• Investors shrug off concerns as DraftKings completes Simplebet buyout.

• In +More: Deutsche Bank stumps up for Apollo’s IGT/Everi deal, BlueBet’s exit.

• Flutter and Spribe rail against legal reversal in Georgia.

• Tabcorp shares suffer as it scraps 2025 targets.

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Forgive and forget

Surcharge, what surcharge? The swift abandoning of its ill-fated player surcharge plan has helped the DraftKings share price to recover the ground lost in the wake of the retreat, leaving it at around the levels it was trading ahead of its Q2 earnings statement.

• Further distraction comes from the news this week that DraftKings has finally bought the ~85% of micro-betting supplier Simplebet it didn’t already own for $70m in cash, which the analysts at JMP suggested could rise to ~$195m.

• The news confirmed a story from Earnings+More in May that suggested DraftKings was in prime position to effect an acquisition of the supplier.

New speedway boogie: DraftKings said in-play betting remained an “area for potential growth,” adding that by leveraging Simplebet’s proprietary tech it would create an in-play experience that moves “at the speed of sports.”

• DraftKings already owned 15% of Simplebet and was its biggest customer.

• The company was formed in 2018 by co-founders Chris Bevilacqua and Joey Levy, who is also founder and CEO of the US-based Betr (see below for more news on Betr).

• The deal follows on from the acquisition of SportsIQ in May.

Eternal sunshine: Ahead of the news of the Simplebet deal, the team at Truist noted investors were already on their way to moving on from the player surcharge debacle. DraftKings might have “egg on its face now,” they said, but investors would “forget this ever happened rather quickly.” 

• The analysts noted that “Importantly” the share price has already recovered to pre-Q2 earnings levels.

😰 Back (almost) where we started: DraftKings shares recovery

Timing is everything: The announcement of the acquisition, coming as it does less than a week before the start of the NFL season, will pose problems for any remaining B2B customers of Simplebet that had not made separate micro-betting arrangements since the story broke in May.

• The analysts at JMP suggested operators could look to other micro-betting technology companies, including nVenue, Kero Sports and Huddle.

Waving, not drowning: In a bid to maintain relevance, the US Betr itself announced yesterday it had launched a new sportsbook, which it said would help it “expand far beyond microbetting for its sportsbook vertical.” The company also launched a new P2P option with its Picks business.

• In a LinkedIn posting, head of gaming Alex Ursa said Betr had “finally moved past the ‘sh*tty sportsbook’ category” as tallied by EKG.

• “We’ve been stuck in last place and not without reason,” he added.

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+More

Deutsche Bank will be the lead bank in a consortium that will backstop Apollo's $6.3bn IGT/Everi bid, according to Bloomberg. The consortium is set to provide $4.33bn of the cash for the deal via a bond and loan offering.

• Macquarie has also reportedly given a financing commitment to the deal.

BlueBet has confirmed its exit from the US, saying it will concentrate on its Australian operations under the Australian Betr brand. The decision came after a strategic review that concluded the dynamics of the B2C market meant smaller players were “unable to achieve the necessary unit economics.”

Golden Matrix has announced the launch of a B2B offering called Expanse Studios into the US and European markets. Expanse is in the process of applying for a New Jersey license and said it has initiated discussions with a number of operators about iCasino content provision.

Tastytrade founders Tom Sosnoff and Scott Sheridan have announced they have sold 6.5m of shares in the financial bookmaker IG Group for ~£65m. IG bought Tastytrade for £1bn in 2021.

Read across

In Compliance+More this week a strike undertaken by up to 5,000 of Evolution’s employees in the Eastern European country of Georgia is having ramifications when it comes to the company’s attempt to buy Las Vegas-based table game provider Galaxy Gaming.

In The Token Word, DraftKings is locked in a lawsuit with the NFL Player Association over the canning of its Reignmakers NFT product, with the NFLPA arguing the gambling operator’s “inability to profitably commercialize the intellectual property it licensed does not excuse performance, and DraftKings must pay what it is due.”

+More careers

The big move: Ahead of the Brazilian market opening in January, local hero brand Aposta Ganha has appointed Vitor Paulin as its new CMO. He previously held the same title at business consultancy Grit Partners.

