Back to the drawing board
DraftKings will seek ‘other solutions’ after player surcharge retreat
Jason Robins says the sector can’t afford to “just eat” tax rises.
Kambi and Genius Sports shoot down E+M’s talks rumor.
In +More: Novig goes national with sports prediction market.
Sector watch: It’s goodbye and good riddance to EBET.
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DraftKings’ solution search
Putting it out there: DraftKings CEO Jason Robins said it “wouldn’t make sense for anybody to completely just eat any tax increase,” as he defended his company’s approach with the now discarded player surcharge idea.
Talking during a Bank of America investor conference, Robins said DraftKings was “not afraid to throw things out there.”
“There might be some other sort of solution ultimately that we pursue that does get a more favorable response,” he said.
Robins suggested that might involve less promos. “There’s multiple levers we can pull,” he added.
A good idea at the time: DraftKings proposed the player surcharge at the time of its Q2 earnings, but following an adverse reaction it canned the move within a fortnight.
Yesterday, Robins said “people didn't like this particular solution, so we changed it.”
Mud in your eye: Asked about the Q2 earnings where adj. EBITDA of $128m was below its estimates, Robins admitted DraftKings “took our eye off the ball” during the quarter when it came to parlays and hold mix.
“We didn't have the right cocktail to drive up that parlay mix in the way we are hoping to,” he said.
He added the company had a “clear line of sight” on how FanDuel achieved its better parlay margins and how DraftKings could improve its parlay hold rate by 100-200 bps.
Deal talk: Having just last week announced the buyout of Simplebet, Robins hinted the company might hold off on any deals for the time being. “It wouldn't be the worst thing in the world if we had a little break from M&A,” he commented.
“M&A takes work to integrate to get the deals done,” he added.
He said the company was aware that “every time we do something like that” there was a cost in terms of the time spent on making a success of the integration.
On the Simplebet deal, Robins said that on the basis of costs saving alone it was “very attractive.”
“The upside is we can really continue to enhance our live betting product to a point where we are heads and tails (sic?) ahead of the competition.”
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Spiked
Ström in a teacup: Kambi and Genius Sports were quick to issue statements denying media speculation – OK, hands up, it was us – that the two were in discussions.
Kambi chair Anders Ström was first out of the blocks, saying the company “tends not to comment on rumor and speculation.”
But in this instance it would make an exception. “I can confirm that Kambi is not engaged in any such discussions,” he said.
Locke, stock and two smoking barrels: It was swiftly followed by a corresponding statement from Genius Sports CEO Mark Locke, who said that similarly his company rarely stoops to comment on “unfounded and ill-informed rumors.”
But to “prevent any further speculation,” he confirmed Genius was “not involved in any discussions of this nature with Kambi.”
Hot gossip: All of which leaves E+M to say that if anyone wishes to impart any further unfounded rumors or ill-informed speculation, please feel free to get in touch by the usual channels.
🫢 Oops: Kambi rallies on ‘rumors’
+More
Novig is the second previously state-licensed operator after Prophet Exchange to opt to go down the sweepstakes sports-betting route with the launch in 42 states of a “prediction markets for sports” offering.
Novig was previously licensed in Colorado. CEO and co-founder Jacob Fortinsky said the company was “beyond excited” to now be able to offer its app nationwide.
Meanwhile, a group of sweepstakes operators has formed a lobby group called the Social and Promotional Gaming Association, with the aim of highlighting the “well-established legality and legitimacy of social sweepstakes games.”
Allwyn has completed its investment in Instant Win Gaming and as of today holds a 70% interest in the business. Co-founders Rhydian Fisher and Simon Bucknall will retain their roles at IWG.
Caesars Sportsbook is the official sports-betting and iCasino partner of the Detroit Lions for the 2024 NFL season.
Fanatics has opened a retail sportsbook at Ocean Casino in Atlantic City, it’s first physical venue in New Jersey
Read across
On Tuesday, Compliance+More covered developments at Australian casino operator Star Entertainment, which has asked its lenders to relax the rules on its outstanding loan repayments after the Bell II report found it was not suitable for a license.
The Token Word this week looked into what Rivalry said about its token offering during its recent earnings call. Plus, OpenSea defends itself against the SEC’s latest intervention.
+More careers
The big move: GMA Consulting has announced that industry veteran Greg Roselli has joined the consulting firm after more than 20 years as a credit analyst and advisor, including working previously for Bank of America and UBS.
