Nevada Gaming board reduces maximum casino occupancy, Ohio flirts with legal sports betting in 2020, and other notable stories in the sports betting and iGaming space
Welcome to The Fly's latest edition of "Bet On It," where we look at news and activity in the sports betting and iGaming space.
SECTOR NEWS: The Nevada Gaming Control Board issued an industry notice to amend the "Health and Safety Policies for the Resumption of Gaming Operations: Nonrestricted Licensees" that states to meet its obligation under section 35 of Governor Sisolak's Emergency Directive 021, licensees must reduce the maximum occupancy on the gaming floors and other gaming areas to 25% of its maximum capacity assigned to it by local building and fire codes. Pursuant to section 16 of Emergency Directive 035, food and beverage establishments may operate at no more
than 25% of their maximum capacities. If a food and beverage establishment has only one certificate of occupancy, both indoor and outdoor dining patrons count towards the 25% capacity limit. Pools and retail establishments may remain in operation at
50% of their maximum capacities.
"Licensees' plans that have been granted approval by the Board with variances for partitions at gaming tables, partitions between gaming machines, and other such variances will remain in effect under the restrictions imposed by Emergency Directive 035," the notice stated. Publicly traded casino companies include Boyd Gaming (BYD), Caesars (CZR), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn National (PENN), and Wynn Resorts (WYNN).
Caesars shares had already started to see an impact from increased restrictions as Morgan Stanley analyst Thomas Allen downgraded the stock to Equal Weight from Overweight with a price target of $67, down from $68. While he sees Caesars with attractive long-term opportunities in sports betting and online gambling, he sees near-term earnings risk from rising COVID-related restrictions, Allen told investors. The states of Illinois, Michigan, New Mexico and Rhode Island have closed casinos in the past few weeks, while Connecticut, Iowa, Indiana, Maine, Massachusetts, New Jersey, New York, Nevada, and Ohio have recently increased restrictions, the analyst noted.
Benchmark analyst Mike Hickey raised the firm's price target on dMY Technology Group (DMYT) to $21 from $20 and maintained a Buy rating on the shares after Rush Street Interactive, or RSI, beat Q3 sales and adjusted EBITDA expectations and raised its FY20 revenue forecast by 20%. RSI maintained a market leadership position in October for online casino and delivered sequential growth in online sports betting handle in Pennsylvania, noted Hickey, who added that he anticipates Michigan will open for both online casino and online sports betting in FY21. He also believes RSI will "de-SPAC" by late December.
OHIO 50/50 ON LEGAL SPORTS BETTING BEFORE 2021: WKBN reported that there is a chance legal sports betting could get done in Ohio before the end of the year. Trumbull County State Senator Sean O’Brien, one of the architects of Senate Bill 11, said that chances the bill passes before the year ends are 50/50. He also noted that the bill has underwent numerous changes since its introduction nearly two years ago. According to O’Brien, sports gambling in Ohio would be run by the casino commission, and only the 15 existing casinos and racinos will be eligible for licenses.
The initial fee would be $100,000 for five years and net revenues would be taxed 8%-10%. Each casino would reportedly have two skins, meaning locations where bets could be placed. WKBN noted that one skin would likely be the actual casino or racino and the other skin would likely be used for an online betting site that could be used only within Ohio itself. “I talked with the president of the Senate today. He seems optimistic we’ll be able to get something moving and back over to the House. So it’s looking promising but time is of the essence. We’re almost at the end of our legislative calendar so it’s going to be a close one,” O’Brien told WKBN.
SPORTS BETTING ABROAD: The Government of Canada is acting to decriminalize single event sport betting in Canada, the Department of Justice Canada announced. Honourable David Lametti, Minister of Justice and Attorney General of Canada, introduced proposed legislative amendments that would permit provinces and territories to regulate and license single event sport betting on any sporting event except horse racing. He added: "The federal government would maintain its role in overseeing pari-mutuel betting on horse racing. The proposed amendments would give provinces and territories the discretion to manage single event sport betting in their respective jurisdictions and offer Canadians an opportunity to place bets in a regulated environment either online or in physical facilities."
Jeffries analyst James Wheatcroft anticipates positive implications for Flutter Entertainment (PDYPY) given that FanDuel already has a daily fantasy sports presence in Canada.
Mike Johnson of Gambling News reported India’s Minister of State for Finance Anurag Singh Thakur and a former president of the Board of Cricket Control in India outlined a new initiative for the legalization of sports betting in India. According to Thakur, legalization would curb match-fixing in cricket, which is widely popular in India. He said the legalization of sports betting on cricket contests and other activities are a way past these corrupt practices. He also noted the additional tax revenue India would gain from legalization. “If we look at the problem of match-fixing, then the trends in betting can give us leads on whether something unholy is happening or not. Betting can become a potent tool to stop fixing.”
Kotak Mahindra Asset Management Company Director Nilesh Shah told Gambling News.
PUBLICLY TRADED COMPANIES IN THE SPACE INCLUDE: Bally's (BALY), Boyd Gaming (BYD), Caesars (CZR), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Entertainment (PDYPY), Gan Limited (GAN), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn National (PENN), William Hill (WIMHY) and Wynn Resorts (WYNN).