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: Elys Game Technology (ELYS) announced an agreement with Petworth Wagering to operate a sportsbook at Entitlement Restaurant and Cigar Lounge located at 829 Upshur Street NW, in Washington D.C. The company's wholly owned subsidiary USBookmaking, is expected to provide sport wagering and bookmaking services to manage the sportsbook risk. If successfully licensed, Entitlement will become the fifth restaurant and bar in Washington, DC where patrons could enjoy sports wagering on the Elys sportsbook system in the comfort a social establishment. The agreement has an initial term of three years from the date of issuance of the license with two possible extensions of 2 years each.
Earlier in the week, Elys announced the agreement to operate the BetDupont sportsbook with District Hospitality located at 1813 M St. NW in Washington D.C. BetDupont, situated in the Dupont Circle area of Washington, DC, is a lounge bar featuring table and cigar service and full-service Mediterranean/American fusion dining experience.
Boyd Gaming (BYD) announced that its board of directors has authorized a $500M increase to the company's existing share repurchase program. The authorization will allow the company to continue share repurchases as the company concludes its previous repurchase authorizations, totaling $361M. CEO Keith Smith says: "This additional share repurchase authorization further reinforces our commitment to pursuing a balanced, robust capital return program. We intend to maintain repurchase activity of approximately $100M per quarter, augmented from time to time by opportunistic repurchases."
Bragg Gaming (BRAG) has completed its previously announced acquisition of Spin Games in a cash and stock transaction valued at approximately $30M. The Spin Games acquisition provides for a differentiated and widely distributed iGaming product offering and accelerates Bragg's North American growth, Bragg said in a statement. Bragg will immediately leverage Spin's U.S. iGaming relationships to introduce new proprietary and exclusive third-party online casino content developed to address the preferences of U.S. and Canadian players and to cross-sell its existing player-popular European casino content, it added.
Caesars Sportsbook (CZR), the official online wagering platform of the New York Racing Association, announced the new horse racing account wagering app, Caesars Racebook, is officially live in Florida and Ohio with plans to add additional states throughout the year. "The launch of Caesars Racebook is an important milestone as we continue to add wagering opportunities for our customers and livestreaming content for the first time... We look forward to welcoming new horse racing customers and existing fans onto the platform and to working with NYRA Bets to grow horse racing as we deploy Caesars Racebook with plans to launch in about 30 states across the country," said Dan Shapiro, Senior Vice President and Chief Development Officer of Caesars Digital.
Macau's gaming bureau reported May gross revenue from games of fortune in the region was down 68.0% year-over-year to 3.341B patacas. Publicly traded companies in the Macau gaming space include Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN) and Melco Resorts (MLCO).
Churchill Downs (CHDN) announced that Katherine Armstrong has been named senior VP of human resources for the company. Armstrong assumes the role from Chuck Kenyon who announced his retirement after 18 years of leading CDI's Human Resources department. Since April 2021, Armstrong has served as VP of culture for CDI.
Citi analyst Jason Bazinet lowered the firm's price target on DraftKings (DKNG) to $28 from $35 and maintained a Buy rating on the shares. The target drop reflects slightly lower active accounts and a lower target enterprise value per account following the company's Q1 results, Bazinet told investors in a research note. However, the analyst continues to view DraftKings as a leading operator in the "fast-growing" U.S. betting market.
SCORE NO MORE: In a matter of weeks, Toronto-based TheScore Bet will exit operations in the U.S. online sports betting business. This affects New Jersey, Colorado, Indiana and Iowa. 'Since Penn’s (PENN) acquisition of theScore, the company’s plan has been to lead with Barstool Sportsbook in the U.S. and theScore Bet in Canada, given our strong brand equity there,” theScore president and COO Benjie Levy said in a statement. “With theScore Bet launched and thriving in Ontario, and as we approach a major undertaking this summer with the launch of our proprietary risk and trading service, the timing is right to focus our U.S. efforts on marketing Barstool Sportsbook and our Canadian efforts on marketing theScore Bet. This move enables us to maximize the value of both brands through our organic media and gaming approach. Key to our strategy is integrating theScore media app with Barstool Sportsbook in the U.S., which we’re currently working towards. Bringing together theScore’s powerful sports media platform with Barstool Sportsbook, supported by our in-house technology will strengthen the overall U.S. product offering and broaden its reach.”
NEW YEAR, NEW OHIO: The Ohio Casino Control Commission has announced that the universal start date for sports gaming will be January 1, 2023. The bill requires all forms of sports gaming be allowed to start accepting wagers on the same date. Currently, the Commission is working through the rules, applications, forms, systems, and other items necessary to implement the bill’s provisions and has announced a timeline for applications, compliance materials and the sports gaming universal start date. The Commission will continue to provide updates as they become available. The Commission said, "As the Commission receives applications, a list of applicants for Type-A, -B, and -C Proprietors and Services Providers will be made available on that webpage on a rolling basis. A public lookup for applicants for other types of licenses will be made available in August when the state’s eLicense system is updated for sports gaming. Please note that most information provided in these applications is confidential and not subject to public disclosure. R.C. 3775.14."
NEW YORK SETS RECORD TAX REVENUE: Governor Kathy Hochul announced that New York's recently launched mobile sports wagering has generated a record-breaking amount of tax revenue in less than six months, surpassing states that have offered sports wagering for years. According to New York State data, the state has generated over $267M from sports wagering since January 2022. Mobile sports wagering accounted for $263M since January 8, and sports wagering at New York's four commercial casinos made up $4.3M of total revenue since July 2019. According to reports, New York has collected more in sports wagering revenue in five months than the total revenue any other state has generated over several years. This includes Pennsylvania, which has collected $253M in sports wagering revenue since November 2018, and New Jersey, which has generated $229M since June 2018. "In less than half a year, New York has become a leader among states in implementing successful gaming policies, with hundreds of millions of dollars going to important programs that will improve the lives of all New Yorkers," Governor Hochul said. "I am committed to upholding responsible and effective gaming policies that will move the industry forward and continue to drive our state's economic growth." New York State Gaming Commission Executive Director Robert Williams said, "These numbers further prove that New York's gaming industry is robust thanks to the implementation of effective gaming regulation and the actions of responsible sports wagering operators. The results — hundreds of millions of dollars in revenue in less than six months of operation — speak for themselves." Assemblymember Gary Pretlow, Committee Chair on Racing and Wagering said, "Back in March I was quoted as saying, 'We are well on the way to being the sports betting capital of the world.' Mobile sports betting is an economic engine for New York. I am ecstatic with the revenue that has been generated for education, youth sports and problem gambling." According to GeoComply, a software firm used by sports books to ensure geolocation requirements, over 2.7M unique player accounts have been created since January, conducting more than 620M transactions.
NOT EVERYONE CAN WIN: According to Legal Sports Report's Brad Allen, the tax structure and competition in New York sports betting has been weighing on sportsbooks. Caesars, BetMGM and Bally's (BALY) have all felt impacts from the sky high tax rates in the Empire State. “Yeah, of course they weren’t going to make money,” Shaun Kelley, an analyst at Bank of America, told LSR. “It’s not rocket science on the numbers. Anyone who knew gaming knew they weren’t going to make money.” Despite the haul sportsbooks are sending to the government, New York has already generated the most sports betting tax dollars of any state at around $267M. While there are hopes among some that New York will agree to a lower tax rate in 2023, reportedly some operators are fine with forking up the cash so long as it's less aggressive spending peers are discouraged from the market.
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) and Wynn Resorts (WYNN).