Good morning. Wynn Resorts has announced the departure of Matt Maddox as CEO with Craig Billings, formerly interactive CEO, named as his replacement while operationally it suggested the “unsustainable” OSB environment necessitated a change of strategy. Scientific Games announced its first results since the sales of its lottery and sports-betting supply businesses. Melco Resorts, FuboTV and Raketech have also announced Q3 numbers.

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Wynn Resorts Q3

The top line 

• Revenues nearly tripled to $994.6m while adj, property EBITDA was back in positive territory at $154.6m from a loss last year of $65.9m. 

• Las Vegas properties generated $476m of revenues and $183.4m in adj. EBITDA (beating consensus) and Macau revenues stood at $312m while adj. EBITDA was at $10.2m (both missing consensus).

• Changes at the top see Craig Billings replace Matt Maddox at CEO. Billings was previously interactive CEO. his replacement there is yet to be decided.

Augean task completed: Maddox has been at the helm for four years after taking on the post from disgraced founder Steve Wynn in what the company said was “one of the messiest transitions in corporate history”. He said Billings was the “exact right person” to replace him, having been his “right-hand man” for five years. 

“He makes decisions fast and he feels the brand,” Maddox added.

Heat/kitchen interface: Talking about the sports-betting landscape, Maddox said the market is “really not sustainable right now”. 

“Competitors are spending too much to get customers,” Maddox said. “The economics are just not something that we're going to participate in in the short term. We're going to be focused on building a long-term business that's sustainable, that is not losing lots and lots of money.”

Burning up: Billings told analysts Wynn Interactive had a turnover of $645m and has an annualized revenue run rate of ~$170m. But in disclosing that WynnBet had achieved 26,000 FTDs in Arizona in September, he added that the company had decided to pivot and suggested the EBITDA burn would “decline materially” in Q122.

“The current combination of large-scale brand spend, performance marketing spend, and customer bonuses that we see in the marketplace does not drive unit economics that meet our return requirements,” Billings said. 

This is a low: Deutsche Bank suggested the new interactive strategy was “sound”, suggesting the ~$103m of expected Q4 losses would be a high- (low) watermark. “We think there are a few reasons for the decision, most notable of which being the chasing of unprofitable cohorts by competitors,” Deutsche Bank added.

“While we applaud the decision, we are intrigued by what the process of re-engagement looks like,” the Deutsche Bank team added. “As we have previously said, we believe customer acquisition is one piece of the puzzle, but customer retention is an entirely different and ongoing matter, as is often the case in a commodity business.”

Let them eat bet slips: “We had a buffet that was losing $12m a year, so we ripped it out when we were shut down and we built probably the world's best sports bar that, once Massachusetts legalizes sports-betting, it'll be the best sportsbook on the east coast, hands-down.”

Matt Maddox talking about the remodeling at the Boston Encore.

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Scientific Games Q3

The top line 

• Revenues up 25% to $539m and 18% YoY,  to $824m when combined with revenues from discontinued operations. Aaj, EBITDA of up 74% to $203m ($332m when including $129m from discontinued operations) vs. $235m combined revenues in Q320. 

• Deleverage strategy brought in $7bn thanks to lottery and OpenBet sales, helping the company to pay down $635m of debt since Oct20, reducing debt leverage to 6.6x vs.10.5x at the start of 2021. 

• Generated $187m of Net Cash and $130m FCF in Q3. 

Streamlined portfolio: The sales of the lottery business to ​​Brookfield and of OpenBet to Endeavor will give Scientific Games more speed, “agility” and enable it to focus on “streamlining its digital portfolio”, said CEO Barry Cottle. Truist concurred, describing SG as being “slimmer, lighter and faster” and noting the gains it made in US iGaming. 

Live ramp: With its recent acquisition of Authentic Gaming, the focus is on “the nascent but fast-growing” live casino segment, Cottle said. The launch date of late 2022 for live gaming was questioned, however, and Cottle said this was due to having to integrate and “launch baccarat before the end of the year”, which meant a ramp-up of studio and casino tables.

“That's the piece you have to ramp up and that’s what we’ll do,” Cottle said. 

SciPlay: Revenues at the soon-to-be-incorporated casual gaming unit were down 3% at $146.6m while adj. EBITDA stood at $44.7m. The Gold Fish Casino product saw its fourth consecutive quarter of growth. The company said Q3 was affected by an “isolated event” which affected the Jackpot Party Casino games which was “identified and addressed quickly”.