Welcoming Roselli to the GMA team, founding partner and MD Josh Swissman said his “strategic vision and proven success” would be instrumental for GMA as it expands its footprint across gaming, lodging and leisure.
Gregory Penkov is the new chief revenue officer at Blask. He was previously head of sales at Softswiss. Nick Cockerill has left his position as VP of product at Stats Perform. Flows has appointed Daniel de Souza as VP of commercial.
Head of Acquisition – Prague
Operations Director – Malta
Mexico Country Manager – Mexico City
Analyst takes – NFL kick off
Go Chiefs! As the NFL season kicked off last night, the analysts at JMP estimated football betting will generate $3.1bn of GGR in regulated states in the season ahead, while handle will hit $33bn.
The JMP team noted the tailwinds heading into the business end of the sports-betting year with OSB handle growth up 34% in July, 33% in Q224, and 24% in Q124.
“On average, operators are seeing impressive wagering growth across legacy and more recently launched states, as well as across product offerings like single-game bets and parlays,” the team said.
The future’s owned by you and me: JMP suggested that entering the new season the duopoly at the top faces less of a risk from “niche and small-scale companies,” but instead will face a stiffer threat from the mid-tier of BetMGM, ESPN Bet and Caesars.
High bar: But they reminded investors the bar remains high, as no company outside the top two has acquired and sustained greater than 3% US market share on a T3M basis since the launch of New York in January 2022.
It’s time for the good times: Talking about the NFL season, which started last night with a 20-27 defeat for the Ravens at the Chiefs, DraftKings’ JasonRobins told the Bank of America investor conference that it was “like holiday season.”
“It’s where we get tons of new customers,” he said. “We’re shipping a lot of product. Over the last week, we shipped more product than we did in the last couple of months.”
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More takes
Rank: Speaking to the analysts at Peel Hunt, Rank CEO John O’Reilly suggested the Grosvenor Casinos business had suffered from a long Covid effect, with consumers still recovering. “It seems strange to talk about lockdowns, but I think we are still recovering,” he said.
London can take it: He said the capital was “performing better,” helped by the Olympics in Paris.
In preparation for the enactment of the long-promised land-based reforms, he said the company was ready to roll out more machines and sports betting.
Earnings in brief
Cirsa: Revenue in Q2 rose 4% to €520m while EBITDA was up 8% to €171m for the second quarter. The Spanish slots unit continued to drive performance with 6% YoY growth, while the casino performance across Panama, Mexico, Morocco and Peru enjoyed a similar 6% uplift.
The Spain-facing online operation saw revenues rise 2%, with an 8% handle increase partly offset by some “one-off” significant customer friendly results.
At the end of the quarter, Cirsa announced the acquisition of a 70% stake in Peruvian operator Apuesta Total.
Hong Kong Jockey Club: Horse racing betting turnover dropped 4.5% to HK$135bn ($17.3bn), while football (soccer) betting turnover was up 2% to HK$160bn. Horse racing net income fell 4% to HK$6.1bn, while football net income was down 16% to $8.1bn due to the special football duty introduced in April 2023.
Sector watch – esports
Another one EBETs the dust: The last month has been mixed for the often volatile relationship between esports and gambling. From a company perspective, it’s farewell to EBET Inc (formerly Esports Technologies), one of the last few public esports meets gambling companies.
Late last year, B2C operator Luckbox closed its platform and Esports Entertainment delisted and sold the bulk of its assets in a bid to stay afloat.
EBET has ceased all business operations following a public foreclosure auction on August 1, as the company was unable to pay $37m of debt.
The company acquired Aspire Global’s B2C assets in December 2021 for $75.9m.
It started to generate revenue through gray market online sportsbook/casino brands such as Karamba, Hopa, Griffon Casino, BetTarget, Dansk777 and GenerationVIP.
Call it a night: Outside of its original Southeast Asia-facing operation, Gogawi, the company made little dent on the esports industry.
Notably, it patented an “esports wagering modeling system” and “‘technology that uses AI to generate odds models at each stage of an esports tournament in multiple titles.” Neither saw the light of day.
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Earnings calendar
Sep 6: Allwyn
Sep 25: Flutter investor day
Oct 24: Betsson, Evolution
Oct 25: Kindred
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Draftkings has already taken steps to make up the tax. Look at the NFL line
Texans -148 / COlts + 24 that is a 24pt spread instead of historic 2opt vs ESPN -155/+135 which remains at 20pts.
Also spread on soccer matches has widened significantly, esp the double chance when a fav scores 1st oves immeditely to -20,000 vs others that might be at -5,000-8,000