Apr 1: Weekend Edition #40
Novibet SPAC listing, Sportradar analyst reaction, Bored analysts NFT, GAN and NeoGames analyst updates, Sector watch - financial trading +More
Good morning. Novibet is to enter the listed fray, somewhat surprisingly, via a de-SPAC. A company that found the UK market apparently too competitive, we can reason, now has its eyes on even more fraught markets in North and South America. You can’t fault the opportunism. But we do wonder at the company’s chances of success. Hope springs eternal which is perhaps an appropriate motto for all SPACs.
Separately we note the SEC is now looking at curbing bullish SPAC forecasts…
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Novibet SPAC listing
As it was in the beginning: Novibet, the Greek-based betting and gaming group which surrendered its UK license in February this year, announced it is to merge with the Artemis Strategic Investment Corporation SPAC and list on the Nasdaq.
The move would value the group, which generated $183m in GGR in 2021 and $18m of EBITDA, at $625m. Forecast 2022 revenues are at $212m and EBITDA will hit $20m.
So shall it be in the end: Novibet’s main markets include Greece, Ireland, Italy and Malta and says it hopes to “leverage” its track record in the US. It has a market access deal with Caesars for Pennsylvania and will launch in Q2 with New Jersey to follow in H2.
It is also negotiating another six agreements for OSB and igaming and says it will launch in Canada in Q4.
It has also secured market access in Mexico via a partnership with casino group Big Bola and is setting up a joint venture in Argentina.
Targeting M&A: With $135m of unrestricted cash on hand after closing, it hopes to embark on mid-tier M&A opportunities and is looking at a range of global markets. The company says it is looking at targets with revenues in the $30m-$100m range and EBITDA of between $5m-$25m.
As you were: Post-merger, expected to close H2, owner Rodolfo Odoni (previously of Centric) will serve as chairman and CEO George Athanasopoulos will remain in his position.
Related: On Wagers.com, is the US market pricing out the competition.
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WE+M NFT EXCLUSIVE DROP
We are delighted to announce the launch of the Bored Analyst (very) limited NFT collection. Coming to a marketplace near you. Probably. Maybe.
Each and every Bored Analyst is unique but each comes with their own take on EV/EBITDA valuations. All analysts are dope but some are harder to fathom than others.
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Sportradar analyst reaction
Playing it safe: The sports data provider’s Q4 earnings were favorably received by the analysts with Jefferies suggesting the better-than-expected results means the timing of the forecast 2025 profits might be “conservative”. The team noted Sportradar expects losses in the US to decrease as growth, particularly in-play, increases.
Compare and contrast: Deutsche Bank said Sportradar’s “continued profitability” at an adj. EBITDA level - €102m in 2021, forecast to rise to between €122m-€133m this year - lay in contrast to the “deeper losses” guidance among OSB operators.
DB said Sportradar was a “pure-play way” to get exposure to the sports-betting theme through a “profitable, subscription-based, high-growth B2B operating model”.
How to get ahead in advertising: DB said a key takeaway from the call was about the success Sportradar was having with its ad:s marketing offering, particularly given the current high customer acquisition costs faced by operators. JP Morgan analysts said the company had “demonstrated continued uptake” of higher-margin products such as ad:s.
Earnings+More pod #3
This week, Jake and Scott discuss Boyd Gaming’s Pala Interactive deal, recent news surrounding Socios and the week’s earnings rom Sportradar and XLMedia.
As well as via yesterday’s newsletter, the pod can be accessed via Spotify, Apple and YouTube.
GAN analyst update
Value yet: The analysts at Jefferies suggest that despite GAN having “under-executed” for the past several quarters, recent transactions (notably Boyd Gaming’s Pala Interactive buyout) suggest there is “some value in the technological capability” in GAN’s B2B business.
However, among Jefferies’ digital coverage, GAN “bears the greatest challenges”. Despite its profit generation, the B2B business is “not generating growth” at levels seen elsewhere. It has also not been helped by the news that Churchill Downs is exiting the OSB business.
Dazed and confused: The Coolbet B2C operation, meanwhile, “prospectively confuses” the market’s view on valuing the business. “It has become less clear how GAN defines its reasons for success longer term,” they add.
Earnings in brief
Codere Online Q4: Net gaming revenue of €22.2m for the quarter was flat YoY. FY21 revenue was up 17% to €83.2m. Q4 NGR from Mexico was up 13% to €7.9 m and stood at €27.9m for the year, up by 38%. Spanish revenue for Q4 was down 13% to €14.4m. The company blamed “regulatory challenges” related to rules on advertising for the Spanish downturn.
Galaxy Gaming Q4: Revenue increased 73% to $5.7m while adj. EBITDA was up 93% to $2.4m. FY21 revenue rose 95% to $20m. Galaxy’s igaming unit achieved revenues of $8.1m in 2021.
Sportech FY: Revenues up 32% to £22.9m but adj. EBITDA loss of £1.8m, excluding the revenues from the disposed-of LEIDSA contract. The LEIDSA disposal brought in net proceeds of £9.4m. CEO Andrew Lindley said that after a year of M&A - the company also disposed of its global tote business and the Bump 50:50 unit - the transformed company was now “tidy and fit for growth” largely around the venues business in Connecticut.
