Making America gamble, again
Kalshi rolls the dice on sports-based events
Prediction markets CEO says America ‘has entered a new era.’
Evolution’s troubles could see operators switch, warn analysts.
Sector watch: financial trader eToro to seek a US listing.
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‘Everyone can win’: In announcing the launch of sports-based events markets, the CEO of Kalshi Tarek Mansour posted on X that “the people have spoken” after the company proclaimed its offering to be accessible in 50 states.
“On the heels of our explosive growth, Kalshi takes its next big step: Sports,” he declared.
America, he said, was “entering a new era,” adding “we are just getting started.”
Age of plunder: A company posting, meanwhile, mimicked President Trump: “We’re gonna be winning so much you may even get tired of winning.”
Another post added “the Golden Age of markets is here” as it promoted “no house,” live trading during games and no bans or restrictions on winners.
Anything you can do: Kalshi’s move comes quickly on the heels of Crypto.com, which earlier this month launched a market on the winner of the Super Bowl via its CFTC-approved Derivatives North America platform.
At the close of last year, Robinhood Markets CEO Vlad Tenev told investors his company was “keenly looking” into offering sports betting.
The Trump stamp: The moves into sports follow the high-profile success Kalshi and offshore rival Polymarket enjoyed with political betting during the November elections.
The nascent prediction markets sector openly aligned with Trump supporters over the utility of allowing political precision markets.
Donald Trump Jnr. has since joined Kalshi as a strategic advisor.
Pham affair: The new Trump administration has since installed Caroline Pham as the CFTC’s interim chair and she has quickly moved to clear out a number of top officials. A permanent CFTC chair has yet to be announced.
Stuffing the envelope: As with Crypto.com before it, the Kalshi CFTC filing is a self-certification, which explains how the market works but did not include the confidential appendices that would include the reasoning for why this is a financial hedging function or utility.
Alex Kane, CEO at betting exchange Sporttrade, posted on LinkedIn that the filing provides “important clues to just how far the envelope can reasonably be pushed.”
Full fat vs. semi-skimmed: While Kane termed what Kalshi was offering a “watered down” version of sports betting, he did add that he could “absolutely” see an OSB operator moving to offer a “hybrid super offering” of “full menu” sports betting where allowed and the limited CFTC-regulated version elsewhere.
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Push and pull: In Compliance+More on Thursday the potential for sweepstakes to push states towards thinking about regulation of iCasino was put forward by the analysts at Macquarie.
Meanwhile, earlier in the week Redburn Atlantic said Evolution, under review by the UK Gambling Commission over the supply of its games to UK-facing black market sisters, might have a case to answer. See ‘Analyst takes’ below for more on Evolution.
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The big move: Rush Street Interactive announced via an SEC filing that its long-term CIO Einar Roosileht has left the company with immediate effect after his contract was terminated by mutual consent.
In the filing, RSI said Roosileht’s departure was “not a result of any disagreement.” He had been with the company for 11 years having joined as CTO in 2013.
RSI has engaged a leading global executive search firm to assist in a “comprehensive search process to identify a replacement.”
PA Media has announced the appointment of Josh Sparke from March 1 as MD of Podium, its sports and betting data business.
Steve Angelo has been appointed SVP for global sales at White Hat Gaming. Angelo was most recently a principal consultant at Global Gaming Advisors.
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Analyst takes – Evolution
A dim view: The team at Deutsche Bank have downgraded the pre-eminent live casino supplier on fears that its well-documented troubles “at the very least” could encourage its operator clients to diversify away from their Evolution dependency.
As E+M noted this week, the problems being faced by Evolution in the UK, where it admitted just before Christmas that it was under a licensing review, on top of the industrial relations strife in Georgia and cyberattacks in Asia have put the company under pressure.
Having downgraded their 2024 revenue and adj. EBITDA forecasts, the DB team suggested the combined factors will continue to impact the company into H1.
“The shares look cheap, but we see its 62% exposure to unregulated markets continuing to act as a drag on relative valuation,” the team added.
More takes
Burning a hole: The correlation between bad outcomes in sports betting and relative success in iCasino states is becoming more evident, suggested the analysts at JMP, who pointed to the 31% increase across the iCasino states in December.
The team noted that along with October and February, the December just gone was one of the worst months for OSB margins but among the three best months for iCasino growth.
The team suggested the operators are becoming “more efficient” in their ability to cross-sell successful OSB players into iCasino.
They added that flush punters likely lay behind FanDuel gaining further iCasino market share, up to 26.6% in December, while DraftKings was just behind on 26.4%.
Earnings in brief
Super Group: The share price of the Betway and Spin brands operator soared nearly 20% this week after it announced it expects to report record quarterly revenues of ~€486m and adj. EBITDA of €125m-€130m.
The company said it now expected to exceed its previously communicated guidance for 2024, with revenues now likely to come in at €1.66bn and adj. EBITDA at between €387m and €392m.
In the US – which the company termed as “developing” and where it is now solely iCasino focused – Super Group said it enjoyed successive all-time highs for revenue in each month of the quarter.
The company noted it expected Q4 investment in the US business to be ~€11m, bringing the total 2024 investment to ~€61m.
It said that, given the reduced footprint and sole iCasino focus, this is expected to reduce materially in 2025.
Diary date: the full Q4 numbers will be released in February.
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The big deal: Britbet Racing has announced a new agreement with the Tote for the continued delivery of on-course betting until October 2030. Britbet is a partnership between 55 UK racecourses including all Jockey Club racecourses and the large independent tracks.
The renewed partnership will continue to provide a “united approach” to growing pool betting in the UK.
Racecourses control the delivery of an on-course service and the Tote provides the recognised brand and the off-course services, combining to create a single pool.
The new deal builds on an existing agreement dating back to 2018.
GiG Software says that its SweepX platform has gone live with its debut client in the US, the previously land-based sweepstakes operator Primero Games. NetBet is now partnering with Relax Gaming for the supply of iCasino content for the Danish market.
Flutter Entertainment has signed up with Pragmatic Play for its live casino content in the UK and Ireland. Delasport has integrated Omega System’s B2B platform. Playtech has signed a partnership extension with Norwegian monopoly operator Norsk Tipping.
Sector watch – financial trading
Bullish: The European-focused retail trading provider eToro, whose largest market is the UK, has filed for a $5bn listing in New York.
The firm allows customers to trade cryptocurrencies alongside other financial instruments.
In at the deep end: CEO Yoni Assia told the FT last year that the US made sense for eToro because “something in the US market creates a pool of both deep liquidity and deep awareness for those assets that are trading in the US.”
The FT reported this week the firm has submitted confidential filings to the Securities and Exchange Commission for a US IPO and that a listing could happen as soon as the second quarter.
Six appeal: This week, UK-listed trading stalwart IG released its H125 interim earnings showing revenue up 11% to £523m and adj. profit before tax of £267m. On the call with analysts, CEO Breon Corcoran said the company had posted a “six out of 10” performance.
“The business remains well placed to capture cyclical upside but demonstrates we have a lot of work to do to grow the active client base, which will be necessary to deliver sustainable, stronger growth,” he added.
Analysts at Deutsche Bank concurred, saying that while there had been progress “more work needs to be done to increase actives.”
Earlier this month, fellow CFD and spread-betting operator Plus500 said in a year-end update that revenue for the year is projected to come in at ~$768m while EBITDA would be at ~$342m.
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Earnings calendar
Jan 29: BlueBet, Las Vegas Sands
Jan 30: Evolution, Rank, PointsBet
Jan 31: Red Rock Resorts
Feb 4: BetMGM
Feb 6: Betsson, Boyd Gaming
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