• Gov. Murphy sets a new online gaming tax rate of 25%.

• Breaking: PointsBet subject to a bidding battle between Mixi and BlueBet.

• In +More: Kambi’s good news, Fertitta ups Wynn stake

• Earnings TL;DR: Caesars, Light & Wonder, IGT and Super Group.

Hard Rock Bet is gearing up for 2025 with a focus on amplifying brand and product engagement. With a powerful, custom-built bonusing system and an ambition to redefine traditional CRM, we’re seeking leaders who are driven to challenge the status quo:

• VP – CRM & Engagement

• SVP – Marketing & Engagement

• And other amazing positions here

Take a hike

Filling the coffers: Governor Phil Murphy has outlined plans to substantially increase New Jersey’s online gambling taxes to 25% as a part of a raft of measures that he hopes will go some way to plug a hole in the budget.

• OSB tax would rise from its current rate of 13% while the iCasino tax rate would rise from 15%.

• Following the news, DraftKings’ share price shipped 4% on the day, Flutter lost 3.5% and Rush Street was down 2.5%.

Pennyfarthing for your thoughts: On the Caesars Entertainment earnings call overnight, CEO Tom Reeg was sanguine about the move.

• “I think it’s a headline cycle we’re in,” he told the analysts. “It’s a function of where state budgets are versus where they’ve been in the last couple of years.”

No surprises: The analysts at Deutsche Bank said the move should “come as no surprise” given prior commentary from the governor. But, they noted the proposal would have to pass through the committee stage.

• “That being said, we strongly expect the New Jersey iCasino tax increase passes, though potentially undergoes some tweaks along the way likely resulting in a slightly lower rate,” they added.

• The team also believed the OSB hike is likely to pass given the new rate would retain unlimited promotional deductions, meaning the effective tax rate would remain below that of neighboring states.

Always look on the bright side: Over at Truist, the team said they believed the news “could have been worse” given the 51% tax rate in New York. But they also warned about the potential for contagion.

• “With New Jersey generally considered among the most industry-friendly states, we wonder what other states propose higher taxes next,” they wrote.

Priced in: Writing ahead of the news, the team at Citizens suggested the hike to 25% was already priced in and noted such impacts were net of any cost-reduction measures to mitigate the increase in taxes.

Taxes hold ’em: However, the DB team was more pessimistic. “Candidly, we find this to be somewhat detached from fundamental realities,” the analysts wrote, suggesting there had been a relative litany of bad news in recent weeks.

• This includes a similar tax hike proposal in Maryland, to 30% from 15%, and talk from the governor of Ohio about a rise in gambling taxes being desirable.

Texas fold ’em: The tax hike in New Jersey was the second blow in the week for DraftKings after the decision of the Texas Lottery Commission to ban lottery courier services within the state. Jackpocket was acquired for $750m in February last year.

Mega hat: DraftKings CEO Jason Robins said during the company’s recent Q4 earnings call that Jackpocket had been “great” for cross-sell and customer acquisition around the recent Mega Millions $1.2bn jackpot.

• He added that the opportunity to build a customer base in non-OSB and iCasino states was “one of the reasons that we feel excited about Jackpocket.”

Share

Join 100s of operators automating their trading with OpticOdds.

Backed by the resources of $GAMB, OpticOdds has the industry's most advanced, comprehensive odds data and is poised to drive innovation and growth like never before.

Join the OpticOdds team at SBC Rio🇧🇷 or Get Access Now⚡

Breaking: PointsBet bid battle

Mixi and math: PointsBet is the subject of a bidding battle, with Japanese entertainment group Mixi vying with BlueBet to buy the business.

• Mixi was first to lodge an offer, which valued the company at A$353m ($223m). This was followed by the news of a bid from BlueBet of between A$340m and A$360m, which apparently was made on February 18 and was initially rejected.

Scriptease: The Australian Financial Review reported two major shareholders supporting the BlueBet bid. “The key attraction of the BlueBet proposal is the option to roll script into the merged entity as we believe there is significant future upside,” Wilson Asset Management’s Shaun Weick told the paper.

