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: Flutter Entertainment (PDYPY) said on Saturday that it is considering listing a small shareholding of its U.S. online betting site FanDuel, Reuters reported, citing a company statement. The Irish company said it was making the disclosure in response to media speculation after CNBC reported that Flutter was considering spinning out the business, a competitor in the growing U.S. sports betting and iGaming markets. "Options including the listing in the U.S. of a small shareholding in FanDuel are being considered but no decision has been made at this time," Flutter stated, according to Reuters. Fox Sports, owned by Fox Corporation (FOXA), has the option in July to buy 18.5% of FanDuel in addition to its current 2.5% stake, the report noted. Jefferies analyst James Wheatcroft believes that an IPO of FanDuel in the U.S. would be "a major catalyst" for Flutter's share price. The analyst estimates 35% upside to GBP 212, assuming a DraftKings (DKNG) valuation multiple is applied to FanDuel. Wheatcraft told investors that in an ever-consolidating sector, he sees strategic merit from ensuring a valuation multiple comparable to peers, plus the benefit of accelerated debt reduction from any IPO proceeds. He maintained a Buy rating on Flutter's shares.
Penn National (PENN) announced it has received a temporary permit from the Virginia Lottery to offer online sports betting in the Commonwealth of Virginia. Penn National expects to launch its Barstool Sportsbook mobile app on iOS, android and desktop in Virginia in the coming months, pending final regulatory approvals. Also in Virginia, WynnBET, the digital gaming division of Wynn Resorts (WYNN), announced it has launched the WynnBET mobile app after being awarded an online sports betting permit in the state. With the recent announcement from the Virginia Lottery, WynnBET is now a legal gaming operator in the Commonwealth of Virginia, and the WynnBET mobile app has launched for sports betting enthusiasts to register and use throughout the state.
This week, Jefferies analyst David Katz upgraded MGM Resorts to Buy from Hold with a price target of $50, up from $36. The improved macro outlook through FY22 due to forthcoming stimulus and further vaccine roll-out is a "key catalyst" for his call, said Katz, who expects the Las Vegas recovery to steepen in the second half and through FY22 given what he sees as strong pent-up demand for leisure travel. He also cites what he sees as building evidence of BetMGM establishing itself among the leaders in digital gaming, Katz added.
EVERYBODY WINS: Connecticut Governor Ned Lamont, Mashantucket Pequot Tribe Chairman Rodney Butler, and Mohegan Tribe Chairman James Gessner Jr. announced that an agreement has been reached between the Lamont administration and both tribes that will allow the State of Connecticut to modernize gaming options available to state residents, including allowing for sports wagering and online gaming. The agreement will generate tens of millions of dollars in new revenue for the state, while keeping Connecticut competitive with gaming currently being offered or considered in neighboring states, according to a statement. The agreement also provides the inclusion of the Connecticut Lottery Corporation as a partner in the effort to modernize the state's gaming landscape. Key components of the agreement include:
Both tribes have agreed to halt development of an East Windsor casino through the duration of this agreement. “Connecticut is on cusp of providing a modern, technologically advanced gaming experience for our residents, which will be competitive with our neighboring states,” Governor Lamont said. “Our state’s tribal partners have worked with my administration thoughtfully, deliberately, and in a constructive fashion for the past few months, and we have achieved an agreement that is best for Connecticut residents and their respective tribal members. We will work to see it ratified and look forward to doing so through a collaborative effort, to include working with elected leaders in the General Assembly.”
MARCH MADNESS BEGINS: March Madness officially kicked off last night with the four NCAA college basketball play-in games. The tournament, which was cancelled last year due to COVID-19 restrictions, is seen as a potential catalyst for the competitors in the online sports betting market. Jefferies analyst David Katz noted that updated sports betting consumer surveys, with the addition of March Madness specific queries, captured impressions of specific brands and spending trends that supports his favoritism toward DraftKings and FanDuel. The analyst also continues to favor Caesars (CZR) and MGM Resorts, operators that are migrating vertically, as he believes control over time to market, product offerings and economics are "critical" to success. Katz outlined the enthusiasm behind the annual collegiate tournament in the following four points:
The Jefferies analyst told investors in a research note that a majority of users are inclined to stick with one platform, making timing on market entrance and market share gain crucial with promotions and Pricing remaining the top two factors when users are choosing platforms.
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).
Use FLUT
+ (+0.00%)
DraftKings
+5 (+7.40%)
Penn Entertainment
+7.1 (+6.34%)
MGM Resorts
+0.7 (+1.77%)
Caesars
-0.54 (-0.60%)
Accel Entertainment
-0.23 (-2.09%)
Bally's
+0.3 (+0.44%)
Boyd Gaming
+1.65 (+2.71%)
Churchill Downs
+3.9 (+1.63%)
Gan Limited
+0.88 (+3.26%)
Las Vegas Sands
-0.315 (-0.49%)
Rush Street Interactive
-0.29 (-1.52%)
Scientific Games
+1.15 (+2.69%)
Score Media
+0.45 (+1.73%)
William Hill
+ (+0.00%)
Wynn Resorts
-0.59 (-0.44%)