• Entain says it failed to recognize the scale of the BetMGM challenge.

• Rush Street has a story to tell north and south of the border.

• Super Group says it is considering a US withdrawal for Betway.

• Betr raises once more, Strive confirms OpenBet stake.

Technicolor pachyderms is really too much for me.

Entain’s mea culpa

The aim of our patrol is a question rather droll: Interim CEO Stella David kicked off Entain’s FY presentation by suggesting she wanted to address a “number of elephants in the room”, including what she said was an erroneous focus on delivering for BetMGM at the expense of the rest of the business. “We know what’s gone wrong,” she said.

• “Delivering product and tech solutions for BetMGM at the pace that we have had to do it has meant there has been some considerable cost in our other markets,” she said.

• She also admitted it took Entain “some time” to realize how quickly the company needed to “feed BetMGM with better products, better consumer experiences and better, more focused US-tailored products.”

• David was keen to stress the relationship with its JV partner MGM Resorts was “as good as it’s ever been.”

That’s not who we are: David also disowned Entain’s previous aspirations as expressed by former CEO Jette Nygaard-Andesen for the company to become a “broader interactive entertainment” entity. “Quite frankly, that was a distraction,” David said.

• “The key isn't strategy,” she said. “The key is delivering and executing on the basics. And that's where we are going to really focus our efforts. The devil is absolutely in the detail.”

• David said the search for a new permanent CEO was continuing.

By the numbers: David admitted the performance for 2023 was not up to snuff. Total revenues including its share of BetMGM were up 14% YoY to £4.77bn or 2% up on a pro forma basis. Underlying EBITDA was up 4% to £857m. 

• Within that, there were a host of regional negatives, including 6% declines in the UK and Australia, a 12% worsening in the Netherlands, a 14% drop-off in Brazil and a whopping 26% falling away in Germany.

• The relative bright spots were Italy (up 3%) and Entain CEE, including Poland and Croatia, where revenues rose 13%.

• As previously reported, BetMGM NGR was up 36% YoY to $1.96bn

Not working: David said Entain would “do better” in key markets. In the UK she said the company had undergone a “very long, iterative process of doing multiple affordability measures”, which had generated “significant complexity in the customer journeys.” 

• in Brazil, she admitted to “some operational decisions that were made back in 2022 that simply did not work.” 

• “We lost significant market share, however, we have taken action,” she added 

• “The leadership has been changed and we are starting to see strong green shoots of a big recovery taking place.” 

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+More

MGM Resorts and Marriott Bonvoy have officially launched their customer loyalty partnership covering all of MGM’s Las Vegas and regional properties.

Circa Sports is to open a sportsbook outlet at Silverton Casino Lodge in Las Vegas next week, its seventh outlet, according to the Las Vegas Review-Journal.

By the numbers

FanDuel reclaimed top spot in terms of OSB and iCasino market share in Q423 from main rival DraftKings, helped by an all-time high share of 23% in iCasino, according to EKG. FanDuel stood at ~34% with DraftKings just behind on ~33%.

Read across

In Compliance+More today, bet365 is in hot water in Australia with the country’s financial intelligence agency. Plus, Alabama’s bill is shorn of OSB and B&M casinos, Minnesota looks at banning in-play and a look at recent moves against college props betting.

Investors warm to Rush Street

Proof of the pudding: Steadily improving adj. EBITDA metrics on a quarterly and yearly basis were enough to see the Rush Street share price rise by almost 20% AMC yesterday. Q4 adj. EBITDA came in at $11.5m compared to a loss of $17.3m the year previous, while on a yearly basis it came in at $8.2m vs. a $91.8m loss in 2022.

• Q4 revenue rose 17% to $194m and it was up the same percentage in FY23 to $691m.

• The $100m improvement in adj. EBITDA was helped by a 27% decline in marketing spend to $158m.

• CFO Kyle Sauers said, with $168m of unrestricted cash on the balance sheet and no debt, the company expects to be cash flow positive in 2024.

• The company introduced FY24 guidance for revenue targets of $770m-$830m and adj. EBITDA of $35m-$45m. 

🚀 Rush Street up 20% after market close yesterday

You Delaware it well: CEO Richard Schwartz was keen to point to RSI’s early success in Delaware where it has taken over the sole operator status previously enjoyed by 888. “Delaware will be profitable for us quite quickly,” he told the analysts. “We came out of the gate pretty strong.”

• “It really did happen overnight for us because the quality differential was so significant that we think the players noticed it,” he added.

Duolingo: LatAm remains “topical”, said Schwartz, who added the company was a “proven leader” in the region with Colombia growing at a “rapid pace.” He noted that five years ago “no one in our company even spoke Spanish fluently,” but by “focusing on the fundamentals” Rush Street was now the second-largest operator in Colombia. 

• He suggested the addition of iCasino to the recent Brazilian legislation “plays to our strength” and that the company “plans to participate.”

