• Super Group exits nine OSB states, but keeps the lights on for iCasino.

• In +More: Sportradar’s expanded UEFA agreement.

• Betfred shows UK retail and South African online strength.

• Penn takeover rumors continue to fuel share price.

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Out of bounds

Exit through the gift shop: Betway parent Super Group and Arizona-focused SaharaBets are the latest operators to join what is now becoming a procession of brands that have exited the US sports-betting space. 

• Super Group’s move came after it concluded its strategic review by saying it “did not see a long-term path to profitability” for OSB in the US

• Meanwhile, SaharaBets, founded in 2022 by ex-Coyotes owner Alex Meruelo, only ever launched in the one state.

More to come: Analysts at JMP said they don’t expect the rate of exits to “materially slow” in the coming months and years, given the elevated cost of capital, an increase in consumer protection/regulation and market share consolidation among the larger players. 

The roll call: Super Group and SaharaBets are following what is now a well-trodden path, with previous exits including Wynn Resorts, Churchill Downs, 888, Kindred, Fubo TV and more. JMP estimated a tally of 18 operators that have quit the US out of a total of 74 market entrants, while a further 10 have significantly curtailed operations and three have been acquired.

• The team pointed out the range of companies seeing a lack of success varied.

• They include well-capitalized casino brands such as Wynn and Churchill Downs, multi-national operators including Kindred and PointsBet, media brands such as Barstool and Fox, and startups. 

Betway was live in nine states but never made more than barely noticeable progress. Super Group added, however, that it would continue with its iCasino presence in New Jersey and Pennsylvania via its Spin portfolio of brands including Jackpot City. 

• CEO Neal Menashe said the “vast majority” of Super Group’s total revenues came via iCasino.

• He added that the company was “open to expanding” its US footprint if the “right investment or strategic opportunities arise.” 

Control freak: JMP noted the extent to which the concentration at the top of the market was affecting the dynamics, pointing out the top seven operators control ~98% of OSB GGR and ~90% of iCasino.

• “Exits are far outpacing new entrants,” the analysts added.

• They also noted that Fanatics, with ~3-4% share, was the “sole company to find some level of success without a first-mover advantage,” albeit at the cost of the highest promo rate of any company.

Diary date: Super Group said it would update investors on the costs and charges in connection with the closure of the US sportsbook during its upcoming Q2 earnings call in early August.

• The company said that “while not insignificant,” the costs incurred would not impact Super Group’s capital allocation or operating plans.

• Recall, at the time of its Q1 earnings, Super Group said it would be taking control of its tech stack from Apricot for an initial €100m.

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+More

Sportradar has reached an extended and expanded agreement with UEFA over the betting data rights for the governing body’s club and national team competitions, including the UEFA Champions League, the UEFA Women’s Champions League, the European qualifiers to the 2026 FIFA World Cup and the qualifiers for Euro 2028.

• Sportradar can now offer more than 900 high-profile matches each season, up 33% from the previous cycle as a result of the new formats introduced for the start of the 2024-25 season.

MGM Resorts has announced a new partnership with the New York Yankees, which the company said builds on its commitment to the state and its existing Empire City facility in Yonkers. 

IGT subsidiary, IGT Global Solutions Corporation, has signed a seven-year contract with the Colorado Lottery to install lottery products and solutions. The contract is expected to run through July 12, 2032 plus seven one-year extensions.

Read across

In Compliance+More this week, the bulging in-tray facing new UK gambling minister Stephanie Peacock was examined on Tuesday while UK Gambling Commission comments regarding the reliability of in-game data led yesterday.

In The Token Word, DraftKings’ failure to get a dismissal of a class action in a Massachusetts court over whether its Marketplace NFTs constitute unregistered securities was the top story.

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Betfred annual results

’Fred again: Writedowns totaling £46m related to its US adventure was the only negative in an otherwise decent set of figures from Betfred, which saw revenue in the year to Oct23 rise 26% to £908m while EBITDA soared by 72% to £117m. 

• More successful was the South African Lottostar business, which Betfred acquired 51% of at the end of 2022 for £184m including £37m of deferred consideration.

• Betfred said the business produced revenues of £134m and net profit of £42m in the year.

