• A cautious investor thumbs up to Evoke’s green shoots.

• In +More: Blackstone’s CIRSA IPO plans, Macau in November.

• Sector share prices enjoy a bumper November.

• By the numbers: NY hold analysis, US bettors’ favorite bet types.

To the long winding road.

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Long and winding road

Story to tell: Evoke has gained a measure of investor trust since its late summer profit warning, with its share price rising over 10% last week, with analysts saying the company was showing signs of shifting the narrative from being “accident prone to competent.”

• Not out of the woods: The team at Peel Hunt suggested the company behind the William Hill and 888 brands was seeing improved product and marketing “paying off.”

• But they added that there remained the risk of “whiplash” given the share price is balancing precariously on a “tower of debt.”

No picnic at overhanging rock: Net debt as of the end of this year will stand at £1.8bn or ~6.4x forecast EBITDA, which Peel Hunt said was “enough to discourage some investors.”

• But they noted the next “material refinancing” isn’t until July 2027, giving CEO Per Widerström and his management team headroom to put new facilities in place.

• With the net debt/EBITDA ratio set to fall to 3.5x by the end of 2026, and interest rates likely to be lower, it will also be in a better place to negotiate.

Ready, aim, misfire: Evoke shocked investors with a profit warning in July when it blamed a backfiring marketing campaign for a £35m-£40m shortfall in H1 adj. EBITDA profits.

• Analysts at Regulus said at the time that it appeared Widerström’s new strategic plan bore close resemblance to previous ideas about generating revenue “simply” by turning on the marketing taps.

Comfort blanket: But the response to the H1 earnings in August was more measured, as Widerström admitted a 67% YoY fall in adj. EBITDA to £43.8m was “not where the business wanted to be.”

• Analysts at Deutsche Bank said following the August update that the company was “reassuringly on track.”

• Meanwhile, the team at Investec said they gave management credit for some “swift decision-making” with what remains a “complex turnaround job.”

🚧 Despite last week’s 10% uplift Evoke is still down 33%+ in the YTD

Balancing act: Such sentiments found an echo in Evoke’s October trading statement when Widerström said the company was “moving decisively and at pace.” But one industry source suggested he still had “a lot of internal work to do” in further stabilising the business and dealing with the debt.

• “They are spinning plates," added the source, who requested anonymity.

• “It’s always a difficult thing to do a turnaround while deleveraging in the public markets.”

Reader, I married him: If successful, the tidying up process will leave Evoke as a clearly more attractive takeover target should a suitor be looking for a UK footprint. A bid now would, according to the source, be “very opportunistic” and would likely be rejected.

• But should Evoke return to growth, “then it becomes one of the classic targets for further consolidation,” in the words of one industry source.

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CIRSA: Blackstone is reported to have lined up Barclays, Deutsche Bank and Morgan Stanley to support a partial IPO of up to 25% of CIRSA on the Madrid Stock Exchange at some point in 2025, according to Spanish business news site Expansión. A partial float would raise between €700m and €1bn.

• Blackstone has owned the Spanish and LatAm B&M and online gaming operator since 2018 when it bought the business for €2bn.

• The company bought a 70% stake in Peruvian operator Apuesta Total earlier this year.

• CIRSA is forecast to generate revenues of €2bn this year with EBITDA coming in at €680m-€710m.

MGM Resorts-owned LeoVegas has launched a sportsbook to sit alongside its existing online slots offering in Germany.

Macau: November GGR rose 15% YoY to $2.31bn but was down 11% sequentially. In the YTD GGR is up 27% YoY to $26.1bn. The November GGR figure was at just over 80% of pre-pandemic levels.

• A boost for the market came late last week with the announcement that China would now allow multi-entry visas to Hong Kong and Macau for residents in the Greater Bay Area.

The week ahead

Game management: Compliance+More tomorrow takes a look at the unraveling situation around BC.GAME, with questions being asked of both the Curaçao authorities and the UK Gambling Commission.

Shares watch

Are you not entertained? It is clear from the performance of the US stock market in November that the re-election of Donald Trump is seen as a good thing by investors, and certainly many big names in the gaming sector have ridden on those coattails.

