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: PlayUp Limited, a global online betting operator, and IG Acquisition (IGAC), a publicly-traded special purpose acquisition company, announced Thursday that they have entered into a business combination agreement and accompanying scheme implementation deed pursuant to which PlayUp will list on the Nasdaq via a newly-formed Irish company. The transaction values PlayUp at $350M. The transaction is expected to close in the first quarter of 2023 subject to the satisfaction of customary closing conditions. PlayUp holds online betting licenses in multiple jurisdictions and currently operates in Australia, New Zealand, India and several regulated states in the U.S. "Currently, there is no platform that allows consumers to access every type of betting product through one single sign on. Generally, industry competitors have chosen to focus on one product or another. IGAC and PlayUp have the same shared vision: to bring the global online betting industry the most comprehensive suite of traditional and innovative betting products from all over the globe together into one app. The transaction is expected to provide PlayUp with access to fresh capital to continue expanding its vision of a true single destination for the future of online betting," said Christian Goode, CEO of IGAC.
Elys Game Technology (ELYS) announced that the partnership with Wright Bet in Ohio has surpassed 50 "Type C" retail host locations that have agreed to install Elys' sports wagering solution, exceeding the company's initial expectations for the first month. Elys has submitted its Type C application and is currently following OCCC protocols to complete outstanding items. The launch of sports wagering in the state of Ohio is subject to regulatory approval, and all required licenses must be approved by the Ohio Casino Control Commission.
In a tweet, iGaming NEXT's Ryan Butler said that, "Barstool Sportsbook has been approved to launch online in Ohio Jan. 1, 2023; all four $PENN Entertainment (PENN) casinos in the state are also expected to open in-person
BetMGM, a sports betting and gaming entertainment partnership between MGM Resorts International (MGM) and Entain Plc (GMVHF), and Comcast's (CMCSA) NBC Sports announced a new partnership for the 2022 NFL season highlighted by weekly integrations on Football Night in America and content across other NBC Sports platforms. "It is a tremendous opportunity to partner with the talented team at NBC Sports and have the ability to engage with football fans nationwide. We look forward to delivering NBC viewers our BetMGM trading team insights as well as entertaining segments that showcase the excitement of betting with BetMGM," said Matt Prevost, Chief Revenue Officer, BetMGM.
Bragg Gaming (BRAG) announced that it has entered into an iGaming content development partnership with Bally's Interactive, the digital arm of Bally's (BALY). Pursuant to the agreement, Bally's Interactive online brands such as Virgin Casino, JackpotJoy and Vera&John, will launch content from Bragg's proprietary slots studios, including Atomic Slot Lab and Indigo Magic, as well as from a range of exclusive proprietary and third-party titles from Bragg's existing and future portfolio. In addition, Bragg will distribute titles on an exclusive basis via the company's Remote Game Server from a select number of Bally's Interactive's third-party partner studios.
Hong Kong leader John Lee said on Tuesday the government aims to make an announcement soon on its Covid-19 hotel quarantine policy for all arrivals, as it wants to keep the city connected with the rest of the world and allow an "orderly opening up," Reuters' Farah Master and Anne Marie Roantree reported. Lee said he was conscious Hong Kong needed to retain its competitiveness, adding that authorities were keen to bring back events and activities to the city. Publicly traded companies that may be impacted by the news include Las Vegas Sands (LVS), MGM Resorts, Melco Resorts & Entertainment (MLCO), and Wynn Resorts (WYNN)
Earlier in the week it was announced that Invitation Homes replaced Penn Entertainment in S&P 500 at open on September 19th.
STATE UPDATE: On Friday, New Jersey's Division of Gaming Enforcement reported that based upon filings with the Division, total gaming revenue reported by casinos, racetracks, and their partners was $470.7M for August, reflecting a 10.1% increase from $427.7M reported in August 2021. Total casino win for the nine casino hotel properties was $274.0M for August 2022, reflecting growth of 4.4% compared to $262.4M for August 2021. For the month of August, internet gaming win reported by casinos and their partners was $131.4M, reflecting growth of 16.1% compared to $113.2M for the prior period. Sports wagering gross revenue reported by casinos, racetracks, and their partners was $65.3M for August 2022, reflecting a 25.5% increase when compared to $52.0M in the prior period.
Michigan commercial and tribal operators reported $154.9M in combined total gross gaming receipts in August, a 4.5% increase from July results, according to Benchmark analyst Mike Hickey. Online casinos and online sports betting contributed 96% of the total gross receipts reported in August. Online sports betting handle of $218.8M was up 6% month-over-month after reporting a record $496.8M back in January of this year. Michigan welcomed new operator Gan Limited (GAN) back in April. Michigan market share leaders include, DraftKings, FanDuel (PDYPY) and BetMGM.
Handle and gross gaming revenue grew in Pennsylvania by 5% and 73% respectively year-over-year.
