Out of left field
Crypto.com’s further threat to OSB status quo
Crypto exchange launches sports event trading across 50 states.
Allwyn buys controlling stake in Novibet for up to €327m.
In +More: Bally’s is selling a 25% stake in its Chicago project.
Evolution suffers pre-Xmas crash on UK licensing review news.
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Out of nowhere
Upsetting the apple cart: The move by Crypto.com to launch sports event trading in 50 states under the auspices of the Commodity Futures Trading Commission is the latest challenge to the hierarchy of the OSB market.
Crypto.com’s pre-holiday season move saw the Singapore-based crypto exchange offer a market on the winner of the Super Bowl via its CFTC-approved Derivatives North America platform.
“It’s a fundamentally new concept for sports, and we’re thrilled to be the first regulated platform in the US to offer it to our users,” CEO Kris Marszalek said in the press release.
It’s important to note that, as the analysts at EKG said, CFTC-regulated entities can self-certify their offerings and that contracts offered can be open to regulatory review.
Noise ’n’ the ’Hood: The move to offer sports-based events via the futures market means Crypto.com has got the jump on trading app provider Robinhood, whose CEO Vlad Tenev told investors his company was “keenly looking” into offering sports betting.
This followed what he said was a successful foray into event betting and prediction markets during November’s presidential election.
That move followed the high-profile success enjoyed by the now regulated Kalshi and the still offshore Polymarket with election-related markets.
Who’s doing what now? Despite the pre-holidays timing, it is still noticeable that there was barely a murmur from either operators in the space or the analysts to the Crypto.com move or Tenev’s comments.
Chris Grove from EKG believes this “relatively muted” reaction suggests sector participants have been caught on the hop.
“I think it's fair to say the industry has been caught off guard by the rapid emergence of futures contract betting,” he added.
A Trumpian wind: What has definitely caught some attention is the extent to which the advent of sports event futures or prediction markets is seen as being part and parcel with the deregulatory instincts of the incoming Trump administration and its wider push into crypto.
As Grove pointed out, the Trump administration is likely to be “highly transactional.”
“The cryptoverse and the prediction market leaders appear to have accrued meaningful capital with that administration, but it’s unclear to me that the regulated gambling industry has done the same,” he added.
See me, Thiel me: In comparison, the links between Crypto.com and the incoming administration appear strong. As EKG noted, Marszalek met with Trump at Mar-a-Lago while Trump’s crypto and AI czar David Sacks is a ‘bestie’ with Peter Thiel, ex-Paypal and now majority owner of Polymarket.
“I don't see many prominent voices championing regulated online gambling in the Mar-a-Lago set,” said Grove.
Take the L: The moves by Crypto.com and Robinhood, alongside the ‘America: the casino’ vibe surrounding meme coins, the rising price of bitcoin and prediction markets, suggests the OSB and iCasino space is getting more crowded.
As EKG said, the potential for a “sports-amenable” CFTC means “elevated near-term competitive risk” for the OSB incumbents.
Coming right at ya: Grove suggested competition is coming from “multiple angles,” including “deep-pocketed” competitors such as bet365 and Fanatics, adjacent challengers like Crypto.com and Robinhood, and “other forms of entertainment that seek to occupy a similar mindshare and slice of the wallet.”
“The opportunity is too large, and we’re too early in its trajectory for any long-term winner to be declared,” he added.
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Allwyn buys Novibet
All in: The global lottery operator Allwyn has agreed to buy a 51% stake in online sports-betting and iCasino operator Novibet for €217m with an earnout of €110m payable depending on performance.
Novibet is a largely Greece-facing business with a LatAm presence in Brazil and Mexico.
It also previously had a UK-facing presence, but in 2022 it surrendered its UK gambling license having been operational there since 2014.
Greek gift: Allwyn said the deal enhanced its tech capabilities and “strengthened” its OSB and iCasino presence. Via a controlling stake in Opap, Allwyn already has a presence in Greece including the Opap-majority owned Stoximan online business.
It also owns a stake in Greece-based Kaizen Gaming, which operates Betano.
In the lottery space, Allwyn operates the UK National Lottery as well as lotteries in Austria and the Czech Republic.
In February last year Allwyn bought a controlling 70% stake in Instant Win Games.
SPAC from the dead: Allwyn and Novibet share an experience of failed SPAC IPO attempts. Novibet tried a float via the Artemis Strategic Investment Corporation in April 2022 but the effort came to nought as the SPAC tide receded.
Similarly, Allwyn pulled its own SPAC listing in September of that year blaming market volatility,
+More
The regulated market in Brazil was officially launched on Wednesday, January 1, with 67 participants getting the nod from the regulator to begin taking legal bets and over 300 associated brands. See Compliance+More.
Gambling.com has sealed the acquisition of Odds Holdings announced at the end of last year. The news comes despite a lawsuit launched by Swish Analytics that accused Odds Holdings of the misappropriation of proprietary sports odds data and is seeking $100m in injunctive relief.
Bally’s is selling a 25% equity stake in its permanent Chicago casino facility in order to raise the funds to complete the project. The company has begun marketing an IPO, which it hopes will raise up to $250m.
The offer for stakes between $250 and $25k is open only to women or people of color, a key component of the Host Community Agreement between Bally’s Chicago and the City of Chicago, according to the Chicago Sun-Times.
Recall, the land for the project was bought by gaming REIT Gaming & Leisure Properties for $250m, taking its total investment in the project to $1.19bn out of the $1.8bn total cost.
