Welcome to Weekend Edition no.17. The week was dominated by news from G2E in Las Vegas where those who could gathered together for the first time since, well, a long while. As for most of the international sector, Wagers.com Earnings+More wasn’t there this year due to travel restrictions, but next year, well, let’s just say we’ve already booked our flights. 

If you were forwarded this newsletter and would like to subscribe, click here:

G2E review

Wish you were here: Travel restrictions meant most of the international representatives were unable to travel to G2E. Analysts at Truist noted that the number of mask-mandated attendees appeared to be around 50% of normal but those that were there were clearly “enthusiastic”. The dominant headlines from the week were generated by Bill Hornbuckle’s less-than-surprising comments on DraftKings-Entain suggesting MGM would have a huge say in any deal. Truist duly noted that the “drama came up in every meeting we held”.

Bull: The AGA took the opportunity of G2E to launch its new Gaming CEO Outlook which unsurprisingly showed optimism among the sector’s top execs on gaming’s prospects. The survey, conducted in late August and early September, showed the Current Conditions Index at 115.5, representing “one of the fastest periods of growth” over the past 20 years. The Future Conditions Index, however, was slightly less positive at 102.5, but still nearly half of all respondents expect business to improve further from the current trading highs.

Welcome back: Bill Miller, president and CEO of the AGA, in his welcoming speech:

“A year ago, this hall was empty… One year later, we’ve come roaring back with the best results in our industry’s history. And we’re not just ahead of last year – we’re on record pace.”

Earth, Wind & Fire: Speaking of the recovery, Deutsche Bank is forecasting GGR growth over the two-year Sep19 comparative across five of the six regions they track, with only Louisiana on a downward path due to the lingering impact from Hurricane Ida. However, they do expect the Las Vegas Locals market to contract on a two-year comp. See Datalines below for the latest state-by-state data.

Going cashless: Winning the PR wars this week was cashless gaming provider Sightline. We counted three deals announced with Mastercard, IGT and Konami, an op-ed from CEO Omer Satter for the Nevada Independent calling for digital sign-ups in Nevada and an award for best payment solution. “As expected, cashless was a key focus point with many operators highlighting the wide-ranging potential applications,” said Truist.

Digital demand: One of the takeaways from the week for Jefferies was that gaming suppliers are now under pressure from operators to leverage land-based content into online and social. “Thus all players are pursuing digital, with no clear winners as yet,” they added. “Companies large and small will remain active on the M&A front as they focus on competitive positioning and capabilities,” they said.

“From this perspective, we believe valuations are secondary to validated capabilities as the Street's focus shifts to technology and content from access to markets and customers,” the Jefferies team added. “We therefore believe it is appropriate to continue more positively skewed ratings on both casino operators and equipment and technology providers.”

Penn to paper: Looking at the current sports-betting marketing war, the Truist team said their meeting with Penn has emphasized the company’s “longer-term, measured approach which is underscored by the strength of the Barstool brand and database.” “We think it’s striking how Penn increasingly sees itself as evolving into a next-generation entertainment company, well beyond just gaming,” they added.

Hailing you know who: In a note reiterating their buy on Caesars, Deutsche Bank said Arizona “will be telling” for the company’s sports-betting ambitions. With synchronized launches, the heavy marketing effort, database strength and a tribal relationship, DB expects Caesars to be a “double-digit market share performer”, thus backing up the case for the group to be a top-four player domestically.

Aspire Global B2C sale

Top line

• Esports Technologies will pay $75.9m for Aspire Global’s B2C operations including the Karamba, Dansk777, Hopa and GenerationVIP brands. The deal consists of $58.3m in cash, $11.7m in a promissory note and c.$5.9m in shares. 

• The closing of the deal will be dependent on Esports Technologies receiving financing and is expected by Nov. 30th. The company says it has entered into “binding agreements with certain investors” for a private placement of $36.2 million convertible stock.

• In the 12 months to June, the B2C operations generated $73.9m of revenue and EBITDA of $8.2m suggesting a historic multiple of 9.25x. In the first six months to June revenue grew at over 40% YoY.

• In Q221 Esports Tech generated revenues of $43k and a net loss of $4m.

Speachers corner: The “transformative” acquisition will see Esports Technologies - which runs the Curacao-licensed and (according to the company) Philippines-facing Gogawi.com esports-betting and traditional gaming site - gain around 1.2 million mainly-European online betting and casino customers which it claims will provide a ready audience for esports cross-sell. On the call with investors on Monday, CEO Aaron Speach said it was a ”pivotal, accretive and synergistic” acquisition noting the bought assets gave the company access to markets in Germany, the UK, Ireland and Denmark. 

