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: The New York State Court of Appeals reversed an earlier decision that said "daily fantasy sports" were in violation NY State's prohibition on gambling, wrote Bryce Derouin of Gambling.com. Fantasy contests held by FanDuel New York (PDYPY) and DraftKings (DKNG) will be now be legal in NY state, added the story. "New York state is FanDuel's home and our New York customers have enjoyed playing daily fantasy for years," We are pleased that New Yorkers will continue to have access to fantasy sports contests," FanDuel spokesperson Kevin Hennessy said in a statement.
Churchill Downs (CHDN) announced that it has signed a definitive agreement to acquire Chasers Poker Room in Salem, New Hampshire. Chasers is a gaming facility located approximately 30 minutes from downtown Boston that offers poker and a variety of table games. In 2021, New Hampshire authorized existing charitable gaming operators to offer historical horse racing at licensed facilities. Following the closing of the acquisition, CDI plans to develop an expanded charitable gaming facility in Salem to accommodate historical racing machines. Upon closing, New Hampshire will be the fourth state in which CDI operates historical horse racing. CDI currently operates HRMs in Kentucky and will operate HRMs in Virginia and in Louisiana. Under New Hampshire law, a portion of revenue from charitable gaming operations is allocated to nonprofit organizations licensed in the state. The transaction is dependent on usual and customary closing conditions, including the company obtaining approvals from the New Hampshire Lottery Commission. The transaction is expected to close during the second quarter of 2022.
Oryx Gaming, a Bragg Gaming (BRAG) company, agreed to distribute content with local Italian operator Microgame. Pursuant to the partnership, Egyptian Magic, the debut title from Bragg's recently launched Atomic Slot Lab studio, will feature in the selection of games made available to local players. In addition, an initial selection of titles from Oryx's content portfolio will go live with Microgame with more games set to follow. Italy became the first major country in continental Europe to regulate online gambling in 2006 and is now the second largest regulated online market on the continent with expected online casino revenues of $2.3B in 2022, according to H2 Gambling Capital estimates.
In an interview on CNBC, where Jim Chanos revealed a new short position in Coinbase (COIN), he noted he is shorting DraftKings, which he called "one of his favorite shorts." DraftKings' stock has fallen more than 30% this year.
EARNINGS RECAP: Gan Limited (GAN) shares took a hit earlier this week as the company's fourth quarter earnings missed the mark. Dermot Smurfit, CEO of GAN stated: "Our fourth quarter financial results were adversely affected by the volatile sports margin in our B2C segment consistent with other International operators, which was partially offset by continued strong new customer growth. However, our fourth quarter was highlighted by strategically important wins for GAN along with new state launches for clients such as FanDuel in Connecticut and our entrance into Ontario when iGaming and online sports betting officially goes live. We also completed the successful acquisition of Silverback Gaming to further grow our SuperRGS portfolio of original content. We have not lost sight of the fact that we delivered incredibly strong revenue growth in 2021, made numerous strategic steps toward solidifying our future, and are projecting another year of very strong revenue growth as well as much improved profitability as we achieve better scale." While B2C segment results were inconsistent throughout FY21, the company expects an improvement going forward. Looking out to 2022 we envision a year of improved financial performance driven by existing growth in B2C, the launch of Ontario, new state launches in the U.S. and continued momentum behind our key initiatives like SuperRGS, and GAN Sports. We are acutely focused on our profitability in 2022 and have taken decisive actions to improving our profitability metrics and margins. Recent sports wins such as Red Rock Resorts and SuperRGS wins like Entain are demonstrating the value behind the investments we are making in the business and validating the quality of our technology and exclusive content. In addition, we recently took considered legal action to defend our patented intellectual property to ensure that it remains both protected and monetized. We believe our patents are enforceable and we are prepared to take a more proactive approach going forward.” Shares were down around 18% following the earnings announcement.
MARCH SADNESS: Despite an expected record handle for legal sports betting this year, investors in sports betting stocks likely haven't seen the gains they wanted, according to Paul R. La Monica of CNN. DraftKings, FanDuel owner Flutter Entertainment, Caesars, MGM and Penn National (PENN) have all reportedly had their own respective struggles. As LaMonica noted, that's despite 30 states and Washington, DC having legalized sports wagering and coming off of a record-setting NFL playoffs and Super Bowl. Flutter, Caesars, MGM and Penn are down between 6% and 25% in 2022. "There are no profits in the near-term," Tommy Mancuso, co-founder and president of The Bad Investment Company said to CNN. "We're not expecting that for another two or three years." Mancuso expects the industry to mature with time so that companies won't be inclined to offer various incentives in an effort to attract potential gamblers. A bunch of mergers and the weaker players leaving the industry are anticipated, which will allow the gambling giants to generate bigger profits, according to Mancuso.
HOMESTRETCH: The Missouri House preliminarily approved a plan to bring sports betting to the state, Kurt Erickson of St. Louis Post Dispatch reported. .The plan, backed by multiple professional St. Louis sports teams, would allow people to legally wager on college and professional sports for the first time. “It’s been a long time coming,” said Rep. Dan Houx, R-Warrensburg, a sponsor of the measure along with Rep. Phil Christofanelli, R-St. Peters. The plan, which still requires a final vote in the Legislature’s lower chamber, calls for an 8% tax on wagers, which would generate approximately $10M annually based on a fiscal analysis by House analysts.
THOSE OPPOSED: A group of California's biggest cardrooms announced Wednesday their opposition to a tribe-supported initiative that would legalize retail sports betting in tribal casinos, Matthew Waters of Legal Sports Report wrote. Cardrooms want in on legal CA sports betting, but their opposition to the tribal initiative is about more than that. The tribal measure would also give California’s tribes more power to sue the cardrooms for offering certain types of card games. That puts “more than 32,000 jobs, $1.6 billion in wages and $5.5 billion in total economic impact at risk,” Taxpayers Against Special Interest Monopolies said in a Wednesday press release.
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) and Wynn Resorts (WYNN).
Accel Entertainment
-0.19 (-1.45%)
Bally's
-0.6 (-1.95%)
Use BYDDF
+0.155 (+0.27%)
Caesars
-1.78 (-2.25%)
Churchill Downs
-5.375 (-2.36%)
DraftKings
-0.985 (-5.17%)
Use FLUT
-1.2 (-2.02%)
Gan Limited
+0.23 (+4.57%)
Genius Sports
-0.175 (-3.72%)
Las Vegas Sands
-0.725 (-1.82%)
MGM Resorts
-0.175 (-0.42%)
Penn Entertainment
-1.765 (-4.09%)
Rush Street Interactive
-0.93 (-10.53%)
Scientific Games
-1.55 (-2.55%)
Wynn Resorts
-1.445 (-1.78%)
Bragg Gaming
-0.135 (-1.92%)
Coinbase
-3.1 (-1.63%)