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: Churchill Downs (CHDN) announced that the Indiana Gaming Commission, IGC, selected the company's application for a casino owner's license, submitted by its wholly-owned subsidiary CDITH, to develop the Queen of Terre Haute Casino Resort in Vigo County, Indiana. The IGC unanimously voted to grant CDITH the sole Certificate of Suitability following a competitive proposal process that included applications from three other bidders. CDI's plan includes a $240M investment that will feature 1,000 slot machines, 50 table games, a 125-room luxury hotel, a TwinSpires Sportsbook and several food & beverage offerings. The IGC will officially award CDITH the casino owner's license to operate an inland casino in Vigo County upon the final affirmation of the pending nonrenewal of the prior license holder. After Churchill Downs made the announcement, Jefferies analyst David Katz said the planned Queen of Terre Haute Casino Resort would "add incremental value to the already robust pipeline" as it furthers the expansion of the company's regional casino network and provides incremental digital opportunity as well. The opportunity supports his view that the recent dip in the shares is a buying opportunity, said Katz, who reiterated a Buy rating and $283 price target on Churchill Downs shares.
Madison Square Garden Sports (MSGS) and Madison Square Garden Entertainment (MSGE) announced a multi-year marketing partnership with Caesars Sportsbook, an entity of Caesars (CZR), making Caesars Sportsbook an Official Sports Betting Partner of the New York Knicks, New York Rangers, Madison Square Garden Arena and MSG Networks. In addition, the sportsbook operator will also gain digital media exposure across MSG Sports' and MSG Entertainment's platforms, as well as MSG and hospitality experiences that will be available to Caesars Rewards program customers. Caesars Sportsbook will have a hospitality space inside Madison Square Garden that will be open for all Knicks and Rangers games, as well as additional select events. Caesars Rewards members will have an opportunity to access the space, which will undergo a full refurbishment leading into the 2022-23 Knicks and Rangers seasons. "Through this partnership with Caesars Sportsbook, a part of the largest gaming and entertainment company in the US, MSG Networks and Caesars Sportsbook will also launch a new content series on MSG Networks and its social media channels featuring JB Smoove. Caesars Sportsbook will receive exposure inside Madison Square Garden, including TV visible signage, in-arena LED messaging, GardenVision features and activations on the court and ice during Knicks and Rangers games. Digital boards outside of Madison Square Garden and in the new Moynihan Train Hall will also feature Caesars Sportsbook branding on display to the millions of people who walk by every day," the companies said.
Based upon filings with the New Jersey Division of Gaming Enforcement, total gaming revenue reported by casinos, racetracks, and their partners for October was $448.7M compared to $338.1M in October 2020, reflecting a 32.7% increase. Casino win for October was $237.5M compared to $186.1M in October 2020. Internet gaming win as reported by casinos and their partners was $127M in October compared to $93.5M in the prior period, reflecting an increase of 35.9%. Sports wagering gross revenue as reported by casinos, racetracks, and their partners was $84.2M for the month. For the year-to-date period, the industry's total gaming revenue reported by casinos, racetracks, and their partners was $3.89B compared to $2.28B, reflecting an increase of 70.8%. Sports wagering gross revenue as reported by casinos, racetracks, and their partners was $641.9M. Casino win for the period was $2.14B.
DraftKings (DKNG) and FanDuel (PDYPY) have already begun the process of becoming sportsbook operators in Nevada, PlayUSA's Brant James reported on Tuesday. A public records request by PlayUSA found that both national sports betting, online casino and daily fantasy sports companies have applied for gaming licenses with the Nevada Gaming Control Board. Spokespersons at the Nevada Gaming Control Board termed those applications "pending" and confirmed neither have been completed to allow for review and approval of the board, the author noted.
Also, DraftKings announced a new deal with FaZe Clan, becoming the Official Sports Betting, iGaming, Daily Fantasy, and Free-to-Play Partner of the gaming, lifestyle and media platform. Upcoming content activations will feature several of FaZe Clan's content creators, including FaZe Adapt, FaZe Temperrr, FaZe Nate Hill, FaZe Swagg, Nuke Squad and more. As part of the deal, DraftKings will appear across FaZe's digital content ecosystem, including custom content, livestream and tournament events, plus new IP and formats highlighted by original series and a new planned podcast. Also, DraftKings will have a presence at upcoming FaZe Clan events with access to FaZe Clan talent, as well as a variety of digital and social media content.
