• Caliente and Hard Rock Digital stakes might be next on the block.

• More job losses at Penn Interactive, say sources. 

• Worries over Las Vegas softness dominate analyst takes.

• Sector watch looks at Playtika’s SuperPlay buyout.

Grease ourselves up on the way down.

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Everything must go?

The family silver: Flush with cash from the sale of Snaitech to Flutter for €2.3bn, analysts have speculated Playtech could soon have a potential M&A warchest of ~€450m. But the new transformation plan suggests management is more incentivized to sell further assets.

• This could include the 31% of Caliente settled upon earlier this week as part of the resolution of the legal dispute between the two.

• It could also mean that Playtech sells the low single-digit stake in Hard Rock Digital acquired in March. 

• Playtech also has stakes in WPlay in Colombia and Northstar Gaming in Ontario.

Gimme Mor: A notable detail in Playtech’s announcement of the sale of Snaitech to Flutter for €2.3bn is the €100m the Playtech management and CEO Mor Weizer in particular will receive as part of the deal. 

• Further, the ‘transformation plan’ that will determine their collective rewards going forward will align Playtech’s senior team “to deliver further significant cash returns to shareholders” beyond the Snaitech payout.

• This could reach up to 10% of any “pool of value” that flows from any sales.

• The team would then be similarly rewarded on any future sale of the entire business.

Money back: Playtech said this week that the bulk of the money from the sale – €1.7bn-€1.8bn – would be returned to shareholders, with a remaining portion used to pay off an existing €350m bond.

• Doing their sums, the team at Deutsche Bank Numis suggested this week that this leaves ~€100m of cash and, if a leverage ratio of 2x were assumed, it would leave the company with a warchest of ~€450m for potential M&A.

• But sources poured cold water on the idea of Playtech being in the market to buy.

Take the cash: Both the Caliente and Hard Rock Digital stakes would be “in the money,” in the words of one sector M&A specialist, meaning Playtech would make sizable profits on any sales. 

• “Caliente is very attractive,” the source added. “It has a dominant position in the Mexican market, which itself is growing fast.”

• Hard Rock Digital, meanwhile, is “successfully levering” its Florida exclusivity, said another consultancy source..

• In each case, the companies themselves would be the likeliest buyers.

They come from the east: Meanwhile, with the Mexican situation cleaned up and the B2C business sold, the potential for Playtech’s Asian investors to return with a takeout offer looks much more likely.

• Recall, TTB Partners called a halt to a previous attempt to buy Playtech in July 2022 largely due to financing constraints.

• The bid team not only had ex-Playtech CEO Tom Hall leading it but also had Mor Weizer on the ticket. In the wake of the failed bid, Weizer remained in his post.

💪 Playtech’s share price over the past month

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Penn Interactive layoffs

Redundant: Penn Entertainment’s interactive business based out of Philadelphia has undergone another round of job losses with 60 people being let go yesterday, according to sources. Recall, Penn Interactive saw up to 100 jobs lost in the summer.

• The job losses affect the engineering and product teams, said one source.

• Penn “had everyone grind until the start of the football season and then just let them go,” the source added.

• Separately, sources suggested there might have also been some personnel changes within the element of Penn’s interactive business in Gibraltar. E+M couldn’t confirm who this affected.

• E+M attempted to contact Penn for a response but received no reply.

Fumble: The rumors come as evidence continues to build that ESPN Bet has further stumbled at the start of an all-important football season. 

• As detailed in Monday’s E+M, the company has missed out on a New York launch until later this month and has seen less than convincing download data.

• Meanwhile, transactional data from week #1 of the NFL pointed to the company failing to gain any ground against the market leaders.

+More

Big move: Pool betting operator Colossus Bets has offered racing the chance to take "risk-free control of its own destiny" after making a proposal to replace the UK Tote Group as partner of the majority of British racecourses.

• The offer comes as the seven-year agreement between the Tote and the 55 racecourses that make up on-course pool betting operation Britbet draws to a close next year.

• That deal involved courses receiving more than £50m over the course of the agreement.

• The Daily Telegraph repoted that Colossus Bets is understood to have made its proposal last week to Arena Racing Company, the Jockey Club and the Large Independent Racecourse Group.

Sportradar has announced a new micro-betting product for ATP tennis in a colab with Tennis Data Innovations involving eight distinct micro markets, including the next breakpoint and will the next serve be an ace, rally or double fault.

Caesars Entertainment has launched the Caesars Sportsbook Muckleshoot app, which is now accepting mobile sports bets at Muckleshoot Casino Resort in Auburn, Washington state. The app can only be used if customers are physically present on the Muckleshoot property.