Marcum has resigned as Codere Online’s independent registered public accounting firm, citing IT control deficiencies and insufficient internal controls.
The company, which is subject to a Nasdaq delisting notice, said it is seeking a new auditor in order to complete financial filings and regain compliance. A hearing is scheduled for January 16.
As was rumored, Fertitta Entertainment owner and CEO Tilman Fertitta has been nominated to be the next US ambassador to Italy by President-elect Donald Trump.
Construction of the main building for the MGM Osaka casino in Japan is set to begin in April, according to local media. The casino is slated to open towards the end of 2030.
By the numbers: Macau revenues in December came in at $2.28bn, down both sequentially, by just over 1%, and YoY, off by 2%. The yearly GGR figure of $28.4bn was up 24%.
What we’re reading: “In its heyday, the money sloshing through the former Portuguese colony of Macau took some beating.” The FT on Macau’s diminished status.
Read across
Fork handle: In The Token Word, a new esports prediction market called Forkast.gg has been launched by an outfit called Community Gaming utilizing the Ronin network. In a press release, Community Gaming said “if all goes to plan” the site will launch on January 7.
Forkast will be an on-chain prediction market enabling users to buy and sell tokens that represent a future event outcome.
Signs of life: An opportunistic bid by a life sciences shell company to pivot into crypto-based online gambling has been revealed via an SEC filing on December 30. The company currently called 180 Life Sciences Corp is hoping to raise $2.9m via a public offering and a concurrent private placement.
The SEC notice revealed that in September the company had bought the source code and IP related to an online blockchain casino in return for convertible shares and warrants from Elray Resources.
+More careers
The big move: Patrick Jay has announced via LinkedIn that he will be joining Evoke this month having left Penn Entertainment where he headed up the company’s faltering sportsbook operation.
Turnaround: Jay said he was joining a team that has been assembled over the past year to “take two of the most recognisable global and international brands in betting and gaming, William Hill and 888, back to where they belong.”
Elsewhere, Yolo CFO Corin Nichols has announced via LinkedIn that he has left the business.
Director of Payments – Malta
Head of VIP – Sofia, Bulgaria
Director of Operations – Malta
Evo’s Brexit
Billion dollar money drop: Evolution suffered its worst one-day drop in three years on the Thursday before Christmas, shedding over 10% of its value or over $1.6bn in market cap after the company revealed the UK Gambling Commission was undertaking a licensing review.
Investors took fright at the wording of Evolution’s press release, which said the review could have a “range of outcomes” including suspension and revocation of its licence to operate.
At issue is the apparent availability of Evolution games to UK customers via offshore operators. Evolution stressed that only ~3% of Evolution’s revenue is from the UK market.
Among the other possible outcomes mentioned by the company are that no action is required, conditions being imposed on the company or some form of financial sanction.
See yesterday’s Compliance+More.
Earnings in brief
LiveScore has published its annual report for the year to March 2024 with Companies House, showing revenue up 38% to £179m and EBITDA losses improving by 23% to £38.8m.
The operator of Virgin Bet and LiveScore Bet, as well as the LiveScore scores updates app, said the losses were in line with expectations.
In late November LiveScore announced a restructuring that would affect 100 staff.
CEO Sam Sadi said at the time that, while the company had enjoyed a period of “significant” growth, the job cuts were needed to “future-proof the organization.”
Mohegan has reported revenues for the year to September 13% YoY to $1.89bn while Q4 revenues rose 12% to $498m. However, yearly adj. EBITDA of $349m was down 13% due largely to the operating costs of the South Korean Inspire casino.
In relation to the Inspire project, the company warned it is in danger of breaching its debt covenants on its Korean term loan facility.
The company subsequently announced it had reached agreement on a fourth amendment to the credit agreement removing a prohibition on going concern language.
The company will hold an earnings call on January 9.
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Stake in the ground
Stake of the nation: In a new year message broadcast via Medium, Ed Craven, the founder of Stake.com and Kick.com, said that while the company is foremost known as a crypto-based casino, it was expanding its payment options “to meet demand.”
Craven noted the business would be launching in Brazil within the new regulated regime (and is among the 67 market entrants), with a launch in the regulated Italian market due early this year.
He said it was also intent on opening an office in Ontario, adding that the company remained “focused on entering regulated markets.”
Workaholic: Craven said he remained more committed than ever to staying deeply involved in the day-to-day operation of both Stake and Kick despite its growth to over 1,000 staff.
“Everyone, from our C-suite to our operational teams, is expected to roll up their sleeves because we believe that relentless attention to detail is key to delivering the bigger picture,” he added.
Carrot and stick: He also appeared to signal further corporate activity, suggesting the Easygo holding company would be “investing in innovative companies,” alongside putting more resources into its game studios and “elevating” its proprietary RGS, called Carrot.
Connections
Golden Matrix’s Expanse Studios entered the US sweepstakes market through a strategic content partnership with sweeps operator Moozi.
Everi has expanded its TournEvent tournament platform into historical horse racing markets with a debut installation at Delaware North’s Gate City Casino in New Hampshire.
SIS’s H2H Global Gaming League, which offers over 200,000 esports events annually through FanDuel and bet365, has now been approved in 12 US states.
NetBet is streamlining operations under an agreement with the no-code automation company Flows.
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Earnings calendar
Jan 22: Las Vegas Sands
Jan 23: PointsBet
Jan 29: BlueBet
Jan 30: Evolution, Rank
Jan 31: Red Rock Resorts
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