Earnings+More - Divide and rule
Divide and ruleIllinois’ tax hike hurts FanDuel and DraftKings the most, Las Vegas room supply, startup focus – Fluid +more
You come on with it, come on, you don't fight fair. Top two targetedHit ’em where it hurts: The new graduated sports-betting tax proposals passed over the weekend by the Illinois Senate featuring a 40% top rate will hurt FanDuel and DraftKings the most while leaving the rest of the market relatively unscathed.
Call that fair? Analysts at Deutsche Bank have estimated the top two would pay an extra $146m between them based on the GGR from the LTM. In comparison, the rest of the market would end up paying less than $25m in extra tax between them.
🤮 Sweating the rich: FanDuel and DraftKings pay the price in Illinois What are you going to do about it? Deutsche Bank suggested the talk post-legislation would be about what mitigation would be sought, with promotions being the area most likely to be focused on.
Point proven: New York has the nation’s highest rate of tax on sports-betting operators at 51% of GGR and, after requesting promo data from the state, the DB team argued that a key plank of the argument against higher tax rates – namely that consumers receive lower proportional offers – appears to be true in the Empire State.
👀 Promo levels as a % of handle in MI, PA and NY Now you’ll see, just you wait: Suggesting that much of the current GGR growth in mature markets is generated by promos, the team at DB argued that any significant reduction in promotional activity “could provide a peek into organic demand in Illinois.”
Empty threat: The team also poured cold water on the argument from the lobbyists that increased tax rates would lead to worse odds for consumers, suggesting it is “nothing more than a threat by operators to politicians.”
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 +MoreBetMGM has replaced FanDuel as the official odds provider for AP’s global sport report. Under the new agreement, BetMGM’s odds will appear in AP’s daily sports odds fixtures, game previews and other sports stories where odds are mentioned. Spanish news reports suggest that Blackstone, the owner of CIRSA, is looking to seek an IPO for the gambling group, with the PE house rumored to have engaged Morgan Stanley, Deutsche Bank and Barclays. By the numbersNorth Carolina: April revenue rose 58% MoM to $105m on handle that was up 25% to $569m. What we’re readingSharp words: Civil rights campaigner Al Sharpton has penned a letter to USA Today complaining that FanDuel and DraftKings’ dominance of the OSB market raises “serious concerns about competition, fairness and consumer protection.” Las Vegas supplyOne door closes: The upcoming closure of the Mirage added to the recent shuttering of the Tropicana will see room inventory across the Las Vegas Strip market decline by about 3% from July, according to analysis from JMP.
That Riviera touch: The example from the most recent period of room supply decreases came with the closure of the Riviera in 2015 when total supply fell by ~1%. JMP noted that occupancy hit an all-time high for the Strip of 91% in the following year while average room rates also experienced an above-average growth rate.
Recall, the Mirage has been bought by Hard Rock and will be closed for extensive remodeling for the next three years. Meanwhile, the Tropicana closed as part of the MLB stadium plans for the site.
Analyst takes – Q1 reviewStormy weather: The team at Macquarie have noted that only 30% of companies within the sector beat estimates, as the US regional B&M operators struggled to overcome the bad weather-related issues at the start of the quarter.
Tiring: In Vegas, the market is somewhat bifurcated with the high-end continuing to outperform but with evident “fatigue” on the lower-end customer. The team noted optimism at MGM Resorts that it will continue to grow EBITDA this year, while Caesars was “clear that volumes are healthy.” More takesFlutter: The team at Jefferies suggested FanDuel’s iCasino momentum has continued into April, with GGR up 54% YoY vs. the 13% increase for DraftKings and BetMGM’s mere 2% of growth.
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Join top operators at opticodds.com/contact. Startup focus – FluidBright spark: Fluid's journey began with “a spark of frustration” a couple of years ago, when the founding team were all working for a medium-sized iGaming operator, says Roberto Rubio, CEO of the payments provider.
Funding backgrounder: Fluid was more or less bootstrapped by Rubio during the first months of 2023, before securing €500k in July from HappyHour. The company is currently completing a seed round of ~€1m. Liquid engineering: Fluid uses advanced machine learning algorithms designed to improve conversion and reduce fraud. “We believe in merging great user experience with technology in order to create the best possible ‘money-in and money-out’ experience,” says Rubio. The response has been “overwhelmingly positive.” But the company’s main challenge, he adds, lies in “convincing” potential clients that the technical installation is “not that complex” and that it can be completed within two days.
Growth company newsNo swap shop: The Nevada Gaming Control Board has nixed the idea of a sports-bet resale exchange more than two years after regulators forced PropSwap to cease operating in the state.
Sports-betting provider CopyBet has entered a new partnership with TrueLayer that will see instant deposits and withdrawal payments being introduced for UK customers. Games studio and supplier 4theplayer has secured regulator approval to offer its games in Pennsylvania. Calendar
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