• See E+M’s coverage from this week on the potential for the 103 brands that will line up when the newly regulated market launches.

Kyle Piasecki is the new CRO at Pro League Network. He was previously head of partnerships at Better Collective and before that worked with Playmaker HQ.

Rush Street Gaming has appointed Cliff Ehrlich as COO. He previously worked at Navajo Nation Gaming Enterprise.

Gaming Innovation Group has announced the appointment of Andreas Söneby to the board of GiG Platform with immediate effect.

• Head of Acquisition – London

• Senior Sales Manager – Remote

• Head of Game Development – Malta / Remote in EU

By the numbers – Las Vegas

Wilting in the heat: A very tough comp including two fewer weekend days and weaker baccarat hold meant July Strip revenue fell 15% YoY to $709m. Brighter news came from the local market, up 13% YoY, while Downtown also enjoyed a 10% increase. Total GGR came in at $1.3bn.

• According to the Las Vegas Convention and Visitors Authority, visitation was flat but conference attendance was down 7%.

• Weekend occupancy was up 1% YoY but weekday was down 2%.

Flight risk

Crash and burn: Sources close to the legal case that has erupted in Georgia between Flutter-owned Adjarabet and the premier crash game provider Spribe vs. rival Aviator LLC – also the former owner of Adjarabet – “has no merit” after a judge in the Court of First Instance last week ruled in favor of the latter’s claim to $330m of damages.

• Flutter said in a statement to Reuters that it disputed both the nature of the case and the size of the damages.

• ​​”The level of damages sought is egregious in nature and bears no resemblance to the actual economics of the property under debate,” the company said.

We built this city: Flutter acquired a controlling stake in Adjarabet in 2019 and bought the remaining stake in the company a year later. Spribe is, according to sources, by far the biggest company in the crash gaming market, controlling 90% of the market and can lay claim to having “created this segment.” 

• “There was no crash gaming before Spribe,” said a source with knowledge of the company.

• Spribe said in a statement that it owns the IP to the Aviator game globally, including logo, copyright and trademark.

Taken in: Sources close to the dispute suggested the rival’s case is “dubious” and that the judge “appears to have wholly swallowed the claims” against Flutter and Spribe despite Adjarabet only making ~$7.5m a year from the game in Georgia.

• “It is utterly bizarre that this has been whipped up into a $330m claim,” the source added.

• “It will be interesting to see the written decision as I suspect it will be a copy and paste of the claim itself,” the source added.

• The case now moves to a court of appeal.

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Tabcorp’s hiccups 

Not there yet: CEO elect Gillon McLachlan suggested the company was “only part way through a turnaround” after it said its targets for 2025 would not be met, causing its share price to crash nearly 21% on the week.

• McLachlan was speaking after the company reported a 4% decline in FY24 revenue to A$2.34bn ($1.6bn) with group EBITDA tumbling by 19% to A$318m.

• An impairment charge against its wagering assets led to a A$1.36bn after tax loss.

Double whammy: McLachlan added that “as a TAB customer” he believed it was fair to suggest the product “looks and feels different,” saying it was “much better today than it was at demerger.”

• “But our product and our business is not yet where I think it will ultimately be,” he told the analysts.

• He noted the economic backdrop remains “challenging” while the regulatory environment “also continues to tighten.”

Overwhelmed: On the potential for a ban on gambling advertising, McLachlan said “there’s too much advertising, and we expect it to come down,” though he didn’t want to “front run where the government will land.” 

💥 Tabcorp suffers a bad week

Earnings in brief

Genting Malaysia: Q2 revenue rose 8% to RM2.67bn ($618m) with the increase largely ascribed to better trading at Resorts World Genting. Revenues were also on the up for the US and Bahamas segment. EBITDA across the group rose 72% to RM770m.

Rivalry: GGR was down but net revenue rose as the esports-led and GenZ-focused bookie said a focus on crypto expansion and VIPs paid off in Q2. GGR was down 3% to C$7.4m ($5.5m) but NGR rose by the same percentage to C$4.5m with a debut contribution from the RVLRY token, which generated C$1.7m.

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Calendar

• Sep 4: Cirsa

• Sep 6: Allwyn

• Sep 25: Flutter investor day

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