21 Oct: LVS: desperately seeking visibility
21 Oct: LVS: desperately seeking visibilityLas Vegas Sands Q3, Penn National and IGT analyst updates +MoreGood morning. The problems being faced by operators in Macau and Singapore are the focus today with the results from Las Vegas Sands showing that recent Covid cases are halting what should be a Las vegas-style recovery as and when the pandemic subsides. Meanwhile, Morgan Stanley has resumed coverage of Penn National Gaming, seeing it as a “key beneficiary” of US gaming and sports-betting growth. If you were forwarded this newsletter and would like to subscribe, click here: Las Vegas Sands Q321The top line
The shape of a pear: On the call, CEO Rob Goldstein said the company remained “confident in the eventual recovery in Macau and Singapore” but as it stands there is no visibility on timings. While in Singapore there are signs of an opening up of international travel from some key markets, in Macau the best the company could say was that its “considerable” investments “continue to take shape”. Storm warning: Grant Chum, COO of Sands China, noted the impact of continuing Covid cases in China and local cases in Macau in September halting any progress towards reopening and impacting Golden Week in October. On the upside, Goldstein noted that vaccination rates in Asia were now above the US, adding that the recovery in Las Vegas was the “blueprint” for an Asian rebound, adding that it was “inevitable”.
Old faithful: As for the ongoing concession renewal process and recent government interventions, Goldstein said he had “faith in the process”. “After two decades of being there, we’ve never found the government to be not thoughtful,” he added. Asked bluntly whether he could envision LVS not operating in Macau due to an adverse Chinese government, Goldstein said he couldn’t see such a scenario playing out. “I see no chance of that whatsoever.”
Drop in the ocean: As for digital, COO Pat Dumont said the company was intent on “investing for the future” but offered little by way of further guidance. “You key some of the valuations that the market is giving to certain areas today,” he said. “We think it’s very compelling, especially for the long term.” He indicated that early-stage investments would be the focus. Analysts at Deutsche Bank suggested LVS was unlikely to make a “big splash with an outsized acquisition”.
Challenge accepted: Jefferies noted that conditions remain challenging for LVS, suggesting the overall corporate and growth strategy in new markets and digital “remain hard to value”. Still, Macquarie suggested the company remains “best-positioned” when it comes to the Macau and Singapore recoveries, as and when they happen. Penn National Gaming analyst updateScores on the doors: Morgan Stanley has resumed coverage of Penn National Gaming following the completion of the acquisition of Score Media and Gaming, suggesting it will benefit from the “inflection in US casino revenue” and further sports-betting legalization. However, the equal rating reflects doubts about the continued lack of technology infrastructure to “compete with other leading sports-betting operators as the market matures past the initial customer acquisition stage... into the phase where product matters more”. IGT analyst updateGood read: Credit Suisse viewed the likely listing of Scientific Games’ lottery unit on the Australian Stock Exchange as a positive read-across for IGT. According to Bloomberg, SG is set to float its lottery business on the ASX in an operation that could raise around A$4bn for the company and value it at around 14x EBITDA. The Credit Suisse analysts said this was positive for IGT due to the valuation discrepancy between IGT at 7-8x EBITDA and the SG lottery multiple of 13-18x EBITDA. NewlinesSchtop: Payment service providers Skrill, Neteller, Trustly and popular Dutch payment method iDEAL will no longer offer their services to unlicensed gambling operators that continue to accept bets from Dutch players. The regulator KSA has the power to order PSPs to stop processing payments from Dutch players. Drive-by investment: DraftKings’ venture capital firm Drive by DraftKings has raised $60m as part of its first venture fund. The company said the fund was oversubscribed by 20%. As was noted by WE+M, $160m of money has been raised by various venture capital funds looking for sports-betting and gaming-related growth company investments in the US right now. Changes: Engine Media has changed its corporate name to Engine Gaming and Media to reflect its focus on esports, gaming and ”next-generation media solutions”. The company said the name change was “an important step in highlighting our gaming DNA”. On socialCalendar
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20 Oct: Catena Media’s European writedowns
Wednesday, October 20, 2021
Catena Media Q3 update, DraftKings/Entain bid extension reactions, Nigel Eccles/BetDEX news +More
19 Sep: Germany and Netherlands dog 888
Tuesday, October 19, 2021
888 Q3 update, Bet-at-home profit warning, New Jersey hits £1bn +More
18 Oct: Aristocrat buys Playtech for £2.7bn
Monday, October 18, 2021
Aristocrat buys Playtech, GAN investor presentation, Gambling.com Group +More
15 Oct: Weekend Edition no.18
Friday, October 15, 2021
Rank Q1 trading update, Esports Entertainment Q4, Startup funding watch, MGM, Entain, Caesars and Scientific Games analyst updates +More
12 Oct: Entain silent on DraftKings bid
Tuesday, October 12, 2021
Entain Q3 trading statement, Sportradar analyst initiation, Bally, Churchill Downs and IGT analyst updates, Las Vegas Southwest worries +More
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