Endeavor acquires OpenBet from Scientific Games, states report August gambling data, and other notable stories in the sports betting and iGaming space.
Welcome to the latest edition of "Bet On It," where The Fly looks at news and activity in the sports betting and iGaming space.
SECTOR NEWS: Endeavor Group (EDR) announced an agreement earlier this week to acquire OpenBet, a content, platform and service provider to the sports betting industry, from Scientific Games (SGMS) for $1.2B paid through a combination of $1B in cash and $200M in Endeavor's Class A common stock. The transaction is expected to close in the second quarter of 2022, subject to regulatory consents and approvals, and customary closing conditions. Shares of Endeavor were up nearly 7% on Tuesday after the deal was announced. Jefferies analyst Randal Konik said he likes that Endeavor is expanding its positioning within sports betting "given the attractive margin profile of this business and the industry's favorable growth trajectory. He views the acquisition of what he calls "a leading content, platform, and service provider to the sports betting industry" as a natural fit into Endeavor's flywheel and one that will augment Endeavor's position within the sports betting ecosystem. Konik reiterated a Buy rating and $41 price target on Endeavor shares.
Genius Sports (GENI) announced an expansion of its existing agreement with Entain (GMVHF) and BetMGM (MGM). The new agreement provides Entain and BetMGM with a full NFL offering including official data feeds, sportsbook content and fan engagement solutions. Genius Sports will provide BetMGM's sportsbook customers with a full range of official sportsbook data, content and fan engagement solutions, including a complete suite of NFL-related products.
MGM Resorts announced that the company has entered into a definitive agreement with Blackstone (BX) to acquire the operations of The Cosmopolitan of Las Vegas for cash consideration of $1.63B, subject to customary working capital adjustments. The purchase price represents a multiple of approximately eight times adjusted EBITDA, inclusive of expected operational synergies and identified revenue growth opportunities. Following the close of the transaction, MGM Resorts will enter into a 30-year lease agreement, with three 10-year renewal options, with a partnership among Stonepeak Partners, Cherng Family Trust and Blackstone Real Estate Income Trust, which will acquire The Cosmopolitan's real estate assets. MGM Resorts will pay an initial annual rent of $200M, escalating annually at 2% for the first 15 years and the greater of 2% or the CPI increase thereafter. The transaction is expected to close in the first half of 2022, subject to regulatory approvals and other customary closing conditions.
Churchill Downs (CHDN) announced plans to open a new historical racing machine, or HRM, entertainment venue, Derby City Gaming Downtown, in Louisville, Kentucky. The 43,000-square-foot entertainment venue will be located at 140 South 4th Street, at the corner of South 4th and West Market, diagonal to the Kentucky International Convention Center. Derby City Gaming Downtown will initially include 500 HRMs, a gaming area and over 200 onsite parking spaces. The new entertainment venue will provide guests three bar concepts. A retail and merchandise store will be located on the street level where guests can shop for Kentucky Derby-themed merchandise. Construction on Derby City Gaming Downtown will begin later this year with an anticipated opening date in early 2023. The investment in the new entertainment venue will create 450 jobs for the local economy, including 350 construction jobs and more than 100 new permanent jobs. Separately, Churchill Downs announced that the board approved a $500M share repurchase program. The new share repurchase program replaces the prior $300M program that was authorized in October 2018 and had unused authorization of $97.9M as of September 29. The new share repurchase program includes and is not in addition to any unspent amount remaining under the prior authorization.
BALL GETS ROLLING IN CONNECTICUT: Mohegan Gaming & Entertainment, or MGE, and FanDuel Group, a subsidiary of Flutter Entertainment (PDYPY), announced their launch of a retail sports betting experience for residents and visitors to the state of Connecticut. "To celebrate the launch of sports betting in Connecticut, a temporary Mohegan Sun FanDuel Sportsbook retail location at Bow & Arrow Sports Bar opened to the public at 9:30am ET... MGE and FanDuel will collaborate on the online casino experience under the Mohegan Sun brand, with more details on an official online launch date to be provided soon," the casino operator and sports-tech entertainment company stated. The Mashantucket Pequot Tribal Nation and DraftKings (DKNG) also announced that retail sports betting in Connecticut has begun at Foxwoods Resort Casino. "Players will be able to place bets at the temporary DraftKings Sportsbook at Foxwoods - located at the Ultimate Race Book in Rainmaker Casino - in addition to betting kiosks located across the resort. Statewide, off-reservation online sports betting and iGaming is expected to launch in early October pending regulatory approvals... In the coming weeks, DraftKings and Foxwoods will announce the opening of their permanent retail sportsbook, currently in the final stages of construction," the company said. Additionally, Genius Sports announced that it has been certified by the State of Connecticut, Department of Consumer Affairs, as an Online Gaming Service Provider. With the addition of Connecticut, Genius Sports is now authorized to operate in 17 U.S. states, powering data, streaming, and marketing solutions for sportsbooks and lotteries.