Aspiral carpets: For Aspire, which in September signed a distribution partnership with Esports Tech for the provision of proprietary esports odds and modeling, the deal completes the previously announced strategic review and sees it become a B2B-focused provider. Redeye analysts reacted positively to the news noting it could generate €70m ($80.9m) in fees over the course of the initial four years. They noted the cash proceeds could be utilized in further M&A following the previous deals for PariPlay and BtoBet. Aspire’s B2B revenues in Q221 rose 24.4% YoY to €40.6m out of total quarterly revenues of €55.8m.

Meanwhile on social

one.fan @onefanaticguy

Without doubt the most ludicrous deal I’ve seen in this FOMO US betting landscape. Paying 75m to find out cross-selling esports to casino customers isn’t the land of milk & honey. 🤦‍♂️ casinobeats.com/2021/10/01/esp…Esports Technologies to acquire Aspire’s B2C segment for $75.9mEsports Technologies has disclosed the execution of a definitive agreement for the acquisition of Aspire Global’s B2C business in a $75.9m transaction. The agreement, which comes a short time after the two inked a “strategic licencecasinobeats.com

October 1st 2021

4 Likes

Rivalry float

Salz and pepper: The appropriately-named Rivalry, another esports-focused provider, has completed its IPO on the Toronto stock exchange. In June the company raised $22m in an oversubscribed offering and it said this week it expects to increase its presence in regulated markets via a launch in Australia in Q421 and with an anticipated application for Ontario. CEO Steven Salz the listing was a “major step” for the business.

NFL season pp data analysis

Take five: Wells Fargo analysis of the leading sports betting and igaming US brands during the first few weeks of the NFL season shows app downloads up by more than 300% sequentially, with BetMGM and Caesars in particular performing strongly. Caesars’ 14 minutes of daily average usage was a 67% rise on August and BetMGM’s 12.5 minutes a 91% rise MoM. Wells Fargo said the omni-channel and igaming strength of the BetMGM and Caesars brands were key factors behind the “longer daily playing/usage sessions.” 

Caught between stools: Despite both FanDuel and DraftKings recording the most TV ad impressions and “significantly out-advertising” rivals Caesars and BetMGM, it is the latter two that have the higher usage levels in the past month. Penn National’s Barstool Sportsbook, meanwhile, has made much of its ability to recruit customers through its social media output (see earlier Truist comments), but its usage and download rates suggest the campaigns by the other four groups are generating much higher recruitment and activity levels.  

iGB Live review  

All you can EAT: Online gambling affiliates should prepare for more frequent Google algorithm updates which will be broader in scope and less easy to correct with easy fixes, Martin Calvert, marketing director of SEO agency ICS-Digital, told delegates at IGB Affiliate last week. Calvert said Google’s updates focus on ‘your money or your life’ (YMYL) websites and want them to display expertise, authority and trust (EAT), context and relevance and core web vitals like speed and stability. That means “more robust content planning and quality control” was necessary, rather than just filling up pages with “fodder content”. Calvert noted that Google considers igaming to be a “controversial” industry that will always be a target for updates. 

Nuvei U.S. IPO

Coming to America: Toronto-listed payments technology provider Nuvei has announced the issuing of 1.5m subordinated shares to be listed on the Nasdaq Global Select Market under the ticker NVEI. Nuvei expects to use the net proceeds from the offering primarily to strengthen the company’s financial position and allow it to pursue its growth strategies. In separate news, Nuvei was announced as the payment partner for Holland Casino and it also announced this week a partnership with DFS platform PrizePicks.

Everi FY21 forecasts

Tighten up: Land-based and digital games provider-fintech provider Everi has narrowed down its net income and EBITDA forecast guidance to the top end of its previously announced range. T​​he company now expects FY21 net income will be $90-95m and adjusted EBITDA will be $337-342m. Analysts at Jefferies noted that during its G2E investor presentation, the company said Q3 volumes were better than expected with modest growth in the installed-machines base and double-digit growth in the fintech arm. It also noted “encouraging” consumer demand into Q4.

What we’re promoting

Reputation Matters: UK Gambling’s Future At Stake will be taking place on Tuesday 2 November at the Ironmongers’ Hall in the City of London. The event will consist of panels discussing the sector’s positioning as it enters a crucial phase of the Gambling Act review process. The event is headlined by John O’Reilly, Rank chief executive, who will provide the keynote. For ticket information, visit the EventBrite page.