The streets will never forget: In the UK, revenue from the retail estate was up 3% to £560m, driven by 8% growth in horseracing betting. The team at Regulus pointed out Betfred now generates more from its UK shops than Evoke does from its William Hill estate.

• “Betfred also now has the strongest revenue per shop of any major operator other than Flutter,” the team said.

• “While the future of GB LBOs remains challenging, Betfred is likely to continue to push most of the pain onto listed competitors,” they added. 

Shed no tiers: Online, Lottostar helped drive the doubling of revenue to £331m, while underlying growth was also up 19% to £197m. Post period close Betfred launched a new omni-channel effort, which Regulus believes will firmly establish the company as a tier 2 operator with further growth possible depending on execution.

• The team added that Betfred has used lockdown and regulatory dislocation in UK retail betting to “deliver growth as well as resilience in its core brand and cash flow base.”

Earnings in brief

Golden Matrix said it generated estimated revenues of $39m in Q2 following the completion of its acquisition of MeridianBet in April. Earnings will be released in mid-August.

Share watch

Investors warmed to Super Group’s decision to call it quits in the US and sent the shares up over 9% on Thursday, leaving them up nearly 7% on the week.

• Also receiving some much needed TLC from the shareholders was Bally’s, which this week gained full control of the Tribune Publishing Plant grounds in Chicago where it plans to build a $1.7bn casino. 

• Its shares were up 7% on the week at close yesterday.

One book, one Penn: Also in positive territory for the week was Penn Entertainment, which continued to excite takeover chatter. As noted earlier this week, the rumor was Flutter might enter the race in a joint bid with Boyd in order to gain control of the Penn interactive unit.

• Looking at the possibility of such a deal, the analysts at EKG said Flutter could “reasonably expect” to solve one of the issues for Penn of a low ARPMUP of ~$27 vs. FanDuel’s $120.

• But the team added that “challenges abound,” including a potential tech stack migration and loss of focus, integration within the ESPN media ecosystem and generating a return on hefty marketing spending commitments.

In a generally positive week, the fallers were rare. Among the worst of them was Bragg Gaming, which was down 5% on the week despite the announcement this week of a launch of the 711.nl offering in the Netherlands.

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Analyst takes – Macau

A low blow: Las Vegas Sands is set to reveal it suffered a lower market share in Macau in Q2, according to the analysts at Deutsche Bank. The team have revised their forecasts accordingly, with Macau property level EBITDA now estimated at $600m, down from $605m.

• But they suggested the long-term picture remained positive for LVS, with organic growth potential in both Macau and Singapore.

• “With respect to Macau, we believe the share slippage is well known, though also disconcerting,” they said.

• But the story of rooms being offline is mostly accepted and, as the new Londoner property phase II work continues, there will be a ‘bias to the upside” for mass market share when the work is completed in 2025.

The bigger picture: Looking at the broader Macau market, the team at Macquarie noted the recent softer-than-expected marketwide results in June could be attributed to one-time calendar shifts in major entertainment events as well as a more rational promotional environment.

• Further, the team anticipated market share swings in Q2, driven by a greater focus on marketing from Galaxy and Melco while MGM and Wynn could end up being market-share donors QoQ.

More takes

Golden Entertainment: The analysts at CBRE have adjusted their revenue and EBITDA targets downwards off the back of continued weakness at the tower end in Las Vegas and increased labor costs.

• Meanwhile, the analysts noted the expected cooling of the promo environment had failed to materialize in Q2 and was persisting longer than expected.

But they saw “greener pastures ahead” with several potential earnings catalysts. These include new additional taverns, the anniversary of higher labor costs in Q3 and the closure of the Tropicana and Mirage, which could accelerate the occupancy recovery at Golden’s Strat.

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Calendar

• Jul 19: Evolution, Betsson

• Jul 23: Red Rock Resorts

• Jui 24: Kambi, Kindred, Churchill Downs (e)

• Jul 25: Churchill Downs (call), GLP (e), Boyd Gaming

• Jul 26: GLP (call)

• Jul 30: IGT, Red Rock, Caesars Entertainment

• Jul 31: MGM Resorts, Rush Street

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