• Get there quicker: Profits could flow if OSB marketing spend was stoppered.

• In +More: DraftKings “rooting” for positive CFTC prediction market ruling.

• Earnings TL;DR: Sportradar and Gambling.com.

• The long take: Deutsche Bank cuts Boyd forecasts.

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Balancing act

Shortcut: BetMGM could quickly ramp towards its medium-term target of $500m in adj. EBITDA – but it would mean the business would have to wean itself off expensive sports-betting promos, according to the analysts at Wells Fargo.

• The Wells Fargo team noted, according to BetMGM’s last update in early February, the company showed its iCasino arm contributed a profit of $424m in 2024.

• But the business was dragged down by $306m of losses in OSB.

Spend, spend, spend: The problem common to all but the top two in the OSB market is the amount being spent on promos vs. the GGR and NGR returns.

• The Wells Fargo analysts said the OSB losses total suggested BetMGM’s general costs and external marketing expenses came to $860m in FY24.

• By their reckoning, BetMGM’s costs and market as a percentage of revenue came in at 91% vs. 80% for FanDuel, 76% for DraftKings and 71% for Caesars.

Pulling up: The latest data from the team at HoldCrunch, which assesses the operational performance of US sportsbooks, showed BetMGM has marginally reined in its promo spend since the start of the year.

• Q1 to date shows the percentage of handle going on promos as standing at 3.6%. This compares with a percentage that reached as high as 4.9% in Q324.

• But by pulling back on its promos, it can be seen that it is being caught by Fanatics, which continues to push the boat out with 5% of handle being spent on promos.

• In terms of handle growth in the YTD, Fanatics is up just over 1% while BetMGM is marginally down.

• The lower the HoldCrunch percentage, the better the prices offered to customers. NGR+ is margin after taking account of both price differences and promos.

Cutting your cloth: As the Wells Fargo team acknowledged, if BetMGM were to cut back on aspects of its marketing that “could alter” both the handle and GGR figures. This would doubly be the case were that to include cutting back on promos.

• But the analysts suggested the benefits of an “improved cost base” could be beneficial to BetMGM moving forward.

Jolly hockey sticks: The team noted that if BetMGM were to pull back on customer acquisition costs and external marketing spend in OSB, it could “very quickly ramp” to its ~$500m EBITDA target.

• “Despite years of EBITDA losses, there is a path to quick profitability and it could generate more EBITDA than Caesars on a run-rate basis over the next few years,” they added.

But I shoot with this hand: Any move to cut back on OSB expenses would then rely on BetMGM maintaining its levels of iCasino market share, which have always been much stronger than its weaker OSB share.

• Wells Fargo pointed out it has been stable at ~19% over the past 15 months, with share in the past three months higher than it has been since October 2023.

• Indeed, the latest data from JMP suggested that in January and February BetMGM managed iCasino share of 22% and 23% respectively.

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+More

• DraftKings predicts: DraftKings management is “rooting” for the Commodity Futures Trading Commission to allow sports-based prediction markets, according to the analysts at Citizens, who recently met with the company’s management team. Given the likely speed to market – a CFTC roundtable will take place within the next few weeks – the Citizens team believes the “initial infrastructure” will need to be “rented” before being migrated in-house over time. They noted established OSB operators would have the advantage of scale and liquidity, but said the existing prediction modellers such as Kalshi “could be viewed as acquisition targets.”

• 👀 On the move: Former William Hill CEO Ulrik Bengtsson has announced he will be stepping down as chair of gaming affiliate Raketech in July after accepting a CEO position at an “international company.” His destination was not revealed.

Read across

• Life in the fast lane: New York, sluggish with most other gambling matters, is racing to ban online sweepstakes. The Senate Racing, Gaming and Wagering Committee passed SB 5935 on Tuesday, sending it to the Senate floor for a final vote with nary a peep. In Compliance+More.

• In next week’s Compliance+More, filings seen by the Australian Financial Review suggest the country’s financial watchdog AUSTRAC allege Entain’s Australia-facing Ladbrokes business was guilty of “serious and systemic non-compliance... over many years.”

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Earnings edit

Sportradar

Arena tour: The big news for Sportradar was the deal announced to acquire IMG Arena and its portfolio of betting rights from Endeavor, a move that CEO Carsten Koerl proclaimed to be “game-changing.”

• No, no, you pay me! Analysts noted Sportradar will be paid $125m by Endeavor to take over the rights portfolio and will also stump up a further $100m to the right holders.

• Fuel for love: Koerl said of the deal that content was the “fuel of our engine” and that this acquisition “gives us an even larger supply of premium fuel to power our business.”

• In Q4, revenues rose 22% to €307m, while on a full-year basis revenues were up 26% to €1.11bn. Quarterly adj. EBITDA soared by 53% to €61m, while the full-year figures were up 33% to €222m.

• Over the period, the company extended its exclusive deal with the MLB through to 2032 while it also acquired the US-facing affiliate assets of XLMedia over the period.