AUGUST FIGURES: Nevada reported August Las Vegas Strip gaming win was up 97.22% compared to 2020 to $625.69M. Colorado sports betting revenue more than doubled to $15.2M in August. Sports wagering revenue in Colorado increased 102.7% year-on-year to $15.2M in August as the state also saw its handle jump 64.8% to $211.9M. In terms of handle, the $211.9M wagered by players in August surpassed the $128.6M spent in the same month last year and was also 16.9% higher than the $181.3m bet in July of this year. Tennessee sports betting revenue fell to a record low of $10.1M in August.
IDA DELAYS LOUISIANA LAUNCH: Hurricane Ida delayed the launch of Louisiana sports betting by about two weeks, Pat Evans of Legal Sports Report noted, citing Louisiana Gaming Control Board chairman Ronnie Johns. October 1 was the initial date, but now the timeframe is uncertain as Johns rushes to get licenses approved The Louisiana State Police Gaming Enforcement Division is reportedly working through 13 applications. The LGCB has given the chairman authority to sign licenses immediately after the state police approves them. “I’m not going to step out and give a time frame, because I don’t want to create a false expectation,” Johns told LSR. “We really want to get this moving and operational as quickly as possible.” Johns added that he intends to approve and announce licenses in batches, instead of rolling them out one-by-one. Licenses can have up to two online sports betting skins, but the mobile aspects is still a couple of months behind the retail aspect. The legislation also grants the Louisiana Lottery a sports betting license. Lottery officials said it will likely launch in January 2022.
FLORIDA LAWSUIT: WTSP 10 Tampa Bay reported that a lawsuit filed on Monday has accused the federal government of circumventing the Florida Constitution by allowing the state to move forward with the gaming compact reached between Governor Ron DeSantis and the Seminole Tribe of Florida. The lawsuit alleges U.S. Secretary of the Interior Deb Haaland allowed the Florida Legislature to violate Amendment 3 of the state's constitution. The amendment was passed by voters in 2018 and gave Florida citizens the right to decide issues related to gambling that occurs off tribal land. The lawsuit also accuses the federal government of violating the Indian Gaming Regulatory Act, the Wire Act and the Unlawful Internet Gambling Enforcement Act by "authorizing gambling outside of Indian lands and by allowing the use of the Internet or interstate payment transmissions where sports betting is illegal." DeSantis has previously said the state and the Seminole Tribe are prepared to vigorously defend the agreement in court.
OH CANADA: A new online sportsbook is expected to launch next year in Saskatchewan following an update to a gambling arrangement between the Prairie province and its First Nations, Geoff Zochodne of Covers reported. This comes after an amended gaming framework agreement between the provincial government and the Federation of Sovereign Indigenous Nations, which represents 74 First Nations in Saskatchewan. The deal reportedly allows for the FSIN-created Saskatchewan Indian Gaming Authority to operate seven casinos in the province, but the amendment now paves the way for the organization to operate an online gambling site as well. According to a press release, the site will likely launch in 2022 and feature both internet-based casino games and online sports betting. A 50-50 revenue-sharing agreement between FSIN and the province is included in the amendment.
PUBLICLY TRADED COMPANIES IN THE SPACE INCLUDE: Accel Entertainment (ACEL), Bally's (BALY), Boyd Gaming (BYD), Caesars (CZR), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Entertainment (PDYPY), Gan Limited (GAN), Genius Sports (GENI), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn National (PENN), Rush Street Interactive (RSI), Scientific Games (SGMS), Score Media (SCR) and Wynn Resorts (WYNN).