• Animal spirits unleashed in the US could unlock big deals.

• In +More: LVS’s MBS II, VICI credit rating, and FDJ’s bonds and loan.

• New Jersey B&M/iCasino crossover and record set in Michigan.

• The growth company focus is Betlabs.

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Hunting party

We’re gonna have a party: A forecast boom in corporate activity in the US next year triggered by the reelection of Donald Trump to the White House on a business-friendly ticket could yet sweep up the betting and gaming sector and be the catalyst for large-scale M&A.

• According to sources, the signal to companies within the sector and their financial advisors is to “go big and be bold” and that the “shackles are off.”

• “The enthusiasm has always been there,” said one investment banker working with the sector, who opted for anonymity. 

• “Transformational deals have been evaluated, they’ve been analyzed.”

Exit velocity: A report from Morgan Stanley issued a week after the presidential election argued that corporate activity has been depressed since 2023. Although the value of M&A deals has risen 25% YoY in the YTD, the team suggested there could be a 50%+ pickup in 2025. 

• Analysts at Deutsche Bank said this week the optimism around M&A stemmed from the recent Fed rate cuts as much as from the election result.

• Along similar lines, Itai Pazner, former CEO at what was then 888 and now a corporate consultant, said the combination of Trump’s victory and rates going down had produced a “great environment for M&A and corporate activity.”

Let the dog see the rabbit: “For me it’s hunting season,” said the investment banking source.

Trust issues: Another factor behind the assumption of 2025 exuberance will come with the appointment of a new chair at the US anti-trust authority, the Federal Trade Commission. 

Khan’t do attitude: Departing chair Lina Khan made her mark in the post with a defiantly anti-trust stance. This was most evident with Microsoft’s Activision Blizzard takeover bid where the bid went through only after a lengthy regulatory review.

• Double negative: “There will be tailwinds there,” said one betting and gaming M&A and investment specialist.

• “Trump is anti-anything that is anti-trust,” the source added.

Everything’s on the table: There has, of course, been some large deals notched up this year including Apollo’s $6.3bn bid for IGT/Everi, Flutter’s €2.3bn deal for Snaitech and Brightstar’s $1.1bn AGS buyout.

• Still more deals are rumored, however, including a potential transaction to end the long-running saga over the future of Penn Entertainment with Boyd Gaming cast in the role of the acquirer of the B&M business.

Take your partner by the hand: By common reckoning, deals involving the future of BetMGM, more acquisitions by Flutter, the future of Entain less its stake in BetMGM and DraftKings’ international ambitions are all subject for potential discussions.

• Meanwhile, as discussed in Monday’s E+M, the future of the Banijay-housed Betclic is uncertain.

• And sources also suggested the PE-owned Tipico and the privately owned Caliente are also situations that “need resolving.”

However, the DB analysts noted some caution among the corporates they have spoken to, suggesting the bullish sentiments are “not shared by all,” with some market participants noting that bid-ask spreads remain very wide. 

• But, they added, M&A will “remain a theme” and may indeed be “more relevant” to the sector in 2025 than it has been “at any time in the recent past.”

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Las Vegas Sands has unveiled more detailed plans for the $8bn IR2 project at its Marina Bay Sands complex in Singapore, which involves the construction of a new hotel tower and a 15,000-capacity arena.

• Separately, Bloomberg reported that LVS is in negotiations with a consortium of Singaporean banks over a $9bn loan to cover the costs of the project. 

VICI has had its credit rating upgraded by ratings service Moody’s to Baa3 with a stable outlook. Moody’s said the gaming REIT’s credit profile “benefits from its dominant size and scale, resilient operating cash flow, good liquidity and disciplined financial policy.” 

La Française des jeux has announced it will issue three tranches of bonds totaling €1.5bn, with the first maturing in 2030 and priced at interest rates of between 3% and 3.7%. FDJ has also received a €400m loan from a syndicate of banks.

• The proceeds from both the bonds and the loan will be used to pay down a €2bn temporary loan used in FDJ’s acquisition of Kindred.

Codere Online is facing a delisting threat from Nasdaq due to its failure to file a 20-F financial disclosure form. The company said the delay is due to the need to appoint an accountancy firm to complete the filing and has asked for a further stay.

• If the stay is not granted, trading in the shares will be suspended on December 4. The shares fell over 7% yesterday.

What we’re reading: Dustin Gouker’s The Closing Line on the signal and the noise around a new sweepstakes launch.

By the numbers – NJ and Michigan

Give up yourself unto the moment: iCasino was the star of the show for both New Jersey and Michigan in October.

