• Social sportsbook ‘piling up the customers’ in Texas, California.

• Both sides of Snaitech M&A are winners, say analysts.

• Michigan offers another sighter of BetMGM success.

• The startup focus this week is Fantasy Sports EVO.

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Making waves

Fliff you can keep your head: The social sportsbook operator Fliff is thought to have got off to a flier with the start of the NFL season and is seeing its valuation soar as it takes advantage of its non-regulated status in states such as California and Texas.

• It is believed that over the first weekend of the NFL, active user numbers reached into six figures “and not with either a one or two handle,” according to one person with knowledge of Fliff.

• Pointing to Fliff’s presence in both the Apple and Google app stores, another industry source said its presence in terms of social networks had “just gone crazy” in the past month.

• “Its share of voice in terms of marketing has gone up exponentially in the last three weeks,” they added. “It is very active on affiliate sites. It is everywhere right now.”

Me? Worried? The industry source suggested it is the operator that the top two in the OSB space, FanDuel and DraftKings, are “most worried about.”

• “They could be so big in California and Texas in three- to five-years’ time that FanDuel and DraftKings could end up being only minor players,” said one industry insider.

Who’s at the table? Fliff embarked upon a Series A funding round in 2022 led by Raine and with the participation of Courtside Ventures, Play Ventures and Acies Investments. Sources indicated it raised ~$12m for a $60m valuation.

• Now sources suggest Fliff could be worth more than $300m depending on regulatory clarity or the risk appetite of any buyer.

• “It doesn’t need money to reach profitability,” said one insider. “It’s there already.”

Stick to the knitting: Speaking to E+M, Fliff CEO and founder Matt Ricci dismissed the potential for a sale at the moment. “That is not something we’ve discussed internally or are actively considering at this time,” he said.

• Beyond a sale, Ricci said Fliff was “continuously assessing new products and monetization strategies.”

• “The most important thing for us at this stage is user acquisition and retention because this drives the network effects that enable the social model to scale,” he added.

• “The free-to-play and freemium model is key to driving the network effects that make the social model tenable.”

Competitor set: Fliff falls into the category of social sportsbook along with a small phalanx of competitors including Sportzino, which is the sportsbook arm of sweepstakes operator Blazesoft, and Thrillzz.

Defense: Fliff was recently one of the launch partners of the sweepstakes lobbying organization, the Social and Promotional Gaming Association, and Ricci defended the regulatory status of social sportsbooks.

• “Our product falls under well-established federal and state-level legal frameworks for social gaming and sweepstakes laws that are leveraged by companies across many different sectors,” he said.

• While others “broadly utilize sweepstakes games to target a wide range of consumers,” he said Fliff tailored its offering to casual sports fans.

• Gamekeeper turned poacher: Fliff recently hired Greg Small as head of legal affairs. He was previously a director at the Indiana Gaming Commission.

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Do your Zuums: The Oaktree-owned electronic table gaming provider Interblock has acquired a majority share in its rival producer Zuum for an undisclosed sum.

• Zuum manufactures Class II and Class III electronic table games, slots and bingo products.

A presentation for GiG’s Platform spin-off highlighted the potential of the sweepstakes market, suggesting it could tap into a $6.9bn opportunity by 2025. GiG Platform will separate from the affiliate business Gentoo Media later this month.

• The company highlighted that it had seen a 500% YoY growth in the sales pipeline this year and was projecting 38% revenue growth.

• It is guiding to 2025 revenue of over €44m and >€10m in EBITDA. In Q224, revenue fell 22% to €7.3m due to client exits in 2023 and new accounting treatment for GiG’s Enterprise Solutions offering.

BetMakers and SIS have signed an agreement with regard to the distribution of race data and video content for clients in Australia and New Zealand.

On the lookout

In Compliance+More tomorrow, Brazil says it will be suspending operators that have not yet applied for authorization to launch in January. And MLB’s Player Association is suing sports-betting and fantasy operators, including DraftKings and FanDuel, claiming operators are wrongfully using player images without a license.

What we’re reading

Hard yards: Experts cast doubt on Wynn’s New York casino jobs claims.

Splashing out

Levers to pull: Flutter Entertainment has a “solid roadmap” of overall market growth in Italy, the further migration to online and scale benefits to drive incremental synergies beyond the headline numbers of the €2.3bn acquisition of Snaitech announced yesterday, suggested the analysts at JMP.

