• Boyd Gaming is reported to have made a bid for Penn Entertainment.

• Florida SCOTUS move spells bad news for sector, say analysts.

• Catena Media issues a profit warning on partnerships fail.

• Shares week: MGM Resorts and Playtech are boosted by live partnership. 

But it's gonna take money, a whole lotta spendin' money.

Boyd makes a Penn play

Got my mind set on you: Boyd Gaming has made an approach to rival Penn Entertainment over a potential buyout, according to a report from Reuters. The news sent Penn shares flying up nearly 10% at close last night in New York.

Reuters said there was no comment forthcoming from either company or from Disney, whose fortunes are linked with Penn via the ESPN Bet relationship.

Speculation about a potential bid for Penn has been mounting since activist investor Donerail went public with its discontent over Penn’s handling of the online opportunity and the levels of executive compensation at the company. 

• At the recent AGM, over a third of investors voted against the company on that issue while a quarter voted against the re-election of chair David Handler.

Selling like a hot cake: Separately, The Nevada Independent reported yesterday that Penn is looking for a buyer for its M Resort in Las Vegas. Penn currently has in place a $206m expansion plan at the property.

Short list: Boyd was previously identified as being one of a small handful of potential buyers of Penn Entertainment, with Hard Rock/Seminole being another that could throw its hat into the ring.

🔥 Hare is running over Penn future

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Aristocrat has signed a multi-year official partnership with the Dallas Cowboys to run in-game promotions and digital activations at AT&T Stadium in Texas. The company will display ads and branding in the Cowboys’ stadium as part of the deal. Recall, Aristocrat last year released an NFL-themed slot machine.

Caesars Entertainment has completed the acquisition of Wynn Resorts’ online business in Michigan. 

Betfred told a meeting of the Maryland State Lottery & Gaming Control Agency it will be exiting the state at the end of next month. 

GiG Media will be renamed Gentoo when it separates from the sportsbook and iCasino supply arm of the business later this year. The new name caused a reaction on social media. 

Partnerships

Codere Online will now offer an AI chatbot to customers in Mexico after partnering with AI-first conversational platform Blip. OpenBet and Danske Spil have extended their decade-long partnership. Gaming1 has launched its Circusbet sportsbook in France through BetConstruct’s platform. Inspired has signed an extended contract with Evoke to supply its gaming machines across the William Hill retail estate. BetMGM has signed social media influencer Brian Christopher as a company ambassador and will promote his live streams and BCSlots brand. GiG has signed its fourth Ontario partnership with Venture Labs. Colombia-based sports-betting company Vicca Group has agreed to integrate Sportradar’s Orako backend for its Zamba sportsbook offering.

By the numbers

Michigan: Flutter Entertainment’s FanDuel maintained its market share lead of Michigan’s online gaming operators at 29% in May. BetMGM came in second with 24%, followed by DraftKings on 19%. Total online gaming revenue increased 29% YoY to $220m during the month.

Pennsylvania: iCasino rose 23% YoY to $171m, with FanDuel in the lead on 25.5% share, followed by DraftKings on 19%, ahead of Rivers on 18% and BetMGM on 15%.

Read across

Pump it up: The Token Word this week led with MicroStrategy’s upsized $700m convertible loan taken out to enable the purchase of Bitcoin. Plus, BetDEX CEO Varun Sudhakar talks about how the on-chain betting exchange hopes to disrupt a segment where innovation has been in short supply for a number of years. 

Losing my edge: In Compliance+More this week, a look at how the online sector appears to have lost its lobbying mojo this year. Plus, the UK election betting scandal escalates.

What we’re reading

Fore! The Washington Post on how heckling from crowd members who had also had a bet on the US Open was a feature of last week’s tournament. The paper reports how this year’s event was the first to be played in a state with legal sports betting, allowing spectators to bet on the course.

Chart of the week: Election betting… from the FT.

• HR Manager – Remote in Europe 

• Head of Product – Malaga, London, Reading 

• VIP Team Manager – French Market – Mauritius 

Florida takes

Houdini tribute act: The “contortions” necessary to put a positive spin on the decision this week by the Supreme Court to effectively rubber stamp the Seminole monopoly over OSB and iCasino in Florida is surprising, suggested the analysts at Deutsche Bank.

Tails I win: The team noted the obvious conclusion – that the bulk of the commercial operators will be shut out of Florida for the foreseeable – is the “proper one” despite the market “clearly disagreeing.”

• Heads you lose: The DB team posed a question for those who think differently:

• “Is it likely that operators, who challenged the compact with a referendum effort in 2022 and others who have fought it in the courts since 2021, now benefit from a ruling in favor of the Seminole Tribe?”

The winner takes it all: The DB team argued the Seminole, which owns the Hard Rock Digital business, “holds all the cards” in Florida and they can “now proceed however they wish.” 

• This could include simply running OSB on their own through to the 2051 expiration of the compact.

• Alternatively, the tribe might decide to engage with an OSB operator or operators for “enhanced technology,” essentially using them as B2B providers.

• Lastly, they might partner with one or several OSB operators to “essentially run sports betting in the state, while collecting a fee.”

This last option – which the analysts suggested might be “one of the better outcomes” – would “essentially equate” to a quasi-New York model with the tribe standing in for the state and exacting a fee that would make profitability “very difficult.”

• Worse for the rest of the sector, the SCOTUS decision – that online wagering falls within compacts as long as the servers are on tribal lands –  “essentially provides a blueprint for California and other states with tribal gaming,” the team noted.

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.

Catena profit warning

The medium is the message: The deterioration in search rankings caused by the changes in how Google treats the media partnerships undertaken by gambling affiliates “could become material,” as Catena said Q2 EBITDA would come in at a mere €0.5m-€1.5m. 

• Revenue for the quarter is now forecast at €12.5m-€13.5m.

Calling a halt: The company said the full financial impact of the media partnerships blow up “cannot be fully quantified at the present time,” but noted the partnerships that are set to expire in Q2 and Q3 came with minimum guarantees of €1.4m a quarter.

• “Exiting these high-cost minimum guarantees is one of the components for setting Catena on a path to improved margins and revenue growth in the second half of 2024,” the company said.

• Recall, at the time of the Q1s the company reiterated its hope for seeing a return to organic growth in H2. It also said it expected FY EBITDA to come in at €20m-€30m. 

• Catena said yesterday that was “no longer applicable,” adding it “deemed it prudent” to issue no new guidance.

The shares week

Live and direct: Penn aside (see above), notable winners this week include MGM Resorts and Playtech, which yesterday announced a new partnership for the production of live casino direct from the gaming floors of two properties on the Las Vegas Strip. MGM Live will be available in regulated markets ex-US.

Double, er, down: Shareholders in social casino and iCasino operator DoubleDown have endured a tumultuous month. The shares were down 13% this week having staged a recovery from a 12% decline at the very end of May.

• Things could have been worse for Bally’s, which was down nearly 7% earlier this week on worries over its plans in Chicago. It revived somewhat to end Thursday off by over 3%.

Calendar

• Jul 16-19: iGB Live, Amsterdam

• Jul 19: Evolution

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