DAZN Bet has launched in the UK via the Pragmatic Play platform. The launch follows on from DAZN Bet’s debut in Spain last November and Germany earlier this year.

Genting Malaysia subsidiary Genting New York has issued an offer of $100m of new notes to add to the $525m that was raised by the parent company last week.

Crown Resorts in Australia is considering selling off non-core assets such as a golf club and a 20% stake in Nobu to stabilize its financial position while VIP gaming demand remains weak in Australia.

Read across

The attempts by the Brazilian government to limit the activities of online operators that have not applied for a license was the lead story in Compliance+More yesterday. The finance minister Fernando Haddad also announced a ban on the use of credit cards for gambling deposits.

The Token Word this week reports on the first instance of an English court stating that USDT tokens “attract property rights under English law.” Tether is “a distinct form of property not premised on an underlying legal right,” said Judge Richard Farnhill.

+More careers

The big move: Tabcorp chair Bruce Akhurst has resigned and will be replaced by existing board member Brett Chenoweth in an apparent putsch undertaken by shareholders.

• The Australian Financial Review this week wrote that Akhurst was under pressure to step down on concerns about the company’s performance on his watch.

• Akhust apparently played a part in securing the services of new CEO Gillon McLachlan.

• His first major announcement was to tell the market that Tabcorp’s 2025 targets would not be met.

• Investors warmed to the news in Friday trading.

Catena Media board member Theodore Bergqvist is to leave the company after more than five years as a director. Catena said it will continue with its existing five non-executive directors until further notice. The former head of government affairs at the AGA, Sara Slane, has announced she is to join the board at Enthusiast Gaming. Stakelogic has appointed Dejan Loncar as CCO.

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Analyst takes

Las Vegas: The Fed’s half-point interest rate cut this week has come not a moment too soon for Las Vegas with muted demand and challenging headwinds for the last quarter, suggested the analysts.

• After a road trip, the team at Morgan Stanley said management teams noted “pockets of softness” in the forward bookings for October and November.

• Meanwhile, having met with MGM Resorts management, Bank of America analysts suggested the company faces “challenging comps” for Q4 and heading into Q125 when it laps last year’s Super Bowl in Las Vegas.

Pumped up kicks: Sticking with MGM, BoA suggested the product improvements for the BetMGM app would have come at the cost of “ramped up marketing” to drive new customers and reactivate the base.

• The team added that they “think” the JV partners will “evaluate the level of OSB marketing spend after football season, as it’s currently a ‘middle of the pack’ player.”

• But the confidence in reaching profitability in 2026 would be “driven solely” on the iCasino contribution.

Red Rock Resorts: A key theme from the Deutsche Bank analysts’ meeting with management this week was a discussion around what levers the company has in the event of an economic downturn.

• They argued that margins are “much more durable” than investors credit and that the downside is “far more limited than historical comparisons may indicate.”

• The team also noted management comments that the local market is now “far more resilient” than in previous downturns. 

Pipeline: Looking at Red Rock’s development plans, the DB team said there has been a change in the cadence of the development pipeline with the 128-acre Cactus plans, which would involve a development as big as Red Rock Casino itself, now higher in the pecking order.

Sector watch – mobile games

Loaded dice: Playtika has reached an agreement to buy SuperPlay, the Israeli-based developer behind popular games including the coin looter game Dice Dreams and the board game Domino Dreams, for $700m in cash up front with a further $1.27bn in earnout and a $50m retention bonus pool.

• SuperPlay was founded in 2019 by former Playtika employees Gilad Almog and Eyal Netzer.

• The company generated revenues of $265m in the LTM to the end of Q224, up over 150% YoY. However, it is yet to reach EBITDA profitability.

Over the limit: On the call with analysts about the deal, Playtika CEO Robert Antokol was asked about the company exceeding its previous guidance on potential M&A of $600m-$1.2bn over the next three years.

• “It just checked all the boxes,” he said, saying SuperPlay had high-growth games, two top franchises and new titles in development.

• “It aligns with our objectives in terms of both growth and increased profitability over time,” he added.

• Asked about the lack of current profitability at SuperPlay, Antokol said it has been “investing significantly in marketing.” 

• SuperPlay is expected to produce an adj. EBITDA loss of $10m in 2025.

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Earnings calendar

• Sep 25: Flutter investor day

• Sep 30: Playtech

• Oct 17: Entain

• Oct 24: Betsson, Evolution

• Oct 25: Kindred

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