Sector watch - financial trading
Stop me if you think you’ve heard this one before: The meme stock frenzy is back, at least for some of the highest-profile of this strange club. Earlier this week Gamestop notched up its 10th session gain in a row, rising 143% between mid-March and the end of the month.
Heard it through the grapevine: As can be seen, this left the Grapevine, Texas-based Gamestop (yes, Grapevine) still somewhat short of its previous highs over $325 in March 2021 when it became the focus of activity from a r/wallstreetbets crowd convinced they were taking part is an epic short squeeze.
Working 9 to 5: Also boosted this week was Robinhood, albeit for the more mundane reason that it has announced it is extending its trading hours in both the morning and the evening as it moved towards allowing 24/7 trading. The share price pinged 25% at one point this week on the news before giving back some of its gains.
Robinhood blog: “Our customers often tell us they’re working or preoccupied during regular market hours, limiting their ability to invest on their own schedule or evaluate and react to important market news.”
iGaming NEXT New York
The iGaming NEXT New York conference will take place on May 12-13 and will bring together the leading OSB/iGaming executives, institutional investors and leaders in the Web3.0 space. The event is supported by the likes of Morgan Stanley, Playtech, Spectrum Gaming and Evolution and is limited to 700 high-level delegates.
To register with a special 10% discount, use the code: 10UNL050.
Conference agenda, ticket purchases and registration details: www.igamingnext.com/nyc22
Startup funding news
Network Gaming: The UK-based sports-betting game developer founded by Harry Collins has raised £1.25m from investors including Betfair founder Andrew Black, Robert Markwick, Colossus Bets’ David O’Reilly, TX Odds’ Einar Knobel Gary Otto and Sandford Loudon, Oakvale Capital. The company’s first pay-to-play game was Fantasy Masters golf where players competed for cash prizes.
Lucra Sports: The San Francisco-based P2P gaming company has announced a $10m Series A funding round led by the Raptor Group, SeventySix Capital and Victress Capital as well as individual investors Marc Lasry, owner of the Milwaukee Bucks, and NFL ProBowl wide receiver Emmanuel Sanders. Lucra provides a ‘social-first wagering’ offering, allowing legal wagering between friends in 37 states.
Ontario licensing
UK and Ireland-licensed online bookmaker Fitzdares has received its iGaming operator’s license from the Alcohol and Gaming Commission of Ontario (AGCO). Casino content aggregator and games supplier Relax Gaming is set to launch in the province on Monday. Sports betting solutions provider FSB Tech has also received a license for the province. Rush Street Interactive has become the first US-based online gaming and betting company to receive accreditations from Ontario’s Responsible Gambling Council’s RG check.
On social: Peuchère ! Fitzdares CEO William Woodhams says the company is launching in the Provence.
Datalines
Colorado Feb22: NCAA grabbed 15.5% share of total wagering in Colorado in Feb of $440.5m, ahead of March Madness. Total GGR came in at $19.6m, up 79%. Table tennis hung in there with 1.7% of total wagering.
Denmark Feb22: Betting revenue fell 17% to DK184m (€24.7m) while online casino was also down 2% to DK214m (€28.8m). Gaming machines bounced back to DK131m (€17.6m) after being out of action due to pandemic restrictions last year. Land-based casinos also benefited with saw revenue return to DK31m (€4.2m) from zero in Feb21.
Newlines
Downstate: New York will award at least one casino license in New York City, according to the New York Daily News. Quoting Sen. Joe Addabbo, the paper says three casino licenses will be included in the budget with Genting Malaysia’s Resorts World and MGM Resorts Empire City getting two of them.
World of wonder: Staying with New York, Genius Sports has announced a data supply deal with New York-licensed Resorts WorldBet to provide its official data and live-trading content.
Upping downs: Churchill Downs upsized its senior notes sales to $1.2bn from an initial $900m. The cash will partly go towards financing the $2.5bn Peninsula Pacific acquisition.
Unicorn hire: Entain has appointed Brian Lancey as the new chief marketing officer for its Unikrn esports betting brand. Unikrn is set to re-launch later this year.
Pathway to profit: Scout Gaming will supply its fantasy sports and betting products to bet365, its biggest client to date according to the press release.
What we’re reading
As night follows day: Matched betting comes to the US.
‘R/sportsbook has only 279,000 members (or ‘degens,’ as the forum’s ‘About Community’ tab calls them), compared with the 11.8 million users on its more famous cousin r/wallstreetbets, but it features a similar aspirational ethos.’
Caving in to Big Egg: Smaller producers are losing out to egg combines.
Who’s in the hat? Make sure you understand the World Cup draw.
On social
For Chris, David and Martin.
Calendar
Apr 7: Entain Q1
Apr 7-8: All American Sports Betting Summit, New York
Apr 12-14: ICE, London
Contact us
Scott Longley scott@clearconcisemedia.com
Jake Pollard jake@openmediaservices.com