• Schwartz added that Colombia has been profitable “for some time” while Mexico was “getting real close.”

Super Group’s US strategic review

All the rage: Betway parent company Super Group became the second largely European-focused operator to say it is considering the future of its US operations, less than a year after stating its bold ambitions for the “attractive market.” Recall, yesterday, 888 said its US business was under review as it exited its Sports Illustrated partnership.

• Super Group’s US operational EBITDA losses hit €17.8m in Q423 and €57.4m across the year.

• Management said its options included reviewing the operational footprint, focusing solely on iCasino states or looking at M&A. 

• "We are not pleased with the status quo,” said CEO Neal Menashe. “We are actively evaluating our US strategy on a state-by-state basis and will make changes as required."

In better news: Elsewhere, the company lauded a record performance with Q4 net revenue up 7% to €352m, although adj. EBITDA sank almost 19% to €33.6m. FY23 revenue was up 8.5% to €1.4bn and adjusted EBITDA was down 6% to €198m.

• Africa continued to be the standout performer, accounting for 33% of revenue in Q423.

• Menashe described iCasino as a “great anchor for the business”, accounting for 85% of revenue in Q423, up from 78% in Q422.

• He added that Super Group is very close to completing the “monumental milestone” of acquiring sportsbook provider Apricot Software from another part of the post-Microgaming ecosystem.

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Betr raises again

Fighting fit: The pugnacious OSB contender Betr has tapped up its investors once again, this time for $15m, valuing the Jake Paul-fronted company at $350m. The new money comes from new investors Harmony Partners and 10X Capital with participation from existing investors including Fuel Venture Capital, Aliya Capital Partners and Eberg Capital.

• Betr’s first funding round came in August 2022 when it announced a $50m raise.

• It then raised a further $35m in June last year for a valuation of $300m.

Out of the frying pan: Having started out as solely a micro-betting operator, Betr subsequently pivoted towards including a full OSB betting roster as well as a fantasy sports offering called Betr Picks. 

• Despite the now $100m of funding, it has struggled to gain a foothold in OSB and recently called a halt to operations in Massachusetts citing cost levels.

• Since its Massachusetts launch in May last year, Betr has managed to accumulate a handle of just $2.4m and GGR of $178k.

• Meanwhile, with its fantasy operation it recently joined the exodus from Florida in the wake of the cease-and-desist letters from the Florida Gaming Control Commission.

Mr Brightside: Talking to Bloomberg yesterday, CEO Joey Levy said Betr still “ultimately plan[s] on being a nationwide sportsbook brand.”

• “This is going to be a very long game,” he added. “This industry is going to be in the tens of billions of dollars in revenue by the end of the decade.”

Strive confirms OpenBet investment

Strive Gaming has confirmed OpenBet has taken a “significant stake” in the business in an investment round with participation from family office Knutsson and specialist gaming fund Astralis Capital Management as well as Betsson, which previously invested in Strive in a seed funding round.

• Strive said its PAM solution would now be integrated into OpenBet’s sports-betting solution.

The new investment was predicted by Earnings+More, which said in late February that Strive would be raising $5m at a valuation of $50m with OpenBet taking up the majority of the new money. 

Earnings in brief

Genius Sports: The data-plus provider was certainly celebrating Hard Rock’s monopoly in Florida, saying it saw an “immediate uplift” on the back of its launch in Q4, with CEO Mark Locke adding that further growth from the Sunshine State for 2024 was “baked in.” 

• Outside the US, he also namechecked Brazil, which he said the company sees as a “$2bn opportunity” this year.

• “It really plays into our natural business model in terms of having additional revenues without any really significant additional costs that go with it,” he added.

• Q4 revenue came in at $127m, up 21%, while adj. EBITDA more than tripled to $12m. Net losses came in at $38.4m, an improvement on the $127m loss in Q423.

NeoGames: The big news from the iLottery-to-iCasino/OSB supplier was its acquisition by Aristocrat is now due to complete in May. Ahead of that, Q4 revenues dropped by 21% to $64.9m due to an accounting change related to new commercial terms for its Aspire Core OSB contracts. Adj. EBITDA was flat at $18.2m.

• The iLottery business, including its share of NeoPollard Interactive, saw revenues rise 11% during the quarter to $31.6m. iGaming revenue was $33.4m.

Bet-at-home: Net revenue fell 14% to €36m while EBITDA tumbled back 62% to €800k, which the company blamed on the imposition of betting limits in its key market of Germany. The company said it had also lost out from the migration of customers to the new EveryMatrix platform during the year.

• For 2024, the company is predicting revenues of €45m-€53m, while adj. EBITDA will be between a negative €1m and €2.5m in the black.

Calendar

• Mar 7: DraftKings (Morgan Stanley conference)

• Mar 12: IGT

• Mar 20: Sportradar

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