BET RESPONSIBLY: The largest online gaming operators in the U.S. have come together to agree to the first industry-led responsible gaming standards. The 12-point pledge is a commitment to principles of responsible online gaming and are recommended as the principles for an industry benchmark. The announcement coincides with this month’s designation as Responsible Gaming Education Month by the American Gaming Association. The collaboration includes Bally’s Corporation, BetMGM, DraftKings, Entain, FanDuel, and MGM Resorts. The 12 principles are derived from four core attributes:
SPORTS ARE BACK: Susquehanna analyst Joseph Stauff told investors in a research note that with online sports betting, or OSB, promotional offers down 7% week-over-week, and down over 70% year-over-year, combined with a favorable month to date September sports-win rate for bookmakers, there is one more weekend of games before one can comfortably expect Q3 earnings for OSB-led platforms to outperform expectations. The analyst added that investor interest and bid-strength are rising for the largest operators only. but is well below a consensus-call, and with that favorable investor sentiment as the current backdrop, he'd expect the stocks with relevant OSB-led digital offerings to continue to move upwards as additional favorable fundamental trends occur. He considers the best stocks in the space to be DraftKings, Penn Entertainment and Flutter Entertainment.
SLOW YOUR ROLL: Governor Mike Parson ended efforts by the Missouri House to legalize sports betting. on Monday as lawmakers are back in the Capitol as part of a special session called by the governor to deal with a cut in state income tax rates, Kurt Erickson of the St. Louis Post-Dispatch reported. Parson spokeswoman Kelli Jones said that sports betting legislation is not relevant to the subject of the special session. “Sports betting is clearly beyond the call and does not relate to Governor Parson’s topics in the call. I do not anticipate sports betting being a part of special session,” Jones said. These comments came hours before a House panel was set to debate the latest version of a sports wagering package.
LOST IN TRANSLATION: Sports betting in Massachusetts is moving slower than expected due to a wording mistake in the enabling legislation, Matthew Waters of Legal Sports Report wrote. However, it is speculated that the issue can be fixed quickly. Representative Dave Muradian, who helped create the final Massachusetts sports betting bill that cleared the legislature in the dead of night, confirmed a quick legislative fix is expected to LSR on Friday. Reportedly, the Massachusetts Gaming Commission reached out to the legislature about the issue. Specifically, the language around temporary licenses is holding up the rollout of Massachusetts sportsbooks, the MGC confirmed. There is no limit on how many temporary licenses are allowed in HB 5164. The requirements are for the applicant to be a qualified gaming entity and to pay a $1M temporary license fee. The language also says the commission “shall” authorize the applicant to offer sports betting, leaving no wiggle room. The commission held a roundtable with online operators Thursday. They are asked to answer if they are still interested in a temporary license given the new information.
ANALYST COMMENTARY: JMP Securities analyst Jordan Bender initiated coverage of Boyd Gaming (BYD) with an Outperform rating and $65 price target. The analyst sees a "disconnect" between the stock's valuation and gaming fundamentals. Macro factors in Nevada, such as home prices and taxable sales, remain healthy, supporting a strong spend per head in the locals/downtown market where the company generates 39% of its earnings, Bender told investors. The analyst says Nevada has proven to be one of the healthiest gaming markets.
Roth Capital analyst Edward Engel initiated coverage of Bragg Gaming (BRAG) with a Buy rating and a $9 price target. The analyst noted that Bragg is an emerging leader among B2B iGaming suppliers, where it develops and distributes iCasino content and technology to B2C operators. After recent M&A and licensing gains, Bragg now has the distribution needed for ramping market share in regulated markets, Engel added. Combined with an expanded portfolio of high performing games and tech, the analyst models EBITDA doubling from 2022-2024 and Bragg 's valuation rerating towards pure-play B2B iGaming peers.
Citi analyst Monique Pollard downgraded Flutter Entertainment to Neutral from Buy with a 11,500 GBp price target. The analyst sees downside to Q3 earnings estimates and a "stretched" balance sheet for the company. Pollard views Q3 as a "pivotal point" for European internet "where the market increases focus on earnings and cash flow as consumer pressures rise."
H.C. Wainwright analyst Scott Buck lowered the firm's price target on Elys Game Technology to $2 from $3 and maintained a Buy rating on the shares after meeting with management. The analyst says the company has an attractive positioning in the "hyper-competitive" sports wagering industry.
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 Entertainment (PENN), Rush Street Interactive (RSI) and Wynn Resorts (WYNN).
IG Acquisition
+0.005 (+0.05%)
Elys Game Technology
+
Penn Entertainment
-0.32 (-1.20%)
MGM Resorts
-0.55 (-1.80%)
Entain
+ (+0.00%)
Comcast
-0.65 (-2.00%)
Comcast
+ (+0.00%)
Bragg Gaming
-0.25 (-5.46%)
Bally's
-0.715 (-3.41%)
Las Vegas Sands
+0.12 (+0.34%)
Melco Resorts
+0.045 (+0.86%)
Wynn Resorts
-0.74 (-1.23%)
Use FLUT
-1.39 (-2.47%)
Boyd Gaming
-1.59 (-3.27%)
Accel Entertainment
-0.13 (-1.62%)
Caesars
-2.665 (-7.08%)
Churchill Downs
-3.15 (-1.71%)
Gan Limited
-0.05 (-2.27%)
Genius Sports
-0.23 (-5.83%)
Rush Street Interactive
-0.295 (-6.82%)