• Recall, PointsBet sold its US business to Fanatics for $225m and now consists of the Australian and Canadian businesses.

• The Matthew Tripp-led BlueBet also recently brought to a halt its US interests and recently merged with the Australian Betr.

+More

• Cirsa is planning a €1bn IPO in Madrid in early April, according to a report from Spanish financial paper Expansión. The report suggested owners Blackstone will announce early in March an intention to offload ~25% of their holding via the float.

• Kambi issued a double dose of good news this week. First, the company announced it has extended its deal with the Entain-owned BetCity in the Netherlands. Then followed it up with the news it has reached an agreement with FDJ to be assigned the contract to provide a sportsbook backend to Ontario Lottery and Gaming. Kambi reported its Q4 earnings this morning, showing revenue flat at €44.5m and EBITDA down 6% to €16m. An Earnings Extra edition will be sent later this morning.

• 👀 Tilman Fertitta has increased his stake in Wynn Resorts to over 10%, a move that, according to SEC rules, makes him a “business insider.” Fertitta, who owns the Golden Nugget casino brand and the NBA’s Houston Rockets, originally bought a 6% stake in late 2022. He is now the largest shareholder in the company.

• Stern words: Nevada congresswoman Dina Titus, Democrat, said via an X posting that she has sent a letter to the new chair of the CFTC with her concerns about legalizing prediction markets on sports-related contracts. “It is a backdoor way to allow sports betting in 50 states,” she said.

• MGM China is reported to be in talks with lenders about securing a $2bn loan. According to Bloomberg, the loan would be MGM China’s first debt facility since before the pandemic. The new money would go towards returning old debt.

• Gambling affiliate provider SharpLink has bought a 10% stake in UK-based affiliate provider Armchair Enterprises, the owner of the CryptoCasino.com site, for $500k along with a right of first refusal to acquire a controlling interest in the company.

Earnings TL;DR

Caesars Entertainment

Fly my pretty one: CEO Tom Reeg suggested Caesars Entertainment could look at potential options to spin-off the company’s digital business as a way to recognise the value of a division that could be trading at higher multiples than the rest of Caesars B&M interests.

• Dollars and sense: He recognized there were “dollars left on the table,” even as the adj. EBITDA for the online business disappointed in Q4 due to the well-advertised hold issues in October and December.

• After-hours trading reacted with a shrug after the company said the digital arm undershot expectations in Q4 with adj. EBITDA at $20m. Total adj. EBITDA fell 5% in sympathy to $885m.

• Reeg was keen to stress regional resilience despite concerns over the health of the US consumer, while the company was “pleased” with Las Vegas trends, particularly in the group business.

• See this morning’s Earnings Extra for more. (Paywall)

Light & Wonder:

Calling it quits: Aside from the Grover acquisition announced just last week, the big – though somewhat buried – news from Light & Wonder came with the revelation it would be exiting the live casino field of play, with CEO Matt Wilson suggesting this was down to a “degradation in pricing” within that segment.

• Wilson said the live sector had turned out to be a “smaller segment” of the iCasino market than had been anticipated.

• In Q4, the company saw revenues rise 4% to $797m while adj. EBITDA was also up 4% to $315m. The company maintained it was on track to hit $1.4bn in adj. EBITDA this year.

• Compare/contrast: Asked about the new Brazilian market, Wilson made the point that it was exciting to see it be regulated after having been a “great market for many years” – i.e. gray market or, in plainer language, unregulated.

• 🤔 But on sweepstakes, he said the company viewed the market as “unregulated” and therefore “against our vision and strategy.”

• The Earnings Extra edition for Light & Wonder will be sent later this morning.

IGT

You have to spend money to make money: The big news for IGT will come in the next few months with the announcement of the Italian lottery concession award. The company is also facing renewals of its contracts with the Texas and New York lotteries. The rebids will entail $25m of increased investment in the business, causing a hit to EBITDA.

• Adj. EBITDA for 2025 is forecast at $1.1bn-$1.15bn, which would represent a small YoY decline.

• Revenue is expected to grow by mid-single digits to $2.55bn-$2.65bn.

