• Games Global‘s New York IPO likely to be sector’s biggest float this year.

• In +More: Flutter announces $1.05bn debt offer; MI, NJ and MA by the numbers.

• International growth at Entain but UK down and BetMGM only up 2%.

• Inspired Entertainment hopes for virtuals success in Brazil.

You've gotta be cool on Wall Street.

Games Global files for IPO

Going public: The Isle of Man-based iCasino backend supplier has filed a prospectus with the New York Stock Exchange for an IPO in what is likely to be the biggest float seen in the sector this year. 

• The prospectus said that in the last nine months of 2023 Games Global generated revenues of €273m, representing a YoY increase of 23%. 

• Adj. EBITDA for the same period rose 10% to €121m.

• It said its customer numbers stood at 350 at the end of 2023, including all of the biggest names in the online sector.

The deets: The IPO will be underwritten by JP Morgan, Jefferies, Macquarie and Barclays. Current owner Zinnia is set to remain the majority shareholder with more than 50% of the shares. The company will not receive any proceeds from the share sale. It will trade under the ticker GGL.

Who are you? Games Global was formed out of the Microgaming iCasino business in July 2021 and is led by CEO Walter Bugno, with Tim Mickley as CFO and Gavin Isaacs as chair. Since commencing operations in April 2022, it has established a network of 40 games studios including 24 in-house and 16 ‘partnered’.

• Crash, bang, wallop: The prospectus noted it hopes to launch a live casino product in the US by the end of this year and will also be expanding into games show and crash game products.

• It said the company is also developing an iLottery product.

Deal talk: Games Global has a history of M&A, including the acquisition in August 2022 of Mahi Gaming for $80.8m and a host of companies working under the umbrella of Velo Studios, which was acquired in Feb23 for €81.2m.

Growth market: The supplier said it is “well-positioned” to establish itself in the North American iCasino space following the acquisition in February of the B2B elements of the Digital Gaming Corporation from Super Group. 

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Flutter Entertainment has announced a $1.05bn offering of senior secured notes due 2029, with the proceeds to be used to pay back a portion of the company’s existing debts. 

NeoGames has signed a deal to provide OSB, iCasino and iLottery backend products to the operator behind the Caesars Brazil brand. BIG Brazil has an agreement with Caesars Entertainment dating back to 2015 to operate the brand in the country.

• Andre Feldman, co-founder and president at BIG Brazil, said the company has “major ambitions” once the regulated Brazilian market opens up.

IGT has resolved its patent dispute with Acres Gaming in the Nevada courts. IGT claimed Acres’ casino-management system violated four of 200 patents held by the company. IGT’s COO Nick Khin said the mutual agreement “resolves all disputes” between the two companies.

Penn Entertainment has said it will open an ESPN Bet retail sportsbook at its Hollywood Casino Greektown property in Detroit on April 24, a day before the 2024 NFL Draft.

By the numbers

New Jersey: March B&M gaming GGR was up 4.9% to $240m while iCasino rose 19% to $197m, but sports-betting GGR fell 3.6% to $89.7m despite handle rising nearly 30% to $1.33bn. Hold was down 240 bps to 6.7%.

Michigan: B&M gaming GGR for March was up 3.8% to $122m while iCasino revenue hit an all-time high at $215m, up 25%. Sports-betting GGR was down 6% to $41.9m from handle that rose nearly 18% to $480m. Hold was down 220 bps at 8.7%.

• In terms of market share, FanDuel grabbed top spot in iCasino with 27% vs. BetMGM’s 25% and DraftKings 19%.

• In sports betting, FanDuel remained in the lead with 44%, followed by DraftKings (26%) and BetMGM (14%). ESPN Bet achieved 6% GGR share.

• In overall terms, FanDuel led on 30% vs. BetMGM’s 24% and DraftKings’ 20%.

Massachusetts: B&M gaming for March came in at $111m, up 6.3% YoY. Sports-betting GGR hit $47.8m, down 0.9%, on $655m of handle, up 15%, implying hold of 7.3%. DraftKings maintained its lead on 50% of GGR but conceded some ground to FanDuel on 33%.

Entain’s mixed bag

Wot no CEO? The interim CEO at the still leaderless Entain, Stella David, kicked off the call by saying the search for a permanent hire was ”progressing well” but added there was nothing more to add at this stage. On the strategic review, she said there was also nothing further to add to previous statements.

• Recall, the company recently announced chair Barry Gibson would be standing down at the end of September. David will replace him in the role.

Losing ground: The UK business continued to lose market share, with revenues off by 9% in online and down 7% in retail. The company pinned the blame on the continued negative effects of regulatory implementation, with David saying it continued to be a “market in flux” for Entain.

• Notably, rival Flutter said in late March that UK and Ireland revenues rose 17% in the 10 weeks to mid-March.

A slot to like: BetMGM revenues for Q1 rose by a somewhat anemic 2%, which the company blamed on adverse sports margins. CFO Rob Wood said Entain “continues to be pleased” with the performance in iCasino. “The growth pathway remains firmly on track,” he added.

Eastern promise: Entain CEE remained a bright spot with revenues up 11% YoY, but international was down 2% on a pro forma basis. The international segment includes many of the recent bolt-on acquisitions, which have been the subject of disposals speculation.

• Recall, Moelis has been appointed to advise on any potential sales.

• David said the Netherlands was also “in flux,” pointing to news overnight about a move to ban online slots. (See Compliance+More tomorrow).

Every now and then I get a little bit lonely: Analysts at Regulus said that “to some extent” Entain is a “special situation” given the lack of operational focus over recent years and the lack of time as yet to effect a turnaround.

• They noted that the lack of growth could not be blamed on poor sports results. “Growth has been broadly missed, not snatched away by bad luck,” the team added.

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.

Inspired earnings review

O jogo bonito: The potential for virtual soccer products in the soon-to-open regulated market in Brazil is one being eyed up by provider Inspired Entertainment, as the company hopes to achieve growth for the virtual product outside of its otherwise saturated markets. 

• In its much-delayed Q423 numbers, Inspired said revenues for the virtual sport business fell 12% to $12.9m.

• Samba soccer: Chair Lorne Weil blamed market share constraints and said a ‘greenfield’ market such as Brazil offered the chance to expand volumes, with the opportunity to tap into a market of over 200m soccer fans.

• Having shown the product to potential clients he added that Inspired was “bullish” on the pipeline of licensees and products.

By the numbers: Group revenue was up 1% to $77.7m while adj. EBITDA rose 3% to $26.5m. With the land-based gaming machine segment down 3% to $35.8m, it was the near-50% rise in interactive to $8m that saved the quarter. 

Hybrid is electric: The company noted the early success with its hybrid dealer product launched with BetMGM in New Jersey, which it said was performing “extraordinarily well.” 

• CEO Brooks Pierce said the company was looking to launch with Caesars later in the year as well as adding roulette to the product suite.

• Analysts at B Riley suggested the hybrid product was “underappreciated”, saying it is a “viable alternative” to expensive live dealer capex outlay for both large and small online operators.

Calendar

• Apr 18: Rank

• Apr 24: Evolution, Kambi

• Apr 26: Betsson

• May 1: MGM Resorts

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