• As pointed out last week by E+M, none can be more pleased by the turn of events than Flutter Entertainment.

• It extended its lead as the largest company in the sector by market cap at just shy of $50bn. It rose just under 20% in November.

• Equally happy will be rival DraftKings, up 24% this past month, and Rush Street Interactive, which has risen 33%.

Super sonic: Top of the tree by percentage gain, however, is Super Group, which rose 62% in November, leaving the shares a whopping 117% higher in the YTD.

• The immediate cause of the re-rating of the shares was well-received Q3 earnings, which showed revenue rising 13% to $403m while adj EBITDA soared 60% to $83.9m.

• More than the numbers, though, it was what the company said about its success in Africa that was notable, with the region now its largest revenue generator for the second quarter in a row.

Better days: Against the backdrop of gaming affiliate market leader Better Collective’s calamitous 40% collapse in late October, rival Gambling.com can be well pleased with its 38% gain on the month.

• BC lost a further 10% this month while Catena Media was also down 20% for November.

Looking for long-term relationship: Rival data-plus suppliers Sportradar (up 40%) and Genius Sports (47%) will be eyeing each other cautiously given their placement in this month’s podium positions. Each is being rewarded for newsflow that points to them deepening their relationships with sports bodies and widening their product offering.

• Within the last fortnight, Sportradar announced a multiyear agreement with MLB to offer scouting services and the launch of a gen AI audio feature within its ad:s multi-channel marketing service.

• Meanwhile, Genius Sports announced a first-of-a-kind EA Sports Madden NFL cast for the Texans-Chiefs game taking place on December 21.

Earnings in brief

The decisive moment: CEO Steven Salz said the quarter just passed was the “most decisive” in Rivalry’s short story after it completed both a product overhaul and an organizational “realignment” (i.e. made staff redundant) and subsequently reduced its operating expenses.

• Adj. revenue hit C$6m ($4.3m), including C$3m deferred from prepayment for the company’s NUTZ token sale.

• Rivalry stepped back from its previous prediction for H224 profitability. Recently, it completed a C$3m private placement, which it said it would use for general working capital purposes.

• As of the end of September, the company had C$2m of cash on hand.

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By the numbers – hold

Recovery position: The latest weekly data from New York pointed to the extent to which operators would have been able to recover their poise following the two weeks of punter-friendly NFL results in later October.

• In November, hold was handily above average in the last three weeks of the month.

• The team at Jefferies pointed out that Q4 margins in New York are now tracking up 0.4% YoY.

• But they added that this hasn’t been an even distribution. While margins for FanDuel were up 0.9 ppts Q4 to date, BetMGM was flat and DraftKings was down 0.5 ppts.

New York hold % Sep-Nov24

Favorite bets

My favorite things: The Morgan Stanley player survey released last week – previously written about by E+M with regard to the fortunes of ESPN Bet – contained an interesting insight into how newer OSB states evolve in potentially divergent ways to older states.

Have it your way: This seems particularly true of the bettors’ favorite bet types. As was pointed out by the MS team, there appears to be a correlation between players in newer states having more of a propensity to choose parlays vs. single bets.

• Looking at the data across the states, the survey found single bets were the favorite type of wager with 50% of respondents vs. 36% for parlays and 12% for SGPs.

• But within that, there was a distinct bifurcation between the older states of Indiana, Pennsylvania, Michigan and New Jersey where between 54% and 66% preferred single bets.

Out with the old: In comparison, in Ohio, North Carolina, Maryland and Louisiana single bet preference dropped to between 32% and 44% whereas the preference for parlay type bets was far more clearly in evidence.

• Those who said parlay bets were their favorite ranged between 34% in Ohio to 44% in Louisiana.

• Those who preferred SGP, meanwhile, stood at between 14% in Ohio and 21% in Louisiana.

• Total parlays preference stood at 65% in Louisiana, 63% in Maryland, 54% in Ohio and 52% in North Carolina.

Favorite types of wager

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Calendar

• Dec 2: DraftKings, RSI, the Craig-Hallum Online Gaming Conference

• Dec 9: Allwyn

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