• Stake.com is the market leader in the Canadian gray market, says EKG.

• In +More: GiG buys Titan, Grupo Codere restructures debt.

• Fanatics’ wild ride in New Jersey continues in May as GGR plummets.

• Truist sees progress at ESPN Bet, CBRE likes the temp cashflow in Chicago.

• The startup focus is AI-assisted games developer XGENIA.

Well, who are you? I really wanna know.

Canadian gray market

High stakes: Stake.com is likely the largest operator in the unregulated Canadian market with ~20% market share, and ahead of Betway-owner Super Group and Bodog, according to analysis from the team at EKG. 

• The team estimated the company could have generated up to C$800m ($582m) in GGR last year from a market they believed was worth ~C4bn in GGR in 2023.

• EKG suggested iCasino makes up the “vast majority” of the total.

Ontario breakout: The gray market total for Canada as a whole compares with the C$2.4bn generated by the regulated Ontario market in the year to March 2024, which the team also noted was largely driven by iCasino. EKG suggested BetMGM was the market leader with nearly 20% share across both verticals.

• Other significant Ontario market share players include Ontario Lottery and Gaming, Penn Entertainment’s theScore and bet365.

• EKG estimated a further $300m was generated in the gambling-adjacent verticals of sweepstakes casino, social casino and skill gaming.

Recall, data from iGaming Ontario for the 12 months to March 2023 showed GGR was up 70% on the debut year. iCasino GGR excluding poker came in at C$1.8bn, while sports betting was worth C$588m and poker chipped in a further C$67m.

• EKG indicated GG Poker – which is live in Ontario – controls ~50% of the gray market for poker.

What ifs? The team suggested, at maturity, a wholly regulated Canadian market would be worth ~C$9.2bn, with iCasino worth over two-thirds of the total or ~C$6.5bn, sports betting representing the bulk of the rest at ~C$2.3bn and poker worth ~C$367m.

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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.

+More

GiG Media has acquired SEO and content services provider Titan for a maximum of €3.2m, with €1m upfront and €2.2 due in stages over the next two years. In 2023, Titan generated €3.3m in revenue and €700k in EBITDA. Separately, the company said it was consulting with its advisors about a bond tap issue of €15m.

Try, try, try again: Grupo Codere is to make a fifth attempt at cutting its €1.6n debt pile, with an ambitious plan to slash the total by over 90%, according to Bloomberg. The deal will see holders of its super senior notes take control of the company and discharge all but €128m of the existing debt. 

• The debtholders were already the effective owners of the Spanish gambling outfit.

You’ll keep: Las Vegas Sands COO and majority shareholder Patrick Dumont said his family is “patient” when it comes to the effort to legalize casino gaming in Texas, according to AP. “We think long term. We’re not people who think in the short term,” he told the newswire.

Bragging rights: Bragg Gaming has partnered with Czech-based Kings Entertainment to provide an all-in solution for its Kingsbet online operation.

Shares watch

Back to earth: Penn Entertainment fell back almost 9% on Friday as investors apparently lost faith in any M&A action. This came after the shares rose 13% earlier in the week.

What we’re reading

Wrecking ball: The FCA is taking a big gamble with the UK listing rules. In Bloomberg.

Career paths

The big move: Tabcorp has a new boss after the company named Gillon McLachlan as the new CEO to replace Adam Rytenskild, who left the company under a cloud following allegations of inappropriate behavior. McLachlan joins from the Australian Football League and will take up his new role in August.

• Tabcorp chair Bruce Akhurst said McLachlan was “one of Australia’s leading CEOs and securing Gill is a great vote of confidence for Tabcorp’s future.”

Other moves: Shareholders at Red Rock Resorts have overwhelmingly re-elected its five, all-male board of directors despite a campaign led by two Californian pension funds for more diversity. Mohegan Gaming has promoted Nelson Parker to chief strategy officer. DraftKings has appointed Erik Bradbury as chief accounting officer. Jamie Hart has joined UK-based consultancy Conquer Technology to launch a betting and gaming division.

By the numbers – New Jersey

Now you see me, now you don’t: Fanatics’ wild ride in New Jersey took another turn in May as its GGR tumbled 94% to just $1.8m from $32.9m in April and it fell from second to seventh by market share.

• Yoyo: It means Fanatics has now swung from $28.5m in January to $6.9m in February, back up to $20.1m and then the YTD high of April before the May plunge.

🎢 Fanatics vs. FanDuel and DraftKings in New Jersey

Life is a rollercoaster: Deutsche Bank’s analysts noted Fanatics’ market share would be “volatile moving forward” given its success in New Jersey since the turn of the year is reputedly down to the company snagging a handful of VIPs.

• Total OSB GGR was down 4.2% to $78.8m on handle up 8% to $839m.

• iCasino revenue rose 19% YoY to $192m while B&M gaming was up 5.2% to $239m.

• DraftKings maintained its lead on 25.5%, followed by BetMGM and FanDuel both on 21%.

