Good morning. The Seminole tribe have gotten over their Florida disappointments by buying themselves a trophy asset on the Las Vegas Strip. Buyer beware: it’s a fixer-upper. Gambling.com Group has announced its long-trailed US acquisition by buying Rotowire. And Betcha Sports gets snapped up by ticketing exchange Vivid Seats.

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MGM sells the Mirage to Hard Rock

The top line

• Sale price is $1.075bn in cash and net proceeds will be approximately $815m

• In FY19 Mirage produced adj. EBITDAR of $154m

• The VICI owned $90m-a-year master lease switches to Hard Rock.

Location, location: The swift sale of the Mirage to Hard Rock - signaled by MGM on its Q3 earnings call - sees the Seminole-owned company take over a casino which, according to the analysts, will need some work. Jefferies suggested the above expectations valuation of ~12.7x EBITDAR was decent given that “considerable capex” of ~$1.5bn will be needed. 

Johnny Guitar: Hard Rock gets to use the Mirage name while it finalizes its plans to rebrand but it has been quick out of the blocks with an artist rendering of its “iconic” guitar looming over the rest of the Strip. VICI is on the hook with the redevelopment loan which Jefferies notes will likely take three years as “planning, approvals and redevelopment evolves”.

Property ladder: In light of the Cosmopolitan buyout in September, the analysts believe this represents a “trade up” for MGM which, according to the Wells Fargo team, now has a “superior” property located next to the Bellagio and CityCenter. Macquarie noted that MGM gets to “walk away” with a clean reporting structure and healthy balance sheet alongside c$11bn of excess liquidity.  

On the block: Jefferies pointed out that further sales on the Strip are likely with Caesars having previously said it is prepping a sale while further older, mid-market properties from MGM and others might also be on the auction block. Macquarie noted the enthusiasm being shown for assets on the Strip.

“Well established and capitalized institutions (Blackstone, Apollo) paying record prices highlights a sustained recovery in the market and the underlying cash flow coming from these assets long term,” said Macquarie.

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Gambling.com buys Rotowire

The top line

• The publisher of Roto Sports has been bought for $27.5m including $20m upfront ($15m cash, $5m shares) with a total $7.5m performance-related earnout.

• The purchase price is set at ~4x Roto Sports’ 2021 revenues.

Fantasy land: The acquisition marks Gambling.com’s entry into the DFS vertical and “is expected to create immediate accretion to fiscal 2022 earnings,” the group said. It will leverage RotoWire’s content library, audience, which includes 100,000 paid subscriptions and 17m unique visitors LTM, and media partnerships to “drive substantial, incremental affiliate revenue” from 2022.

Picks & shovels: In a note published late last week, the analysts at Peel Hunt described the affiliate sector as an “interesting subsector of the gambling sector but somewhat orphaned in the public markets by their small and mid-cap size”. They noted that “affiliates are the picks-and-shovel merchants in the online gambling industry” and “a crucial part of the gambling ecosystem”.

Fertile territory: Peel Hunt says the affiliate TAM could reach $3bn (~10% of overall $30bn US market) and customer acquisition costs are the largest single cost for operators at ~35% of their total costs. With “valuations that do not appear demanding to us” and some affiliates attracting lower ratings than their peers, the affiliate sector “seems fertile territory for consolidation”. However, it also cautions that the estimates for some of the smaller affiliates “may not be up to date”. 

Note: Gambling.com Group will host an analyst call today at 8am ET.

Vivid Seats buys Betcha Sports

I can see clearly: Betcha Sports, the real-money fantasy sports app, has been bought by Vivid Seats for $25m in shares plus up to $40m in a cash-and-equity earnout. Betcha has positioned itself as being a mix of fantasy sports, sports-betting, social media and esports which by our reckoning touches on about as many hot topics as is possible via one app.

Betting and social you say? Vivid Seats is a recently Nasdaq-listed ticketing exchange that floated via a de-SPAC with Horizon Acquisition Corp. with an enterprise value of ~$2bn. In the announcement of the Betcha buyout its spoke about allowing millions of Vivid Seats customers to play fantasy sports in "a new way" which translates into another social-betting function that allows fans and friends to "play and win together".

Quick return: Headed up by Jason Shapiro, Betcha raised $4m in new investment in the summer from a host of betting and gaming angel investors, including 888 founder Eyal Shaked and Tekkorp Capital CEO Matt Davey as well as LA-based venture houses Sinai Ventures and Muse Capital.

Newslines

All-in: Las Vegas is in line to host the 2024 Super Bowl, according to a report in the Las Vegas Review Journal. The decision is pending approval from the NFL owners with an announcement expected tomorrow, Wednesday. A shifting of the schedule to accommodate the NFL’s 17th game plans means the original venue of New Orleans may no longer be available due to a clash with the Mardi Gras.

Sno-job: The Snoqualmie Casino in Washington State has become the first tribal gaming facility in the state to offer on-premise mobile sports betting with a mobile app that utilizes GeoComply’s on-premise mobile solution, PinPoint. 

Accelent: Deutsche Bank issued a by note for VGT operator Accel Entertainment following a 45.3%  rise in VGT revenues to $205.4m in November in the state of Illinois (-6.3% MoM). The Deutsche Bank team estimates that Accel Entertainment recorded ~$59m during the month, a 54% rise vs. 2019 and 7% decrease MoM. VGT numbers increased up ~26%  to 41,472 vs. 2019 and win per day of ~$165 was up ~16% vs. 2019.

It’s ace: Spotlight Sports Group has partnered with Diario AS, the publisher of AS.com, one of the biggest Spanish-language sports websites worldwide, to deliver sports betting content and user engagement technology to readers of AS.com.

What we’re reading

Bermuda triangle: Will ex-PlayUp CEO Laila Mintas show up at her Las Vegas hearing set for Thursday?

Dealbreaker: She described PlayUp’s Australian leadership team “as the deal breaker.”

Squeaky bum time: The meme stock meltdown.

Break point: Will AC casinos really close without a tax break?

Gold top: Certifying SPACs.

Calendar

• Dec 14: Gambling.com analyst call; Sazka Q3 (earnings call the following day)

• Dec 16: New Jersey monthly statistics

Contact us

• Scott Longley scott@clearconcisemedia.com

• Jake Pollard jake@openmediaservices.com