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: FuboTV (FUBO) shares saw major volatility this week as so-called "mem stocks" also traded lower. Other high-short-interest names also in focus this week were GameStop (GME), Blue Apron (APRN), and Bed Bath & Beyond (BBBY). Additionally, FuboTV said Friday morning that on August 16, 2022, the Compensation Committee of FuboTV's Board of Directors granted restricted stock unit awards covering an aggregate of 40,283 shares of its common stock to five new non-executive employees to induce them to join FuboTV. The awards were granted under FuboTV's 2022 Employment Inducement Equity Incentive Plan, and vest annually over a four-year period following their grant, subject to continued employment. The awards were granted as employment inducement awards pursuant to the New York Stock Exchange rules.
Meanwhile, Sportradar (SRAD) reported upbeat second quarter revenue and increased its revenue guidance for FY22 above Wall Street estimates. Along with the report, the company said that CFO Alex Gersh has opted to leave the company to accept another position int he U.S. "I appreciate Alex's many contributions to Sportradar and invite you to join me in wishing him well as he embarks on his next chapter," said CEO Carsten Koerl. "We have launched a search for a new CFO, and have named Ulrich Harmuth as interim CFO. Ulrich, who has been with the company since 2013, has served as Chief Strategy Officer since 2020 and has been a member of my management team overseeing corporate development activities, including M&A, strategic partnerships, and ventures. I am confident in Ulrich's leadership to support Sportradar's growth and the continued execution of our financial priorities."
EARNINGS RECAP: Elys Game Technology (ELYS) reported lower-than-expected Q2 revenue on Wednesday, though the company noted that disaggregated sportsbook hold continues to perform in double digits at 16.6% in Q2 compared to 14.8% in Q2-2021. Michele Ciavarella, executive chairman of Elys Game Technology stated: "The first half of 2022 finished strong considering the absence of land-based B2C operations in Italy as well as our continuing technology investments for U.S. facing deployments in D.C. as well as the Ocean Casino Resort in New Jersey. Our mobile and online channels through our Multigioco subsidiary carried outstanding results for the second consecutive profitable quarter in line with the corporate pathway-to-profitability mandate that we set out in Q1 of 2022."
Also releasing Q2 results this week was Gan Limited (GAN), which reported lower-than-expected earnings per share and revenue for the period. Commenting on the results, CEO Dermot Smurfit said, "We continue to make strong progress toward the launch of GAMESTACK 2.0 and GAN Sports in U.S. markets as we position GAN for improved performance in the face of a difficult macroeconomic environment. Our cost saving initiatives and other productivity measures are working and will enhance our long-term profitability profile. Both our B2B and B2C segments continue to demonstrate unique technology and capabilities, as customer adoption and new launches remain on a positive trend. GAN is now licensed in 16 U.S. states, Canada, and has begun the initial stages of entering the Mexican market. We are excited about the momentum behind our key initiatives, such as Super RGS, and the customer feedback surrounding the uniqueness and value of our exclusive gaming content has been highly encouraging and validating. We expect a robust launch schedule for GAN Sports throughout the U.S. in 2023, which will further our position as a leading provider of a true omnichannel gaming experience. We are excited about the prospect of a stronger second half of the year, supported by the FIFA World Cup."
Meanwhile, Genius Sports (GENI) reported upbeat Q2 earnings and revenue and provided FY22 revenue guidance that was just below consensus estimates. Following the report, analysts at Needham and B. Riley raised their price targets on the stock, with B. Riley's David Bain said the company's Q2 results represent a "solid execution" quarter. The analyst added that Genius is his top pick amongst pure-play online gaming companies.
Additionally, Melco Resorts & Entertainment (MLCO) reported sharp year-over-year declines in Q2 earnings and revenue, with chairman and CEO Lawrence Ho saying the results were heavily impacted by the COVID-19 pandemic and restrictions imposed across mainland China and Macau. "Throughout the pandemic, ensuring the health and safety of our Colleagues has been very important, and these continued to be our highest priority through the recent outbreak in Macau," Ho commented. "We very much appreciate the Macau government's expeditious handling and publication of the amendments to the gaming law in June, and the publication of the regulations for the new concession tender. The amended gaming law and the tender regulations provide clear direction for the remainder of the year and set a foundation for a smooth transition to the new concessions. We are committed to Macau, and aligned with the Macau government's vision to further develop Macau and diversify its economy."
OFFICIAL: This week, Kansas Governor Laura Kelly announced that sportsbooks at Kansas’ four state-owned casinos can begin accepting wagers in person and on mobile platforms starting September 1, 2022, and will officially open September 8. Sports wagering, like all gaming in Kansas, is owned by the state and operated by the Kansas Lottery. Under temporary rules and regulations, the state’s four casino gaming partners can begin launching sports betting just in time for the first professional football game on September 8. The four casinos contracted with the state to offer sports wagering through independent platforms are Boot Hill Casino & Resort; Ford County near Dodge City; Kansas Star Casino in Mulvane; Hollywood Casino at Kansas Speedway, Kansas City, KS; and Kansas Crossing Casino & Hotel in Pittsburg.
A week after Massachusetts Governor Charlie Baker signed the sports betting legalization bill into law, the Massachusetts Gaming Commission issued a notice of intent form gauging interest in sports betting licenses in the state. The commission is asking any company interested in any category of license to let the commission know by the end of August.
AWAITING ONLINE SPORTS BETTING: Earlier this week, the Ohio Casino Control Commission said that 200 bars and restaurants in the state have been approved to establish sports gambling kiosks when the state rolls out legal sports betting on January 1, 2023. Roughly 2,500 establishments in the state are eligible to apply, and state lawmakers are encouraging them to do so, according to NBC 4 Columbus.
ANALYST COMMENTARY: On Wednesday, Roth Capital analyst Edward Engel upgraded DraftKings (DKNG) to Buy from Neutral with a price target of $25, up from $18, saying he sees a tactical opportunity to own U.S. iGaming stocks ahead of NFL season. OSB/iGaming stocks have historically outperformed between mid-summer and the start of NFL season, when the sports calendar swings from trough to peak, Engel notes. He also believes investors are buying into the narrative of OSB profitability, after Q2 commentary from FanDuel (PDYPY)/Penn Entertainment (PENN)/Caesars (CZR). While the analyst still expects an intense marketing/promo environment over NFL season, he sees less intensity versus second half of 2021 after Caesars and several fringe operators tapered back in 2022. Engel also thinks a softening macro favors OSB/iGaming stocks as investors rotate into secular growth stories that benefit from a nationwide pull back in ad spend.
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).
Accel Entertainment
-0.26 (-2.47%)
Boyd Gaming
-1.43 (-2.50%)
Churchill Downs
-2.42 (-1.12%)
Caesars
-2.64 (-5.37%)
DraftKings
-1.44 (-7.36%)
Elys Game Technology
+
Eldorado Resorts
+ (+0.00%)
FuboTV
-0.47 (-9.87%)
Gan Limited
-0.12 (-3.82%)
Las Vegas Sands
-0.06 (-0.16%)
MGM Resorts
-0.82 (-2.30%)
Melco Resorts
-0.26 (-4.61%)
Use FLUT
-0.78 (-1.19%)
Penn Entertainment
-1.395 (-3.91%)
Score Media
+ (+0.00%)
Scientific Games
+
Sportradar
-0.65 (-4.97%)
Wynn Resorts
-1.54 (-2.36%)
Bally's
-0.815 (-3.22%)
Golden Nugget Online
+ (+0.00%)