• In New Jersey, the big news was that iCasino achieved a crossover with B&M gaming, notching up a 28% leap to $214m. This bettered the $209m total for B&M.

• In Michigan, meanwhile, another record was set with GGR coming in at $221m, a 27% increase albeit on a relatively easy comp.

Michigan iCasino GGR Oct23-Oct24 ($m)

Losing streak: The October numbers in both states also gave glimpses of the varied fortunes of the operators when the punters started to win big. Sports-betting GGR in Michigan fell nearly 27% to $33m on hold that declined 250 bps to 5.9%.

• In NJ, sports-betting GGR fell 16% YoY to $77.5m with hold down 30 bps YoY to 6.8%.

• Yet, as befits the differing earnings commentary from the major players, FanDuel gained OSB market share over the month in both NJ (up to 46% from 44%) and Michigan where it topped 51% vs. 42% in September.

• DraftKings fell to 20% of GGR in Michigan from just shy of 30% and was down to 29% in NJ vs. 33% in the prior month.

Analyst takes – Tyson/Paul

The big draw: The Tyson-Paul bout last weekend ended up being “considerably more impactful” than had been expected, according to the team at JMP, who pointed out that on the Friday of the event the app download rates were the highest since last February’s Super Bowl.

• DraftKings was up a whopping 282% on the NFL season average to 534k, Hard Rock was equally impressive, up 327% on the same metric, and Fanatics rose 103%.

• 👀For week 11 overall, it was notable that ESPN Bet declined 95% to 57k as it started to lap the launch period this time last year.

More takes

Aristocrat: The team at Jefferies noted that Aristocrat’s iLottery division notched up some significant wins during the last quarter having converted two licenses, in New Hampshire and Michigan, from the NeoPollard JV to 100% Aristocrat operated.

• This was a “significant milestone,” Jefferies said, given the NeoPollard JV gave what was then NeoGames (since acquired by Aristocrat) the “stature within the market.”

• The team also noted the launch in West Virginia in October, which was another NeoPollard JV license win.

Train delays: Deutsche Bank analysts lowered their price target for Light & Wonder but continued to recommend a Hold rating, suggesting the downgrade was caused by the uncertainties around Aristocrat’s legal action pertaining to the Dragon Train slot.

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Growth company news

XGENIA: The AI solutions provider in the iGaming sector and subject of a previous growth company focus last week won the SiGMA Europe Startup Pitch award.

• CEO Mark Flores Martin said winning the award was “not just a validation of our technology” but also a significant milestone as the company works towards “setting a new standard in game development.” 

• Competition judge Mark Blandford, partner at Burlywood Capital, said XGENIA's pitch was a “genuine innovation to me. It’s going to be a very exciting company to follow.”

4casters: Co-founder of the Ethereum-based smart contract betting platform, Zack Panos, took to LinkedIn last week to say that, although the company never officially launched the Ethereum platform and faced significant financial setbacks in 2019, “persistence kept us moving forward.”

• “Our guiding belief was: if you never quit, you never fail,” he added.

Calling all growth companies: If your company wishes to be featured as part of the Earnings+More Growth Company Focus series then get in touch by reply.

Growth company focus – Betlabs

Who are you? Based in Cape Town, South Africa, Betlabs was founded by CEO Johnny Coetzer. The company’s core team comprises experts in software development and iGaming solutions.

What’s the big idea? Betlabs’ raison d’être is to “help operators increase customer acquisition and retention by facilitating unique and engaging sports-betting experiences,” says Coetzer. Its flagship products, Dynamic Multis and Boost Bets, “reimagine” traditional betting markets through dynamic payouts, a mechanism “inspired by the proven excitement of slot machines and lotteries.” 

• Dynamic Multis is a form of multi or parlay betting, designed to give sports bettors more flexibility and control. “Unlike traditional multi bets where you need all selections to win for a payout, Dynamic Multis allows bettors to receive a payout even if some of their selections lose,” Coetzer explains. 

• Bettors can set a “cut amount,” which represents how many selections they can get wrong and still win an attractive payout. “It’s like progressive parlays but without all the restrictions.” 

The company is set to launch with its first client – a Nigerian operator. “Given the vast majority of bets in Nigeria are placed on standard multis, Dynamic Multis is poised to make a significant impact in this market,” says Coetzer.

Funding backgrounder: Betlabs has, so far, been funded through a friends and family round.

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Event calendar

• Dec 2-4: Thai Entertainment Complex Summit, Bangkok

• Jan 20-22: ICE, Barcelona

• Feb 25-27: SBC Summit, Rio de Janeiro

• Mar 12-13: Next: NYC 2025, New York

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