Earnings in brief 

Melco Resorts and Entertainment: Q3 revenues hit $446.4 million, up 110% YoY. The company said the increase in total operating revenues was primarily attributable to improved performance in all gaming segments and non-gaming operations as a result of a year-over-year increase in inbound tourism in Macau. Operating losses were pared to $182.2 million, compared with US$275.0 in Q320.

FuboTV: Revenues in Q3 were up 156% YoY to $156.7m, advertising revenue grew 147% YoY to $18.6m, net loss was up 61% to $106m and subscriber numbers were up 108% to 944,605, although CEO David Gandler said it had reached $1m subscribers at the time of the release. During the quarter Fubo gained market access in Arizona for sports-betting, the fifth state where it will be active, and launched its sportsbook in Iowa on 3 November.

Raketech: Revenue for Q3 rose 30.4% to €9.6m and adj. EBITDA rose 50% to €4.4m. Recall, yesterday Raketech announced its latest M&A with the buying of a US-facing ‘tipster asset”. This followed on from the purchases in Q3 of the P&P Vegas Group/QM Media and Infinileads deals. The company said non-Nordic revenue reached an all-time high of 40% of total revenues, up from 20% in Q320. Revenues in October rose 46% to €3.8m.

Playtech counterbid

Rodent time again: As was prefigured last week when it had become known there was stake-buying taking place in Playtech on the part of Birmingham FC owner Paul Suen, it was announced on Monday that Gopher Investments, a Hong Kong-based investment entity, has indicated it is willing to trump Aristocrat's offer for Playtech. Gopher has form with Playtech having crashed the original deal to sell the financial arm Finalto. That attempt ultimately appears to have succeeded (deal not yet finalized) and now it appears it wants to repeat the trick.

If not now, Suen: Playtech’s shares are now trading at around the 734p level, above the 680p Aristocrat offer suggesting that others alongside Suen (who has amassed a 3.2% stake) believe they can eke out more value from the counterbid. In the statement, Playtech said Gopher was seeking “certain due diligence information” and that there was no certainty of an offer emerging. Moreover, Aristocrat remains the board’s favored option.

Betting partnerships

BetMGM was quick out of the blocks, announcing a sports-betting partnership with Madison Square Gardens, the owners of the NBA’s Knicks and the NHL’s Rangers. Analysts at Jefferies noted that the partnership was not exclusive and exp[ect more partnerships or be announced soon.

Funding rounds

Parleh game: Parleh Media Group, creators of Canadian-focused sports-betting newsletter The Parleh and Parleh TV, has announced the closing of a C$1m seed funding round led by Benjie Cherniak and Wagers.com’s own Chris Grove. “The rise of open and regulated sports betting markets has created a once-in-a-generation disruption in the business of sports and media,“ said Parleh Media founder Mark Silver. Parleh TV Toronto launched in October to become the city’s first dedicated multi-sport news and information TV channel, available free online 24/7.

Lottery game: Jackpocket has announced a $120m Series D funding round. The lottery app currently has 2.5m active users across 10 US states and it expects to add a further five by the end of Q1. The investment round was led by Left Lane Capital alongside previous backers Greenspring Associates, The Raine Group, Anchor Capital, Gaingels, Conductive Ventures and Blue Run Ventures as well as new backer Santa Barbara Venture Partners. 

Newslines

King Charles: DraftKings and Golden Nugget have announced the intention to open a sportsbook at the Golden Nugget Casino in Lake Charles, Louisiana, pending regulatory approval.

To the moon: A new online gambling games studio Skyrocket has acquired the rights to produce a game based on the Amazon prime hit American Gods. Skyrocket’s ambition is to deliver up to 20 premium branded Slot games per year.

Sustain-ability: Entain is to showcase a range of ESG initiatives and safer betting and gaming efforts at a conference being held in London today. WE+M will report on the event tomorrow.

X Factor: DAZN Group has launched a new innovation hub to be called DAZN X following its acquisition of Israel-based video streaming company Texel. DAZN X will operate as a global business unit across all DAZN’s core markets.

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What we’re reading

On the hook: New Yorkers’ long wait for mobile betting is nearly over.

Listen to the band: The latest proposal in California has the San Miguel Band of Mission Indians behind it.

Musk have: About that Twitter poll Elon.

Calendar

• 10 Nov: Rush Street Interactive 

• 11 Nov: NeoGames, Inspired Entertainment

• 10-11 Nov: WE+M @Betting on Sports Europe

Contact us

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com