• Temporarily, at least, Flutter will be adding to its leverage when it closes on both the Snaitech and NSX acquisition in Q225.

• However, before then the adj. EBITDA profits from FanDuel – estimated by JMP at $1.8bn – will start rolling in, allowing Flutter to delever to ~1.6x before shelling out cash on the acquisitions.

• But even as the leverage ratio of debt to EBITDA moves beyond the target range of 2.5x, synergies and organic growth will soon trim that to under 2.5x by year end 2025, the analysts believe.

Buy not build: The JMP team noted the “route of M&A provides more certainty for future success” than relying on organic growth alone to acquire market share and expand EBITDA margins in any given market.

• They pointed out that, alongside the NSX purchase, Flutter would be expending ~€2.9bn of capital outlay on the coming deals but this would “position the company for long-term growth opportunities.” 

Rolling in it

Sale force: On the other side of the deal, analysts were quick to applaud Playtech’s management for achieving the sale at a “substantial premium” of 9x vs. the 5.6x the company achieved when it bought Snaitech in 2018 for €846m.

• After giving shareholders a €1.8bn special divi and paying off a €350m 2019 bond issue, the team at Deutsche Bank Numis suggested Playtech would have ~€100m of spare cash.

• If a leverage multiple of 2x EBITDA on the remaining B2B business is presumed, it would mean Playtech has ~€450m to potentially pursue acquisitions.

By the numbers – Michigan

Marginal gains: More evidence of BetMGM’s success in gaining GGR market share, arguably due to the improvements brought to its margin performance by the utilization of Angstrom, comes with a 300bps+ improvement in Michigan.

• BetMGM’s share for August OSB GGR reached 17% vs. just below 14% in the prior month. This came from a share of handle that also increased from over 13% to just below 15%.

• BetMGM still trailed the market leaders FanDuel and DraftKings, which claimed 40% and nearly 28% respectively.

• Penn’s ESPN Bet lost GGR market share, down 120bps to 4%.

Recall, in the New York NFL week 1 data published late last week, BetMGM enjoyed 24% of GGR growth compared to declines for its top two rivals.

• In iCasino, BetMGM maintained top spot with nearly 27% share vs. FanDuel on nearly 25%, DraftKings (19%) and Caesars (6%).

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Analyst takes

Caesars Entertainment: Falling interest rates will be a boon to Caesars, with every 100bps of lowered rates leading to a $60m decline in the interest paid on its long-term debt, according to the analysts at B Riley.

• Looking at $1.8bn of notes due to expire at some point next year, B Riley suggested Caesars could look to refinance this portion of its debt with better terms.

• The analysts estimate Caesars will see its net debt to EBITDA ratio fall to below 3.5x while the lease-adjusted ratio will be below 5x.

Light & Wonder: After meeting with management, the team at Jefferies noted the company’s emphasis on what it sees as the social gaming opportunity and how that plays into the guidance for 2025, with the “burgeoning” direct-to-consumer offering likely to be a “driver of continued momentum.”

• The analysts added that the expectation was the iCasino supply business “should increasingly benefit from the improved game development strategies over time.”

• But they noted the business has been “slower than expected, especially in the US.”

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Growth company news

United we stand: A new platform provider called United Interactive, founded just last year, has announced itself to the world alongside a new B2C betting brand called Bet United. Founder and CEO of the India and US-based company is Bunty Doshi.

• The United Interactive B2B offering includes a PAM, an RGS and proprietary geolocation system as well as exclusive iCasino content..

• The leadership team includes COO Charles Harper, Shaan Devaraj as CTO and Julie Barker as general counsel. 

Startup focus – Fantasy Sports EVO

Who are you? Fantasy Sports EVO was founded in 2020 by New Jersey resident Mark Hazen, president and head of technology and development. He was joined in the following year by Tara Kovatch, VP of player accounts and daily operations, and Debra Kovatch, CMO.

What's the big idea? Fantasy Sports EVO is a “truly unique” daily fantasy sports app, where users pick teams not players to build a lineup, says Hazen. “This innovative approach makes DFS less intimidating for new players and less time consuming.” 

• There are no salary caps, no need to keep track of players and no need to worry about a player injury “ruining your lineup.”  

• The app covers a range of sports, including NFL, NBA, WNBA, MLB and NHL. 

• EVO is available in 28 states and Canada.

Funding backgrounder: EVO has been self-funded by its initial group of investors, but is gearing up for the next round of capital raising.

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