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: Wynn Resorts (WYNN), Bally's Corporation (BALY) and Las Vegas Sands (LVS) are all quietly preparing to contend for a New York City-area casino license as Albany is expected to issue a request for proposals as soon as next month, the New York Post's Josh Kosman and Carl Campanile reported, citing sources. Efforts have included discussions with possible developer partners and pursuing local politicians for support. Despite cashing out on its Las Vegas properties in a move considered to be a shift of focus towards Asia, Las Vegas Sands CEO Robert Goldstein told the NYP, “We are eager to bring our expertise and resources to New York - a move that could bring needed revenue, thousands of jobs and help rebuild the state from the devastating effects of COVID. And we don’t need any subsidies to do it.” The company recently fetched $6.2B for its Vegas properties.
Penn National (PENN) announced that following the approval of its application to offer online sports wagering in Illinois by the Illinois Gaming Board, the company launched its Barstool Sportsbook mobile app on iOS and Android, as well as for desktop users. "We are extremely excited to launch our online Barstool Sportsbook in Illinois just as the college basketball regular season wraps up and bettors begin their preparations for March Madness," said Jay Snowden, president and CEO of Penn National.
DRAFT KINGS INVESTOR DAY: DraftKings (DKNG) held in its virtual investor day on Tuesday with a number of analyst coming away with raised target prices. Following the webcast and ensuing analyst commentary, shares of the company were up. DraftKings mentioned it has a 30% share in online sports betting and 19% share in iGaming and predicts those two markets could potentially be worth at least $67B. Morgan Stanley analyst Thomas Allen noted that DraftKings' investor day furthered his belief that scale will "differentiate" the winners in the U.S. sports betting and iGaming market. The analyst told investors in a research note that DraftKings' tech is already built to enter new markets quickly because of daily fantasy sports, hence the company already being live in the most states with 12, adding that only six operators are in greater than five states. Allen also said that the company already has a greater than 15% share in iGaming in every state it operates, and he projects greater than 20% in states excluding New Jersey. Craig-Hallum analyst Ryan Sigdahl commented that DraftKings' investor day reinforced his thesis that the company will be "a long-term winner with A+ management, strong unaided brand awareness, DFS database, product innovation, and first mover advantage with scale." He believes DraftKings is making the biggest investments in marketing, user acquisition, data science and technology to be one of the few operators with majority of market share. The analyst also said the stock remains a "must own for growth investors," citing accelerating revenue growth and early innings of a "megatrend" in online gambling over the next decade.
FANDUEL ATOP U.S. MARKET: Despite the long, expansive reach of DraftKings, it is FanDuel (PDYPY) who sits on top of the U.S. market. The operator currently boasts a 40% online sportsbook market share and iGaming share of 20%. "We are bulls of US sports betting and iGaming given potential market size and multi-year growth," Jefferies analyst James Wheatcroft told investors. The analyst noted that more clarity on the permanence of the COVID-accelerated structural shift to online could drive outperformance for Flutter through 2021 and beyond. He noted that the company's valuation appears full, but the opportunity in the U.S. creates material value in the longer term. Earlier this week Boyd Gaming (BYD) and the company announced plans to launch Stardust-branded online casinos in New Jersey and Pennsylvania. FanDuel and Boyd Gaming anticipate launching the Stardust casinos in April, pending final regulatory approval from each state. FanDuel plans to rebrand its existing Betfair Casino in New Jersey under Boyd Gaming's Stardust brand, while launching a Stardust online casino in Pennsylvania.
ACCEL EXCELS IN ILLINOIS: Penn National is not the only company that is experiencing a boon from Illinois, a state that experienced record wagering activity in February. Accel Entertainment (ACEL) is reportedly positioned to capture approximately 27.5% of state-wide net terminal income, or NTI. The Illinois Gaming Board reported monthly net terminal income of $171.5M, up 13%. Northland analyst Greg Gibas has projected NTI for Q1 to be approximately $422M. The analyst believes Accel has the ability to report closer to $116M in Q1 revenue, and consequently raised estimates for FY21 revenue and adjusted EBITDA. Gibas told investors in a research note that Accel is well positioned to take advantage of the rapidly growing distributed gaming industry with its attractive gaming as-a-service business model and he expects the company’s significant backlog, impressive license win rate and disciplined M&A strategy to pave the way for continued growth. He reiterated an Outperform rating and $15 price target on Accel shares.
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), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn National (PENN), Rush Street Interactive (RSI), Scientific Games (SGMS), Score Media (SCR), William Hill (WIMHY) and Wynn Resorts (WYNN).
Wynn Resorts
-0.76 (-0.55%)
Bally's
-1.23 (-1.69%)
Las Vegas Sands
-0.68 (-1.08%)
Penn Entertainment
-0.41 (-0.31%)
DraftKings
+0.13 (+0.18%)
Use FLUT
+ (+0.00%)
Boyd Gaming
-1.69 (-2.58%)
Accel Entertainment
+0.16 (+1.33%)
Caesars
-0.14 (-0.14%)
Churchill Downs
+2.78 (+1.10%)
Gan Limited
+0.4 (+1.46%)
MGM Resorts
-0.22 (-0.56%)
Rush Street Interactive
+0.42 (+2.24%)
Scientific Games
+0.58 (+1.18%)
Score Media
+0.71 (+2.78%)
William Hill
+ (+0.00%)