Wagers.com features 

US sports betting: Jake Pollard on the quantity and high profile nature of US betting advertising and how industry stakeholders are navigating those waters. With scrutiny only likely to increase in the coming months, they will need to be alert.

Draftkings share price: Scott Longley looks at the DraftKings bid for Entain and the issues arising from the predominantly share-based offer.

Datalines

Illinois: Land-based revenues saw GGR in September fall 1.5% MoM to $106.3m and down 4.8% on Sep19. Wells Fargo analysts noted that just two of Illinois' 10 casinos had Q321 GGR that was above Q319 levels, including Rivers Des Plaines (18.2% higher than Q319) and Caesars’ Grand Victoria (2.4% higher than Q319).

Maryland: September GGR was up 16.3% on Sep19 to $165.4m, a YoY rise of 15.1% but down sequentially by 1.8%. Leading the way was Maryland Live (Cordish) which generated $56.5m or ~34% of September GGR. It was also announced this week that Maryland Live, along with Caesars’ Horseshoe Casino in Baltimore and the MGM National Harbor have met the Maryland Lottery and Gaming Control Commission’s requirements for sports wagering licenses.

Virginia: July betting handle was down 29% to $161.9m, GGR dropped 9.3% to $20m, operators recorded strong margins of 12.3%. Accounting for bonuses and promotions that came to $7.3m, taxable revenue was $12.7m. The four licensed operators in the state paid $1.9m. Around 18 companies have applied for licenses, gambling regulator the Virginia Lottery said it still had five licences ready to be awarded to operators.  

Ohio: September GGR was up 12.6% YoY to $185.4m, Q3 GGR was also up YoY by 14.1% to $590.9m. 

Newslines

Born on the (Salford) Bayou: Betfred is the unlikely debut retail sportsbook in Louisiana after going live this week with a sportsbook at the Tunica-Biloxi Tribe-owned Paragon Casino Resort. The launch follows Louisiana voters’ approval of legalized sports betting in a November 2020 referendum. Commercial casinos are still awaiting sign-off to open.

Here comes the Cavalry: Paysafe has agreed a partnership with Fubo Gaming that will see the streaming specialist and sportsbook operator plug into Paysafe for credit and debit card payments, the Skrill digital wallet along with Paysafe’s e-cash solutions. In more Fubo news, the company has signed up to a marketing partnership with the NBA franchise the Cleveland Cavaliers. Sports betting is not yet regulated in Ohio but is slated for next year. 

Green means go: Red Rock Resorts has received permission to go ahead with its planned new resort in southwest Las Vegas. The newly-named Durango, a Station Casinos Resort, will break ground early next year. On the Q221 call in July CEO Frank Fertitta said the Durango was its “primary focus.”

Bettor and better: Bettor Capital, led by ex-FanDuel exec David VanEgmond, has raised the first $50m of an intended $120m for its Fund I offering which will focus on early-stage real-money gaming and tech opportunities. Bettor Capital announced its first investment last week in data purveyor Data Skrive.

Hat tip: Scientific Games has announced a content partnership deal with White Hat Studios, the US-facing games content business. The deal will see White Hat Studios content made available in Michigan, Connecticut, New Jersey, Pennsylvania and West Virginia beginning in 2022.

This is the way: Evolution and Betway have signed an agreement for live casino and RNG content in New Jersey and Pennsylvania. Betway is already live with Evolution brand NetEnt in both states. 

Top ten: The broadcasting arm of the Big Ten Conference, the oldest collegiate league, has relaunched its offering in conjunction with Sportradar. The new B1G+ streaming service will feature Big Ten Olympic sports, as well as video-on-demand of basketball and football games that previously aired on linear channels.

What we’re reading

Talking up your book: Nardini predicts more social media/betting operator tie-ups

Smart city: On MGM and the Cosmopolitan.

UnTethered: From Bloomberg.

What we’re watching 

This is Howe you do it: “Battle will be won on the product front”, newly-minted FanDuel CEO Amy Howe tells CNBC in her first media interview. 

On social

Stephen Diehl @smdiehl

Lets finally talk about how NFTs are a giant scam. (1/) 🧵

October 6th 2021

11,568 Retweets32,530 Likes

Share Wagers.com Earnings+More

Calendar

• 12 Oct: Entertain Q3 trading statement

• 19 Oct: 888 Q3 trading statement

• 20-21 Oct: iGamingNEXT conference

• 25 Oct: Gaming in Germany conference

Contact us

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com