

• “During the day, it looks like where the Department of Motor Vehicles store sat. I mean, it really is pretty unimpressive. At night, we project images on it, so it’s not just a black hole.”

EveryMatrix delivers iGaming software, solutions, content and services for casino, sports betting, payments, and affiliate/agent management to 300+ global Tier-1 operators and newer brands. The platform is modular, scalable, and compliant, allowing operators to choose the optimal solution depending on their needs.

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AGS earnings review

Air supply: Asked about his reaction to the IGT/Everi split and merger announced last week, CEO David Lopez noted the last big consolidation period within the gaming supply space during 2012-14 saw the non-Big 4 suppliers triple their ship share in the subsequent three or four years.

• The merger will “create a little bit of an air pocket here for some smooth sailing,” he added, giving AGS an “opportunity to step up from a ship share perspective and get more eyeballs from the customers.”

• Analysts agreed that consolidation in the space could help AGS. “The competitive landscape provides for upstart suppliers, such as AGS, to continue growing in at least the near term,” said the team at Jefferies.

Flying: Lopez was speaking after a Q4, which he said “capped off an exceptional year” for the gaming supplier with growth spread across all three segments of the business. Revenue rose 15% to $94m while adj. EBITDA was also up 15% to $42.8m.

• EGM sales were up 36% YoY to over 1.5k units, helping to push segment revenues up 14% to $86m. Table game revenue was up 24% to $4.8m

• Lopez noted that, online, the company now had a market share of slots supply into the US of ~5%. Revenues in that segment rose 30% to $3.4m while segment-level EBITDA doubled to $1.4m.

• JMP were positive on the prospects for the year ahead: “Healthy capital expenditure budgets from the gaming operators and new property openings provide a positive backdrop for AGS replacement/expansion units into 2024,” the team wrote.

Analyst takes

Aristocrat: The Jefferies team noted that social digital gaming revenue declined in February, dropping 3.4% YoY in the past month, the third consecutive month of decline. The team said the other studios in the same segment they track gained 7% during February and have been flat since the start of the quarter.

Calendar

• Mar 6: Genius Sports, Super Group, Rush Street

• Mar 7: Entain

• Mar 12: IGT

• Mar 20: Sportradar

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