BET ESPN: Roth Capital analyst Edward Engel told investors in a research note that ESPN's interest in online sports betting, or OSB, presents one of the biggest catalysts he sees for online gaming stocks. Disney (DIS) has hinted interest in OSB, where management believes ESPN's media presence offers significant synergies. The analyst believes an announcement of an ESPN sportsbook would send DraftKings shares lower, where he'd expect material cannibalization to industry leaders. On the other hand, Engel sees this as a positive catalyst for Rush Street Interactive (RSI), given his view that an RSI takeout provides the best avenue for ESPN attaining market access. Market access is reportedly a key deterrent for ESPN expanding into OSB. For a BetESPN product to achieve scale, it would need to acquire an incumbent, Engel noted. According to the analyst, the most likely targets are RSI and PointsBet (PBTHF). RSI offers market access in more states than PointsBet as of now. Unlike DraftKings, Roth Capital believes Penn National (PENN) would be more insulated from potential ESPN cannibalization, citing user loyalty for the Barstool brand. Additionally, Penn has a sizable opportunity to take share in iGaming, while an ESPN sportsbook would offer limited cannibalization to iGaming-first users Engel contends. The analyst concluded Penn has a sizable opportunity to take share in iGaming, while an ESPN sportsbook would offer limited cannibalization to iGaming-first users.
MASS GAMING COMMISSION TO TAKE CLOSER LOOK: Despite inactivity from the state senate on legislation for the legalization of sports betting, the Massachusetts Gaming Commission on Thursday commissioned a study of sports wagering legalization and insisted it be put on the research team’s front burner, Colin Young of State House News Service reported. Mark Vander Linden, director of research and responsible gaming, recommended, and commissioners zeroed in on, a study of how legal sports betting has been implemented in the nearly three dozen states that have approved it in recent years. “An analysis in this area would be done to take a look at, obviously leveraging [a previous National Council on Problem Gambling] study, looking at other data that may exist in other states, looking at how legalization has been rolled out in those states, and combining that would allow us to have a better understanding of the likely impacts of legalization of sports wagering in Massachusetts, should it be legalized, as well as what would be kind of a guiding path towards measures to mitigate that harm,” Vander Linden said. The lack of action from the Senate has put legal sports betting in flux for Massachusetts because it was easily passed of the House level. Commissioners noted they would be interested in seeing if the SEIGMA research team would be able to complete its study and report before June 30, 2022, which would be the typical deadline for a fiscal year study. “I agree with that. If we could push this study to take a front seat for the team, that would be great,” Vander Linden said. “I can’t speak for them and how their work is being teed up right now, but I will certainly talk to them about this and express that it’s a priority.”
WAITING GAME: Online sports betting in Maryland will likely not launch for another year, Pat Evans of Legal Sports Report reported, citing John Martin, director of the Maryland Lottery and Gaming Control Agency. Retail sports betting could reportedly launch sometime around New Year’s Day, but there is still no actual timetable. The Sports Wagering Application Review Commission can approve five casinos for retail sportsbook licenses Thursday. Those casinos received Maryland Lottery and Gaming Control Commission approval for alternative licensing standards in October. Still, MLGCA has 30 to 45 days for final approvals before the sportsbooks can open, setting a course for right around January 1, 2022. Martin admitted the SWARC has an incredible amount of legal challenges to navigate. “There is no indication,” he said. “They have all the information that they need to make an informed decision. If it doesn’t happen, then we’re waiting at least another week or two. Then it’s asking if we are going to make the playoffs or the Super Bowl? I’d love to help, I just don’t know how we can because so many things are in their court.” There are three casinos among the 17 entities named in Maryland sports betting legislation to automatically qualify for sports betting licenses:
Even Governor Larry Hogan has echoed displeasure at the delay at the SWARC level. “It’s a problem and I’m sure they’re all going to be sued by all the people whose licenses have already been approved,” Hogan told Maryland Matters.
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).
Las Vegas Sands
-0.39 (-1.01%)
MGM Resorts
-0.18 (-0.41%)
Churchill Downs
-2.71 (-1.13%)
MSG Sports
-2.68 (-1.48%)
MSG Entertainment
-3.095 (-4.36%)
Caesars
-1.05 (-1.09%)
DraftKings
-0.595 (-1.63%)
Use FLUT
-0.39 (-0.50%)
Disney
-1.7 (-1.09%)
Rush Street Interactive
-0.39 (-1.84%)
PointsBet
-0.294 (-4.93%)
Penn Entertainment
-0.28 (-0.53%)
Accel Entertainment
-0.37 (-2.94%)
Bally's
-0.82 (-1.83%)
Boyd Gaming
+0.17 (+0.29%)
Gan Limited
-0.53 (-4.65%)
Genius Sports
-0.68 (-4.76%)
Scientific Games
-1.02 (-1.49%)
Score Media
+ (+0.00%)
Wynn Resorts
-0.16 (-0.18%)