• $2.4bn of the proceeds due from the sale of the gaming and digital business will go towards lowering its leverage.

• See yesterday’s Earnings Extra for more. (Paywall)

Super Group

Targets met: CEO Neal Menashe opened up the call with analysts by saying that a year ago the company set out to “refine” its global footprint, increase its focus on key growth markets, fine-tune the product and tech, and realize OpEx and marketing efficiencies. “We have achieved all of this,” he said.

• Excluding the US, FY24 revenue reached an all-time annual high of €1.66bn, up 18% YoY, while adj. EBITDA rose 53% to €391m.

• The company similarly underscored an excellent Q4 performance ex-US, with revenue growing 38% YOY to €487m and adj. EBITDA climbing 152% to €129m.

• See yesterday’s Earnings Extra for more. (Paywall)

In brief

Ainsworth: FY revenue was down 7% to A$264m ($167m) while post-tax profit soared fivefold to A$30.3m. Revenue declines were suffered across Asia Pacific, LatAm and online, while North America provided the bright spot. Particularly noted was the HRM capability, which contributed A$32.9m over the period.

Acroud: Proclaiming itself to be a “new, stronger” company, the gaming affiliate and services provider, which recently reorganized its ownership and converted bondholders to shareholders, said Q4 revenue rose 5% to €10.4m while adj. EBITDA fell 16% to €1.2m.

Are payments getting in the way of your progress? A poor payments experience can lead to many operational problems, including higher fraud, increased player churn, low conversion rates and more.
PayNearMe is a payments experience management platform that enables you to streamline deposits and withdrawals, increase acceptance rates and radically drive down your total cost of acceptance—all with a single, modern platform.

Take the first step toward progress: www.paynearme.com

The long take – Evolution

Evolution’s management has admitted – perhaps for the first time in the company’s history – margins are being squeezed, and the team at Deutsche Bank have reduced their FY25 EBITDA guidance accordingly and cut their price target.

• The well-documented industrial strife in Georgia, the issues over Asian content theft and the UK Gambling Commission licensing review account for the pessimism.

• The analysts suggested the latter situation, while relatively modest so far, represents the “greatest risk” for the live casino supplier.

• “There could be material reputational risk and the threat of a loss of licenses, with the risk of further contagion if other regulators choose to follow suit,” the DB team argued.

• As such, DB now estimates FY25 EBITDA margins at ~67%, the midpoint in the company’s one range.

Venture playground

Registration closes this week! Don’t miss your chance to network with gaming operator founders and industry leaders for insightful discussions and expert-led sessions.

Click here to register!

Challenger: Details of the schedule for the event taking place in New York on March 11 have been released:

• The Art of The Deal: A conversation with Daniel Burns from Oakvale Capital, moderated by Karolina Pelc, founder of BeyondPlay.

• The Good, The Bad and The Ugly of iGaming’s PR Machine: David Briggs, co-founder at GeoComply, talks to Dustin Gouker from The Closing Line.

• Building for Tomorrow, Today: Philip Drury from Citi talks to Tom Hall, vice-chair at The Sporting News and Joe Asher, former chair at the Wilson Center

• Emerging Gaming: Talking to David Huffman, COO at Sporttrade, and Akshay Khanna, co-founder and CEO at Jackpot.

• For information on attending, click here.

Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem.

Upcoming earnings

• Feb 26: Kambi, Galaxy Entertainment, Star Entertainment, Rush Street

• Feb 27: GiG Software, Penn Entertainment, Golden, Accel

• Feb 28: Melco Resorts

• Mar 4: Flutter Entertainment, Lottomatica, Genius Sports

• Mar 6: Entain, FDJ, Full House Resorts

Fincore delivers innovative technology solutions for operators and gaming studios.

Built on decades of expertise in Sportsbook and iGaming, driven by a passion for problem-solving, and powered by the latest ML technology.

Our modular and custom solutions empower you to scale, adapt, and thrive in our fast-paced industry while giving you the control and flexibility to own your platform and tailor it to your unique needs.

Click here to find out more.

An +More Media publication.

For sponsorship inquiries email scott@andmore.media.