Investors not buoyed by weather-beaten Boyd
Investors not buoyed by weather-beaten Boyd
Below-estimate Boyd, Betsson earnings recap, Churchill Downs’ derby date, Gambling.com shares watch +More
Boyd Gaming blames weather and new competition for earnings miss.
In +More: MGM Osaka funding, BettingJobs’ Jobsboard.
Betsson overcomes issues in Argentina to record Q1 uplift.
Churchill Downs management ‘buoyant’ on paddock project.
Get up and shake the glitter off your clothes.
Weather-beaten Boyd
A passing storm: Boyd Gaming’s shares fell almost 9% in after-hours trading after the company reported below-estimate earnings, with the regionals business hit by poor weather in January and new competition in its Las Vegas Locals business.
“It’s always hard to unpack and understand what’s driving the Nevada numbers,” CEO Kevin Smith told the analysts.
“The retail customer is more economically sensitive to inflation and other changes in the economy.”
🤒 Investors get queasy with Boyd after-hours
Las Vegas by the numbers: Yesterday also saw the release of the March data showing Strip revenues down 1% YoY to $716m, while the Locals market was static at $271m and Downtown fell 13% to $76m.
Boyd by the numbers: Revenue was down less than half a percent to $961m but adj. EBITDA fell by 10% to $331m. The Locals segment EBITDA fell 12.5% to $110m, while Downtown was off by 20% to $18m and the Midwest & South was down 9% to $181m.
The bright spot was online where revenues rose 19% to $146m, although adj. EBITDA was down just under 1% to $20.5m.
The company attributed the revenue rise to FanDuel’s continued strength.
Smith noted the 5% equity investment in FanDuel remained a “valuable strategic and financial asset.”
👀 In downgrading Boyd to a Hold, Deutsche Bank said the only event that could move the dial would be the partial or outright sale of its FanDuel stake.
Throwing rocks: The team at JMP said they believed “trends shifted negatively across several areas of the Las Vegas market” including tough comps and competitive pressure, notably from Red Rock’s Durango opening, with the negatives persisting for the rest of this year. The team added that M&A seemed “unlikely.”
Deutsche Bank suggested, while Durango was adding $18m-$20m per month in GGR to the wider Locals tally, the rest of the market is down mid-single-digits.
We were so much older then: Regionally, DB noted the “surprising” sequential weakness in the Midwest & South segment, adding that while comps might get easier “we struggle to see how the gaming consumer of tomorrow is better than the gaming consumer of yesterday.”
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+More
Signed, sealed, delivered, I’m yours: Aristocrat has completed the $1.2bn acquisition of NeoGames. The all-cash deal was originally announced in May 2023.
Give me all your money: MGM Osaka – the JV between MGM Resorts and Orix Corp in Japan – has secured $3.42bn of funding from a consortium of Japanese banks in order to fund the building of the planned IR. Total funding is expected to come in at over $8bn for a project that is slated to open in 2030.
Genting Malaysia is reported to be in early discussions to build a casino in Forest City, a new city-sized development that will lie between Singapore and Malaysia.
OpenBet is to supply its scalable betting engine and advanced trading system to Australian wagering giant Tabcorp.
Lottery.com has restarted its sweepstakes operations in conjunction with the WinTogether Trust.
Demolition time: Bally’s has secured permission to implode the Tropicana in September or October to make way for the planned MLB ballpark.
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Betsson’s uplift
My oh Milei: Betsson overcame its lowest sportsbook margin for two years and the devaluation of the Argentine peso to record a 32% EBITDA uplift to €71.6m for Q1 2024. Betsson’s Q1 launch in the province of Córdoba means it now services over half of Argentina’s population. However, the new Argentine president’s 50% devaluation in December turned a 25% growth rate in the country to a revenue decline.
The company continues to build its infrastructure in a region that now accounts for 18% of group revenue.
It is preparing for the launch of Peru’s regulated market and completed the migration of its Colombian operation to its own tech stack in Q1.
“We see increased competition in the market, and it’s natural,” said CEO Pontus Lindwall, who promised the company would “beat” all-comers.
By the numbers: Overall group revenue was up 12% YoY to €248m, with casino revenue up 19% and sportsbook down 3% due to unfavorable football results hammering its margin. Revenue from Western Europe increased by 60% due to last June’s €120m acquisition of Belgium’s Betfirst reporting for the first time.
Lindwall shrugged off the threat of a slots ban in the Netherlands as “unlikely” and acclaimed the €27.5m February acquisition of Holland Gaming Technology, which will see Betsson relaunch in the country several years after pulling out of the market.
A payment ban ahead of re-regulation in Finland contributed to a 10% decrease in Betsson’s home Nordic market.
Churchill Downs recap
May the fourth be with you: Ahead of the Kentucky Derby on May 4, management was in buoyant mood on the call, with analysts speaking about the $200m it has spent on its new “transformative” paddock project.
History boys: Meanwhile, its HRM expansions continue in the key markets of Kentucky, where its seventh facility is under construction in Queensboro, and in Virginia where it is working on a $465m greenfield project in Washington D.C.
Bill Carstanjen, CEO, said the success of HRMs was in part down to the “continued trend towards familiarity and acceptance” by customers.
He added that the Exacta acquisition had improved the tech behind the product, helping to “better optimize” the gaming floors.
By the numbers: Revenue rose 6% to $591m, with adj. EBITDA coming in up 9% to $243m. The live and HRM segment saw a 23% adj. EBITDA uplift to $101m, while TwinSpires was up 35% to $39.6m and gaming was down 5% to $123m.
Combination: Carstanjen said Churchill Downs was “rolling with the punches” when it came to the regulatory backdrop in various states with regard to the status/non-status of skill gaming.
“Across the different jurisdictions that we participate in, it’s fairly common to see legislation you like or don’t like in any given [legislative] session,” he added.
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The shares week
Gambling.com: The analysts at B Riley resumed their coverage of the gaming affiliate with a Buy, suggesting it will “outpace” the online gambling sector. Noting the 30%+ fall in the share price since November, the analysts believed the primary reason for investors’ lack of faith was the worry over the impact of Google’s algo updates on Gambling.com’s SEO efforts.
But B Riley pointed out that Gambling.com has countered this well publicized industry-wide issue with a “repositioned” tech/SEO response.
They also noted that the media partnerships temporarily impacted margins in Q3 and Q4, but said that absolute EBITDA was in line with forecasts.
Further reading: Sportico this week reported CEO Charles Gillespie as suggesting the media partnership strategy allows old newspaper brands to “leverage their assets to make money off of sports betting.”
⛷️ Google it: Gambling.com investors take fright on SEO algo fears
Earnings in brief
Gaming & LeisureProperties: The gaming REIT said adj. funds from operations (AFFO) was static at 92¢. Adj. EBITDA rose 3% to $333m. GLP will hold its call with analysts later today, Friday.
BlueBet, which just the other week announced the merger with the Australian Betr, saw its first-ever cash flow positive quarter in FYQ3, with gross win up 23% to A$19.5m ($12.8m) and net win soaring 37% to A$16.4m.
The company claimed it was “gaining traction” with ClutchBet in the US, although net win from its operations in Iowa and Colorado amounted to less than A$1m for the quarter.
Recall, the US business was put under strategic review when the Betr deal was announced.
Calendar
Apr 26: Gaming & Leisure Partners (call)
Apr 30: Caesars Entertainment, Lottomatica, Melco Resorts
May 1: MGM Resorts, Bally’s, Rush Street
May 2: Penn National, VICI, DraftKings (earnings)
May 3: DraftKings (call)
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