Gambling.com

Some girls are bigger than others: While some in the gaming affiliate sector might, as one analyst said on the call, be suggesting that currently “the house is on fire,” CEO Charles Gillespie was coolness personified as he batted back the fears, saying simply that some companies are “better at selling traffic than others.”

• Don’t say I didn’t warn you: Gillespie said, compared to its rivals, his company had warned 2024 would be a tougher year for sports-betting affiliation in the US.

• “I think the competitors just didn’t necessarily fully appreciate that as much as we did,” he added.

• Come up and see me: More positively, talking about the potential for prediction markets, Gillespie said there were “a lot of big name companies with big balance sheets” either looking or already entering the market. “And we are talking to all of them.”

• Favorable optics: The big corporate news came on January 1 with the acquisition of Odds Holdings, the company behind OddsJam and OpticOdds, for up to $160m.

• Brightest and the best: Gillespie said the company now had the “biggest and most talented team” in its history and would now be aiming at its long-term goal of reaching $100m in annual EBITDA.

In brief

• Opap: GGR rose 10% to €2.3bn while Q4 GGR was up 11.5% YoY to €648m, helped by “high-flying” iCasino growth. FY24 EBITDA rose 14% to €832m while Q4 was up 17% to €245m. The company said its online business now accounts for 32% of total GGR. iCasino was up 21% YoY to €92.3m in Q4 and up 29% to €325m in the full year. The other big positive was betting, which rose 27% YoY to €228m in Q4.

• Bragg Gaming: Following on from its content-plus deal Caesars Entertainment announced in January, CEO Matevž Mazij was keen to point out the company’s games content was now available in 90% of the US iCasino market. Q4 revenue rose 16% to €27.2m while adj. EBITDA was up 68% to €4.7m. The company reiterated guidance for 2025 of revenue at €117.5m-€123m and adj. EBITDA of €19m-€21.5m.

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The long take – Boyd Gaming

Cautionary tales: The health and wellbeing of the regional gaming consumers is at the forefront of investor minds and the evidence from various regional markets from the quarter to date suggested caution may be justified.

• The team at Deutsche Bank have indeed cut their forecasts for Boyd off the back of this YoY underperformance.

• But they suggested the longer-term picture for the segment is relatively positive.

The team pointed to the soon-to-complete capital projects that will give Boyd a boost, including upgrades at the Treasure Chest in Louisiana, while, looking ahead, the development is underway in Richmond, Virginia.

• The company is spending ~$750m on the project, with expected returns in the 15-20% range.

• A temporary casino is slated to open in November this year with the permanent one to follow.

Balancing: In Boyd’s Las Vegas Locals business, the analysts are a touch more pessimistic than the consensus for 2025, but they said the modest undershoot on EBITDA of $107m vs. the $109m forecast is “emblematic of a broadly stable environment.”

• Malaise forever: For the Downtown segment, meanwhile, the team said the pressure on room rates on the Strip and what they believe is a “continued malaise in leisure trends more broadly” has led them to trim their forecast.

Still, despite the backdrop, the DB team expected the buyback program to accelerate this year over the purchases in H224. They remain the “best use of capital, and highest return on capital, at present.” the team added.

Quick takes

• Evoke: As with the rest of the UK-facing bookmakers, Evoke should see something of a boost from last week’s Cheltenham festival, with betting volumes on the up and “largely operator-friendly results,” suggested the analysts at Deutsche Bank. The team noted the read-across from rivals Entain and Lottomatica also represented a positive, with both having said sports results started “strongly” this year.

Connections

• The big deal: Ford has renewed its exclusive auto partnership with Churchill Downs Racetrack and the Kentucky Derby through 2029 and will gain naming rights to the upscale First Turn Club hospitality area. The new deal will also see Ford provide new fan experiences and vehicle displays throughout areas of the track, including the Paddock Plaza and the VIP Gate.

• Inspired Entertainment is to supply Buzz Bingo with 500 Category B3 and C terminals across 79 venues in the UK under the terms of a renewed partnership. Fanatics has agreed a deal with Greentube for the provision of online games on its sportsbook and casino platforms in New Jersey and Michigan. Delasport is integrating its plug-and-play iFrame sportsbook into the Multiple Group platform.

• NetBet is now the official sportsbook and betting partner of the UFC across the UK, Ireland, Greece, Italy and Romania. Betclic has partnered with SkillzzGaming to launch The Betclic Show online slot game in Portugal. Trustly is to provide its pay-by-bank services for instant player deposits and withdrawals to Hard Rock Digital in the US. IGT and Galaxy Gaming have entered a five-year licensing agreement for table game content.

• Deals: CashTrac received a strategic minority investment from private equity firm Serent Capital. Lottery.com has closed on the all-share acquisition of Spektrum from PlusEvo valued at $1.5m.

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Upcoming earnings

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• Mar 27: Playtech

• Apr 23: Churchill Downs (earnings)

• Apr 24: Churchill Downs (call)

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