Washington DC: Meanwhile, the regulator in DC has released the data from FanDuel’s first month since taking over from Intralot-run GambetDC, showing turnover rising by 450% to $29.7m while GGR came in at $4.9m. 

• FanDuel took over as exclusive provider from Intralot in mid-April but might see that status lost after council members voted to open up the market to competition last week. See Compliance+More tomorrow.

Illinois: OSB GGR came in up 3% at $92m on handle that rose 23% to $1.1bn. FanDuel led at 48%, followed by DarftKings on 30%.

ESPN progress

’Cause I saw the light: The team at Truist insisted they were seeing improvement with Penn’s ESPN Bet with “key product milestones” now visible ahead of the football season, including a revamped parlay product and ESPN fantasy app linking.

• With ESPN parent Disney intent on “transitioning” it into the “preeminent digital sport platform” by 2025, Truist saw the betting operation as a “core tenant” of that strategy.

• “Our base assumption is that Disney does not wish to get licensed for gaming, and an integrated betting application seems to be a strategic priority to Disney’s wider digital strategy,” the team added.

Ignoring the noise: Despite the recent activist investor agitation, the analysts “don’t think any sort of formal strategic review at Penn is likely in the near term,” with the “clear” product roadmap, the fast-approaching football season and volatile interest rates still affecting the M&A market.

Green shoots: Meanwhile, looking at the early data for May, over at JMP they suggested there were signs of improvement for ESPN Bet in margins, noting they have risen to 10% vs. 7.7% in QTD and 5.3% in Q1.

Analyst takes – Chicagoland

Temporary pleasures: The two recent temporary openings from Bally’s and Full House, one in downtown Chicago and the other in Waukegan, have allowed for quick market entry and initial cash flow generation.

• The team suggested the money coming through the doors would help support long-term financing for the permanent facilities.

• “Cash flow generation and good top-line indicators provide proof of concept,” the analysts added.

• It gives investors “comfort” over the projects’ potential, which the team indicated would be critical as the companies put their respective cases to the capital markets for development financing.

Coming up short: Recall, Bally’s in particular is facing questions about its plans for a permanent facility, with commentators speculating the company is ~$800m short of the $1.7bn needed.

Sweating the small stuff: CBRE noted that May’s AGR of $11.7m was the best month to date for the property, with operational improvements such as improved parking driving increased foot traffic. CBRE forecasted AGR of $133m in 2024 for Bally’s Chicago.

More takes

Macau: The team at Citi noted June would see a seasonal slowdown in Macau, “acting as a floor” before the market rebounds later in the summer. The analysts said their regular survey data suggested heavy rainfall has had an effect, though underlying gaming trends, including a 31% rise in player count and a 10% uplift in total wagers, boded well for the rest of the year.

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Startup focus – XGENIA

Who, What, Where and When: Founded in June 2023 by CEO/CTO Mark Flores Martin, the UK-based XGENIA specializes “in the development of advanced AI agents designed to transform how online casino games are conceived, developed and deployed.”

• The company’s other main movers include Adam Davis, chief revenue officer; Monte Singman, chief business development officer; and Heiti Kinder, chief strategy officer.

• “Together, we’ve won BAFTA awards, developed over 60 hit mobile games, enhanced NASA’s web security, and pioneered the first VR casino game,” says Davis.

Funding backgrounder: XGENIA secured pre-seed funding earlier this year from a mix of private investors and business angels from within and outside the iGaming industry.

The pitch: “The iGaming industry is ripe for disruption due to its reliance on traditional, antiquated processes, time-consuming and costly development and lack of true innovation,” says Davis. The company sees a “significant opportunity to revolutionize this space,” he adds.

Talkin’ ’bout my XGeneration: Davis calls the reaction to XGENIA's products “overwhelmingly positive,” saying the company is not just building games but “redefining the boundaries of what is possible in the iGaming industry.” 

• We g-g-get around: The opening of new markets particularly interests XGENIA, including the gradual opening of the US, the passing of regulation in Brazil and the evolving legislative framework in Africa.

What will success look like? “XGENIA is here to transform the iGaming industry, bring it into the age of AI and change the way we engage with gaming entirely as an enduring company,” toots Davis.

Growth company news

Free-to-play provider Splash Tech has partnered with Altenar to deliver engagement tools across its platform. Its entire free-to-play sports product suite will be integrated, including Daily Jackpot Predictor, Pick6 and its newest release PlayBuilder. 

’Til your daddy takes the T-bird away: HappyHour portfolio company WKND has rebranded as FUNNZ.

Ahead of kick-off last Friday, gamification provider Low6 has teamed up with FairPlay Sports Media’s Oddschecker brand to offer Euro24 Bet Bingo.

Plucky.com, which provides the Telegraph Fantasy Football games, has signed a deal with Genius Sports to power a new cash-league interface.

Calendar

• Jun 18-20: Canadian Gaming Summit

• Jul 16-19: iGB Live, Amsterdam

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