Dec15: 888 flogs bingo wing for $50m

888 sell bingo business, PlayUp developments, Tekkorp, Caliente and Playtech news, Gambling.com analyst reaction, Las Vegas Strip dynamics +More

Dec 15

Good morning. This morning 888 signaled a further strategic move ahead of the completion of its William Hill buyout with the sale of its B2C and B2B bingo business to Broadway Gaming for $50m. There is more fallout from the spectacular PlayUp bust up. We have reaction to Gambling.com’s acquisition of RotoWire and finally, there are more analyst thoughts on the Las Vegas Strip post-MGM’s sale of the Mirage.

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888 sells bingo business

The top line

888’s B2C and B2B bingo business to a Broadway Gaming subsidiary Saphalata Holdings for $50m.
The deal is on a cash-free, debt-free basis including a potential earnout of $4m.
B2C and B2B bingo revenues generated revenues of $60m in 2020 and EBITDA of $7.4m.

Three fat ladies: The sale of the bingo wing of 888 came after a strategic review which will see the company concentrate on its core betting and gaming operations and reduce compliance complexity that arose from having related accounts across its entire operation. The transaction includes the entire business including all its exclusive technology, assets, operations, B2B clients and consumer-facing brands. 888 hopes to complete the acquisition of William Hill early next year. As part of that deal, it will be raising $500m through an equity raise which will be completed prior to completion.

Unlucky for some: 888 has a chequered past when it comes to bingo. It bought the Wink Bingo business for £60m in 2009 and the Costa Bingo business in 2019 for £18m. However, in its FY20 results the company reassessed the value of the business and wrote down $79.9m in related goodwill and other intangible assets.

On Broadway: The acquirer runs a number of existing bingo brands including Butler’s Bingo, Dotty Bingo and Bingo Diamond as well as casino brands Casino of Dreams and Lucky247. David Butler, CEO of Broadway Gaming, said he hoped the deal would propel the company towards an “even stronger global footprint” in key regulated markets.

ITMA: Advisers on the deal included Oakvale Capital led by Daniel Burns. Of course.

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PlayUp developments

Blame game: With allegations flying in the media this week, PlayUp has refuted comments made by Laila Mintas with respect to the proceedings. With the matter now before the courts it said it will make no further comment. In an effort to steady the ship, however, it has announced that industry veteran Dennis Drazin will take over as chairman of PlayUp USA.

Senseless: Recall, on Monday Wagers.com Earnings+More broke the news that PlayUp had obtained a temporary restraining order against Mintas for alleged breach of confidentiality, making false statements about the company and causing its $450m sale to FTX to fall through. Mintas issued a statement over the past few days saying “it makes no sense” that she would have “tried to destroy a deal to sell PlayUp as I would have benefited from that as well as all other shareholders”. Mintas is set to file her reply to the PlayUp claims today.

Tekkorp, Caliente and Playtech

The heat is on: According to Sky News, Caliente is in talks with the Tekkorp SPAC fronted by Matt Davey over a $2.5bn merger. The deal complicates the takeover situation revolving around Playtech due to its 49% stake in the Mexican-based business via a joint venture, worth ~$339m according to analysts at Peel Hunt. According to Sky, as part of the merger Caliente would take over Playtech's right to acquire a 49% stake in Calipay, its parent company, thus triggering a payment to shareholders in the UK-based company. The Tekkorp deal will also involve PIPE cash of c$440m provided by Univision and other institutional shareholders.

Fast times: Sky also suggests that the Eddie Jordan and Keith O’Loughlin-fronted JKO vehicle is finalizing the terms of a 750p-a-share offer and are hoping for a Playtech board recommendation. The offer on the table from Aristocrat values Playtech at ~$3.7bn or 680p-a-share.

Las Vegas Strip dynamics

Chicken tonight: Analysts at CBRE suggested MGM’s $1bn-plus sale of the Mirage to Hard Rock was a “winner, winner, Chicken Dinner” deal for all involved, including “bystanders” such as Caesars Entertainment and Wynn Resorts. “Hard Rock prevailed in what was likely another bidding war for a scarce opportunity to gain access to the Strip,” they suggested.

“The beautiful thing about Native American capital is that it is generational and Hard Rock will be able to do this right without concern for short-term ROI hurdles, which is a positive for all of Las Vegas,” the CBRE team added.

Top dollar: Analysts at Truist noted that with the Hard Rock database and brand it could be a “formidable player in the Vegas market once fully open”. They added that they believe the Hard Rock bid was “meaningfully ahead” of the next best bidder. Nevertheless, the CBRE team believes it means that Ceasars will be able to achieve top dollar ($3bn+) for its prospective Strip property sale.

“For Wynn, the impact could be even greater,” they add. “We value Wynn Las Vegas at 15x in our SOTP, but with OpCo and PropCo both trading above that, the potential value that Wynn could unlock in Las Vegas alone could be transformative, especially for an asset that needs no capex and has plenty of excess land for development,” said CBRE.

Gambling.com analyst call

Fly by Wire: On the call for the RotoWire deal yesterday, CEO Charles Gillespie said the acquired business was “ripe for substantial growth”. “We believe we can drive significant incremental traffic via RotoWire’s content plus new traffic by applying affiliate marketing best practice,” he said. Analysts at Truist noted this was the “greatest opportunity” to establish a category-leading OSB affiliate.

Under the radar: The company also revealed it had completed a lesser acquisition, snapping up USBettingReport.com for an undisclosed sum in November. Truist said this was an “under-optimized and monetized sports-betting affiliate site”. On the call, Gillespie also revealed the fruits of the group's recent domain name buys including BetCalifornia.com, BetTexas and Scores.com. Ain’t got Wagers.com though, have they?

Newslines

Torn and frayed: Payment provider Nuvei has defended itself against an attack last week from short-seller Spruce Point Management which alleged various improprieties on the part of Nuvei’s CEO Phil Frayer and top-level executives. An independent board inquiry initiated in the wake of the attack (and subsequent 50%-plus share price collapse) said the claims were “misleading, false or unrelated to Nuvei’s business”. Meanwhile, Nuvei has also announced a partnership with the aforementioned crypto-exchange FTX.

Gauling: Esports Entertainment has completed the full migration of its SportNation.com and Vie.bet iGaming sites to its proprietary Idefix platform. Prior to the migration, both iGaming brands had been on the BetConstruct icasino and sportsbook platforms. The Idefix platform came as part of the Lucky Dino acquisition this time last year.

Dib, dib, dib: Scout Gaming has recruited Niklas Jönsson as CFO of the group. He was previously CFO for Global Gaming 555 and operational CFO for Evolution Gaming Malta.

Fanatical: DFS and esports platform ThriveFantasy has signed a partnership deal with Fanatics enabling Thrive to advertise via Fanatics’ social media platforms.